Prime European office: a quiet repricing.

The narrative on European office is wrong in its generality. Vacancy rates are genuinely elevated, transaction volumes are down, and secondary stock is structurally impaired. But "office" is not a single asset class — and the flight to quality inside it is one of the sharpest capital movements of the decade.

Grade-A buildings in tier-one locations with strong ESG credentials are leasing at or above peak rents. Everything below that is compounding discount. The bid-ask spread on truly prime stock has compressed to normal levels; the spread on the rest has not even begun to converge. This is a two-speed market that average-of-market analytics miss.

The instruction to buyers is to accept that capital will not be rewarded for courage broadly applied. It will be rewarded for discipline: refuse the tempting yield on grade-B, underwrite the real retrofit cost to taxonomy alignment on anything older than 2015, and pay for the few assets that do not need the cycle to turn. That is the opportunity that is quietly opening.