2021 Retail Investor Survey Report

RETAIL INVESTMENT ADVISORS

RETAIL INVESTMENT ADVISORS THE DOMINANT MARKET LEADING TEAM

With 9 offices and more than 50 team members, the Retail Investment Advisors are a national service platform comprised of a fully integrated team specializing in the sale and finance of retail properties across the US

CONNECTING GLOBAL CAPITAL WITH LOCAL EXPERTISE

MIAMI Florida

NEW YORK New York

ATLANTA Georgia

EAST RUTHERFORD New Jersey

CHICAGO Illinois

WASHINGTON D.C.

PHOENIX Arizona

DALLAS Texas

SAN FRANCISCO California

2 // RETAIL INVESTOR SURVEY REPORT

INTRODUCTION

Cushman &Wakefield’s Retail Investment Advisors surveyed approximately 150 investors in mid-February 2021 and this report incorporates the results of that survey. It is clear from the survey that there are mixed opinions about where the industry is presently but there exists undeniable commonalities including; a robust pipeline of leasing activity, concern with movie theaters regarding uses, and a “smaller is better” mentality when it comes to the ideal acquisition. We suspect that as the country reaches herd immunity in the next 3 to 6 months, investor appetite for large deals will return. Respondents believe cap rates will rise on non-grocery anchored centers and stay the same on grocery anchored centers while the debt markets will not fully recover until sometime in 2022. The Southeast appears to be at present the favored region within the U.S. for investing due to less restrictive pandemic policies translating to healthier retail fundamentals relative to other regions. We hope you find this survey insightful and welcome any and all feedback and more than anything greatly appreciate your participation in order to make this possible. On to a better 2021!

Chicago, IL

New York, NY

East Rutherford, NJ

San Francisco, CA

Washington D.C.

Atlanta, GA

Phoenix, AZ

Miami, FL

Dallas, TX

RIA Team

C&W Office Locations

CUSHMAN & WAKEFIELD // 3

01 SURVEY RESPONDENT OWNERSHIP STRUCTURE

PUBLIC REIT

PRIVATE REIT

18.5% 24.1%

INSTITUTIONAL INVESTOR / ADVISOR

PRIVATE INVESTOR

21.3%

36.2%

4 // RETAIL INVESTOR SURVEY REPORT

RETAIL INVESTMENT ADVISORS

02 INVESTMENT OUTLOOK FOR RETAIL REAL ESTATE

GET ME OUT OF RETAIL 2.8%

BEARISH 48.6%

BULLISH 48.6%

INSTITUTIONAL INVESTOR / ADVISOR

PUBLIC REIT

PRIVATE REIT

PRIVATE INVESTOR

BEARISH 72.7%

BEARISH 47.4% BULLISH 52.6%

BEARISH 40.0% BULLISH 60.0%

BEARISH 35.0% BULLISH 65.0%

GET ME OUT OF RETAIL 13.6%

BULLISH 13.6%

CUSHMAN & WAKEFIELD // 5

03 BUSINESS PLAN ALTERATIONS OVER THE COMING 12-24 MONTHS 80%

79.2%

70%

60%

50%

40%

30%

15.1%

20%

5.7%

10%

0%

SIGNIFICANT CHANGES TO BUSINESS PLAN

MINOR CHANGES, BUT MOSTLY THE SAME

NO CHANGES TO BUSINESS PLAN

6 // RETAIL INVESTOR SURVEY REPORT

RETAIL INVESTMENT ADVISORS

04 BIGGEST CONCERN IN THE RETAIL SECTOR

LEAST CONCERNED

MOST CONCERNED

Tenant Survival

Too much retail space Consumer Spending Weakness Post-Vaccine 05 RETAILERS INVESTORS ARE MOST COMFORTABLE HAVING AS PART OF THEIR PROPERTY MOST COMFORTABLE LEAST COMFORTABLE Online / Ecommerce Covid-19 Activity Restrictions

Sit Down Restaurant

Movie Theater

Gym / Fitness Center

Bar / Brewery

CUSHMAN & WAKEFIELD // 7

06 PLANS FOR BUYING OR SELLING MORE ASSETS IN 2021

MATCHING FUNDS ONLY 14.4% WE ARE ONLY FOCUSED ON OPERATIONS 2.8%

WE’RE A NET BUYER 52.8% WE’RE A NET SELLER 29.2%

INSTITUTIONAL INVESTOR / ADVISOR

PUBLIC REIT

PRIVATE REIT

PRIVATE INVESTOR

WE ARE ONLY FOCUSED ON OPERATIONS 2.7% MATCHING FUNDS ONLY 10.8% WE’RE A NET SELLER 21.6% WE’RE A NET BUYER 64.9%

WE ARE ONLY FOCUSED ON OPERATIONS 5.0% WE’RE A NET SELLER 20.0% MATCHING FUNDS ONLY 40.0% WE’RE A NET BUYER 35.0%

WE ARE ONLY FOCUSED ON OPERATIONS 4.3% WE’RE A NET SELLER 47.8% WE’RE A NET BUYER 47.8%

WE ARE ONLY FOCUSED ON OPERATIONS 15.4% WE’RE A NET SELLER 30.8% WE’RE A NET BUYER 53.8%

8 // RETAIL INVESTOR SURVEY REPORT

RETAIL INVESTMENT ADVISORS

07 INVESTOR INCLINATIONS

PUBLIC REIT

9.7%

“ A C

Q U

I R

E

N E

PRIVATE REIT

W A S

INVEST IN EXISTING PORTFOLIO 41.0%

ACQUIRE NEW ASSETS 59.0%

S E T S ” R E

27.4%

S P O N

INSTITUTIONAL INVESTOR / ADVISOR

D E

N T

27.4%

P R

O F

I L

E

PRIVATE INVESTOR

35.5%

CUSHMAN & WAKEFIELD // 9

08 MOST ATTRACTIVE ASSET TO PURCHASE

LEAST ATTRACTIVE

MOST ATTRACTIVE

Grocery Anchored

Malls

Power Center

High Street

Small Shop

Value-Add

09 PRIORITIZING UNDERWRITING METRICS

1. Market Rents 2. Vacancy 3. Downtime 4. Rental Growth 5. Yield Targets 6. TA Costs

10 BIGGEST CHALLENGE IN TODAY’S PURSUIT OF ACQUISITIONS MOST CHALLENGING

LEAST CHALLENGING

Lack of Compelling Opportunities

Cost of Capital

Limited Debt Options

Uncertainty in Underwriting Cash Flow

Bid-Ask Gap

10 // RETAIL INVESTOR SURVEY REPORT

RETAIL INVESTMENT ADVISORS

11 IDEAL ACQUISITION SIZE $50M - $75M 18.1%

$75M + 8.6%

$30M - $50M 32.4%

$10M - $30M 41.0%

RESPONDENT PROFILE

$10M - $30M $30M - $50M

$50M - $75M

$75M +

INSTITUTIONAL INVESTOR / ADVISOR 42.2%

PUBLIC REIT 29.4%

PUBLIC REIT 33.3%

PRIVATE INVESTOR 62.8%

PRIVATE INVESTOR 33.3%

PRIVATE REIT 26.5%

PRIVATE REIT 20.9%

PRIVATE REIT 31.6%

INSTITUTIONAL INVESTOR / ADVISOR 26.5%

PUBLIC REIT 9.3%

INSTITUTIONAL INVESTOR / ADVISOR 22.2%

PUBLIC REIT 15.8%

INSTITUTIONAL INVESTOR / ADVISOR 7.0%

PRIVATE INVESTOR 17.7%

PRIVATE INVESTOR 10.5%

PRIVATE REIT 11.1%

CUSHMAN & WAKEFIELD // 11

12 2021 CAP RATE TRAJECTORY FOR POWER & NON-GROCERY ANCHORED CENTERS

PUBLIC REIT

FALL 6.5%

17.5%

E

PRIVATE REIT

I L

O F

P R

P O N D E N T

27.0%

RISE 58.9%

STAY THE SAME 34.6%

INSTITUTIONAL INVESTOR / ADVISOR

E S

R

E ”

S

“ R I

22.3%

PRIVATE INVESTOR

33.3%

12 // RETAIL INVESTOR SURVEY REPORT

RETAIL INVESTMENT ADVISORS

13 2021 CAP RATE TRAJECTORY FOR GROCERY-ANCHORED CENTERS

PUBLIC REIT

20.5%

“ F

A L

L

PRIVATE REIT

0 -

5 0

B P

STAY THE SAME 52.3%

S ”

28.2%

FALL 0-50BPS 36.4%

R E S P O

INSTITUTIONAL INVESTOR / ADVISOR

N D

E N

T

P R

O F

17.9%

I L

E

PRIVATE INVESTOR

RISE 0-50BPS 7.5%

RISE MORE THAN 50BPS 3.7%

33.3%

CUSHMAN & WAKEFIELD // 13

14 MOST DESIRED REGION TO ACQUIRE MORE ASSETS

#1 // SOUTHEAST

#4 // SOUTHWEST

#5 // WEST COAST & NORTH WEST

#2 // SOUTH CENTRAL

#3 // NORTHEAST

#6 // MIDWEST

14 // RETAIL INVESTOR SURVEY REPORT

RETAIL INVESTMENT ADVISORS

15 PLANS TO MONETIZE SINGLE TENANT NNN ASSETS CONSIDERING RECORD LOW CAP RATES YES, WE WANT TO SELL NNN PROPERTIES IN OUR PORTFOLIO 44.3% 16 NON-TRADITIONAL RETAIL USES WITH MOST FAVORABLE PREDICTED IMPACT TO PORTFOLIO OVER NEXT 5 YEARS

NO, WE WANT TO MAINTAIN CONTROL OF THE NNN PROPERTIES 55.7%

78.3%

80% 70% 60% 50% 40% 30% 20% 10% 0%

57.5%

34.9%

32.1%

17.9%

16.0%

Medical Tenancy

Quick Service Restaurants

Distribution

Digitally Native Brands opening brick & mortar

Pop-Up Shops

Ghost Kitchens

CUSHMAN & WAKEFIELD // 15

17 ESTIMATED TIME FOR DEBT MARKETS TO RETURN TO PRE- COVID LEVELS FOR NON-GROCERY ANCHORED ASSETS

NEVER 6.5%

2ND HALF OF 2021 24.3%

2022-2023 54.2%

3-5 YEARS 15.0%

RESPONDENT PROFILE

2022-2023

2ND HALF OF 2021

PRIVATE INVESTOR 36.2% INSTITUTIONAL INVESTOR / ADVISOR 25.9%

PRIVATE INVESTOR 42.3% INSTITUTIONAL INVESTOR / ADVISOR 11.5%

PUBLIC REIT 15.5%

PUBLIC REIT 19.2%

PRIVATE REIT 22.4%

PRIVATE REIT 26.9%

16 // RETAIL INVESTOR SURVEY REPORT

RETAIL INVESTMENT ADVISORS

18 2021 LEASING PIPELINE STRENGTH

11.3%

VERY STRONG

48.1%

STRONG

34.0%

NEUTRAL

5.7%

POOR

0.9%

VERY POOR

0%

10%

20%

30%

40%

50%

CUSHMAN & WAKEFIELD // 17

CHANGING THEWAY THEWORLD SEES RETAIL

RETAIL INVESTMENT ADVISORS

MIAMI Florida

NEW YORK New York

ATLANTA Georgia

EAST RUTHERFORD New Jersey

CHICAGO Illinois

WASHINGTON D.C.

PHOENIX Arizona

DALLAS Texas

SAN FRANCISCO California

For additional information on this survey report, please contact:

MEAGAN CLEMENTS Graphic Designer +1 305 351 2456 meagan.clements@cushwake.com

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