2025 Was the Year We Stopped Talking About the ‘Return-to-the-Office’

• Attendance office: In 2025, the return-to-office debate faded as companies quietly locked in hybrid norms, enforced attendance, and brought offices back.

• Country of industry: Prologis’s new China logistics REIT is trading below its IPO price shortly after listing.

• Rising Empire: New York CRE enters 2026 with tighter vacancies and solid demand, but stalled projects, retail gaps, and policy risks weigh on the outlook.

• Multifamily outlook 2026: Demand will be steady in 2026, but margins are thinner and execution matters more than ever. Sign up for the webinar

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2025 Was the Year We Stopped Talking About the ‘Return-to-the-Office’

For much of the past five years, the office conversation was framed around anticipation. Would workers come back, and when? In 2025, that question quietly disappeared. The year marked the moment when the return to office stopped being debated and started being operationalized. Companies no longer spoke in hypotheticals or pilot programs. Attendance expectations were formalized, monitored, and increasingly enforced. Surveys show that roughly 70 percent of companies now require employees to be in the office at least part of the week, with three days emerging as the dominant standard. Fully remote work, once positioned as the future, has become the exception rather than the rule.

The shift is visible in the data. Kastle Systems’ office utilization metrics climbed to their highest levels since the pandemic, with average occupancy across major U.S. markets consistently hovering in the mid-50 percent range and pushing past 60 percent on peak days in some cities. That may still trail 2019 norms, but the direction matters more than the distance. Office buildings are no longer empty symbols of uncertainty. They are active again, even if activity looks different than it did before.

Corporate leadership played a decisive role in accelerating the change. In 2025, major employers across tech, finance, professional services, and government rolled out clear attendance mandates. High-profile CEOs openly questioned the productivity of remote work, reframing in-office presence as essential for collaboration, culture, and performance. Once a critical mass of large employers moved, the rest of the market followed. Founder surveys show that more than half of companies adjusted their policies in response to peer actions, signaling that return to office had become less about preference and more about competitive alignment.

For commercial real estate, this marked an important inflection point. The office sector did not suddenly recover, but it stabilized in ways that were not visible in prior years. Foot traffic supported ground floor retail, transit usage ticked up, and leasing conversations shifted from survival to optimization. Tenants began focusing less on whether they needed space and more on how much and what kind. Buildings with strong amenities, efficient layouts, and central locations benefited first, reinforcing the flight to quality narrative that has defined the post pandemic cycle.

None of this means flexibility disappeared. Hybrid work remains deeply embedded in workplace culture, and employees continue to value autonomy. Workers continue to value flexibility, and surveys show a substantial preference for hybrid arrangements over the traditional five-day work week. What changed in 2025 was the tone. The office stopped being treated as a temporary experiment or a reluctant obligation. It became an accepted part of modern work again. Companies and employees are negotiating a new equilibrium where offices matter again, not as defaults but as purposeful hubs for collaboration, culture, and innovation. The office of 2025 now looks less like an abandoned relic and more like an evolving asset class under renewed demand.

Overheard

Prologis China Logistics REIT Faces Early Investor Skepticism

Prologis’s China logistics REIT began trading on the Shenzhen Stock Exchange after raising nearly $350 million. Now, the stock has been trading below its IPO price since its debut, closing about 9 percent under initial pricing in its first week of secondary market activity. The REIT holds three logistics hubs in the Guangdong-Hong Kong-Macao Greater Bay Area, a region long viewed as a linchpin for China’s consumption and industrial growth. Prologis, a global industrial real estate leader, owns a substantial portfolio in China and has been building out its presence there since the early 2000s, making this REIT a marquee entrant in the mainland market.

China’s REIT market remains young by global standards but has grown rapidly in recent years as regulators widen the types of assets that can be securitized and draw broader investor participation. The mainland REIT market expanded its total issuance significantly, and logistical, retail, and other commercial sectors now represent a growing share of the ecosystem. Greater policy support aims to channel domestic savings, reportedly well over $22 trillion, into listed real estate products and provide a recurring income alternative to traditional development and sales models. The Prologis issuance was also notable for internationalization, as a globally recognized logistics operator taking part in China’s capital markets signals both confidence and the strategic role logistics plays in the nation’s economic pivot.

A trading price below the IPO can reflect broader caution among secondary market investors still assessing China’s REIT disclosures, liquidity, and visibility. That hesitancy could slow capital inflows into new REITs and pressure yields relative to global peers until secondary market confidence solidifies. On the other hand, the underlying demand drivers for logistics real estate in China remain strong. The interplay between policy support, performance, and economic fundamentals will be central to how China’s industrial and logistics real estate markets evolve and how investors value these assets going forward.

New York’s CRE Outlook for 2026 Shows Strength but Growing Fault Lines

On paper, New York City’s commercial real estate market is heading into 2026 with real momentum. Vacancies are tightening, sublease space is shrinking, rents are inching up, and return-to-office levels are outperforming every other major U.S. city. High-profile lease renewals and expansions by firms like Bloomberg, Jane Street, Guggenheim, and Amazon signal long-term confidence, while new trophy towers, billion-dollar sales, strong hotel performance, and accelerated office-to-residential conversions suggest a market that has found its footing after years of disruption.

The darker reality is that this recovery remains uneven and fragile. Manhattan is dotted with stalled development sites where financing gaps or missing anchor tenants have frozen progress, from Midtown corridors to downtown’s still-unfinished Two World Trade Center. Several iconic properties sit in limbo, including the former Roosevelt Hotel, the Chrysler Building, and parts of the South Street Seaport. Retail conditions are especially misleading: despite upbeat brokerage surveys, vast stretches of prime storefronts remain empty across Madison Avenue, Fifth Avenue, and neighborhood corridors, reinforcing a visible disconnect between reported “availability” metrics and street-level experience.

Looking toward 2026, New York still stands apart from the broader U.S. commercial real estate market. While many cities continue to grapple with persistent office distress, weak leasing demand, and slower conversions, NYC benefits from scale, global capital interest, and a stronger return-to-office culture that most markets simply cannot replicate. Yet its challenges are also uniquely amplified: higher development costs, political and environmental constraints, and contentious waterfront policies could limit long-term growth. In short, New York may outperform the national CRE market next year but its margin for error is thinner, and its setbacks more visible, than anywhere else in the country.

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