The Big Picture: Global Trends in Real Estate Robert M White, Jr., CRE, FRICS November 14, 2014
INVESTMENT ACTIVITY BACK TO NEAR RECORD LEVELS IN 2014 Quarterly Commercial Property Transaction Volume Billions $450 $400 Americas EMEA AsiaPac $350 $300 $250 $200 $150 $100 $50 $0 '07 '08 '09 '10 '11 '12 '13 '14
SHIFT OF MOMENTUM TO EUROPE; GREATER APPETITE FOR RISK H1 14 Global Transactions Summary $ bil China - Land $187.7 China - Commercial $10.4 Japan $24.7 Australia $15.2 Hong Kong $9.2 Singapore $5.5 South Korea $2.9 Taiwan $4.8 Malaysia $2.1 India $1.9 Asia Other $1.5 AsiaPac $266.0 United Kingdom $40.0 Germany $26.7 France $17.4 Nordics $12.2 Peripherals $9.4 Benelux $7.7 AustriaSwitz $3.8 Russia $3.4 Central Europe $3.4 Eastern Europe $1.5 ME/Africa $3.9 EMEA $129.4 United States $153.9 Canada $7.4 Latin America $4.3 Americas $165.6-32% -32% -49% -48% -52% -30% -28% YOY Change -7% -8% -6% -6% 4% 12% 7% 2% 32% 32% 42% 40% 40% 31% 22% 23% 14% 43% 52% 56% 84%
CROSS-BORDER FLOWS SIGNIFICANT AND GROWING INFLUENCE
FOREIGN CAPITAL FROM EVERY DIRECTION Direct Acquisitions by Foreign Investors in US 4 2013 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed. 4
US TRENDS SOLIDLY POSITIVE Source: RCA, Moody s/rca CPPI
RECOVERY SELECTIVE AND UNEVEN ACROSS PROPERTY SECTORS Office Q2 14 Price Levels Relative to Peak US Office -5% 6MM CBD Office 17% NMM CBD Office -6% 6MM Suburban Office NMM Suburban Office -18% -23% Single-tenant Office 4% Industrial Indus trial 6MM Industrial NMM Industrial Single-tenant Industrial Warehouse Flex -11% -6% -15% -15% -7% -20% Retail -15% 6MM Retail 2% Retail NMM Retail Single-tenant Retail Anchored Center -23% -16% 2% Unanchored Center -27% Apartment Apartment 6MM Apartment NMM Apartment Garden Mid/Highris e 4% 7% 15% 32% 36% Hotel Hotel Full-s ervice Hotel Limited-Service Hotel -25% -16% -28%
LIQUIDITY NOW ACROSS ALL MARKETS! NYC, San Francisco, Boston, DC, LA, Chicago Seattle, Houston, Dallas, Denver, Austin, Raleigh Miami, Phoenix, Minneapolis, Charlotte, San Diego, Oakland, Inland Empire, NYC Burbs Atlanta, Las Vegas, Orlando Sacramento, Tampa, Jax, tertiary markets
PRICE RECOVERY SELECTIVE AND UNEVEN Q2 14 Price Levels Relative to Peak Commercial Apartments NYC-Manhattan 38% NYC-Manhattan SF-San Francisco 23% SF-San Francisco SF-San Jose NYC-Boroughs 8% 7% NYC-Boroughs Denver DC Metro Seattle Dallas/Houston/Austin Boston SF-Oakland Southeast ex Fl/Atl Denver LA-LACounty LA-InlandEmpire West Others Philly/Baltimore NYC-Burbs Southwest Others Chicago Miami/So Fl NEMA Others San Diego Tampa/SW Florida LA-OrangeCounty Sacramento/Central CA Orlando/Central Fl Phoenix Atlanta Midwest ex Chicago Las Vegas -1% -3% -4% -4% -5% -5% -5% -6% -9% -10% -11% -11% -11% -13% -15% -17% -18% -19% -21% -24% -30% -30% -33% -33% -40% SF-San Jose Boston Dallas/Houston/Austin Seattle San Diego Philly/Baltimore West Others LA-LACounty NYC-Burbs Southwest Others NEMA Others LA-OrangeCounty DC Metro Southeast ex Fl/Atl SF-Oakland Miami/South Florida LA-InlandEmpire Midwest ex Chicago Atlanta Orlando/Central Fl Tampa/SW Fl Chicago Sacramento/Central CA Jacksonville/No Fl Phoenix -1% -2% -2% -3% -8% -8% -9% -14% -21% Jacksonville/No Fl -41% Las Vegas -34% 62% 55% 47% 39% 37% 32% 32% 27% 25% 25% 24% 22% 22% 17% 16% 13% 11% 11% 9% 1%
RECOVERY SELECTIVE AND UNEVEN ACROSS MARKETS 450 RCA Commercial Property Price Indices 400 Manhattan 350 300 NYC Boroughs 250 200 US (Moody s/rca CPPI) 150 NYC Suburbs 100 50 - '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
YIELDS IN LINE WITH OTHER GLOBAL MARKETS Prime Office Yields Spread to Sovereign Bonds 4.5% Manhattan Central London 200 Manhattan Central London 4.0% 150 3.5% 100 3.0% 50 2.5% 2.0% - 1.5% (50) 1.0% (100) 0.5% (150) 0.0% 2007 Peak Current (200) 2007 Peak Current
THANK YOU rwhite@rcanalytics.com 11 2013 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed. 11