Office

The definition of office space is a piece of real estate designed and designated for companies to use to conduct business or professional activities. Companies (lessees) enter into an agreement with the property manager or asset owner for a lease, usually for two or more years, that requires them to pay a certain amount per month to rent and use the space. Of course, not all office space is leased. Some companies own the property and use it as office space. 

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To make the property more attractive to tenants, office building owners may include amenities or services for their tenants to use. Modern office spaces might include the following:

• Collaboration spaces in common areas

• Private rooms for meetings or conferences

• Security features, such as electronic locks, cameras, and security staff

• Tech amenities like high-speed internet or Internet of Things (networked light switches, climate controls, etc.)

• Secure, enterprise-grade network infrastructure

• Kitchen areas, vending machines, and appliances

• Lobby furniture and decor

• Storage spaces

• Eco-friendly features like solar panels

• Fitness centers

• Cleaning service

• Landscaped outdoor spaces

• Parking structures

 

Class A office space will have the most modern amenities, while Class C has the least; Class B falls somewhere between.

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How does office space differ from other CRE?

 

Offices differ from other commercial real estate mainly in their function as dedicated professional work environments for businesses. This means that offices need:

• Spaces for desks, meetings, and collaboration

• Flexible layouts for different types of tenants

• Professional detailing and atmosphere

• Capability for tenant improvement

• Long-term, 5-10 year leases

 

By contrast, other CRE asset classes serve very different needs. For example, retail, where tenants want visibility and foot traffic, or industrial, which is about functionality over professional form. Multifamily assets, on the other hand, accommodate residential renters who typically sign one-year leases. The differences with office assets become clearer, as offices need to balance the flexibility of their tenants’ business structures while still having professional capabilities. 

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An office asset, like all real property, comes with risks and returns. Offices are more sensitive to trends like remote working and economic cycles, while an industrial or multifamily asset may be more resilient. On the other hand, offices can be lucrative long-term assets once an agreement with a tenant is made. 

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For marketers and sales teams, this means office-focused outreach needs to consider the longer sales cycles and multiple stakeholders. Biscred helps by narrowing the search to office-specific decision-makers. Asset managers, property teams, or brokers, for example, so you can focus on the leads.

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What trends are in the office sector?

Based on these trends, it appears that demand for low- to mid-tier office space may continue to decline, driven by workforce reductions and remote work adoption. Meanwhile, companies that remain committed to premium office locations may expect more—pushing for higher-end amenities and concessions. This shift could challenge owner-operators, who face rising costs to meet these expectations while overall demand softens.

 

There are some key trends beyond 2025 in the office sector to keep an eye on (see sources 1, 2, 3). 

• Amenities: Owner-operators will do more remodeling, shifting toward flex, multi-use spaces, and concessions for tenants (i.e., fitness centers and on-site dining).

• Vacancies: Concerns continue about worsening vacancies and lower tenant demand.

• Co-working: We’ll continue to see a rise of adaptable co-working spaces with modular layouts.

• Technology: Asset owners will continue to enhance office spaces with better technology like smart building systems.

• HVAC: Modern HVAC systems (especially driven by COVID-19 concerns) will be must-haves for attracting good tenants.

• Trophy spaces: Despite dwindling demand for office space, premium office spaces — or “trophy spaces” — may increase for top companies.

• Leases: Larger companies are committing to longer-term leases.

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Who’s looking for office space?

 

The types of companies that rent office spaces will depend on the type of office available. Here is a list of office tenants and the types of spaces that are attractive to them:

• Financial and legal firms: Typically interested in premium, trophy spaces in major cities. 

• Tech industry: Demand hybrid-friendly spaces equipped with high-tech amenities that make working in the office attractive to employees.

• Corporations: Corporations looking to relocate headquarters often seek large, low-tax locations with ample square footage. 

• Mid-sized businesses: These companies are usually looking for smaller spaces in office parks near major urban centers where their workforces live. 

• Medical: Medical office space is typically near or adjacent to hospital or medical hubs (which fall under the healthcare asset class in CRE).  

• Life sciences: Technically an asset class of its own, the expanding life sciences sector requires specialized office spaces located in key U.S. cities.