2015 AFIRE Foreign Investment Survey2015 AFIRE Foreign Investment Survey

Risk of premature obsolescence d t d hi d t h l i l hdue to demographic and technological changes

Percent of Members' Votes

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Mid/Hi‐Rise Apartments

WarehouseWarehouse

CBD Office

Garden Apartments

Regional Malls

Hotel

Strip Retail Centers

Suburban Office

L Ri k M d t Ri k Hi h Ri kLow Risk Moderate Risk High Risk

Expected changes in cap rates by year‐end 2015p g p y y

Percent of Members' Votes

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Office

Warehouse

lRetail

Hotel

Multifamily

M h L Sli htl L N Ch Sli htl Hi h M h Hi hMuch Lower Slightly Lower No Change Slightly Higher Much Higher

When China may become the largest sourcef l t t it l i t tof real estate capital investment

Percent of Members' Votes0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

When, if ever, do you anticipate that China will become the l t f l t t it l i t t i t USA llargest source of real estate capital investment into USA real 

estate?

2014 or 2015 2016 or Beyond Not Likely to Happen2014 or 2015 2016 or Beyond Not Likely to Happen

Are Chinese capital inflows cyclicalt j it lor a permanent major capital source

Percent of Members' Votes0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Do you think the recent surge in investment from China is more likely a short‐term surge or cyclical inflow, as we have 

f th t i i th t th b i iseen from many other countries in the past, or the beginning of a long period of high investment volumes from China into 

the USA?

Short term or Cyclical Inflow Long term Permanent Inflow No OpinionShort‐term or Cyclical Inflow Long‐term Permanent Inflow No Opinion

Expected first increase in interest ratesp

Percent of Members' Votes0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

When do you expect the y pfirst increase in interest rates?

2015 2016 2017 2018 or Beyond2015 2016 2017 2018 or Beyond

Changes in perspective on USA real estate marketsg p p

80%

60%

70%

Votes

40%

50%

of M

embe

rs' V

10%

20%

30%

Percent o

0%

10%

More Pessimistic About the Same More Optimistic

2013 20142013 2014

Country providing the most stable and securel t t i t treal estate investments

70%

50%

60%

Votes

30%

40%

of M

embe

rs' V

10%

20%

Percent o

0%USA Germany UK Canada Switzerland

2010 2011 2012 2013 20142010 2011 2012 2013 2014

Country providing the best opportunity f it l i tifor capital appreciation

70%

50%

60%

Votes

30%

40%

of M

embe

rs' V

10%

20%

Percent o

0%USA Spain UK China Brazil Mexico Netherlands

2010 2011 2012 2013 20142010 2011 2012 2013 2014

Ranking of global cities for real estate investmentg g

35%

25%

30%

ore

15%

20%

ent o

f Total Sc

5%

10%Perce

0%New York London San 

FranciscoTokyo Madrid Houston Berlin Sydney Shanghai

2010 2011 2012 2013 2014

The responses were scored with 3 points to each respondent’s first choice, 2 points to second choice, and 1 point to third choice.

2010 2011 2012 2013 2014

Ranking of USA cities for real estate investmentg

40%

30%

35%

ore

15%

20%

25%

cnt o

f Total Sc

5%

10%

15%

Perec

0%New York San 

FranciscoHouston Los Angeles Washington 

DCAtlanta Boston Chicago Seattle

2010 2011 2012 2013 2014

The responses were scored with 3 points to each respondent’s first choice, 2 points to second choice, and 1 point to third choice.

2010 2011 2012 2013 2014

Ranking of USA property types, by yearg p p y yp , y y

4.5

3 0

3.5

4.0

2.0

2.5

3.0

Mean Score

1.0

1.5

M

0.0

0.5

2010 2011 2012 2013 2014

Multifamily Retail Hotel Office Industrial

The responses were scored with 5 points to each respondent’s first choice, 4 points to second choice, and so on down to 1 point to the fifth choice.

Multifamily Retail Hotel Office Industrial

Ranking of USA property types, by property typeg p p y yp , y p p y yp

4.5

3 0

3.5

4.0

2.0

2.5

3.0

Mean Score

1.0

1.5

M

0.0

0.5

Multifamily Retail Hotel Office Industrial

2010 2011 2012 2013 2014

The responses were scored with 5 points to each respondent’s first choice, 4 points to second choice, and so on down to 1 point to the fifth choice.

2010 2011 2012 2013 2014

Mean real estate portfolio sizesp

$25

$20

$15

$ Billion

s

19.6 

$

$10US$

7.3 

$0

$5

Global USA

Real estate portfolio geographic distributionp g g p

Percent of Members' Portfolios

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

USA

Europe

C dCanada

Asia Pacific

Latin America

>75% Allocation 25% 75% Allocation <25% Allocation No Allocation>75% Allocation 25% ‐ 75% Allocation <25% Allocation No Allocation

Planned changes to the size of portfoliosg p

Percent of Members' Votes

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

USA

Latin America

Europep

Canada

Asia Pacific

MajorNet Increase

ModestIncrease

Maintain orRein est

Modest Decrease

Major NetDecreaseNet Increase Increase Reinvest Decrease Decrease

Allocation of portfolios by investment strategy or stylep y gy y

Percent of Members' Portfolios

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Core

Value Add

Opportunistic

Other

>75% Allocation 25% 75% Allocation <25% Allocation No Allocation>75% Allocation 25% ‐ 75% Allocation <25% Allocation No Allocation

Planned changes to investment strategy or styleg gy y

Percent of Members' Votes

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Core

Value Add

OpportunisticOpportunistic

Major NetIncrease

ModestIncrease

Maintain orRein est

Modest Decrease

Major NetDecreaseIncrease Increase Reinvest Decrease Decrease

Ranking of countries for real estate acquisitions:2014 ti d 2015 l2014 executions and 2015 plans

Percent of Total Score0% 10% 20% 30% 40% 50% 60%

USA

UKUK

Germany

France

Canada

Japan

Australia

China

2014 Executions 2015 Plans

The responses were scored with 3 points to each respondent’s first choice, 2 points to second choice, and 1 point for the third choice.

2014 Executions 2015 Plans

Ranking of emerging countries considered f l t t i itifor real estate acquisitions 

Percent of Total Vote0% 5% 10% 15% 20% 25% 30% 35%

Brazil

China

Mexico

Chile

Poland

Colombia

India

Czech Republic

2013 Plans (from 2012 s r e )

2014 Plans (from 2013 s r e )

2015 Plans (from c rrent s r e )

Each member was allowed to mention up to 6 countries. All mentions are counted equally to add up to the score of the country.

(from 2012 survey) (from 2013 survey) (from current survey)