17Q1 National and Regional Commercial Real Estate Overview

Presented By Steve Basham - Senior Market Analyst

Todays Agenda

Where Does The Data Come From? National Economy Los Angeles Economy National Office Los Angeles Office National Apartments Los Angeles Apartments National Industrial Los Angles Logistics National Retail Los Angeles Retail

is the Number One leader in 5 key industries

LargestCommercialRealEstateInformation&Analytics

MostHeavilyTraffickedDigitalRentalMarketplace

MostHeavilyTraffickedBusinessforSaleMarketplace

MostHeavily TraffickedCommercialR.E.Marketplace

MostHeavilyTraffickedRuralLandforSaleMarketplace

Full Time Researchers

FIELD RESEARCH

130+VEHICLES

400,000+COMMUNITIES

VISITED

FIELD RESEARCH

AERIALRESEARCH$3 MILLION INVESTEMENT

National Economy Overview

GDP Growth Trending Up

S o u r c e s : M o o d y ' s A n a l y t i c s ; B E A ; C o S t a r Por t fo l io S t r a tegy A s of 1 6 Q 3

6 %

4 %

2 %

0 %

( 2 % )

( 4 % )

( 6 % )

( 8 % )

( 1 0 % )

8 %

0 7 1 2 1 60 8 0 9 1 0 1 1

G o o d s ( M a n u f a c t u r i n g ) S e r v i c e s

1 3 1 4 1 5

S t r u c t u r e s ( C o n s t r u c t i o n ) G D P

C o n t r i b u t i o n t o G D P G r o w t h

Consumption Is Driving Growth

S o u r c e s : B E A ; C o S t a r Por t fo l io S t r a tegy A s of 1 6 Q 3

6 %

4 %

2 %

0 %

( 2 % )

( 4 % )

( 6 % )

( 8 % )

( 1 0 % )

( 1 2 % )

8 %

1 00 8 0 9

C o n s u m p t i o n

E x p o r t s

1 1 1 2

B u s . I n v e s t m e n t

I m p o r t s

1 3 1 4

R e s i d . I n v e s t m e n t

G o v e r n m e n t

1 5 1 6

C h g I n v e n t o r y

T o t a l G D P

C o n t r i b u t i o n t o G D P G r o w t h

A Troubling Trend Slowing Growth During Expansions

A s o f 1 6 Q 3

4 .9 %3 .8 %

3 .3 % 3 .3 % 3 .5 %2 .4 %

1 .9 % 1 .4 %

8 %

6 %

4 %

2 %

0 %

(2 % )

(4 % )

(6 % )

(8 % )

1958

Q2

-19

60Q

1 Rec

essi

on19

61Q

1-

1969

Q3 Rec

essi

on19

70Q

3-

1973

Q4 Rec

essi

on19

75Q

2-

1980

Q1 Rec

essi

on19

82Q

4-

1990

Q2 Rec

essi

on19

91Q

2-

2001

Q1 Rec

essi

on20

01Q

4-

2007

Q4 Rec

essi

on20

09Q

3-

2016

Q3

A v e r a g e A n n u a l i z e d R e a l p e r C a p i t a G D P G r o w t h D u r i n g E x p a n s i o n s T o t a l p e r C a p i t a G D P D e c l i n e D u r i n g R e c e s s i o n s

S o u r c e s : M o o d y ' s A n a l y t i c s ; B E A ; C o S t a r Por t fo l io S t r a t e g y

R e a l p e r C a p i t a G D P G r o w t h

Leading Indicators Foreshadow Continued Slow Growth

(1 0 % )

(8 % )

(2 % )

0 %

2 %

8 %

1 0 %

(2 0 % )

(1 5 % )

(4 % )( 1 0 % )

(6 % )

(5 % )

0 %

5 %

6 %1 0 %

4 %

1 5 %

2 0 %

7 3 7 5 7 7 7 9 8 1 8 3 8 5 8 7 8 9 9 1 9 3 9 5 9 7 9 9 0 1 0 3 0 5 0 7 0 9 1 1 1 3 1 5

S o u r c e s : M o o d y ' s A n a l y t i c s ; C o n f e r e n c e B o a r d ; B E A ; C o S t a r Por t fo l io S t r a t e g y A s of N o v 2 0 1 6

L e a d i n g E c o n o m i c I n d i c a t o r s ( Y / Y ) G D P G r o w t h ( Y / Y )

Imbalances Beginning To Build Up Again?

S o u r c e s : M o o d y ' s A n a l y t i c s ; B E A ; C o S t a r Por t fo l io S t r a t e g y A s o f 1 6 Q 3

0 %

2 %

4 %

6 %

8 %

1 0 %

1 2 %

1 4 %

1 6 %

1 .5

2 .0

2 .5

3 .0

3 .5

4 .0

4 .5

5 .0

7 5 7 7 7 9 8 1 8 3 8 5 8 7 8 9 9 1

M e d i a n H o m e P r i c e / I n c o m e S a v i n g s R a t e

9 3 9 5 9 7 9 9 0 1 0 3 0 5 0 7 0 9 1 1 1 3 1 5

A v e r a g e H o m e P r i c e / I n c o m eA v e r a g e S a v i n g s R a t e

M e d i a n H o m e P r i c e / I n c o m e R a t i o P e r s o n a l S a v i n g s R a t e

The Cycle Marches On

8 0 0

6 0 0

4 0 0

2 0 0

0

( 2 0 0 )

( 4 0 0 )

( 6 0 0 )

( 8 0 0 )

(1 ,0 0 0 )

1 ,0 0 0

6 0 6 5 7 0 7 5 8 0 8 5

S o u r c e s : B u r e a u o f L a b o r S t a t i s t i c s ; C o S t a r Por t fo l io S t r a t e g y

9 0 9 5 0 0 0 5 1 0 1 5

A s of N o v 2 0 1 6

M o n t h l y J o b C h a n g e ( 0 0 0 s )

A Strong Run For Employment Winding Down

S o u r c e s : M o o d y ' s A n a l y t i c s ; B L S ; C o S t a r Por t fo l io S t r a t e g y A s of N o v 2 0 1 6

2 %

4 %

6 %

8 %

1 0 %

1 2 %( 9 0 0 )

( 6 0 0 )

( 4 5 0 )

( 3 0 0 )

( 1 5 0 )

0

1 5 0

3 0 0

4 5 0

6 0 0

0 5 1 2 1 3 1 4 1 5 1 60 6 0 7 0 8

J o b s G a i n e d / L o s t

0 9 1 0 1 1

U n e m p l o y m e n t R a t e

M o n t h l y J o b s G a i n e d ( 3 - M o n t h T ra i l ing A v e r a g e ) U n e m p l o y m e n t R a t e

4 .4 %

1 0 .0 %( 7 5 0 )

4 .9 %

Health Care And Retail Leading The Recovery

S o u r c e s : S t a n d a r d & Poor ' s ; C o S t a r Por t fo l io S t r a t e g y A s o f D e c 2 0 1 6

3 0

8 0

1 3 0

1 8 0

2 3 0

2 8 0

0 9 1 2 1 41 0

S & P 5 0 0

1 1

E n e rg y

1 3

H e a l t h C a r e

1 5

F i n a n c e

1 6

I T R e ta i l

I n d e x L e v e l

Time For A Raise Unemployment Vs. Wage Growth

0 %

2 %

4 %

6 %2 %

3 %5 %

4 %

5 %

6 %3 %

7 %

8 %

9 %1 %

1 0 %

1 1 %0 1 0 2 0 3 0 4 0 5 0 6 0 7 0 8 0 9 1 0 1 1 1 2 1 3

S o u r c e s : B u r e a u o f L a b o r S t a t i s t i c s ; Fede ra l Rese rve B a n k o f A t l an ta ; C o S t a r Por t fo l io S t r a t e g y

1 4 1 5 1 6

A s o f N o v e m b e r 2 0 1 6

A vg . H o u r l y W a g eU n e m p l o y m e n t R a t e

The Clock Is Ticking On This Cycle

3 0 %

2 5 %

2 0 %

1 5 %

1 0 %

5 %

0 %

Probab i l i ty O f R e c e s s i o n

1 0 0 %

8 0 %

6 0 %

4 0 %

2 0 %

0 %1 6 1 7 1 8

S o u r c e : C o S t a r Por t fo l io S t r a tegy

1 9 2 0 2 1 2 2 2 3 2 4A s O f 1 6 Q 3

1 6 1 7 1 8 1 9 2 0 2 1 2 2 2 3 2 4C u m u l a t i v e P r o b a b i l i t y O f R e c e s s i o n

page 17

Demographics Favor The South And West

A s of 16Q3

2 0 %1 8 %1 6 %1 4 %1 2 %1 0 %

8 %6 %4 %2 %0 %

(2% )

Orla

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Aust

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s

Cumulat ive Forecas t G r o w t h in W o r k i n g Age Popula t ion (2017-2022)

W e s t Sou th Eas t M idwes tSources: Moody's Analy t i cs ; CoStar Portfol io Strategy

LA Employment Gains Trailing US Average

S o u r c e s : M o o d y ' s A n a l y t i c s ; C o S t a r Por t fo l io S t r a t e g y A s o f D e c e m b e r 2 0 1 6

1 3 0 %

1 2 5 %

1 2 0 %

1 1 5 %

1 1 0 %

1 0 5 %

1 0 0 %

9 5 %

9 0 %

8 5 %

Aust

inSa

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anci

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Nas

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E m p l o y m e n t R e l a t i ve T o P r e r e c e s s i o n P e a k

Slowing Job Growth In Most Markets

S o u r c e s : M o o d y ' s A n a l y t i c s ; C o S t a r Por t fo l io S t r a t e g y A s o f 1 6 Q 4

4 %

3 %

2 %

1 %

0 %

5 %

Orla

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Las

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City

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City

A n n u a l E m p l o y m e n t G r o w t h - P r e v i o u s T w o Y e a r s F o r e c a s t E m p l o y m e n t - N e x t Y e a r

A n n u a l E m p l o y m e n t G r o w t h

Sales Volume Slowing

A s o f 1 6 Q 4

0

5 0

1 0 0

1 5 0

2 0 0

2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6

O f f i c e I n d u s t r i a l

S o u r c e : C o S t a r Por t fo l io S t r a t e g y

2 0 0 9 2 0 1 0

M u l t i - F a m i l y R e ta i l

A n n u a l S a l e s V o l u m e $ B

Y o Y C h a n g e :Mul t i -Fami ly : - 5 %

Of f i ce : - 1 0 %

Reta i l : - 1 4 %

Industr ia l : - 2 3 %

0 7 Q 3 - 0 8 Q 3 % C h a n g eMul t i -Fami ly : - 4 1 %Of f i ce : - 5 8 %Reta i l : - 3 7 %Industr ia l : - 4 4 %

Solid Income Gains Through 2019

S o u r c e : C o S t a r Por t fo l io S t r a t e g y A s of 1 6 Q 3

Y / Y N O I G r o w t h

5 .0 %

4 .0 %

3 .0 %

2 .0 %

1 .0 %

0 .0 %

6 .0 %

2 0 2 02 0 1 6

Of f i ce (U .S . )

2 0 1 7 2 0 1 8

A p a r t m e n t (U .S . )

2 0 1 9

Log i s t i c s ( U .S . )

2 0 2 1

R e ta i l (U .S . )

Los Angeles Economy Overview

Los Angeles Historical Employment Growth

As of 16Q4Sources: Moody's Analytics; CoStar Market Analytics*Year-To-Date

(8%)

(6%)

(4%)

(2%)

0%

2%

05 06 07 08 09 10 11 12 13 14 15 16*

Los Angeles United States

Employment Growth (Y/Y)4%

Los Angeles Job Growth By Employment Sector*

As of 16Q4Sources: Moody's Analytics; CoStar Market Analytics*Employment sectors ordered by total number of workers.

103% 98% 101%

114%102%

96%

126%

57%

90%82% 81%

(1%)

2%

3%

4%

0%

40%1%

20%

60%

80%

100%

120%

140%

Tota

lNon

agric

ultu

ral

Offi

ce-U

sing

Trad

e

Educ

atio

n/He

alth

Serv

ices

Bus

ines

sSe

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Gov

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Leis

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and

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Man

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Fina

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Info

rmat

ion

Con

stru

ctio

n

Employment As A % Of Prerecession Peak Employment Growth Last 12 Months

Employment As A % Of Prerecession Peak Employment Growth(Y/Y)

Los Angeles Current Population And Growth By Age Cohort

Sources: Moody's Analytics; CoStar Market Analytics As of 16Q4

21%

26%

25%

United States

28%

65+ Years Older 50-64 Years Old 35-49 Years Old 20-34 Years Old

25%20%15%10%5%0%

(5%)65+ Years Older 20-34 Years Old

2011-2016 Growth

50-64 Years Old

Los Angeles35-49 Years Old

UnitedStates

24%

27%

31%

Los Angeles

17%

Sales Volume Shows Continued Growth

Source: CoStar Market Analytics As of 16Q4

$0

$2

$4

$6

$8

$10

$12

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Office Multifamily Retail Industrial

Sales Volume (Billions)

National Office Overview

Vacancy Improves As Other Fundamentals Weaken

S o u r c e : C o S t a r P o r t f o l i o S t r a t e g y A s o f 1 6 Q 4

2 0 1 5 2 0 1 6

N e t A b s o r p t i o n 1 0 2 M S F 8 3 M S F iV a c a n c y 1 0 . 7 % 1 0 . 4 % i

R e n t G r o w t h ( Y / Y ) 4 . 4 % 3 . 2 % iD e l i v e r i e s 6 5 M S F 5 9 M S F i

U n d e r C o n s t r u c t i o n 1 2 9 M S F 1 3 8 M S F hS a l e s V o l u m e $ 1 5 6 B i l l i o n $ 1 4 1 B i l l i o n i

U.S. Office Space Per Worker In Square Feet

S o u r c e s : M o o d y ' s A n a l y t i c s , C o S t a r Por t fo l io S t r a t e g y A s of 1 6 Q 3No te : A s s u m e s a 5 % s h a r e i n c r e a s e in of f ice j obs for 2 0 0 0 t o 2 0 1 6 d u e t o fas ter of f ice j ob g r owth t h a n t h e overal l e m p l o y m e n t t rend

2 7 0

2 6 0

2 5 0

2 4 0

2 3 0

2 2 0

2 1 0

2 0 0

2 8 0

9 0 9 2 9 4 9 6 9 8 0 0 0 2 0 4 0 6 0 8 1 0 1 2 1 4 1 6

S q u a r e F e e t P e r J o b In O f f i c e S p a c e

rS p a c e pecession

e r j o b r i sbecause

e s d u r i nj ob l a y o

g affs

grea t l y e x c e e d s pareductio

c en s

2 3 0

Vacancy Rates: Current Vs. Two-Year Forecast

A s of 1 6 Q 4

1 6 %

1 4 %

1 2 %

1 0 %

8 %

6 %

4 %

1 8 %

Hou

ston

Dal

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FW Chi

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nt

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Los

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San

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ew

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San

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Was

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D.C

.

Bost

W e s t S o u t h

S o u r c e : C o S t a r Por t fo l io S t r a t e g y

E a s t M id w e s t 1 8 Q 4 F o r e c a s t V a c a n c y

1 6 Q 4 V a c a n c y R a t e

Many Office Markets Have Sub 9% Vacancy

Asof16Q4Source:CoStarPortfolio Strategy

Vacancies Declining In Most Markets

Source:CoStarPortfolioStrategy

A s o f 1 6 Q 3

A t l a n t a

B o s t o n

D a l l a s - F W

D e n v e r

L o s A n g e l e sD e t r o i t

N e w Y o r k

P h o e n i x

C h a r lo t te E a s t B a y

S a n D i e g o

S a n J o s e

S a n F r a n c i s c o

M i n n e a p o l i s O r a n g e C o u n t y

O r la n d o A u s tinI n d i a n a p o l i s

W a s h i n g t o n , D . C .

(1 )

0

1

2

3

4

5

6

7

(1 ) 0 7

I m p r o v i n g D e m a n d

S l o w i n g D e m a n d

W e s t S o uth E a s t M id w e s tS o u r c e : C o S t a r P o r t f o l i o S t r a t e g y

H o u s t o nC h i c a g o

1 2 3 4 5 6A v g . A n n u a l N e t A b s o r p t i o n , P a s t T h r e e Y e a r s ( S F Mi l l ions)

P a s t 6 M o n t h s A b s o r p t i o n , A n n u a l i z e d ( S F Mi l l ions)

Current Vs. Three-Year Trend In Office Net Absorption

Vacancy Rates for Buildings 0-10 years Old

S o u r c e : C o S t a r Por t fo l io S t r a t e g y A s of 1 6 Q 3

1 8 %

1 6 %

1 4 %

1 2 %

1 0 %

8 %

6 %

4 %

2 %

0 %

San

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2 0 0 6 - N e w e r V a c a n c y

Southern California: Half As Much Supply As Last Cycle

A s of 1 6 Q 3

54 4 5 4 4 4

2 2 2 2 2 2 23 3 2

3 3 44 4 4 4 3 4 4 3 3 2 3 3

3 34 3

2

7

65 4

4

3 3

3

21

11

1 1

1 11

11 1

1 1 2 2 2 3 33

33

33

4

0 %

1 0 %

2 0 %

3 0 %

4 0 %

5 0 %

6 0 %

7 0 %

8 0 %

9 0 %

0

2

4

6

8

1 0

1 2

1 4

07Q

3 07Q

4 08Q

1 08Q

2 08Q

3 08Q

4 09Q

1 09Q

2 09Q

3 09Q

4 10Q

1 10Q

2 10Q

3 10Q

4 11Q

1 11Q

2 11Q

3 11Q

4 12Q

1 12Q

2 12Q

3 12Q

4

U C C o m m i t t e d U C A v a i l a b l e

S o u r c e : C o S t a r Por t fo l io S t r a t e g yI n c l u d e s Lo s An g e l e s , O r a n g e Coun t y , a n d S a n D i e g o

P e r c e n t A v a i l a b l e

R B A U n d e r C o n s t r u c t i o n (Mi l l ions S F ) ( % S p e c u l a t i ve )

Los Angeles Office Overview

Los Angeles Office Fundamentals

Source: CoStar Market Analytics As of 16Q4

0%

2%

4%

6%

8%

10%

12%

14%

-8

-6

-4

-2

0

2

4

6

8

10

05 06 07 08 11 12 13 16

Demand Change

09 10

Supply Change Vacancy

14 15

National Index Vacancy

Demand & Supply (MSF)12

Vacancy

Vacancy By Star Rating

Source: CoStar Market Analytics As of 16Q4

16%

14%

12%

10%

8%

6%

4%

2%

0%

18%

05 06 07 08 09 10 11 12 13 14 15 16

1 & 2 Star 3 Star 4 & 5 Star

Vacancy Rate

Submarkets With The Most Deliveries

Source: CoStar Market Analytics As of 16Q4

1,000

800

600

400

200

0

1,200G

reat

erD

ownt

own

Hol

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Silv

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Long

Beac

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ownt

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East

ern

SGV

ElSe

gund

o

Pasa

dena

/Arc

adia

/Mon

rovi

a

New Supply Since 2013

Square Feet (000s)

Largest Percent Of Inventory Growth Since 2013

Source: CoStar Market Analytics As of 16Q4

8.7%7.8% 7.8%

3.4% 3.3% 3.0%2.3% 2.3%

2%

0%

4%

6%4.4%

8%

10%

Long

Beac

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ownt

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Wes

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Tarz

ana

Hol

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Silv

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Ant

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East

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SFV

Mar

ina

Del

Rey

/Ven

ice

Sant

aC

larit

aVa

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East

ern

SGV

ElSe

gund

o

Percentage of Total Inventory Growth

Percentage of Growth12%

10.1%

Submarkets With The Most Construction

Source: CoStar Market Analytics As of 16Q4

0%

1%

2%

3%

4%

5%

6%

1,600

1,400

1,200

1,000

800

600

400

200

0

Gre

ater

Dow

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n

Hol

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Silv

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Mar

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Cul

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Wes

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Sant

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Sout

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Pasa

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/Arc

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/Mon

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a

SF Preleased SF Available % Of Inventory

% Of Inventory GrowthSquare Footage Under Construction (000s)1,800

Rent Growth

Source: CoStar Market Analytics As of 16Q4

4.4%

7.3%

11.9%

-4.0%

5.1%6.5%

5.8%

1.8%

5.5%

8.2%

0.3% 0.7%

-7.1%-7.3%

-2.1% -2.0%

0.4%1.7% 1.6%

3.0% 3.0%3.8% 4.4%

3.1%

(10%)

(5%)

0%

5%

10%

05 06 07 08 09 10 11 12 13 14 15 16

Rent Growth (Y/Y)15%

Rent Growth National Rent Growth

Los Angeles Sales Volume And Pricing

Source: CoStar Market Analytics As of 16Q4

$0

$50

$100

$150

$200

$250

$300

$350

$0

$2

$4

$6

$8

$10

05 06 07 10 11 15 1608 09

Annual Sales Volume

12 13 14

Median Price Per Square Foot

$12 Sales Volume (Billions) Price Per Square Foot

Submarket Sales Volume And Pricing$1,000

$900

$800

$700

$600

$500

$400

$300

$200

$100

$0

$1,600

$1,400

$1,200

$1,000

$800

$600

$400

$200

$0

$1,800Sa

nta

Mon

ica

Gre

ater

Dow

ntow

n

Mar

ina

Del

Rey

/Ven

ice

Wes

twoo

d

ElSe

gund

o

Pasa

dena

/Arc

adia

/Mon

rovi

a

Bre

ntw

ood

Sales Volume Last 4 Quarters

Source: CoStar Market Analytics

Median Price Per Square Foot Last 4 Quarters

As of 16Q4

Price Per Square FootSales Volume (Millions)

Office Cap Rates By Star Rating

As of 16Q4Source: CoStar Market Analytics*Year-To-Date

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

05 06 07 08 09 10 11 12 13 14 15 16*

1&2 Star 3 Star 4&5 Star

Cap Rate

National Apartment Overview

Peak Supply Levels Should Nudge Vacancies Modestly Higher

A s o f 1 6 Q 4S o u r c e : C o S t a r Por t fo l io S t r a t e g y* H i s t o r i c a l A v e r a g e : 2 0 0 1 - 1 6

4 .5 %

5 .0 %

5 .5 %

7 .0 %

7 .5 %

8 .0 %

0

5 0

1 0 0

6 .5 %1 5 0

6 .0 %

2 0 0

2 5 0

3 0 0

0 8 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1

2 .9 %

(0.5%)(1 .0%)

0 .5 %

2 .5 %

4 . 9 % 4 . 7 %

0 .2 %

(5 .5 %)

1 . 7 % 1 . 6 %2 . 7 % 3 . 1 % 3 . 3 %

4 .9 %

2 .3 % 2 .5 % 2 .2 % 2 .4 % 2 . 2 %1 .4 %

6 %4 %2 %0 %

(2 % )(4 % )(6 % )

A n n u a l C h a n g e in D e m a n d & S u p p l y ( 0 0 0 s U n i t s ) V a c a n c y & V a c a n c y A v e r a g e

0 1 0 2 0 3 0 4 0 5 0 6 0 7A n n u a l R e n t G r o w t h

Decline In Homeownership Has Driven Rental Demand

S o u r c e s : M o o d y ' s A n a l y t i c s ; U . S . C e n s u s B u r e a u ( C P S / H V S ) ; C o S t a r Por t fo l io S t r a t e g y A s o f 1 6 Q 3

3 0

3 2

3 6

3 8

4 0

4 4

4 6

6 0 %

6 1 %

6 3 %3 4

6 2 %

6 4 %

6 5 %

6 6 %

6 7 %

6 8 %4 2

6 9 %

7 0 %

9 4 0 2 0 8 1 0 1 2 1 4 1 69 6 9 8 0 0

R e n t e r H o u s e h o l d s

0 4 0 6

U . S . H O R a t e

H o m e o w n e r s h i p R a t e R e n t e r O c c u p i e d H o u s e h o l d s (Mi l l ions)

H . O . R a t e in 2 0 0 4 P e a k : 6 9 . 2 % 2 0 1 6 Q 3 H . O . R a t e : 6 3 . 5 % I n c r e a s e in R e n t e r H H ' s : 1 0 . 3 MI n c r e a s e d u e to H H F o r m a t i o n : 3 . 5 MI n c r e a s e d u e to C h a n g e in H . O . R a t e : 6 . 8 M

Homeownership Declined Across All Age Cohorts

A s o f 1 6 Q 3

1 1 0

1 0 5

1 0 0

9 5

9 0

8 5

1 1 5

9 0 9 2 9 4 9 6 9 8 0 0 0 2 0 4 0 6 0 8 1 0 1 2 1 4 1 6

< 3 5 3 5 - 4 4 4 5 - 5 4 5 5 - 6 4 6 5 +

S o u r c e s : M o o d y ' s A n a l y t i c s ; U . S . C e n s u s B u r e a u ( C P S / H V S ) ; C o S t a r Por t fo l io S t r a t e g y*T hree -Quar te r M o v i n g Ave r age

H o m e o w n e r s h i p R a t e I n d e x * ( 1 0 0 = 1 9 9 0 )

More People Are Living Alone

A s o f 1 6 Q 4S o u r c e s : U . S . C e n s u s B u r e a u ; Cur ren t P o p u l a t i o n Survey , A n n u a l S o c i a l a n d E c o n o m i c S u p p l e m e n t ; C o S t a r Por t fo l io S t r a t e g y

1 0 %

1 5 %

2 0 %

2 5 %

3 0 %

0

5

1 0

1 5

2 0

2 5

3 0

3 5

4 0

6 0 8 5 9 0 9 5 0 0 0 5 1 0 1 56 5 7 0 7 5 8 0

S i n g l e P e r s o n H o u s e h o l d s S i n g l e P e r s o n H o u s e h o l d s a s % o f T o t a l H o u s e h o l d s

S i n g l e P e r s o n H o u s e h o l d s ( M i l l ions ) % S i n g l e P e r s o n H o u s e h o l d s

The Renter Demand Pool By Income

A s o f 1 6 Q 4S o u r c e s : U . S . C e n s u s A C S Survey ; C o S t a r Por t fo l io S t r a t e g y* A m e r i c a n C o m m u n i t y Survey D a t a T h rough 2 0 1 5

1 5 . 7 M i l l i o n 3 6 %

1 2 . 2 M i l l i o n 2 8 %

7 . 2 M i l l i o n 1 6 . 5 %

3 . 8 M i l l i o n 8 . 6 %

4 . 8 M i l l i o n 11 %

$ 0 - $ 2 5 , 0 0 0

$ 2 5 , 0 0 0 - $ 5 0 , 0 0 0

$ 5 0 , 0 0 0 - $ 7 5 , 0 0 0

$ 7 5 , 0 0 0 - $ 1 0 0 , 0 0 0

$ 1 0 0 , 0 0 0 +

R e n t e r H o u s e h o l d s (Mi l l ions)

Peak Construction Expected In 2017 (Top 54 Metros)

S o u r c e : C o S t a r Por t fo l io S t r a t e g y A s o f 1 6 Q 3

0

5 0

1 0 0

1 5 0

2 0 0

2 5 0

0 0 0 1 0 2 0 3 0 4 0 5 0 6 0 7 0 8 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1

S u p p l y C h a n g e ( Y / Y ) H i s to r i ca l A v e r a g e S u p p l y ( 1 9 9 0 - 1 5 )

S u p p l y ( 0 0 0 s U n i t s )

Renter Households Growth Concentrated In CBDs

A s o f 1 6 Q 4S o u r c e s : N e u s t a r ; C o S t a r Por t fo l io S t r a t e g y* B u b b l e s i z e d e n o t e s n u m b e r o f ren ter h o u s e h o l d s i n 1 6 Q 4 .

C B DS e c o n d a r y C o r e

P r i m e S u b u r b a n

S u b u rb a n

0 . 0 %

( 0 . 2 % )

( 0 . 4 % )

U rb a n( 0 . 6 % )

( 0 . 8 % )

( 1 . 0 % )

0 .2 %

0 .4 %

0 .6 %

4 % 5 % 6 % 1 3 % 1 4 % 1 5 %

C h a n g e In S h a r e O f R e n t e r H o u s e h o l d s

7 % 8 % 9 % 1 0 % 1 1 % 1 2 %

P e r c e n t a g e G r o w t h O f R e n t e r H o u s e h o l d s

CBD Vacancies Continue Their March Upwards

S o u r c e : C o S t a r Por t fo l io S t r a tegy A s of 1 6 Q 3

4 .0 %

4 .5 %

5 .0 %

5 .5 %

6 .0 %

6 .5 %

2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6

V a c a n c y R a t e

C B D S e c o n d a r y C o r e U r b a n P r i m e S u b u r b a n S u b u rb a n

Submarkets With Most Supply Last 8 Quarters

S o u r c e : C o S t a r Por t fo l io S t r a t e g y A s o f 1 6 Q 3

0 8 ,0 0 02 ,0 0 0

U n i t s D e l i v e r e d

4 , 0 0 0 6 , 0 0 0

U n i t s U n d e r C o n s t r u c t i o n

U n i t s D e l i ve r e d A n d U n d e r C o n s t r u c t i o nC H I C - D o w n t o w n C h i c a g o

H O U S - N e a r t o w n / R i v e r O a k s A T L A - B u c k h e a d - B r o o k h a v e n

D E N V - D o w n t o w n / C h e r r y C r e e k D A L L - U p t o w n / P a r k C i t i e s A T L A - D o w n t o w n / M i d t o w n

N A S H - W e s t E n d / C B DS A N A - N o r t h w e s t S i d e

L O S A - D o w n t o w n L o s A n g e l e s H O U S - Br ia r F o r e s t / W e s t M e m o r i a l

D A L L - F a r m e r s B r a n c h / A d d i s o n H O U S - N o r t h w e s t H o u s t o n

N E W Y - M i d t o w n W e s t R A L E - C e n t r a l R a l e i g h

D A L L - E a s t D a l l a s H O U S - C i n c o R a n c h

K A N S - J o h n s o n C o u n t y K SA U S T - S o u t h D A L L - P l a n o

N E W Y - J e r s e y C i t y W a t e r f r o n t

Developers Building Smaller Units

A s of 1 6 Q 3S o u r c e s : U . S . C e n s u s Bu reau ; Cur ren t Popu la t i on Survey, A n n u a l S o c i a l a n d E c o n o m i c S u p p l e m e n t ; C o S t a r Por t fo l io S t r a tegy

3 0 %

3 5 %

4 0 %

4 5 %

5 0 %

5 5 %

6 0 %

1 0 %

1 2 %

1 4 %

1 6 %

1 8 %

2 0 %

2 2 %

2 4 %

2 6 %

2 8 %

3 0 %

7 0 0 6 1 0 1 47 4 7 8 8 2 8 6 9 0 9 4 9 8 0 2

S in g le P e r s o n H o u s e h o l d s A s A % O f T o t a l H o u s e h o l d s S t u d i o s A n d O n e B e d r o o m s A s A % O f N e w C o n s t r u c t i o n

S t u d i o s A n d 1 B R s A s % O f N e w C o n s t r u c t i o n% S ing le P e r s o n H o u s e h o l d s

page 57

Multifamily NationProportional Representation Of All Multifamily Units Delivered, 2010

Source: CoStar PortfolioStrategyAs of 16Q2

page 58

Multifamily NationProportional Representation Of All Multifamily Units Delivered, 2010-11

Source: CoStar PortfolioStrategyAs of 16Q2

page 59

Multifamily NationProportional Representation Of All Multifamily Units Delivered, 2010-12

Source: CoStar PortfolioStrategyAs of 16Q2

page 60

Multifamily NationProportional Representation Of All Multifamily Units Delivered, 2010-13

Source: CoStar PortfolioStrategyAs of 16Q2

page 61

Multifamily NationProportional Representation Of All Multifamily Units Delivered, 2010-14

Source: CoStar PortfolioStrategyAs of 16Q2

page 62

Multifamily NationProportional Representation Of All Multifamily Units Delivered, 2010-15

Source: CoStar PortfolioStrategyAs of 16Q2

page 63

Multifamily NationProportional Representation Of All Multifamily Units Delivered, 2010-16*

Source: CoStar PortfolioStrategyAs of 16Q2*Includes units expected to deliver by year-end 2016

Rent Growth Decelerating Across The Country

A s o f 1 6 Q 3

1 4 %

1 2 %

1 0 %

8 %

6 %

4 %

2 %

0 %

(2 % )

(4 % )

Sacr

amen

toSe

att

le In

land

Empi

re

Salt

Lake

City

Las

Vega

sAt

lant

aO

rang

eC

ount

yPh

oe nix

Nas

hville

Ta

mpa

Po

rtlan

dO

R

Dal

las

-FW

Los

Ange

les

Orla

ndo

Ral

eigh

D

etro

it C

harlo

tte

Min

neap

oli s

Col

umbu

sO

HFo

rtLa

uder

dale

East

Bay

Nor

ther

nN

JPh

ilade

lphi

aAu

st in

Chi

ca go

Mia

mi

Palm

Beac

hSa

nAn

toni

o

Y / Y R e n t G r o w t h

1 6 Q 3 R e n t G r o w t h

S o u r c e : C o S t a r Por t fo l io S t r a t e g y

1 5 Q 3 R e n t G r o w t h T ie r I T ie r I I T ie r I I ISan Die

go

Rent Premium Declining Over Last Few Quarters

A s of 1 6 Q 3

3 8 %

4 0 %

4 2 %

4 4 %

4 6 %

4 8 %

5 0 %

$ 6 0 0

$ 8 0 0

$ 1 ,0 0 0

$ 1 , 2 0 0

$ 1 , 4 0 0

$ 1 , 6 0 0

$ 1 , 8 0 0

0 7 0 8 0 9

A ve r a g e A s k i n g R e n t

0 0 0 1 0 2 0 3 0 4 0 5 0 6

4 & 5 S t a r P r e m i u m O v e r 3 S t a rS o u r c e : C o S t a r Por t fo l io S t r a tegy

4 & 5 S t a r

1 0 1 1 1 2

3 S t a r

1 3 1 4 1 5 1 6

1 & 2 S t a r

P r e m i u m

Los Angeles Apartment Overview

SFR Housing Starts And Apt Deliveries vs Household Growth

Source: Moody's Analytics; CoStar Market Analytics As of 16Q4

40

30

20

10

0

(10)

(20)

50

05 06 07 08 09 12 15 16

Housing Starts

10 11

Household Growth

13 14

ApartmentsGrowth

SFR Starts & Apt Deliveries vs Household Growth (000s)

Apartment Fundamentals

Source: CoStar Market Analytics As of 16Q4

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

0

2

4

6

8

10

05 06 07 08 11 12 13 16

Supply Change

09 10

Demand Change Vacancy

14 15

National Vacancy

Demand & Supply (000s Units)12

Vacancy

Vacancy By Star Rating

Source: CoStar Market Analytics As of 16Q4

8%

7%

6%

5%

4%

3%

2%

1%

0%

9%

05 06 07 08 09 10 11 12 13 14 15 16

1 & 2 Star 3 Star 4 & 5 Star

Vacancy Rate

Submarkets With The Most Deliveries

Source: CoStar Market Analytics As of 16Q4

6,000

5,000

4,000

3,000

2,000

1,000

0

7,000D

ownt

own

Los

Ang

eles

Gre

ater

Cul

ver

City

Gle

ndal

e

San

Gab

rielV

alle

y

Kor

eato

wn

Hol

lyw

ood

Veni

ceB

each

Mid

-Wils

hire

Woo

dlan

dHi

lls

Stud

ioC

ity/N

Hol

lyw

ood

New Supply Since 2013

Number of Units

Submarkets With The Most Construction

Source: CoStar Market Analytics As of 16Q4

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

8,000D

ownt

own

Los

Ang

eles

Kor

eato

wn

Hol

lyw

ood

Gle

ndal

e

Veni

ceB

each

Gre

ater

Cul

ver

City

Wes

tlake

San

Gab

riel V

alle

y

Wes

tSan

Fern

ando

Valle

y

Wes

tHol

lyw

ood

Under Construction Units

Number of Units

Los Angeles Rent Level & Growth

Source: CoStar Market Analytics As of 16Q4

(10%)

(8%)

(6%)

(4%)

(2%)

0%

2%

4%

6%

8%

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

05 06 07 08 09 10 11 12 13 14 15 16

Rent Growth Rent Level

Rent Level/Month$2,000

Rent Growth (Y/Y)

Average Asking Rent By Star Rating

Source: CoStar Market Analytics As of 16Q4

$3,500

$3,000

$2,500

$2,000

$1,500

$1,000

$500

$0

$4,000

Los

Ange

les

Met

ro

Wes

tlake

Kor

eato

wn

Cen

tral

San

Fern

ando

Vly

Sout

hBa

y

Nor

thea

stLo

sA

ngel

es

Hol

lyw

ood

Long

Beac

h/Po

rts

East

Hol

lyw

ood

Mid

-Wils

hire

Sout

heas

tLos

Ange

les

4 & 5 Star Asking Rent 3 Star Asking Rent

Asking Rent

Los Angeles Sales Volume And Pricing

Source: CoStar Market Analytics As of 16Q4

$0

$50

$100

$150

$200

$250

$0

$1

$2

$3

$4

$5

$6

$7

$8

$9

05 06 07 10 11 12 13 14 15 1608 09

Annual SalesVolume Average Price Per Unit

$10 Sales Volume (Billions) Price Per Unit (000s)

Submarket Sales Volume And Pricing

$500

$400

$300

$200

$100

$0

$600

$600

$500

$400

$300

$200

$100

$0

$700Lo

ngBe

ach/

Port

s

Sant

aM

onic

a

Stud

ioC

ity/N

Hol

lyw

ood

Gre

ater

Ingl

ewoo

d

Gre

ater

Cul

ver

City

Hol

lyw

ood

San

Gab

rielV

alle

y

Sout

heas

tLos

Ange

les

Kor

eato

wn

Mid

-Wils

hire

Sales Volume Last 4 Quarters

Source: CoStar Market Analytics

Average Price Per Unit Last 4 Quarters

As of 16Q4

Price Per Unit (000s)Sales Volume (Millions)

Apartment Cap Rates By Star Rating

Source: CoStar Market Analytics As of 16Q4

7.0%

6.5%

6.0%

5.5%

5.0%

4.5%

4.0%

3.5%

3.0%

7.5%

05 06 07 08 09 10 11 12 13 14 15 16

1 & 2 Star 3 Star 4 & 5 Star

Cap Rate

Downtown Los Angeles Submarket Fundamentals10.0%

9.0%

8.0%

7.0%

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%0

500

1,000

1,500

2,000

2,500

07 08 09 10 11 12 13 14 15 16

3.6%2.1%

5.4%

-3.1% -3.6%

1.3%2.4% 2.2% 2.6%

4.3%2.9%

8%6%4%2%0%

(2%)(4%)(6%)

05 06Source: CoStar Market Analytics

07 08 09 10 11 12 13 14 15 16As of 16Q4

Annual Change in Demand & Supply Vacancy & Vacancy Average

05 06

Annual Ren7t.2G% rowth

National Industrial Overview

Not All Boxes Are Created Equally

D is t r i bu t i o n

L i g h t M a n u f a c t u r i n gL i g h t I n d u s t r i a l

S o u r c e : C o S t a r PoWrtfoaliroeShtraoteugsy e A s o f 1 4 Q 2

M a j o r I n d u s t r i a l S u b t y p e C o m p o n e n t S u b t y p e s R B A

L o a d i n g D o c kR a t i o ( S F / D o c k ) F A R

C l e a rH e i g h t

O f f i c eF i n i s h S h a p e

L o g i s t i c sW a r e h o u s e 2 5 K + S F < = 1 5 K S F < = 0 . 5 2 2 ' + < 2 0 % B o x

D i s t r i b u t i o n 2 0 0 K + S F < = 1 0 K S F < = 0 . 4 2 8 ' + < 5 % B o x

L igh t Indus t r i a lL i gh t Indus t r i a l < = 1 2 0 K S F < = 1 5 K if 2 5 K + S F b o x A n y 1 6 ' + < 5 0 % B o x if < 2 5 K S FL igh t M a n u f a c t u r i n g 1 0 0 K - 3 0 0 K S F 1 5 K + S F A n y 1 2 ' - 2 2 ' < 5 0 % A n y

Source:CoStarPortfolio Strategy Asof2016

Vacancies Lower Than Any Point In The Last Cycle

S o u r c e : C o S t a r Por t fo l io S t r a t e g y A s o f 1 6 Q 3

1 2 %

1 0 %

8 %

6 %

4 %

2 %

0 %

1 4 %

1 6 %

1 6 Q 3 V a c a n c y P r e v i o u s C y c l e V a c a n c y T r o u g h

V a c a n c y

T o ta lH i g h

F u n c ti o n L o wF u n c t i o n

Big Or Small, Keep Pushing Those Rents!

A s o f 1 6 Q 3

6 .8 % 6 .4 %7 .1 %

5 .2 %

6 .5 % 6 .8 %

5 .0 %

7 .0 %

9 .5 %8 .5 %

1 0 .0 %

0 %

2 %

4 %

6 %

8 %

1 0 %

1 2 %

C h a n g e i n R e n t Y / YS o u r c e : C o S t a r P o r t f o l i o S t r a t e g y

T o ta l H i g h F u n c t i o nC h a n g e i n R e n t ( Y / Y )

L o w F u n c t i o n

Logistics Buildings Capturing Majority Of Absorption

A s o f 1 6 Q 3

1 8 0

1 6 0

1 4 0

1 2 0

1 0 0

8 0

6 0

4 0

2 0

0

1 6 Q 1 1 6 Q 2 1 6 Q 3S o u r c e : C o S t a r Por t fo l io S t r a t e g y

N e t A b s o r p t i o n ( M S F )

T o t a l H i g hFunctio n

L o wFunctio n

A Clear Difference In Demand Increases

S o u r c e : C o S t a r Por t fo l io S t r a tegy A s of 1 6 Q 4

2 .6

2 .4

2 .2

2 .0

1 .8

1 .6

1 .4

1 .2

1 .0

0 .8

0 .6

0 .4

0 .2

0 .01 7 1 8 1 9 2 0 2 10 0 0 1 0 2 0 3 0 4 0 5 0 6

L o g i s t i c s D e m a n d

0 7 0 8 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6

L ig h t Indus t r ia l D e m a n d

C h a n g e in D e m a n d (Bi l l ions S F )

Industrial Deliveries - All Distribution

A s o f 1 6 Q 3

0

2 0

4 0

6 0

8 0

1 0 0

1 2 0

1 4 0

1 6 0

1 6 Q 1 1 6 Q 2 1 6 Q 3S o u r c e : C o S t a r Por t fo l io S t r a t e g y

D e l i ve r e d R B A ( M S F )

T o ta l H i g hF u n c t i o n

L o wF u n c ti o n

Its The Output That Counts

A s o f 1 6 Q 3S o u r c e s : M o o d y ' s A n a l y t i c s ; C o S t a r Po r t f o l i o S t r a t e g y* 2 0 0 9 $ , S A A R

I n d e x ( 8 3 Q 1 = 1 0 0 )

5 0

1 0 0

1 5 0

2 0 0

2 5 0

3 0 0

1 7 1 98 3 8 5 8 7

D e m a n d

8 9 9 1 9 3 9 5 9 7 9 9 0 1 0 3

M a n u f a c t u r i n g E m p l o y m e n t

0 5 0 7 0 9 1 1 1 3 1 5

M a n u f a c t u r i n g O u t p u t *

Increased Speculative Logistics Construction

A s o f 1 6 Q 3

6 2 6 05 4 5 1 4 8

3 4 2 9 2 62 1 1 7 1 6 1 8 1 8 1 8 1 9 2 0 2 0 1 7 2 3

3 2 3 3 3 0

4 9 5 1 4 75 6 5 8

6 9 7 3 6 55 4 5 6 5 6

6 8 6 97 5

5 1

8 47 3

6 7

5 44 4

2 6

1 67

1 1 1 1 222 2 3 9

1 0

1 7 1 91 0

1 9 1 9 2 8

3 44 0

4 4

5 8

5 6

6 1 6 27 7

7 2 6 86 9

7 6

9 3 %

8 6 %

8 7 %

8 8 %

8 9 %

9 0 %

9 1 %

9 2 %

9 3 %

9 4 %

0

2 0

4 0

6 0

8 0

1 0 0

1 2 0

1 4 0

1 6 0

07Q

3 07Q

4 08Q

1 08Q

2 08Q

3 08Q

4 09Q

1 09Q

2 09Q

3 09Q

4 10Q

1 10Q

2 10Q

3 10Q

4 11Q

1 11Q

2 11Q

3 11Q

4 12Q

1 12Q

2 12Q

3 12Q

4

C o m m it te d A v a i la b leS o u r c e : C o S t a r P o r t f o l i o S t r a t e g y

O c c u p a n c y

U n d e r C o n s t r u c t i o n ( M S F ) O c c u p a n c y ( % )

Logistics Investment Very Strong

A s of 1 6 Q 3S o u r c e : C o S t a r Por t fo l io S t r a tegy*Four -quar te r ro l l ing average.

1 4 1 5 1 6

$1 0

$8

$6

$4

$2

$0

$1 2

0 1 0 2 0 3 0 4 0 5 0 6

L igh t Indus t r i a l S a l e s V o l u m e

0 7 0 8 0 9 1 0 1 1 1 2 1 3

Log is t i c s S a l e s V o l u m e

S a l e s V o l u m e ( $ B )

Los Angeles Logistics Overview

Logistics Fundamentals

As of 16Q4Source: CoStar Market Analytics*Year-To-Date

0%

2%

4%

6%

8%

10%

12%

14%

-4,000

-2,000

0

2,000

4,000

6,000

8,000

05 06 07 08 11 12 13 16*

Demand Change

09 10

Supply Change Vacancy

14 15

National Index Vacancy

Demand & Supply (000s)10,000

Vacancy

Vacant Available Blocks

Source: CoStar Market Analytics As of 16Q4

70

60

50

40

30

20

10

0

80

06 07 08 09 10 11 12 13 14 15 16

Existing 100K-250K Existing 250K-500K Existing 500K-1M

# of SF Blocks

Rent Growth

As of 16Q4Source: CoStar Market Analytics*Year-To-Date

3.8%

8.1%

2.1%

-11.7%

0.9%

7.9%

5.7%

10.7% 10.2%

2.8%4.2% 3.7%

4.8%

-0.2%

-7.1% -7.3%

-4.6%

-0.6%-1.1%

1.3%

3.5%4.3%

6.1% 6.5%

(15%)

(10%)

(5%)

0%

5%

10%

05 06 07 08 09 10 11 12 13 14 15 16*

Rent Growth (Y/Y)15%

Rent Growth National Rent Growth

Los Angeles Sales Volume And Pricing

As of 16Q4Source: CoStar Market Analytics*Year-To-Date

$0

$20

$40

$60

$80

$100

$120

$140

$0

$200

$400

$600

$800

$1,000

$1,200

05 06 07 08 09 10 11 12 13 14 15 16*

Annual SalesVolume Median Price Per Square Foot

$1,400 Sales Volume (Millions) Price Per Square Foot

National Retail Overview

Effects of Last Cycles Overbuilding

Source: CoStar Portfolio Strategy As of 16Q3

06 07 10 12Mall

08 09Neighborhood Center

11Power Center

13 14Community Center

15 16Strip Center

Under Construction (Millions SF)120

100

80

60

40

20

0

Steady Downward Trend

Sources: CoStar Portfolio Strategy; About.com; Terranomics; SEC Filings As of 16Q3

80

60

40

20

0

(20)

(40)

(60)

100

2015 20162010 2011 2012

Announced Store Openings (SF)

2013 2014

Announced Store Closings (SF) Net Change

SF (Millions)

Recovery By Abstention

S o u r c e : C o S t a r Por t fo l io S t r a t e g y A s o f 1 6 Q 3

0 %

1 %

2 %

7 %

8 %

9 %

0

5 0

6 %1 5 0

5 %

4 %1 0 0

3 %

2 0 0

2 5 0

9 2 9 4 9 6 9 8 0 0 0 2

Q u a r t e r l y S u p p l y G r o w t h

0 4 0 6 0 8 1 0 1 2 1 4

Q u a r t e r l y D e m a n d G r o w t h

1 6 1 8 2 0

V a c a n c y

S u p p l y & D e m a n d (Mi l l ions S F ) V a c a n c y

Competitive Vacancies Tighter Than Ever

S o u r c e : C o S t a r P o r t f o l i o S t r a t e g y A s o f 1 6 Q 4

7 %

6 %

5 %

4 %

3 %

2 %

1 %

0 %

8 %

0 6 0 7 0 8 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6

V a c a n c y C o m p e t i t i v e V a c a n c y ( e x c l . b l d g s w i t h > 4 0 % v a c a n t )

V a c a n c y R a t e

Investment Activity Slowing

S o u r c e : C o S t a r Por t fo l io S t r a t e g y A s o f 1 6 Q 4

$ 0

$ 2

$ 4

$ 6

$ 8

$ 1 0

$ 1 2

$ 1 4

$ 1 6

5 0

7 5

1 0 0

1 2 5

1 5 0

1 7 5

2 0 0

2 2 5

0 0 0 1 0 2 0 3 0 4

I n v e s t m e n t V o l u m e

0 5 0 6 0 7 0 8 0 9

R e p e a t S a l e s I n d e x

1 0 1 1 1 2 1 3 1 4 1 5 1 6

A v g Q u a r t e r l y I n v e s t m e n t V o l u m e

Q u a r t e r l y I n v e s t m e n t V o l u m e ( $ B )R e p e a t R e t a i l S a l e s I n d e x ( V a l u e W e i g h t e d )

Los Angeles Retail Overview

Retail Fundamentals

Source: CoStar Market Analytics As of 16Q3

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

-3,000

-2,000

-1,000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

05 06 07 08 11 12 13 16

Supply Change

09 10

Demand Change Vacancy

14 15

National Vacancy

Demand & Supply (000s Units)8,000

Vacancy

Retail Rent Growth

As of 16Q3Source: CoStar Market Analytics*Year-To-Date

4.8%

8.7%

16.0%

-4.4%

-7.2%-5.5%

-2.6%

-0.4%

0.1%

4.3%

7.3%5.6%

(10%)

(5%)

0%

5%

10%

15%

05 06 07 08 09 12 13 14 15 16*

Rent Growth (Y/Y)20%

10 11

Rent Growth (Y/Y)

Los Angeles Retail Sales Volume And Pricing

As of 16Q3Source: CoStar Market Analytics*Year-To-Date

$0

$50

$300

$350

$0

$500

$3,000$250

$2,500$200

$2,000

$150$1,500

$100$1,000

$3,500

05 06 07 08 09 10 11 12 13 14 15 16*

Annual Sales Volume Median Price Per Square Foot

Sales Volume (Millions) Price Per Square Foot$4,000

Presented By:

Steve BashamSenior Market Analyst sbasham@costar.com 866.834.4096