Across the U.S., a surprising trend is taking shape in the office real estate sector: companies that once signed long-term leases are now signing purchase agreements. Fueled by sharply reduced building prices, attractive financing options, and the desire for stability, a growing number of office tenants are becoming office owners.
New data from JLL reveals that owner-occupier purchases accounted for 20% of all U.S. office sales in Q1 2025 a sharp increase from 15% in 2024 and a massive leap compared to pre-pandemic levels, when the figure rarely topped 8% annually.
“User acquisitions are expected to remain a major force in the office market through 2025,” says Mike McDonald, Senior Managing Director at JLL.
📉 Falling Prices Create Big Opportunities
One of the most striking examples of this shift is Los Angeles County’s acquisition of the Gas Company Tower in 2024. Once valued at $632 million, the property was purchased for just $200 million less than a third of its peak value after falling into receivership. The distressed sale followed a Brookfield-managed fund’s decision not to refinance a $784 million loan tied to the property.
For the county, buying wasn’t just a bargain it was a long-term cost-saving move.
“It would’ve cost the county $1,500 a foot and years to rebuild its outdated, seismically vulnerable office spaces,” explains Carl Muhlstein, founder of Muhlstein CRE. “Instead, they bought a tower for less than $200 a foot that just needs some upgrades.”
Why Tenants Are Choosing to Own
JLL identifies three key forces driving the move from leasing to ownership:
- Lower Sale Prices – Post-pandemic market resets have created unprecedented buying opportunities.
- Clearer Space Needs – Companies now have a better grasp of long-term occupancy requirements, making ownership less risky.
- Access to Cheaper Capital – Some buyers, especially governments and institutions, can tap into low corporate lending rates or issue municipal bonds financing tools typically unavailable to private investors.
For buyers, ownership comes with several financial and strategic perks:
- Cost Control: Owners can avoid the unpredictability of future rent hikes.
- Customization: Full control over renovations and space design.
- Tax Advantages: Lower assessed values after purchase reduce property taxes, and customized buildouts can be depreciated over 35 years instead of five to 10 improving long-term financial performance.
A Broader Range of Buyers
While the earliest adopters of this strategy were tech companies, the trend has now spread to governments, healthcare providers, and educational institutions. In Reno, Nevada, over half of all 2024 office transactions were small-scale owner-occupier deals many serving medical or technical purposes.
🔄 A Win-Win for Sellers, Too
For landlords struggling in the current market, selling directly to tenants can be a strategic way to recoup value.
“Selling to tenants is an avenue right now, because they already know the property and are often financially stronger than the developer,” notes Muhlstein.
📅 The Outlook for 2025
While buying an office building comes with more complexity than signing a lease especially for companies unfamiliar with property management JLL expects the owner-occupier segment to remain a powerful force in the market for the remainder of 2025.
With prices still below pre-pandemic highs and financing conditions favorable for certain buyers, the shift from renting to owning could become one of the defining trends of the post-pandemic office market. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.
