The office sector is facing a major challenge: billions of dollars in assets risk becoming stranded—not because of physical obsolescence, but because of how we value lease terms.

As tenants demand more flexibility (and are willing to pay a premium for it), outdated valuation methods have become a bottleneck for landlords, investors, and lenders. In this presentation—“The New Era in Office Valuations”—Sam Gamble, co-founder of ReturnSuite, breaks down why traditional models are falling short, explores alternative approaches, and lays out a practical path forward.

This talk was part of a Brave Ideas event, hosted by Workplace Creations at their London headquarters on March 17, 2025.

Content: 0:01 Introduction – How inflexible valuations are stranding office assets
2:15 The office market as a ‘lost world’ – why valuations haven’t evolved
4:00 Why landlords, lenders, investors, and operators must care about office valuation
4:54 How to value any income-producing asset (not just real estate)
7:15 The valuation methods family tree – 5 ways to approach office value
7:31 Standard Direct Capitalization – why it ignores flex income
9:02 Should flexible lease income be included in office valuations?
10:55 Overview: Alternative methods to value flexible office leases
11:21 Tiered Capitalization – valuing flex and traditional space separately
13:10 Top Slice Method – valuing excess income from flexible leases
15:00 Comparing the Direct Capitalization methods for flex office
16:33 Present Value methods – going beyond single-year snapshots
17:05 Discounted Cash Flow (DCF) – multi-year view, more assumptions
18:46 A paradigm shift – model the variability in cash flows, not just the rate
19:11 Expected Value Method – Monte Carlo modelling for flex lease income
21:34 Understanding valuation risk with probabilistic modelling
24:23 Comparing all office valuation methods side-by-side
26:06 Why office is becoming more equity-like – and what that means for modelling
26:57 Tools for valuing flexible office space – beyond spreadsheets
27:50 The data problem – what’s needed to value flex office properly
30:11 Conclusion – fixing flex office valuation is in our hands

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