13. Presentation by Courtland - 2016 Real Estate Strategic Plan

13

Courtland Partners, Ltd.

Presentation to: Department of Water and Power Employees’ Retirement Plan (the “Plan”)

2016 Real Estate Portfolio Strategic Plan

February 24, 2016

127 Public Square, Suite 5050 | Cleveland, OH 44114 | Tel 216 522 0330

10866 Wilshire Blvd., Suite 830 | Los Angeles, CA 90024 | Tel 310 474 3040

42 Brook Street | London W1K 5DB, United Kingdom | Tel +44 7557 670374

www.courtland.com

Table of Contents

1

I. 2016 Strategic Plan Overview 2

II. 2015 Commitment Review 4

III. 2016 Projected Income Returns 5

IV. Proposed 2016 Strategic Plan 6

V. 2016 Risk/Return Targets 7

VI. 2016 Components of Return and Leverage 8

VII. 2016 Property-Type Diversification 9

VIII. 2016 Geographic Diversification 10

IX. 2016 Portfolio Model 11

X. 2016 Strategy Implementation/Action Plan 21

2016 Strategic Plan Overview

Target Real Estate Allocation:8% of the total portfolio.

Performance Objective*:To exceed the designated benchmark (NCREIF plus 50 basis points) in the Plan’s Investment Policy

for Real Estate. Based on the Plan’s long-term 70/20/10 (Core/Value/Opportunistic) allocation with the real estate portfolio assumed return of 8.4% and standard deviation of 9%.

Real Estate Portfolio Investment Objectives:

Attractive Income and Total Returns. Historically, real estate has provided stable, long term income returns thatcomprise a significant portion of total return [e.g., the NCREIF Property Index (“NPI”) income return comprises morethan 80% of the total NPI return since inception]. Significant income return increases the transparency anddecreases the volatility of total return. Of note, real estate income returns compare favorably to those generated bypublic equity and debt vehicles.

Portfolio Diversification. Investment in real estate may enhance the diversification of the Plan’s total investmentportfolio given the historically low or negative return correlation of real estate with other asset classes (e.g., equitiesand fixed income).

Inflation-Hedge. Real estate has historically provided a reasonable hedge against price inflation.

2Based on the target policy allocation of 70/20/10 core/value-add/opportunistic and return assumptions of 7% for core, 11% for value-add, and 13% for opportunistic.

1

1

2016 Strategic Plan Overview

The following have been established as short and long term investment themes and initiatives:

3

STRATEGIC INITIATIVES (Long-Term Plans)

Exceed benchmark: NCREIF + 50 basis points

Strategic target: 70/20/10 (core/value/opportunistic)

Increase diversification with respect to risk / property type / geography

Increase average commitment size to $60-$90 million

Maintain income and preservation of capital focus

Consider follow-on funds with existing managers

Potentially focus on real estate exposure and fee reduction via co-investment opportunities

TACTICAL INITIATIVES (Short-Term Goals)

Continue to focus on income-oriented returns

Continue to slightly overweight non-core component of portfolio, given market opportunity set

Selectively allocate to core strategies as opportunities arise

Evaluate opportunities across the capital stack with potential focus on debt-oriented investments

Seek opportunities in opportunistic category which benefit from market disclocation

2015 Commitment Review

4

The Plan made the following real estate allocations in 2015 to maintain the Plan’s real

estate allocation and satisfy the initiatives of 2015 Strategic Plan.

Investments Date $ Amount Risk Profile Objectives

Jamestown Premier

Property Fund

(Consistent with 2014 Strategic Plan)

1Q15 $60 million Core/Core Plus – U.S.

Exposure to trophy assets in major U.S. markets, complementary to traditional core

Harrison Street Core

Fund2Q15 $60 million Core/Core Plus

– U.S.

Exposure to non-traditional assetswithin the core-plus segment of the market

Mesa West Fund IV 4Q15 $60 million Value – U.S. Exposure to value-add U.S. transitional mortgage debt

Westbrook Fund X 4Q15 $60 million Value – GlobalExposure to value-add equity on a global basis with a focus in ten key markets globally

Lone Star REF IV 1Q15 $48.5 million Opportunistic –Global

Exposure to real estate through the acquisition of direct equity positions or the purchase of underlying real estate loans or pools of loans

2016 Projected Income Returns

5

Income returns have trended down over the past year as asset pricing has escalated

In 2016, the portfolio is projected to generate approximately $24 million in income returns

2015 investments Harrison Street Core Fund and Jamestown Premier Property Fund both have moderate income focus

Debt funds continue to bring strong income returns to the Plan’s portfolio

Investment

Expected

Income (%) Expected Income ($)

Core

DFA 2.00% $500,000 Harrison Street 4.00% $2,000,000 Heitman Securities 2.00% $500,000 INVESCO 4.00% $2,000,000 Jamestown 4.00% $2,000,000 JP Morgan SPF 4.00% $2,500,000 PCCP II 6.00% $1,000,000 PRISA 4.00% $2,800,000 Prologis Industrial 2.00% $500,000

Value

Angelo Gordon 5.00% $750,000 Almanac VI 8.00% $500,000 Almanac VII 8.00% $600,000 Bristol II 2.00% $600,000 DRA VII 7.00% $900,000 DRA VIII 7.00% $1,000,000 Mesa West II 7.00% $600,000 Mesa West III 7.00% $800,000 Mesa West IV 7.00% $1,000,000 PRISA II 3.00% $900,000 Westbrook X N/A $0

Opportunistic

Blackstone VII N/A $0 Blackstone Europe IV N/A $0 Lone Star REF II 3.00% $80,000 Lone Star REF IV 3.00% $450,000 Lone Star VII 3.00% $60,000 Torchlight IV 6.00% $1,200,000 Torchlight V 6.00% $900,000

Total $24,140,000

Proposed 2016 Strategic Plan

6

To achieve an 8% allocation to real estate, Courtland recommends the

following commitments be made in 2016:

Core: $75-$100 million (2 allocations)

Value: $60-$90 million million (1 allocation)

Opportunistic: $60-$90 million (1 allocation)

Real estate drops to 4.2% by 2019 in the absence of new commitments based on 7.5% growth rate (actuarial return).

Additionally, Courtland projects the following 2017 commitment amounts to attain an 8% allocation to real estate:

• 2017 Core: $75 million

• 2017 Value-Add: $60 million

• 2017 Opportunistic: $60 million

2016 Risk/Return Targets

7

Investment and Portfolio Risk/Return Ranges1

Risk/Return

Nominal Net

Return

Standard2

Deviation

Exposure

9-30-15

Fully Funded

Exposure3

Proposed

Strategy Range

Policy

Range

Core 6%-8% 7.0% 62% 54% 50%-60% 50%-100%

Value-Add 10%-12% 12.0% 24% 25% 25%-30% 0%-40%

Opportunistic 13%+ 17.0% 14% 21% 15%-20% 0%-20%

For the core section of the portfolio, strong demand for institutional “trophy” real estate in majormarkets (from domestic and offshore) continue to be strong causing concern of pricing “bubbles”

particularly with billion-dollar contribution queues to the top open-end funds.

Continue to consider pursuing alternative core/core plus strategies.

Continue to focus on downside protection via the inclusion of debt-oriented strategies across therisk/return spectrum.

Given the current market conditions, consider core plus/value strategies that emphasize strongcurrent income and modest use of leverage.

For Opportunistic investments, continue to consider strategies that look to take advantage of:dislocation in the capital markets (e.g., European banking sector).

Note: 1: Data based on 9/30/15 valuations and managers in place at that time.2: Based on historical Courtland Partners Index Quarterly Return Information as of 12/31/88 - 9/30/15.3: Includes commitments through 3Q2015. Does not include December commitments to Mesa West IV or Westbrook X.

8

2016 Leverage Review

Leverage Ranges and Average Loan-To-Value Target (as of 3Q2015)

Risk Actual Strategic Ranges Range

Aggregate Core 18.1% 20%-25% Up to 40%Aggregate Value 45.5% 50%-60% Up to 65%

Aggregate Opportunistic 45.2% 55%-65% Up to 75%Total Real Estate Portfolio 28.5% 25%-30% Up to 50%

Leverage, on a portfolio basis, has continued to decline (29% in 3Q2015 from 37% in 3Q2010)due in part by market recovery and manager selection (targeted strategies with cap on leverage).Continue to closely monitor leverage to avoid leverage related risks in case of market volatility.

The Staff and Courtland have continued to pursue strategies where leverage is not the primarydriver of returns.

Leverage within opportunistic risk/return category has also remained lower over recent years(45% in 2015 from 56% in 2012) as managers (Torchlight, Blackstone and Lone Star) haveworked to find distressed deals without using leverage as a main driver of return.

The Plan’s Staff and the Consultant will closely monitor the use of leverage, the debt maturityschedule and debt composition (fixed vs. floating) for investments that comprise the Real EstatePortfolio.

9

2016 Property Type Diversification Targets

Property Type Diversification (as of 9/30/2015)

Property Type Allocation** Policy Range NCREIF Property Index

Office 34.8% Up to 40% 38.3%Industrial 15.2% Up to 35% 13.1%

Retail 16.5% Up to 40% 23.2%Residential 22.0% Up to 40% 24.1%

Hotel 5.0% Up to 15% 1.3%Other* 6.6% Up to 20% N/A

Proposed recommendation for 2016:

Pursue strategies which are diversified across property types (limit single property-type funds).

Consider non-traditional property types (e.g. parking, medical office, storage and student housing), as these property types are generally not fully priced.

Seek investments with property types generally more immune to market downturns (e.g., grocery-anchored retail).

Retail continues to remain underweight; focus upon expanding this property type.

*May include senior living, healthcare, student housing, land, self storage, and other non categorized investments (e.g. debt portfolio) .** Due to pooled fund investments, it is difficult to project property type exposures.

10

2016 Geographic Diversification Targets

Geographic Diversification (as of 9/30/2015)

Sub Regions Allocation Policy Range NCREIF Property Index

West (1) 34.0% Up to 50% 36.1%South (2) 19.6% Up to 40% 20.4%

Midwest (3) 6.8% Up to 40% 9.4%East (4) 25.7% Up to 50% 34.2%

US Non Classified 4.1% N/A N/AInternational* 9.8% Up to 20% N/A

(1) Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming. (2) Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Oklahoma, Tennessee, Texas.(3) Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin.(4) Connecticut, Delaware, District of Columbia, Kentucky, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, West Virginia.

*Includes full funding of Blackstone Europe IV; Note: Due to pooled fund investments, it is difficult to project geographic exposures.

Proposed Recommendation for 2016:

Maintain but closely monitor the portfolio’s exposure to costal markets (i.e., East, West).

Avoid regions where oversupply has been an issue (e.g. Houston).

Consider emerging secondary cities (e.g. Seattle, Portland) where pricing is still relativelyattractive.

Consider select tertiary markets very selectively based on property type and strategy.

11

Current Portfolio at 0% Growth Rate

Note: Based on 3Q15 data.Note: Estimated plan assets and over/under allocation based on assumed 0% total portfolio-level growth rate.

Dec-15 Dec-16 Dec-17 Dec-18 Dec-19

Mkt. Value Mkt. Value Mkt. Value Mkt. Value Mkt. Value

Core:

DFA Global Real Estate Securities 25,538,361 26,225,906 26,225,906 26,225,906 26,225,906 Harrison Street Core Property 0 60,000,000 60,000,000 60,000,000 60,000,000 Heitman REIT 24,715,972 26,576,203 26,576,203 26,576,203 26,576,203 Invesco Core Real Estate 54,295,955 54,295,955 54,295,955 54,295,955 54,295,955 Jamestown Premier 0 60,000,000 60,000,000 60,000,000 60,000,000 JP Morgan SPF 68,640,374 68,640,374 68,640,374 68,640,374 68,640,374 PCCP First Mortgage II 15,095,871 13,876,057 0 0 0 Prologis Industrial Fund 26,522,346 26,522,346 26,522,346 26,522,346 26,522,346 Prudential PRISA 73,225,455 73,225,455 73,225,455 73,225,455 73,225,455

Total 288,034,334 409,362,296 395,486,239 395,486,239 395,486,239

60% 58% 53% 54% 61%Value:

AG Core Plus Realty Fund III 15,937,488 12,687,488 9,687,488 5,987,488 2,587,488Almanac Realty Securities VI 6,469,838 11,859,838 14,739,838 10,739,838 6,739,838Almanac Realty Securities VII 6,134,039 16,134,039 26,134,039 24,974,616 19,974,616Bristol Value II 9,057,422 14,925,334 10,925,334 6,925,334 0DRA Growth and Income Fund VII 16,035,528 15,163,528 11,561,528 5,561,528 0DRA Growth and Income Fund VIII 9,232,899 17,365,232 21,957,825 17,957,825 12,957,825Mesa West Income Fund II 1,736,210 0 0 0 0Mesa West Income Fund III 14,067,939 18,126,838 14,126,814 10,126,790 0Mesa West Income Fund IV 1,736,210 21,736,210 38,236,210 54,736,210 51,236,210Prudential PRISA II 32,310,674 32,310,674 32,310,674 32,310,674 32,310,674Westbrook X 0 20,000,000 40,000,000 60,000,000 60,000,000

Total 112,718,247 180,309,181 219,679,750 229,320,303 185,806,651

23% 25% 30% 32% 29%Opprotunistic:

Blackstone BREP VII 26,243,239 20,243,239 14,243,239 8,243,239 2,000,000Blackstone Europe IV 16,275,840 25,522,923 24,522,923 19,522,923 14,522,923Lone Star Fund VII 2,117,115 666,597 536,858 19,314 0Lone Star Real Estate Fund II 2,123,792 820,237 528,937 83,687 0Lone Star Real Estate Fund IV 12,873,751 46,095,551 43,095,551 36,095,551 26,095,551Torchlight Debt Opportunity IV 18,407,493 17,407,493 16,407,493 12,407,493 7,407,493Torchlight Debt Opportunity V 1,478,795 9,478,795 27,978,795 24,978,795 19,978,795

Total 79,520,025 120,234,836 127,313,796 101,351,002 70,004,763

17% 17% 17% 14% 11%

Total Real Estate 480,272,606 709,906,313 742,479,786 726,157,544 651,297,653 % of Plan Assets 4.2% 6.1% 6.4% 6.3% 5.6%

Plan Assets (0% Growth) 11,559,367,342 11,559,367,342 11,559,367,342 11,559,367,342 11,559,367,342

Over/Under Funded -444,476,781 -214,843,074 -182,269,602 -198,591,843 -273,451,734

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Current Portfolio at 7.5% Growth Rate

Dec-15 Dec-16 Dec-17 Dec-18 Dec-19

Mkt. Value Mkt. Value Mkt. Value Mkt. Value Mkt. Value

Core:

DFA Global Real Estate Securities 25,538,361 26,225,906 26,225,906 26,225,906 26,225,906 Harrison Street Core Property 0 60,000,000 60,000,000 60,000,000 60,000,000 Heitman REIT 24,715,972 26,576,203 26,576,203 26,576,203 26,576,203 Invesco Core Real Estate 54,295,955 54,295,955 54,295,955 54,295,955 54,295,955 Jamestown Premier 0 60,000,000 60,000,000 60,000,000 60,000,000 JP Morgan SPF 68,640,374 68,640,374 68,640,374 68,640,374 68,640,374 PCCP First Mortgage II 15,095,871 13,876,057 0 0 0 Prologis Industrial Fund 26,522,346 26,522,346 26,522,346 26,522,346 26,522,346 Prudential PRISA 73,225,455 73,225,455 73,225,455 73,225,455 73,225,455

Total 288,034,334 409,362,296 395,486,239 395,486,239 395,486,239

60% 58% 53% 54% 61%Value:

AG Core Plus Realty Fund III 15,937,488 12,687,488 9,687,488 5,987,488 2,587,488Almanac Realty Securities VI 6,469,838 11,859,838 14,739,838 10,739,838 6,739,838Almanac Realty Securities VII 6,134,039 16,134,039 26,134,039 24,974,616 19,974,616Bristol Value II 9,057,422 14,925,334 10,925,334 6,925,334 0DRA Growth and Income Fund VII 16,035,528 15,163,528 11,561,528 5,561,528 0DRA Growth and Income Fund VIII 9,232,899 17,365,232 21,957,825 17,957,825 12,957,825Mesa West Income Fund II 1,736,210 0 0 0 0Mesa West Income Fund III 14,067,939 18,126,838 14,126,814 10,126,790 0Mesa West Income Fund IV 1,736,210 21,736,210 38,236,210 54,736,210 51,236,210Prudential PRISA II 32,310,674 32,310,674 32,310,674 32,310,674 32,310,674Westbrook X 0 20,000,000 40,000,000 60,000,000 60,000,000

Total 112,718,247 180,309,181 219,679,750 229,320,303 185,806,651

23% 25% 30% 32% 29%Opprotunistic:

Blackstone BREP VII 26,243,239 20,243,239 14,243,239 8,243,239 2,000,000Blackstone Europe IV 16,275,840 25,522,923 24,522,923 19,522,923 14,522,923Lone Star Fund VII 2,117,115 666,597 536,858 19,314 0Lone Star Real Estate Fund II 2,123,792 820,237 528,937 83,687 0Lone Star Real Estate Fund IV 12,873,751 46,095,551 43,095,551 36,095,551 26,095,551Torchlight Debt Opportunity IV 18,407,493 17,407,493 16,407,493 12,407,493 7,407,493Torchlight Debt Opportunity V 1,478,795 9,478,795 27,978,795 24,978,795 19,978,795

Total 79,520,025 120,234,836 127,313,796 101,351,002 70,004,763

17% 17% 17% 14% 11%

Total Real Estate 480,272,606 709,906,313 742,479,786 726,157,544 651,297,653 % of Plan Assets 4.2% 5.7% 5.6% 5.1% 4.2%

Plan Assets (7.5% Growth) 11,559,367,342 12,426,319,893 13,358,293,885 14,360,165,926 15,437,178,370

Over/Under Funded -444,476,781 -284,199,278 -326,183,725 -422,655,730 -583,676,617

Note: Based on 3Q15 data.Note: Estimated plan assets and over/under allocation based on assumed 7.5% total portfolio-level growth rate.

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Current and New Commitments at 0% Growth RateDec-15 Dec-16 Dec-17 Dec-18 Dec-19

Mkt. Value Mkt. Value Mkt. Value Mkt. Value Mkt. Value

Core:

DFA Global Real Estate Securities 25,538,361 26,225,906 26,225,906 26,225,906 26,225,906 Harrison Street Core Property 0 60,000,000 60,000,000 60,000,000 60,000,000 Heitman REIT 24,715,972 26,576,203 26,576,203 26,576,203 26,576,203 Invesco Core Real Estate 54,295,955 54,295,955 54,295,955 54,295,955 54,295,955 Jamestown Premier 0 60,000,000 60,000,000 60,000,000 60,000,000 JP Morgan SPF 68,640,374 68,640,374 68,640,374 68,640,374 68,640,374 PCCP First Mortgage II 15,095,871 13,876,057 0 0 0 Prologis Industrial Fund 26,522,346 26,522,346 26,522,346 26,522,346 26,522,346 Prudential PRISA 73,225,455 73,225,455 73,225,455 73,225,455 73,225,455 Core 2016 0 37,500,000 75,000,000 75,000,000 75,000,000 Core 2017 0 0 37,500,000 75,000,000 75,000,000

Total 288,034,334 446,862,296 507,986,239 545,486,239 545,486,239

60% 56% 53% 53% 57%Value:

AG Core Plus Realty Fund III 15,937,488 12,687,488 9,687,488 5,987,488 2,587,488Almanac Realty Securities VI 6,469,838 11,859,838 14,739,838 10,739,838 6,739,838Almanac Realty Securities VII 6,134,039 16,134,039 26,134,039 24,974,616 19,974,616Bristol Value II 9,057,422 14,925,334 10,925,334 6,925,334 0DRA Growth and Income Fund VII 16,035,528 15,163,528 11,561,528 5,561,528 0DRA Growth and Income Fund VIII 9,232,899 17,365,232 21,957,825 17,957,825 12,957,825

Mesa West Income Fund II 1,736,210 0 0 0 0Mesa West Income Fund III 14,067,939 18,126,838 14,126,814 10,126,790 0Mesa West Income Fund IV 1,736,210 21,736,210 38,236,210 54,736,210 51,236,210Prudential PRISA II 32,310,674 32,310,674 32,310,674 32,310,674 32,310,674Westbrook X 0 20,000,000 40,000,000 60,000,000 60,000,000Value 2016 0 20,000,000 40,000,000 60,000,000 60,000,000

Total 112,718,247 200,309,181 259,679,750 289,320,303 245,806,651

23% 25% 27% 28% 26%Opprotunistic:

Blackstone BREP VII 26,243,239 20,243,239 14,243,239 8,243,239 2,000,000Blackstone Europe IV 16,275,840 25,522,923 24,522,923 19,522,923 14,522,923Lone Star Fund VII 2,117,115 666,597 536,858 19,314 0Lone Star Real Estate Fund II 2,123,792 820,237 528,937 83,687 0Lone Star Real Estate Fund IV 12,873,751 46,095,551 43,095,551 36,095,551 26,095,551Torchlight Debt Opportunity IV 18,407,493 17,407,493 16,407,493 12,407,493 7,407,493Torchlight Debt Opportunity V 1,478,795 9,478,795 27,978,795 24,978,795 19,978,795Opportunistic 2016 0 30,000,000 60,000,000 90,000,000 90,000,000

Total 79,520,025 150,234,836 187,313,796 191,351,002 160,004,763

17% 19% 20% 19% 17%

Total Real Estate 480,272,606 797,406,313 954,979,786 1,026,157,544 951,297,653 % of Plan Assets 4.2% 6.9% 8.3% 8.9% 8.2%

Plan Assets (0% Growth) 11,559,367,342 11,559,367,342 11,559,367,342 11,559,367,342 11,559,367,342

Over/Under Funded -444,476,781 -127,343,074 30,230,398 101,408,157 26,548,266

Note: Based on 3Q15 data.Note: Estimated plan assets and over/under allocation based on assumed 0% total portfolio-level growth rate.

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Current and New Commitments at 7.5% Growth Rate

Dec-15 Dec-16 Dec-17 Dec-18 Dec-19

Mkt. Value Mkt. Value Mkt. Value Mkt. Value Mkt. Value

Core:

DFA Global Real Estate Securities 25,538,361 26,225,906 26,225,906 26,225,906 26,225,906 Harrison Street Core Property 0 60,000,000 60,000,000 60,000,000 60,000,000 Heitman REIT 24,715,972 26,576,203 26,576,203 26,576,203 26,576,203 Invesco Core Real Estate 54,295,955 54,295,955 54,295,955 54,295,955 54,295,955 Jamestown Premier 0 60,000,000 60,000,000 60,000,000 60,000,000 JP Morgan SPF 68,640,374 68,640,374 68,640,374 68,640,374 68,640,374 PCCP First Mortgage II 15,095,871 13,876,057 0 0 0 Prologis Industrial Fund 26,522,346 26,522,346 26,522,346 26,522,346 26,522,346 Prudential PRISA 73,225,455 73,225,455 73,225,455 73,225,455 73,225,455 Core 2016 0 37,500,000 75,000,000 75,000,000 75,000,000 Core 2017 0 0 37,500,000 75,000,000 75,000,000

Total 288,034,334 446,862,296 507,986,239 545,486,239 545,486,239

60% 56% 53% 53% 57%Value:

AG Core Plus Realty Fund III 15,937,488 12,687,488 9,687,488 5,987,488 2,587,488Almanac Realty Securities VI 6,469,838 11,859,838 14,739,838 10,739,838 6,739,838Almanac Realty Securities VII 6,134,039 16,134,039 26,134,039 24,974,616 19,974,616Bristol Value II 9,057,422 14,925,334 10,925,334 6,925,334 0DRA Growth and Income Fund VII 16,035,528 15,163,528 11,561,528 5,561,528 0DRA Growth and Income Fund VIII 9,232,899 17,365,232 21,957,825 17,957,825 12,957,825Mesa West Income Fund II 1,736,210 0 0 0 0Mesa West Income Fund III 14,067,939 18,126,838 14,126,814 10,126,790 0Mesa West Income Fund IV 1,736,210 21,736,210 38,236,210 54,736,210 51,236,210Prudential PRISA II 32,310,674 32,310,674 32,310,674 32,310,674 32,310,674Westbrook X 0 20,000,000 40,000,000 60,000,000 60,000,000Value 2016 0 20,000,000 40,000,000 60,000,000 60,000,000

Total 112,718,247 200,309,181 259,679,750 289,320,303 245,806,651

23% 25% 27% 28% 26%Opprotunistic:

Blackstone BREP VII 26,243,239 20,243,239 14,243,239 8,243,239 2,000,000Blackstone Europe IV 16,275,840 25,522,923 24,522,923 19,522,923 14,522,923Lone Star Fund VII 2,117,115 666,597 536,858 19,314 0Lone Star Real Estate Fund II 2,123,792 820,237 528,937 83,687 0Lone Star Real Estate Fund IV 12,873,751 46,095,551 43,095,551 36,095,551 26,095,551Torchlight Debt Opportunity IV 18,407,493 17,407,493 16,407,493 12,407,493 7,407,493Torchlight Debt Opportunity V 1,478,795 9,478,795 27,978,795 24,978,795 19,978,795Opportunistic 2016 0 30,000,000 60,000,000 90,000,000 90,000,000

Total 79,520,025 150,234,836 187,313,796 191,351,002 160,004,763

17% 19% 20% 19% 17%

Total Real Estate 480,272,606 797,406,313 954,979,786 1,026,157,544 951,297,653 % of Plan Assets 4.2% 6.4% 7.1% 7.1% 6.2%

Plan Assets (7.5% Growth) 11,559,367,342 12,426,319,893 13,358,293,885 14,360,165,926 15,437,178,370

Over/Under Funded -444,476,781 -196,699,278 -113,683,725 -122,655,730 -283,676,617

Note: Based on 3Q15 data.Note: Estimated plan assets and over/under allocation based on assumed 7.5% total portfolio-level growth rate.

Risk/Return Allocation

15Note: The above risk/return levels are based on current portfolio with no proposed allocations.

Risk/Return Strategy2015 2016 2017 2018 2019

Core 60% 58% 53% 54% 61%Value 23% 25% 30% 32% 29%Opportunistic 17% 17% 17% 14% 11%Total 100% 100% 100% 100% 100%

Core61%

Value29%

Opportunistic11%

2019

Property-Type Diversification

16Note: The above property-type diversification tables/charts are based on current portfolio with no proposed allocations.Proposed allocation diversification information is not included as it is difficult to predict the nature of future commitments.

Property Type2015 2016 2017 2018 2019

Office 35% 38% 38% 39% 39%Retail 17% 16% 17% 17% 18%Residential 21% 17% 17% 17% 16%Industrial 15% 11% 11% 10% 11%Hotel 5% 5% 5% 4% 4%Other* 8% 13% 13% 13% 13%Total 100% 100% 100% 100% 100%

Geographic Diversification

17Note: The above geographic diversification tables/charts are based on current portfolio with no proposed allocations.Proposed allocation diversification information is not included as it is difficult to predict the nature of future commitments.

Geographic Diversification2015 2016 2017 2018 2019

East 26% 32% 33% 34% 35%West 35% 30% 31% 33% 34%Midwest 8% 7% 7% 7% 6%South 20% 17% 17% 15% 14%International 7% 9% 9% 8% 6%Other* 5% 4% 4% 4% 4%Total 100% 100% 100% 100% 100%

*Includes Latin America, South America, and other (non-allocated).

Other Portfolio Structure Diversification

18Note: The above property-type diversification are based on current portfolio with no proposed allocations.Proposed allocation diversification information is not included as it is difficult to predict the nature of future commitments.

Non-Development/Development2015 2016 2017 2018 2019

Development 2% 2% 2% 2% 2%Non-Develop 98% 98% 98% 98% 98%Total 100% 100% 100% 100% 100%

Public vs. Private2015 2016 2017 2018 2019

Public 13% 9% 9% 9% 9%Private 87% 91% 91% 91% 91%Total 100% 100% 100% 100% 100%

Debt vs. Equity (Portion of Capital Structure)2015 2016 2017 2018 2019

Debt 17% 19% 19% 19% 16%Equity 83% 81% 81% 81% 84%Total 100% 100% 100% 100% 100%

Projected Changes in Portfolio Value

19Note: The above projected changes in portfolio value are based on current portfolio with no proposed allocations.

In the absence of new commitments, the portfolio begins to decline in value starting in 2018.

Cash Flow out of/into Fund

2015-2016 Change

2016-2017 Change

2017-2018 Change

2018-2019 Change

Return of Capital (16,832,097) (39,899,120) (52,822,241) (74,859,891)Capital Calls 246,465,804 72,472,593 36,500,000 -Total 229,633,707 32,573,473 (16,322,241) (74,859,891)

Projected Changes in Portfolio Value

20Note: The above projected changes in portfolio value are based on current portfolio with no proposed allocations.

Courtland Financial Model Projected Allocation to Real Estate

Assuming no Additional Investment Commitments

Dec-15 Dec-16 Dec-17 Dec-18 Dec-19

Total Plan Asset $11,559,367,342 $12,426,319,893 $13,358,293,885 $14,360,165,926 $15,437,178,370

Real Estate Investments $480,272,606 $709,906,313 $742,479,786 $726,157,544 $651,297,653

Real Estate Percent of Total 4.2% 5.7% 5.6% 5.1% 4.2%

Allocation to Real Estate $924,749,387 $994,105,591 $1,068,663,511 $1,148,813,274 $1,234,974,270

Remaining Commitments $409,411,435 $148,601,619 $64,629,026 $20,788,449 $20,788,449

Over/(Under) Allocation - Gross -$444,476,781 -$284,199,278 -$326,183,725 -$422,655,730 -$583,676,617

Over/(Under) Allocation - Net -$35,065,346 -$135,597,659 -$261,554,699 -$401,867,281 -$562,888,167

2016 Strategy Implementation/Action Plan

21

Risk/Return Action Plan Focus

Core

$75-$100 million in total to two investments

• Consistent with 2015 core initiatives, consider alternative core strategies (e.g., stabilized non-traditional property type strategies).

• Consider debt portion of capital structure.• Potentially consider additional allocation to REITs given discount to

NAV based on current valuation environment.• Place continued emphasis to current income and preservation of

capital/downside protection.• Consider potential co-investment opportunities as they arise.

Value$60-$90 million to one investment

• Place continued emphasis to high income with potential for value creation.

• Focus on managers that acquire assets below market value and discounts to replacement cost and subsequently “manufacture” core

assets.• Focus on top performing follow-on managers if their strategies

continue to be a portfolio fit.• Consider strategies that focus on secondary markets.• Consider potential co-investment opportunities as they arise.

Opportunistic$60-$90 million to one investment

• Focus on investments that target stressed/distressed capital structures as opposed to stressed/distressed assets.

• Focus on strategies that provide basis protection in order to minimize downside volatility.

• Consider investments in international markets (preference for Europe) that have not had the market recovery experienced in the U.S.

• Focus on investments that are not generating returns solely through the use of financial engineering.