A weekday research note on U.S. commercial real estate.

The widening CBD/suburban office spread, and what the blended print is concealing.

The headline U.S. office cap rate moved 18 bps last quarter. Trophy CBD moved 4 bps. Value-add suburban moved 64 bps. Treating either as a comp for the other is now a screening error, not a methodology choice.

The blended U.S. office cap rate published by the major transaction-based indices in Q1 2026 came in at 8.10%, up from 7.92% the prior quarter. That print is doing two things at once, and the average is hiding both of them.

Trophy CBD — the cohort trading with credit tenancy and a refinancing or recapitalization within the past 24 months — transacted at a sample-weighted 6.40%. Value-add suburban, where the bid is thin and the comps include forced sales and recapitalizations, transacted at 9.85%. The 345-bps spread between the two is the widest in the series since 2012, and it widened 60 bps in the most recent quarter alone.

Three things follow for acquisitions teams:

One, screening processes that anchor on the blended print are mispricing both ends. A trophy bid backed off the blended cap is too soft; a value-add bid backed off the blended cap is too aggressive. The bifurcation requires two separate screening models, not one with a credit overlay.

Two, the “office is uninvestable” narrative and the “office is mispriced cheap” narrative are both correct — for different cohorts. The Q1 print does not adjudicate between them.

Three, the 345-bps spread makes cross-cohort comparables operationally unreliable. A cap rate observed on a CBD trophy transaction is not a comp for a suburban value-add acquisition — even with a manual credit overlay applied. The directional error is no longer within rounding tolerance. Require cohort specification before accepting any external cap rate reference.

This is a representative sample issue. Full briefings — one per U.S. weekday morning — are open access with subscription.