How Service Providers Can Win Work From the Office ‘Flight to Quality’

A common trend highlighted in the CRE office space market involves amenity-rich, newer renovated spaces that are pulling demand away from aging, out-of-date office designs. This trend represents an opportunity for service providers and subcontractors, as property owners are spending more on remodeling or repositioning their offices into modern types of office spaces.

Office repositioning presents growth opportunities for vendors and service providers, such as:

• Proptech companies, such as IT and telecommunications

• Construction companies and subcontractors 

• Commercial painting companies

• Solar companies

• HVAC companies

• Commercial landscape companies

Owners and investors face added pressure to get their properties earning again amidst the tenant “flight to quality”: Avison Young’s Q1 2026 US office report states that the flight-to-quality trend remains strong nationwide, with Class B/C leasing share continuing to shrink year over year while trophy and Class A assets expand their share across major markets. 

What is Real Estate Repositioning?

Repositioning in commercial real estate is focused on reworking and remodeling underperforming, aging properties into more profitable, attractive spaces for tenants or buyers. Repositioning fits under four key areas.

Physical upgrades to enhance a CRE property’s usability

In the office CRE asset class, physical upgrades might include renovations to the property’s flooring, lighting, amenities, finishes, and other physical changes that improve its use, functionality, and value. Besides updating a building’s usefulness, physical upgrades also make the property attractive to modern companies. Examples include: 

• Sustainability upgrades like energy-efficient or natural lighting, efficient HVAC systems and solar panels.

• Remodeling work areas to have a balance of open collaborative spaces and quiet, closed focus spaces. 

Operational shifts to accommodate modern businesses

An operational shift happens when building management transitions its pricing and leasing structure to be more adaptive to modern businesses. Examples of the shift among types of office spaces include:

• Shifting operation from traditional office space to a coworking space where startups, entrepreneurs, and small businesses can rent out modular spaces on a short-term lease. 

• Creating an adaptive hybrid office space that focuses on hybrid work models. These spaces mix office and social spaces in a footprint that’s smaller than the company’s total headcount would require. 

Rebranding buildings under new names

Older office buildings carry the baggage of perceptions from old management or poor tenant experiences. Rebranding an office building under a new name, management company, or identity is a valid strategy for repositioning the office space as a whole. An example is an office space changing its name and property management company to reset its poor reputation. 

Adaptive reuse

Adaptive reuse involves taking older buildings in one asset class and transforming them into completely different asset classes. While adaptive reuse is not technically repositioning, it involves repurposing outdated space — this distinction especially matters when it comes to zoning. Regardless, for vendors and service providers, CRE companies that perform adaptive reuse present lucrative opportunities. Examples include:

• Converting an unused warehouse space to a mixed-use office and retail space in a developing metropolitan area. 

• Adapting older department stores to hybrid or coworking spaces, especially those attached to malls or major shopping centers. 

What is the Difference Between Repositioning and Repurposing?

Property repositioning focuses on the strategy of a building’s physicality, management, and design to meet current market demands under its original purpose. Repurposing involves completely shifting an asset class and function of a property. Repositioning strategy identifies the elements of an underperforming property that need to be revitalized or remodeled. Repurposing strategy requires much more research into what asset class shift would align with the geographical location and while also factoring in the rezoning process.

Why Do CRE Owners Reposition Properties?

CRE owners reposition properties so they keep generating revenue. Market shifts, like office flight to quality, can trigger property repositioning. But the main goal is preserving and growing property value, which is why a CRE owner or investor needs vendors with real estate repositioning expertise.

JLL research reported finding that spaces that have been repositioned to have wider uses can transform underutilized properties into something accessible, both privately and publicly. They also found that flexible properties are better positioned to meet current and future emerging market trends.

The SyndicationPro definition of property repositioning refers to competitive positioning as a motivation. Renovations or upgrades to obsolete, outdated, or aging buildings are sometimes necessary for a property to compete in the current market. 

Repositioning distressed properties extends beyond financial benefits for the investors, according to Forbes Business. They point to economic revitalization, environmental benefits from reusing existing structures instead of building new, and a ripple effect on surrounding property values. A reimagined building attracts further investment in the neighboring areas. 

What Does Repositioning Look Like Across Asset Classes?

Here are three examples of what repositioning might look like across asset classes. 

In multifamily assets, repositioning can involve new management, branding, and remodeling of individual units. Repositioning maximizes the value of these properties.

Example: Vercanta in Newport Beach, California, a renovation project that added a new fitness center, pool, dog park, and leasing office alongside full unit upgrades, taking the community from one of the worst-performing multifamily properties in the area to one of the best-performing. 

For offices, repositioning means making working spaces more attractive for potential tenants. This often includes converting offices to mixed-use spaces with restaurant and retail spaces. Older offices also feature less efficient HVAC and sustainability features that are overhauled when repositioning. Example: 600 Fifth Class-A office space with 20,000 sqft of ground floor retail. This property is designed with modern amenities and plenty of fresh air and natural lighting. 

Retail spaces face pressure to modernize older, outdated mall designs into flexible indoor/outdoor retail and social spaces. Example: Topanga Social, a retail transformation of the Westfield Topanga Center to incorporate more food and beverage options in a modern space. 

Where Are Owners Spending Money on Repositioning?

As owners focus on maximizing the value of their properties, they concentrate spending in three areas. 

Repositioning projects

Owners of aging, outdated buildings trying to stay competitive within their asset class focus spending in:

• Building design and layout

• Remodeling lobby spaces

• HVAC systems

• Building amenities

• Property management

• Outdoor landscaping

• Building facades

• Sustainability (solar, wind, etc.)

• Smart building technology (access control, IoT sensors, energy management systems, etc.)

Spec suites and TI buildouts

Move-in-ready offices customized for the needs of a customer can give a space a competitive, targeted edge. Spending for spec suites and tenant improvement build-outs includes:

• Interior fixtures (walls, doors, flooring, paint, etc.)

• Plumbing

• Electrical and network infrastructure

• Lighting

• Countertops and break spaces

• HVAC

Conversions and redevelopment

Investors may be interested in purchasing outdated or undervalued property and converting or redeveloping it into a more valuable asset. Spending for conversions and redevelopment includes:

• Architecture and planning services

• Construction

• HVAC

• Landscaping

• Budgeting and on-site management

• Project management

• Demolition services

How Can Service Providers Find Office Owners Who Are Spending?

For vendors, identifying office owners repositioning their properties comes down to searching for characteristics matching your goals. The Biscred platform comes with plenty of commercial real estate filters so that you can search for owners relevant to your expertise.

Biscred includes industry filters to search specifically for property owners, REITs, real estate investment firms, property management companies, and developers. Additionally, you can add geographic filtering to focus on cities and urban hubs where there’s the most repositioning activity. Although you can filter by just the office asset class, there are plenty of asset class filters to find companies and contacts with expertise in other areas. 

Learn more about how Biscred helps service providers find property owners spending on repositioning by scheduling a demo with us today.