Published by Wanda Rich
Posted on October 1, 2025
4 min readLast updated: February 26, 2026
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The return to the office signals a cultural shift affecting organizational cohesion, mentorship, and collaboration. At the same time, it’s emerging as a compelling investment story. Rising occupancies, lease momentum, and evolving loan markets suggest that select office properties are regaining valu...
The return to the office signals a cultural shift affecting organizational cohesion, mentorship, and collaboration. At the same time, it’s emerging as a compelling investment story. Rising occupancies, lease momentum, and evolving loan markets suggest that select office properties are regaining value. Edward L. Shugrue III, a CMBS Portfolio Manager and Managing Director at RiverPark Funds, explains what these trends mean both for companies shaping their culture and investors allocating capital.
Shugrue is a seasoned portfolio manager specializing in commercial mortgage securities. He translates market signals into actionable investment strategies, drawing on a unique combination of operational insight and capital markets experience. His background spans CMBS fund management, property ownership, mezzanine finance, and special servicing, providing a comprehensive view of office markets and their implications for investors.
At a broader level, the office market shows signs of divergence. While the national vacancy rate remains elevated, major gateway cities such as New York are experiencing a faster recovery. Improved leasing activity and high-profile investments in New York are driving a rebound in prime assets, even as secondary properties and less central markets continue to face challenges.
Shugrue connects that return-to-office shift directly to the CMBS market. As top-tier leasing and occupancy improve, investor demand for loans secured by premium offices has risen, and new CMBS issuance has accelerated. “Office assets have been a leading CMBS new issuance contributor so far in 2025. In fact, in the past week $2.7 billion of CMBS secured by NYC office properties were issued,” Shugrue observes.
His core insight is that high-quality outperforms. Class A, well-located, amenity-rich, and technologically upgraded office buildings are filling fastest and drawing competitive bids. Meanwhile, older, inefficient Class B and C properties face refinancing challenges or conversion pressure. “New York City office occupancy has rebounded significantly since the pandemic. In fact, when lower-quality buildings are set aside, occupancy levels in prime properties are approaching their pre-pandemic norms,” Shugrue says.
Shugrue frames the return to the office as fundamentally about people, not mere presence. The argument is that in-person time accelerates mentoring, cross-pollination of ideas, and collaboration that are difficult to create remotely. “As a team, we are more productive working together live and in person. The collaboration, synergies, and mentor opportunities are just so much greater. Plus, it’s nice to see the team face-to-face and over a meal. It’s hard to do that on screens,” he remarks.
That human-centered view is consistent with a tactical pivot Shugrue executed during the pandemic. His portfolio rotated into sectors benefiting from secular changes, notably industrial logistics and multifamily housing. With the summer behind us, Shugrue believes there’s a renewed seriousness about in-office norms and dealmaking in the weeks that follow. He adds that his team is “devoting a fair amount of time researching office transactions and is uncovering value,” signaling a research-driven, cautious re-entry into the office market.
New York exemplifies the market’s duality: marquee leasing and high-profile transactions have buoyed sentiment even as residential rents and cost-of-living pressures shape who can afford to live near work. The city’s reopening, amplified by the arrival of a newly completed, multi-million-square-foot bank headquarters on Park Avenue, has helped normalize commuting patterns and clustered demand in the city’s best assets.
Manhattan leasing volumes illustrate the concentration. Leasing activity accelerated in early 2025 with roughly 12 million square feet of new leases signed in the first quarter alone, underscoring how demand is clustering in high-quality cores and leaving peripheral products exposed. At the same time, residential rents have pushed higher, tightening choices for many workers and reinforcing why the best offices, not all offices, are benefiting from the return.
For investors, the implication is that this isn’t a one-line “buy office” trade. It’s a disciplined, property-by-property underwriting exercise that overlays leasing momentum, tenant credit, and physical infrastructure on top of traditional debt analysis.
Overall, the return to the office is both a cultural restoration and an investment theme. Shugrue’s advice is practical. He says, “Track occupancy trends, monitor CMBS issuance and delinquencies, and underwrite the operational features that enable modern collaboration. Granular analysis will separate winners from laggards.”
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