Office Deals Surge 42% as Investors Embrace the Sector’s Rebound
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After years of caution, commercial real estate investors are jumping back into the office market — and in a big way.
U.S. office sales totaled $25.9B in the first half of 2025, up 42% year-over-year, according to a JLL client report cited by CNBC. That momentum made office the fastest-growing major property type for transaction volume, with a 110% increase over the same period in 2024.
Investors shelled out $16B in Q2 alone, the highest quarterly total since Q2 2022. And in the third quarter, the mood shifted from “office curious” to “office serious,” according to JLL, as interest rates fell, return-to-office mandates gained ground, and a shrinking pipeline of new developments created new urgency around trophy assets.
“What typically happens is, after a downturn, the high net worth private capital comes back in because of opportunistic returns,” said Mike McDonald, JLL’s Senior Managing Director. “The REITs follow, and then the institutional capital flows.”
One of the biggest signs of confidence? High-value deals are back.
JLL tracked 34 office trades worth $100M+ in the first six months of 2025, totaling $7.6B. That’s a 130% jump from the 15 comparable deals in H1 2024, which totaled just $3.4B. These transactions signal that investors are targeting higher-quality, well-located office buildings, often with modern amenities, sustainability certifications, or significant leasing activity.
Why the renewed interest?
A few key dynamics are driving this pivot:
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Limited new construction: Higher interest rates, construction costs, and economic uncertainty have stalled many ground-up projects.
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Office conversions: A growing portion of Class B and C space is being removed from inventory through residential conversions or redevelopment, reducing future competition.
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Stronger leasing signals: National net absorption was still negative in Q2 at -2M SF, but that’s a significant improvement from -7M SF in Q1, per JLL. Notably, New York City and Sun Belt markets saw positive absorption.
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RTO momentum: According to JLL, most Fortune 100 companies now require five-day in-office attendance, and many private employers are quietly increasing RTO mandates. Work Forward found a 12% rise in employer demand for in-office work versus 2024.
Still, employee behavior hasn’t fully aligned. Despite corporate expectations, the rate of days worked from home has held steady compared to 2023, showing that flexible work isn’t going away — but the pendulum is swinging back toward the office.
What this means for the market
The return of deal volume — especially from private capital — suggests a growing belief that pricing has stabilized and that value can now be unlocked in well-located, high-quality assets. This confidence could mark the beginning of a new investment cycle for office, albeit one focused on best-in-class properties.
Expect continued activity through year-end, particularly as REITs and institutional investors re-enter the space, and leasing fundamentals stabilize further.
As one JLL executive told CNBC, “The smart money always moves first. We’re seeing the early stages of that shift right now.”
