U.S. Capital Markets Glide Path to Clearer Skies

Sell-side: crystallizing strong returns & the go/no-go decision …cumulative returns still accretive across most sectors; sell-side decisions still worth consideration

Cumulative Total Unlevered Returns* on Real Estate Investment

3-Year Hold (bought in 2020 Q1)

5-Year Hold (bought in 2018 Q1)

7-Year Hold (bought in 2016 Q1)

10-Year Hold (bought in 2013 Q1)

Office

-1%

12%

26%

73%

Multifamily

27%

41%

60%

117%

Industrial

77%

128%

190%

328%

Retail

2%

3%

16%

69%

All Property Types

23%

38%

59%

123%

• Returns for assets purchased in the “peak years” just prior to downturns hold up well on a cumulative rolling basis (except for office). • Properties faced with a needs-based, sell-side situation have still had a chance to accrue strong rolling returns, particularly those with hold periods over five years. This is particularly the case for industrial and multifamily, which have witnessed outsized capital appreciation returns (driven by cap rate compression) over the last several years. • Retail appreciation has been flat on a 3-year hold basis but improves with longer-term hold horizons. • With forecasts for an oncoming recession, the current chapter offers an opportunity to crystallize relatively healthy returns before impending weakness sets in.

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Source: NCREIF, calculations by Cushman & Wakefield Research. Note: *Income + Capital Returns = Total Return