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Office investment preference rises as sentiment improves in 2026
Investors’ office preference climbed to 11 percent in the second quarter, up from 4 percent in early 2025, amid tighter office cap rates and increased interest in conversion strategies.
Commercial Observer reports that commercial real estate investors are showing renewed interest in office deals, with office preference reaching 11 percent in the second quarter, compared with 4 percent in early 2025, according to SitusAMC’s ValTrends quarterly research report.
The report also found that office sentiment eased versus the 16 percent recorded in the first quarter, but the broader shift points to improving investor confidence after years when appetite for the asset class hovered in the low single digits, according to SitusAMC Insights head Peter Muoio.
Muoio attributed the renewed interest to greater clarity on valuations and said pressure on some distressed debt may be contributing. He also cited growing optimism around the financial feasibility of executing office conversions.
SitusAMC said office cap rates tightened by 10 basis points in the second quarter, although they remained 80 bps above their long-term average. The report showed multifamily stayed the top-ranked asset class in the second quarter, but preference cooled from 60 percent to 36 percent, while industrial rose 16 percentage points quarter-to-quarter to 32 percent, supported by expectations of data center demand tied to AI growth.