Office REITs get a major bank's nod as corporate demand rebounds
Latin America's largest investment bank highlights a major disconnect between rising office occupancy and discounted fund prices in São Paulo.
Global real estate investors searching for yield in a high-rate environment are seeing a sharp divergence between struggling commercial office markets in the U.S. and a quiet, rapid recovery unfolding in South America's financial capital. While many American office towers continue to grapple with high vacancy rates and remote-work policies, corporate leasing activity in Brazil is experiencing a significant turnaround.
On November 10, 2026, Banco BTG Pactual, the largest investment bank in Latin America, issued a highly favorable analysis of six Brazilian office Real Estate Investment Trusts (REITs), including JSRE11, PVBI11, and HGRE11. The bank's research department highlighted that while physical properties have filled up, the market prices of these publicly traded funds have lagged behind, trading at an average of 0.64 times their book value—well below their historical average of 0.82 times.
The primary driver behind this positive outlook is a dramatic surge in corporate leasing in São Paulo, the economic engine of Brazil. According to data released by BTG Pactual on November 10, 2026, net office absorption in São Paulo—which measures the physical space occupied by new tenants minus the space vacated—reached 106,800 square meters in the third quarter of 2026. This is nearly double the 60,600 square meters recorded in the third quarter of 2025, fueled by a broad corporate return-to-office push and a lack of new prime office construction.
However, the recovery is not lifting all boats equally, and the bank is warning investors to avoid highly leveraged players. BTG Pactual expressed a cautious stance on RECT11 (REC Renda Imobiliária), leaving it out of its preferred list. The bank pointed to significant outstanding financial obligations linked to past property acquisitions as a key risk, noting that these debt commitments could restrict the fund's cash flow and limit future dividend distributions to shareholders.
In your brokerage app
For investors with a U.S. brokerage account at Fidelity, Schwab, or Robinhood, direct exposure to individual Brazilian REITs (known locally as FIIs) is generally restricted to local trading desks. However, global real estate investors can track these underlying corporate dynamics through broader Latin American financial assets or specialized regional real estate holdings. Banco BTG Pactual, which manages and analyzes these real estate portfolios, is listed in New York as an over-the-counter asset and can be accessed through diversified emerging market financial funds.
