1. Applied Real Estate
Investment Track
2015-2016 FALL BOARD MEETING
SEPTEMBER 25, 2015

2. Team Introduction
Zi Chong Jonathon Davis Jeffrey Grabowski

3. Agenda
Fund Objective and Investment Theme
Macroeconomic View
Investment Strategy & Implementation
Property Sector Fundamentals
Company Stock Recommendations
Portfolio Management
Questions & Discussion

4. Fund Objective
Outperform the MSCI US REIT Index

5. Investment Theme
Slower Economic Growth,
Continued Volatility
Focus on Value
Preservation

6. Agenda
Fund Objective and Investment Theme
Macroeconomic View
Investment Strategy & Implementation
Property Sector Fundamentals
Company Stock Recommendations
Portfolio Management
Questions & Discussion

7. Macroeconomic View - Domestic
Recovered
Housing
Housing Market Index 61
Manufacturing
Expansion
High Capacity Utilization
Job Gains
2-3 Millions
5.1% Unemployment Rate
GDP Growth
2%+
Since 2012
Stable and Improving US Economy

8. Macroeconomic View - Global
China is Slowing
Recession Risk
Brazil, Canada &
Australia
Very Slow Growth
Deflation Risk
Reduced Demand
for Commodity
Japan and Europe

9. Macroeconomic View - Implications
Volatile Stock Market Slower GDP & Job Growth Slowing
U.S. Economy

10. Macroeconomic View – Capital Markets
Source: Commercial Mortgage Alert September 24, 2015

11. Macroeconomic View – Interest Rates
Market expects 61% chance that rate
hikes in March 2016
Multiple Interest Rate Increases
Source: CME Group and St Louis Fed

12. Agenda
Fund Objective and Investment Theme
Macroeconomic View
Investment Strategy & Implementation
Property Sector Fundamentals
Company Stock Recommendations
Portfolio Management
Questions & Discussion

13. Investment Strategy
• Underweight sectors most affected by global uncertainty
• Overweight sectors driven by strong US fundamentals
• Neutral all other sectors
Sector Weighting
• High Quality Real Estate
• Strong Balance Sheet
• Opportunities for Growth
• Intrinsic Value
Stock Selection

14. Tactical Investment Implementation
Rank Multi-Family Rank Hospitality Rank Industrial Rank Office Rank Healthcare Rank
Shopping
Malls
Rank
Shopping
Centers
3Month 2 0.70 6 0.90 7 0.92 5 0.79 1 0.56 3 0.74 4 0.77
6Month 2 0.75 7 0.94 6 0.93 5 0.82 1 0.62 3 0.77 4 0.80
1Year 2 0.63 7 0.94 6 0.81 5 0.72 1 0.48 3 0.69 4 0.70
3Year 2 0.63 7 1.06 6 0.91 4 0.76 1 0.58 3 0.74 5 0.76
5Year 2 0.85 7 1.36 6 1.23 5 1.00 1 0.82 4 0.99 3 0.98
10Year 2 1.37 7 1.80 6 1.75 4 1.48 1 1.25 5 1.55 3 1.44
Betawith S&P 500

15. Tactical Investment Implementation
Rank Multi-Family Rank Hospitality Rank Industrial Rank Office Rank Healthcare Rank
Shopping
Malls
Rank
Shopping
Centers
3Month 2 0.95 3 1.02 7 1.16 4 1.04 1 0.91 5 1.04 6 1.06
6Month 2 0.99 3 1.01 7 1.09 5 1.01 1 0.95 4 1.01 6 1.04
1Year 3 1.01 5 1.02 7 1.04 2 0.99 1 0.98 4 1.01 6 1.03
3Year 1 0.96 5 1.04 7 1.08 2 0.98 6 1.05 4 1.00 3 0.99
5Year 2 0.96 6 1.18 7 1.18 4 1.01 1 0.95 5 1.03 3 1.00
10Year 2 0.99 6 1.15 7 1.18 4 1.03 1 0.88 5 1.09 3 1.00
Betawith RMS

16. Tactical Investment Implementation
Underweight
Hospitality
Neutral
Industrial Office Healthcare Retail
Overweight
Multi-Family

17. Agenda
Fund Objective and Investment Theme
Macroeconomic View
Investment Strategy & Implementation
Property Sector Fundamentals
Company Stock Recommendations
Portfolio Management
Questions & Discussion

18. Industrial Sector
Current Environment
 Strong fundamentals
 Growth in E-Ecommerce
 Housing & Auto Industry Strength
Looking Forward
 Plateauing Economic Indicators
 Strong Dollar
 Global slowdown
Weighting Recommendation: Neutral

19. Office Sector
Current Environment
 Healthy Employment Data
 Limited Supply Growth
 Strong Net Absorption
Looking Forward
 Modest Economic Growth
 S&P 500 Downward Forecast
 Structural concern in office space usage
Weighting Recommendation: Neutral

20. Retail Sector
Current Environment
 Highest consumer sentiment index recorded
since 2010
 Small business optimism index close to long run
average
 Record occupancy; SS-NOI growth between 3%-
5%
Looking Forward
 Muted supply (12MM SF) with strong
absorption (32 MM SF in 20151H)1
 Stronger pricing power: contractual rent bumps
 E-commerce growth: from 7% current to 12% in
20202
Weighting Recommendation: Neutral Sources: 1) International Council of Shopping Center an CoStar.
2) Quarterly Retail E-Commerce Sales, 1st Quarter 2015, U.S. Bureau News.

21. Healthcare Sector
Current Environment
 Strong past NOI growth: 3%-4%1
 Record high occupancy
 RIDEA structure increase risk and return
Looking Forward
 Low beta sector
 Demographics favor healthcare
 Short-term supply concern
 Great susceptibility to rising interest rates
Weighting Recommendation: Neutral
Source: 1) Green Street Healthcare Sector Report 2015 Q2

22. Multi-Family Sector
Current Environment
 Lowest homeownership rate since 1967
 Population and job growth driven by millennials
 Record high occupancy
Looking Forward
 Millennial demographics continue to strengthen
 Construction to accelerate but in control
 Absorption to remain healthy as demand
continues
to outpace supply
Weighting Recommendation: Overweight

23. Hospitality Sector
Current Environment
 Business travel biggest driver of demand
 Occupancy levels at record highs
 Enplanements have continued to grow.
 2015 & 2016 REVPar growth revised downward
Looking Forward
 Drop in corporate earnings may affect business
travel
 Strong dollar will hurt foreign leisure travel
 Supply is concerning in Houston, Miami, and
New York
Weighting Recommendation: Underweight

24. Agenda
Fund Objective and Investment Theme
Macroeconomic View
Investment Strategy & Implementation
Property Sector Fundamentals
Company Stock Recommendations
Portfolio Management
Questions & Discussion

25. Company Screening Considerations
Real Estate and
Operations
High Quality Real
Estate
Proven Operational
Track Record
Internal & External
Growth
Balance Sheet
Large Institutional
Ownership
Credit Ratings
Valuation
Price/NAV
Price/FFO
Beta

26. DCT Industrial Trust, Inc. (DCT)
Primary Rationale
Major distribution market
concentration paired with strong
operating track record and
accretive disposition activity

27. DCT Industrial Trust, Inc. (DCT)
Real Estate:
 Strategic portfolio repositioning into major
distribution markets
 7.0% SS NOI Growth Rate
Balance Sheet
 Low leverage
 Staggered Debt Maturity Schedule
 Investment Credit Rating
Valuation
 Current Discount to NAV vs historical
premium
 Multiple in line with Peers

28. Regency Centers Corporation (REG)
Primary Rationale
High quality grocery-anchored
centers with high discount to
NAV.

29. Regency Centers Corporation (REG)
Real Estate:
 70% grocery-anchored centers
 ¾ of grocers have 1st /2nd largest market share
 50% exposure to top 3 job gaining states.
Balance Sheet
 Lower-than-peers leverage; 96% fixed rate
 Investment grade balance sheet
 $794MM of line of credit
Valuation
 -12% to NAV vs historical average +0.5%
 Bigger discount than peer average -9%

30. Equity Residential (EQR)
Primary Rationale
High quality assets in
core and coastal markets
trading at a high discount
to NAV

31. Equity Residential (EQR)
Real Estate:
 Over past 10 years, repositioned portfolio of
suburban and urban properties to a focused
portfolio of urban properties in core markets.
Balance Sheet
 Healthy balance sheet with 28.8% Debt-to-
Capitalization
 S&P and Moody’s Investment Credit Rating
Valuation
 Trading at a (14.8%) discount to NAV
Financial Highlights EQR Peer Avg
Price $72.11
Market Capitalization (B) 27.40 15.40
Debt / Market Capitalization 28% 26%
1 Yr Beta (RMZ) 0.76 1.01
Valuation EQR Peer Avg
NAV $84.66
Premium / Discount -14.8% -5.8%
Nominal Cap Rate 4.6% 4.8%
Dividend Yield 3.1% 3.3%
P / FFO (2015E) 20.9x 18.8x
P / AFFO (2015E) 23.8x 21.1x
SS NOI Growth (2015) 4.8% 6.0%

32. Agenda
Fund Objective and Investment Theme
Macroeconomic View
Investment Strategy & Implementation
Property Sector Fundamentals
Company Stock Recommendations
Portfolio Management
Questions & Discussion

33. Portfolio Management

34. Portfolio Management
Academic &
Professional
Guidance
Weekly Macro
Review
Weekly ASAP
Updates
Active Portfolio
Monitoring

35. Questions & Discussion