The C&W study, "Short-term volatility, long-term stability,"finds that, barring a prolonged economic downturn, fundamentals inleading US office markets will remain sold and will "giveowner/investors the upper hand once again when the economyrebounds." The report acknowledges the hits that the officeinvestment arena has suffered since its heyday of 2006-07, whichwas the all-time peak for investment volume in the US officemarket. The researchers also point out that office investmenttransaction volume today "is the lowest it's been in nine-plusquarters."

Despite continuing problems in the office market and the economyin general, the report cites three major factors that bode well forUS office investors in the long run and explains why it is betterpositioned than in previous cycles to weather a downturn: solidsupply-side fundamentals, strong tenant balance sheets and thediversification provided by the global economy.

Regarding supply-side fundamentals, C&W points out that"unlike previous cycles, which were burdened by excessive amountsof new supply, construction across leading investment markets hasbeen held in check over the last four years." In addition, thereport notes, the credit crunch is making it difficult fordevelopers to line up construction financing, which "willundoubtedly delay the start of some projects that have yet toreceive lender approval and further temper the additions to newsupply."