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Investor Sentiment Improves, Even For Class B and C Offices

May 20, 2026, 10:24 AM by Matt Mowell

By: Matt Mowell and Tyler Deckard

Investors are beginning to look a bit more favorably on the office sector, even long-shunned Class B and C commodity space.

We can see this in CBRE’s biannual Cap Rate Survey (CRS)1, which provides insight into office property yields. Figure 1 shows Class B and C properties with an estimated cap rate of 10% or more. Each block represents a unique market (geographic market x submarket type x risk profile x class).

After peaking at 74% in H2 2024, the percentage of Class B and C properties with double-digit cap rates declined modestly in the two CRS surveys conducted in 2025. While it’s concerning that more than 70% of Class B and C properties still have double-digit cap rates, increased capital markets activity is enabling office valuations to find a floor, even for marginal assets. This trend is being helped along by office properties that are sold for demolition or conversion.

1 The CRS asks CBRE capital markets and valuation professionals to estimate office yields by market, submarket type, risk profile and class across 36 geographic markets.

cotmapril2026

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