Callahan Capital Partners - Office Real Estate Digest

7/31/2025

Callahan Capital Partners is a real estate private equity firm and operator focused exclusively on the origination, acquisition and management of high quality office assets in select urban markets throughout the United States.

Here's a glimpse into what we are reading to shape our view on the evolving office market.

“Our best estimate is that by 2027, we’re effectively going to be out of prime trophy space in the market, which leads us to say, ‘Well, what’s next?’

Real estate executives from Avison Young, CBRE, and Granite Properties who spoke at the Real Estate Journalism Conference commented on the discrepancy between overall office vacancy and Prime office vacancy, which has been trending much lower. Read more here.

“54% of employees at Fortune 100 companies are under five-day office requirements as of this month [July], compared to 41% for hybrid work policies ….That represents a sizable shift from the same month last year, when JLL found that 11% of employees at those companies were under full time in-person requirements and 83% were under hybrid work.”

Per research from JLL, the shift towards more workplace flexibility has lost momentum and corporate policies have shown signs of swinging back to an in-office culture. As the larger firms (JP Morgan, Amazon, Walmart) announce a 5 day in-office policy, other firms, large and small are taking note and also increasing in office requirements.

Charts We Are Talking About

Per Kastle, Class A+ assets are up to mid-to-high 90% occupancy this summer on peak day (Tuesday), and broadly high 70% occupancy as a weekly average. This is a drastic increase from the Kastle 10-City barometer that incorporates all office classes, which is further evidence of the distinction in performance of highest quality office as compared to the asset class more broadly.

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