TreppPrivate± Mixed
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Office property expenses grew faster than revenue in every year from 2021 through 2025, according to a Trepp analysis of office properties backing CMBS loans. Across the five annual medians, operating expenses posted 2.7% implied annualized growth, revenue grew 1.3%, and net operating income grew just 0.2%. Median operating expense growth eased to 2.1% in 2025 from 2.5% in 2024, but revenue growth also slowed, to 0.7% from 1.1%, leaving a 1.4-percentage-point gap between expenses and revenue for the second consecutive year and median NOI growth of negative 0.4%. Property insurance recorded the fastest implied annualized expense growth at 6.1%, followed by utilities at 4.9%, though in 2025 insurance growth slowed sharply to 3.3% from 5.8% while utilities accelerated to 6.7% from 2.0%. Trepp said the cash-flow pattern offered limited additional refinancing support, with chained annual net cash flow medians implying a five-year increase of only 1.1%, and noted that operating expenses outgrew revenue in all seven Census divisions that met its sample threshold, with the gap ranging from 0.8 percentage points in New England to 1.6 points in East North Central.