I have to laugh when I hear the phrase “return to the office.”
I mean, COVID started more than five years ago. With the turnover in Corporate America since then, we can hardly call what’s happening now a “return.”
Most of those “returning” aren’t even the same people!
Nonetheless, the shall we say, revenge, of the office is real. My wife and I saw it firsthand when we went to an open house here in Sacramento a few months ago. Staring into the front room, labeled “home office,” my wife said, “Programmer.”
“They’re hoping for a rentback,” said the realtor. “The couple has to move out of town for work.” Back to the Bay Area for these two!
They’re far from alone. Major cities—Boston, New York, San Francisco—are shaking off five years of downtown rust, preparing for commuters back four or more days a week.
Funny thing is, many companies issuing back-to-office mandates these days don’t have space for these workers, after shedding leases in 2021. Pinterest (NYSE:), you may recall, canceled a lease for nearly 490,000 square feet of future office space back then. Meta Platforms (NASDAQ:) walked away from 200,000 square feet in New York.
Nowadays, freshly “returned” workers are elbowing each other out of lousy temporary desks! That means we’re going to be looking at a “reverse 2021” shortly, as companies hunt for more space. And I’ve got a complete strategy for us to play it—and grab some high, and growing payouts, as we do.
“Revenge” of the Office Will Long Outlast Work-From-Home
According to Placer.ai’s Office Index, June was the fourth-best month for in-office visits since COVID. (Placer specializes in foot-traffic data for offices, stores and the like.)
That might make it sound like we’re too late here. But the gap between now and the “old times” is still wide, with office visits down about 27% compared to June 2019.
A shifting trend with at least a 27% runway still ahead? That has our attention.
So how do we tap into it? Here’s my take on two popular office landlords. One is the wrong way to play the shift; another could work as a speculative pickup. Finally, we’ll dive into our very best play on this trend, which isn’t an office REIT at all.
Sell This “Revenge of the Office” Stock Yesterday
Let’s start with one REIT we’re not going to buy: Easterly Government Properties REIT (NYSE:).
Back in the “old days,” having a portfolio of mainly government tenants was a plus—Uncle Sam, of course, always paid the rent! But now, a government-focused REIT is the opposite of conservative. Uncle Sam has been on a spending bender and has a $2-trillion deficit to tame. That adds risk.
Don’t be pulled in by its 7.7% dividend. DEA’s $1.6-billion of long-term debt eclipses its market cap (or value as a public company) by a lot—about $600 million. And it’s been rising.
DEA Groans Under Heavy Debt Load
DEA also executed a 1 for 2.5 reverse stock split on April 28. This is usually done to reduce its share count and give the impression of a higher share price—not a good look. Neither is the 32% dividend cut the REIT announced earlier in the month. Management still has a lot of work ahead to turn things around, and we don’t need to be here for it.
This NYC Office Landlord Has Appeal—and Risk, Too
Next up is SL Green Realty (NYSE:), with interests in 53 buildings, or around 31 million square feet, in New York City. SLG yields 5.1% dividend, and that payout is well-covered, at 53% of the midpoint of management’s forecast funds from operations (FFO—the best metric of REIT profitability) for 2025.
In fact, with that low of a ratio (for a REIT—ratios of 80%+ are common in the sector, and safe, thanks to steady rent checks), I’d expect SLG to do more on the payout front. But it’s been holding off for a good reason: Management has been cutting long-term debt, from about $5.5 billion five years ago to around $3.7 billion today.
That’s smart, as interest rates remain elevated. But I’m concerned about the company’s focus on New York, where office visits are only 5.3% below 2019, according to Placer’s June numbers. Moreover, SLG’s occupancy rate is a bit lower than I’d like to see, at around 91%, as of June 2025.
All of this suggests SL’s growth potential may be close to a top. But that’s not the case with the REIT I favor most as a play on “revenge of the office.”
Our Top “Revenge of the Office” Play Isn’t an Office Owner at All
There’s a chance the couple whose open house I attended are headed back to the Bay Area—and renting an apartment there from Equity Residential (NYSE:).
The REIT yields 4.1% and has interests in nearly 85,000 units in major markets like Boston, New York, Washington, DC, and, on the West Coast, Seattle, San Francisco and Southern California.
Regarding those last three markets, I know there’s been a lot of talk about AI replacing humans in Big Tech, and that trend will continue. But it’ll still take years to play out.
Meantime, Big Tech still employs more people than it did five years ago. Consider Meta, which had 58,604 workers back in 2020. As of March 31, that number stood at 76,834. And even if headcounts just held steady, demands for more in-office time alone will bring more workers back to these areas. Meta, for the record, requires three days a week, while Salesforce (NYSE:) now requires three days at minimum, with some teams back in their cubicles four and five days.
Continued jobs growth supports EQR’s cash flow—and dividend, which has returned to growth after staying flat during the pandemic years. That’s notable, as management has been raising the payout straight through the current higher-rate period, which has been tough on REITs.
EQR’s Dividend Springs Back to Life
To be sure, EQR’s dividend yield is a bit low for us. But it has room to keep growing, with the current yearly amount at 70% of the midpoint of management’s forecast 2025 FFO—again, low for a REIT.
What’s more, EQR is seeing rental rates rise, with the expectation of what it calls “blended rates” rising around 2% to 3% this year. Occupancy is also high: 96.2% as of the end of Q2.
What’s more, the REIT stands to gain as interest rates move lower over time, cutting its borrowing costs. That’s a big plus—and management is already doing a solid job on the debt front, reducing long-term borrowings sharply in the last decade. The current level of $7.85 billion is just 31% of EQR’s market cap, or its value as a public company. That’s a very light debt load for a REIT.
Management Tackles Debt, Leaving More Room for Divs, Expansion
Finally, we love the fact that EQR is smartly culling older buildings from its portfolio and using the proceeds to snap up newer ones. That, of course, boosts its portfolio value and attractiveness to tenants while going easy on its balance sheet.
In the second quarter, the REIT sold off some of its older properties on the coasts and used the cash to pick up 2,064 units in fast-growing Atlanta. Management sees these new additions contributing to FFO in about two years.
Tech workers, after all, love their modern conveniences. EQR’s newer units give them just that—a small consolation, perhaps, for being herded back to the 9-to-5 grind.
Disclosure: Brett Owens and Michael Foster are contrarian income investors who look for undervalued stocks/funds across the U.S. markets. Click here to learn how to profit from their strategies in the latest report, “7 Great Dividend Growth Stocks for a Secure Retirement.”