THE MOST INFORMATIVE EVENT COVERING REAL ESTATE INVESTMENTS

THE MOST INFORMATIVE EVENT COVERING REAL ESTATE INVESTMENTS

2014 U.S. Economic, Capital Markets, and Retail Market Overview and Outlook Retail Trends 2014

U.S. Economic Overview and Outlook

Total Employment (Mil.) Total U.S. Employment Has Recovered to Pre-Recession Level 150 140 +8.2M +8.6M 130 120 110 100 1990 1991 1992 +24.5M * Through April Sources: Marcus & Millichap Research Services, BLS 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005-2.6M -8.7M 2006 2007 2008 2009 2010 2011 2012 2013 2014*

U.S. Household Wealth Now 14% Above 2007 Total Household Assets in ($)Trillions $60 Stocks/Bonds/Mutual Funds*** Checking/Saving/Money Market*** Owner Occupied Real Estate** $45 $30 $15-11% $0 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 ** Includes mobile homes and vacant land *** Includes nonprofit holdings Sources: Marcus & Millichap Research Services, Federal Reserve

Retail Sales ($ Bil.) U.S. Retail Sales Now Well-Beyond Prior Peak Level; Steady, But Slower Growth Most Likely $300 Monthly Retail Sales Excl. Auto and Gas +14% $270 $240 $210 $180 02 04 06 08 10 12 14* * Through April Sources: Marcus & Millichap Research Services, U.S. Census Bureau

National Employment Rank by Metro Y-O-Y Absolute Change Through April 2014 Top 10 Metros Absolute Change Percent Change Dallas-Ft. Worth 106,800 3.5% Los Angeles 92,700 2.3% Houston 82,300 3.0% New York 61,300 1.5% Atlanta 52,100 2.2% Orlando 46,600 4.4% Seattle 46,400 2.6% San Jose 40,900 4.3% Denver 37,600 2.9% Phoenix 37,500 2.1% U.S. Total 2,367,000 1.7% Bottom 10 Metros Absolute Change Percent Change Detroit -4,600-0.2% Washington, D.C. 3,700 0.1% Kansas City 6,200 0.6% Cleveland 8,600 0.8% Columbus 9,500 1.0% St. Louis 9,700 0.7% Philadelphia 12,000 0.4% Milwaukee 12,500 1.5% Palm Beach 16,100 3.0% Charlotte 16,900 1.9% U.S. Average 2,367,000 1.7% Sources: Marcus & Millichap Research Services, BLS

Retail Supply and Demand Overview and Outlook

Ratio of Inventories to Sales Retail Sector Earnings Well-Above Prior Peak As Operations Have Improved 1.8 1.7 1.5 1.4 1.2 Inventory-to-Sales Ratio: Retailers Corporate Profits-Retail Trade $190 $160 $130 $100 $70 Corporate Profits-Retail Trade ($ Bil. SAAR) 2001 2002 2004 2005 2007 2008 2010 2011 2013 Sources: Marcus & Millichap Research Services, Census Bureau, BEA

Completions (Millions of Sq. Ft.) U.S. Retail Vacancy Dropping As New Supply Remains Limited Completions Vacancy Rate 240 9% 180 120 60 8% 7% 6% Vacancy Rate 0 5% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* * Forecast Sources: Marcus & Millichap Research Services, CoStar Group, Inc.

20-34 Year Old Population (Mil.) Favorable Demographics a Major Retail Driver: Echo Boom (20-34 Years Old) Population 70 2014*-2018* Growth: 2.2 Million 66 62 58 54 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014* 2016* 2018* * Forecast Sources: Marcus & Millichap Research Services, U.S. Census Bureau

Percent of Sales Post-Recession Retail Sales by Category; Electronic Shopping Gaining Share of Retail Sales Post-Recession Growth Change from Dec. 2008 to Mar. 2014 Electronic Shopping as % of Retail Sales 12.0% Nonstore Retailers Clubs and Superstores Restaurants/Bars 23.5% 23.2% 58.0% 9.5% Grocery 16.9% Building Materials 13.9% 7.0% Drug Stores / Pharmacies 12.8% Furniture Automotive Parts 10.2% 9.9% 4.5% Electronic and Appliance 5.6% Department Stores -11.8% 2.0% -15% 0% 15% 30% 45% 60% 1993 1996 1999 2002 2005 2008 2011 2014* * Through March Excludes auto & gas sales Sources: Marcus & Millichap Research Services, U.S. Census Bureau

Retail Vacancy Rate Rank by Metro 1Q 2014 Top 10 Markets 1Q 2014 Vacancy YOY Bps Chg. San Francisco 2.5% -60 New York 4.0% -30 Miami 4.2% 0 San Jose 4.4% -60 Boston 4.6% -20 San Diego 4.8% 0 Oakland 4.9% -70 Salt Lake City 5.0% 0 Minneapolis 5.2% -30 Austin 5.3% -60 U.S. Average 7.1% -30 Bottom 10 Markets 1Q 2014 Vacancy YOY Bps Chg. Phoenix 11.1% -80 Las Vegas 11.0% -60 Detroit 9.9% -60 Atlanta 9.8% -110 Sacramento 9.6% -70 Cleveland 9.5% -30 Inland Empire 9.4% -40 Chicago 9.0% 50 St. Louis 8.5% -50 Cincinnati 8.3% -90 U.S. Average 7.1% -30 Sources: Marcus & Millichap Research Services, CoStar Group, Inc.

U.S. Retail Investment and Capital Markets Overview and Outlook

Average Price Per Square Foot Average Price Per Square Foot U.S. Retail Price and Cap Rate Trends Single-Tenant Multi-Tenant $250 Average Price Cap Rate 10% $200 Average Price Cap Rate 10% $200 $150 $100 9% 8% 7% Average Cap Rate $150 $100 $50 9% 8% 7% Average Cap Rate $50 02 04 06 08 10 12 14* 6% $0 02 04 06 08 10 12 14* 6% * Through 1Q Includes sales $1 million and greater Sources: Marcus & Millichap Research Services, CoStar Group, Inc., Real Capital Analytics

Average Cap Rate Yields Driving Capital to Secondary Markets; Value-Add Investments 10% Primary Secondary Tertiary 9% 8% 7% 6% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* * Through 1Q Includes sales $1 million and greater Sources: Marcus & Millichap Research Services, CoStar Group, Inc., Real Capital Analytics

Average Rate 380 bps 210 bps 450 bps 560 bps 440 bps Average Rate 250 bps 640 bps 470 bps 560 bps 450 bps 550 bps 520 bps Retail Cap Rate-Interest Rate Spreads 12% 9% Single-Tenant Cap Rate 10-Year Treasury Rate Cap Rate Long-Term Avg. 12% 9% Multi-Tenant Cap Rate 10-Year Treasury Rate Cap Rate Long-Term Avg. 6% 6% 3% 10-Yr Treasury Long-Term Avg. 3% 10-Yr Treasury Long-Term Avg. 0% 0% 1993 1996 1999 2002 2005 2008 2011 2014* 1993 1996 1999 2002 2005 2008 2011 2014* * Through 1Q Includes sales $1 million and greater Sources: Marcus & Millichap Research Services, CoStar Group, Inc., Real Capital Analytics

Total Transactions (000s) Retail Investor Sentiment Index- Early Indicator of Transaction Activity 16 $1M-$10M $10M-$20M $20M+ Retail Investor Sentiment 150 12 8 4 125 100 75 Sentiment Index 0 50 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* * Investor sentiment through 1Q 2014; sales for trailing 12 months through 1Q estimate Includes sales $1 million and greater Sources: Marcus & Millichap Research Services, CoStar Group, Inc., Real Capital Analytics

2014 U.S. Economic, Capital Markets, and Retail Market Overview and Outlook Retail Trends 2014

INFORMATIVE EVENT COVERING REAL ESTATE INVE