Another sign that the office market may be truly recovering is commercial real estate companies are starting to invest in the long moribund sector.

Sure, there have been consecutive quarters of positive net absorption, a shrinking construction pipeline and companies demanding their employees come back to the office. But even with those positive indicators, the office recovery remains uneven across the country, and many back-to-office mandates haven’t really materialized.

According to research by Founders Reports, only 30% of companies require in-person work five days per week. Gallup reports that only 21% of U.S. workers are fully on-site, which is restricting the office sector recovery.

Flexible employee schedules still seem to be the norm, with 17% of companies requiring workers in the office four days per week, 25% requiring employees at their office desks three days per week and 11% requiring a mere two days in the office. Founders Reports maintains that 10% of companies still allow employees to work fully remote.

Still, office space is in higher demand thanks to the surge in artificial intelligence spending and the new technology companies that have popped up to support the AI industry.

Kastle Systems found that office occupancy levels reached 56.3% last December, the highest mark recorded in the post-pandemic era. As of July 1, Kastle reported that the average occupancy for the top 10 U.S. markets had fallen to about 53%.

Despite this tricky and contradictory office landscape, some commercial real estate companies are opening their checkbooks. CBRE reports that commercial real estate investment activity remains on track for a 16% year-over-year increase to about $605 billion. In the office sector, demolitions and conversions are outpacing new completions for the second consecutive year. CBRE found that 64% of tech companies plan to grow their office footprint during the next three years.

Contrarian office investments

Other signs of life in the office sector include real estate investment firm Real Capital Solutions announcing Monday the launch of the RCS Contrarian Office Fund. It will target Class A and Class B properties in prime and secondary markets that are facing financial distress, according to Bisnow.

Marcel Arsenault, the chief executive of RCS, has announced plans to put $50 million in capital to seed the new fund. He wants to raise $350 million in commitments from qualified investors and leverage the deal with debt to acquire about $850 million in assets.

“We believe the current market presents one of the most compelling office investment opportunities in decades, as forced selling, limited financing availability and historically wide bid-ask spreads continue to create attractive entry points for disciplined investors,” Adam Abeln, RCS’s chief investment officer and managing director, said in a press release.

Also jumping into the fray is Yardi Systems, a property management technology firm that has expanded into the flexible office market in the past few years.

In 2024, Yardi bought a 60% stake in the much-maligned WeWork flexible office company. A year later, Yardi bought Hubble, a U.K.-based company that provides online listings of available office space and offers free advisory services for those using the service.

Hubble launched a U.S. version of the marketplace last October that offers flexible office space in eight major markets, including New York, Boston, Chicago, Philadelphia, San Francisco and Washington, D.C. Hubble plans to launch in 10 additional cities and offer office space in 1,500 buildings by the end of 2026.