US Investment Market Overview Text January 15, 2019
2018 PRELIMINARY RESULTS Individual Portfolio Entity RCA CPPI $700 150 Billions $600 125 $500 $400 100 $300 $200 75 $100 $0 50 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 150% YOY Change 100% 50% 11% 0% -9% -5% -50% -100% '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 2
2018 PRELIMINARY RESULTS Volume YOY Change $bil All Individual Office 132.3 0% 0% Industrial 89.2 21% 2% Retail 80.0 25% -3% Hotel 41.2 47% 5% Apartment 166.7 8% 8% Sr Housing 13.2 -20% 24% Dev Site 20.6 3% 3% Grand Total 543.1 11% 3% 3
PRICE TRENDS DIVERGING BETWEEN SECTORS Property Prices in by Property Type Apartment Industrial Office-CBD Office-Sub Retail Hotel 180.00 160.00 140.00 120.00 100.00 80.00 60.00 40.00 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 RCA CPPI, Dec’06 = 100 4
2018 MOST ACTIVE MARKETS 2017 2018 Market Sales Volume ($m) YOY 34,619 50% 2 1 Manhattan 28,367 0% 1 2 Los Angeles 22,203 26% 5 3 Chicago 21,685 -2% 3 4 Dallas 16,993 -4% 4 5 Atlanta 15,943 9% 6 6 Houston 15,797 29% 8 7 Seattle 15,001 36% 11 8 Phoenix 14,077 -3% 7 9 Boston 63% 13,830 16 10 NYC Boroughs 12,250 8% 10 11 Denver 11,849 23% 14 12 San Francisco 10,269 0% 13 13 San Jose -19% 9,420 9 14 DC VA burbs 18% 9,127 17 15 San Diego -15% 8,863 12 16 No NJ 28% 8,743 20 17 Inland Empire 7,761 18% 22 18 DC 11% 7,451 21 19 Philadelphia -14% 7,308 15 20 Orange Co 1% Office, Industrial, Retail, Apartment, Hotel, Seniors Housing & Care, and Dev Sites Markets labeled in orange hit an all time high for activity in 2018. 5
2018 MARKET MOMENTUM 20% Las Vegas SF - San Jose 15% Houston LA - Inland Empire Phoenix Sacramento Fort Myers/Sarasota/Naples YOY % Growth in RCA CPPI 10% SF - Oakland/East Bay Denver Orlando Portland Seattle Jacksonville Nashville 5% SF - San Francisco LA - Los Angeles Co Miami/So Fla Tampa Charlotte Atlanta LA - Orange Co Philly Metro NYC - Burbs Chicago Raleigh/Durham San Diego Baltimore NYC - Manhattan Boston Metro Dallas 0% Minneapolis NYC - Boroughs DC Metro -5% -20% -10% 0% 10% 20% 30% 40% 50% 60% YOY % Growth in Deal Volume 6
VOLUME REBOUNDING AFTER SLIGHT PRICE CORRECTION Manhattan 500% 7.0% 6.5% 400% 6.0% 300% 5.5% 5.0% 200% 4.5% 100% 4.0% 3.5% 0% 3.0% -100% 2.5% -200% 2.0% '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 Manhattan Commercial YoY Change Manhattan Commercial Top Quartile Cap Rate 7
US CRE REMAINS ATTRACTIVE GLOBALLY 8
PRIVATE & INSTITUTIONAL DEMAND STRONG Year-Over-Year Change in Acquisitions 70% Overall Individual 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% Cross-Border Institutional Private Public User/Other 9
TRANSACTION ACTIVITY SHIFT TO REFINANCE 10
DEBT FUNDS MAKING A DIFFERENCE 11
OPPORTUNITY FUND ZONES 12
ARE THEY INVESTIBLE? 13
MYTH: O ZONES ARE DEPRESSED AREAS 14
OPPORTUNITIES VARY GREATLY BY MARKET 15
DON’T BE LATE 16
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