Why Empty Offices Are the Biggest Real Estate Opportunity of the Decade

• Less work, more live and play: A new report from Cushman & Wakefield shows how the right mix of property types can boost the value of urban areas.

• So gone: The Soho house has decided to take itself private as a way to fund its future expansion.

• Silicon factory: The town of Fremont has become the Bay Area’s advanced manufacturing hub because it decided to keep its old warehouses rather than convert them to other uses.

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Urban Development

Why Empty Offices Might Be the Biggest Real Estate Opportunity of the Decade

Cushman & Wakefield’s new study, Reimagining Cities: Disrupting the Urban Doom Loop, reframes the story of downtown decline. Instead of only blaming remote work and office vacancies, it quantifies how lopsided land use is in major U.S. central business districts. The analysis finds that an “optimal portfolio” is closer to 42 percent office use, not the 70 percent averages common today. In places like San Francisco, where office once accounted for nearly 90 percent of downtown real estate, the imbalance has left valuations sinking, vacancies climbing, and city budgets under strain.

The report gives teeth to what urban planners have been saying for years: downtowns need more balance between living, working, and playing. The math shows that replacing obsolete, lower-tier office space with residential, hotel, or other uses could unlock over $120 billion in value nationally while stabilizing tax bases. It’s not a call to eliminate office—Class A space still has demand—but to trim the excess of older product and target conversions where the market can support them. Cities like New York, Washington, and Chicago are experimenting with subsidies, zoning flexibility, and permitting reforms to speed the transition, but the pace still lags behind the need.

For real estate investors and civic leaders, the takeaway is that downtowns represent both the biggest risk and the biggest opportunity. They drive outsized shares of GDP and tax revenue, yet their dependence on office has left them vulnerable. A portfolio mindset—one that prioritizes diversification of uses, targeted public support, and repositioning of weak assets—offers a path out of the doom loop. If cities can execute at scale, empty floors can be traded for active streets, stronger communities, and durable value creation.

Overheard

How Fremont Became Silicon Valley’s Factory Floor

The small Bay Area town of Fremont has carved out a bold and timely niche by doubling down on industrial real estate. Rather than following the Silicon Valley trend of converting old warehouses and R&D spaces into office or residential developments, Fremont preserved its industrial area and is not reaping the benefit. Since 2018, manufacturing jobs there have soared from 30,000 to an impressive 65,000, making it the largest advanced manufacturing hub on the West Coast. Today, about 35% of all jobs in the city are tied to manufacturing, largely thanks to players like Tesla and nearly 900 other firms tapping into Fremont’s industrial bones.

The prospects for the city look promising. Fremont holds 9 million out of Silicon Valley’s 12.6 million square feet of advanced manufacturing space—mega-industrial real estate that’s proving critical to the region’s AI and hardware supply chain. With another 1.6 million square feet under construction and demand sharply rising, from 4.6 million to 7.3 million square feet since mid-2024, the city’s decision to preserve and purpose-build industrial zones is paying off in spades.

That said, this industrial-first strategy isn’t without its trade-offs. Facing a state-mandated goal of adding 13,000 housing units by 2031 (including 7,000 affordable ones), Fremont is forced into vertical growth over sacrificing industrial lands. Affordability also remains a sticking point, especially for workers who still commute hours in order to be able to afford the cost of housing. Fremont will have to weigh its desire to remain the Bay Area's manufacturing hub against its need for housing for its workforce population.

Soho House’s Quiet Exit from Wall Street

Soho House, the elite members-only club known for its creative clientele, is pulling a page from its own playbook. It's now going private in a $2.7 billion deal led by MCR Hotels, with Apollo Global Management in tow and Ashton Kutcher joining the board. Shareholders will receive $9 per share, a premium of about 17.8 percent, sending the stock tumbling in reverse after years of volatility and value erosion.

This move isn’t a noisy exit, it’s a discreet regrouping. Insiders, including Executive Chairman Ron Burkle, are rolling most of their equity into the new structure, while Apollo provides a hybrid debt-equity package totaling over $700 million. The structure is purpose-built to nurse Soho House back to health, away from the glare of quarterly scrutiny.

The brand has always walked the line between exclusivity and expansion. Going private lets it refocus—preserving what works while building out future locations with finesse, not frenzy. Real estate companies that try to rely on the value of their brands often struggle in the public market. That tension dissolves when you remove the ticker. Investors may see this move not as a retreat but as a reset, a way to recalibrate strategy before growing again on their own terms.

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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