CREW, SAN ANTONIO PRESENTATION SPENCER G. LEVY, AMERICAS HEAD OF RESEARCH

CREW, SAN ANTONIO PRESENTATION SPENCER G. LEVY, AMERICAS HEAD OF RESEARCH April 7, 2015

THE BIG PICTURE

FORWARD

GLOBAL TRANSACTION VOLUME FY 2014 Total transaction volume worldwide totaled $714B in 2014. The United States accounted for 43% of total volume. Source: Real Capital Analytics, Q4 2014. Note: Apartment, Hotel, Industrial, Office, and Retail Transactions Greater than $10 million.

CAPITAL MARKETS - IMPRESSIVE INVESTMENT GAINS Total 2014 direct investment = $399 billion. 17% rise over 2013. 2014 only 5% below prior peak (excluding entity sales). CBRE Research projects a gain of 10-15% in 2015. Sources: Real Capital Analytics and CBRE Research. Excludes property acquisitions associated with entity (company) purchases..

U.S. INVESTMENT VOLUMES BY GLOBAL REGION ORIGIN 2014 Sources: Real Capital Analytics and CBRE Research. Totals excluding transactions under contract.

ASIAN INVESTORS ARE DRIVEN BY CYCLICAL FACTORS Time for Asian investors to diversify into a new cycle Office supply profile in three major regions Office capital value cycle 101% Gateway APAC A A Non-gateway Europe Gateway US E U Non-gateway US U E Gateway Europe Source: CBRE Research (As of June 2014)

PREFERRED PROPERTY SECTOR In the Americas, which property sector do you believe to be the most attractive for investment purchase in 2015? Industrial is the preferred property type at 33% (logistics and other combined), about the same as 2014. Office comes in 2 nd with 25% of the vote down just slightly from 2014. Multifamily rose slightly in popularity to 22%. Preference for retail still trails in appeal and slipped in 2015 to 13% (vs. 15% in 2014). Source: CBRE Research, Global Investor Intentions Survey 2015. Industrial Retail

TOTAL EMPLOYMENT GROWTH (%) Source: CBRE, CoStar Group, M/PF YieldStar, CBRE EA.

BEST METROS FOR INVESTMENT Which city in the Americas do you believe to be the most attractive? San Francisco came is as the most attractive metro for investment in 2015, for the second year in a row. The most notable jumps were: Charlotte from 12 th (tied) to 7 th Washington from 20 th to 8 th. Miami from 15 th (tied) to 9 th (tied) Nashville from 17 th (tied) to 9 th (tied) Moving off the top 10 list was Houston. Source: CBRE Research, Global Investor Intentions Survey 2015

THE SCARCITY OF ATTRACTIVE LONG-TERM YIELDS

TOP BUYERS IN SAN ANTONIO Past Two Years: Overall and Foreign Top Overall Buyers in San Antonio Top Foreign Buyers in San Antonio # Buyer Country Acq. ($M) # Props Avg.Pric e ($M) # Buyer Country Acq. ($M) # Props Avg.Price ($M) 1 Blackstone USA $231.6 11 $21.1 2 Presidium Group USA $112.6 8 $14.1 NorthStar Realty 3 Finance USA $115.5 7 $16.5 Starwood Capital 4 Group USA $50.1 7 $7.2 5 Omninet Capital USA $82.6 6 $13.8 6 ARCP USA $74.1 6 $12.3 1 GIC Singapore $54.1 4 $13.5 Global Logistic 2 Properties Singapore $54.1 4 $13.5 3 RioCan REIT Canada $25.7 3 $8.6 4 Electra Ltd Israel $21.9 2 $10.9 5 Pure Industrial REIT Canada $16.4 1 $16.4 6 Desarrollos Delta Mexico $10.9 1 $10.9 7 Spirit Realty Capital USA $42.5 5 $8.5 8 TA Realty USA $107.3 4 $26.8 American Realty 9 Capital USA $101.3 4 $25.3 10 GIC Singapore $54.1 4 $13.5 Source: Real Capital Analytics, April 2, 2015. Note: Transactions over $2.5M from April 2, 2013 to April 2, 2015.

SAN ANTONIO INDUSTRY GROWTH AS OF Q4 2014 San Antonio Employment by Sector % Share of Total Sector Category Employment Construction 4.7% Manufacturing 5.0% Wholesale Trade 3.5% Retail Trade 11.2% Trans & Warehousing 2.5% Information 2.3% Financial Activities 8.4% Prof & Bus Services 12.4% Leisure & Hospitality 13.0% Other Services 3.7% Government 17.3% National vs. San Antonio Growth by Industry (Next 5 Years) Industry Category San Antonio U.S. Construction 2.5% 1.8% Manufacturing 0.7% 0.2% Wholesale Trade 1.1% 0.2% Retail Trade 0.9% 0.8% Trans & Warehousing 1.0% 0.9% Information 0.8% 1.3% Financial Activities 2.0% 1.0% Prof & Bus Services 3.0% 2.1% Leisure & Hospitality 3.5% 1.9% Other Services 2.4% 0.8% Government 1.9% 0.8% Source: CBRE Econometric Advisors, April 2015

GDP AND FORECASTED JOB GROWTH Major Peer Metros GDP Growth: 2012-2013 Job Growth: % Increase Next 5 Years Source: Bureau of Economic Analysis and CBRE Econometric Advisors, April 2015

PROPERTY SECTORS

CBRE YEAR-END 2014 Fundamentals Update Property Type Rate Type Q4 2014 Past Cyclic High Natural Rate Office Vacancy Rate 13.9% 16.8% / 2010 13% - 15% Industrial Availability Rate 10.3% 14.5% / 2010 9% - 10% Retail Availability Rate 11.4% 13.2% / 2011 9% - 10% Multifamily Vacancy Rate 4.6% 7.4% / 2009 5% - 6% Hotels Vacancy Rate 35.6% 43.0% / 2009 34% - 38% Source: CBRE Econometric Advisors, Q4 2014.

OFFICE

SAN ANTONIO VS. TEXAS: OFFICE Texas Center for Athletes $32,658,000 $/SF: $254 Cap Rate: 7.9% San Antonio, TX December 2014 Carter Burgess Tower $167,000,000 $/SF: $175 Cap Rate: 6.1% Fort Worth, TX December 2014 Source: Real Capital Analytics, April 2,, 2015 Note: Transactions over $2.5M from January 1, 2014 to December 31, 2014 Vacancy Rate TW Rent Vacancy Rate TW Rent Vacancy Rate TW Rent Vacancy Rate TW Rent (%) Index (%) Index (%) Index (%) Index Year ($/SF) ($/SF) ($/SF) ($/SF) 2011 14.7 $23.25 22.2 $17.78 15.1 $21.75 18 $19.66 2012 12.5 $23.86 20.9 $18.31 13.1 $23.52 19.7 $19.24 2013 10.8 $26.61 19.2 $19.77 12.8 $25.46 18.7 $19.61 2014 8.1 $26.91 18.3 $21.66 12.2 $26.99 16.7 $19.54 2015 10.1 $29.58 18.1 $23.59 16.8 $27.12 16.5 $20.08 2016 10.3 $31.23 16.5 $25.57 17.6 $27.65 15.7 $20.81 Source: CBRE Econometric Advisors, Q4 2014 ------ Forecasted Prior 12 mos (Thru Q4 '14) # of Properties Total Value (in millions) Total SF (in millions) Average Price PSF Avg. Cap Rate Avg. Cap Rate 2013 2014 Austin 50 $1,359.6 7.5 $292 6.60% 6.20% Dallas 28 $455.0 3.9 $282 7.10% 6.80% Houston 38 $542.1 5.1 $201 7.10% 7.30% San Antonio 32 $291.7 3.3 $274 8.00% 7.90% TOTAL 148 $2,648.4 19.8 $1,049 7.20% 7.05% Austin Dallas Houston San Antonio

RETAIL

SAN ANTONIO VS. US MARKETS: RETAIL Cedar Park Town Center $39,150,000 $/SF: $215 Cap Rate: 6.25% Austin, TX February 2014 Lawndale Plaza $24,500,500 $/SF: $263 Cap Rate: --% Philadelphia, PA March 2015 Prior 12 mos (Thru Q4 '14) # of Properties Source: Real Capital Analytics, April 2, 2015 Note: Transactions over $2.5M from January 1, 2014 to December 31, 2014. Total Value (in millions) Total SF (in millions) Average Price PSF Avg. Cap Rate 2013 Avg. Cap Rate 2014 Philadelphia 39 $643.2 $4.6 $212 7.0% 6.9% Phoenix 45 $553.9 $3.4 $233 7.3% 6.6% San Diego 41 $506.6 $2.1 $366 6.3% 5.8% San Antonio 49 $549.1 $4.2 $198 7.3% 7.6% TOTAL 174 $2,253 14.3 $1,009 7.0% 6.7% Philadelphia Phoenix San Diego San Antonio Vacancy Rate TW Rent Vacancy Rate TW Rent Vacancy Rate TW Rent Vacancy Rate TW Rent (%) Index (%) Index (%) Index (%) Index Year ($/SF) ($/SF) ($/SF) ($/SF) 2011 14.1 $21.06 17.5 $17.06 9.8 $24.00 13.7 $13.42 2012 13.6 $20.69 16.8 $16.91 9.2 $23.13 12.8 $13.32 2013 13 $20.41 15.4 $16.57 9.4 $23.39 11.6 $13.68 2014 12.6 $20.43 15.2 $16.46 8.3 $23.89 11 $13.83 2015 11.2 $20.42 13.6 $17.07 7 $25.05 8.3 $13.96 2016 9.9 $20.77 12.5 $18.37 6.3 $26.81 7.9 $14.19 Source: CBRE Econometric Advisors, Q4 2014. ------ Forecasted

MULTIFAMILY

SAN ANTONIO VS. TEXAS: MULTI-FAMILY Bellaire Apartments $35,000,000 $/Unit: $108,025 Cap Rate: --% San Antonio, TX September 2014 La Maison Townhomes $5,300,000 $/Unit: $50,962 Cap Rate: --% San Antonio, TX November 2014 Prior 12 mos Total Value (in Avg. Cap Avg. Cap # of Properties Total Units Average Price PSF (Thru Q4 14) millions) Rate 2013 Rate 2014 Austin 67 $720.7 104,494 $104,494 6.3% 6.0% Dallas 80 $709.6 20,762 $64,467 6.4% 7.0% Houston 79 $822.9 21,183 $71,092 6.8% 7.3% San Antonio 93 $1,256.7 21,940 $80,816 6.0% 6.6% TOTAL 319 $3,509.9 $168,379 $320,869 6.4% 6.7% Source: Real Capital Analytics, April 2, 2015 Note: Transactions over $2.5M from January 1, 2014 to December 31, 2014. Austin Dallas Houston San Antonio Vacancy Rate TW Rent Vacancy Rate TW Rent Vacancy Rate TW Rent Vacancy Rate TW Rent (%) Index (%) Index (%) Index (%) Index Year ($/SF) ($/SF) ($/SF) ($/SF) 2011 5 $937.75 6.4 $876.46 8.9 $881.79 6.2 $807.48 2012 4.9 $990.78 5.7 $915.38 7.2 $942.39 5.3 $843.66 2013 4.7 $1,041.73 5.3 $950.67 5.9 $990.62 6 $848.61 2014 4.8 $1,086.23 5.2 $1,000.13 5.4 $1,044.21 6.5 $857.15 2015 6.3 $1,093.10 5.5 $1,035.96 6.5 $1,071.99 6.3 $883.61 2016 6.4 $1,093.26 5.5 $1,069.54 7.7 $1,097.69 6.7 $917.08 Source: CBRE Econometric Advisors, Q4 2014. ------ Forecasted

INDUSTRIAL

SAN ANTONIO VS. TEXAS: INDUSTRIAL Carrier Corporation $31,832,978 $/SF: $62 Cap Rate: --% San Antonio, TX December 2014 Houghton Mifflin Warehouse $41,000,000 $/SF: $473 Cap Rate: --% San Antonio, TX July 2014 Prior 12 mos (Thru Q4 '14) # of Properties Source: Real Capital Analytics, April, 2015 Note: Transactions over $2.5M from January 1, 2014 to December 31, 2014.. (%) Index (%) Index (%) Index (%) Index Year ($/SF) ($/SF) ($/SF) ($/SF) 2011 14.7 $5.35 14.8 $3.18 9.8 $5.70 15.1 $4.82 2012 12.4 $5.37 13.5 $3.07 9.3 $5.92 14.5 $5.68 2013 10.9 $5.91 10.6 $3.38 8.4 $6.17 11.8 $5.63 2014 11.2 $6.47 10.3 $3.52 7.3 $6.27 10.4 $6.61 2015 10.6 $6.62 12.8 $3.66 7.2 $6.52 9.4 $7.20 2016 9.5 Source: CBRE Econometric Advisors, Q4 2014. $6.93 13.6 $3.69 6.9 $6.82 10.6 $7.67 ------ Forecasted Total Value (in millions) Total SF (in millions) Average Price PSF Avg. Cap Rate 2013 Avg. Cap Rate 2014 Austin 23 $109.5 3.7 $98 7.6% 7.0% Dallas 54 $326.9 10.0 $48 7.3% 6.3% Houston 35 $143.7 4.7 $55 8.8% 6.4% San Antonio 26 $194.9 5.1 $74 8.9% 7.3% TOTAL 138 $775.0 23.5 $275 8.2% 6.8% Austin Dallas Houston San Antonio Vacancy Rate TW Rent Vacancy Rate TW Rent Vacancy Rate TW Rent Vacancy Rate TW Rent

CONCLUSION: TEXAS SLIDE

COLLETE ENGLISH DIXON Principal, Prudential Real Estate Investors

POLL QUESTION #1 The greatest threat to the long-term success of Commercial Real Estate is: A. Interest rates B. Middle East conflict C. Sanctions on Iran & Russia D. Oversupply of oil

POLL QUESTION #2 Canada is our biggest trading partner in commercial real estate. Who is #2? A. China B. Norway C. Germany D. Saudi Arabia

POLL QUESTION #3 Where do you see the greatest opportunity in commercial real estate in 2015 A. Retail B. Office C. Industrial D. Multifamily

POLL QUESTION #4 There are women CEO s in Fortune 500 companies: A. 98 B. 26 C. 175 D. 250