IPSOS GLOBAL CONFIDENCE INDEX December Source: IPSOS, Sage Policy Group; February 2018.

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2 Economic Overview

3 GET OFF OF MY CLOUD

4 IPSOS GLOBAL CONFIDENCE INDEX December 2017 Source: IPSOS, Sage Policy Group; February 2018.

5 OECD BUSINESS CONFIDENCE INDEX Select Regions / Countries OECD - Total Euro area (19 countries) United States China Nov-00 May-01 Nov-01 May-02 Nov-02 May-03 Nov-03 May-04 Nov-04 May-05 Nov-05 May-06 Nov-06 May-07 Nov-07 May-08 Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15 Nov-15 May-16 Nov-16 May-17 Nov-17 The business confidence index (BCI) is based on enterprises assessment of production, orders and stocks, as well as its current position and expectations for the immediate future. Opinions compared to a normal state are collected and the difference between positive and negative answers provides a qualitative index on economic conditions. Source: OECD, Sage Policy Group; February 2018.

6 ESTIMATED GROWTH IN OUTPUT Select Global Areas 2018 Projected Advanced Economies Euro Area Spain Germany France United Kingdom Italy Japan Australia Canada United States Emerging Market & Developing Economies Sub-Saharan Africa Emerging & Developing Europe Russia Emerging & Developing Asia China India Middle East, North Africa, Afghanistan, & Pakistan Latin America & the Caribbean Mexico Brazil 2018 Proj. Global Output Growth: +3.9% 2017 Growth (Estimate) World: 3.7% Euro Area: 2.4% United States: 2.3% Japan: 1.8% 2.3% 2.2% 2.4% 2.3% 1.9% 1.5% 1.4% 1.2% 2.9% 2.3% 2.7% 1.9% 2.3% 1.9% ANNUAL % CHANGE Source: International Monetary Fund: World Economic Outlook Update January 2018, Sage Policy Group; February % 3.3% 4.0% 3.6% 4.9% 6.5% 6.6% 7.4% 0% 2% 4% 6% 8% 10%

7 CONSUMER CONFIDENCE INDEX United States January 2018 = Feb-08 Jun-08 Oct-08 Feb-09 Jun-09 Oct-09 Feb-10 Jun-10 Oct-10 Feb-11 Jun-11 Oct-11 Feb-12 Jun-12 Oct-12 Feb-13 Jun-13 Oct-13 Feb-14 Jun-14 Oct-14 Feb-15 Jun-15 Oct-15 Feb-16 Jun-16 Oct-16 Feb-17 Jun-17 Oct-17 Source: Conference Board, Sage Policy Group; February Note: 1985 = 100.

8 NFIB INDEX OF SMALL BUSINESS OPTIMISM United States 110 December 2017 = Source: National Federation of Independent Business, Sage Policy Group; February Note: Data is seasonally adjusted 1986 = 100.

9 PAINT IT BLACK CORPORATE PROFITS United States $2,000 Q = $1.74 Trillion $1,600 IN BILLIONS $1,200 $800 $400 $ Source: Bureau of Economic Analysis, Sage Policy Group; February Note: After tax with IVA and CCAdj.

10 JOB OPENINGS United States 7 6 IN MILLIONS 5 4 November 2017 = Nov-01 May-02 Nov-02 May-03 Nov-03 May-04 Nov-04 May-05 Nov-05 May-06 Nov-06 May-07 Nov-07 May-08 Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15 Nov-15 May-16 Nov-16 May-17 Nov-17 Source: Bureau of Labor Statistics, Sage Policy Group; February 2018.

11 BEASTS OF BURDEN NONFARM EMPLOYMENT United States December 2016 vs. December 2017 Professional and Business Services 527 Education and Health Services 438 Leisure and Hospitality 306 Construction 210 Manufacturing Financial Activities Other Services ,055K jobs gained Trade, Transportation, and Utilities Mining and Logging Government Information IN THOUSANDS Source: Bureau of Labor Statistics, Sage Policy Group; February Note: Data is seasonally adjusted.

12 EMPLOYMENT GROWTH - PERCENT CHANGE 25 Largest Metros December 2016 vs. December 2017 Orlando Riverside-San Bernardino San Antonio Seattle-Bellevue Portland Dallas-Fort Worth Miami Minneapolis-St. Paul Tampa Denver Boston Atlanta Phoenix Charlotte Washington San Francisco Detroit San Diego Houston Los Angeles St. Louis Philadelphia New York Chicago Baltimore 0.6% 1.7% 3.8% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% Source: Bureau of Labor Statistics CES Survey, Sage Policy Group; February Note: Data is not seasonally adjusted.

13 UNEMPLOYMENT RATES 25 Largest Metros November 2017 Chicago Philadelphia New York Houston Charlotte Atlanta Seattle-Bellevue Riverside-San Bernardino Miami Baltimore Los Angeles Phoenix Detroit Washington Tampa Portland Orlando St. Louis San Diego Dallas-Fort Worth San Antonio Boston Denver San Francisco Minneapolis-St. Paul 2.4% 3.6% 4.1% 4.7% United States = 4.1% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% Source: Bureau of Labor Statistics, Sage Policy Group; February Note: Data is not seasonally adjusted and area boundaries do not reflect official OMB definitions.

14 GIMME SHELTER

15 MEGATREND ONE The Revenge of Homeownership

16 15-YEAR AND 30-YEAR FIXED MORTGAGE RATES United States 10% 9% 8% 15-Year 30-Year 7% 6% 5% 4.15% 4% 3% 2% 3.62% 1% Jan-95 Jul-95 Jan-96 Jul-96 Jan-97 Jul-97 Jan-98 Jul-98 Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18* Source: Freddie Mac, Sage Policy Group; February *Week ending 1/25/2018.

17 HOUSEHOLDS: OWNER VS.RENTER OCCUPIED United States From the number of households headed by owners remained relatively flat. At the same time, the number of households renting their home increased significantly (+26.5%). The share of renter households also increased from 31.2% of households in 2006 to 36.6% in NUMBER OF HOUSEHOLD HEADS IN MILLIONS Owner Occupied Renter Occupied Source: Census Bureau; Pew Research Center, Sage Policy Group; February 2018.

18 HOMEOWNERSHIP United States 70% 68% 66% Q = 64.2% 64% 62% 60% 58% Source: Census Bureau, Sage Policy Group; February Note: Data is not seasonally adjusted.

19 PRIVATE NEW MULTIFAMILY CONSTRUCTION United States $70 November 2017 = $60.5 $60 $50 IN BILLIONS $40 $30 $20 $10 $ Source: Census Bureau, Sage Policy Group; February Note: Data is seasonally adjusted annual rate.

20 SINGLE-FAMILY HOUSING STARTS United States IN THOUSANDS 2,000 1,800 1,600 1,400 1,200 1, December 2017 = Nov-99 May-00 Nov-00 May-01 Nov-01 May-02 Nov-02 May-03 Nov-03 May-04 Nov-04 May-05 Nov-05 May-06 Nov-06 May-07 Nov-07 May-08 Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15 Nov-15 May-16 Nov-16 May-17 Nov-17 Source: Census Bureau, Sage Policy Group; February Note: Data is seasonally adjusted annual rate.

21 S&P/CASE-SHILLER HOME PRICE INDICES Select Metro Areas 12-Month Ending November % 10.6% 10% 9.1% PERCENT CHANGE 8% 6% 4% 3.3% 3.6% 4.1% 5.2% 5.7% 6.3% 6.4% 6.9% 7.0% 7.0% 7.0% 2% 0% Source: Standard & Poor s, Sage Policy Group; February 2018.

22 NONRESIDENTIAL CONSTRUCTION SPENDING United States November 2014 vs. November 2017 Lodging Office Communication Commercial Amusement and Recreation Educational Health Care Transportation Power Highway and Street Conservation and Development Public Safety Religious Manufacturing Sewage and Waste Disposal Water Supply -5.6% -8.3% -8.4% -14.2% -14.9% -18.4% 7.7% 7.2% 7.1% 2.4% 29.6% 29.1% 26.5% 33.9% 45.2% Total Nonresidential Construction: +$81.5 Billion; +12.8% 58.9% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% THREE- YEAR PERCENT CHANGE Source: Census Bureau, Sage Policy Group; February 2018.

23 COMMERCIAL/MULTIFAMILY OFFSHORE INVESTMENT Sales Volume Reaches New Heights in 2015/2016 $60 Foreign investment increased 85.1% in 2015 IN BILLIONS OF U.S. DOLLARS $50 $40 $30 $20 $10 $ Cross-border investment remained elevated in 2016: Although down relative to a record 2015, offshore investment levels still exceeded the pre-2015 high in Source: Jones Lang LaSalle, Real Capital Analytics, Sage Policy Group; February Note: Among transactions larger than $5.0 million.

24 FOREIGN INVESTMENT IN U.S. CRE Top Destination Markets First Half 2017 New York 17.4% Washington 9.7% Boston Los Angeles 6.9% 7.6% San Francisco Chicago Dallas-Ft. Worth Seattle-Bellevue Houston Austin 4.2% 3.4% 3.0% 2.6% 2.3% 2.2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% INVESTMENT AS PERCENTAGE OF TOTAL Source: Jones Lang LaSalle, Real Capital Analytics, Sage Policy Group; February Note: Among transactions larger than $5.0 million, includes portfolio, entity-level transactions.

25 MEGATREND TWO Capitalization Rates: Red Flag or New Normal?

26 COMMERCIAL PROPERTY PRICE INDEX United States December 2017 = Dec-97 May-98 Oct-98 Mar-99 Aug-99 Jan-00 Jun-00 Nov-00 Apr-01 Sep-01 Feb-02 Jul-02 Dec-02 May-03 Oct-03 Mar-04 Aug-04 Jan-05 Jun-05 Nov-05 Apr-06 Sep-06 Feb-07 Jul-07 Dec-07 May-08 Oct-08 Mar-09 Aug-09 Jan-10 Jun-10 Nov-10 Apr-11 Sep-11 Feb-12 Jul-12 Dec-12 May-13 Oct-13 Mar-14 Aug-14 Jan-15 Jun-15 Nov-15 Apr-16 Sep-16 Feb-17 Jul-17 Dec-17 Source: Green Street Advisors, Sage Policy Group; February Note: Indexed to 100 in August 2007.

27 MONETARY POLICY TIGHTENING/EASING Global December 2017 Source: Council on Foreign Relations, Global Monetary Policy Tracker, Sage Policy Group; February 2018.

28 STNL* CAP RATES VS. 10-YEAR TREASURY RATES United States 8% STNL Cap Rates 10-Year Treasury Rates Spread 7% 6% 6.45% 6.22% 5% 4% 4.54% 3.98% 3% 2% 1.91% 2.24% 1% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Source: Federal Reserve Bank of St. Louis, Calkain Companies, Sage Policy Group; February *Single Tenant Net-Leased.

29 19 TH NERVOUS BREAKDOWN

30 GROSS DOMESTIC PRODUCT United States 10% 8% PERCENT CHANGE FROM PRECEDING PERIOD 6% 4% 2% 0% -2% -4% -6% -8% Q = 2.6% -10% Source: Bureau of Economic Analysis, Sage Policy Group; February Note: 1 st (advance) estimate at Q4 2017; data is seasonally adjusted annual rate.

31 LEADING ECONOMIC INDICATORS INDEX United States ONE- MONTH PERCENT CHANGE 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% December 2017 = 0.6% Index at December 2017: where 2010: % Aug-07 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10 Apr-11 Aug-11 Dec-11 Apr-12 Aug-12 Dec-12 Apr-13 Aug-13 Dec-13 Apr-14 Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 Apr-16 Aug-16 Dec-16 Apr-17 Aug-17 Dec-17 Source: Conference Board, Sage Policy Group; February 2018.

32 SAVING RATE United States 12% 10% 8% December 2017 = 2.4% 6% 4% 2% 0% Dec-05 Apr-06 Aug-06 Dec-06 Apr-07 Aug-07 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10 Apr-11 Aug-11 Dec-11 Apr-12 Aug-12 Dec-12 Apr-13 Aug-13 Dec-13 Apr-14 Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 Apr-16 Aug-16 Dec-16 Apr-17 Aug-17 Dec-17 Source: Bureau of Economic Analysis, Sage Policy Group; February Note: Savings as percentage of personal disposable income.

33 GLOBAL DEBT REACHES ALL-TIME HIGHS According to the International Institute of Finance (IIF), global debt has reached an all-time high in 2016 At $215 trillion, global debt including household, government, and corporate now represents 325% of global GDP Last year, the IMF warned of risks to the global economy: sheer size of debt could set the stage for an unprecedented private deleveraging process that could thwart the fragile economic recovery Source: Institute of International Finance, Global Debt Monitor, Business Insider, The Telegraph, Reuters, Sage Policy Group; February 2018.

34 SHILLER PRICE-EARNINGS RATIO United States December 2017 = Dec-80 Dec-81 Dec-82 Dec-83 Dec-84 Dec-85 Dec-86 Dec-87 Dec-88 Dec-89 Dec-90 Dec-91 Dec-92 Dec-93 Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Source: Robert J. Shiller Data used in his book, "Irrational Exuberance" Princeton University Press, Sage Policy Group; February 2018.

35 SHATTERED! BITCOIN PRICE $20,000 $18,000 1/28/18 = $11.8K $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 1/1/14 3/1/14 5/1/14 7/1/14 9/1/14 11/1/14 1/1/15 3/1/15 5/1/15 7/1/15 9/1/15 11/1/15 1/1/16 3/1/16 5/1/16 7/1/16 9/1/16 11/1/16 1/1/17 3/1/17 5/1/17 7/1/17 9/1/17 11/1/17 1/1/18 Source: CoinMarketCap.com, Sage Policy Group; February 2018.

36 TIME IS ON MY SIDE, AT LEAST IN THE NEAR-TERM U.S. setting up for best year since Global economy also picking up momentum, in large measure due to policymaking Job opportunities are abundant Corporate profitability elevated Consumer and business confidence has been surging... And now tax cuts, including major reductions in corporate taxes... What could go wrong? A lot can go wrong that s always true first there are the Black Swan threats cyber, contagion, conflict, Korea, EMP, trade war: I m forever blowing bubbles, pretty bubbles in the air, they fly so high, nearly reach the sky, and like my dreams, they fade and die Equity markets? U.S. bond market? Commercial real estate? Bitcoin? Where are all the pretty bubbles? 2018 will be fine better than fine 2019 might be, too, but beyond that, possible deleveraging cycle prompted by a repricing of assets Bad!!!! Source: Sage Policy Group; February 2018.

37 MEGATREND THREE Elevated Apartment Absorption Will it Continue?

38 CLASS A APARTMENT ABSORPTION Washington Metro Area 16,000 14,000 Long-term Annual Average Absorption = 7,096 12,000 NUMBER OF UNITS 10,000 8,000 6,000 4,000 2,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q District of Columbia Northern Virginia Suburban Maryland Source: Delta Associates; February 2018.

The Apollo, 600 H Street, NE F1RST Residences, 1263 1 st

39 APARTMENT ABSORPTION LEADERS District of Columbia Capitol Hill/Riverfront/SW & NoMa/H St. The Apollo, 600 H Street, NE F1RST Residences, st Street, SE Source: Grosvenor, McCaffery Interests, Insight Property Group; February 2018.

Jones Branch Drive Ten at Clarendon, 3110 10 th

40 APARTMENT ABSORPTION LEADERS Northern Virginia RCB Corridor and Tysons Highgate at the Mile, 7915 Jones Branch Drive Ten at Clarendon, th Street N Source: Clark Realty Corp, Kettler; February 2018.

9122 Baltimore Avenue The Remy, 7730 Harkins Road

41 APARTMENT ABSORPTION LEADER Suburban Maryland North Prince George s County Monument Village, 9122 Baltimore Avenue The Remy, 7730 Harkins Road Source: Berman Enterprises, Monument Realty; February 2018.

42 CLASS A APARTMENT RENTER TYPES Urban Locations in Washington Metro Area 2015 BABY BOOMER 13% TRADITIONALIST 2% MILLENNIALS 60% GEN X 25% Source: The Bozzuto Group, Delta Associates; February 2018.

43 CLASS A APARTMENT AVERAGE TENURE BY RENTER TYPE Urban Locations in Washington Metro Area AVERAGE MONTHS OCCUPIED Millennials Gen X Baby Boomer Traditionalist Source: The Bozzuto Group, Delta Associates; February 2018.

44 MOBILITY BY GENERATION OF 25 TO 35-YEAR OLDS United States 30% % OF 25- TO 35- YEAR- OLDS WHO MOVED IN THE PREVIOUS YEAR 25% 20% 15% Millennials in 2016 Early Boomers in 1981 Traditionalists in 1963 Gen X in 2000 Late Boomers in 1990 Source: Pew Research Center, American Community Survey, Delta Associates; February 2018.

45 CLASS A APARTMENT RENTER TYPES Urban Locations in Washington Metro Area Millennials Gen X Baby Boomer Traditionalist 13% 2% 12% 2% 25% 2015 Average Tenant Tenure = 22.1 Months 60% 27% 2017 Average Tenant Tenure = 22.1 Months 59% Source: The Bozzuto Group, Delta Associates; February 2018.

Edge Technology Look Beyond Fitness Facilities and Pools Go with

46 APARTMENT MARKET OPPORTUNITIES Washington Metro Area Co-Living Apartments Rise in Popularity Among Millennials Invest in Cutting- Edge Technology Look Beyond Fitness Facilities and Pools Go with Smaller and More Efficient Unit Designs Source: Delta Associates; February 2018.

47 MEGATREND FOUR The Beginning of the End of Boutique Condominium Development?

48 AVERAGE UNIT COUNT OF NEW CONDO PROJECTS Washington Metro Area NUMBER OF UNITS Source: Delta Associates; February Note: Includes condo projects actively selling, under construction, and/or pre-marketing. Data is of year-end for each year.

49 AVERAGE UNIT COUNT OF NEW CONDO PROJECTS District of Columbia NUMBER OF UNITS Source: Delta Associates; February Note: Includes condo projects actively selling, under construction, and/or pre-marketing. Data is of year-end for each year.

50 SHARE OF CONDOMINIUM SALES ACTIVITY Washington Metro Area District of Columbia Northern Virginia Suburban Maryland 13% 23% 17% 37% % 46% Source: Delta Associates; February Note: Includes condo projects actively selling, under construction, and/or pre-marketing.

51 NEW CONDOMINIUM PROJECTS District of Columbia 624 Eye Street, NW Avidian, 1210 Van Street, SE Source: Monument Realty; February 2018.

52 NEW CONDOMINIUM PROJECTS Northern Virginia The Arbor, Arbor Row - Tysons Verse, The Boro - Tysons Source: Meridian Group, Kettler, Renaissance Centro; February 2018.

53 NEW CONDOMINIUM PROJECTS Suburban Maryland The Haven at National Harbor Source: Peterson Cos; February 2018.

54 NEW CONDO SALES VS. APARTMENT ABSORPTION Washington Metro Area 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% New Condo Sales Apartment Absorption 0% Source: Delta Associates; February 2018.

Programs Create Mixed-Use Buildings to Allow for High-Rise Condo Construction Target

55 CONDOMINUM MARKET OPPORTUNITIES Washington Metro Area Build in Supply- Constrained Submarkets Condo Project Size Should Not Be Too Large, Avoiding Longer Sales Programs Create Mixed-Use Buildings to Allow for High-Rise Condo Construction Target First-Time Millennial Homebuyers in Select Submarkets Source: Delta Associates; February 2018.

56 MEGATREND FIVE Battle of the Fittest The Office Amenities War

57 OFFICE VACANCY RATE Washington Metro Area 20% 18% 16% New Construction Class A - 2nd Generation Class B 18.5% 15.3% VACANCY RATE 14% 12% 10% 10.3% 8% 6% Source: CoStar, Transwestern; February 2018.

58 CLASS B/C OFFICE INVENTORY REMOVED Washington Metro Area DEMOLISHED TO NEW OFFICE 18% 26.8 Million SF RENOVATED TO CLASS A OFFICE 54% CONVERTED TO ANOTHER PROPERTY TYPE 28% Source: CoStar, Transwestern; February 2018.

Using Lobby Space Make Room for Coworking, Lounges, and Spec Suites

59 OFFICE MARKET OPPORTUNITIES Washington Metro Area Success will go to assets with unique and above-average amenities and design: Differentiate Buildings Using Lobby Space Make Room for Coworking, Lounges, and Spec Suites Amenitize with Unique, Tenant- Focused Offerings Source: Transwestern; February 2018.

Terrell Place, 575 7 th Street, NW Source: ESI

60 OFFICE MARKET OPPORTUNITIES Differentiate Buildings Using Lobby Space 80 M Street, SE Terrell Place, th Street, NW Source: ESI Design, Slate, Columbia Property Trust; February 2018.

61 OFFICE MARKET OPPORTUNITIES Make Room for Coworking, Lounges, and Spec Suites 8614 Westwood Center Drive Source: MRP Realty; February 2018.

62 OFFICE MARKET OPPORTUNITIES Make Room for Coworking, Lounges, and Spec Suites Spec Suite: Metropolitan Square, th Street, NW 3.1 MONTHS OF DOWNTIME POST CONSTRUCTION TENANTS PAY A 3% PREMIUM AVERAGE SPEC SUITE (3,500 SF) ALIGNS WITH TENANTS IN THE MARKET Source: Boston Properties, Transwestern; February 2018.

63 OFFICE MARKET OPPORTUNITIES Amenitize with Unique, Tenant-Focused Offerings Market Square, 701/801 Pennsylvania Avenue, NW Source: Blackstone Group; February 2018.

64 MEGATREND SIX Barriers to Entry = Flex / Industrial Rent Spikes

65 RETAIL SALES United States $450 $400 $350 E-Commerce Retail Sales Department Store Sales $300 IN BILLIONS $250 $200 $150 $100 $50 $ Source: Federal Reserve Bank of St. Louis, Transwestern; February 2018.

66 FLEX / INDUSTRIAL LEASED BY AMAZON Washington / Baltimore Region 7 6 LEASED SF IN MILLIONS Source: CoStar, Amazon, Transwestern; February 2018.

67 INDUSTRIAL LAND SALES PRICE Washington / Baltimore Region AVERAGE PRICE PER ACRE $500,000 $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 Last Mile Non-Last Mile 1998 to to to to 2017 Source: CoStar, RCA, Transwestern; February 2018.

68 FLEX / INDUSTRIAL CONVERSION Washington / Baltimore Region 2005 to 2020 FLEX/INDUSTRIAL 10% RETAIL 7% SELF STORAGE 3% OFFICE 16% 29.9 Million SF HOTEL 1% MULTIFAMILY 63% Source: CoStar, Transwestern; February 2018.

Best Supply/Demand Balance Focus on Fulfillment

69 FLEX / INDUSTRIAL MARKET OPPORTUNITIES Washington / Baltimore Region Select Submarkets with the Best Supply/Demand Balance Focus on Fulfillment and Warehouse Space Source: Transwestern; February 2018.

70 BUY / HOLD / SELL RECOMMENDATIONS United States 2018 Buy Hold Sell Fulfillment 64.4% Warehouse 56.8% R&D 29.8% Flex 24.2% Manufacturing 14.2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% SHARE OF RESPONDENTS Source: Emerging Trends in Real Estate 2018 Survey, Transwestern; February 2018.

71 FLEX / INDUSTRIAL ASKING RENT Washington / Baltimore Region Through 2019 Northern Virginia - Last Mile 10-Year Historical Annual Growth 0.6% District of Columbia - Last Mile 2.1% Suburban Maryland - Last Mile 1.2% Suburban Maryland - Non-Last Mile Northern Virginia - Non-Last Mile Baltimore Metro Area - Last Mile Baltimore Metro Area - Non-Last Mile -1.1% -0.2% -0.9% -0.9% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% ANNUAL CHANGE IN ASKING RENT Source: Transwestern; February 2018.

U.S. Economic and Apartment Market Overview and Outlook. July 15, 2014

2014 U.S. Economic and Apartment Market Overview and Outlook July 15, 2014 U.S. Economic Overview U.S. GDP Growth Persistent Despite 1Q Polar Vortex Annualized Quarterly Percent Change 10% 5% 0% -5% -10%