Wolfe said construction of new office buildings has picked up pace in the last two years, with completion expected to peak at 90 million square feet between 2017 to mid-2018, Wolfe said. But demand has grown as well especially with the burgeoning technology firms in the country, he said.
Rising office rents in the gateway cities have also resulted in demand shifting to secondary U.S. cities, said to be Manulife U.S. REIT's primary focus for potential acquisitions.
Chief executive Jill Smith was tight-lipped about potential deals and would only say that the acquisition team "has been very busy" scouting for properties to add to the portfolio. But analysts covering the country expect it to add at least one property into the portfolio this year.
"Near term acquisitions are expected to be around $100-150 million, likely targeting key secondary cities to provide portfolio diversification… Its sponsor, Manulife Group, has a U.S. office portfolio assets of more than $6 billion, providing a strong pipeline in addition to third party assets," RHB analyst Vijay Natarajan wrote in a note last week.
On the impact of President Donald Trump's policies, Smith said the administration has proven to be pro-business and that is good news for the REIT.
"We see it like this: politics are politics. We have this new administration but business is business. We would not have two interest rates [hikes] – December and March – if the economy in America had not been doing very well," she said.
"At the end of the day, the Trump administration is pro-business and I think that's very important. So again, whatever happens with the tax bill, it reflects a pro-business approach and I feel very confident that it will continue to go well for us."