Kevin O'Leary's Office Playbook: What It Means for Utah CRE

A National Investor Flags Office Opportunity

Kevin O'Leary's blunt take on the office sector has been making the rounds, as reported by AOL. His argument is straightforward: office values have been cut roughly in half nationally as cap rates climbed from the 3-4% range before the pandemic to somewhere between 5% and 9% today. That kind of repricing, he says, is exactly what creates opportunity for patient buyers.

O'Leary isn't alone in that read. Industry data cited in the reporting points to vacancy rates expected to drop below 18% this year and lending activity up 35% year over year heading into 2026, suggesting the office market may have already bottomed. For Utah owners and investors watching the sidelines, that's a meaningful signal worth paying attention to, even if local conditions differ from the national averages driving the headlines.

The Leverage Lesson Utah Owners Should Heed

The more important part of O'Leary's message wasn't the opportunity call. It was the warning attached to it. As he put it, "the biggest mistake I see investors make is using too much debt." He's pointing to roughly $2.2 trillion in commercial real estate debt coming due before 2028, much of it originated when rates sat near 3%. Refinancing that debt today at 7-8% changes the math on a lot of deals that once looked solid.

This isn't an abstract risk. When property values fall and financing costs rise at the same time, owners get squeezed from both directions. They either bring more equity to the table, accept punishing refinance terms, or hand the property back to the lender. O'Leary's fix is simple: finance only about a third of a property's value instead of the two-thirds many buyers typically use. That lower leverage buys a cushion if values soften further or a recession hits before the next refinance date.

How This Plays Out in Utah's Office Market

Utah's office fundamentals have generally held up better than many coastal and Sun Belt markets battered hardest by the national office correction. Still, the same debt maturity wall applies to any owner or investor holding a Utah office asset financed at pre-2022 rates. Loans coming due over the next two years will need to be underwritten at today's cost of capital, regardless of geography.

For owners with maturing debt, now is the time to model refinance scenarios honestly rather than assuming rates will drop back to where they were. For investors circling Utah office product, O'Leary's framework offers a useful discipline: don't chase a discounted purchase price if the leverage required to hit your return target leaves no room for error. A building that looks cheap on paper can still be a bad deal if the debt structure can't survive a bump in the road.

Buy What You Know: A Playbook for Local Investors

O'Leary's broader advice translates well to Utah's submarkets. His approach favors buying properties in neighborhoods you actually know, keeping leverage conservative, taking care of tenants, and thinking long term rather than chasing large deals in unfamiliar markets. He points to Brooklyn as an example of a neighborhood that looked rough a decade ago and is now among the priciest real estate in New York, arguing similar patterns can play out in other cities where values haven't fully recovered.

Utah investors don't need to look to Brooklyn for that lesson. The same logic applies to submarkets along the Wasatch Front where values softened during the office correction but fundamentals, access, and tenant demand remain intact. Local knowledge, conservative debt, and a willingness to reinvest in a property rather than simply hold it are the ingredients O'Leary is describing, and they apply just as directly here as anywhere else.

If you're weighing an office acquisition, a refinance, or a disposition in this environment, the team at Team Utah Commercial can help you stress-test the numbers before you commit. Call 801-898-8810 to talk through your options with Robert Farnsworth, Randy Cummins, or Stockton Farnsworth.

Source: this analysis discusses reporting by Blog - Kevin O'Leary's office market strategy.