Corporate return-to-office mandates and the practical economics of rent constraints are quietly building a case for secondary office stock that the market has largely dismissed since the pandemic. For much of the past five years, the consensus on office real estate, particularly B and C class buildings, has been straightforward: oversupplied, structurally impaired, and unlikely to recover in any meaningful timeframe. Conversion to residential use has been widely discussed as the most realistic exit for distressed secondary stock. But that consensus may be running ahead of what the market is actually doing, according to Lisa Knee, Managing Partner and National Real Estate Practice Leader at EisnerAmper.
Knee argues that the office is following a pattern she has observed across other asset classes that were written off prematurely, and that the conditions for a gradual but real recovery in B and C class space are beginning to take shape. She points to retail and multifamily as sectors that went through similar periods of deep skepticism before demand eventually returned. “It happened to retail, it happened to multifamily,” Knee says. “I think we’re going to see some movement back into the office.”
The most visible driver of Knee’s thesis is the broad reversal among major technology companies in their remote-work policies. Firms that spent 2020 and 2021 announcing permanent work-from-home arrangements have, in many cases, moved to mandatory in-office requirements, a trend Knee says is now spreading across industries beyond tech.
“Think about all the big tech companies that came back originally right after Covid and said everyone can work from home, and now they’re like, everyone needs to come into the office,” she says.
Knee also points to a less-discussed factor: employee demand for workplace connection. She argues that the return to office is not purely a top-down corporate mandate but reflects a genuine change in how workers experience remote and hybrid arrangements after several years of practice. That combination, employer mandates and employee preference, creates a more durable demand signal than either factor alone would suggest.
San Francisco offers what Knee considers a useful case study. She says she argued publicly roughly 18 months ago that the San Francisco office would recover, a position that was not widely shared at the time. The subsequent rebound in that market, driven by AI company expansion and the concentration of technical talent, supports her broader argument that office demand can return in ways that are difficult to predict from a position of maximum pessimism.
Knee draws a clear distinction between different segments of the office market. Class A trophy buildings in top-tier markets, she argues, have already recovered; they are attracting debt, equity, and tenants, and the distress narrative no longer applies to them. The more contested question is what happens to the secondary stock that has been struggling most visibly.
Her argument is that B- and C-class buildings have a structural advantage often overlooked in the recovery conversation: affordability. Companies with rent constraints, a category that includes a significant portion of the tenant universe, need space they can actually afford, and B- and C-class buildings provide that. As Class A space fills up and commands premium rents, cost-conscious tenants are likely to look downmarket for workable alternatives.
“The A’s are fully occupied, and we know that the lower end, because of the lower rents needed, those B’s and C’s are going to start refilling themselves over time,” Knee says. This is not a prediction of a dramatic or rapid recovery. Knee frames it as a gradual process driven by practical economics and the natural progression of market cycles, not a sudden reversal of the structural challenges that have weighed on office since 2020. The timeline she suggests is measured in years, not quarters.
EisnerAmper’s real estate practice advises owners, operators, and investors across all commercial real estate sectors on cash flow planning and asset positioning over three- to seven-year horizons. Other advisory and accounting firms serve similar clients in the commercial real estate space, but Knee says EisnerAmper’s approach centers on avoiding blanket dismissals of asset classes based on pessimism about cycle peaks. Instead, the firm focuses on sub-sectors and local market dynamics that determine actual performance.
That means stress-testing assumptions at the local level rather than relying on national averages, whether the asset class is multifamily, retail, or office. “There are always sub-sectors within each of these classes and regions,” Knee says, “and so doing that really good underwriting and looking to make sure that rent growth assumptions are reflecting what’s going on locally” is essential.
The firm’s upcoming mid-year report, produced in partnership with commercial real estate data provider Trepp, is expected to address the broader commercial real estate landscape, including office market dynamics.
For investors and lenders who have categorically avoided office exposure, Knee’s position suggests that a more nuanced re-evaluation of secondary stock may be warranted, particularly in markets where return-to-office momentum is strongest, and Class A vacancy is tightening. The recovery she describes is not the kind that generates headlines overnight, but rather the kind that rewards early movers who recognize the gap between prevailing sentiment and on-the-ground demand. If her reading of the cycle is correct, waiting for consensus may mean arriving too late.
About the Expert: Lisa Knee is the Managing Partner and National Real Estate Practice Leader at EisnerAmper, where she advises owners, operators, and investors across commercial real estate sectors.
This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.
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