The current U.S. office market environment can be one of opportunity for investors where fundamental supply/demand dynamics for office space appear robust, keeping in mind potential risks are ever present. The United States has recovered 196 percent of the office-using jobs lost in the recession of 2008–2009, and new supply of office space is limited, especially outside of CBDs and technology-driven submarkets. Broadly speaking, these dynamics favor absorption of office space to house new employees, in tandem with rent growth driven by supply constraints.

At the same time, emerging dynamics have made the recovery slower and also moderated expectations for space absorption and rents over the long term. We believe office tenants are using space much more efficiently under new leases, so employment growth and recovery of the magnitude experienced to date does not translate into as much positive absorption as might be expected based on past metrics.

The same trend toward