Planning for the future

October 11, 2019 Appalachian Human Resources Summit

Parkway Ballroom, Plemmons Student Union

Daniel Manware, Associate, Nuveen Real Estate

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1. Name

2. Company/Industry

3. What do you hope to accomplish from this workshop?

Introductions

Source: Harvard Joint Center for Housing Studies, America's Rental Housing 2017; US Census Bureau

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• What is your company headcount?

• What city is your office located in?

• Any field offices? Where are these field offices located?

• What % of your workforce is comprised of millennials and Gen Z?

• What are your primary recruitment tools?

• Internship program, college recruitment, social media, etc.?

• What are your primary HR issues?

• Do you offer flexibility for quiet work place? Work from home? Easy to work from tech perspective?

• What are the biggest challenges you face as an HR professional when thinking about the

workforce of the future?

Questions

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Demographics are a key megatrend

Source: US Census Bureau

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Generations’ Share of Total US PopulationGeneration Z Millennials Generation X Baby Boomers

Generation Z and Millennials comprise half of the total US population

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Generation Z and Millennials will comprise ~75% of workforce by 2035

1940 1960 1980 2000 2020 2040 2060

1997 - 2015

1981 - 1996

1965 - 1980

1946 - 1964

Gen Xages 38-53

Gen Zages 3 - 21

Millennialsages 22 - 37

WORKING AGE

WORKING AGE

WORKING AGE

WORKING AGEBoomers

ages 54-7245%

59%

69%7 4%

89%

100%

55%

41%

31%26%

11%

0%

25%

50%

75%

100%

2020 2025 2030 2035 2040 2045

Gen Z & Millenials Gen X & Boomers

Working Age by Demographic Generations as % of Working Age Total (25-64)

Source: Harvard Joint Center for Housing Studies, America's Rental Housing 2017; US Census Bureau

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• 21% of millennials say they've changed jobs within the past year,

• More than 3X the number of non-millennials who report the same

• 60% of millennials say they are open to a different job opportunity

• 15 percentage points higher than the percentage of non-millennial workers who say the same

• Not just leaving for high-paying jobs, but for:

• Positive work culture

• Better work-life balance

• Environmental and social issues

Retaining millennials aka the “job hopping generation”

Source: Gallop, 2019

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Younger workforce is technologically-adept

Source: Pew Research Center

A more tech-advanced workforce will impact workplace desires and expectations

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Tomorrow’s offices: technologically-advanced

Source: WeWork

Younger generations will desire

tech-enabled workplaces:

• Applications that allow them to

book conference rooms, help find

nearest lunch locations booking

conference rooms via app

• Social messaging within

application (i.e. Jammer,

community board)

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Tomorrow’s offices: amenity-rich

Wellness Various areas Cafeteria

High design Fitness

Younger generations entering workforce will desire amenity-rich work environments

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Tomorrow’s offices: sustainable

Resource Efficiency Occupant Experience Resilience

• Energy/water efficiency

• Renewable energy sources

• Waste management

• Building technology, EMS, remote

diagnostics

• Net zero carbon/energy

• Health and wellness

• Thermal comfort

• Ventilation/air quality

• Lighting

• Views/Biophilia

• Amenities/communal space

• Noise/acoustics

• IoT

• Decrease grid reliability

• Assess climate change

exposure/vulnerability

• Protect infrastructure

• Future-proof against carbon pricing

and regulation

Younger generations entering workforce will desire sustainable work environments

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Interactive exercise:Your current office space offerings

Is your office space technologically advanced? How so?

Does your office space offer the amenities that millennials and Gen Z will want?

If not, let’s brainstorm ways to make your office offerings more in line with what the next generation of workers wants.

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• Unlimited Paid Time Off

• Work from home

• Dress for your day

• Maternity/Paternity Leave

• Fitness and health

reimbursement

• Providing free breakfast/lunch

• Paid time off for volunteering

Tomorrow’s workplace: progressive HR benefits

Source: Forbes; Business Insider

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Recent study: financial benefits remain top perk

Source: State of Remote Work Report 2019, OWL Labs

44%

54%

60%

61%

63%

68%

76%

81%

81%

88%

88%

40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90%

Transportation benefits

Parental leave

Flexibility in work schedule

Education/training reimbursement

Employee wellness programming

Flexibility in workplace location

Performance-based compensation

Vacation policy

Retirement savings matching

Health insurance

Base compensation

Importance of Different Perks for All Respondents

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Growing college debt continues to ignite younger generations’ financial stress

• Recent studies show that there is a directcorrelation between financial stress andworkplace performance.

• 25% of employees report that issues withpersonal finances have been a distraction atwork.

• Of those distracted, 43% say that they spendthree hours or more at work each week thinkingabout or dealing with issues related to theirpersonal finances, and 15% report missing workoccasionally as a result.

Attracting/retaining talent: tuition reimbursement

Sources: U.S. Census Bureau, Real Median Household Income in the United States; [MEHOINUSA672N], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MEHOINUSA672N, June 25, 2019.; CollegeBoard, Trends in College Pricing 2017; US Inflation Calculator, 2019 Centers for Medicare & Medicaid Serv ices, Office of the Actuary, National Health Statistics Group.

0.78%

4.40% 4.45%

Real medianhousehold income

Public four yearinstitution fees

and tuition

Total personalhealthcare

expenditures

10-year growth rates (2008-2017)

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Workers who work remotely are happier, feel more trusted, less stressed, are more inclined

to recommend their employer to a friend, and are less likely to leave than their office bound colleagues

• A study by Owl Labs found that full-time remote workers reported being happy in their jobs 22% more than workers who are never remote.

• Remote workers reported having better work-life balance, focus, and less stress. Companies that give workers more flexibility were more likely to retain them.

• Remote workers will also work longer hours; they reported working over 40 hours per week 43% more than non-remote workers.

Attracting/retaining talent: flexible working solutions

Source: Business Insider; Owl Labshttps://www.businessinsider.com/study -says-remote-workers-are-happier-stay-in-jobs-longer-2019-9

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Interactive exercise:Progressive HR benefits

What are some of your most popular HR benefits?

Have there been any updates/revisions in the last decade?

How do you envision your benefits changing given a more progressive workforce?

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Tomorrow’s cities: Attracting Talent

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U.S. tomorrow’s cities: Investment cities

Source: Nuveen Real Estate

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Identifies those cities best positioned for structural growth

Our proprietary city-focused approach

Source: Nuveen Real Estate

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Our research identifies the characteristics of cities best positioned for structural growth

Our proprietary city-focused approach

Characteristics Metrics Best-Positioned City Examples

Hard Factors

• Scale

• Productivity• Youthfulness

• Affluence

• Population, Size of GDP

• GDP per Capita

• Population <40

• Households >$100K

• London

• New York

• Los Angeles

Soft Factors

• Connectivity

• Technology• Liveability

• International flights

• Innovation index

• Quality of life index

• Boston

• San Francisco

• Sydney

Growth Factors • Population growth

• Economic growth

• Affluence growth

• Perth

• Shanghai

• Austin

Sustainability • Air quality index

• Climate change vulnerability

• Grid carbon intensity

• Brisbane

• Copenhagen

• Auckland

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Interactive exercise:

Show case the Tomorrow’s Cities filtering metrics for all MSAs

What cities do you currently operate in? Let’s see how those cities score within our Framework.

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Net migration rate of Millennials and Generation Z (2020)

Source: StratoDem Analytics

Winners:

• Austin, TX

• Orlando, FL

• Nashville, TN

Losers:

• Youngstown, OH

• Milwaukee, WI

• Scranton, PA

Strongest net-migration experienced in Sunbelt cities

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Growth of educated Millennials and Generation Z (2019-2027)

Source: StratoDem Analytics

Winners:

• Provo, UT

• San Antonio, TX

• Colorado Springs, CO

Losers:

• Philadelphia, PA

• New York, NY

• Erie, PA

Southern and mountain cities are expected to experienced the strongest growth

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Strongest population growth expected in South, weakest (negative) in North

Tomorrow’s cities: Long-Term Population Growth (2010-2030)

Source: Moody’s Analy tics

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Top 3:

1) Austin, TX – 67%

2) Orlando, FL – 57%

3) Las Vegas, NV – 55%

Bottom 3:

33) New York, NY – 4%

34) Honolulu, HI – 4%

35) Chicago, IL – -1%

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Interactive exercise:StratoDem Analytics custom query tool

Showcase the ability to forecast demographic trends using StratoDem Analytics (AI based tool).

Chosen participants can generate their own question and the group will analyze the results.

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Strongest net-migration experienced in South and WestTomorrow’s cities: Net Migration (2018)

Source: Moodu’s Analy tics

Top 3:

1) Orlando, FL – 1.9%

2) Las Vegas, NV – 1.7%

3) Austin, TX – 1.7%

Bottom 3:

33) Los Angeles, CA – -0.6%

34) Chicago, IL – -0.6%

35) Honolulu, HI – -1%-1.5%

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College debt will continue to hinder younger generations

Source: Federal Reserve Bank of New York Consumer Credit Panel / Equifax

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$600

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$1,000

$1,200

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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

in $

B

Total student loan balances by age group

60+

50-59

40-49

30-39

under 30

Student debt burdens influence where younger generations can afford to live.

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22.5% millennials are living at home (up 9% since 2005)

Many millennials are living at home until they can afford to move

Source: Zillow Research

0% 5% 10% 15% 20% 25% 30% 35%

New York

Los Angeles

San Diego

Boston

Tampa

San Jose

San Francisco

Phoenix

Dallas

Charlotte

Raleigh

Austin

Share of millennials living w/ parent(s) by metro

U.S. Average: 22.5%

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If/when they move out, they need roommates to reduce the cost

Source: Bureau of Labor Statistics and US Census Bureau

16%

19%20%

18%

24% 24%

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South Northeast West

% of Under 34 households with roommates by region

2005 2017

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States with low (or no) personal income tax rates like Nevada and Texas are expected to experience strong population growth in the medium term.

States with high personal income tax rates like Connecticut and Maine are expected to experience weak population growth in the medium term.

Affordability will impact where younger generation move

Source: StratoDem Analytics, 2019Note: Straight-line average of personal income tax rate

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State Population Growth (2020-2027) vs. 2019 Average Personal Income Tax Rate

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Northeast and California cities are amongst the most expensive places to live while Sunbelt cities are amongst the least expensive.

High cost of living:

• San Jose, CA

• Santa Cruz, CA

• Honolulu, HI

• Santa Maria, CA

• San Diego, CA

• Fairfield County, CT

• Portland, OR

Younger generations will desire a low cost of living

Source: Moody’s Analy tics

Low cost of living:

• Greenville, NC

• Greensboro-High Point, NC

• Omaha-Council Bluffs, NE-IA

• Memphis, TN-40

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Moody's Analytics': Cost of living index relative to US

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While traditional office markets like NY and LA have the most apartment units, Atlanta and

Phoenix make the top 10.

Where are the most apartment units in US?

Source: CBRE-EA, 2019

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Largest US Apartment Markets

Inventory (units) (L) Rent ($/unit) (R)

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What does the rest of the U.S. apartment landscape look like?

Source: CBRE-EA, Q2 2019

New YorkLos Angeles

Chicago

Houston

Washington, DC

Dallas

Boston

Atlanta

Seattle

Phoenix

Denv er

Philadelphia

Detroit

San Diego

MiamiMinneapolis

Orange CountyTampa

San Francisco

Austin

Clev eland

Orlando

Baltimore

Oakland

Portland

Fort Lauderdale

San Antonio

Las Vegas

Fort Worth

Riv ersideNewark

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Columbus

San JoseCincinnati

Sacramento

Indianapolis

Kansas City

St. Louis

Nashville

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PittsburghNorfolk

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Greensboro

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Tucson

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US Apartment Markets: Inventory vs. Rent(minus top 10)

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Where in the city will they want to live/work?

• Live-Work-Play areas

• Walking distance to restaurants, bars,

fitness studios, etc.

• Compatible location for ride sharing applications (Uber, Lyft, etc.)

• Close proximity to public transportation

Seaport Boston

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Interactive exercise:PlacerAI demonstration

Identify a Gen Z/millennial “hot spot” in your city and we will analyze real-time foot traffic analytics to see where they are going/coming from to better understand where this generation spends its time in your city.

How can your firm take advantage of the live-work-play options within your city?

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Real estate investments are subject to various risks including fluctuations in property values, higher expenses or lower income than expected, and potential environmental problems and liability.

This material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy or sell securities, and is not provided in a fiduciary capacity. The information provided does not take

into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. Financial professionals should independently evaluate the risks associated with products or

services and exercise independent judgment with respect to their clients.

Nuveen Real Estate is a real estate investment management holding company owned by Teachers Insurance and Annuity Association of America (TIAA). Nuveen Real Estate securities products distributed in North

America are advised by UK regulated subsidiaries or Nuveen Alternatives Advisors, LLC, a registered investment advisor and wholly owned subsidiary of TIAA.

The information presented in these materials is believed to be materially correct as at the date hereof, but no representation or warranty (express or implied) is made as to the accuracy or completeness of any of this

information. Data was taken from sources deemed reliable, but cannot guarantee its accuracy. The

statements contained herein reflect opinions as of the date written and are subject to change without further notice. Nothing set out in these materials is or shall be relied upon as a promise or representation as to the

past or future

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Important information