Why Some Investors Still See Life in Office Buildings

• Office bulls: Despite trepidation about the future of the office, one firm has been actively investing in the asset class.

• Rollercoaster investment: Activist investors are pushing Six Flags to spin off its real estate portfolio and adopt an Opco/Propco model.

• Foreign doubts: Mitsubishi is shedding American real estate and instead focusing on the U.K.

• Multifamily webinar: Centralization is helping apartment owners cut costs, reduce risks, and improve resident experiences. Sign up

Office

Why Some Investors Still See Life in Office Buildings

For years, the prevailing narrative has been that office is dead. Occupancy remains far below pre-pandemic levels, many towers sit empty, and more are being converted into housing. Yet, despite the gloomy headlines, a handful of investors continue to see value in the sector.

Lincoln Property Company is one of them. A spinout of Trammell Crow, Lincoln manages 250 million square feet of office and has been one of the most active buyers since the pandemic, acquiring 15 buildings. The firm looks for “software problems, not hardware problems,” meaning properties with financial challenges rather than structural ones, and uses its capital and lender relationships to reposition them.

Rather than writing off entire cities, Lincoln is evaluating opportunities market by market — from San Francisco to San Diego, Boston, and beyond. Their focus is on tenant demand and long-term workplace appeal, wagering that while weaker offices may fade, the best properties will remain in demand.

Overheard

Foreign Investors Rethink U.S. Real Estate

Mitsubishi is repositioning its large real estate portfolio. According to recent reporting, the Japanese property giant is rerouting investments toward the U.K., citing turbulence in the U.S. real estate market and using U.K. assets as a hedge. The move is emblematic of broader jitters. Investors who once viewed U.S. real assets as a safe harbor are reassessing that thesis in light of policy uncertainty, regulatory risk, and capital control shifts.

What makes this noteworthy is how it dovetails with a softening in U.S. foreign direct investment. U.S. foreign investment flows slid to $52.8 billion in Q1 2025, marking a 21% drop from the same quarter in 2024. The reallocation of capital by marquee firms like Mitsubishi may reflect a growing sentiment that U.S. real estate no longer offers the same margin of policy safety it once did.

As more institutional investors from Japan, Europe, and Asia shift capital toward other markets, U.S. real estate faces a potential tightening of the foreign capital faucet. The change in investor sentiment is likely a repercussion of the tumultuous political situation in the U.S. at the moment. Markets and property types that can claim stability, regulatory clarity, and resilience to policy swings may attract a bigger share of remaining global capital. The U.S. may still win over international investors, but it won’t be the go-to safe haven for foreign capital.

Land & Buildings Turns Its Sights on Six Flags Real Estate

Activist investor Land & Buildings has ratcheted up the pressure on Six Flags to spin off or sell its property assets, arguing the theme-park operator is trading at too low a multiple and that its real estate could unlock as much as $6 billion in value. With only a 2% stake, the activist published a letter laying out its case that separate the operating business from the property holdings, or monetize them via sale or REIT, and use the proceeds to reprice the shares. The move sent Six Flags stock up around 4%.

This isn’t new territory for L&B. Jonathan Litt’s firm has made a name pushing structural changes in real estate-heavy companies. The firm has engaged in proxy fights, board nominations, and asset optimization campaigns before. For example, targeting National Health Investors (NHI) to force better lease terms and governance changes.

Land and Buildings' general playbook is to use financial pressure and public proposals to force companies to unlock value within underutilized real estate portfolios. This latest bid at Six Flags shows that real estate is no longer a passive asset class for operating companies, but a lever in capital allocation and corporate strategy. As markets remain volatile and operating performance is uncertain, firms like L&B see the imbalance between the value of real assets and the depressed trading multiples of operators as fertile ground for activism. If more of this type of pressure gets put on real estate heavy companies then we will likely see more Propco/Opco strategies arise where the real estate is separated from the rest of the business entity.

Office-to-Residential Playbook

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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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