Beyond Hybrid: the quality gap splitting the office market

While the top of the market is operating close to full occupancy, a relevant portion of the stock remains disconnected from the new corporate demand.

Renato Franklin, CEO of Casas Bahia, tenant responsible for the largest absorption in Q1 2025 in a top-tier asset

By: SiiLA News

01/06/2026

The corporate office market has been confirming a transformation that goes beyond the debate around in-person or remote work. The sector is now operating—more clearly than ever—at two different speeds.

On one side, ultra-premium buildings (A+ and A), located in primary submarkets, are posting low vacancy (15.09%), record prices, and higher liquidity. On the other, Class B assets face increasing occupancy challenges, pressured by technical obsolescence and declining competitiveness.

This movement reflects a shift in occupier behavior. Offices are no longer just operational hubs—they have become instruments for talent attraction, productivity, and institutional positioning.

Value and demand concentrated at the top of the market

The preference for higher-quality assets is not only related to aesthetics. Large floor plates, better layout efficiency, modern HVAC systems, ESG certifications, higher ceiling heights, and robust technological infrastructure have become prerequisites for technology companies, financial institutions, and large law firms.

In São Paulo’s main corporate corridors—such as Faria Lima—the combination of limited new supply and qualified demand has supported a new appreciation cycle. Up to Q3 2025, according to the Market Analytics platform, the market value for A+ offices in these regions reached R$ 143.62/m², an increase of 29.54% compared to 2020, which closed the year at R$ 110.95/m².

Chart illustrating the growth of market value for high-end assets (A+ and A) in prime regions of São Paulo

The scenario is more modest for Class B buildings, where the naturally lower market value grew 20.45% from 2020 to 2025, currently standing at R$ 87.29.

Chart showing the difference in net absorption between high-end (A+ and A) and Class B assets in São Paulo’s prime regions

When looking at net absorption, the discrepancy in both growth and consistency between the classes also becomes evident. The contrast peaks in 2022, the year with the largest gap: the high-end segment recorded approximately 135.5 thousand m² of net absorption, while Class B closed the period with only 19.5 thousand m².

Retrofit or permanent loss of value

For owners of obsolete buildings, the current scenario demands a strategic decision. Without retrofit investments, the trend is continued devaluation and an increased risk of the asset becoming financially inefficient. The cost of upgrading to modern standards of thermal efficiency and connectivity is high, but 2025 data suggests this is the only path to prevent the property from turning into a financial liability.

The office market is not shrinking; it is transforming. The success metric for 2026 and beyond will not be simply the number of square meters leased, but the asset’s resilience in maintaining technical and geographic relevance in an environment of extreme selectivity.

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