Table of Contents 1 Overview 3 1.1 Sector Allocations 3 1.2 Market Allocations 4 2 Commercial Real Estate Fundamentals 4 2.1 Economic and Structural Demand Drivers 5 2.2 Real Estate Supply 6 3 Commercial Real Estate Capital Markets 8 3.1 Public and Private Equity 8 3.2 Public and Private Debt 9 3.3 Commercial Real Estate Total Returns 10 4 Industrial Sector 11 4.1 Current Conditions 11 4.2 Outlook and Strategy 12 5 Office Sector 14 5.1 Current Conditions 14 5,2 Outlook and Strategy 15 6 Retail Sector 16 6,1 Current Conditions 16 6.2 Outlook and Strategy 18 7 Apartment Sector 19 7.1 Current Conditions 19 7.2 Outlook and Strategy 20 8 Appendix 1: U.S. House Portfolio 22 9 Appendix 2: Real Estate Target Markets 23 Important Information 24 Research and Strategy Team 25 2 U.S. Real Estate Strategic Outlook I September 2016 CONFIDENTIAL - PURSUANT TO FED. R. GRIM. P. 6(e) DB-SDNY-0092288 CONFIDENTIAL SDNY_GM_00238472 EFTA01388627