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Office’s Recovery Comes With a Pricing Reset

Office’s Recovery Comes With a Pricing Reset

Deal counts say recovery. Pricing suggests the office market is still resetting.

Nina Dale
September 16, 2026

In partnership with

Good morning. The office market is moving again, but don’t mistake more deals for a full recovery. Pricing shows that bigger assets are still undergoing a major reset.

🎙️ This Week on No Cap: Basis Industrial's president explains why small bay's diversified, deeply invested tenant base makes it the safest bet in commercial real estate right now. (Thanks to our sponsor, Warespace)

CRE Trivia 🧠

In which US city was the world's first parking meter installed in 1935, changing how municipalities monetize urban curb space?

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Market Snapshot

S&P 500

GSPC

7,585.73

Pct Chg:
-0.45%

FTSE NAREIT

FNER

822.29

Pct Chg:
-0.30%

10Y Treasury

TNX

5.008%

Pct Chg:
+0.047%

CME Term SOFR

1-Month

3.88%

Pct Chg:
-0.00

*Data as of 09/15/2026 market close.

Price Check

Office’s Recovery Comes With a Pricing Reset

Office transactions may look recovered, but bigger buildings are returning at sharply reset prices.

By the numbers: Office deal counts have rebounded toward pre-pandemic norms, but square footage and capital haven’t kept pace. From the post-COVID peak to trough, deal count fell 43%, versus 50% for square footage and 64% for dollar volume.

Small deals carried the market: Even during the 2021-2022 boom, deal counts surpassed pre-pandemic levels while square footage and dollar volume did not. Buildings under 50,000 square feet grew from 30.2% of space traded in Q4 2019 to 43.8% by Q3 2023.

Big buildings are coming back: Buildings above 500,000 square feet accounted for 18.9% of space traded in Q2 2026, nearing their 20.9% pre-pandemic share after falling to 8.4%. Average building size traded has also climbed from roughly 27,700 square feet in late 2023 to 35,200 square feet.

Pricing tells another story: Since Q4 2019, median pricing per square foot has risen 42% for buildings under 50,000 square feet and 17% for those between 50,000 and 100,000. Meanwhile, prices for buildings above 100,000 square feet have fallen 24% to 36%.

Source: Altus Group

The size premium shrinks: The pricing advantage once enjoyed by larger offices has narrowed considerably. The gap between average and median pricing fell from $72 per square foot in Q4 2019 to just $15 by Q2 2026.

➥ THE TAKEAWAY

A recovery or a reset? Office liquidity is returning, including for large assets, but old valuations aren’t. Rising deal counts increasingly signal that buyers and sellers are finding common ground at a new—and cheaper—price for scale.

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✍️ Editor’s Picks

Acquisition parity: National builders have hunted off-market land with dedicated departments for decades. Prophetic gives multifamily developers the same discovery and owner contact reach, without the headcount. (sponsored)
Real estate hub: Yahoo Finance launched a dedicated real estate hub naming CRE Daily as one of five founding media partners.
Construction squeeze: Nonresidential construction inputs rose 8.9% year over year in August, while multifamily inputs climbed 7.5%, squeezing CRE returns as development, maintenance and debt-service costs rise.
Growth reversal: Houston’s population growth is stalling as immigration plunges, with net migration into Harris County down nearly 80% and developers recalibrating projects amid weaker housing demand and labor shortages.
Cost control: Know where project costs are headed, not just where they’ve been. Rabbet combines live budgets and forecasting to help developers identify financial risks earlier. (sponsored)
Transparency gains: JLL’s 2026 index finds highly transparent markets widening their lead, with energy, AI, credit markets and broader access to real estate capital emerging as key transparency frontiers.
Maturity pressure: CMBS special servicing climbed to 11.42% in August, its highest level since 2013, as large maturity defaults drove rising distress across office, retail and mixed-use properties.
Alexandria lawsuit: A California judge dismissed a shareholder suit accusing Alexandria Real Estate Equities of misleading investors about its life sciences portfolio, though the case can be refiled.

🏘️ MULTIFAMILY

Housing squeeze: U.S. residential permits are 19.2% below the pre-pandemic trend, signaling constrained housing supply that could sustain pressure on home prices, rents and multifamily demand.
Nashville split: Nashville rents fell 2.9% year over year, but Music Row, Metrocenter, South Nashville and Antioch posted rent growth as central neighborhoods like The Gulch and Midtown continued to weaken.
Denver concessions: Denver apartment rents grew 1.7% in Q2, but weak demand and high supply keep concessions elevated at an average 43 days free, despite the first quarterly decline since 2023.
Atlanta rebound: Atlanta multifamily vacancy is projected to fall 70 bps to 5.6% as 2026 deliveries drop 43%, reviving investor activity and supporting modest rent growth.

🏭 Industrial

Brookfield AREP: Brookfield will acquire a minority stake in AREP, combining its global capital and infrastructure expertise with AREP’s vertically integrated data center platform to accelerate AI-driven development.
Independent momentum: Independent self-storage operators are outperforming REITs on rate growth and occupancy recovery, highlighting a stronger performance rebound across the industry’s largely overlooked non-REIT segment.
California fallback: California is emerging as a data center fallback as power shortages and local opposition squeeze Nevada, Utah and Arizona, though rising resistance and infrastructure limits remain challenges.
Auto condos: A 63,202-SF Torrance warehouse sold for $20M will become 33 luxury car condominiums and an automotive club, reflecting growing demand for amenity-rich collector storage.

🏬 RETAIL

Chino Hills: Stockdale Capital and Hamilton Lane acquired the 378,140-SF Shoppes at Chino Hills for $157M, planning a repositioning and rebranding to capture Southern California’s strong demographics.
Retail divide: Los Angeles retail is splitting, with investment and rents rising in prime corridors while weaker districts face declining foot traffic, vacancies and pressure on small businesses.
Retail resilience: U.S. retail visits edged up 0.3% in August while dining fell 2.4%, with Western and Southern markets showing resilience as inflation and calendar shifts weighed on consumer traffic.

🏢 OFFICE

Tech momentum: New York tech leasing reached 1.1M SF in Q3, with AI driving 60% of activity and Flatiron, Madison Square Park and Union Square emerging as key submarkets.
Ballston rebound: Piedmont Realty Trust bought a 189K-SF Ballston office building for $52.7M, nearly doubling its 2024 price after occupancy rose from 52% to 83%.
Citadel accident: A drilling rig collapsed at Citadel’s $2.5B Miami headquarters site, injuring four people and prompting an investigation into the cause.

🏨 HOSPITALITY

Holiday boost: Favorable fourth-quarter holiday timing is expected to support hotel demand, with long weekends benefiting leisure and business travel despite shorter booking windows.
Bally’s financing: Bally’s secured a $560M loan for its $4B Bronx casino project, providing liquidity as the operator faces financial pressure and construction challenges elsewhere.
Hotel bargain: Daniel Negari bought the 241-room Hotel Per La in Downtown LA for $34M, expanding his discounted hotel portfolio amid a wave of distressed sales.

📈 CHART OF THE DAY

CRE dry powder relative to transaction volume fell to 46% in 2026, down from a 97% peak in 2023 and below the 10-year average of 56%, as available capital declined and deal activity picked up.

CRE Trivia (Answer)🧠

Oklahoma City, Oklahoma. Inventor Carl Magee's "Black Maria" meter went live on Park Avenue on July 16, 1935, launching a global industry in urban parking management.

Office’s Recovery Comes With a Pricing Reset

Deal counts say recovery. Pricing suggests the office market is still resetting.

CRE Trivia 🧠