Absorption pacing cycle-high construction. Strong Bay Area economic growth continues to drive demand for Oakland/East Bay office space. The relatively affordable rents are 20 percent lower than the San Jose and San Francisco markets, supporting net absorption that has steadily outpaced construction. The positive supply/demand balance has underpinned steady rent gains that nearly doubled over the past five years, providing exceptional performance trends for well-positioned assets. While construction has continually pressed higher, with a cycle-high expected this year, active pre-leasing has reduced the impact of new supply. Last year’s square footage delivery, the highest pace of completions in over a decade, produced little more than a marginal bump in available space. Meanwhile, rent appreciation has approached or exceeded double-digit gains in each of the past four years, with similar conditions in 2019 likely to produce another outstanding year of NOI growth.