imperial county employees retirement 21 august 2019

REAL ESTATE INVESTMENT MANAGEMENT

│ 21 AUGUST 2019│ IMPERIAL COUNTY EMPLOYEES RETIREMENT

Table of Contents

Section Page

Section I Firm Overview 3

Section II Lion Properties Fund 10

Appendix

Appendix A Recent Transaction Activity 30

Appendix B List of Major Investments 53

Appendix C Summary of Terms 56

Appendix D Biographies 58

Appendix E Market Outlook & House View 68

Appendix F Notes to Performance 78

2

SECTION I

Firm Highlights

4

One of the largest pure-play real estate investment managers

Personnel information as of June 30, 2019. All other information as of March 31, 2019. 1Diversification percentages are based on Gross Asset Value (GAV) at share.2Gross of Fees. Please see Important Legal Information at the end of this presentation.

GAV, Gross Real Estate Value (GRE) and AUM are defined at the end of this presentation.

RISK PROFILE1

INVESTMENT FORMAT1

37-Year History of Stability and Growth

International Operating Platform

Long-Term Outperformance

Partnership structure:Equity owned broadly across ~90 senior employees; independently operated affiliate of Legg Mason

Co-investment: Over $275 million invested by employees in our Firm and its products

Diversification: Broad client base provides stability (over 350 investors globally)

Focus: 99 acquisitions and asset management team members with presence and expertise in local markets across the U.S. and Europe.

Scale: Over $40 billion of deals reviewed annually to generate equity and debt investment opportunities across all property sectors

Discipline: In-house research group informs investment strategy and execution

Consistency: Successful management through market cycles

Results: Firm-level property performance since inception exceeds NCREIF Property Index by 87 bps2

Core $26.3 Bn

Core-Plus $19.0 Bn

Value-Add/ Opportunistic

$5.0 Bn 52%

62%

38%

Funds

$31.4 Bn

Separate Accounts

$18.9 Bn

10%

38%

Global Investment Management Platform with Local Execution

5

Personnel and offices as of June 30, 2019. All other data as of March 31, 2019.

Geographic information represents GRE; compared to Firm-level GAV. Please see the Important Legal Information at the end of this presentation.

Acquisitions

32 Team Members

Regional teams based in New York, Dallas, Los Angeles, Barcelona and London.

Asset Management

67 Team Members

Property sector specialists positioned regionally

Investment Research

9 Team Members

Proprietary research informs all investment decisions

AUM ($bn)

$50.3

Assets

1,235

Offices

9

Employees

298

HEADQUARTERS

REGIONAL

< $500 M

$500 M - $1,500 M

$1,500 M +

AUM STATEWIDE

UNITED STATES EUROPE

LONDON

BARCELONA

BERLIN

NEW YORK

LOS ANGELES

ATLANTA

BOSTON

DALLAS

WASHINGTON, DC

SPAIN

FRANCE

NETHERLANDS

GERMANY

SLOVAKIACZECH REP.

National Scale Across All Property Types

6

Scale enhances deal flow and tenant relationships across all major sectors

As of March 31, 2019. Dollar values and diversification percentages are GRE.1Excludes Land and Other Investments.2Based on Fund’s GAV at June 30, 2019.

34%

25%

21%

17%

2%

% OF FIRM AUM

INDUSTRIAL $16.7 billion, 720 properties, 43 markets

Includes a $13.5 billion2 open-end, sector-focused fund; one of the largest private, pure-play industrial funds in the U.S.

Growing European industrial presence through acquisition and development of logistics properties

OFFICE $12.3 billion, 99 properties, 20 markets

Over 1,100 tenant relationships

Investments in 22 MSAs nationwide

MULTIFAMILY $10.4 billion, 170 properties, 34 markets

Spans spectrum: apartments, student housing, condominium projects

Includes a $4.2 billion2 open-end, sector-focused fund operated by a vertically integrated, 35-year old operating company with over 27,000 owned/managed units in the U.S.

RETAIL $8.3 billion, 141 properties, 37 markets

Proven execution through JVs with public companies and direct investment

Partner relationships include Brookfield Properties Retail Group, Simon, Kimco & New England Development

HOTEL $1.2 billion, 54 properties, 36 markets

One of the largest institutional owners of hotel assets in the U.S.

Diversified portfolio of upper-scale branded hotels catering to business travel

1

Clarion Partners Management: Proven Industry Leaders

7

Senior management averages 30 years of experience and 18 years tenure with the Firm

As of June 30, 2019.

Numbers in parentheses represent tenure with the Firm/years in the industry. Staff counts are inclusive of administrative personnel, but exclude the offices of the CEO & CIO as well as the Executive Chairman. Corporate Support includes Information Technology, Human Resources, and Insurance Risk Management staff members.

ACQUISITIONS

32 members

PORTFOLIO MANAGEMENT

52 members

ASSET MANAGEMENT

67 members

INVESTMENT RESEARCH

9 members

FINANCIAL MANAGEMENT

86 members

CLIENT CAPITAL MANAGEMENT

25 members

LEGAL & COMPLIANCE

3 members

CORPORATE SUPPORT

20 members

EXECUTIVE BOARD

David Gilbert (12/36)Chief Executive Officer & CIO

Jeb Belford (23/35)Portfolio Manager

Hugh Macdonnell (7/28)Head of Client Capital

Management

Stephen Furnary (35/45)Executive Chairman

Edward Carey (12/34)Portfolio Manager

Craig Tagen (22/35)Head of Asset Management &

Separate Accounts

Patrick Tully (21/25)Chief Financial Officer

INVESTMENT COMMITTEE

David Gilbert (12/36)Chief Executive Officer & CIO

Jeb Belford (23/35)Portfolio Manager

Onay Payne (15/22)Portfolio Manager

Craig Tagen (22/35)Head of Asset Management &

Separate Accounts

Stephen Furnary (35/45)Executive Chairman

Hugh Macdonnell (7/28)Head of Client Capital

Management

Richard Schaupp (18/24)Portfolio Manager

Tim Wang (13/14)Head of Investment Research

Investment Style

8

*Open to investment. Gramercy Property Europe IV final close expected July 2019. As of June 30, 2019. The above chart only includes comingled funds targeted at institutional investors that are currently investing or harvesting investments. It does not include offerings to non-institutional investors or funds in wind-down. Please see Important Legal Information at the end of this presentation.

Lion Properties Fund*$13,501 mm GAV

(Open-End, U.S. Diversified)

Lion Industrial Trust*$13,493 mm GAV

(Open-End, U.S. Industrial)

Clarion Gables Multifamily Trust*$4,224 mm GAV

(Open-End, U.S. Residential)

Debt Investment Fund$104 mm equity commitment

(Closed-End, U.S. Mezzanine Debt)

Gramercy Property Europe IV*€187 mm equity commitment

(Closed-End, European Logistics)

Gramercy Property Europe III€262 mm equity commitment

(Closed-End, European Logistics)

Campus-Clarion Student Housing Partners

$403 mm equity commitment(Closed-End, U.S. Student Housing)

Clarion Ventures 4$130 mm equity commitment

(Closed-End, U.S. Diversified)

Clarion Development Ventures III$202 mm equity commitment

(Closed-End, U.S. Diversified)

RISK

PO

TEN

TIA

L R

ETU

RN

CORE

CORE+

VALUE-ADD

OPPORTUNISTIC

Clarion offers a wide range of products across the risk-return spectrum

Clarion Corporate ResponsibilityEnhancing Value Through Responsible Investment

9

The belief that the sustainability and competitiveness of our properties go hand-in-hand is embedded throughout our organization and is a key consideration in our investment process

As of December 31, 2018.

Green Stars Earned by all three

open-end funds for excellence in ESG policy & implementation

A+The highest possible score

for implementation of responsible investment

policies

A C C O M P L I S H M E N T S , I N D U S T R Y R E C O G N I T I O N & C E R T I F I C A T I O N S

CREATING VALUE

CONSERVING RESOURCES

LEADING BY EXAMPLE

49ENERGY STAR certified assets

71LEED

certified assets

$26mm+ in recent efficiency

investments

23MW+ of solar power installations

INVESTING IN SUSTAINABLE

BUILDINGS

SECTION II

Executive Summary

11

As of June 30, 2019. Past performance is not indicative of future results and a risk of loss exists. Please see Important Legal Information at the end of this presentation.

LPF HIGHLIGHTS:

– Consistent outperformance over NFI-ODCE Benchmark YTD, 1-, 3-, 5-, 7- and 10- year periods

– High-quality, growth-oriented portfolio difficult to replicate

– Current strategy investments have been accretive and outperform investments made in the ODCE benchmark over same period

– Appropriate risk positioning

• Overweight industrial and apartments, underweight office and retail

• Leverage and non-core exposure consistent with ODCE benchmark

Acadia at Metropolitan Park, Arlington, VA

One Victory Park, Dallas, TX245 First Street, Cambridge, MA 100 Fifth Ave, New York, NY

Redlands Business Ctr, Inland Empire, CA

Fund Statistics and Investment Performance – Rolling Time Periods

12

1 As of July 1, 2019. Includes current and former Clarion Partners employees.

As of June 30, 2019. Lion Properties Fund inception date April 1, 2000. Chart returns are presented before fees. NFI-ODCE Index presented as benchmark. Past performance is not indicative of future results and a risk of loss exists. Please see Important Legal Information at the end of this presentation.

FUND PERFORMANCE

Gross Asset Value $13.5 billion Number of Investments 143 Dividend Yield 4.06%

Net Asset Value $10.2 billion Portfolio Occupancy 94.5% Mgmt Co-investment1 $70.5 million

Leverage Ratio 20.9% Value-Add / ex. Pre-leased 11.3% / 9.4% Entry Queue None

3.5%

7.8%8.6%

11.1% 11.1%10.2%

7.8%

2.4%

6.4%7.6%

9.8%10.5% 9.9%

8.2%

0%

5%

10%

15%

20%

YTD 1-Year 3-Year 5-Year 7-Year 10-Year Since

Inception

RETU

RN

RATE

TIME PERIOD

Lion Properties Fund NFI-ODCE Index

JUNE 30, 2019 YTD 1-YEAR 3-YEAR 5-YEAR 7-YEAR 10-YEARSINCE

INCEPTION

Income Return 1.93% 3.99% 4.34% 4.44% 4.59% 4.98% 5.88%

Appreciation Return 1.51% 3.66% 4.13% 6.40% 6.32% 5.00% 1.82%

LPF Total Return Before Fees 3.46% 7.76% 8.60% 11.05% 11.13% 10.16% 7.77%

NFI-ODCE Total Return Before Fees 2.43% 6.41% 7.57% 9.76% 10.52% 9.88% 8.19%

LPF Total Return After Fees 3.03% 6.88% 7.71% 10.12% 10.18% 9.20% 6.89%

13

LPF Investment Performance – Properties Acquired 2012 – YTD 2019

As of March 31, 2019. Chart returns are presented before fee. Past performance is not indicative of future results and a risk of loss exists. Please see Important Legal Information at the end of this presentation.

Source: MSCI Real Estate

Key LPF Differentiator: New acquisitions since 2012 (64% of current portfolio) have been significantly outperforming new acquisitions in the ODCE benchmark

– LPF’s 78 new investments since 2012 have been highly accretive (yellow bars below); the same is not true of the ODCE (blue bars below)

– Outperformance is fairly consistent across all acquisitions, led by the office and industrial sectors: 62 core acquisitions ($7.2 billion, 55% of current portfolio), plus 16 non-core investments ($1.1 billion, 9% of current portfolio)

– Validates LPF’s strategy and execution capability; focus on growth submarkets and price discipline

8.7% 8.6%

10.7%

8.3%7.8%

9.6%

7.2% 7.3%

9.0%

7.0% 7.2%

9.1%

0%

3%

6%

9%

12%

15%

1 Year 3 Year 5 Year

RETU

RN

RATE

TIME PERIOD

LPF 2012-YTD 2019 Acquisitions LPF Total Property Return ACOE 2012-YTD 2019 Acquisitions ACOE Total Property Return

TOTAL UNLEVERED PROPERTY RETURN

Geographic Diversification

14

Strategic focus on dynamic infill submarkets and urban growth nodes, typically driven by tech, healthcare and education clusters

As of June 30, 2019. Percentages represent Gross Real Estate Value at share. Arrows indicate intended portfolio diversification targets.

Please see Important Legal Information at the end of this presentation.

Washington DC, 5.6%

New York, 11.9%Denver, 3.2%

Raleigh, 1.4%

Houston, 4.0%

Boston, 11.7%

S.F. / Bay Area, 16.0%

Chicago, 4.6%

Seattle, 4.4%

South

19.3%

East

33.3%Midwest

5.1%West

42.3%

Austin, 1.9%So. California, 16.1%

South Florida, 5.9%Top 10 Markets 84.0%

Remainder of Portfolio,

7.2%

Atlanta, 2.3%

Denver, 3.3%

Carolinas, 1.3%

Office

Apartment

Industrial

Retail

Other

Dallas, 3.8%

Property Type Diversification

15

1 Other represents lab office/life sciences and land for LPF. Other represents self-storage, hotels, healthcare, and land for ODCE.

As of June 30, 2019. Percentages represent Gross Real Estate Value at share. Arrows indicate intended portfolio diversification targets. Please see Important Legal Information at the end of this presentation.

32.8%

25.6%

22.2%

15.9%

3.5%

34.7%

26.1%

17.0%18.0%

4.2%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Office Apartment Industrial Retail Other

SECTO

R D

IVERSIF

ICATIO

N

SECTOR

Lion Properties Fund

NFI-ODCE

1

Fund Strategic Range

Fund Tactical Target Range

Portfolio Composition and Strategy: Industrial

16

As of June 30, 2019. Chart percentages represent Gross Real Estate Value. Arrows indicate intended portfolio diversification targets. Please see Important Legal Information at the end of this presentation.

– Strong overweight bias; sector is major beneficiary of e-commerce and solid economic fundamentals in general

– Focus on top primary distribution markets and strong secondary markets

– Significant allocation to Southern California (and the West in general), which historically has had strong performance

– Focus on highly functional assets with modern specifications, across size ranges

– Leverage deep Clarion platform in the industrial sector

22.2%17.0%

0%

13%

25%

INDUSTRIAL ALLOCATION

Target Allocation: 23%-25%

LPFODCE

55%

28%

17%

BUILDING SIZE

Over 500k SF

Btwn 250-500k SF

Under 250k SF

28%

22%21%

29%

GEOGRAPHIC ALLOCATION

SoCal

Other West

Other Primary

Top Secondary

Cranbury Station, Cranbury, NJ

Portfolio Composition and Strategy: Office

17

1 Lab office/life sciences investment is included in donut charts, but broken out between office and other in property type allocation.


– Long-term underweight bias to office; sector underperforms with high volatility

– Major focus on urban & “premier suburban” submarkets (avoiding traditional, commodity suburbs)

• Growth-oriented “innovation” submarkets led by technology, life sciences/ healthcare, education clusters, etc.

– Highly diversified tenant base across the portfolio

– Significant allocations to “creative office” and high-growth “lab office” sector in premier life sciences submarkets

24%

24%

16%

10%

9%

8%

9%

TENANT BY SECTOR1

FIRE/Legal TechHealthcare/Life Science Consumer GoodsEnergy MediaOther

44%

45%

11%

OFFICE TYPE1

Traditional

Creative

Lab Office/Life Sciences

59%

37%

4%

OFFICE LOCATION

CBD

Premier Suburb

Commodity Suburb

32.8% 34.7%

0%

10%

20%

30%

40%

LPFODCE

OFFICE ALLOCATION


Portfolio Composition and Strategy: Apartment

18

– Long-term overweight bias; sector has consistent strong performance with low volatility

– Focus on urban and walkable/transit-oriented suburbs

– Portfolio diversified by rent level

• Includes allocation to “workforce housing”

– Active asset management focus on renovating older existing apartment units, achieving accretive yield on cost


61%

33%

4%2%

LOCATION TYPE

UrbanPremier Suburb/On TransitAge RestrictedCommodity Suburb

66%

24%

10%

LIFECYCLE

StabilizedUnit RenovationBuild-to-Core Development

42%

45%

13%

APARTMENT TYPE

Class A Luxury

Class A-/B+

Rent Stabilized

25.6% 26.1%

0%

10%

20%

30%

ODCELPF


APARTMENT ALLOCATION

Portfolio Composition and Strategy: Retail

19


– Strong underweight bias given retail headwinds

– Focus on grocery and urban & high street retail, which are likely to remain resilient in the face of e-commerce

• Look for assets with proven formats and solid operating history, excellent demographics and strong rent-to-sales ratios

– Avoid retail directly impacted by e-commerce; low portfolio exposure to power centers; no exposure to mall sector

– Maintain vigilance on tenant credit (currently healthy)

15.9%18.0%

0%5%

10%15%20%25%

LPF

RETAIL ALLOCATION

Marketplace at the Outlets, West Palm Beach, FL


89%

7%4%

TENANT RISK

Low Risk

Medium Risk

High Risk

48%

33%

14%

5%

RETAIL FORMAT

Urban & High StreetGroceryOutletsPower Center

ODCE

Recent Acquisition Activity

20

1 Purchase Price is inclusive of certain closing costs.2 Stabilized year-2 cap rate. 3 Programmatic joint venture with properties acquired on multiple close dates. Date shown above is the first close of 2019.4 Mezzanine loan investment. 5 This investment has a current interest pay rate of 1 month Libor plus 450 bps. At the time of acquisition, the rate was 7.0%

As of June 30, 2019. The activity described above includes all transactions consummated by the Fund since January 1, 2019. For new investments, estimated capitalization rates and IRRs are derived from Clarion Partners’ underwriting targets. Forecasts have certain inherent limitations and are based on complex calculations and formulas that contain substantial subjectivity and should not be relied upon as being indicative of future performance. Please refer to Important Legal Information at the end of this presentation regarding the valuation of unrealized assets. The target returns established by Clarion Partners are based on assumptions and calculation using available data and in light of current market conditions and available investment opportunities and any investment is subject to the risk of loss. The target returns are for illustrative purpose and are subject to significant limitations. Potential investors should not rely on them when making a decision on whether or not to invest in the strategy. The target returns cannot account for the impact that economic market and or other factors may have on the implementation of an investment. Target returns do not reflect actual investments liquidity constraints and actual fees and expenses. There can be no assurance that target returns will be achieved and a risk of loss exist.

2019 CORE ACQUISITIONS

2019 NON-CORE ACQUISITIONS

PROPERTY TYPE Market DATEPURCHASE PRICE ($)

CAP RATETARGET

UNLEVERED IRR

215 Fremont Street1,2 Office SF Bay Area 01/31/19 396,565,000 4.0% 6.8%

75-125 Binney Street Office/Lab Boston 02/13/19 438,000,000 4.4% 6.6%

Veritas Apartment Portfolio3 Apartment SF Bay Area 02/22/19 18,280,000 3.5% 6.8%

Space Center Logistics Portfolio4 Industrial Various 03/28/19 105,000,000 7.0%5 7.5%

Artist Walk Apartment SF Bay Area 07/15/19 110,250,000 4.4% 6.5%

North Boca Village Apartment So. Florida 07/18/19 120,850,000 4.1% 6.3%

Avana Knox Henderson Apartment Dallas 07/19/19 31,800,000 4.3% 6.6%

1,220,745,000

PROPERTY TYPE Market DATETOTAL DEV.

COST ($) UNTRENDED

ROC

TARGETUNLEVERED

IRR

Waypoint Business Park Industrial Houston 02/26/19 67,430,000 6.4% 7.7%

3855 Watseka Avenue Land Los Angeles 02/28/19 2,200,000 N/A N/A

Mansfield Logistics Park Industrial New York 06/19/19 115,770,000 5.3% 7.9%

185,400,000

Recent Acquisition Activity

21

1 Target unlevered IRR for the Bronx Apartment Portfolio assumes a 5-year hold. 2 Programmatic joint venture with properties acquired on multiple close dates. Date shown above is the initial close of the venture.3 Stabilized year-2 cap rate. As of December 31, 2018. The activity described above includes all transactions consummated by the Fund since January 1, 2018. For new investments, estimated capitalization rates and IRRs are derived from Clarion Partners’ underwriting targets. Forecasts have certain inherent limitations and are based on complex calculations and formulas that contain substantial subjectivity and should not be relied upon as being indicative of future performance. Please see Important Legal Information at the end of this presentation regarding the valuation of unrealized assets. The target returns established by Clarion Partners are based on assumptions and calculation using available data and in light of current market conditions and available investment opportunities and any investment is subject to the risk of loss. The target returns are for illustrative purpose and are subject to significant limitations. Potential investors should not rely on them when making a decision on whether or not to invest in the strategy. The target returns cannot account for the impact that economic market and or other factors may have on the implementation of an investment. Target returns do not reflect actual investments liquidity constraints and actual fees and expenses. There can be no assurance that target returns will be achieved and a risk of loss exist.

2018 CORE ACQUISITIONS

2018 NON-CORE ACQUISITIONS

PROPERTY TYPE MSA DATEPURCHASE PRICE ($)

CAP RATETARGET

UNLEVERED IRR

8870 Washington Office Los Angeles 01/12/18 28,000,000 4.8% 6.8%

Bronx Apt Portfolio1,2 Apartment New York 02/01/18 91,580,000 3.3% 7.3%

Watermark Seaport Apartment Boston 02/27/18 238,750,000 3.9% 6.0%

Gateway Towne Center Retail Los Angeles 03/01/18 85,550,000 5.6% 6.9%

3950 Alto Avenue Industrial Las Vegas 05/01/18 35,760,000 5.8% 6.4%

Veritas Apt Portfolio2 Apartment SF Bay Area 05/15/18 115,540,000 2.9% 6.8%

Crescent Park Apartment Los Angeles 09/11/18 117,500,000 3.7% 6.6%

Hillside Village Apartment SF Bay Area 09/11/18 57,750,000 4.1% 6.4%

Lake Washington Park Office Seattle 09/11/18 39,250,000 5.3% 6.7%

Tower at Hollywood Hills Apartment Los Angeles 09/11/18 30,100,000 4.2% 6.5%

1811 Brittmoore Industrial Houston 09/11/18 13,250,000 6.8% 6.6%

Harbour Pointe Shopping Center Retail Seattle 10/01/18 44,300,000 4.8% 5.8%

7043 South 190th Street Industrial Seattle 10/18/18 11,920,000 4.0% 6.4%

Interstate Logistics Portfolio Industrial Atlanta 11/13/18 102,550,000 4.0% 6.1%

Plaza Yarrow Bay Office Seattle 11/21/18 134,500,000 4.6% 7.2%

Oakmont Porftolio3 Industrial Riverside 12/07/18 68,000,000 4.4% 6.1%

1,214,300,000

PROPERTY TYPE MSA DATETOTAL DEV.

COST ($) UNTRENDED

ROCTARGET

UNLEVERED IRR

Heartland Corp Ctr Bldg D Industrial Chicago 05/16/18 37,015,000 6.1% 7.9%

LaTerra Apartment Portfolio Apartment Los Angeles 08/07/18 111,820,000 5.1% 7.9%

148,835,000

Recent Disposition Activity

22

1Mezzanine loan investment payoff.

As of June 30, 2019. The activity described above includes all transactions consummated by the Fund since January 1, 2018. Past performance is not indicative of future performance and a risk of loss exists. Please see Important Legal Information at the end of this presentation.

2019 DISPOSITIONS

2018 DISPOSITIONS

PROPERTY TYPE MSA DATELAST

APPRAISAL ($) SALES PRICE ($)

REALIZED IRR

Tri County Distribution Center Industrial San Antonio 02/13/19 18,700,000 20,550,000 14.9%

The Overlook Office Austin 03/14/19 19,700,000 19,300,000 12.3%

Lake Washington Park Office Seattle 03/18/19 43,600,000 53,000,000 33.6%

3225/3245 Meridian Parkway Industrial Miami 03/28/19 60,600,000 63,050,000 9.0%

Azola at Magnolia Park Apartment Tampa 05/08/19 17,700,000 18,300,000 37.1%

Turnbull Canyon Distribution Center Industrial Los Angeles 05/31/19 28,400,000 27,100,000 10.1%

188,700,000 201,300,000 19.1%

PROPERTY TYPE MSA DATELAST

APPRAISAL ($) SALES PRICE ($)

REALIZED IRR

Chevy Chase - Hotel Hotel Washington DC 01/09/18 58,500,000 58,500,000 2.6%

575 Lexington1 Office New York 06/18/18 59,200,000 59,332,000 7.9%

Martin Square Retail Port St. Lucie 07/18/18 16,940,000 15,400,000 4.8%

One Del Mar Office San Diego 11/06/18 70,900,000 73,350,000 3.7%

10 Brookline Place Office Boston 11/07/18 151,000,000 153,055,000 10.2%

The Paxon/Velo Apartment Minneapolis 11/29/18 68,500,000 68,475,000 2.7%

Parkway Lofts Apartment New York 12/21/18 99,700,000 98,500,000 1.4%

140 North Mitchell Court Industrial Chicago 12/21/18 12,100,000 12,500,000 5.6%

536,840,000 539,112,000 5.4%

Same Property NOI Growth

23

1Historical NCREIF statistics derived from published NCREIF reports. 2Estimated growth projections are derived from Clarion Partners’ forecasts. Forecasts have certain inherent limitations and are based on complex calculations and formulas that contain substantial subjectivity and should not be relied upon as being indicative of future performance. Please see Important Legal Information at the end of this presentation regarding target returns, forecasts and projections. 3Weighted average includes the Fund’s Hotel portfolio (exited in 2018) and garage properties.

The Fund’s current budget projections are based on assumptions about future operating results and a wide range of factors outside of the Fund’s control. Accordingly, there can be no assurance that NOI growth will occur in accordance with the budget presented and readers are cautioned not to place undue reliance on the Fund’s budget projections. Furthermore, growth in the Fund’s Same Property NOI does not represent the performance of any investor’s investment in the Fund. Each period in the above analysis contains differing property sets due to sales activity, the exclusion of new investments made in the prior year and properties under development or major renovation. Newly acquired properties are included in the analysis once they have been owned for a full year, and development/repositioning projects are included once they have become operational on a year-over-year basis. Past performance is not indicative of future results and a risk of loss exists. Please see Important Legal Information at the end of this presentation.

PROPERTY TYPE

2016V. 2015

2017 V. 2016

2018V. 2017

2019BV. 2018

2020BV. 2019B

2021BV. 2020B

Industrial 7.7% 4.6% 4.0% 4.3% 5.4% 4.9%

Office 6.6% 2.6% 7.4% 3.3% 7.6% 11.3%

Apartment 8.8% 6.9% (0.6%) 3.5% 6.5% 5.3%

Retail 3.3% 1.3% 2.0% 3.7% 10.7% 6.4%

Weighted Average3 7.1% 3.8% 3.6% 3.6% 7.2% 7.4%

NCREIF NOI Growth1 3.8% 3.0% 2.6%

LPF 4-Yr Rolling CAGR2 5.2% 4.8% 5.3% 4.5% 4.5% 5.4%

NCREIF 4-Yr Rolling CAGR1,2 3.8% 3.7% 3.2%

Current Valuation Metrics & Lease Rollover

24

As of June 30, 2019. Please see Important Legal Information at the end of this presentation. 1 Occupancy excludes properties in initial lease-up and properties undergoing significant renovation.2 Commercial Properties is defined as office, retail, and industrial and excludes the Fund’s apartment properties.

CURRENT VALUATION METRICS

OCCUPANCY YR-1 CAP RATESTABILIZED CAP

RATEEXIT CAP RATE DISCOUNT RATE

Office 93.9% 4.38% 5.30% 5.61% 6.38%

Apartment 94.9% 4.16% 4.32% 5.00% 6.32%

Industrial 96.3% 4.38% 5.00% 5.42% 6.13%

Retail 91.1% 4.52% 5.39% 5.49% 6.29%

Other – Lab Office 100.0% 4.28% 4.28% 5.19% 5.83%

Total 94.5%1 4.34% 4.97% 5.38% 6.28%

2.8%

8.7% 9.3%

13.3% 12.8%13.7%

8.4%

4.6%

12.5%

3.2%

0%

5%

10%

15%

20%

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

LEASE ROLLOVER SCHEDULE – COMMERCIAL PROPERTIES2 (% OF TOTAL RENTABLE SF)

Value Drivers: Core Portfolio

25

1Budgeted NOI and Cap Ex is as of Year 2024 to reflect leasing rollover occurring in 2023. 2Comprises 24.8% of LPF’s total portfolio. Approximately 89.2% of the portfolio is composed of core properties. Estimated Value Pickup of all core properties is available upon request.3There can be no assurance that investment and/or target objectives will be achieved. Past performance is not indicative of future performance and a risk of loss exists.

As of December 31, 2018. Estimated market capitalization rates and future values are derived from Clarion Partners’ underwriting projections. Forecasts have certain inherent limitations and are based on complex calculations and formulas that contain substantial subjectivity and should not be relied upon as being indicative of future performance and no express or implied prediction is made to be interpreted as investment advice. Please see Important Legal Information at the end of this presentation.

PROPERTYPROPERTYTYPE

METROMARKET

2019 BUDGET NOI (M)

2023 BUDGET NOI (M)

CAP EX –2019 -2022

(M)

ESTIMATED MARKET

CAP RATE

ESTIMATED FUTURE

VALUE (M)

12/31/18 APPRAISAL VALUE (M)

ESTIMATEDVALUE

PICKUP (M)

245 First Street Office Boston 19.0 20.2 7.3 4.25% 469.0 424.0 45.0

101 Arch Street Office Boston 10.3 13.3 19.1 4.50% 275.8 256.0 19.8

One Victory Park Office Dallas 10.5 14.01 15.91 5.50% 239.0 214.0 25.0

Perry Brooks Tower Office Austin 5.3 6.31 3.31 5.75% 106.5 85.6 20.9

Waterway Plaza I & II Office Houston 9.2 11.4 11.6 5.50% 195.2 169.7 25.5

475 Brannan Street Office San Francisco 13.5 15.1 5.8 4.50% 330.7 306.0 24.7

60 Spear Office San Francisco 6.0 8.7 1.8 4.50% 190.9 156.0 34.9

Arboretum Gateway Office Los Angeles 11.2 13.1 3.0 4.50% 288.8 271.0 17.8

Essex Green Retail New York 4.3 9.4 26.2 5.50% 144.8 107.4 37.4

Eastchester Heights Apartment New York 8.9 11.8 14.8 4.50% 247.1 206.1 41.0

Bronx Apartment Portfolio Apartment New York 3.4 6.0 10.6 4.75% 115.5 94.8 20.7

Veritas Apartment Portfolio Apartment San Francisco 4.0 6.4 13.1 4.00% 147.4 120.5 26.9

Oak View at Sonoma Hills Apartment San Francisco 3.4 3.8 0.9 4.75% 78.2 65.5 12.7

Mile High Distribution Ctr. Industrial Denver 5.2 6.6 2.6 4.75% 135.4 124.0 11.4

Durango Commerce Ctr Industrial Phoenix 2.1 3.2 4.3 5.25% 56.7 46.4 10.3

Seattle Distribution Center Industrial Seattle 1.7 3.1 2.8 4.75% 62.9 42.9 20.0

Pacific Coast Park II Industrial Seattle 3.0 3.91 5.61 5.00% 72.6 60.5 12.1

7400 Hazard Industrial Los Angeles 1.7 2.6 1.1 4.50% 56.7 47.8 8.9

Knott Distribution Center Industrial Los Angeles 2.8 3.7 2.0 4.50% 80.7 65.4 15.3

16850 Heacock Street Industrial Los Angeles 2.9 4.3 2.8 4.00% 104.7 84.8 19.9

TOTAL2 $128.4 $166.9 $154.6 4.70% $3,398.6 $2,948.4 $450.2

Estimated % change in value from 2019-2022: 15.3%3

Significant future value creation is targeted within the core portfolio, largely resulting from NOI increases due to below market rents and contractual rent bumps

Value Drivers: Non-Core Portfolio

26

As of June 30, 2019. Estimated stabilized values are derived from Clarion Partners’ underwriting projections. Forecasts have certain inherent limitations and are based on complex calculations and formulas that contain substantial subjectivity and should not be relied upon as being indicative of future performance. Please see Important Legal Information at the end of this presentation.

8777 WashingtonCulver City, CA

LaTerra Apartment PortfolioLos Angeles, CA

Market StationDenver, CO

Sunnyvale KiferSunnyvale, CA

DEVELOPMENTS

Est. All-In Basis

$977m

Est. Stab. Value

$1,186m

Value Pickup

21.4%

% of Portfolio

7.2%

PRE-LEASED DEVELOPMENTS

Est. All-In Basis

$257m

Est. Stab. Value

$327m

Value Pickup

27.2%

% of Portfolio

1.9%

LEASING ASSETS

Est. All-In Basis

$263m

Est. Stab. Value

$277m

Value Pickup

5.6%

% of Portfolio

1.9%

Value Drivers: Non-Core Portfolio (cont’d)

27

As of June 30, 2019. Estimated market capitalization rates and stabilized values are derived from Clarion Partners’ underwriting projections. Forecasts have certain inherent limitations and are based on complex calculations and formulas that contain substantial subjectivity and should not be relied upon as being indicative of future performance. Please see Important Legal Information at the end of this presentation regarding the valuation of unrealized assets. 1Untrended from current rents.


METROMARKET

06/30/19CARRYING VALUE (M)

REMAININGCOST (M)

ALL-INBASIS

(M)

STABILIZED NOI (M)1

EST. MKT CAP RATE

EST. STABILIZED

VALUE (M)

EST. VALUE PICKUP (M)

DELIVERYDATE

American Stock Exch. Retail New York 117.5 31.8 149.3 7.6 5.0% 173.1 23.8 -

Market Station Mixed-Use Denver 104.9 65.4 170.3 10.4 5.1% 204.6 34.3 1Q20

Sunnyvale Kifer Apartment SF Bay Area 226.9 133.8 360.7 19.3 4.5% 429.5 68.8 1Q20

LaTerra Apt Portfolio Apartment Los Angeles 43.3 69.5 112.8 6.2 4.3% 146.5 33.7 3Q20

Waypoint Bus Park Industrial Houston 20.0 47.6 67.6 4.6 5.3% 87.1 19.5 3Q20

Mansfield Log Park Industrial New York 55.2 60.6 115.8 6.2 4.3% 144.9 29.1 3Q20

TOTAL $567.8 $408.7 $976.5 $54.3 4.7% $1,185.7 $209.2


METROMARKET


REMAININGCOST (M)

ALL-INBASIS (M)

STABILIZED NOI (M)

EST. MKT CAP RATE

EST. STABILIZED

VALUE (M)Palm Beach Land Land W. Palm Beach 24.8 N/A 24.8 N/A N/A N/A

3855 Watseka Avenue Land Los Angeles 2.2 2.2

TOTAL $27.0 $27.0

REDEVELOPMENT/DEVELOPMENT PIPELINE

LEASING

LAND


METROMARKET


REMAININGCOST (M)

ALL-INBASIS (M)

STABILIZED NOI (M)1

EST. MKT CAP RATE

EST. STABILIZED

VALUE (M)


DELIVERYDATE

Gateway Tech Center Industrial SF Bay Area 82.1 19.1 101.2 5.8 4.5% 129.4 28.2 4Q19

8777 Washington Office Los Angeles 113.0 43.2 156.2 8.9 4.5% 197.8 41.7 2Q20

TOTAL $195.1 $62.3 $257.4 $14.7 4.5% $327.2 $69.9

PRE-LEASED / BUILD-TO-SUIT


METROMARKET

06/30/19 CARRYING VALUE (M)

REMAININGCOST (M)

ALL-INBASIS (M)

STABILIZED NOI (M)

EST. MKT CAP RATE

EST. STABILIZED

VALUE (M)


OCC.

Chevy Chase – Retail Retail Washington DC 48.5 15.0 63.5 4.7 7.0% 66.6 3.1 51.0%

Park Place Shopping Ctr Retail Seattle 32.6 7.9 40.5 2.9 6.5% 43.9 3.4 61.7%

1025 Airport 100 Way Industrial Baltimore 16.3 0.6 16.9 0.9 5.0% 17.5 0.6 34.8%

Blue Ridge Dist Ctr Industrial Atlanta 21.9 0.6 22.5 1.1 5.0% 22.4 (0.1) 68.6%

Heartland Corp Ctr D Industrial Chicago 39.7 7.2 46.9 2.4 5.0% 48.6 1.7 0.0%

Univ Park Tech III & IV Industrial San Antonio 30.8 3.7 34.5 2.7 7.0% 38.0 3.5 0.0%

8570 Hickory Avenue Industrial Riverside 35.6 2.5 38.1 1.6 4.0% 40.4 2.3 63.6%

TOTAL $225.4 $37.5 $262.9 $16.3 5.8% $277.4 $14.5

Financial Management

28

1 Represents the prevailing interest rates on the Fund’s existing loans calculated by the Fund’s Debt Valuation Firm pursuant to the Fund’s Debt Valuation Policy.

As of June 30, 2019. Please see Important Legal Information at the end of this presentation.

– Current leverage ratio: 20.9%

– Closed on $200M tranche of total $400M of fund level notes

• Terms ranging from 9-11 years; weighted average fixed interest rate of 4.40%

– Closed on $230M secured pooled loan

• Backed by four residential properties; 12-year term with a fixed interest rate of 4.00%

– Repaid $195M of secured loans backed by eight properties with a weighted average interest rate of 5.65%

– Repaid $150M of fund level notes with an interest rate of 5.84%

– $500M revolving line of credit for liquidity purposes

• Undrawn as of June 30, 2019

– Fixed 91% / Floating 9%

– 2019 Strategy

• Retire remaining $18M

• Execute new financing (closed mid-July)– $350M fund level notes; 9-12 year terms;

weighted average fixed interest rate of 3.74%

• Target YE Leverage 20-22%

ANNUAL DEBT MATURITIES

$18.2

$247.0

$61.5

$242.8

$183.0

$100.0

$255.0

$363.5$341.1

$225.0

$375.0

$330.0

$0 M

$50 M

$100 M

$150 M

$200 M

$250 M

$300 M

$350 M

$400 M

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031

Fund Level Notes Pooled Property Mortgages Individual Property Mortgages

$39.0

AS OF JUNE 30, 2019 AMOUNT (M)CONTRACTUAL

RATE MARKET

RATE1 YEARS

Property Mortgages $1,481 3.72% 3.64% 7.3

Fund Level Notes $1,300 4.12% 3.53% 7.8

Total Debt (Par Value) $2,781 3.91% 3.59% 7.6

29

Representative Properties

West Hollywood GatewayLos Angeles, CA

475 Brannan Street San Francisco, CA

Arboretum GatewaySanta Monica, CA

101 Arch Street Boston, MA

1000 Jefferson Hoboken, NJ

The Millennium at Metropolitan Park

Arlington, VA

Park 5940 MDDallas, TX

Westside Provisions DistrictAtlanta, GA

APPENDIX A

Recent Acquisition

31

As of June 30, 2019. Investment case studies presented herein describe all of the Fund’s investments that were acquired since January 1, 2018. Properties are valued at their most recent independent appraisal with the exception of properties acquired during the previous quarter or current quarter, which are carried at cost or purchase price, respectively. There can be no assurance that any unrealized investment described herein will prove to be profitable. Please see Important Legal Information at the end of this presentation.

Mansfield Logistics Park

I-295 and the New Jersey TurnpikeMansfield, NJ

Investment Rationale

Mansfield Logistics Park is located in central New Jersey, which has one of the strongest industrial markets. The site’s location between I-295 and the New Jersey Turnpike is ideal for distribution, giving tenants access to the major population centers of the Northeast Corridor. To acquire an already entitled industrial development opportunity in New Jersey is rare. This investment adds to the Fund’s industrial exposure through investing in a supply constrained location where it is difficult to acquire assets on a core basis.

Property Description

Development will commence immediately and is expected to be completed by mid 2020. Mansfield Logistics Park will be comprised of two Class-A industrial warehouse buildings, ranging from 250,000 sq.ft. to 710,000 sq.ft. Each building will feature modern specifications, including 36’-40’ clear heights, deep truck courts, cross-dock and rear-loading configurations, as well as ESFR fire sprinklers and LED lighting.

Property SizeDevelopment Cost

Occupancy RiskYearAcquired

959,854 sq.ft. (to be built)

$115,770,000 N/A Development 2019

Recent Acquisition

32


Space Center Logistics Portfolio


The portfolio consists of high-quality collateral spread out across major industrial markets. The largest submarket in this portfolio, the Inland Empire, is a primary industrial market due to its large distributional reach and well-developed capabilities. The sponsor, Blackstone’s global opportunistic real estate fund, is the leading global alternative asset manager of real estate assets, and this deal will build a more dynamic relationship for future opportunities. The investment provides a good cash flow, an attractive yield in comparison to core industrial cap rates, and a total return greater than most core transactions.

Property Size Loan AmountInterest Rate

RiskYearAcquired

19,222,467 sq.ft.

$105,000,000 1m Libor + 450 bps

Core 2019


The Fund provided a $105 million Junior Mezzanine Loan to affiliates of Blackstone Real Estate Advisors LP to acquire the Blackstone Space Center Logistics Portfolio. The portfolio consists of 41 warehouse distribution properties and totals 19.2 million sf across seven markets. The markets in this portfolio include the Inland Empire, Kansas City, Chicago, Atlanta, Memphis, Minneapolis, and Dallas/Fort Worth.

Recent Acquisition

33


Waypoint Business Park

Northwest corner of Sam Houston Tollway and HWY 90Houston, TX


Waypoint Business Park adds to the Fund’s industrial exposure through investing in an attractive industrial development with returns at a healthy spread above current market cap rates. The site is located in Houston, which is the fourth-largest industrial market in the U.S. The Southwest Industrial submarket within Houston has extremely strong fundamentals with all-time low vacancies, which should support future rent growth.


The Fund entered into a joint venture with 4M Investments to develop six industrial buildings totaling 863,105 sq.ft. Phase I is expected to deliver at the beginning of 2020 and Phase II in August 2020. Building size ranges from 20,000 sq.ft. to 145,000 sq.ft., offering strong flexibility to accommodate a large range of configuration requirements for tenants. The buildings will feature LED lighting, ESFR sprinklers, ample car and trailer parking, as well as additional market leading specifications. The site is located at the northwest corner of Sam Houston Tollway and Highway 90, which is a major logistical intersection for local and regional distribution, providing access to Houston’s fastest growing suburbs.

Property Size

Development Cost (at share)



$67,430,000 N/A Development 2019

Recent Acquisition

34


75-125 Binney Street

75-125 Binney StreetCambridge, MA


The property is very well-located in the heart of the East Cambridge/Kendall Square office and lab Submarket, a critical location within Boston for life science and biotechnology companies. Local universities and hospitals such as MIT, Harvard, and Massachusetts General Hospital provide unrivaled talent for local firms. This submarket has limited supply of new Class A lab office product, making 75-125 Binney Street a unique acquisition. The JV partner, Alexandria, is a premier owner and operator of life science assets, giving the Fund access to unapparelled experience in the lab office space. The property is 100% master leased to a credit-rated Pharmaceutical company through March 2030, providing a steady long-term income stream.

Property Size Current Value Occupancy RiskYearAcquired

388,271 sq.ft. $438,600,000 100.0% Core 2019


The Fund entered into a 60%/40% joint venture with Alexandria Real Estate Equities to recapitalize 75-125 Binney Street, a 388,271 sq.ft., five-story, lab office building located in Cambridge, MA. Completed in 2015, the property is LEED Gold certified, and features 14’-19’ ceiling heights, two indoor bike storage rooms, a landscaped glass enclosed atrium, shuttle service, and a two-floor below-grade parking garage. The property takes up nearly an entire city block, and is located three blocks from LPF’s 245 First Street. This is a leading location for biotechnology tenants due to premiere local research institutions and life science firms.

Recent Acquisition

35


215 Fremont Street

215 Fremont StreetSan Francisco, CA


The South Financial District is considered to be one of the prime office locations in San Francisco. Major tenants in the submarket include Salesforce, Facebook, Google, and Amazon. Demand has remained strong in this market due to limited supply and strong tenant demand for high-quality office buildings. 215 Fremont Street stands out in this submarket from its large floorplate and proximity to the Transbay Transit Center, connecting eight Bay Area counties through eleven transit systems. The property is currently 100% leased to Google, FitBit, and Charles Schwab, with 6.2 years of weighted average remaining lease term.


367,925 sq.ft. $434,000,000 100.0% Core 2019


215 Fremont Street is a 367,925 sq.ft., eight-story, class A office building in the South Financial District submarket of San Francisco, CA. The property features large 49,000 sq.ft. floorplates, full-height windows, open-exposed concrete ceiling, and a secure bicycle storage room. In addition, the property features 21,000 sq.ft. of ground-floor retail and a 10,000 sq.ft. terrace with views of the San Francisco skyline and the Bay Bridge.

Recent Acquisition

36

Oakmont Portfolio

VariousInland Empire, CA


The Inland Empire is one of the best industrial markets in the country with extremely strong fundamentals. There are limited opportunities to invest in Class A industrial properties in the Inland Empire West submarket, affording the Fund an exceptional opportunity to acquire such a high-quality two-property portfolio. The portfolio was underwritten with one property to be acquired vacant; however during due diligence Clarion Partners advanced lease negotiations with a prospective tenant to execution, increasing occupancy to 76.9%. Low vacancy, limited supply, and increased tenant demand could support the opportunity to increase rents substantially as vacancies absorb and in-place leases roll.


The Oakmont Portfolio consists of two newly built warehouses totaling 441,008 sq.ft. located in the Inland Empire West submarket of the Inland Empire, CA. Both buildings were completed in 2018 and built to Class A specifications. The buildings are strategically located with convenient access to the major freeway infrastructure of Southern California.



441,008 sq.ft. $72,600,000 82.2% Core 2018

Recent Acquisition

37

Plaza Yarrow Bay

VariousKirkland, WA


The property is located one mile south of the Fund’s recent acquisition of Lake Washington Park. Kirkland is an affluent close-in Eastside “live, work, play” waterfront community that is located three miles north of Bellevue’s CBD and five miles west of Microsoft’s world headquarters. Kirkland has become a desirable location for many of the region’s most notable technology tenants including Google, Tableau, Wave Broadband, Bluetooth SIG, GoDaddy.com, and Comcast. The property’s occupancy is below its long term average and average rents at the property are under-market, both of which should provide potential upside as the property leases up and in-place leases expire.


Plaza Yarrow Bay is a 284,876 sq.ft., four-building office campus located in Kirkland, WA. The property was built between 1987 and 1994 and offers a park-like setting with mature landscaping and on-site biking/walking trails. The buildings feature flexible floorplate layouts, expansive window lines, outdoor terraces and meeting areas, an on-site café, and a fitness facility with lockers and showers. The property is located in a highly visible and accessible location along SR-520, which offers tenants freeway signage and visibility, along with immediate freeway access.



284,876 sq.ft. $138,000,000 76.8% Core 2018

Recent Acquisition

38

Interstate Logistics Portfolio

VariousAtlanta, GA


Atlanta is the third-largest U.S. industrial market and operates as a strategic distribution hub with access to 80% of the U.S. population in under two days. The portfolio is located in two of Clarion’s preferred Atlanta industrial submarkets that contain infill locations and are proximate to key interstate highways, providing excellent access to the Atlanta metro region. The portfolio consists of new, high quality, Class A industrial assets that can accommodate users ranging in size from 50,000 sq.ft. to 265,000 sq.ft. New development in Atlanta this cycle has been primarily big-box product allowing these buildings an advantage in meeting demand for smaller tenants.


Interstate Logistics Portfolio consists of five, light industrial buildings that total 1,127,658 sq.ft. Four buildings are located in the Northeast I-85 submarket and one building is located in the I-75 Northwest submarket of Atlanta, GA. The buildings are infill, multi-tenant, single-load facilities that range in size from 168,564 sq-ft to 264,550 sq.ft. The properties were delivered between 2016 and 2018 and feature 30’-34’ clear heights in addition to other Class A modern specifications.



1,127,658 sq.ft. $103,200,000 93.3% Core 2018

Recent Acquisition

39

7043 South 190th Street

7043 South 190th StreetKent, WA


The property is located in the preferredsubmarket in the Puget Sound region,due to its proximity to freeways, Sea-TacInternational Airport, both Ports, as wellas primary population centers of Seattleand Bellevue. The submarket is largelybuilt out with limited new supplyopportunities. At the time of acquisition,in-place rents were approximately 24%below market and the weighted averagelease term is 3.03 years, providing thenear-term opportunity to mark rents tomarket as leases roll.


7043 South 190th Street is a 74,777 sq.ft.,front-load industrial building located in Kent,WA, in the Kent Valley North/Airportsubmarket. The property was built in 1975and features 24’ clear heights, 13 dock-highdoors, 2 drive-in doors, 6 rail doors, 100’truck court depth and 20’ x 50’ columnspacing.



74,777 sq.ft. $11,900,000 100.0% Core 2018

Recent Acquisition

40

Harbour Pointe Shopping Center

11700 Mukilteo SpeedwayMukilteo, WA


Harbour Pointe Shopping Center is the premier grocery-anchored retail center in the area with very limited competing grocery-anchored centers nearby. Due to the mature commercial and residential buildings, along with topography and land limitations, the submarket is supply constrained with limited remaining developable retail sites. The property is located in a more affluent neighborhood and the surrounding density and trade area is constrained by the Puget Sound to the west and Paine Field to the north. The area has a substantial aerospace employment node with a strong daytime population and strong demand drivers from Boeing, Paine Field and the Mukilteo Ferry Terminal.


Harbour Pointe Shopping Center is a premier 113,281 sq.ft., grocery-anchored center located in Mukilteo, WA approximately 20 miles north of downtown Seattle. The property is anchored by QFC/Kroger and Rite Aid, both of which have been operating at the property since its opening in 1993. The property also has 14 in-line spaces, three freestanding pads, two drive-through pads and one gas station pad. The property completed a $1.2 million façade renovation in 2017 and QFC recently completed a significant remodel to its store.



113,281 sq.ft. $44,300,000 96.0% Core 2018

Recent Acquisition

41

1811 Brittmoore

1811 Brittmoore RoadHouston, TX


The Northwest submarket is the largest and the most desired industrial submarket in Houston due to strong population growth, high barriers to entry, strong tenant base, and its convenient access to expansive logistical infrastructure. Located north of Loop 610 between I-10 and U.S. Highway 290, the submarket offers many logistical advantages over other submarkets.


1811 Brittmoore is a 140,181 sq.ft. industrial warehouse located in the Northwest submarket of Houston, TX. Delivered in 2008, the property features 20’ clear heights, 177’ building depth, 122’ truck court depth, ESFR fire sprinklers, 43 dock high doors and ample parking. The property is 100% leased to four tenants with 3.3 years of weighted average remaining lease term.



140,181 sq.ft. $15,200,000 100.0% Core 2018

Recent Acquisition

42

Hillside Village

1801 Shattuck AvenueBerkeley, CA


Berkeley is one of the West Coast’s most challenging entitlement environments and a severely supply-constrained market with consistent strong demand due to its proximity to the UC Berkeley campus. A large student population, increasing enrollment, and shortage of on-campus housing provides Hillside Village with a unique and reliable demand generator, ensuring high occupancy rates, and potential for significant rent growth.


Hillside Village is a Class A apartment building with a small retail component located in Berkeley, CA, that was completed in 2007. The units feature granite countertops and cherry wood cabinetry throughout with some units upgraded to include stainless steel appliances, hardwood-style flooring and washers and dryers. The property’s amenities include bike parking, study rooms and lounges, common area courtyards and outdoor terraces with panoramic views of the San Francisco Bay and Berkeley foothills. The property is walkable to the main retail and entertainment thoroughfare, offering residents convenient access to a wide array of restaurants, bars and shops. UC Berkeley’s main campus is just one block away and the BART, the Bay Area’s main Metrorail system, has a stop four blocks from the property.



94 units $59,700,000 100.0% Core 2018

Recent Acquisition

43

Crescent Park

5710 Crescent Park EastPlaya Vista, CA


Playa Vista is a premier master planned community located in West Los Angeles that features luxury apartments, Class A office space and highly desirable retail. Significant office users in the submarket include Google, Facebook, Yahoo!, the Honest Company and Microsoft. The unit interiors and common amenities are dated as compared to the competitive set and therefore the Fund believes the property offers an excellent value-add renovation opportunity without needing to achieve top of the market rents.


Crescent Park is a 214-unit apartment community located in the Playa Vista neighborhood of Los Angeles, CA. The property was built in 2003 with unit features including granite countertops, stainless steel appliances, carpeted bedrooms and hardwood floors. Community amenities include a pool and hot tub, fitness center, clubhouse and a BBQ/picnic area.



214 units $123,000,000 91.5% Core 2018

Recent Acquisition

44

Tower at Hollywood Hills

1800 N Normandie AvenueLos Angeles, CA


Los Feliz is in an infill, supply-constrained submarket, with limited existing and prospective Class A multifamily product located approximately five miles northwest of Downtown Los Angeles and approximately 2.5 miles northeast of Hollywood. Los Feliz provides walkable access to retail nodes, as well as entertainment and jobs. Los Feliz and the surrounding area is home to a significant and expanding employment base, with large employers such as Kaiser Permanente, Children’s Hospital of LA and Hollywood Presbyterian Hospital


Tower at Hollywood Hills is a 80-unit, three-story property located in the Los Felizneighborhood of Los Angeles. The property was built in 1990 and renovated in 2006. Unit features include granite countertops, stainless steel appliances, vinyl plank flooring and 9’ ceiling heights. Property amenities include a fitness center, an outdoor pool, an outdoor fire pit/BBQ, a sauna and a recently updated laundry room. The property is proximate to public transportation options including the Vermont/Sunset Metro Station, providing public transit to Downtown Los Angeles.



80 units $31,500,000 95.0% Core 2018

Recent Acquisition

45

LaTerra Apartment Portfolio

4850 & 4900 Hollywood BoulevardLos Angeles, LA


The development is located in Los Feliz, an infill, supply-constrained submarket that is adjacent to Hollywood. It is a high barrier to entry submarket with limited existing and prospective Class A multifamily product. The project will offer a walkable location with convenient access to retail, entertainment and jobs, which is unusual for Southern California. Los Feliz and the surrounding area is home to a significant and expanding employment base, with large employers such as Kaiser Permanente, Children’s Hospital of LA and Hollywood Presbyterian Hospital. The site is located approximately a half-mile from the Vermont/Sunset Metro station for the Red Line and is adjacent to Barnsdall Park, a popular 36-acre park with panoramic views of Los Angeles.


The Fund entered into a 80%/20% joint venture with LaTerra Development for a two-phase development with target delivery of the entire project in mid-2020. The apartment phases are across the street from each other and will feature high-quality finishes such as stainless steel appliances, quartz countertops, tile backsplashes and showers, stackable washers/dryers, 9’ ceilings and vinyl plank flooring with amenities including rooftop decks, fitness centers, outdoor courtyards and pools.


Property Size



246 units (to be built)

$111,820,000 N/A Development 2018

Recent Acquisition

46

Veritas SF Apartment Portfolio

San Francisco Bay Area


Rent stabilized apartments tend to have strong demand drivers and can be more insulated from new supply than luxury apartments. Veritas has extensive experience with this type of housing product in the San Francisco Bay Area, currently owning over 5,000 units across more than 200 buildings, making them the largest multifamily property owner in San Francisco. San Francisco has been one of the top performing apartment markets in the nation over the long term. Owning Class B+, rent stabilized assets is a good complement to the Fund's other apartment holdings and provides portfolio diversification by rent level.


The Fund entered into a 97.75%/2.25% joint venture with Veritas Investments to acquire Class B/B+, urban infill, rent-stabilized multifamily assets in the city of San Francisco and Oakland. The properties are located in premier, walkable neighborhoods, proximate to restaurants, night-life, entertainment and retail nodes. The properties are built in the early 1900’s with in-place rents substantially below market and provide the opportunity to add value through individual unit renovations, vacancy lease increases and building capital improvements.


Property SizeCurrent Value (at share)


252 units $146,280,597 85.4% Core Plus 2018

Recent Acquisition

47

Heartland Corporate Center Building D

Southwest Corner of 215th Street & Frontage RoadShorewood, IL


The Fund’s strategy is to increase its industrial exposure by investing in core assets as well as attractive industrial developments. The Fund is developing Heartland Corporate Center Building D to a return on cost approximately 125-150 bps above spot market cap rates. Heartland Corporate Center Building D is adjacent to other Clarion-owner industrial properties, which will allow for synergies in managing and operating Building D.


The Fund entered into a 90%/10% joint venture with HSA Commercial Real Estate to develop Heartland Corporate Center Building D, a warehouse development with target delivery in early 2019. The site is located on the northwest corner of Interstate-55 and Interstate-80, approximately 40 miles southwest of downtown Chicago. The building will feature a cross-dock configuration, 36’ clear heights, 195’ truck court depth, ESFR sprinkler system, 108 dock doors, ample car and trailer parking and other market leading specifications.


Property Size




$37,000,000 N/A Development 2018

Recent Acquisition

48

3950 Alto Avenue

3950 Alto AvenueLas Vegas, NV


Las Vegas is a market the Fund has looked to enter for industrial investment, as e-commerce and logistics tenants are increasingly attracted to its close proximity to West Coast cities and relatively large pool of warehouse labor. North Las Vegas is a strategic distribution location offering one-day truck service to San Francisco, Los Angeles and Phoenix, two-day truck service to Denver, Portland and Santa Fe, and allows for next-day freight service to approximately 42 million people.


3950 Alto Avenue is a recently developed Class A industrial property located in Las Vegas, NV. The property was delivered in 2017 and features 32’ clear heights, 50’x52’ column spacing, ESFR fire sprinklers, LED lighting, 64 dock high doors, 190’ deep truck courts, ample parking and 100% climate control throughout the building. 3950 Alto Avenue is 100% leased to DHL Supply Chain, providing a steady income stream to LPF.



339,257 sq.ft. $38,000,000 100.0% Core 2018

Recent Acquisition

49

Gateway Towne Center

101-242 Towne Center Drive &1633-1733 Alameda StreetCompton, CA


Gateway Towne Center is situated in the center of a dense trade area within urban Los Angeles in a neighborhood that is underserved for Class A retail. The area has exceptional demographics, with over 750,000 residents averaging household incomes in excess of $65,000 and an additional daytime population of 715,000 working in the surrounding area. Tenants at the property have strong sales (typically well-above chain averages) and low occupancy costs. The Fund believes assets with these attributes (quality demographics, strong sales productivity, stellar tenant lineup, unique positioning in the trade area) are poised to remain solid investments even in a transforming retail environment. The Fund acquired the asset for a 5.7% cap rate.


Gateway Towne Center is a regional grocery-anchored shopping center located in Compton, CA, leased to a mix of regional and national retailers including Aldi, Home Depot, Ross, Best Buy, 24 Hour Fitness, and shadow-anchored by Target. The property is located on the northwest corner of the Artesia (91) Freeway and Alameda Street, a major north/south thoroughfare visible to approximately 215,000 vehicles per day with prominent freeway signage.



281,771 sq. ft. $96,600,000 98.9% Core 2018

Recent Acquisition

50

Watermark Seaport

85 Seaport BoulevardBoston, MA


The Seaport District is a top submarket in Boston. Recent and in-process mixed-use development has turned the area into a thriving urban neighborhood that has been attracting major employers such as GE, Amazon and Boston Consulting Group. The Seaport offers a dynamic live-work-play environment with immediate proximity to the urban core, public transportation and unique dining and entertainment offerings. The property is located in the heart of the Seaport, a short walk to Downtown Boston and adjacent to the MBTA Silver line with direct access to South Station, Downtown Boston and Logan International Airport.


Watermark Seaport is a LEED Gold, Class A+ apartment building located in the Seaport District of Boston. The property was completed in 2016 and is made up of two interconnected structures, including a 17-story tower and a 6-story loft-style building. The two structures offer distinct unit designs with the tower featuring hardwood floors and granite countertops while the loft building features recycled concrete floors, glass countertops and exposed metal and steel ceiling beams. All units have oversized windows, in-unit washers/dryers, stainless steel appliances and Nest thermostats. Amenities at the property include a terrace and roof deck with sweeping views of Downtown Boston and the Boston Harbor, state of the art fitness center and resident lounge.



346 units $250,000,000 95.9% Core 2018

Recent Acquisition

51

Bronx Workforce Housing Portfolio

Bronx, NY


The Fund seeks to own workforce housing at the lower end of the apartment spectrum, as a complement to its other apartment holdings. This segment of the apartment market tends to have strong demand drivers and can be more insulated from new supply than luxury apartments. The Fund has experience in workforce housing in New York City, where it has owned a large rent stabilized apartment community in the Bronx called Eastchester Heights since 2007.


Bronx Workforce Housing Portfolio consists of seven rent stabilized apartment buildings located in various neighborhoods in the Bronx, NY. The properties were built between 1910 and 1929 and range in size from 42 units to 124 units. The units feature 9’+ ceilings with management renovating units upon turnover and installing new appliances, kitchen and bath fixtures, and vinyl flooring. The buildings are proximate to transit, allowing quick access to Manhattan and other New York City boroughs. Other nearby cultural and entertainment amenities include Yankee Stadium, the Bronx Zoo, the Bronx Museum of Arts and the Bronx Botanical Garden.


Property SizeCurrent Value (at share)


503 units $98,600,000 98.6% Core Plus

2018

Recent Acquisition

52

8870 Washington

8870 Washington BoulevardCulver City, CA


Culver City is a top submarket within West Log Angeles. The area has attracted technology and media employers from the greater Los Angeles area because of its central location and creative new development. The property is adjacent to Platform I, a premier high-end retail and office project that opened in 2016, and is proximate to recently completed or to-be-built developments including the Fund’s 8777 Washington.


8870 Washington is a premier creative office and retail asset located in Culver City, CA. The property was originally constructed in three phases between 1985 and 1967, and was extensively renovated to feature many modern amenities tenants seek in creative office and retail spaces, including original building materials, an open-air courtyard, bow-trussed ceilings, skylights and collaborative spaces. The single-story brick building is 100% leased through 2027.



29,723 sq. ft. $29,600,000 100.0% Core 2018

Draft 10.16.18

APPENDIX B

List of Major Investments

54

1Gross Market Value includes the Fund's preferred partnership interest of $96 million.

As of June 30, 2019. The Fund’s Major Investments for purposes of this description include the Fund’s largest investments by property type.


PROPERTY LOCATION TYPE % OWNEDGROSS MARKET VALUE

($)% OF

PORTFOLIO

215 Fremont Street San Francisco CA Office 100.0% 434,000,000 3.3%

100 Fifth Avenue New York NY Office 100.0% 348,000,000 2.6%

475 Brannan Street San Francisco CA Office 100.0% 326,000,000 2.5%

Arboretum Gateway Santa Monica CA Office 100.0% 285,000,000 2.2%

245 First Street Cambridge MA Office 100.0% 261,000,000 2.0%

101 Arch Street Boston MA Office 100.0% 257,000,000 2.0%

One Victory Park Dallas TX Office 100.0% 216,000,000 1.6%

75-125 Binney Street Cambridge MA Office 60.0% 186,000,000 1.4%

Sand Hill Commons1

Menlo Park CA Office 51.0% 175,600,000 1.3%

Waterway Plaza I & II The Woodlands TX Office 100.0% 173,200,000 1.3%

Office Total 2,661,800,000 20.2%

Watermark Seaport Boston MA Apartment 100.0% 250,000,000 1.9%

Sunnyvale Kifer Sunnyvale CA Apartment 96.3% 226,900,000 1.7%

The Acadia at Metropolitan Park Arlington VA Apartment 100.0% 223,000,000 1.7%

Eastchester Heights Bronx NY Apartment 90.0% 209,700,000 1.6%

Veritas Apartment Portfolio SF Bay Area CA Apartment 97.8% 146,300,000 1.1%

Columbia Town Center Columbia MD Apartment 100.0% 144,000,000 1.1%

The Millennium at Metropolitan Park Arlington VA Apartment 100.0% 144,000,000 1.1%

Avignon Townhomes Redmond WA Apartment 100.0% 142,000,000 1.1%

1000 Jefferson Hoboken NJ Apartment 100.0% 141,000,000 1.1%

Westbrooke Place Washington DC Apartment 100.0% 123,000,000 0.9%

DC Apartment Total 1,749,900,000 13.3%

List of Major Investments (cont’d)

55

2Mezzanine loan investment.

As of June 30, 2019. The Fund’s Major Investments for purposes of this description include the Fund’s largest investments by property type.


PROPERTY LOCATION TYPE % OWNEDGROSS MARKET

VALUE ($)% OF

PORTFOLIO

600 North Michigan Avenue Chicago IL Retail 100.0% 374,000,000 2.8%

Palm Beach Outlets West Palm Beach FL Retail 90.0% 293,900,000 2.2%

West Hollywood Gateway Los Angeles CA Retail 100.0% 168,000,000 1.3%

Westside Provisions District Atlanta GA Retail 97.5% 130,600,000 1.0%

Gateway at Kearny Mesa San Diego CA Retail 100.0% 125,000,000 1.0%

Marketplace at the Outlets West Palm Beach FL Retail 100.0% 119,000,000 0.9%

Essex Green West Orange NJ Retail 100.0% 104,000,000 0.8%

Gateway Towne Center Compton CA Retail 100.0% 96,600,000 0.7%

American Stock Exchange New York NY Retail 70.0% 96,600,000 0.7%

Village Shopping Center Boulder CO Retail 80.0% 68,300,000 0.5%

Retail Total 1,576,000,000 11.9%

Cranbury Station Cranbury NJ Industrial 100.0% 213,000,000 1.6%

Research Tri-Center Durham NC Industrial 100.0% 172,500,000 1.3%

Pacific Technology Park San Diego CA Industrial 100.0% 142,000,000 1.1%

Mile High Distribution Center Denver CO Industrial 100.0% 131,100,000 1.0%

Principio Commerce Center North East MD Industrial 100.0% 119,000,000 0.9%

Space Center Logistics Portfolio2

Various Various

Industrial 100.0% 105,000,000 0.8%

Pompano Business Center Pompano Beach FL Industrial 100.0% 90,100,000 0.7%

Redlands Business Center Redlands CA Industrial 100.0% 87,200,000 0.7%

16850 Heacock Street Moreno Valley CA Industrial 100.0% 87,100,000 0.7%

Carmel Mountain San Diego CA Industrial 100.0% 86,400,000 0.7%

Industrial Total 1,233,400,000 9.5%

75-125 Binney Street Cambridge MA Other 60.0% 252,600,000 1.9%

245 First Street Cambridge MA Other 100.0% 201,000,000 1.5%

Other Total 453,600,000 3.4%

TOTAL MAJOR INVESTMENTS 7,674,700,000 58.3%

APPENDIX C

Summary of Key Terms

57

As of June 30, 2019. This summary of key terms is not an exhaustive summary of the terms of an investment in the Fund and is qualified in its entirety by reference to the Fund’s private placement memorandum and definitive organizational documents. Asset Management and Cash Management fees are billed quarterly in arrears and are paid from each Limited Partner’s quarterly distribution. Please see Important Legal Information at the end of this presentation.

Eligible Investors:Pension funds, foundations, endowments, non-U.S. institutions and taxable qualified investors

Cash Distributions: Quarterly with re-investment option

Redemptions: Quarterly with 90 days written notice; no withdrawal fee

Fee Structure: Asset Management Fee

First $25 million 1.10%

Greater than $25 million 0.85%

Cash Management Fee

In lieu of the Asset Management Fee, 0.10% is charged on cash/marketable securities held by the Fund

APPENDIX D

Fund Management and Resources

59

As of June 30, 2019. Numbers in parentheses represent tenure with the Firm/years in the industry. Staff counts are inclusive of administrative personnel.

HARRIS MARKOWITZ JESSICA BETTS JOSHUA COHEN ALICE MCAVOY

Portfolio OperationsVice President

Portfolio OperationsVice President

Portfolio AnalyticsSenior Associate

Fund AdministrationVice President

INVESTMENT RESEARCH

ACQUISITIONS ASSET MANAGEMENTCLIENT CAPITAL MANAGEMENT

FINANCIAL MANAGEMENT

LEGAL &COMPLIANCE

CORPORATE SUPPORT

Team – 9 Team – 32 Team - 67 Team - 25 Team – 86 Team - 3 Team - 20

INVESTMENT COMMITTEE

LION PROPERTIES FUND

KATIE VAZ (14/15) HEATHER HOPKINS (4/24)

Assistant Portfolio ManagerManaging Director

Chief Financial OfficerManaging Director

CONTROLLERSCUI TUNG

Vice PresidentJOHN DEBERADINIS

Vice President

ASSISTANT CONTROLLERSGENEVA KINGSr. Associate

JULIE RAICESr. Associate

ACCOUNTANTSKATHY HANDLON, Sr. Associate

NATALIE SEONG, Sr. Associate

CHARLES CARITA, Associate

SETH GOLDSTEIN, Associate

JOSEPH GUISTINO, Associate

CHRIS PERINO

Portfolio AnalyticsAnalyst

JEB BELFORD (24/36) JON GELB (12/15)

Portfolio ManagerManaging Director

Portfolio ManagerManaging Director

OWEN KAPLAN

Fund AdministrationAssociate

Biographies

60

Prior Experience

Winthrop Financial Associates, Boston, MA - Acquisitions and Asset Management (1984-1995)

Education

Dartmouth College, B.A. - Mathematics and Religion (1983)

JEB BELFORD(212) 883-2535 [email protected]

Managing Director, Lion Properties Fund Portfolio Manager

Jeb Belford is an equity owner and Managing Director with Clarion Partners and a member of the

Firm’s Investment Committee and Executive Board. Jeb is also the Portfolio Manager of the Lion

Properties Fund, the Firm’s $13.5 billion open-end core fund. As Portfolio Manager, Jeb has overall

responsibility for Fund management and portfolio strategy. From 2005-2012, Jeb was the Portfolio

Manager for the Lion Value Fund, the Firm’s value-add investment platform. Prior to becoming a

portfolio manager, Jeb was a senior member of the Firm’s Acquisitions Group, completing more

than $3.5 billion in real estate acquisitions across a broad range of strategies. He joined Clarion

Partners in 1995, and began working in the real estate industry in 1984. His background includes all

key aspects of portfolio management, including acquisitions, financing and sales totaling over $15.5

billion in all property types and risk strategies, in markets across the U.S., Brazil and Mexico.

Biographies

61

Prior Experience

Cushman & Wakefield, New York, NY - Transaction Consultant (2005-2007)

JON GELB(212) 883-2733 [email protected]

Managing Director, Lion Properties Fund Portfolio Manager

Jon Gelb is an equity owner, Managing Director and Portfolio Manager for the Lion Properties Fund.

Jon shares responsibility for all facets of Fund management including acquisitions and dispositions,

asset management and investor communications. Previously, Jon served as Assistant Portfolio

Manager to Jeb Belford on an open-end value-added fund and had acquisitions and portfolio

management responsibilities for other Clarion portfolios. Jon joined the Firm in 2007 and began

working in the real estate industry in 2005.

Education

Harvard Business School, M.B.A. (2005)

Wesleyan University, B.A. (1997)

Biographies

62

Prior Experience

Pharmacia Corporation, Peapack, NJ - Manager of Sales Analytics (2001-2003)

ZS Associates, Princeton, NJ - Analyst (2000-2001)

KATIE VAZ(212) 883-2546 [email protected]

Managing Director, Lion Properties Fund Assistant Portfolio Manager

Katie Vaz, equity owner and Managing Director, is an Assistant Portfolio Manager for the Lion

Properties Fund. Katie shares responsibility for all facets of Fund management including

acquisitions and dispositions, asset management and investor communications. Previously, she

served as a portfolio manager for three of Clarion’s separate account portfolios totaling over $1.2

billion in assets under management. Prior to focusing on portfolio management, she was an asset

manager of office product in the New York tri-state and Florida markets and also a portfolio

management associate for Clarion’s multifamily fund. Katie joined Clarion in 2005 and has 14

years of experience in the real estate industry.

Education

New York University, Stern School of Business, M.B.A (2005)

Princeton University, B.A. (2000)

Biographies

63

Prior Experience

Pretium Partners, LLC, New York, NY – Chief Financial Officer (2012–2015)

The Winter Organization, New York, NY – Chief Financial Officer (2007–2012)

Thor Equities, LLC, New York, NY – Vice President of Finance (2004–2007)

Soros Fund Management, LLC, New York, NY – Senior Controller, Real Estate division (2003–2004)

Goldman, Sachs & Co., New York, NY – Vice President, Controllers division (1996–2003)

Deloitte & Touche, New York, NY and Atlanta, GA – Senior Accountant, Audit services (1992–1996)

HEATHER HOPKINS, CPA (212) 808-2163 [email protected]

Managing Director, Lion Properties Fund Chief Financial Officer

Heather Hopkins is a Managing Director and the Chief Financial Officer of the Lion Properties Fund.

Heather oversees financial reporting, cash management, investor relations and the legal, tax and

capital structure aspects related to the Fund. Additionally, Heather is the Head of Investment

Accounting for Clarion Partners. She joined Clarion Partners in 2015 and began working in the real

estate industry in 1996. Heather is a Certified Public Accountant with the State of New York.

Education

University of North Carolina at Chapel Hill, Masters in Accounting and BS in Business Administration (1992)

Biographies

64

Prior Experience

Deloitte & Touche, New York, NY - Audit Senior (2003-2006)

CUI TUNG, CPA (212) 883-2618 [email protected]

Vice President, Lion Properties Fund Controller

Cui Tung is a Vice President and the Controller for the Lion Properties Fund at Clarion Partners.

Cui is responsible for accounting and financial reporting of the Fund. She joined Clarion Partners

in 2006 and began working in the real estate industry in 2003. Cui is a Certified Public

Accountant with the State of New York.

Education

Rutgers University, BS in Accounting (2003)

Biographies

65

Prior Experience

Pretium Partners, New York, NY - Vice President, Controller (2013-2016)

Brixmor Property Group, New York, NY - Financial Accounting Manager (2009-2013)

Health Systems Solutions, New York, NY - Senior Financial Analyst (2008-2009)

KPMG, Stamford, CT - Senior Associate (2006-2008)

JOHN DEBERADINIS, CPA (212) 883-2609 [email protected]

Vice President, Lion Properties Fund Controller

John DeBeradinis is a Vice President and a Controller for the Lion Properties Fund at Clarion

Partners. John is responsible for accounting and financial reporting of the Fund. He joined Clarion

Partners in 2016 and began working in the real estate industry in 2009. John is a Certified Public

Accountant with the State of New York.

Education

Loyola University Maryland, BBA in Accounting (2006)

Biographies

66

Prior Experience

Waronzof Associates (2010-2011)

JESSICA BETTS(213) 236-3443 [email protected]

Vice President, Portfolio Management

Jessica Betts, Vice President is responsible for Portfolio Management of West Coast assets for the

Lion Properties Fund. Jessica serves as asset manager for a portfolio of office properties in Los

Angeles and the Bay Area, totaling 1 million square feet. In addition, Jessica provides portfolio

oversight of the Fund’s West Coast assets. Jessica joined the Firm in 2011 and previously had

asset management and acquisitions responsibilities for other Clarion portfolios.

Education

University of Southern California, B.S. (2010)

Biographies

67

Prior Experience

Goldman, Sachs & Co., Jersey City, NJ – Senior Associate (2010-2012)

Ernst & Young, New York, NY – Audit Senior (2005-2010)

HARRIS MARKOWITZ, CPA(212) 808-2164 [email protected]

Vice President, Portfolio Management

Harris Markowitz is a Vice President on the Lion Properties Fund Portfolio Management Team at

Clarion Partners. Harris is responsible for the quarterly property valuations, return calculations

and performance reporting. Harris also is an asset manager for several of the Lion Properties

Fund’s assets. He also has portfolio management oversight responsibilities for the Fund’s

Baltimore-area, Midwest and Mountain region assets. He joined Clarion Partners in 2012 and

began working in the real estate industry in 2005. Harris is a Certified Public Accountant with

the State of New York.

Education

The George Washington University, Bachelor of Accountancy (2005)

APPENDIX E

U.S. Expansion Expected to Moderate in 2019 After a Strong 2018

– Q3 2018 quarterly earnings for S&P 500 grew by 24.9% and sales increased by 7.7% year-over-year; 2019 earnings growth is forecast to be 7.9%

Source: Bloomberg, J.P. Morgan, FactSet, IMF, Clarion Partners Investment Research, January 2019. 2019 forecast is based on FactSet as of 02/15/2018.Note: Past performance is not indicative of future performance. GDP growth forecasts are the medians from the Bloomberg survey of 52 major financial institutions as of December 20, 2018. Please see Important Legal Information at the end of this presentation.

U.S. & GLOBAL REAL GDP GROWTH FORECASTS U.S. CORPORATE EARNINGS GROWTH STRONGEST

Note: 2018 U.S. GDP data have not been released yet due to government shutdown.

2016 2017 2018F 2019F 2020F

U.S. 1.9% 2.5% 2.9% 2.5% 1.9%

Global 3.1% 3.3% 3.7% 3.5% 3.3%

69

This Market Cycle Will Likely be the Longest in U.S. History

70

– The slow and steady pace may extend the current expansion

Source: Bureau of Economic Analysis, Clarion Partners Investment Research, Q3 2018.

Note: Past performance is not indicative of future performance. Please see Important Legal Information at the end of this presentation.

CUMULATIVE REAL GDP GROWTH BY EXPANSION CYCLE

-10%

0%

10%

20%

30%

40%

50%

60%

0 4 8 12 16 20 24 28 32 36 40

Number of quarters

1948Q4 1953Q2 1957Q3

1960Q2 1969Q4 1973Q4

1980Q1 1981Q3 1990Q3

2001Q1 2007Q4

2007-?

Prior expansion peak

+50% / 3rd Longest

1960s

1990s

+40% / The Longest

+18% / 2nd Longest

Strong Household Formation and Job Growth = Bright Spots in the U.S. Economy and a Distinct Competitive Advantage in the Global Market

71

– Year-to-date job growth is trending slower than last year

Source: Zelman Associates, Bureau of Labor Statistics, Clarion Partners Investment Research, May 2019.

Note: Past performance is not indicative of future results. LTA = long-term average. Please see Important Legal Information at the end of this presentation.

ANNUAL U.S. EMPLOYMENT GROWTH (MILLION)ANNUAL U.S. HOUSEHOLD FORMATION (MILLION)

0.96

1.331.40 1.42

1.37

0

0.4

0.8

1.2

1.6

2014 2015 2016 2017 2018

LTA = 1.15

3.0

2.7

2.32.1

2.7

0

0.8

1.6

2.4

3.2

2014 2015 2016 2017 2018

LTA

72

CUMULATIVE AND AVERAGE NEW SUPPLY

(GRAY BAR = RECESSION; DOTTED LINE = ANNUAL AVERAGE)

CUMULATIVE AND AVERAGE NEW SUPPLY

Cumulative New Supply is Significantly Lower This Cycle Relative to Previous Cycles

Source: CBRE-EA, Clarion Partners Investment Research, Q1 2019.

Note: Deliveries % is the average of industrial, multifamily, office and retail sectors. Cumulative new supply was calculated from the beginning of the cycle to the end of recession. Past performance is not indicative of future performance. Please see Important Legal Information at the end of this presentation.

0%

1%

2%

3%

4%

5%

6%

7%

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019F

2021F

2023F

Annual D

eliveri

es a

s %

Sto

ck

1992-2001Cum. 18.0%

2010-2018Cum. 7.7%

2002-2009Cum. 12.7%

Forecast

Ann. Avg. 1.8%

Ann. Avg. 1.6%

Ann. Avg. 0.9%

1985-1991Cum. 30.0%

Ann. Avg. 4.3%

2010-2023Cum. 12.8%

Ann. Avg. 0.9%

73

Inte

rest

Rate

Inte

rest

Rate

Inte

rest

Rate

Current Cap Rate Spreads Over Treasuries and Corporates Still Well Above Prior Peaks

Source: NCREIF, Federal Reserve, BofA Merrill Lynch, Clarion Partners Investment Research, Q1 2019.Note: All yields are as of Q1 2019. Red circles represent periods of high relative values; LTA (dotted line) = long-term average. Past performance is not indicative of future performance. Please see Important Legal Information at the end of this presentation.

… VS. 10-YR TREASURYCURRENT = +229 BPS LTA = +291 BPS2007 PEAK = +86 BPS

… VS. BAA CORPORATE BOND CURRENT = -15 BPS LTA = +27 BPS2007 PEAK = -114 BPS

… VS. HIGH YIELD BOND (BB)CURRENT = -258 BPS LTA = -54 BPS2007 PEAK = -223 BPS

0%

2%

4%

6%

8%

10%

12%

0%

2%

4%

6%

8%

10%

12%

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Spread (right)

NCREIF Cap Rate (left)

10-Yr Treasury (left)

-4%

-2%

0%

2%

4%

6%

8%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Spread (right)


Baa Yield (left)

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

0%

2%

4%

6%

8%

10%

12%

14%

16%

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Spread (right)


BB Yield (left)

History Shows That Core U.S. Real Estate Values in General Reacted Favorably Even in Rising Interest Rate Environments

– Higher interest rates often linked to better economic growth, which should lead to stronger demand for commercial space and higher NOI growth, offsetting potential negative impact on cap rates

74

Source: NCREIF, Federal Reserve, S&P, Clarion Partners Investment Research, Q2 2018.

Note: Returns and GDP growth are annualized over the period of rising rates; past performance is not indicative of future performance. Please see Important Legal Information at the end of this presentation.

Index

Inte

rest

Rate

Period (A) (B) (C) (D) (E) (F) (G) (H)

Real GDP Growth 1.3% 2.8% 7.8% 3.7% 4.4% 4.9% 3.5% 2.2%

NCREIF Tot. Ret. 17.4% 13.6% 13.3% 7.0% 4.9% 11.4% 15.8% 10.9%

NCREIF Appr. Ret. 10.5% 6.5% 5.2% -0.3% -3.6% 2.8% 8.3% 5.0%

S&P 500 Tot. Ret. 3.3% 5.4% 10.6% 50.7% 2.9% 21.1% 11.2% 24.8%

Barclays Agg. Bond Tot. Ret. -12.6% -6.1% 4.3% -3.8% -2.3% -0.8% 2.1% -1.5%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

100

120

140

160

180

200

220

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Recessions NCREIF Apprec. Index (left) 10-Yr Treasury (right)

+383 bps(A)

+575 bps(B) +348 bps

(C)

+240 bps(D)

+244 bps(E) +180 bps

(F)

+161 bps(G)

+139 bps(H)

U.S. Real Estate Cycles Historically Last More Than 10 Years; Strong Performance: 37 Years of Positive Returns in 41-Year History

75

Source: NCREIF, Clarion Partners Investment Research, May 2019.

Note: LTA = long-term average, 1978-2018. 1978 is the NCREIF Property Index inception year. Please see Important Legal Information at the end of this presentation. Past performance is not indicative of future performance. Forecasts have certain inherent limitations and are based on complex calculations and formulas that contain substantial subjectivity and should not be relied upon as being indicative of future performance.

NCREIF PROPERTY INDEX TOTAL RETURN HISTORY

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Appreciation Return

Income Return

Total Return

1991-1992Severe RE Over-supply

2008-2009Global Financial Crisis

15 Years of Positive Total Returns13 Years of Positive Total Returns

Tech DemandDecline

2010 - ?

LTA Returns

Income 7.2%

Appreciation 2.1%

Total 9.4%

U.S. Real Estate Investment Outlook

76

Global & U.S. Macro Economy

– Goldilocks economy: a strong possibility of a super-long cycle

– Fed and rising interest rates = less threats

– U.S. global competitiveness driven by:

• Strong household formation

• Job growth

• Tech innovation

• Tax reform

• Energy independence

– Potential risks:

• Full-blown trade war

• Slower global growth / China hard landing

• Late market cycle

• Geopolitical events

Source: Clarion Partners Investment Research, July 2019.

U.S. Real Estate Investment Outlook (Continued)

77

U.S. Real Estate Fundamentals

– Record low new supply continues the 30-year trend, supporting strong fundamentals

– Rent growth moderating yet still at or above long-term averages

– Healthy demand in most markets supports core/value-creation strategies

– Industrial and retail in structural transformation

– Real estate decisions largely influenced by access to talent, labor availability, housing affordability, and CAPEX

– Adaptive in a disruptive environment

U.S. Capital Markets

– Lower interest rates positive for real estate valuations

– Record global investment capital and stiff competition for desirable core assets/projects

– Asset pricing at cyclical peak, but still attractive relative to alternatives

– Lenders remain conservative; value-add and construction tougher to finance

– Plenty of opportunities to obtain and create value through disciplined, active investment strategies

Source: Clarion Partners Investment Research, July 2019.

APPENDIX F

Important Legal Information

79

This is not an offer to sell, or a solicitation of an offer to buy, securities. Investment in real estate and real estate derivatives entails significant risk and is suitable only for certain qualified investors as part of an overall diversified investment strategy and only for investors able to withstand a total loss of investment. This material is for distribution only to prospective investors who are highly sophisticated and are “accredited investors” and “qualified purchasers,” as those terms are defined in the Securities Act of 1933 and the Investment Company Act of 1940, respectively. This presentation is strictly confidential and is not intended for distribution without the written permission of Clarion Partners. Unless otherwise indicated, returns are presented on a gross basis and do not reflect expenses, management fees or incentive allocations. References to indexes are hypothetical illustrations of aggregate returns and do not reflect the performance of any actual investment. Investors cannot invest in an index. Past performance is not indicative of future results and a risk of loss exists. Any investor’s actual returns may vary significantly from any aggregate returns set forth in this presentation. Forecasts and projections rely on a number of economic and financial variables and are inherently speculative. Such forecasts and projections are based on complex calculations and formulas that contain substantial subjectivity. There can be no assurance that market conditions will perform according to any forecast or that any fund or account will achieve its objectives. Investors are cautioned not to place undue reliance on any forward-looking statements. Clarion Partners does not assume any obligation to update any forward-looking statements as a result of new information. Such statements are believed to be accurate as of the date provided but are not guaranteed and are subject to change without notice. This material does not constitute investment advice and should not be viewed as a current or past recommendation to buy or sell any securities or to adopt any investment strategy. Clarion Partners does not provide tax or legal advice. Tax-related statements are based on Clarion Partners’ understanding of the tax laws. Investors must seek the advice of their independent legal and tax counsel before investing. Certain information contained in this material may have been obtained or derived from independent sources believed to be reliable. Clarion Partners cannot guarantee the accuracy or completeness of such information and has not reviewed the assumptions on which such information is based.

Target Return Disclosure. Target returns may be included herein and, if so, are based on historical performance of the real estate market, current marketconditions, the amount of risk to be assumed by the account or fund, as applicable, and certain subjective assumptions relating to the respective investment strategy. Fund-level target returns assume investment through a complete real estate investment cycle. Target returns are presented to establish a benchmark for future evaluation of fund performance, to provide a measure to assist in assessing the anticipated risk and reward characteristics of an investment in the strategy and to facilitate comparisons with other investments. In general, the higher a target return is for an investment, the greater the amount of risk that is associated with that investment. The target is not intended to provide an investor with a prediction of performance and no investment should be made as a result of the target. Any target data or other forecasts contained herein are based upon estimates and assumptions about circumstances and events that may not occur or may change over time. For instance, the target may assume a certain rate of increase in the value of real estate over a particular period of time. If any of the assumptions used do not prove to be true, actual results may be lower than targeted returns. The target investment returns are subject to change at any time and are current as of the date hereof only. In any given year, there may be significant variation from these targets, and Clarion Partners makes no guarantee that an investment will be able to achieve the target investment returns in the short term or the long term (i.e., over a complete real estate investment cycle). Targets are subjective and should not be construed as providing any assurance as to the results that may be realized.

Target Internal Rates of Return. “Target Gross IRRs” are returns calculated gross of fund-level management fees, incentive allocations and expenses, which in the aggregate will be substantial and will have the effect of reducing returns. “Target Net IRRs” are returns calculated net of fund-level management fees, incentive allocations and expenses, unless otherwise disclosed. Target IRRs are based solely on internal cash flow projections and estimates of current market value and do not reflect opinions of value from third party appraisals.

Aggregated Property-Level Data. Aggregated (or “Blended”) property-level return targets, capitalization rates and internal rates of return (IRR), as applicable, are based, in part, on the value of the properties held in the portfolio. Values are assigned to each property using a consistent methodology that is applied in accordance with the written valuation policies. Aggregated asset-level return targets, capitalization rates and IRRs may incorporate property values assigned to properties on different dates within the prior year. Such property values are estimates only. This data is provided for illustrative purposes only and should not be viewed as a guarantee of current property value, capitalization rate or internal rate of return, as applicable. Neither individual nor aggregated cap rates represent a return or distribution from the portfolio itself.

Important Legal Information (cont.)

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Private Fund Disclosure. The information provided herein with respect to one or more funds (each, a “Fund”), as applicable, has been provided for informational purposes only and does not constitute an offer to sell, or solicitation of offers to buy or convert, securities in any existing or to-be-formed issuer. Investment in a Fund can be made only pursuant to the subscription agreement, offering memorandum and related documents and after careful consideration of the risk factors set forth therein. The information provided with respect to any the Fund is qualified in its entirety by reference to, and will be superseded by, such documents.

An investment in a Fund is speculative and involves a high degree of risk, potentially including risks related to the use of leverage. The performance of the Fund and its assets may be volatile. An investor may lose all or a significant amount of its investment in the Fund. Investment in the Fund is suitable only for sophisticated investors and requires the financial ability and willingness to accept the high risk and lack of liquidity inherent in the investment.

There can be no assurance that unrealized investments will be realized at the current valuations. There can be no guarantee that any Fund will be successful in implementing its investment strategy or that target returns will be realized. Gross returns are calculated prior to deduction of all fund-level fees, including asset management fees and incentive distributions, and investor-level taxes, all of which will reduce returns to investors.

Value Definitions, As Applicable. Gross Asset Value (“GAV”) is the Firm’s consolidated wholly owned total assets and proportionate share of joint venture total assets. Gross Real Estate (“GRE”) is the Firm’s consolidated wholly owned real estate assets and proportionate share of joint venture real estate assets. In contrast to GAV, GRE excludes cash and other assets. For Periods on or after 12/31/2013, Assets under Management (“AuM”) is Gross Asset Value (“GAV”). Prior to that date, AuM is Gross Real Estate Value (“GRE”).

Important Disclosure Relating to Clarion Partners Property Performance and Comparisons to the NCREIF Property Index

Inception date is 10/1/1984. Clarion Partners’ performance is calculated by blending the performance of assets from all client portfolios that meet the criteria for inclusion in the NCREIF Property Index (“NPI”). If the performance shown is for a subset of accounts of Clarion Partners, then all properties that would meet the criteria for inclusion in such subset in the NPI are included. Except with respect to subsets (e.g., industrial properties), qualifying properties include all Clarion Partners client-owned U.S. office, industrial, retail, residential and hospitality operating properties accounted for at market value, pursuant to the current valuation policy applicable to the respective client. New qualifying properties are included in the first full quarter in which they reach a minimum of 60% occupancy or, for newly acquired renovation or development assets, the earlier of 60% occupancy or 1 year after completion of the renovation or development. Once a property is included by Clarion Partners, it remains in the track record until it is disposed or converted to a property type which does not meet NPI inclusion criteria. With the exception of subsets outside of the hospitality sector, Clarion Partners includes the historical performance of 2 hotel investments managed by a Clarion Partners employee between 2002 and 2005 while working at Sarofim Realty Advisors and transferred to Clarion Partners in 2006 and 2007. The performance of Clarion Partners is hypothetical in that it does not track the aggregate performance of all assets held in Clarion Partners client accounts or of any individual account. No client has received the performance shown. Except as otherwise noted, Clarion Partners performance is shown unleveraged and gross of taxes, investment management fees, incentive fees, and, any fund expenses, if applicable. If such fees and expenses were deducted from the assets shown, performance would be substantially lower.

The NPI is a primary benchmark for the commercial real estate industry calculated and maintained by the National Council of Real Estate Investment Fiduciaries. The NPI is a total rate of return measure of the investment performance of a large pool of individual commercial properties that have been acquired in the private market for investment purposes. The NPI includes only U.S. office, industrial, retail, residential and hospitality operating properties owned in whole or in part by non-taxable institutional investors and accounted for at market value. The NPI is gross of investment management fees and is unleveraged. Information regarding NPI’s methodology is available at http://www.reportingstandards.info/. Substantial differences exist between the methodology for calculating the NPI and the Clarion Partners performance data. Performance was achieved under certain economic conditions that may not be repeated. Past performance is not a guarantee of future results.

Effect of Fees on Gross Performance

If management and other fees were included, performance would be lower. Advisory fees are disclosed in each fund’s private placement memorandum, in each investment advisory agreement for separate accounts, and in Part 2A of Clarion Partners’ Form ADV, Part 2A.

Important Legal Information (cont.)

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Additional Index Definitions

The NCREIF Total Return Property Index (NPI). The NPI quarterly, annual and annualized total returns consist of three components of return – income, capital and total. Total Return is computed by adding the Income Return and the Capital Value Return.

NPI Market Value Index (MVI). The NPI MVI is simply an equal-weighted average of quarterly changes in reported market value for the properties that are not undergoing a major capital expansion. MVI is designed to reflect how property values are changing over time and be an alternative to the NCREIF capital index.

NCREIF Appreciation Index. The NCREIF Appreciation Index is a quarterly, unleveraged composite appreciation return for private commercial real estate properties held for investment purposes only.

NCREIF Industrial Sub-Index. The NCREIF Industrial Sub-Index is a quarterly, unleveraged composite total return for private industrial real estate properties held for investment purposes only.

Bloomberg Barclays US Aggregate Bond Index. The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS (agency and non-agency).

EURO STOXX 600. The STOXX Europe 600 or STOXX 600 is a stock index of European stocks designed by STOXX Ltd. This index has a fixed number of 600 components, among them large companies capitalized among 18 European countries, covering approximately 90% of the free-float market capitalization of the European stock market (not limited to the Eurozone).

FTSE NAREIT All Equity REIT Index. The FTSE NAREIT All Equity REITs Index is a free-float adjusted, market capitalization-weighted index of U.S. Equity REITs. Constituents of the Index include all tax-qualified REITs with more than 50 percent of total assets in qualifying real estate assets other than mortgages secured by real property.

JLL Global RE Transparency Index. The JLL Global Real Estate Transparency Index is based on a combination of quantitative market data and information gathered through a survey of the global business network of JLL and LaSalle Investment Management across 109 markets.

Morgan Stanley EAFE Int’l Stock (MSCI EAFE) Index. The MSCI EAFE Index is designed to represent the performance of large and mid-cap securities across 21 developed markets, including countries in Europe, Australasia and the Far East, excluding the U.S. and Canada.

Morgan Stanley Emerging Markets (MSCI EM) Index. The MSCI Emerging Markets Index captures large and mid-cap representation across 24 Emerging Markets (EM) countries. With 845 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country.

NAREIT Equity REIT. NAREIT Equity REIT Index is an index designed to provide the most comprehensive assessment of overall industry performance, and includes all tax-qualified real estate investment trusts (REITs) that are listed on the New York Stock Exchange, the NYSE AMEX Equities or the NASDAQ National Market List.

The FTSE NAREIT Equity REITs index contains all Equity REITs not designated as Timber REITs or Infrastructure REITs.

Investment Property Databank (IPD) Index. The IPD Index is a composite of investment returns on both a historical and current basis of its participating members, who must qualify as being open-end, core, diversified funds pursuing a core investment strategy and includes all investments owned by them including real estate, cash and other investments (mezzanine loans receivable, notes receivable, forward commitments, etc.). The IPD Index is capitalization-weighted and is reported gross of fees. Measurement is time-weighted. Unless otherwise noted, IPD Index returns are presented without leverage and before the deduction of portfolio level management fees and do not reflect the results of any actual investment portfolio. The index’s history is unfrozen; therefore, any reconstitution would result in a revision to the index’s historical data. For comparative purposes, IPD calculates LPF returns using the same methodology as the IPD Index. Further information is available online at http://www.ipd.com.

S&P 500 - Standard and Poor’s 500 Index. The S&P 500 Index is a capitalization-weighted index of 500 large U.S. stocks. The index is designed to capture the returns of many different sectors of the U.S. economy. The total return calculation includes the price-plus-gross cash dividend return.

imperial county employees retirement 21 august 2019

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