The Top 10 Office Sectors in Commercial Real Estate to Watch in 2025

SKIP AHEAD TO

• Flexible & Hybrid Workspaces
• Life Sciences & Biotech Offices
• Medical Office Buildings 
• Government & Public Sector Offices
• Financial & Legal Sector Offices
• Tech Hubs & AI-Focused Offices
• Sustainability & Green Buildings
• Corporate Headquarters & HQ Relocations
• Legal Cannabis Industry Offices
• Suburban Office Parks & Satellite Offices

The office sector in commercial real estate (CRE) is undergoing significant transformation, influenced by evolving work models, economic shifts, and technological advancements. As we move into 2025, certain office sectors are poised for growth, offering unique opportunities for investors, developers, and occupiers. CompStak’s real-time lease comps and market intelligence provide valuable insights into the changing dynamics of office space demand. Here are the top 10 office sectors to watch this year.

1. Flexible & Hybrid Workspaces

With hybrid work now a mainstay, flexible office spaces continue to be in high demand. Companies are seeking adaptable lease structures that allow them to scale up or down as needed. CompStak’s data reveals trends in leasing activity for co-working and flex office providers.

2. Life Sciences & Biotech Offices

The life sciences sector is expanding, driving demand for specialized office and lab space in key markets like Boston, San Diego, and the Research Triangle. Investors are focusing on properties equipped for research, testing, and development. CompStak’s leasing comps highlight market shifts in this fast-growing niche.

CompStak’s recent Q4 office market report revealed that in 2024, the rate of growth in average starting rents for life science office space, compared to Q4 2019 levels, slowed for three straight quarters. The highest point for starting rents was reached in Q4 2021, with a 46.7% increase over Q4 2019 levels. By the end of 2024, the average starting rent for life science office space was $61.68 per square foot, a 19.1% decrease from the 2021 peak of $76.22 per square foot.

3. Medical Office Buildings 

An aging population and increased healthcare spending are fueling growth in medical office real estate. Demand remains high for properties near hospitals and residential areas. CompStak’s CRE transaction data helps investors assess market trends in MOB leasing and sales.

4. Government & Public Sector Offices

Despite remote work trends, government agencies have historically required secure, long-term office space. Federal and local government leases have previously been a source of stability.

However, the GSA (Government Services Administration) has been focused in the past few years on reducing the government’s leased and owned real estate. DOGE is greatly accelerating this trend in 2025 by reducing federal agencies’ headcounts and canceling leases across the nation. Still, the impact is expected to be most detrimental to the Washington D.C. market. According to CompStak’s latest office market report, the average lease term for government office deals increased year-over-year, but other industries saw even faster growth, narrowing the gap. In 2024, government leases were only 7.5% longer than the market average for other industries, down from 14.5% in 2023. In addition, 2027 is a peak year with more than one-third of all leases expiring within the government sector in another potential warning sign for the Washington D.C., market as DOGE evaluates the federal government’s leased and owned real estate footprint.

CompStak’s platform offers insights into government office leasing patterns and rental rate benchmarks.

5. Financial & Legal Sector Offices

The financial and legal industries continue to favor high-end office spaces in central business districts (CBDs), despite shifts toward remote work. Many firms are consolidating their footprints while maintaining prestigious locations. CompStak’s lease comps help track rental trends in premium office markets.

6. Tech Hubs & AI-Focused Offices

The tech industry is evolving, with AI-driven companies driving demand for office space in key innovation hubs. Markets like Silicon Valley, San Francisco,  Austin, and Seattle are experiencing fluctuating leasing trends. CompStak’s market analytics provide real-time data on leasing activity in tech-heavy cities.

AI’s impact on office leasing is evident in the Bay Area and San Francisco markets. As of 2024, AI-related tenants have steadily increased their share of total office leasing by square footage for the second consecutive year, accounting for 15% of all leasing activity in the market.

7. Sustainability & Green Buildings

Environmental concerns and ESG initiatives are pushing companies to seek LEED-certified and energy-efficient office buildings. Landlords investing in sustainable upgrades are gaining a competitive edge. CompStak’s data helps investors identify top-performing sustainable office assets.

8. Corporate Headquarters & HQ Relocations

Major corporations continue to reassess their headquarters strategy, with some opting to relocate to business-friendly states. Sunbelt markets have seen an influx of new headquarters projects. CompStak’s CRE insights track corporate relocation trends and their impact on office demand.

In the New York City market, private equity firm Atairos signed a top deal for 21,450 square feet, and at one of the highest starting rents of Q4 2024, relocating from 620 Fifth Avenue to Park Avenue’s Lever House. The deal’s starting rent of $220 per square foot exceeded the Q4 2024 market average of $87.50 per square foot for new leases and expansions by 151.4%, according to CompStak data.

In another relocation, Elliot Management relocated from 40 West 57th Street where it had occupied space across six unconnected floors to 280 Park Avenue. The firm signed a multi-part deal that included a sublease for 126,516 square feet from Franklin Templeton running through November 2031. Elliot Management also signed a subsequent direct lease with landlords Vornado Realty Trust, Broadway Partners, and SL Green Realty Corp. for the same space through March 2037. Additionally, Elliott Management signed an expansion of 22,931 square feet also at 280 Park Avenue that runs through December 2036.

9. Legal Cannabis Industry Offices

With more states legalizing cannabis, there is increasing demand for office space serving this industry, from administrative functions to compliance operations. Markets with evolving cannabis regulations are seeing growth in this niche office sector. CompStak’s data tracks emerging trends in cannabis-related office leasing.

10. Suburban Office Parks & Satellite Offices

The shift away from dense urban centers has led to a resurgence in suburban office parks, offering employees a balance between remote and in-office work. Employers are investing in smaller satellite offices closer to where employees live. CompStak’s lease data provides insights into suburban office leasing trends.

In CompStak’s 2024 office market report, major markets were separated into urban/CBD vs. suburban areas for ranked by levels of recovery in effective rents by Class A and B/C space. Overall, CompStak’s data revealed that suburban areas outperformed CBD/urban areas in recovery, with 9 markets/building classes in recovery compared to just 5 for CBD/urban. The Philadelphia market (including parts of Pennsylvania, Delaware, and South Jersey), Phoenix, and Atlanta were all identified as having suburban areas in strong recovery, topping the list. In contrast, Boston and the San Francisco Bay Area ranked at the bottom, with both Class A and B/C space continuing to decline as of year-end 2024.

Final Thoughts

As the office sector continues to evolve in 2025, staying ahead of market shifts is critical for making informed investment and leasing decisions. By leveraging real-time market intelligence and CRE data, industry professionals can navigate the changing office landscape with confidence. CompStak’s data-driven insights help brokers, investors, and tenants understand office leasing trends and opportunities.

Want to dive deeper into office market trends? Explore CompStak’s platform for the latest commercial real estate insights and analytics.