Principal Real Estate Investors’ base-case economic outlook is for the U.S. economy to finally achieve a cyclical period of moderate escape velocity with the forecast for real GDP to expand by around 3 percent in 2015. This progress will be a welcome relief after nearly five years of sluggish growth following the end of the global financial crisis. The hesitant and sluggish economic and labor recovery has prompted questions on whether the United States has entered a structural downshift in its growth potential; only time will tell.

Looking out over the next 12 to 18 months, our optimism about a cyclical rebound is anchored in several factors: a continued robust expansion of the labor market; vigor in the three major cyclical drivers of growth — technology, energy and housing; and a long-awaited acceleration in corporate spending.

Our optimism is tempered, however, by both internal and external constraints that may act as a governor on this cyclical rebound. Interna