Owner-occupier deals are gaining momentum in the U.S. in response to falling property values, tighter capital, and a broader economic downturn. Tenants who had been leasing office space are now looking to buy a building outright—at reduced prices and favorable terms—to reap the long-term benefits of property ownership.
According to JLL, these types of acquisitions accounted for 20 percent of total U.S. office sales in the first quarter of 2025—up from 15 percent for all of 2024, Before the pandemic it was only eight percent or less annually.
“With this year’s owner-occupier transaction volume already above 2024’s total, user acquisitions are expected to remain a major force in the office market through 2025,” says Mike McDonald, senior managing director at JLL.
Case in point: Los Angeles County’s recent acquisition of the Gas Company Tower in downtown L.A. At the time, the county had been exploring alternatives to costly seismic retrofits on its leased properties, and the newer, more modern Gas Company Tower offered a cheaper option. The opportunity came about after a Brookfield-managed fund chose not to extend its $784 million loan tied to the tower and another office building. The property then went into receivership in 2023 and was sold at auction in 2024. The county closed in December after paying a neat $200 million for the trophy building—less than a third of its $632 million value just four years ago.
Since the modern high-rise requires relatively less retrofitting than the aging leased spaces, L.A. County’s transition from renter to owner will potentially save hundreds of millions of dollars over the long term.
Muhlstein, a top L.A. broker who recently started his own advisory firm, Muhlstein CRE.
“It would’ve cost the county $1,500 a foot and years to rebuild its outdated, seismically vulnerable office spaces,” says Carl Muhlstein, a top L.A. broker who recently started his own advisory firm, Muhlstein CRE. “Instead, they bought a tower for less than $200 a foot that needs some work, but how do you argue with that these days?”
Why owner-occupier deals are proliferating now
JLL, which manages about 1 billion square feet (93 million sq m) of office space across the U.S., saw a 76 percent increase in bid activity from tenants in 2024 compared to 2023, according to McDonald.
For some organizations, particularly those with stable growth or specific operational needs, ownership is becoming a preferred strategy. It helps tenants gain control, optimize their environment, and secure their long-term presence in a market.
McDonald says three main factors are driving the surge. First, there has been a significant basis reset in the office universe, with most office buildings across the country selling for prices below replacement cost.
Second, tenants and users now have better visibility into their space requirements and growth needs, giving them more confidence to make long-term real estate commitments. On the flip side, for traditional property investors seeking tenants, it remains much harder to anticipate a customer’s space requirements, as many companies are still navigating their evolving work setups and adapting to hybrid or remote work models.
Lastly, with current market dynamics, tenants can obtain capital at corporate lending rates, which are significantly lower than those available to traditional investors. Organizations also can take advantage of more creative financing strategies—such as municipal bonds or balance sheet acquisitions—not typically available to investors.
Moreover, tenants often have strong, long-standing relationships with their banks, which may hold large deposits or run a company’s payroll. As a result, banks may be more willing to lend to occupier-owners than to investors. Some organizations have been able to leverage their bank relationships to secure more favorable, long-term financing—such as 20-to-25-year loans, compared to the five- or 10-year financing that investors typically receive.
“Users’ deep insight into their own space needs and growth potential allows them to secure long-term financing at a much lower cost of capital,” McDonald says.
Who are the tenants buying buildings?
Between 2015 and 2019, major tech companies accounted for most of the building acquisitions made by tenants. That activity, however, has largely subsided since the COVID pandemic. McDonald says that while some corporate users are returning to the office acquisition market, a new wave of buyers has also emerged, including counties, cities, state governments, and users from the education and healthcare sectors.
For example, Landmark Properties, an Athens, Georgia-based student housing developer, recently acquired an Atlanta office space for $80 million, with plans to relocate some of its employees to the new building and “lay the foundation for future corporate expansion,” according to a statement by Landmark CEO and Chairman Wes Rogers.
Although it is a smaller office market, Reno, Nevada, has also registered notable activity when it comes to user acquisitions. Last year, more than half of the 65 office sales closed in the city were owner-occupier deals, concentrated in smaller spaces ranging from 2,500 to 7,500 square feet (230 to 700 sq m). These deals frequently involved medical services or companies in construction and technical trades.
For tenants, ownership is a long-term value play
While tenant-buyers may enjoy “Black Friday” discount opportunities in the market, they are ultimately making these purchases with the strategic, long-term benefits of ownership in mind. Among these benefits are long-term cost stability, the chance to build equity, significant tax advantages, and greater control over space customization.
As Muhlstein explains, ownership offers a buffer from rent fluctuations, especially in core markets like Los Angeles.
Additionally, those with costly, customized buildouts often prefer to invest in ownership instead of repeatedly upgrading leased space.
“As a tenant, you write off your improvements over five or 10 years,” Muhlstein says. “But as an owner, you depreciate them over roughly 35 years, making ownership more favorable on the balance sheet.”
Another major incentive for tenant-buyers is the immediate reset of property taxes. Leasers often pay higher property taxes based on pre-pandemic property values. However, if a tenant purchases a building, the property is reassessed at the new, lower purchase price, which also results in lower property taxes.
“If a building once sold for $1,000 per square foot and is now bought for $500 or $600 per square foot, the annual property taxes are cut in half immediately,” Muhlstein says.
A complex solution for landlords
As the office market struggles to reinvent itself in the post-pandemic economy, many landlords are facing the financial burden of upgrading their properties to attract and hold tenants. Owner-occupier deals offer an attractive option to mitigate some of those expenses.
“Selling to tenants is an avenue right now, because [tenants] know the property and are financially much stronger than the developer,” Muhlstein says. “It’s not a complete win, but it’s a smaller loss relative to other options.”
Additionally, selling to occupiers can be easier, as they are already familiar with the building and space, and don’t need convincing of its value.
“They’re in the building,” Muhlstein says. “You don’t need a coffee table book in New York telling the story from scratch and seeing if you could get an institutional investor’s attention.”
The challenge, according to JLL’s McDonald, is that while tenants know their space, they are less familiar with real estate and what it takes to close a deal.
With investors, the process is typically well-defined: approval times, return expectations, and deal evaluations are all clear. But with users, McDonald says, “you throw all that out the window.” Brokers and sellers must spend more time educating this type of buyer and guiding them through the deal process.
“So, there’s a little bit more hand-holding on our side, which can be advantageous to our clients,” McDonald says, “but it does require more work.”
