Office REITs Eye Comeback as Workers Return, Data Centers Wobble

What's happening

A cautious optimism is building around office real estate investment trusts as employees increasingly return to physical workplaces, with investors now weighing whether beaten-down office REIT stocks are due for their own recovery 1. That thesis sits alongside a broader reassessment of commercial real estate as an asset class heading into 2026, with one forecast putting total CRE investment at $605 billion for the year, a 16% jump from 2025 despite interest rates remaining elevated 4. At the same time, the sector's hottest corner — data centers — is facing new doubts, as warnings about a potential slowdown in AI spending hit shares of major data center REITs including Digital Realty and Equinix 6. Meanwhile, residential-focused trusts are quietly delivering steadier results, with Canadian Apartment Properties REIT posting gains that outpaced the broader market on at least one trading day, even as it slipped on another 35.

The office story

The idea driving renewed interest in office REITs is straightforward: if workers are physically back at their desks in greater numbers, the demand picture for office space should eventually follow, and investors who fled the sector during the pandemic-era exodus may be looking to re-enter before valuations catch up 1. This is presented as a turning point rather than a settled fact — a bet on a beaten-down segment of the market rather than a confirmed rebound already reflected in fundamentals 1.

The AI wildcard in data centers

Data center REITs have been among the biggest beneficiaries of the AI infrastructure buildout, but that same dependency is now a source of risk. Digital Realty's chief executive pushed back on the idea that any cooling in AI investment would be catastrophic for the business, framing a potential slowdown as manageable rather than existential, even as the stocks of Digital Realty and Equinix dropped on investor anxiety about the durability of AI-driven demand 6. That tension — a sector built on a growth story now facing questions about how long the growth lasts — is a notable counterweight to the optimism elsewhere in commercial real estate.

Apartments and the broader REIT toolkit

On the residential side, Canadian Apartment Properties REIT's stock movements, alternating between an up day and a down day while still beating the market on both occasions, point to a sector benefiting from the broader theme of rising apartment rents even amid daily volatility 35. Separately, general investing guidance on REITs continues to position them as an accessible, lower-cost way for ordinary investors to gain exposure to commercial real estate without buying property directly, spanning office, residential, industrial and other niches 2.

Where the reporting agrees

Across the coverage, there is a consistent picture of commercial real estate as a sector in transition rather than crisis. The office recovery narrative 1, the broader CRE investment growth forecast 4, and the steady performance of apartment REITs 35 all point toward capital cautiously flowing back into real estate after a rough stretch tied to high interest rates and pandemic-driven disruption. There is also agreement, implicit across sources, that REITs remain a primary vehicle for investors to access these trends without direct property ownership 24.

Where it doesn't

The sources diverge sharply on tone when it comes to the sector's most dominant recent growth story: data centers. While the $605 billion investment forecast is framed as broadly bullish for commercial real estate overall 4, the data center-specific reporting reveals real strain, with investor confidence rattled enough to send Digital Realty and Equinix shares lower on AI slowdown fears, even as the companies' own leadership downplays the risk 6. That is a meaningful split: one account treats 2026 as a year of accelerating capital deployment, while another shows a specific, high-profile REIT category already absorbing negative sentiment. The Canadian Apartment Properties items also illustrate a smaller but telling inconsistency — one day's stock rise and the next day's decline are both reported as market outperformance, a reminder that daily trading narratives don't necessarily reflect a clean trend line even when the underlying fundamentals, like rising rents, are positive 35.

The read

Taken together, the evidence supports a bifurcated commercial real estate market rather than a uniform recovery. Office REITs and the residential apartment sector appear to be benefiting from tangible, on-the-ground shifts — people returning to offices and rents climbing — that give investors a reasonable, if still unproven, case for renewed confidence 135. Data centers, by contrast, look like the segment most exposed to sentiment risk, since their growth story depends on continued AI capital spending that even industry executives now feel compelled to defend 6. The $605 billion investment figure suggests money is still moving into the sector at scale 4, but the data center wobble is the clearest sign that not every corner of commercial real estate is being repriced upward with equal conviction.