Text January 15, 2019 2018 PRELIMINARY RESULTS Individual - - PowerPoint PPT Presentation

US Investment Market Overview Text January 15, 2019

2

2018 PRELIMINARY RESULTS

50 75 100 125 150 $0 $100 $200 $300 $400 $500 $600 $700

'02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18

Billions

Individual Portfolio Entity RCA CPPI

• 9%
• 5%

11%

• 100%
• 50%

0% 50% 100% 150%

'02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 YOY Change

3

2018 PRELIMINARY RESULTS

Volume $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% YOY Change

4

40.00 60.00 80.00 100.00 120.00 140.00 160.00 180.00 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 Apartment Industrial Office-CBD Office-Sub Retail Hotel

PRICE TRENDS DIVERGING BETWEEN SECTORS

RCA CPPI, Dec’06 = 100

Property Prices in by Property Type

5

2018 MOST ACTIVE MARKETS

Office, Industrial, Retail, Apartment, Hotel, Seniors Housing & Care, and Dev Sites Markets labeled in orange hit an all time high for activity in 2018. 2017 2018 Market Sales Volume ($m) YOY 2 1 Manhattan 1 2 Los Angeles 5 3 Chicago 3 4 Dallas 4 5 Atlanta 6 6 Houston 8 7 Seattle 11 8 Phoenix 7 9 Boston 16 10 NYC Boroughs 10 11 Denver 14 12 San Francisco 13 13 San Jose 9 14 DC VA burbs 17 15 San Diego 12 16 No NJ 20 17 Inland Empire 22 18 DC 21 19 Philadelphia 15 20 Orange Co

34,619 28,367 22,203 21,685 16,993 15,943 15,797 15,001 14,077 13,830 12,250 11,849 10,269 9,420 9,127 8,863 8,743 7,761 7,451 7,308 50% 0% 26%

• 2%
• 4%

9% 29% 36%

• 3%

63% 8% 23% 0%

• 19%

18%

• 15%

28% 18% 11%

• 14%

1%

6

2018 MARKET MOMENTUM

YOY % Growth in Deal Volume

Atlanta Baltimore Boston Metro Charlotte Chicago Dallas DC Metro Denver Fort Myers/Sarasota/Naples Houston Jacksonville LA - Inland Empire LA - Los Angeles Co LA - Orange Co Las Vegas Miami/So Fla Minneapolis Nashville NYC - Boroughs NYC - Burbs NYC - Manhattan Orlando Philly Metro Phoenix Portland Raleigh/Durham Sacramento San Diego Seattle SF - Oakland/East Bay SF - San Francisco SF - San Jose Tampa

• 5%

0% 5% 10% 15% 20%

• 20%
• 10%

0% 10% 20% 30% 40% 50% 60%

YOY % Growth in RCA CPPI

7

VOLUME REBOUNDING AFTER SLIGHT PRICE CORRECTION

2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% 7.0%

• 200%
• 100%

0% 100% 200% 300% 400% 500% '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18

Manhattan

Manhattan Commercial YoY Change Manhattan Commercial Top Quartile Cap Rate

8

US CRE REMAINS ATTRACTIVE GLOBALLY

9

PRIVATE & INSTITUTIONAL DEMAND STRONG

• 30%
• 20%
• 10%

0% 10% 20% 30% 40% 50% 60% 70% Cross-Border Institutional Private Public User/Other Overall Individual

Year-Over-Year Change in Acquisitions

10

TRANSACTION ACTIVITY SHIFT TO REFINANCE

11

DEBT FUNDS MAKING A DIFFERENCE

12

OPPORTUNITY FUND ZONES

13

ARE THEY INVESTIBLE?

14

MYTH: O ZONES ARE DEPRESSED AREAS

15

OPPORTUNITIES VARY GREATLY BY MARKET

16

DON’T BE LATE

rcanalytics.com