City Office REIT’s take-private transaction marks another step in the quiet retreat of office assets from public markets. The deal is not a bullish call on office demand; it is a recognition that public pricing mechanisms are incompatible with long-duration real estate repositioning.

Public REIT investors demand liquidity, transparency, and near-term stabilization. Office portfolios offer none of those today. Lease roll-downs, tenant downsizing, and capex-heavy repositioning require time horizons that public markets penalize daily through stock price volatility. The result has been persistent NAV discounts that make capital raising and strategic planning ineffective.

Private equity is stepping into that gap. By removing assets from public trading, sponsors regain control over timing, capital deployment, and narrative. The bet is not on recovery speed, but on basis discipline and optionality. In many secondary markets, land value and replacement cost still provide downside protection if capital is patient.

The implication is structural. As more office portfolios go private, public comparables will thin, transparency will decline, and pricing dispersion will increase. Office will not disappear — but it will increasingly trade off-screen.