Unlocking Alternatives: Investing Beyond the Major CRE Asset Type

WHAT ARE CRE ALTERNATIVES?

Alternatives is a catch-all term for a diverse set of product subtypes that service distinct populations and/or have differentiating operating attributes. Pricing, liquidity and investor profiles are distinct from conventional asset classes such as traditional office, industrial, retail and multifamily.

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DYNAMIC SECTORS Since our last report on these sectors in 2019, a substantial amount has shifted as the pandemic, inflation and now a restrictive capital markets space have dramatically shifted the landscape of alternative CRE asset types. KEY TAKEAWAYS Cycle-specific effects of the pandemic, such as the rise of remote/hybrid work and hastening of family formations, have amplified longer-term secular demand drivers that have steadily grown these sectors. SURVIVORS AND THRIVERS During the last three economic downturns (Dot Com, GFC, COVID-19), alternative assets consistently outperformed the recovery of the major asset types. This data continues to reinforce the idea that alternative assets could offer a safe haven for capital in the event of a future economic downturn. LONG- AND SHORT-TERM FACTORS AT PLAY

RESILIENT TO RECENT HEADWINDS While overall transaction activity has trended downward over the past year along with the rest of CRE, a number of these subsectors have shown resiliency and have maintained strong operating fundamentals in rent and occupancy. RUNWAY FOR CAPITAL A number of these asset types continue to be operated by non-institutional entities. Institutional participation in alternative asset sectors varies, and there is room for further expansion. This expansion has the potential to bolster pricing and liquidity, creating a mutually beneficial cycle. BARRIERS TO ENTRY Investors should be aware of operational, regulatory, and industry-specific nuances to managing these property types—often market entry will involve selecting the right acquisition target or experienced partner to execute a feasible strategy.

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ALTERNATIVES VS MAJOR ASSET TYPES While representing a fraction of overall transaction volume, alternatives that are either resilient or benefit from changing work and demographic trends are positioned well for growth

Sectors scored from -2 (strong underperform) to +2 (strong outperform) – sized by H1 2023 transaction volume Changing Prospects for Growth

2

Peaked

Remaining Strong

Industrial - Warehouse

Life Sciences Student Housing

SFR / BTR

Apartment - Garden

1.5

Senior Housing Data Center

Manufactured Housing

Self Storage

1

Industrial - Flex

Cold Storage

Healthcare

0.5

Apartment - Highrise

Ag / Resource

Hotel & Resorts

0

-0.5

Office - CBD

Office - Suburban

Retail - Shops

Retail - Centers

-1

-1.5

12-Month Previous Performance Lagging

Improving

-2

-2

-1.5

-1

-0.5

0

0.5

1

1.5

2

12-Month Future Performance Outlook

Source: Through Q2 2023, RCA, CoStar, Preqin, Cushman & Wakefield Research

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ALTERNATIVE SECTORS TRANSACTION VOLUMES OVER TIME While total volume has slowed ($15.7B YTD ‘23 vs $41.8B YTD ‘22), alternatives remain at a resilient 10% of total volume—comparable to historical average

• Combined, alternatives represent a comparable size to that of the major asset types—historically hovering near retail but now surpassing both office and retail in total size. • While having fallen from record peaks in 2021 and 2022, the overall alternatives sector has remained relatively resilient to limited debt availability and cautious capital over the past year. • As a percentage of total transaction volume, alternatives have ranged from 9%-17% since 2020. Previously, alternatives made up 6%- 15% between 2017 to 2019. • The largest alternative sectors are in the residential space with student and senior / age-restricted routinely topping the list. • In recent years, self storage, R&D/life sciences and healthcare / MOB have seen significant growth.

Quarterly Transaction Volume by Asset Type

-$10 $10 $30 $50 $70 $90 $110 $130 $150 $170

Billions

Office

Apartment

Industrial

Retail

Alternatives

Quarterly Alternatives Transaction Volume and % Volume Share

$0 $20 $40 $60

5.0% 10.0% 15.0% 20.0%

Billions

% of Transaction Volume

‘

'17

'18

'19

'20

'21

'22

23

Medical Office

Mobile/Manufactured Housing

R&D

Self Storage

Student Housing

Tech/Data Center

(RHS)

Cold Storage

Age-Restricted

Alternatives as % Total CRE Transaction Volume

Source: Single + Portfolio trades on MSCI / Real Capital Analytics, Cushman & Wakefield Research

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ALTERNATIVES RESILIENT IN DOWN MARKETS While recession conditions have been unique, alternative asset REITs have generally outperformed NAREIT’s Equity Index

• In the 2000 and GFC recessions, alternative REITs outperformed the equity index across the board (even while taking losses during the GFC). • The pandemic provided another example where some alternative asset types outperformed traditional asset returns during a recessionary period. • The pandemic affected alternative asset groups wildly differently. Unsurprisingly, sectors that benefitted from affordability, migration and remote work (e.g., manufactured homes, self storage and data centers) saw strong gains since 2020 while sectors such as student housing, hospitality and healthcare saw struggles in the immediate aftermath.

REIT Performance Across Recessions

150%

125%

100%

52%

50%

31%

26%

21%

13%

12%

0%

-5%

-10%

-26%

-33%

-34%

-35%

-50%

-53%

-63%

-100%

Dot Com (2001 2002) COVID-19 (2020) NAREIT Equity Manufactured Homes Healthcare Self Storage Student Housing Data Center GFC (2008 - 2010)

Source: NAREIT, Cushman & Wakefield Research

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BUYER TYPES FOR ALTERNATIVE ASSETS Increasing private capital involvement has been driving volume growth in alternatives

• For the past decade, private capital has been the dominant buyer across most alternative sectors. However, sectors with unique operational moats and proven pandemic resilience (e.g., data centers, life sciences) have driven greater institutional interest. Recently, as capital has grown more cautious due to overall economic factors, private capital has once again become the predominant buyer type as they seek opportunity a slow transaction landscape. • Institutional involvement fell to a low of 10% in 2019. Since then, there has been a substantial shift to reallocate investments away from office. Alternatives are among those poised to be the beneficiaries of these reallocations. • In certain alternative sectors, namely self storage, healthcare and R&D/life science, REITs continue to be key buyers. Often these were once early movers that aggregated portfolios and have maintained strong growth through to today.

Alternatives Buyer Type Breakdown Q3 2023

Alternatives % Transaction Volume Share

0% 50% 100%

1.2%

Tech/Data Center

Medical Office

11%

70%

6%

0.3%

Cold Storage

Mobile/Manufactured Housing

88%

2%

0.6%

Age-Restricted

R&D/Life Sciences

3%

66%

12%

2.7%

Student Housing

Self Storage

17%

80%

2%

1.9%

Self Storage

Student Housing

95%

5%

2.1%

R&D/Life Sciences

Age-Restricted

80%

Mobile/Manufactured Housing

0.8%

Cold Storage

90%

2.6%

Medical Office

Tech/Data Center

100%

0.0% 1.0% 2.0% 3.0%

Institutional/Fund Private Listed/REIT

Cross-Border

2022 2021 Avg '17-'19

User/Other

Source: RCA, Cushman & Wakefield Research

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CONTENTS

DATA CENTER

HEALTHCARE

LIFE SCIENCES

COLD STORAGE

STUDENT HOUSING

SENIOR HOUSING SINGLE FAMILY RENTAL / BUILD TO RENT (SFR / BTR)

SELF STORAGE

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DATA CENTERS

DATA CENTERS: DEMAND DRIVERS New factors joining historic growth in data consumption and storage needs

• Data traffic (and corresponding data storage) growth is a result of increasing digitization in emerging / rural markets, 5G rollouts at scale and growing enterprise use of the cloud. • A greater portion of the sector (estimated at over 50%+ by 2027) is catering to hyperscale tenants—cloud providers such as Amazon AWS, Google Cloud, Microsoft Azure, Oracle and other large data users such as Meta. Each of these platforms is increasingly doing site sourcing and development in-house, leading to longer-term questions on the opportunities that developers and landlords will see from this significant tenant base over the next decade. • Major headwinds in the space currently are a dearth of power availability in key markets and increasingly limited developable land. Notably, Northern Virginia (the largest market in the U.S.) is experiencing a 2-3 year pause on development in top submarkets as local utility Dominion Energy is upgrading infrastructure to be able to distribute the necessary power for data centers. Other markets have begun to face constrictions in available power, and developers are seeking earlier commitments from utilities to satisfy demand. Land has also become increasingly difficult to acquire with increased competition and the need for larger parcel sizes (50-100+ acre sites with dedicated substations and longhaul fiber). • Growth in AI interest has boomed recently, having received hundreds of billions in funding in recent years. Hyperscalers are rapidly growing portfolios to meet demand.

Global Internet Data Traffic

Investment in AI / Machine Learning Companies

$300

30

28

$250

25

25

21

$200

20

17

$150

Billions

15

14

Zettabytes

$100

12

10

9

$50

7

5

$

0 - 499K 500K - 0.9M 1M - 4.9M 5M - 9.9M 10M - 24.9M 25M+

0

Q1 2016

Q1 2017

Q1 2018

Q1 2019

Q1 2020

Q1 2021

Q1 2022

Q1 2023

Source: IPI Partners, Pitchbook, Cushman & Wakefield Research

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DATA CENTERS: INVESTMENT PERFORMANCE

• As many owners in the space are either operator / investor vehicles or, increasingly, hyperscalers through self performance operations, sales in the sector are limited. • While transaction volumes have tempered somewhat from the past several years, sales of existing assets do occur, typically as part of the M&A of an operator, geographic expansion / retrenchment or distressed operator margins. • A number of significant acquisitions have occurred over recent years. In 2023, Brookfield purchased Compass Datacenters for an estimated $5.5B, following in the footsteps over other significant data center operator acquisitions: KKR/GIP purchasing CyrusOne (2021, $15B), Blackstone purchasing QTS (2021, $10B), American Tower buying Coresite (2021, $10.1B), DigitalBridge / IFM acquiring Switch (2022, $11B). • In other cases, certain operators have sold or diluted their control of assets in order to help fund the development of new data centers. Given the relatively high cost of development, operators require significant capital to redeploy and expand their pipelines. • Cap rates have continued to compress as larger, more modern assets increasingly make up transaction sales. • A significant amount of capital activity in the space goes toward purchasing land, which has faced rising costs in recent years. As local land markets have reacted quickly to the arrival of new data centers, construction of these assets is often capital intensive, with development budgets often running into the billions of dollars for data centers sized for hyperscale use.

North American Pricing & Volume Trends

$10 $15 $20 $25 $30 $35 $40

$ $1 $2 $3 $4 $5 $6 $7 $8 $9 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

$ Millions / MW

$ $5

Billions Transacted

Sales Volume (LHS)

Average of $/MW (RHS)

North American Data Center Cap Rates

$2B $1B Seattle Atlanta Los Angeles Phoenix Philadelphia Top Markets by Sales Volume 2011 - 2023

4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 7.50% 8.00% 8.50%

$2B $2B $2B $2B

DC/NoVa NYC/Northern NJ San Francisco Bay Area Chicago Dallas

$3B

$3B $3B

DIVE DEEPER: • 2023 Global Data Center Market Comparison • APAC, Americas, EMEA Data Center Updates

$8B

$B

$5B

$10B

Source: Cushman & Wakefield Research

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HEALTHCARE

HEALTHCARE: DEMAND DRIVERS Aging demographics continue to support long-term demand for healthcare

• Healthcare spending has been on a continual upward trend in the United States, with CMS projecting that spending could exceed $6T by 2028. Per capita spending has similarly grown, with latest estimates suggesting an average of $12,500 spent per year, over $3,500 higher than ten years ago. • Baby boomers continue to flow through the 65+ age cohort, with Gen X approximately seven years away from beginning to enter this high-care age segment. These populations will continue to drive the number of required procedures across a range of different specialties. • While demand is strong and will grow, there are challenges to the sector. o In an AMN Healthcare survey, 85% of healthcare facilities were experiencing labor shortages. While healthcare employment has risen since the pandemic, the sector is still behind current demand. o Patient expectations have shifted the point of-care across specialties from inpatient to outpatient.

U.S. Healthcare Spending

U.S. Population by Age

5.0

8T

4.5

7T

6T

4.0

5T

3.5

4T

3.0

$ Healthcare Spending

3T

2.5

Millions of Persons (U.S.)

2T

2.0

1T

1.5

T

1.0

20 25 30 35 40 45 50 55 60 65 70 75

2000

2002

2004

2006

2008

2010

2012

2014 Year

2016

2018

2020

2022

2024

2026

2028

2030

Age

Source: CMMS, Moody’s Analytics, Cushman & Wakefield Research

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HEALTHCARE: PERFORMANCE

Assets continue to perform strongly, transaction volumes await confident capital

• In the wake of the pandemic, there was a steady increase in the sales volume of healthcare assets in the U.S. As funds reallocated their portfolio distributions away from traditional asset classes such as office and retail, healthcare has been a beneficiary of that growth. • During this period, large portfolio acquisitions and recapitalizations led to heightened transaction volumes and peak pricing. • While transactions have fallen as investors remain wary of the overall economic environment, performance indicators for the asset type remain strong and resilient. • Occupancy for quality assets in top markets has steadily grown through 2022 – 2023, as leasing remains robust. Occupancies generally stay comfortably in the 90% - 95% range. • Interest in office-to-healthcare conversions has grown, these adaptive reuse projects will likely require experienced developers / operators to execute properly to patient and investor needs. DIVE DEEPER: • Vital Signs: Healthcare Capital Markets H1 2023 • Vital Signs: Managing Healthcare Construction Projects • Vital Signs: Top Design Considerations

US Healthcare Pricing & Volume Trends

$200 $250 $300 $350 $400 $450

$B $2B $4B $6B $8B 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 23Q1 23Q2 23Q3 On-Campus Sales Volume ($) Off-Campus Sales Volume ($) On-Campus Avg Price ($/sf) Off-Campus Avg Price ($/sf)

Completions, Absorption, Occupancy

US Healthcare Cap Rates

Completed SF (LHS) Occupancy Rate (RHS)

Absorption SF (LHS)

0.00 200.00 400.00 600.00 800.00

3.50% 4.50% 5.50% 6.50% 7.50%

90.00% 90.50% 91.00% 91.50% 92.00% 92.50% 93.00%

0 1 2 3 4 5 6

Millions SF

% Occupancy

17Q1

17Q3

18Q1

18Q3

19Q1

19Q3

20Q1

20Q3

21Q1

21Q3

22Q1

22Q3

23Q1

23Q3

Spread - Office (RHS) MOB Cap Rate (LHS)

Spread - MOB (RHS)

Source: RevistaMed (Completions, Absorption, Occupancy based on Top 50 Markets, 7,500+ sf MOBs), Cushman & Wakefield Research

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LIFE SCIENCES

LIFE SCIENCES: DEMAND DRIVERS Despite falling VC investment, resiliency in key markets remains

• VC funding has slowed as a result of overall economic factors, limiting the ability for smaller life sciences startups from expanding space in the key hubs of Boston, the Bay Area, San Diego and the Research Triangle. • An influx of new construction deliveries will increase inventory, which has already grown by 18% since 2020. The current construction pipeline is twice as large as it was when the pandemic began (38 msf vs. 16 msf). • Continuous breakthroughs in biotechnology, including gene editing technologies like CRISPR and advancements in drug discovery, will continue demand in the life sciences sector as researchers and pharmaceutical companies seek to develop innovative therapies and treatments. • Evolving healthcare regulations and policies, particularly those aimed at expediting drug approvals and ensuring patient safety, will drive demand by shaping the development, testing and commercialization processes. DIVE DEEPER: • Life Sciences Update: September 2023

2020 – 2022 Public Biotech Company Revenue

Life Sciences VC Funding

$300

$250

Billions

$200

$150

$100

$50

$

0 - 499K 500K - 0.9M 1M - 4.9M 5M - 9.9M 10M - 24.9M 25M+

Source: Pitchbook, Cushman & Wakefield Research

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COLD STORAGE

COLD STORAGE: DEMAND DRIVERS Urban populations are requiring higher refrigerated storage volumes for food, drink

• Growing urban populations will require more extensive supply chains for many products including food, beverage and pharmaceuticals. Demand for these perishable goods is a core driver for cold storage space in the US. • The last mile requirements for e-commerce, and specifically e-grocery, will further heighten cold storage demand and push asset locations in some cases to be closer to urban cores. Burgeoning consumer preferences for ready to-eat (RTE) meals, specialty alcohol and high quality produce all have added to cold storage requirements. • The need for chilled pharmaceutical products, particularly in the wake of the pandemic, have also created another demand pool for cold storage capacity. • As average global temperatures rise, warmer climates near the Sunbelt will face increasing pressure to expand their capacity for cold storage.

Demand for Frozen Goods Rising

Cubic Volumes Have Begun to Rise Again

4.3

1800

4.2

1600

4.1

1400

4

1200

3.9

1000

3.8

800

$ Billions

3.7

600

3.6

400

3.5

200

3.4

0

3.3

2011 2013 2015 2017 2019 2021 2023 US Refrigeration capacity (gross cubic sf)

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Food & Drink Location Sales Grocery Store Sales Health, Pharmacy, Personal Care Sales

Source: Moody’s Analytics, Statista, Cushman & Wakefield

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COLD STORAGE: PERFORMANCE

• With a limited supply and much of the existing inventory decades old, cold storage has maintained a robust occupancy rate, routinely ranging between 94% - 97%. Low vacancy has coupled with rising demand to continue to push asking rents upward, surpassing $10 psf in 2023. • Third party logistics firms (3PL’s), including Americold Realty Trust and Lineage Logistics (both now REITs) have become a key players substantially between 2018 and 2022, driven in part by substantial M&A and portfolio activity. Some particularly notable transactions include: Lineage Logistics’ acquisition of Canadian VersaCold Logistics (2022, 114M cubic feet) Americold’s acquisition of Agro Merchants Group (2021, 236M cubic feet). • Cap rates have generally been compressing for several years, though a mix of single and portfolio sales has resulted in greater variance. • Geographically, development activity has been concentrated in the Southeast, with 4.3M sf (of the national 6.5M sf) under development in the region. in aggregating portfolios in the sector. • Sales volume for the sector had risen

Pricing and Volume Trends

Transaction Volume (LHS)

Sale Price Per SF (RHS)

$M $200M $400M $600M $800M $1000M $1200M

$110 $130 $150 $170 $190 $210

$50 $70 $90

2015 Q1

2015 Q2

2015 Q3

2015 Q4

2016 Q1

2016 Q2

2016 Q3

2016 Q4

2017 Q1

2017 Q2

2017 Q3

2017 Q4

2018 Q1

2018 Q2

2018 Q3

2018 Q4

2019 Q1

2019 Q2

2019 Q3

2019 Q4

2020 Q1

2020 Q2

2020 Q3

2020 Q4

2021 Q1

2021 Q2

2021 Q3

2021 Q4

2022 Q1

2022 Q2

2022 Q3

2022 Q4

2023 Q1

2023 Q2

2023 Q3

2023 Q4

Rent & Occupancy Performance

Avg Cap Rates

3% 4% 5% 6% 7% 8% 9% 10%

Occupancy Rate (LHS)

Asking Rent PSF (RHS)

$10.00 $11.00

93% 94% 95% 96% 97% 98%

$5.00 $6.00 $7.00 $8.00 $9.00

2015 Q1

2015 Q3

2016 Q1

2016 Q3

2017 Q1

2017 Q3

2018 Q1

2018 Q3

2019 Q1

2019 Q3

2020 Q1

2020 Q3

2021 Q1

2021 Q3

2022 Q1

2022 Q3

2023 Q1

2023 Q3

2015 Q2

2015 Q4

2016 Q2

2016 Q4

2017 Q2

2017 Q4

2018 Q2

2018 Q4

2019 Q2

2019 Q4

2020 Q2

2020 Q4

2021 Q2

2021 Q4

2022 Q2

2022 Q4

2023 Q2

Source: CoStar, Cushman & Wakefield

/ 19

STUDENT HOUSING

STUDENT HOUSING: DEMAND DRIVERS Continuing employment opportunities for graduates driving student housing demand

• Enrollment in college and universities continues to rebound from the pandemic era, with forecasts suggesting the total number of students will trend once again toward 20 million towards the end of the decade. This growth will be fueled by a combination of the size of the Gen Z population domestically, as well as a continued influx of international students. • The earning potential of college educated individuals continues to maintain a 85%+ premium over the population with only a high school degree. Advanced degree earnings maintained even greater differences. • Students increasingly prefer to live off-campus, with highly limited and aging on-campus accommodations. In some cases, off-campus accommodations can be more cost-effective as well, with on-campus options often including a number of ancillary costs. Off-campus neighborhoods, amenities and nightlife can also be desirable over on-campus options. • Students also have preferences for properties that offer a range of amenities, such as fitness centers, study lounges, and communal spaces. Investors are responding by developing and upgrading such facilities to meet economic and lifestyle preferences.

Mean Earnings by Education Level

U.S. Enrolled College / University Students

$180K

25M

$160K

$140K

20M

$120K

$100K

15M

$80K

$60K

10M

$40K

$20K

5M

$K

High School Graduate College Degree Masters Degree

M

Professional Degree

Doctoral Degree

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

Source: Moody’s Analytics, Cushman & Wakefield Research

/ 21

STUDENT HOUSING: INVESTMENT PERFORMANCE

Pricing and Volume Trends

• As with many other asset types, 2022 was a banner year for student housing as the sector experienced several major portfolio and M&A transactions that pushed transaction volumes to record highs. Among those transactions was the $12.1B purchase of American College Communities’ 166-property portfolio by Blackstone, as well as other large purchases by Harrison Street, Morgan Stanley and Brookfield. • Volumes have tapered linearly since Q3 2023, as debt availability becomes more constrained. Average pricing has slid slightly, as the composition of deals shifts toward distressed sales. • Cap rates had been steadily compressing through the end of 2021, but have slowly expanded since then. The student housing yield spread has noticeably compressed. After reaching 480 basis points (bps) at the beginning of 2020, the spread has reduced to 50 bps as of Q3 2023.

$10B $15B $20B $25B $30B

$100K $150K $200K $250K $300K

$B $5B

$K $50K

Unit Pricing ($)

Transaction Volume ($)

Transaction Volume (LHS)

Price per Unit (RHS)

Cap Rates and Spreads

0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00%

600

500

400

300

200

Cap Rate

bps spread

100

0

DIVE DEEPER: • 2023 UK Student Housing Report

Yield Spread (RHS)

Cap Rate (LHS)

Top Quartile Cap Rate (LHS)

/ 22

Source: MSCI/Real Capital Analytics, Cushman & Wakefield Research

SENIOR HOUSING

SENIOR HOUSING: DEMAND DRIVERS As Baby Boomers continue to age, demand for senior housing assets will grow

• Depending on facility type, average move-in age can for a resident can range from 75 (active) to 83 for assisted living. • The population in the 75+ age range is expected to increase by over 50% in the next twelve years, with current senior housing capacity and expected growth falling far short of demand. • With expected population cohort growth and current senior housing usage, the sector will need to growth annually by 35,000 units. • Construction starts have been constricted due to the lack of liquidity, dropping below 5,000 units started per quarter for the past year. This challenge opens opportunities for those with available capital to begin building out developments to address the substantial oncoming demand. • Affordability remains a challenge, as higher care facility types such as memory care remain out of reach economically to a large segment of the population.

Rapid Senior (80+ years old) Population Growth Will Outpace Planned Supply

35

3.5

30

3.0

Millions

Millions

25

2.5

20

Supply Shortage

2.0

15

1.5

10

1.0

5

0

0.5

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2043

2044

2045

2046

2047

2048

2049

2050

Demand (80+, LHS)

Supply (Avg., LHS)

Population (80+, RHS)

Source: Moody’s Analytics, NICMAP Vision, Cushman & Wakefield

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SENIOR HOUSING: PERFORMANCE

• Transaction volumes slowed in 2022-2023 after a particularly active 2021. This record peak in investment was driven by institutional interest: buyers such as Harrison Street, Welltower and Omega all executed substantial portfolio acquisitions. • Despite the lack of liquidity in the overall market, the sector’s key performance indicators continued to gain strength. After occupancy dipped to below 80% during the height of the pandemic, it has steadily risen again and will son look to surpass 90% once again. Rents continue to be on an upward trend, reaching record levels of 5%+ YoY rent growth during the past four quarters. • Cap rates have generally been compressing since 2016. The sector, as with others, has experienced some expansion of these since rate increases began. • For further information, including a survey of 90 investors in the sector, please see the report below. DIVE DEEPER: • Senior Housing: Investor Survey & Trends Report

Pricing and Volume Trends

$B $1B $2B $3B $4B $5B $6B

$K $50K $100K $150K $200K $250K $300K

Senior Housing Transaction Volume (LHS) Price Per Unit - Nursing Care (RHS)

Price Per Unit - Senior (RHS)

Rent & Occupancy Performance

Avg Cap Rates

4.0% 4.5% 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0%

Median Occupancy (LHS) Average Rent Per Unit (RHS)

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000

70% 75% 80% 85% 90% 95%

1Q2015

3Q2015

1Q2016

3Q2016

1Q2017

3Q2017

1Q2018

3Q2018

1Q2019

3Q2019

1Q2020

3Q2020

1Q2021

3Q2021

1Q2022

3Q2022

1Q2023

3Q2023

1Q2015

3Q2015

1Q2016

3Q2016

1Q2017

3Q2017

1Q2018

3Q2018

1Q2019

3Q2019

1Q2020

3Q2020

1Q2021

3Q2021

1Q2022

3Q2022

1Q2023

3Q2023

Source: NICMAP Vision, Cushman & Wakefield Research

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SINGLE FAMILY RENTAL (SFR) / BUILD-TO-RENT (BTR)

SFR / BTR: DEMAND DRIVERS Homeownership affordability challenges remain, driving buyers to rental options

• Rising home prices have become a key catalyst for the increased demand for single family rentals. Skyrocketing property values have made homeownership less accessible to many Americans, especially first-time buyers. As a result, individuals and families are turning to renting single-family homes as a more affordable and flexible housing option. • These Build-to-Rent (BTR) single family homes generally offer larger floorplates, outside yard access, better school districts and larger garage space. • Concurrently, slow household earnings growth has contributed to the single-family rental market's appeal. Stagnant wage growth, when compared to the rising cost of living and housing expenses, has left many individuals and families with limited disposable income for down payments.

Home Prices vs Household Earnings YOY%

Increased Single Family Demand Driving Pricing

30

70

450

25

400

68

20

350

15

300

66

10

250

5

64

200

0

$ Thousands

-5

62

150

-10

% Homeownerhip Rate

100

60

-15

50

-20

58

0

2005Q1

2006Q2

2007Q3

2008Q4

2010Q1

2011Q2

2012Q3

2013Q4

2015Q1

2016Q2

2017Q3

2018Q4

2020Q1

2021Q2

2022Q3

2023Q4

2025Q1

2026Q2

2027Q3

2028Q4

Median Existing Single Family Price YoY% Median Household Earnings YoY%

2000Q1

2001Q2

2002Q3

2003Q4

2005Q1

2006Q2

2007Q3

2008Q4

2010Q1

2011Q2

2012Q3

2013Q4

2015Q1

2016Q2

2017Q3

2018Q4

2020Q1

2021Q2

2022Q3

Homeownership Rate% (LHS) Median Existing Single Family Price (RHS)

Source: Moody’s Analytics, Cushman & Wakefield

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SFR / BTR: PERFORMANCE Interest surged in 2020 – 2022, and pricing remains high

• BTR supply ramped up only recently, creating an imbalance between supply and investor demand to deploy capital. Record-high construction costs, including lumber and labor, have limited new supply. • Rising home prices limit scattered-site acquisition-rehabilitation providers from acquiring homes in certain markets, and they face increased competition from individual buyer demand in the post-pandemic period. There is also a steep learning curve in SFR BTR, including land development bottle necks, zoning, tax calculations, site selection and management. • Institutional interest surged post-pandemic, driving both volumes and prices. Volume exceeded the $3B mark. • Cap rates had been steadily trending downward until the past couple quarters, as the overall rate environment has had an impact on the space.

SFR / BTR Volume & Pricing Trends

Average SFR / BTR Cap Rates

0.07

700.00

$280K

$3B

$260K

0.065

600.00

$3B

$240K

0.06

500.00

$220K

$2B

0.055

400.00

$200K

$2B

$180K

0.05

300.00

Cap Rate

$160K

$1B

Avg Price / Unit

0.045

200.00

Transaction Volume

Spread Over 10 yr Treasury

$140K

$1B

0.04

100.00

$120K

0.035

0.00

$100K

$B

17Q1

17Q3

18Q1

18Q3

19Q1

19Q3

20Q1

20Q3

21Q1

21Q3

22Q1

22Q3

23Q1

Spread - Multifamily (RHS) Spread - SFR BTR (RHS) SFR BTR Cap Rate (LHS)

2015 Q1

2015 Q4

2016 Q3

2017 Q2

2018 Q1

2018 Q4

2019 Q3

2020 Q2

2021 Q1

2021 Q4

2022 Q3

2023 Q2

Transaction Volume (LHS) Average Price Per Unit (RHS)

Source: CoStar, Cushman & Wakefield

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SELF STORAGE

SELF STORAGE: DEMAND DRIVERS Migration and downsizing, across multiple generations, provide robust demand

• Self storage is driven by a variety of factors including migration (over short or long distances), home downsizing, crossing other life thresholds (college graduation, family formation, marriage, death). • Exogenous events, such as the COVID-19 pandemic, can also spur substantial growth in the sector as migration was kickstarted to record levels temporarily and storage space became a necessity. • While home sales have slowed slightly, forecasted rise in sales will also drive need for self storage capacity in the mid- and long-term. • Use of self storage is prevalent across generations, with over half of Baby Boomers and Gen X respondents in a StorageCafe survey affirming use of storage units. Perhaps more surprising was the prevalency among younger

Rising Home Sales Push Demand for Temporary Storage Space

Demand Prevalent Across Generations

60%

7

54%

51%

50%

6

40%

40%

5

34%

30%

4

25%

20%

3

10%

2 Home Sales (Millions)

0%

1

generations, suggesting further runway as Millennials and Gen Z continue to grow their consumer footprint.

0

% of population who have used self storage

2015Q1

2016Q1

2017Q1

2018Q1

2019Q1

2020Q1

2021Q1

2022Q1

2023Q1

2024Q1

2025Q1

2026Q1

2027Q1

2028Q1

2029Q1

2030Q1

Source: Moody’s Analytics, National Association of Realtors (NAR), StorageCafe, Cushman & Wakefield Research

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SELF STORAGE: PERFORMANCE

• Transaction volume subsided in the first half of 2023 with the trailing 12-month volume down by 57% year-over-year (YOY). While this decline is significant, self storage remains a top performer, with volume remaining above the 12-month levels leading up to the pandemic. • Despite the rising cost of debt, capitalization rates for self storage remain relatively stable, averaging 5.1% in the second quarter of 2023, up only 10 bps from all-time lows. • Self storage continues to show resiliency as valuations remain intact, averaging $165 per square foot (psf). Though down slightly from the 2022 peak, the average price psf marked a 2.5% increase YOY. • As the self storage sector continues to mature as an asset class, while maintaining low operational costs — interest from institutional investors will increase. Established players and new entrants will likely look to acquire at scale. DIVE DEEPER: • Self Storage: Market Trends & Sector Outlook

Self Storage Pricing and Volume Trends

$80 $100 $120 $140 $160 $180

$10B $12B $14B $16B

$B $2B $4B $6B $8B

Avg Price Per Unit

Transaction Volume

15Q1

15Q2

15Q3

15Q4

16Q1

16Q2

16Q3

16Q4

17Q1

17Q2

17Q3

17Q4

18Q1

18Q2

18Q3

18Q4

19Q1

19Q2

19Q3

19Q4

20Q1

20Q2

20Q3

20Q4

21Q1

21Q2

21Q3

21Q4

22Q1

22Q2

22Q3

22Q4

23Q1

23Q2

23Q3

Transaction Volume (LHS)

Avg Price psf (RHS)

$ Price per Unit

Average Self Storage Cap Rates

$100 $120 $140 $160

76% 78% 80% 82% 84% 86% 88% 90% 92%

0.00 100.00 200.00 300.00 400.00 500.00 600.00 700.00

3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00%

$0 $20 $40 $60 $80

Cap Rate

17Q1

17Q3

18Q1

18Q3

19Q1

19Q3

20Q1

20Q3

21Q1

21Q3

22Q1

22Q3

23Q1

Spread Over 10 yr Treasury

Spread - Multifamily (RHS) Self Storage Cap Rate (LHS)

Spread - Self Storage (RHS)

15Q1

15Q3

16Q1

16Q3

17Q1

17Q3

18Q1

18Q3

19Q1

19Q3

20Q1

20Q3

21Q1

21Q3

22Q1

22Q3

23Q1

Asking Rent Per Unit (LHS)

Occupancy (RHS)

Source: MSCI / Real Capital Analytics, Cushman & Wakefield Research

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Jacob Albers Head of Alternatives Insights Global Think Tank +1 312 424 8086 jacob.albers@cushwake.com

Sam Tenenbaum Head of Multifamily Insights +1 512 814 3376 sam.tenenbaum@cushwake.com

David Smith Head of Americas Insights Global Research +1 404 853 5310 david.smith4@cushwake.com

Abby Corbett Senior Economist Global Head of Investor Insights +1 720 244 1061 abby.corbett@cushwake.com

About Cushman & Wakefield Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 52,000 employees in over 400 offices and approximately 60 countries. In 2022, the firm had revenue of $10.1 billion across core services of property, facilities and project management, leasing, capital markets, and valuation and other services. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.

©2023 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources believed to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.