WelcomeColumbus Investor Forum

May 12, 2016

Columbus Investor Forum

Market of Focus:

Columbus, Ohio

Presented by:

Doug WilsonSVN, Managing Director, Columbus

Tim TreasureSVN, Managing Broker

“Maximum Competition = Maximum Value”

Columbus Investor Forum

Sponsors:

Anne Treasure, JD/CPA

Tim Norris, Sr. Vice President

Jennifer Alvarez, CEO

“Maximum Competition = Maximum Value”

What to expect…

• Commercial Real Estate Market Overview

• What is the “SVN Difference”

• Expansion of Columbus SVN

• Presentation of Forum Sponsors:– Tim Norris, Columbus First Bank– Ann Treasure, Whalen and Co. CPA’s– Jim Havens, Cardinal Title

Robert M. White Jr., CRE, FRICS

US Commercial Real Estate Capital Markets Update

April 5, 2016

US 2015 – ANOTHER STRONG YEAR

US Quarterly Volume & Pricing

*Moody’s/RCA CPPI, national aggregate, December 2000 = 100

0

25

50

75

100

125

150

175

200

225

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

'02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Bill

ions

Individual Portfolio Entity CRE Prices*

RECENT TRENDS SLOWING

140

150

160

170

180

190

200

210

220

1'14

2 3 4 5 6 7 8 9 10 11 12 1'15

2 3 4 5 6 7 8 9 10 11 12 1'16

2

-40%

-20%

0%

20%

40%

60%

80%

100%

1'14

2 3 4 5 6 7 8 9 10 11 12 1'15

2 3 4 5 6 7 8 9 10 11 12 1'16

2

Year-Over-Year Change

in Monthly Volume(excluding portfolios)

Commercial Property Prices (Moody’s/RCA CPPI National Aggregate)

MORTGAGE RATES RISING

CRE CAPITAL MOUNTING

$167 $171$180

$148

$167$156

$186

$199

$252

Dec '07 Dec '08 Dec '09 Dec '10 Dec '11 Dec '12 Dec '13 Dec '14 Dec '15

Source: Preqin

Dry Powder in Real Estate Funds

BROAD BASE OF EQUITY CAPITAL

RECORD CROSS-BORDER INFLOWS TO US

US Direct Acquisitions by Foreign Buyers

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Canada Europe Middle EastAsia Australia Latin America

billions

SHIFTING SOURCES OF DEBT CAPITAL

DEBT AND EQUITY TRENDS STILL FAVOR MAJOR METROS

HEADWIND: MORE CAPITAL FLOWING TO DEVELOPMENT

Dollars Invested in Construction

HOWEVER NEW FED SCRUTINY AND REGS ON CONSTRUCTION LOANS SHOULD KEEP BANKS DISCIPLINED…

HEADWIND: RISING INTEREST RATES?

OFFICE, INDUSTRIAL, RETAIL PROPERTIES

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

10yr UST* Mortgage Rate Cap Rate

WHAT’S NEXT: FROM GREAT TO GOOD

PREA CONCENSUS Moody’s Analytics

MACRO: GDP, Jobs & Money

• US GDP IS 70% CONSUMER DEMAND

• 2015 GDP growth @ 2 - 3%

• 2016 GDP Growth, likely in same range as 2015.

• Political uncertainties = repeat of 2015: budget extensions, high deficits

• Jobs @ 200K/month

• Consumer debt is declining

• Consumers still spending

• Corporate profits: softening

• Investment markets still flooded with capital

• Expect little inflation + only modest interest rate change

Real Estate National Outlook

• $200 billion, annualized in transactions in 2015

– (up 15% over 2014), no decline anticipated

– 2016, slight decline in the 1st quarter

• Job growth slowly impacting office absorption

• Apartments: “the new” demographic

– Substantial room for additional construction

• Retail property sales will ease into single digits cap rates and

construction still slow.

• Real estate remain asset class of choice for at least next decade

• Increased institutional investment in secondary & tertiary markets

• Cap rate compression makes asset & property management critical

• Low interest rates the new normal in the near future

APARTMENT OVERVIEW:

• Strong Demand vs. Bubble Market?

• Growth of Households still outpacing new construction

• Fundamentals Still Strengthening:– Vacancy 4%, Rent Growth 3.5%

– Population Growth: 22,000/yr in the Columbus MSA

– Millennial Population exceeds Baby Boomer Population

– New Construction mostly single bedroom

– Only entry level housing boom slows apartments

• Large quantities of affordable capital driving investment market

• Columbus Pricing is VERY attractive compared to US average.

• Columbus apartments are on the radar of National Investors

Columbus Apartments – Number of Sales

Transactions

0

10

20

30

40

50

60

70

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1

2012 2013 2014 2015 2016

Source: Xceligent

Columbus Apartments –Sales Volume

$0

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1

2012 2013 2014 2015 2016

Source: Xceligent

Columbus Apartments –Average Price Per Unit

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1

2012 2013 2014 2015 2016

Source: Xceligent

Columbus Apartments Cap Rates

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

2012 2013 2014 2015 2016

Apartments - Secondary

Apartments - Teritary

Source: Xceligent

Completed Projects

Under Construction

Planned/Proposed

Columbus Submarkets1 University/Downtown 2 Bexley 3 Sharon/Worthington4 Dublin/Powell 5 Hilliard 6 Grove City7 Whitehall/Gahanna/Reynoldsburg 8 Northeast/Minerva Park 9 Westerville10 Southeast 11 Groveport/Canal Winchester 12 Upper Arlington/North Columbus

RETAIL OVERVIEW:

• Construction Levels Slowly Improving – Still Strong By Local Standards

• Selective Big Box and Existing Renovations Show most Strength.

• Vacancy Improving, in all Sub Markets

• Cap Rates Falling: Dearth of New Construction combined with Job Growth

• Local Market is Strong Fundamentally.

Columbus Retail Number of Sales

Transactions

0

20

40

60

80

100

120

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1

2012 2013 2014 2015 2016

Source: Xceligent

Columbus Retail Sales Volume

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

$140,000,000

$160,000,000

$180,000,000

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1

2012 2013 2014 2015 2016

Source: Xceligent

Columbus Retail Cap Rates

7.00%

7.50%

8.00%

8.50%

9.00%

9.50%

10.00%

2012 2013 2014 2015 2016

Source: Xceligent

OFFICE OVERVIEW:

• Fundamentals Improving, Finally

• Vacancy Beginning to Wane, especially CBD

• Transactions Increasing, Especially CBD:

– Mixed Use, 250 S. High St.

• Cap Rates and Prices Locally Very Intriguing

• Institutional Buyers Active in Columbus “hyper markets” Now– Grandview Yard

– Easton

– Polaris

Columbus Office Number of Sales

Transactions

0

10

20

30

40

50

60

70

80

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1

2012 2013 2014 2015 2016

Source: Xceligent

Columbus Office Sales Volume

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

$140,000,000

$160,000,000

$180,000,000

$200,000,000

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1

2012 2013 2014 2015 2016

Source: Xceligent

Columbus Office Cap Rates

8.00%

8.50%

9.00%

9.50%

10.00%

10.50%

11.00%

2012 2013 2014 2015 2016

Source: Xceligent

INDUSTRIAL OVERVIEW:

• Locally Diminished Speculative Development Aiding Absorption

• Developers Have Looked at Improvements as an Opportunity to Expand

• Growth Sluggish and Expansion in Manufacturing, Nationally

• Columbus Warehouse Space Leading Improvement

• Vacancy Improving Locally

• CAP Rate reflects compression pricing from low vacancy and slow construction

Columbus IndustrialNumber of Sales

Transactions

0

10

20

30

40

50

60

70

80

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1

2012 2013 2014 2015 2016

Source: Xceligent

Columbus Industrial Sales Volume

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

$400,000,000

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1

2012 2013 2014 2015 2016

Source: Xceligent

Columbus Industrial Cap Rates

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

2012 2013 2014 2015 2016

Source: Xceligent

So What?. . . 2016 and you…

• Cap Rate Compression:

− Less with Multifamily, but more compression otherwise

− But with high BPS spreads vs. T-Bills…

• Affordable capital still available…

• Record number of investors…

• Low capital gain rate unchanged for <$450k Income, 15%

• Vacancy % moving in right direction…

• Supply and demand always in play…

• Lack of alternative asset investments…

The bottom line…

• Buy product you understand

• Buy in a market you understand

• Tolerate RISK on your terms

• Don’t buy and sell the same way

• Sell to outside “capital”

• Do not try to “finitely” time the market

• Diversify

2016 Business Trends

How we usespace.

How we build space.

How we re-use space.

How we move products between spaces.

Employee experience

Offices designed for:

Concentration

Collaboration

Socialization

Education

Less about the desk.

How to Make Old Buildings Attractive

• Neighborhood/Community Retail in

building or nearby

• Urbanization of the location Multiple

commonareas

• Lots of glass/interactive walls

• Collaborativespaces

• Open space along windows

The future of housing? Co- l iving

common KR'ASH commonspace

2 2 2 1 S. Clark StreetCrystal City

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See what you

put in storage.

View your catalog of stuff and account activity,

add photos and descriptions, and more.

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• Furniture with multiple uses

• Recycling furniture program

• 3D printing spare parts

• Flat packaging

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and see real-

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Summing it All Up

Millennials are questioning the default option -affectinghow we work and live.

New users of space

Different reuse of space

New services for people in those spaces

Open, Collaborative & Transparent is now the preferredwork and lifestyle option.

Offices

Companies

Housing

Wilson Commercial Group

Doug Wilson, Managing Director Tim Treasure, Managing Broker

Kristen Asman, Senior Advisor Steven Heiser, Senior Advisor

Jack Turner, Senior Advisor Chris Salomone, Senior Advisor

Nail Dawaher, Senior Advisor Mike Bockbrader, Advisor

Rick Bergman, Advisor Beth Long, Advisor

Toyia Devine, Advisor Michele Reynolds, Advisor

Joe Smiley, Advisor Ann Lhota, Advisor

240 Offices Nationally, 1500 Advisors

“Local Listings with World Class Marketing”

GROWING TO MEET THE NEEDS OF CLIENTS AND THE COMMUNITY

4200 Regent Drive, Suite 200, Columbus, Ohio, 43219, 614-206-3881