by: Raisa Sarkisyan

Over the past few years, the U.S. commercial real estate market has undergone a seismic shift, none more dramatically than in the office sector. Once the bedrock of institutional portfolios, office assets have faced steep headwinds in the post-COVID landscape: hybrid work trends, elevated vacancies, pricing uncertainty, and lender pullback have forced market participants to re-evaluate what makes an office deal viable.

Yet amid this turbulence, interest in office is quietly resurfacing. Opportunistic investors are re-entering the conversation, not because the storm has passed, but because they know this is when real value can be created. And Lever Capital Partners is uniquely positioned to help these investors navigate that complexity.

The Office Reset: Post-COVID Challenges and Shifting Fundamentals

The pandemic introduced lasting behavioral and structural changes. Remote and hybrid work models remain sticky, pushing vacancy rates to historic highs in many core markets. As of Q2 2025, the national office vacancy rate is approximately 19.4%, up from 12.3% pre-COVID. In key markets like San Francisco, vacancy rates have reached 28.4%, and Chicago is hovering around 25.1%.

These pressures have translated into steep value declines. Office pricing is down 35–40% from 2019 peaks, and transaction volume has dropped sharply, over 60% below pre-pandemic averages in the first half of 2025. Investor hesitation is widespread, but so is opportunity: distressed pricing, low competition, and creative repositioning strategies have made this a compelling moment for experienced capital to step in.

Why Debt Is Leading the Way

In today’s market, debt is taking the lead. With equity investors more hesitant, and valuation uncertainty driving caution, debt strategies offer greater flexibility and lower risk exposure. This has coincided with a sharp pullback from traditional lenders: CRE lending volume among banks has declined nearly 40% since 2022, and many have placed office loans in a “watch” or restricted category.

As a result, the lending landscape has shifted. Non-bank lenders now account for roughly 66% of all non-agency CRE originations, including 26% from CMBS conduits, 21% from life companies, and 19% from private credit and debt funds. Borrowers face a more fragmented and opaque market, where execution hinges on aligning with the right capital at the right time.

Lever’s Role: Capital Clarity in a Complex Market

This is where Lever Capital Partners brings outsized value. As an advisor that works across the capital stack, not as a direct lender, Lever can identify and structure financing solutions that meet the evolving needs of each sponsor and asset. That might mean sourcing bridge-to-repositioning loans, arranging preferred equity in recapitalizations, or packaging bespoke capital stacks for non-core office acquisitions.

In a market where office deals require nuance, creativity, and speed, Lever’s deep network of capital providers gives sponsors a competitive advantage.

Market Outlook: A Window for the Bold

Looking ahead, the opportunity set continues to grow. Over $80 billion in U.S. office loans are maturing over the next 18 months, many on assets worth less than their current loan balance. This wave of maturities coupled with elevated interest rates and constrained refinancing options is leading to increased distress, recapitalizations, and discounted sales.

For sponsors willing to take a long-term view, particularly on value-add or repositioning plays, the dislocation presents a rare entry point. Lever is already helping clients capitalize on this window by delivering clarity, creativity, and capital when it’s needed most.

Conclusion: Redefining the Future of Office Finance

As the office sector continues to recalibrate, one truth is clear: creativity will define the next cycle of winners. While banks retrench and others wait on the sidelines, Lever Capital Partners is helping investors move forward with confidence.

By thinking beyond traditional financing and embracing the full spectrum of the capital markets, Lever is shaping what the next generation of office deals will look like, one capital stack at a time. Position your office deal for success, reach out to Lever Capital Partners today.