Office investment activity continued to rebound in early 2026 as institutional investors and publicly traded real estate firms increased acquisitions after several years of caution around the sector.
According to a new Avison Young report, office investment sales reached $20.5 billion in the first quarter of 2026, up 38.6% year over year.
Institutions Reenter The Market
Large institutional buyers sharply reduced office exposure following the pandemic as remote work disrupted leasing demand and raised questions about long-term office usage. But improving fundamentals are beginning to draw those investors back, according to BisNow.
Institutional office acquisitions totaled $7.1 billion year-to-date, nearly matching all of 2023’s volume. Real estate investment trusts (REITs) have also accelerated activity, recording $3.3 billion in office transactions so far this year, already exceeding 2023’s full-year total.
Several high-profile deals in New York illustrate the shift. Earlier this year, SL Green Realty acquired 65 E. 55th St. for $730 million, while Vornado Realty Trust took a 49% stake in Park Avenue Plaza in a deal valuing the property at $1.1 billion.
Those transactions followed other major Manhattan office sales completed in late 2025, including RXR and Elliott Investment Management’s $1.1 billion acquisition of 590 Madison Ave.
Trophy Offices Are Driving Demand
Investors are concentrating heavily on premium office buildings in top-tier markets, where leasing activity and rents have shown greater resilience.
Market analysts say clearer distinctions are emerging between highly desirable “trophy” office properties and aging buildings struggling to attract tenants. Return-to-office policies, improving leasing demand, and AI-related expansion from large companies have all helped support confidence in high-end office assets.
That confidence is also showing up in new development pipelines. BXP is moving forward with multiple ground-up office developments in Washington and a large new office tower above Grand Central Terminal in New York.
Avison Young said more than 10 million square feet of office development is currently underway in Manhattan, signaling growing confidence that demand for premium workspace remains durable despite broader uncertainty across the office sector.
