Dr. Gleb Tsipursky – The Office Whisperer
Nirit Cohen – WorkFutures
Angela Howard – Culture Expert
Drew Jones – Design & Innovation
Jonathan Price – CRE & Flex Expert
U.S. commercial real estate prices rose across major property types over the past year, with office buildings posting the strongest gains after a steep pullback in 2024. New pricing data suggests investor confidence is stabilizing—especially around high-quality office assets in major markets—despite ongoing uncertainty about how and where work happens.
According to CoStar, value-weighted office prices increased 3.8% in the 12 months through December. That marks a sharp reversal from the prior year, when the same category fell more than 11%, reflecting the sector’s deep reset amid remote-work disruption.
A Split Market: Big, Prime Assets Lead the Recovery
The rebound was concentrated in larger, higher-value properties, which tend to trade in core urban markets and attract institutional capital. CoStar’s value-weighted index—which gives more influence to expensive transactions—also showed modest gains in industrial, retail, and multifamily properties over the year.
That stands in contrast to 2024, when office prices declined broadly and only industrial and retail properties posted annual growth. That points to a selective recovery rather than a broad-based rebound, with capital flowing toward assets perceived as more resilient or strategically important in the next phase of workplace evolution.
Leasing activity helped support that confidence. Major brokerage firms reported higher U.S. office leasing volumes in 2025, with markets like San Francisco benefiting from demand tied to artificial intelligence and tech-driven companies that continue to prioritize in-person collaboration.
Regional Performance Tells a Mixed Story
Pricing trends varied significantly by region, with gains and losses evenly split across property types.
- Midwest: The strongest performer, with value-weighted prices up 7.4% year over year. Multifamily and industrial assets led the gains, while office prices also rose.
- South: Posted steady growth, with value-weighted prices up 3.1% annually. Office and multifamily assets performed well, though retail lagged.
- Northeast: Saw an overall annual decline despite late-year momentum. Multifamily prices edged higher, but office, retail, and industrial assets fell.
- West: Continued to face headwinds, with value-weighted prices down 5.8% year over year, even as the fourth quarter showed signs of stabilization.
What It Signals for the Future of Work
The data suggests that the office market is not uniformly recovering, but it is recalibrating. Investors appear increasingly focused on location, asset quality, and relevance to evolving work patterns rather than office space as a monolithic category.
