The Lost World of Office Real Estate

Special Brave Ideas Deep Dive

Featuring Sam Gamble, CoFounder of ReturnSuite

For decades, office real estate has operated in a stable—but rigid—ecosystem built around the long-term lease. I often joke that it’s a Lost World—a closed system that evolved under specific, isolated conditions. The lease shaped everything: how buildings were financed, how risk was underwritten, and how value was calculated.

But the issue with Lost Worlds is that while they’re highly specialized, they’re also fragile. Even small changes can break the system.

If the office market is a Lost World, then flexible leasing is its First Contact event—the moment when an isolated system encounters something fundamentally new and incompatible. Tenants are demanding more flexibility and better amenities—and they’re often willing to pay a premium for it.

But owners, stuck in legacy systems, struggle to meet that demand.

The Problem: How Flex Is Valued

The challenge lies in how we value flexible leasing. Standard models like Direct Capitalization are designed to handle leases—not licenses—and assume predictable, fixed income. Because valuers rely on comparable sales, and comps reflect what investors are underwriting, we’re stuck in a loop:

No one underwrites flex differently, so nothing trades differently. If nothing trades differently, nothing gets valued differently.

It’s a Catch-22.

📺 Watch: Circular Reference – CRE Valuations & Sale Prices

The Solution: A New Model (From Other Industries)

The good news? This is a solved problem—just not in real estate.

Other sectors like insurance have been here before.

Take mining for example. Mining involves big upfront investments followed by uncertain, variable cash flows over time.

Sound familiar? Swap out commodity prices and ore grades for desk rates and occupancy levels, and you have the same core valuation challenge.

The valuation method all the industries facing potential volatility have adopted?

The Expected Value Method—a probabilistic approach that models cash flow volatility directly, rather than papering over it with crude discount rate adjustments.

What We Need: Data + Tools

Of course, this is easier said than done. There are two major challenges:

1. Better dataWe need to shift from relying solely on market transaction data to using real operational data. But that data is fragmented:

* Operators understand costs and occupancy patterns.

* Service providers can track utilization and performance.

* Platforms and tools can help benchmark and analyze.

2. Better toolsOnce we have the data, we need the tools to model it. That’s why I co-founded ReturnSuite—to give landlords and investors a way to build and understand probabilistic cash flow models that reflect reality and unlock capital.

Our Future is in Our Control

Valuers won’t lead this shift—and they shouldn’t. Their job is to follow the market. But we—the landlords, operators, and investors—are the market. If we start underwriting differently, valuations will follow.

This was the focus of the Brave Ideas talk I gave in London earlier this year:“The New Era in Office Valuations: A Collaborative Approach.”

As always, if you’re curious about the models or want to chat, I’d love to hear from you.

About the authorSam Gamble i