A PRESENTATION OF
CUSHMAN & WAKEFIELD CAPITAL
MARKETS
MARCH 5, 2013
CAPITAL MARKETS
GLOBAL MARKET
CUSHMAN & WAKEFIELD
1
CAPITAL MARKETS
THE GLOBAL CAPITAL MARKETS
GLOBAL VOLUME 2007-2012
$600.0
Asia Pac
$509.3
$321.1
$431.6
$206.2
$279.2
$374.0
$162.5
$142.9
$196.0
$225.6
$58.6
$118.8
$156.5
$164.6
$200.0
$232.0
$266.4
$300.0
$198.5
$235.0
$368.0
$402.9
$500.0
$400.0
Americas
$541.0
EMEA
'07
'08
'09
'10
'11
'12
'13F
$1,210.2 Bil.
$553.1 Bil.
$402.9 Bil.
$673.4 Bil.
$807.5 Bil.
$906.8 Bil.
$ 1,036.6 Bil.
$100.0
$-
Source: RCA, C&W Capital Markets
CUSHMAN & WAKEFIELD
2
CAPITAL MARKETS
THE GLOBAL CAPITAL MARKETS
INVESTMENT SALES VOLUME RELATIVE TO PRIOR PEAK
2007
2008
2009
2010
2011
2012
2013F
%
DROP
PEAK
2010
2011
2012
TO
VOLUME VOLUME VOLUME
TROUG AS % OF AS % OF AS % OF
H
PEAK
PEAK
PEAK
UNITED
STATES
$553.19 $166.20
$56.73
$130.05
$207.04 $250.40
$287.96
-90%
24%
37%
45%
EUROPE
$400.95 $227.22
$116.11
$ 67.48
$191.10 $194.10
$203.81
-71%
42%
48%
48%*
ASIA
PACIFIC
$271.66 $168.38
$233.58
$378.22
$373.79 $431.60
$509.29
-38%
139%
138%
159%
$1,225.80 $561.81
$406.43
$675.76
$771.92 $876.10 $1,001.05
-67%
55%
63%
71%
TOTAL
OTHER
AMERICAS
$38.85
$27.25
$38.85
$27.69
$28.80
$28.80
$33.12
0%
71%
74%
74%
$7.73
$14.10
$ 7.73
$4.11
$7.39
$1.90
$2.38
-47%
53%
96%
25%
$46.58
$41.35
$46.58
$31.80
$36.03
$30.70
$35.50
0%
68%
77%
66%
$1,272.38 $603.16
$453.01
$707.56
$807.95
$906.8 $1,036.55
-64%
56%
63%
71%
ME &
AFRICA
TOTAL
GRAND
TOTAL
Peak
Trough
*Without currency impact, 2012 volume return to prior peak would be closer to 51%.
Source: RCA, C&W Capital Markets
US volume is forecasted
to return to 52% of prior
peak volume in 2013.
Investment in the
European property
markets is forecasted to
grow 5% in 2013 as the
Euro crisis is worked
out.
Asian investment
markets will remain
above prior peak levels
and grow 18% in 2013.
Overall the market
should be at 71% of
prior peak volume by
the end of 2013.
CUSHMAN & WAKEFIELD
3
CAPITAL MARKETS
THE GLOBAL CAPITAL MARKETS
THE TOP 10 INVESTMENT MARKETS BY COUNTRY
THROUGH END OF PERIOD
2011
2012
COMMERCIAL PROPERTY INVESTMENT* US$ BN
PA
300
250
Sales volume
increased 21%
in the US,
leading major
market growth
200
150
100
50
0
China United United Germany Japan
States Kingdom
Hong Australia France CanadaSingapore
Kong
*Based on closed transactions $10M+.
Source: RCA, C&W Capital Markets
CUSHMAN & WAKEFIELD
4
CAPITAL MARKETS
THE GLOBAL CAPITAL MARKETS
2012 CROSS BORDER ACTIVITY CAPITAL SOURCES
EMEA
Domestic
57%
Americas
Intra-region
3%
Americas
Domestic
92%
EMEA
Intra-region
24%
APAC
Intraregion
9%
Capital Sources:
 Americas
 EMEA
 APAC
C&W Global Offices
APAC is 1% of Americas
Americas is 1% of APAC
CAPITAL SOURCES
Region
APAC
EMEA
Americas
Domestic
Total
Source: RCA, C&W Capital Markets
APAC
Domestic
89%
2011
Regional
% of Total
Inflow
Activity
$43.7B
6%
$71.8B
9%
$18.7B
2%
$628.0B
83%
$762.2B
100%
*Based on closed transactions $10M+.
2012
Regional
% of Total
Inflow
Activity
$40.3B
5%
$72.1B
9%
$20.7B
3%
$666.1B
83%
$799.2B
100%
CUSHMAN & WAKEFIELD
5
CAPITAL MARKETS
US MARKET
CUSHMAN & WAKEFIELD
6
CAPITAL MARKETS
ECONOMIC OVERVIEW
U.S. GROWTH IN GROSS DOMESTIC PRODUCT, 1980 – 2015
FORECAST
10%
ANNUALIZED QUARTERLY CHANGE
8%
6%
4%
2%
Fourth quarter 2012 GDP
fell to -0.14%, down from
the third quarter reading of
3.1%. The fourth quarter
drop was attributed mainly
to a drop in defense
spending as fiscal issues
continued to be worked out.
0%
-2%
-4%
-6%
-8%
Source: Moody’s Analytics, Cushman & Wakefield Capital Markets
2014
2012
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
-10%
GDP grew at an annual
rate of 2.2% in 2012 and is
expected to remain in the
2.0% range in 2013.
Employers will continue to
cautiously add jobs,
keeping an eye on the
fiscal negotiations, as well
as the European sovereign
debt issues.
CUSHMAN & WAKEFIELD
7
CAPITAL MARKETS
ECONOMIC RECOVERY
2013 is forecasted to be
‘less uncertain’ than 2012.
RECOVERY IS SPREADING
IN RECESSION
AT RISK
2012 US GDP: 2.2%
RECOVERING
EXPANDING
MIDWEST
GRP: 2.0%
EAST
GRP: 2.1%
WEST
GRP: 3.1%
SOUTH
GRP: 2.8%
Energy-focused states
continue to expand.
In the Northeast, fiscal
issues and the effects of
Hurricane Sandy have
caused the states' outlook
to be adjusted downward.
However, rebuilding is
expected to give NJ a
boost once it gets
underway.
Areas are labeled according to where their local
economies are in the business cycle, based on
indicators of employment, residential
construction, house prices and manufacturing
production.
Source: Moody’s Analytics, Cushman & Wakefield Capital Markets
CUSHMAN & WAKEFIELD
8
OFFICE SPACE – USING EMPLOYMENT RECOVERY TO PRIOR
PEAK
TIMING OF OFFICE SPACE – USING EMPLOYMENT RECOVERY TO PRIOR
PEAK:
INTRAMETRO SPREAD BY KEY COUNTIES
METRO
ATLANTA
BOSTON
CHICAGO
DALLAS-FORT WORTH
HOUSTON
INLAND EMPIRE
LOS ANGELES
MIAMI
NEW YORK
PHILADELPHIA
SAN FRANCISCO
BAY AREA
WASHINGTON, D.C.
COUNTY
GWINNETT (GA)
FULTON (GA)
DEKALB (GA)
MIDDLESEX (MA)
SUFFOLK (MA)
NORFOLK (MA)
LAKE (IL)
COOK (IL)
COLLIN (TX)
TARRANT (TX)
DALLAS (TX)
HOUSTON
RIVERSIDE (CA)
SAN BERNARDINO (CA)
LOS ANGELES (CA)
ORANGE (CA)
MIAMI-DADE (FL)
BROWARD (FL)
PALM BEACH (FL)
HUDSON (NJ)
SUFFOLK (NY)
NEW YORK (NY)
NASSAU (NY)
CHESTER (PA)
MONTGOMERY (PA)
PHILADELPHIA (PA)
SAN MATEO (CA)
SAN FRANCISCO (CA)
SANTA CLARA (CA)
ALAMEDA (CA)
DISTRICT OF COLUMBIA (DC)
ARLINGTON (VA)
FAIRFAX (VA)
MONTGOMERY (MD)
Source: Moody’s Analytics, Cushman & Wakefield Capital Markets
NEW PEAK
CURRENT
2013
2016
CURRENT
2015
2020
2016
2016
CURRENT
CURRENT
CURRENT
CURRENT
2016
2015
2016
2015
2016
2017
2017
CURRENT
CURRENT
CURRENT
2016
2013
2014
2015
2013
2014
2013
2015
CURRENT
CURRENT
CURRENT
CURRENT
CAPITAL MARKETS
National employment
grew 1.7% in 2012.
The forecast calls for
a restrained
employment growth in
2013 as employers
cautiously continue
hiring.
One-third of major
markets have returned
to prior peak
employment levels. In
most markets, jobs
should reach prior
peak levels in 20132014 barring a
geopolitical contagion.
CUSHMAN & WAKEFIELD
9
CAPITAL MARKETS
REAL ESTATE FUNDAMENTALS
Vacancy rates have
dropped from their
2009 highs across all
property types, with
Multifamily below prerecession levels.
VACANCY RATES, ALL PROPERTIES
Office-CBD
Retail
Office-Non-CBD
Industrial
Multifamily
Hotel
FORECAST
50%
45%
40%
35%
The two-year forecast
calls for further drops
in vacancy rates
across all asset types.
30%
25%
20%
15%
10%
5%
Source: C&W Research, Smith Travel Research, Reis, C&W Capital Markets
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
0%
CUSHMAN & WAKEFIELD
10
CAPITAL MARKETS
REAL ESTATE FUNDAMENTALS
ASKING RENTS YEAR-OVER-YEAR PERCENT CHANGE, ALL PROPERTIES
Office-CBD
Retail
Office-Non-CBD
Industrial
Multifamily
Hotel*
FORECAST
40%
30%
20%
10%
Retail has trailed the
property market
recovery, however, at
this point in the cycle
all the property
sectors have
bottomed and show
improving
fundamentals.
0%
-10%
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
-20%
*Change in RevPAR
Source: C&W Research, Smith Travel Research, Reis, C&W Capital Markets
CUSHMAN & WAKEFIELD
11
CAPITAL MARKETS
THE CAPITAL MARKETS
US INVESTMENT SALES VOLUME, 2001-2012
IN $BILLIONS
Individual Asset Sales
2013 Forecast
Portfolio (Non-privatization)
$600
$500
$400
Down
89%
From
Peak
$300
Up
126%
YOY
$200
Up
63%
YOY
Up
Up 15%
21% YOY
YOY
$100
Closed deals $5M+, including partial interest and entity level sales. Not including dev sites.
Source: RCA, C&W Capital Markets
2013F
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
$0
2012 sales volume in
the US totaled
$250.4B, up 21% from
2011 levels. 2013
sales volume is
forecasted to be up
15%, approaching
2005 levels.
Top six office markets Manhattan, Boston,
Chicago, Washington
DC, San Francisco and
Los Angeles accounted for
approximately 46% of
total office sales
volume.
CUSHMAN & WAKEFIELD
12
CAPITAL MARKETS
ASSET CLASS RETURNS
HISTORICAL COMMERCIAL REAL ESTATE RETURNS VERSUS ALTERNATE RETURNS,
CALENDAR YEAR RETURNS
CRE has
outperformed
1997
1998
1999
S&P
33.4
S&P
28.8
S&P
21.1
2000
2001
2002
2004
2005
2006
2007
2008
2009
2010
S&P
28.7
T-BILL NCREIF BOND NAREIT NCREIF
4.7
12.3
7.2
3.8
9.0
NCREIF NAREIT NCREIF BOND
14.5
12.2
16.6
8.7
T-BILL
1.8
S&P
26.5
S&P
15.1
S&P
10.9
S&P 4.9
S&P
15.8
BOND
2.4
BOND
3.5
T-BILL
3.0
T-BILL
4.6
T-BILL NAREIT NAREIT S&P - S&P - S&P - T-BILL
5.2
-17.5
-4.6
9.2
11.9
22.1
1.1
T-BILL
1.2
BOND
2.7
BOND NAREIT NAREIT NCREIF T-BILL
3.5
-15.7
-37.7
-16.9
0.1
BOND
9.2
2011
2012
NAREIT NAREIT BOND NAREIT NAREIT NCREIF NAREIT NCREIF BOND NAREIT NAREIT NCREIF NAREIT
26.4
13.9
11.5
37.1
31.6
20.1
35.1
15.9
12.4
28.0
28.0
14.3
19.7
NAREIT NCREIF NCREIF BOND NCREIF NCREIF
20.3
16.3
11.4
13.2
7.3
6.8
NCREIF BOND
13.9
7.0
2003
T-BILL BOND - T-BILL
5.1
2.2
6.0
T-BILL
4.1
T-BILL
1.7
S&P 5.5
BOND
9.0
S&P
16.0
NCREIF T-BILL NCREIF NAREIT NCREIF
-6.5
0.2
13.1
8.3
10.5
other asset
classes in 11 of
the last 16
years.
T-BILL S&P - BOND - BOND
BOND
S&P 2.1
4.7
37.0
2.2
5.5
2.0
T-BILL
0.1
T-BILL
0.1
Barclays Government Bond and 90 Day T-Bill.
Source: NCREIF, Cushman & Wakefield Capital Markets
CUSHMAN & WAKEFIELD
13
CAPITAL MARKETS
US EQUITY MARKETS
MAJOR MARKETS PEAK-TO-TROUGH REAL ESTATE RECOVERIES
2,000
S&P 500 DAILY CLOSE
1,200
PEA
K
PEA
K
TROUGH 38%
FROM PEAK
800
400
CURRENT -17%
FROM PEAK
TROUGH 56%
FROM PEAK
15
0
10
0
50
0
1/3/07
3/3/07
5/3/07
7/3/07
9/3/07
11/3/07
1/3/08
3/3/08
5/3/08
7/3/08
9/3/08
11/3/08
1/3/09
3/3/09
5/3/09
7/3/09
9/3/09
11/3/09
1/3/10
3/3/10
5/3/10
7/3/10
9/3/10
11/3/10
1/3/11
3/3/11
5/3/11
7/3/11
9/3/11
11/3/11
1/3/12
3/3/12
5/3/12
7/3/12
9/3/12
11/3/12
1/3/13
2/12/13
0
Source: NCREIF, Moody's Analytics, Cushman & Wakefield Capital Markets
APPRECIATION
1,600
25
CURRENT - 0
3%
FROM PEAK 20
0
INDEX
S&P 500
NCREIF
Although publicly
traded stocks fell
at a faster rate,
they have
recovered closer
to their peak
levels than CRE.
Currently, the
CRE recovery is
17% below peak
values. S&P 500
is within peak
levels as the
stock markets
have responded
favorably to
recent
employment
numbers.
CUSHMAN & WAKEFIELD
14
CAPITAL MARKETS
THE CAPITAL MARKETS
U.S. CAPITALIZATION RATES BY CORE PROPERTY TYPE
ANNUAL AVERAGE BY YEAR, 2004-2012
2012
2011
2010
2009
2008
2007
2006
2005
2004
Office
In 2012 cap rates
compressed further for
top assets in top
markets due to low
interest rate levels.
Industrial cap rates
are the highest among
the property types,
leaving room for
further compression in
2013.
Apartment
Retail
Hotel
Industrial
2%
3%
4%
Source: RCA, C&W Capital Markets
5%
6%
7%
8%
9%
10%
11%
CUSHMAN & WAKEFIELD
15
CAPITAL MARKETS
THE CAPITAL MARKETS
EQUITY REIT DIVIDEND YIELD VS. 10-YEAR CONSTANT MATURITY TREASURY
YIELD
12%
FTSE NAREIT Equity REITs Dividend Yield
10%
8%
Dividend yield spreads
are currently 179bp,
75bp higher than the
10 year average.
Dividend yields are
trending downwards
and, at a current
average of 3.5%, they
enable accretive
acquisitions.
6%
4%
2%
HISTORICAL OFFERING OF SECURITIES, 2009-2012
Offering T ype
2012
2011
2010
2009
Secondary Equity
$45.8B
$35.2B
$26.3B
$21.2B
Unsecured Debt
$25.7B
$13.8B
$19.2B
$10.4B
$1.8B
$2.3B
$2.0B
$3.0B
$73.3B
$51.3B
$47.5B
$34.6B
IPOs
T ot al
Source: NAREIT, Moody’s Analytics, C&W
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
0%
Equity REIT market
capitalization = $541
billion.
CUSHMAN & WAKEFIELD
16
CAPITAL MARKETS
THE CAPITAL MARKETS
MOODY'S/RCA COMMERCIAL PROPERTY PRICE INDEX
National
Major Markets
Non-Major Markets
250
200
The investor flight to
quality in gateway cities
has led to prices in major
markets recovering more
than twice as quickly as
those in non-major
markets.
150
100
50
The “Major Markets” are the six gateway metropolitan areas:
Boston, Chicago, Los Angeles, New York, San Francisco and Washington, D.C.
Source: RCA, C&W Capital Markets
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
0
Secondary markets
made significant gains in
2012 and ended the year
28% below peak, but
stilled lagged major
markets which ended
2012 just 9% below peak
levels. CBD office had
the highest price
increase at 19.1%,
followed by multifamily at
11.2%.
CUSHMAN & WAKEFIELD
17
COMMERCIAL REAL ESTATE DEBT MARKETS
COMMERCIAL/MULTIFAMILY MORTGAGE BANKERS ORIGINATIONS INDEX BY
INVESTOR GROUP
ORIGINATION VOLUME INDEX
(2001 AVG QTR = 100)
700
Conduits
Commercial Banks
600
Life Insurance Cos
Fannie/Freddie Mac
500
Total
400
300
CAPITAL MARKETS
Commercial/multifamil
y originations in 2012
were up 24% YOY.
The year ended on a
high note, propelled
by a surge in the
fourth quarter, the
strongest quarter
since the peak of the
market in 2007.
200
100
2006Q1
2006Q2
2006Q3
2006Q4
2007Q1
2007Q2
2007Q3
2007Q4
2008Q1
2008Q2
2008Q3
2008Q4
2009Q1
2009Q2
2009Q3
2009Q4
2010Q1
2010Q2
2010Q3
2010Q4
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
0
Source: MBA, C&W Capital Markets
The increase in
originations was led
by commercial banks
which continued to
increase lending with
a 51% YOY increase
and conduits which
had a 45% YOY
increase.
CUSHMAN & WAKEFIELD
18
CAPITAL MARKETS
COMMERCIAL REAL ESTATE MATURITIES
As the delevering
process continues,
investors remain
watchful of
commercial real estate
maturities which are
set to peak this year.
COMMERCIAL REAL ESTATE MATURITIES
BY INVESTOR TYPE, IN $BILLIONS
Banks
CMBS
Life Cos
Other
400
350
300
250
200
150
100
50
Source: Trepp, C&W Capital Markets
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
0
CUSHMAN & WAKEFIELD
19
CAPITAL MARKETS
COMMERCIAL REAL ESTATE MATURITIES
CMBS maturities are
set to peak between
2016 and 2017 as the
ten year legacy loans
mature for 2006-2007
issuance.
TOTAL CMBS MATURITIES
IN $BILLIONS
160
140
120
This may present a
financing “gap” unless
new CMBS issuance
and/or Bank/Life
companies step up
lending.
100
80
60
40
20
Source: Trepp, C&W Capital Markets
2020
2019
2018
2017
2016
2015
2014
2013
0
CUSHMAN & WAKEFIELD
20
CAPITAL MARKETS
OFFICE MARKET
CUSHMAN & WAKEFIELD
21
OFFICE DRIVERS
U.S. CORPORATE PROFITS
2,400
2,200
CAPITAL MARKETS
Corporate profits have
surpassed their prior
peak levels and
layoffs have abated.
BILLIONS OF DOLLARS
2,000
However, economic
uncertainty has
delayed hiring.
1,800
1,600
1,400
1,200
1,000
800
600
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
400
Source: U.S. Bureau of Economic Analysis, C&W Capital Markets
CUSHMAN & WAKEFIELD
22
CAPITAL MARKETS
OFFICE DRIVERS
U.S. PRIVATE SECTOR PAYROLL EMPLOYMENT
600
Payroll Employment
Unemployment Rate
12%
10%
400
200
6%
8.8 Mil.
Jobs
Lost
4%
0
2%
6.1 Mil.
Jobs
Gained
(200)
0%
-2%
(400)
-4%
12/07-2/10 -8.8 Mil.
2/10-1/13 +6.1 Mil.
(600)
(800)
(1,000)
1996
-6%
2009: -5.0 Mil.
2010: +1.2 Mil.
2011: +2.4 Mil.
2012: +2.2 Mil.
-8%
UNEMPLOYMENT RATE
THOUSANDS OF PERSONS
8%
Private payroll
employment has
recovered to 69% of
its peak 2007 levels.
2.7 million jobs need
to be added in order
to return to prior peak
levels.
The current national
unemployment rate
of 7.7% has dropped
190bp from its 2009
high.
-10%
-12%
1998
2000
Source: Trepp, C&W Capital Markets
2002
2004
2006
2008
2010
2012
CUSHMAN & WAKEFIELD
23
CAPITAL MARKETS
OFFICE DRIVERS
EMPLOYMENT CHANGE SINCE FEBRUARY 2010 BY INDUSTRY SECTOR
1,800
1665
1595
1,400
1140
982
1,000
645
490
600
346
113
200
-43
-200
Source: Moody’s Analytics, C&W Capital Markets
Government
Information
Financial
Transportation & Utilities
Manufacturing
Retail
Leisure & Hospitality
Education & Health
Professional Services
-600
Office-Using
THOUSANDS OF PERSONS
Total Increase: +5.1
mil.
Private Sector: +6.1
mil.
Office-Using and
Professional Services
sectors have been the
most active in adding
jobs since the
recovery began.
CUSHMAN & WAKEFIELD
24
CAPITAL MARKETS
OFFICE DRIVERS
U.S. OFFICE-USING EMPLOYMENT
30,000
12/07-10/09 -2.45 Mil
10/09-10/12 +1.7 Mil
THOUSANDS OF PERSONS
29,000
Office-Using
employment has
recovered on par with
the U.S. private sector
employment.
28,000
While the job recovery
has lagged the
economic recovery,
office-using
employment jobs are
expected to return to
prior peak levels in
2014 in most markets.
27,000
26,000
25,000
24,000
23,000
22,000
1996
1998
2000
2002
Source: Moody’s Analytics, C&W Capital Markets
2004
2006
2008
2010
2012
CUSHMAN & WAKEFIELD
25
CAPITAL MARKETS
REAL ESTATE FUNDAMENTALS
Suburban office space
absorption
accelerated in 2012 to
20.7 msf. CBD
absorption slowed to
5.2 msf.
NATIONAL OFFICE NET ABSORPTION, 1994 – 2012
IN MILLIONS OF SQUARE FEET
CBD
Non-CBD
80
60
40
20
0
-20
-40
Source: C&W Research, C&W Capital Markets
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
-60
CUSHMAN & WAKEFIELD
26
Midtown South NY
San Francisco, CA
Downtown NY
Boston, MA
Midtown NY
Portland, OR
Philadelphia, PA
Houston, TX
Denver, CO
Washington, D.C.
National U.S.
Oakland, CA
Tampa, FL
Chicago, IL
New Haven, CT
Orange County CA
Orlando, FL
Westchester County NY
Miami, FL
Baltimore, MD
San Diego, CA
Jacksonville, FL
Ft. Lauderdale, FL
Los Angeles CBD
Atlanta, GA
Phoenix, AZ
Palm Beach, FL
Fairfield County CT
Silicon Valley CA
Hartford, CT
Dallas, TX
VACANCY RATE
30%
Vacancy
30%
25%
25%
20%
20%
15%
15%
13.1%
10%
10%
5%
5%
0%
0%
Source: C&W Research, C&W Capital Markets
UC AS % OF INVENTORY
CBD OFFICE MARKET OVERVIEW - MOMENTUM
CAPITAL MARKETS
NATIONAL VACANCY RATES ACROSS CBD MARKETS
% UC
CBD markets continue
to keep construction at
bay as they work
through their available
inventory.
Construction in
Downtown NYC total
9% of inventory and
reflects the
reconstruction of the
WTC.
CUSHMAN & WAKEFIELD
27
CBD OFFICE MARKET OVERVIEW - MOMENTUM
TOP CBD OFFICE INVESTMENT MARKETS
QUARTER-OVER-QUARTER CHANGE IN ASKING RENT AND VACANCY RATE
95%
2012Q3
2012Q4
San Francisco
OCCUPANCY RATE
90%
CAPITAL MARKETS
QOQ rent and occupancy
gains were positive
across the nation.
Manhattan
Boston
U.S.
85%
Washington DC
Chicago
80%
Los Angeles
75%
$0
$10
$20
$30
$40
$50
$60
$70
$80
OVERALL ASKING RENT
TOP CBD OFFICE INVESTMENT MARKETS
YEAR-OVER-YEAR CHANGE IN ASKING RENT AND VACANCY RATE
OCCUPANCY RATE
95%
2011Q4
2012Q4
San Francisco
YOY rent and occupancy
across all CBD markets
increased as rents were
up 5% and occupancy
was up 40bp.
Manhattan
90%
U.S. Boston
Washington DC
Chicago
85%
Los Angeles
80%
75%
$0
$10
$20
$30
$40
$50
$60
OVERALL ASKING RENT
Source: C&W Research, C&W Capital Markets
$70
$80
The largest moves were
in San Francisco (double
digit rent gain), Boston
(tech markets) and
Manhattan.
CUSHMAN & WAKEFIELD
28
VACANCY RATE
Vacancy
30%
30%
25%
25%
20%
17.6%
Source: C&W Research, C&W Capital Markets
20%
15%
10%
10%
5%
5%
0%
0%
UC AS % OF TOTAL INVENTORY
15%
Silicon Valley CA
SF Peninsula CA
San Diego, CA
San Francisco, CA
Houston, TX
Contra Costa, CA
Baltimore, MD
Denver, CO
Hartford, CT
Tampa, FL
Orange County CA
New Haven, CT
Miami, FL
Ft. Lauderdale, FL
Philadelphia, PA
Portland, OR
SanFran North Bay CA
National U.S.
Boston, MA
Suburban MD
Los Angeles Metro
Long Island NY
New Jersey - Northern
Oakland, CA
Westchester County NY
Northern VA
Jacksonville, FL
Southern NH
Orlando, FL
Dallas, TX
Atlanta, GA
Palm Beach, FL
Fairfield County CT
New Jersey - Central
St. Petersburg FL
Inland Empire CA
Chicago, IL
Phoenix, AZ
NON-CBD OFFICE MARKET OVERVIEW - MOMENTUM
CAPITAL MARKETS
NATIONAL VACANCY RATES ACROSS NON-CBD MARKETS
Under Construction
Construction activity
continues to be
restrained in the NonCBD markets, but has
picked up in tech
markets, such as
Silicon Valley.
CUSHMAN & WAKEFIELD
29
NON-CBD OFFICE MARKET OVERVIEW - MOMENTUM
TOP NON-CBD OFFICE INVESTMENT MARKETS
QUARTER-OVER-QUARTER CHANGE IN ASKING RENT AND VACANCY RATE
OCCUPANCY RATE
90%
2012Q3
2012Q4
85%
Los
Orange County U.S.
Angeles
Dallas
Northern
Atlanta Boston
NJ
80%
Chicago
Phoenix
75%
Northern VA
CAPITAL MARKETS
QOQ improvements in
the suburbs illustrate
more occupancy than
rent gains, but are a
positive as the suburban
market recovery has
lagged CBD
improvements.
70%
$5
$10
$15
$20
$25
$30
$35
$40
$45
OVERALL ASKING RENT
TOP NON-CBD OFFICE INVESTMENT MARKETS
YEAR-OVER-YEAR CHANGE IN ASKING RENT AND VACANCY RATE
90%
YOY suburban markets
have picked up
momentum in both
occupancy and rent
gains, similar to CBD
conditions in 2011.
2011Q4
2012Q4
OCCUPANCY RATE
85%
Los Angeles
Orange County U.S.
Northern VA
80%
Atlanta
Boston Northern
NJ
Dallas
Chicago
75%
Phoenix
70%
$5
$10
$15
$20
$25
OVERALL ASKING RENT
Source: C&W Research, C&W Capital Markets
$30
$35
$40
$45
Dallas occupancy has
risen as Texas has
recovered to prior peak
employment levels.
CUSHMAN & WAKEFIELD
30
OFFICE CAPITAL MARKETS OVERVIEW
CLOSED SALES VOLUME1
QUARTERLY 2001-2012
$80
$70
Sales of office
properties totaled
$75.2B in 2012, up
20% YOY.
While top tier markets
attracted the most
attention in 2012,
investors chasing
higher yields turned to
prime assets in
secondary markets.
$60
$BILLIONS
CAPITAL MARKETS
$50
$40
$30
$20
$10
2001Q1
2001Q3
2002Q1
2002Q3
2003Q1
2003Q3
2004Q1
2004Q3
2005Q1
2005Q3
2006Q1
2006Q3
2007Q1
2007Q3
2008Q1
2008Q3
2009Q1
2009Q3
2010Q1
2010Q3
2011Q1
2011Q3
2012Q1
2012Q3
2012Q4
$0
1. Deal size $5M+, includes partial interest sales
Source: RCA, C&W Capital Markets
CUSHMAN & WAKEFIELD
31
OFFICE CAPITAL MARKETS OVERVIEW
AVERAGE WEIGHTED CAPITALIZATION RATE1 VS. NCREIF
QUARTERLY 2001-2012
RCA
12%
NCREIF*
10Yr Treasury
*NCREIF derived transaction based cap rates
10%
CAPITAL MARKETS
Office cap rates ended
the year 22bp lower
than 2011 levels and
remain at historically
wide spreads to
treasuries.
8%
Cap rates remain
bifurcated between
top tier markets and
“other” CBDs.
Midtown Manhattan
Class A assets are
trading at average cap
rates of 3.9%.
6%
4%
2%
2001Q1
2001Q3
2002Q1
2002Q3
2003Q1
2003Q3
2004Q1
2004Q3
2005Q1
2005Q3
2006Q1
2006Q3
2007Q1
2007Q3
2008Q1
2008Q3
2009Q1
2009Q3
2010Q1
2010Q3
2011Q1
2011Q3
2012Q1
2012Q3
2012Q4
0%
1. Does not include partial interest sales
Source: RCA, NCREIF, Moody’s Analytics, C&W
Investors remain
focused on the quality
of both product and
rent roll.
CUSHMAN & WAKEFIELD
32
CAPITAL MARKETS
OFFICE CAPITAL MARKETS OVERVIEW
SHARE OF INVESTMENT BY BUYER AND SELLER TYPES
IN BILLIONS
User/Other
Public
Net Investment
Private
BUYER
SELLER
Public entities
(REITs/REOCs) were
the largest net buyers
of office product in
2012.
2012
The most active buyers
included:
Beacon Capital
Partners
SL Green
Tishman Speyer
Boston Properties
Invesco
2011
2010
Billions
30
25
20
15
Source: RCA, C&W Capital Markets
10
5
0
5
10
15
20
25
30
Institutional entities
were the largest net
sellers in 2012.
CUSHMAN & WAKEFIELD
33
OFFICE CAPITAL MARKETS – TOP CBD SALES MARKETS
TOP CBD OFFICE INVESTMENT MARKETS
BY SALES VOLUME 2005-2012, IN $BILLIONS
2012
2011
2010
2009
2008
2007
2006
2005
Manhattan
CAPITAL MARKETS
The top 6 CBD
markets account for
two-thirds of all CBD
office transactions in
the nation.
Chicago
Washington DC
Boston
San Francisco
Los Angeles
$0
$5
$10
Source: RCA, C&W Capital Markets
$15
$20
$25
$30
$35
$40
$45
CUSHMAN & WAKEFIELD
34
OFFICE CAPITAL MARKETS – TOP CBD SALES MARKETS
TOP CBD OFFICE INVESTMENT MARKETS
WEIGHTED AVERAGE CAPITALIZATION RATE, 2005-2012
2012
2011
2010
2009
2008
2007
2006
2005
Manhattan
Chicago
CAPITAL MARKETS
CBD office cap rates
are the lowest among
asset classes with
Manhattan prime
properties
commanding the
lowest in the nation.
Cap rates are
experiencing upward
pressure as
underwritten rent
growth expectations
are eroding for 2013.
Washington DC
Boston*
San Francisco
Los Angeles*
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
*1Q cap rate used for 2012 due to low transaction volume.
Source: RCA, C&W Capital Markets
CUSHMAN & WAKEFIELD
35
OFFICE CAPITAL MARKETS – TOP CBD SALES MARKETS
CAPITAL MARKETS
TOP CBD OFFICE INVESTMENT MARKETS
AVERAGE SALES PRICE PER SQUARE FOOT
2012
2011
2010
2009
2008
2007
2006
2005
Manhattan
Chicago
Washington DC
Boston
San Francisco
Los Angeles
$0
$100
Source: RCA, C&W Capital Markets
$200
$300
$400
$500
$600
$700
$800
CUSHMAN & WAKEFIELD
36
CAPITAL MARKETS
RETAIL MARKET
CUSHMAN & WAKEFIELD
37
RETAIL MARKET OVERVIEW – DRIVERS
CAPITAL MARKETS
RETAIL SALES AND INDEX OF CONSUMER SENTIMENT
Retail Sales
U of Michigan Index of Consumer Sentiment (Feb., 1966=100)
10%
120
100
Jan 2013
73.8
80
0%
60
-5%
40
-10%
20
-15%
0
Consumer sentiment
rose modestly in January
as fiscal issues, which
dragged down
confidence at the end of
2012, were temporarily
resolved.
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
5%
INDEX OF CONSUMER SENTIMENT
FORECAS
T
ROLLING 4-QUARTER CHANGE
15%
Retail sales rose 0.1% in
January, down from
December’s 0.5%. The
QOQ decline is attributed
to the expiration of the
payroll tax holiday which
suppressed spending
growth. 2012 YOY retail
sales growth rose to
4.7%.
Source: Moody’s Analytics, C&W Capital Markets
CUSHMAN & WAKEFIELD
38
0%
San Francisco
New York
DC Metro
Long Island
Los Angeles
San Diego
Boston
Seattle
Miami
Portland
Raleigh-Durham
Philadelphia
Charlotte
National
Columbia
Minneapolis
Phoenix
Tampa-St.…
Chicago
Palm Beach
Denver
Houston
Milwaukee
St. Louis
Memphis
Las Vegas
Orlando
Dallas
Atlanta
Cleveland
Indianapolis
Columbus
VACANCY RATE
RETAIL MARKET OVERVIEW – MOMENTUM
NATIONAL VACANCY RATES ACROSS RETAIL MARKETS
18%
16%
14%
12%
Source: Reis, C&W Capital Markets
CAPITAL MARKETS
Falling cap rates are
supported by firming
fundamentals. 2012
national vacancy rates
fell 27bp YOY.
10.7%
10%
8%
6%
4%
2%
CUSHMAN & WAKEFIELD
39
RETAIL MARKET OVERVIEW – MOMENTUM
CAPITAL MARKETS
TOP RETAIL INVESTMENT MARKETS QUARTER-OVER-QUARTER
CHANGE IN EFFECTIVE RENT AND VACANCY RATE
100%
2012Q3
2012Q4
98%
DC Metro
Retail fundamentals
improved in 2012 with
positive momentum on
average across the
nation. 4Q was largely
flat QOQ, however, on a
YOY basis there gains in
both rent and occupancy.
SF Metro
OCCUPANCY RATE
96%
NY Metro
94%
LA Metro
So. Florida
92%
90%
U.S.
88%
Chicago
86%
Dallas
Atlanta
84%
$5
$10
$15
$20
$25
$30
$35
OVERALL ASKING RENT
$40
$45
TOP RETAIL INVESTMENT MARKETS YEAR-OVER-YEAR
CHANGE IN EFFECTIVE RENT AND VACANCY RATE
100%
2011Q4
2012Q4
OCCUPANCY RATE
98%
National rents increased
0.6% YOY and national
occupancy gained 30bp
YOY, signaling a turn
from negative momentum
a year ago. The positive
momentum is forecast to
continue at moderate
levels in 2013-2014.
SF Metro
96%
DC Metro
94%
NY Metro
So. Florida
LA Metro
92%
U.S.
90%
88%
Chicago
86%
Dallas
Atlanta
84%
$5
$10
$15
Source: Reis, C&W Capital Markets
$20
$25
$30
$35
OVERALL ASKING RENT
$40
$45
CUSHMAN & WAKEFIELD
40
CAPITAL MARKETS
RETAIL CAPITAL MARKETS OVERVIEW
CLOSED SALES VOLUME1
QUARTERLY 2001-2012
Strip
$30
Mall
Other
Fourth quarter retail
sales volume totaled
$16.7B, double the
prior quarter and up
57% YOY. This was
also the highest
quarterly volume since
the peak in 2007.
$25
$20
$BILLIONS
Retail sales totaled
$46.7B in 2012, up
18% YOY.
$15
$10
$5
2001Q1
2001Q3
2002Q1
2002Q3
2003Q1
2003Q3
2004Q1
2004Q3
2005Q1
2005Q3
2006Q1
2006Q3
2007Q1
2007Q3
2008Q1
2008Q3
2009Q1
2009Q3
2010Q1
2010Q3
2011Q1
2011Q3
2012Q1
2012Q3
2012Q4
$0
1. Deal size $5M+, includes partial interest sales. RCA’s published 2012 retail sales volume of $52.8B includes deals $2.5M+.
Source: RCA, C&W Capital Markets
Mall transactions
accounted for 27% of
total transaction
volume and strip
centers accounted for
40%.
CUSHMAN & WAKEFIELD
41
CAPITAL MARKETS
RETAIL CAPITAL MARKETS OVERVIEW
AVERAGE WEIGHTED CAPITALIZATION RATE1 VS. NCREIF
QUARTERLY 2001-2012
12%
RCA
NCREIF*
10Yr Treasury
*NCREIF derived transaction based cap rates
2012 weighted
average cap rates fell
90bp YOY to 6.3%.
Cap rates are at prerecession lows and
are at historically high
spreads to Treasuries.
10%
8%
6%
4%
2%
2001Q1
2001Q3
2002Q1
2002Q3
2003Q1
2003Q3
2004Q1
2004Q3
2005Q1
2005Q3
2006Q1
2006Q3
2007Q1
2007Q3
2008Q1
2008Q3
2009Q1
2009Q3
2010Q1
2010Q3
2011Q1
2011Q3
2012Q1
2012Q3
2012Q4
0%
1. Does not include partial interest sales. RCA cap rates are equally averaged, whereas, C&W cap rates are
weighted averages resulting in cap rates that more closely reflect the institutional market.
Source: RCA, NCREIF, Moody’s Analytics, C&W
CUSHMAN & WAKEFIELD
42
CAPITAL MARKETS
RETAIL CAPITAL MARKETS OVERVIEW
AVERAGE WEIGHTED CAPITALIZATION RATE1 VS. NCREIF
QUARTERLY 2001-2012
12%
Retail-ALL
Mall*
Strip
*Large movements in mall cap rates
during periods of low transaction
volume represent the quality of the
asset traded and not necessarily
market trends.
11%
10%
9%
8%
7%
6%
5%
Strip center cap rates
have compressed
200bp from the
recession highs.
Quarterly mall cap
rates are relatively
volatile on a quarterly
basis since don’t
transact as often as
strip centers.
Therefore, they are
largely affected by the
quality of the mall
trading in the quarter.
2001Q1
2001Q3
2002Q1
2002Q3
2003Q1
2003Q3
2004Q1
2004Q3
2005Q1
2005Q3
2006Q1
2006Q3
2007Q1
2007Q3
2008Q1
2008Q3
2009Q1
2009Q3
2010Q1
2010Q3
2011Q1
2011Q3
2012Q1
2012Q3
2012Q4
4%
1. Does not include partial interest sales
Source: RCA, NCREIF, Moody’s Analytics, C&W
CUSHMAN & WAKEFIELD
43
CAPITAL MARKETS
RETAIL CAPITAL MARKETS OVERVIEW
Although private buyers
edged out public buyers in
total volume, public
buyers (REITs) were the
only net buyers in 2012 by
a large margin.
SHARE OF INVESTMENT BY BUYER AND SELLER TYPES
IN BILLIONS
User/Other
Public
Private
Institutional
Foreign Net Investment
Equity Fund
SELLER
BUYER
2012
The most active buyers
included:
Simon Property Group
CPP Investment
Blackstone
DDR
2011
2010
Billions
20
15
10
Source: RCA, C&W Capital Markets
5
0
5
10
15
20
CUSHMAN & WAKEFIELD
44
RETAIL CAPITAL MARKETS OVERVIEW – TOP SALES MARKETS
The top 8 metros
accounted for 50% of
total retail sales.
TOP RETAIL INVESTMENT MARKETS
BY SALES VOLUME 2005-2012, IN $BILLIONS
2012
2011
2010
2009
2008
2007
2006
CAPITAL MARKETS
2005
LA Metro
NYC Metro
Chicago
So Fla
DC Metro
SF Metro
Atlanta
Phoenix
$0
$1
$2
Source: RCA, C&W Capital Markets
$3
$4
$5
$6
$7
$8
The NYC Metro area
posted its largest sales
year on record with a
total of $7.0B in
transaction volume,
$4.2B of which traded
in Manhattan despite
it’s hefty $2,000/sf
price tag. Manhattan
retail sales activity
spilled into the outer
boroughs as the NYC
boroughs posted a
record $1.4B in retail
sales volume.
CUSHMAN & WAKEFIELD
45
RETAIL CAPITAL MARKETS OVERVIEW – TOP SALES MARKETS
TOP RETAIL INVESTMENT MARKETS
WEIGHTED AVERAGE CAPITALIZATION RATE, 2005-2012
2012
2011
2010
2009
2008
2007
2006
2005
LA Metro
NYC Metro
CAPITAL MARKETS
2012 cap rates
compressed an
average of 127bp from
recession highs
across the top 8
markets.
Chicago
So Fla
DC Metro
SF Metro
Atlanta
Phoenix
2%
3%
4%
Source: RCA, C&W Capital Markets
5%
6%
7%
8%
9%
10%
CUSHMAN & WAKEFIELD
46
RETAIL CAPITAL MARKETS OVERVIEW – TOP SALES MARKETS
TOP RETAIL INVESTMENT MARKETS
AVERAGE SALES PRICE PER SQUARE FOOT
2012
2011
2010
2009
2008
2007
2006
2005
LA Metro
CAPITAL MARKETS
Average price per
square foot of retail
properties was up
58% among the top 8
metro markets.
NYC Metro
NYC Metro’s high
price psf is a reflection
of several high street
retail transactions that
traded at $10,000+/sf
in Manhattan.
Chicago
So Fla
DC Metro
SF Metro
Atlanta
Phoenix
$50
$250
Source: RCA, C&W Capital Markets
$450
$650
$850
$1,050
$1,250
CUSHMAN & WAKEFIELD
47
CAPITAL MARKETS
ISSUES ON THE RADAR SCREEN
M-COMMERCE RETAIL SALES 2012 2017
E-COMMERCE SALES 2012 - 2017
$360
$35
$30
2014
2015
2016
2017
$5
$31
$344
2013
$10
$27
$338
2012
$180
$15
$22
$314
$200
$283
$220
$240
$240
$17
$260
$20
$12
$280
$25
$8
$300
MOBILE COMMERCE SALES
$320
$226
E-COMMERCE SALES (IN
$340
2012
2013
2014
2015
2016
2017
$0
Source: InternetRetailer.com, Forrester Inc.
Source: InternetRetailer.com, Forrester Inc.
– In 2012, U.S. e-commerce sales amounted to $225.5 billion, up by 15.8 percent from 2011, with total retail sales
increasing 5.0 percent year-over-year, according to the U.S. Census Bureau.
– The Census Bureau survey also showed that e-commerce retail sales reached $59.5 billion in fourth quarter 2012 alone.
– The growth in online retail sales is three times faster than overall retail sales growth. Retailers that do not have significant
online sales are missing a major opportunity for growth.
– U.S. consumers made $8.0 billion worth of retail purchases via smartphone in 2012, accounting for 3.0 percent of total ecommerce sales, according to Forrester Research Inc.
– Forrester Research Inc. also predicts, smartphone based retail sales are forecast to hit $12.0 billion, 5.0 percent of total
e-commerce in 2013; $17.0 billion, 6.0 percent, in 2014; $22.0 billion, 7.0 percent, in 2015; $27.0 billion, 8.0 percent, in
2016; and $31.0 billion, 9.0 percent, in 2017.
CUSHMAN & WAKEFIELD
48
CAPITAL MARKETS
KEY DIRECTIONAL RETAIL THEMES
1-YR CHANGE IN QUARTERLY REVENUE
RETAIL INDUSTRY TRENDS
NORDSTROM
AMERICAN EAGLE
ABERCROMBIE & FITCH
GAP
NEIMAN MARCUS
COACH
SAKS
MACY'S
LIMITED BRANDS
SEARS
J.C. PENNEY
KOHL'S
TARGET
WAL-MART
DOLLAR TREE
COSTCO
DOLLAR GENERAL
TJX
FAMILY DOLLAR
• Continued barbelled performance, emerging fiscal cliff softness
• Heightened Grocery Wars
• Ecommerce and ‘Millennials’ buying pattern changes
• Convergence of Millenials and retiring Baby Boomers in the
gateway cities
-6%
-2%
2%
6%
10%
14%
Sources: Cushman & Wakefield
RETAIL INVESTMENT TRENDS
• Investors beginning to move out the risk reward spectrum for yield
• Foreign Capital: Inflows from Canada, Netherlands, Germany, Malaysia, Kuwait, UK and
Israel. Over $4.7 billion of foreign capital invested in retail last 12 months.
• Cap Rates: Secondary markets spreads are beginning to tighten from historical wide spread
compared to primary markets.
CUSHMAN & WAKEFIELD
49
CAPITAL MARKETS
MULTIFAMILY MARKET
CUSHMAN & WAKEFIELD
50
MULTIFAMILY MARKET OVERVIEW – DRIVERS
CAPITAL MARKETS
HOME SALES, NEW AND EXISTING
1999-2015, QUARTERLY CHANGE IN UNITS (THOUSANDS)
FORECAST
1000
500
New home sales rose
20.0% on a YOY basis
in 2012. Prices were
up as well with median
new home prices rising
14% YOY.
Sales of existing
homes rose in
December dropped
1.0% month-overmonth but were
up12.8% from a year
ago. Median existing
home prices rose
11.5% YOY.
0
-500
-1000
Source: Moody’s Analytics, C&W Capital Markets
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
-1500
The drop in existing
home sales in
December is attributed
to the uncertainty of
the fiscal cliff at the
CUSHMAN & WAKEFIELD
51
MULTIFAMILY MARKET OVERVIEW – DRIVERS
CAPITAL MARKETS
The number of vacant
homes for sale
peaked in 2008.
Current inventory has
dropped below 2006
levels, the peak of the
housing market.
NUMBER OF VACANT HOMES FOR SALE
QUARTERLY IN THOUSANDS
2,400
2,200
2,000
1,800
Median home prices
rose 6.6% in 2012, the
first gain in pricing
since 2006.
1,600
1,400
1,200
Source: Moody’s Analytics, C&W Capital Markets
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1,000
A growing trend is
vacant households
that were foreclosed
on are being
purchased as rental
properties by
investors.
CUSHMAN & WAKEFIELD
52
MULTIFAMILY MARKET OVERVIEW – DRIVERS
COMPOSITE HOUSING AFFORDABILITY INDEX
MONTHLY INDEX SA
220
200
180
CAPITAL MARKETS
Housing continues at
its most affordable as
interest rates are still
at historically low
levels.
However, tighter
underwriting
guidelines and
uncertain home values
make purchasing
homes challenging to
most prospective
home buyers.
160
140
120
100
80
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
Source: Moody’s Analytics, C&W Capital Markets
CUSHMAN & WAKEFIELD
53
MULTIFAMILY MARKET OVERVIEW – DRIVERS
HOUSEHOLD FORMATION RATE AND CHANGE IN POPULATION AGE 20-34
YEAR-OVER-YEAR CHANGE IN THOUSANDS
4,000
Change in Population Age 20-34
Household Formations
3,000
FORECAST
5,000
CAPITAL MARKETS
As the number of
20-34 year olds (prime
renter cohort) has
increased in the last
few years, demand for
rental housing has
been robust.
2,000
Even though the pace
of increased renters
between 2014-2015
slows, the trend is still
positive.
1,000
0
-1,000
-2,000
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
-3,000
Source: Moody’s Analytics, C&W Capital Markets
CUSHMAN & WAKEFIELD
54
MULTIFAMILY MARKET OVERVIEW – HOUSING TRENDS
MULTIFAMILY PERMITS
400,000
360,000
320,000
280,000
240,000
200,000
160,000
120,000
80,000
40,000
0
CAPITAL MARKETS
SINGLE FAMILY PERMITS
Multifamily permits
declined 2.1%
month-over-month
in December after
posting a strong
9.9% increase in
November.
325,000
223,000
192,114
700,000
600,000
578,000
500,100
500,000
444,000
400,000
143,718
300,000
Single-family
permits in
December
increased 2.0%
month-over-month
and are ahead of
the last 12 months
for the previous
year.
256,479
200,000
100,000
Last 12 Mos Last 12 Mos
Previous
Year
*As of January 17, 2013
5-Year
Annual
Average
0
10-Year
Annual
Average
Last 12 Mos Last 12 Mos
Previous
Year
*As of January 17, 2013
5-Year
Annual
Average
10-Year
Annual
Average
Source: Moody’s Analytics, C&W Capital Markets
Source: Moody’s Analytics, C&W Capital Markets
CASE-SHILLER® MONTHLY HOME PRICE INDEX:
20-METRO COMPOSITE (INDEX 2000Q1=100, SA)
FORECAST
250
200
Home price index
has begun to tick
up slowly as
median home
prices increased
YOY.
150
100
50
2000Q1
2000Q4
2001Q3
2002Q2
2003Q1
2003Q4
2004Q3
2005Q2
2006Q1
2006Q4
2007Q3
2008Q2
2009Q1
2009Q4
2010Q3
2011Q2
2012Q1
2012Q4
2013Q3
2014Q2
2015Q1
2015Q4
0
Source: Moody’s Analytics, C&W Capital Markets
CUSHMAN & WAKEFIELD
55
MULTIFAMILY MARKET OVERVIEW – MOMENTUM
CAPITAL MARKETS
NATIONAL VACANCY RATES ACROSS MULTIFAMILY MARKETS
12%
30%
25%
8%
20%
6%
15%
4.6%
4%
10%
2%
5%
0%
0%
New York
Minneapolis
San Diego
San Francisco
Long Island
Portland
Westchester
Northern New Jersey
Philadelphia
Los Angeles
Orange County
Boston
Baltimore
Seattle
Chicago
Miami
Suburban Virginia
Suburban Maryland
District of Columbia
Austin
Fort Lauderdale
Denver
Nashville
Raleigh-Durham
National
Richmond
Columbus
Palm Beach
Charleston
St. Louis
Orlando
Indianapolis
Tampa-St. Petersburg
Phoenix
Dallas
Charlotte
Las Vegas
Atlanta
Houston
Memphis
VACANCY RATE
10%
Source: Reis, C&W Capital Markets
COMPLETIONS AS % OF INVENTORY
Vacancy
Completions (as % of Inventory)
The national multifamily
vacancy rate dropped
23bp QOQ and 79bp
YOY.
New York City vacancy
rate is the lowest in the
nation at 2.0%. Phoenix
had the steepest drop
in vacancy from its
2009 high, dropping
over 600bp to its
current rate of 5.8%.
Construction
completions averaged
0.27% of total national
inventory in the fourth
quarter 2012, double
the previous year’s
level.
CUSHMAN & WAKEFIELD
56
MULTIFAMILY MARKET OVERVIEW – MOMENTUM
TOP MULTIFAMILY INVESTMENT MARKETS
QUARTER-OVER-QUARTER CHANGE IN ASKING RENT AND VACANCY RATE
100.0%
OCCUPANCY RATE
97.5%
2012Q3
2012Q4
Los
Angeles
SeattleChicago
95.0% Phoenix
92.5%
90.0%
U.S.
Dallas
Atlanta
Houston
New York City
Boston
CAPITAL MARKETS
QOQ positive momentum
continued as the national
vacancy rate tightened a
further 20bp to 4.6%.
DC/VA Suburbs
87.5%
85.0%
$500
$750 $1,000 $1,250 $1,500 $1,750 $2,000 $2,250 $2,500 $2,750 $3,000
OVERALL ASKING RENT
OCCUPANCY RATE
TOP MULTIFAMILY INVESTMENT MARKETS
YEAR-OVER-YEAR CHANGE IN ASKING RENT AND VACANCY RATE
100.0%
2011Q4
Los
New York City
2012Q4
Angeles
97.5%
Boston
Seattle
Chicago
95.0% Phoenix U.S.
DC/VA Suburbs
Dallas
92.5%
Atlanta
90.0%
Houston
87.5%
85.0%
$500 $750 $1,000 $1,250 $1,500 $1,750 $2,000 $2,250 $2,500 $2,750 $3,000
OVERALL ASKING RENT
Source: Reis, C&W Capital Markets
National occupancy and
rental rates experienced
significant momentum YOY
as the demand for rental
properties increased. Core
multifamily markets of NY,
Boston, LA and D.C. are
significantly above national
rent and occupancy levels.
Secondary markets of
Phoenix, Houston and
Atlanta experienced large
movements in occupancy,
but are still below national
levels.
CUSHMAN & WAKEFIELD
57
MULTIFAMILY MARKET OVERVIEW - TRANSACTIONS
CLOSED SALES VOLUME1
QUARTERLY 2001-2012
$40
$35
$BILLIONS
$30
$25
CAPITAL MARKETS
Multifamily sales volume
totaled $78.8B in 2012, up
49% YOY. 3Q volume was the
highest since 2007 and is
partially attributed to Lehman’s
purchase of its remaining
interest in Archstone; large
portfolios which were
subsequently flipped to EQR
and AvalonBay in November.
$20
A favorable debt market in
terms of all-in pricing, LTV and
depth of providers (GSEs, Life
Cos, Banks) provided a strong
under-pinning for transaction
activity in 2011 that continued
in 2012.
$15
$10
$5
2001Q1
2001Q3
2002Q1
2002Q3
2003Q1
2003Q3
2004Q1
2004Q3
2005Q1
2005Q3
2006Q1
2006Q3
2007Q1
2007Q3
2008Q1
2008Q3
2009Q1
2009Q3
2010Q1
2010Q3
2011Q1
2011Q3
2012Q1
2012Q3
2012Q4
$0
1. Deal size $5M+, includes partial interest sales
Source: RCA, C&W Capital Markets
Due to a limited amount of
core opportunities, buyer
interest in value-add is
expected to increase.
CUSHMAN & WAKEFIELD
58
MULTIFAMILY MARKET OVERVIEW - TRANSACTIONS
AVERAGE WEIGHTED CAPITALIZATION RATE1 VS. NCREIF
QUARTERLY 2001-2012
RCA
10%
NCREIF*
10Yr Treasury
CAPITAL MARKETS
Multifamily cap rates
ticked down slightly by
10bp to 5.8%.
*NCREIF derived transaction based cap rates
9%
New strategy: build to
core
8%
7%
6%
5%
4%
3%
2%
1%
2001Q1
2001Q3
2002Q1
2002Q3
2003Q1
2003Q3
2004Q1
2004Q3
2005Q1
2005Q3
2006Q1
2006Q3
2007Q1
2007Q3
2008Q1
2008Q3
2009Q1
2009Q3
2010Q1
2010Q3
2011Q1
2011Q3
2012Q1
2012Q3
2012Q4
0%
1. Does not include partial interest sales
Source: RCA, NCREIF, Moody’s Analytics, C&W
CUSHMAN & WAKEFIELD
59
MULTIFAMILY MARKET OVERVIEW - TRANSACTIONS
SHARE OF INVESTMENT BY BUYER AND SELLER TYPES
IN BILLIONS
User/Other
Public
Private
Institutional
SELLER
Equity Fund
Foreign
Net Investment
BUYER
2012
Private buyers were the most
active buyers with 51% of
total investment volume in
2012. However, they were
also the largest net sellers.
The most active buyers
included:
Lehman Brothers Holdings
purchased their remaining
interest in Archstone,
valued at $9.4B.
2011
2010
Billions
CAPITAL MARKETS
50 45 40 35 30 25 20 15 10 5 0
Source: RCA, C&W Capital Markets
5 10 15 20 25 30 35 40 45 50
Equity Residential
purchased assets through
3Q totaling $808M and
located in the top metros of
Manhattan, DC, Los
Angeles, San Francisco and
Seattle.
CUSHMAN & WAKEFIELD
60
MULTIFAMILY CAPITAL MARKETS OVERVIEW – TOP SALES
MARKETS
TOP MULTIFAMILY INVESTMENT MARKETS
BY SALES VOLUME 2005-2012, IN $BILLIONS
2012
2011
2010
2009
2008
2007
2006
2005
Manhattan
CAPITAL MARKETS
The top ten multifamily
investment sales markets
accounted for 45%
of total sales transactions
in the first half of 2012.
Los Angeles
Manhattan deal volume
for 2012 more than
doubled to $8.8B.
Investor interest
continues as rents in the
market have risen to all
time highs.
Dallas
Atlanta
Phoenix
Houston
DC VA burbs
Seattle
Chicago
NYC Boroughs
$0
Source: RCA, C&W Capital Markets
$3
$6
$9
$12
The secondary market of
Seattle also saw its sales
volume more than
double in 2012, and the
hard hit markets of
Atlanta and Phoenix
experienced renewed
interest with increased
sales volume
of 50%+
CUSHMAN
& WAKEFIELD
YOY.
61
MULTIFAMILY CAPITAL MARKETS OVERVIEW – TOP SALES
MARKETS
TOP MULTIFAMILY INVESTMENT MARKETS
WEIGHTED AVERAGE CAPITALIZATION RATE, 2005-2012
2012
2011
2010
2009
2008
2007
2006
2005
CAPITAL MARKETS
Multifamily cap rates
continue to compress
as interest rates fall.
Manhattan
Cap rates in the prime
markets of Manhattan
and Los Angeles
continued to tighten.
This has given rise to
continued interest in
construction, which
is restrained in these
markets due to the
lack of buildable sites.
Los Angeles
Dallas
Atlanta
Phoenix
Houston
DC VA burbs
Seattle
Chicago
NYC
Boroughs
0%
2%
Source: RCA, C&W Capital Markets
4%
6%
8%
10%
12%
CUSHMAN & WAKEFIELD
62
MULTIFAMILY CAPITAL MARKETS OVERVIEW – TOP SALES
MARKETS
TOP MULTIFAMILY INVESTMENT MARKETS
AVERAGE SALES PRICE PER UNIT
2012
2011
2010
2009
2008
2007
2006
2005
Manhattan
Los Angeles
Dallas
Atlanta
Phoenix
Houston
CAPITAL MARKETS
Multifamily is most
expensive to purchase
in Manhattan where
properties traded for
$1M+ per unit in the
fourth quarter of 2012.
The vacancy rate is
below 2% and rents
are the highest in
nation, making this a
high demand market.
DC VA burbs
Seattle
Chicago
NYC Boroughs
$0
$100
Source: RCA, C&W Capital Markets
$200
$300
$400
$500
CUSHMAN & WAKEFIELD
63
CAPITAL MARKETS
INDUSTRIAL MARKET
CUSHMAN & WAKEFIELD
64
INDUSTRIAL MARKET OVERVIEW – DRIVERS
CAPITAL MARKETS
INDUSTRIAL CAPACITY AND UTILIZATION
Industrial Production
edged down 0.1% in
January after rising 0.4 %
in December. At 98.6%
of its 2007 average, total
industrial production was
up 2.1% YOY.
MONTHLY 1988-2012
140
Capacity
Utilization
100%
90%
120
110
80%
100
90
70%
80
60%
70
60
UTILIZATION PERCENT
CAPACITY INDEX (2007=100)
130
Capacity utilization for
total industry rose 30bp in
January to 79.1%.
50%
50
40%
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
40
Source: Moody’s Economy.com C&W Capital Markets
CUSHMAN & WAKEFIELD
65
INDUSTRIAL MARKET OVERVIEW – DRIVERS
U.S. EXPORTS AND IMPORTS OF GOODS
1988-2015
Exports
$2,000
Imports
Net Exports
FORECAST
EXPORTS
$1,500
$1,000
Import prices rose 0.6% in
January after three months of
declines and after a negative
2012. The rise in January was
led mostly by a 2.9% increase
in fuel prices.
Export prices were up 0.3% in
January after ending 2012 up
at 1.1% over 2011. The gains
in January are attributed to an
increase in prices of finished
capital goods and industrial
materials, while the 2012
increase was largely due to
agriculture prices in the first
half of the year.
$500
$0
$500
$1,000
IMPORTS
CAPITAL MARKETS
$1,500
$2,000
$2,500
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
$3,000
Source: Moody’s Economy.com, C&W Capital Markets
Import/export activity is
expected to accelerate and
prices firm in 2013-2014 as
the global slowdown abates.
CUSHMAN & WAKEFIELD
66
INDUSTRIAL MARKET OVERVIEW – DRIVERS
SUPPLY AND DEMAND TRENDS
The strong market demand for
high-quality class A space has led
to short supply, which in turn has
resulted in constrained market
activity and absorption in some
markets. Due to the shortage of
class A distribution facilities,
several large tenants, including
Amazon, PetSmart, Home Depot
and Unilever, are pursuing build-tosuit developments.
150
Million Square Feet
100
50
0
-50
-100
2006
2008
Absorption
CAPITAL MARKETS
2010
2012
New Construction
2014F
2016F
Additionally, with Amazon building
new one-million-square-foot
distribution centers in smaller
markets, it appears that the supply
chain for e-commerce is headed in
a new direction with more space,
closer to distribution markets.
Land constraints and the functional
obsolescence of older facilities
should spur more redevelopment
and retrofitting of existing facilities
in coming years.
Source: C&W Research
CUSHMAN & WAKEFIELD
67
WAREHOUSE MARKET OVERVIEW – MOMENTUM
CAPITAL MARKETS
NATIONAL WAREHOUSE VACANCY RATES ACROSS INDUSTRIAL MARKETS
20%
30%
Vacancy
Under Construction (as % of Inventory)
VACANCY RATE
20%
12%
8.3%
15%
8%
10%
4%
5%
0%
Greater Los Angeles
Lakeland, FL
Denver, CO
St. Petersburg, FL
Orange County, CA
Philadelphia, PA
Oakland, CA
SF Peninsula, CA
Houston, TX
Miami, FL
Inland Empire CA
Portland, OR
Tampa, FL
Palm Beach, FL
Silicon Valley, CA
National
New Jersey - Central
Suburban MD
San Diego, CA
SF North Bay CA
Ft. Lauderdale, FL
Baltimore, MD
Dallas/Ft. Worth TX
Atlanta, GA
Contra Costa, CA
Orlando, FL
PA I-81/I-78 Dist Corridor
New Jersey - Northern
Chicago, IL
Hartford, CT
Jacksonville, FL
Long Island NY
Phoenix, AZ
Northern VA
Boston, MA
0%
Source: C&W Research, C&W Capital Markets
UC AS % OF INVENTORY
25%
16%
National warehouse
vacancy rates
dropped 30bp from
the previous quarter to
8.3% and 90bp from
one year ago.
The Greater LA
market has the lowest
vacancy rate in the
nation at 4.4%,
followed by Lakeland,
FL 4.7%.
YOY, Dallas has seen
a 220bp drop in
vacancy rate, the
largest drop among
the top ten metro
areas.
CUSHMAN & WAKEFIELD
68
INDUSTRIAL MARKET OVERVIEW – MOMENTUM
TOP INDUSTRIAL INVESTMENT MARKETS YEAR-OVER-YEAR
CHANGE IN ASKING RENT AND VACANCY RATE
QOQ occupancy increased
on average 22bp across the
nation.
96%
2012Q3
2012Q4
OCCUPANCY RATE
94%
LA Metro
So Fla
U.S.
92%
Atlanta
90%
CAPITAL MARKETS
Chicago
NYC
Metro
SF Metro
San Diego
Dallas
DC Metro
88%
86%
$3
$4
$5
$6
$7
W AREHOUSE ASKING RENT
$8
$9
$10
TOP INDUSTRIAL INVESTMENT MARKETS YEAR-OVER-YEAR
CHANGE IN ASKING RENT AND VACANCY RATE
National warehouse vacancy
rates fell 90bp YOY and rents
increased 2.2%. Among the
major industrial markets, San
Francisco and San Diego
experienced the largest gains
in rent and occupancy.
96%
2011Q4
2012Q4
LA Metro
OCCUPANCY RATE
94%
U.S.
92%
Chicago
90%
Atlanta
So Fla
NYC
Metro
SF Metro
San Diego
DC Metro
Dallas
88%
86%
$3
$4
$5
$6
$7
$8
WAREHOUSE ASKING RENT
Source: C&W Research, C&W Capital Markets
$9
$10
Occupancy should remain
healthy as construction
continues to be tempered,
with only 0.5% of total
CUSHMAN & WAKEFIELD
inventory currently
under
69
INDUSTRIAL CAPITAL MARKETS OVERVIEW
CLOSED SALES VOLUME1
QUARTERLY 2001-2012
$18
$16
$14
$BILLIONS
$12
CAPITAL MARKETS
Sales of industrial
properties totaled $30.8B
in 2012, in line with 2011
levels. Net of entity level
transactions, volume was
up 31%.
Portfolio transactions have
contributed significantly
activity, accounting for 41%
total volume.
$10
$8
$6
$4
$2
2001Q1
2001Q3
2002Q1
2002Q3
2003Q1
2003Q3
2004Q1
2004Q3
2005Q1
2005Q3
2006Q1
2006Q3
2007Q1
2007Q3
2008Q1
2008Q3
2009Q1
2009Q3
2010Q1
2010Q3
2011Q1
2011Q3
2012Q1
2012Q3
2012Q4
$0
1. Deal size $5M+, includes partial interest sales
Source: RCA, C&W
Investor interest has
increased in industrial
product, where there is
favorable pricing and
fundamentals have strong
positive momentum.
Exclusive of entity level
transactions, 4Q 2012
volume was the highest
level since 2007.
CUSHMAN & WAKEFIELD
70
INDUSTRIAL CAPITAL MARKETS OVERVIEW
AVERAGE WEIGHTED CAPITALIZATION RATE2 VS. NCREIF
QUARTERLY 2001-2012
RCA
12%
NCREIF*
10Yr Treasury
*NCREIF derived transaction based cap rates
10%
CAPITAL MARKETS
At year-end 2012,
industrial cap rates
dropped 60bp YOY.
Further compression is
forecasted in secondary
markets.
Industrial cap rates have
gradually come down
from their recession highs
and are at historic high
spread to treasuries.
8%
6%
4%
2%
2001Q1
2001Q3
2002Q1
2002Q3
2003Q1
2003Q3
2004Q1
2004Q3
2005Q1
2005Q3
2006Q1
2006Q3
2007Q1
2007Q3
2008Q1
2008Q3
2009Q1
2009Q3
2010Q1
2010Q3
2011Q1
2011Q3
2012Q1
2012Q3
2012Q4
0%
2. Does not include partial interest sales
Source: RCA, NCREIF, Moody’s Economy.com, C&W
CUSHMAN & WAKEFIELD
71
CAPITAL MARKETS
INDUSTRIAL CAPITAL MARKETS OVERVIEW
SHARE OF INVESTMENT BY BUYER AND SELLER TYPES
User/Other
Public
Private
Institutional
Foreign Net Investment
Equity Fund
Top buyers in 2012
include:
BUYER
SELLER
Industrial Income Trust
2012
DRA Advisors
DivcoWest Properties
Blackstone
2011
Verde/ Brookfield
2010
Billions 14 12 10
Source: RCA, C&W
8
6
4
2
00
2
4
6
8
10 12 14
CUSHMAN & WAKEFIELD
72
INDUSTRIAL CAPITAL MARKETS OVERVIEW – TOP SALES
MARKETS
TOP INDUSTRIAL INVESTMENT MARKETS
BY SALES VOLUME 2005-2012, IN $BILLIONS
2012
2011
2010
2009
2008
2007
2006
2005
LA Metro
SF Metro
NYC Metro
Chicago
DC Metro
Atlanta
Dallas
So Fla
$0
Source: RCA, C&W Capital Markets
$2
$4
$6
$8
CAPITAL MARKETS
The top eight metros
were 51% of total
industrial transactions in
2012. Warehouse
transactions accounted
for 66% of total industrial
volume in 2012.
The LA Metro continued
to be the dominant
industrial market despite
a 4% drop in volume
YOY. The NYC Metro
experienced a rise in
sales as industrial
transaction volume
doubled in the NYC
boroughs, however, this
is attributed to the
purchase of industrial
properties for
conversation to
residential units.
CUSHMAN & WAKEFIELD
73
INDUSTRIAL CAPITAL MARKETS OVERVIEW – TOP WAREHOUSE
SALES MARKETS
TOP WAREHOUSE INVESTMENT MARKETS
WEIGHTED AVERAGE CAPITALIZATION RATE, 2005-2012
2012
2011
2010
2009
2008
2007
2006
2005
LA Metro
CAPITAL MARKETS
National warehouse cap
rates were 7.0% at the
end of 2012, down 30bp
YOY.
SF Metro
NYC Metro*
Chicago
DC Metro
Atlanta
Dallas
So Fla
2%
4%
Source: RCA, C&W Capital Markets
6%
8%
10%
12%
CUSHMAN & WAKEFIELD
74
INDUSTRIAL CAPITAL MARKETS OVERVIEW – TOP WAREHOUSE
SALES MARKETS
TOP WAREHOUSE INVESTMENT MARKETS
AVERAGE SALES PRICE PER SQUARE FOOT
2012
2011
2010
2009
2008
2007
2006
CAPITAL MARKETS
The NY metro had the
priciest transactions in
the at $170 PSF followed
by LA metro at $92 PSF.
However, most of the
transactions in the NYC
boroughs of the NY Metro
were industrial
conversions to
multifamily.
2005
LA Metro
SF Metro
NYC Metro
Chicago
DC Metro
Atlanta
Dallas
So Fla
$0
$25
$50
Source: RCA, C&W Capital Markets
$75
$100
$125
$150
$175
$200
CUSHMAN & WAKEFIELD
75
CAPITAL MARKETS
TRENDS TO WATCH
CUSHMAN & WAKEFIELD
76
CAPITAL MARKETS
THE MILLENNIAL IDENTITY
Millennials Balance Lifestyle and Work: Only Generation not to Cite Work Ethic as Defining Characteristic
MILLENNIAL
GEN X
BOOMER
SILENT
1
Technology use (24%)
Technology use (12%)
Work ethic (17%)
WW II, Depression (14%)
2
Music/Pop culture (11%)
Work ethic (11%)
Respectful (14%)
Smarter (13%)
3
Liberal/tolerant (7%)
Conservative/Trad’l (7%)
Values/Morals (8%)
Honest (12%)
4
Smarter (6%)
Smarter (6%)
“Baby Boomers” (6%)
Work ethic (10%)
More Diverse: Race/Ethnicity in 2009,
% by generation
Source: Pew Research Center, C&W Capital Markets
More Educated Male Educational Attainment
When They Were 18-28
% by generation
CUSHMAN & WAKEFIELD
77
A COLLISION OF MILLENIALS AND BOOMERS IN CBD
LIVE/WORK MARKETS?
CAPITAL MARKETS
TOP CITIES WHERE NEW MBA’S WANT TO LIVE
CITY
New York
San Francisco
Chicago
Atlanta
San Diego
Washington D.C.
Boston
Nashville
Los Angeles
Seattle
Las Vegas
0
5
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
90-94
100+
Source: Fortune, C&W Capital Markets
14%
12%
8%
6%
6%
5%
5%
4%
4%
3%
3%
10
15
20
25
Boomers in Peak earning and saving years, headed for
retirement
CUSHMAN & WAKEFIELD
78
CAPITAL MARKETS
CAPITAL FLOWS TO REVERSE OVER THE NEXT 20 YRS?
WORLD POPULATION BY 5 YEAR AGE GROUPS
BOOMERS IN PEAK EARNING YEARS AND HEADED TO RETIREMENT FORECAST 2026
Mature Markets Population (In Millions)
0
10
20
30
40
50
60
Mature Markets Population (In Millions)
70
80
0
0-4
0-4
10-14
10-14
20-24
20-24
30-34
30-34
40-44
40-44
50-54
50-54
60-64
60-64
70-74
10
20
30
40
50
60
70
80
70-74
Peak earning and saving years
80-84
France, Germany, Italy, Japan, UK, US
All Other
90-94
80-84
Peak earning and saving years
France, Germany, Italy, Japan, UK, US
All Other
90-94
TOTAL POPULATION: 1.0 BILLION
100+
TOTAL POPULATION: 1.0 BILLION
100+
World Population (In Millions)
Emerging Markets Population (In Millions)
0
100
200
300
400
500
600
0
700
0-4
0-4
10-14
10-14
20-24
20-24
30-34
30-34
40-44
40-44
50-54
50-54
60-64
60-64
70-74
70-74
80-84
80-84
TOTAL POPULATION: 6.0 BILLION
90-94
100+
Source: US Census Bureau, C&W Capital Markets
90-94
100
200
300
400
500
Mature
600
700
Emerging
TOTAL POPULATION: 7.0 BILLION
100+
CUSHMAN & WAKEFIELD
79
UNITED STATES ENERGY INDEPENDENCE WITHIN 20 YRS?
CAPITAL MARKETS
The US could be
energy self sufficient by
the year 2020 and be a
net exporter.
The economic impact
would be to cut the
current account deficit
by 2.4% of GDP and to
improve the exchange
rate by 1.6 to 5.4%.
Source: Citibank Energy 2020 Report, US EIA, C&W Capital Markets
CUSHMAN & WAKEFIELD
80
CAPITAL MARKETS
MCOMMERCE IMPACT ON RETAIL
M-COMMERCE RETAIL SALES 2012 2017
E-COMMERCE SALES 2012 - 2017
$360
$35
$30
2014
2015
2016
2017
$5
$31
$344
2013
$10
$27
$338
2012
$180
$15
$22
$314
$200
$283
$220
$240
$240
$17
$260
$20
$12
$280
$25
$8
$300
MOBILE COMMERCE SALES
$320
$226
E-COMMERCE SALES (IN
$340
2012
2013
2014
2015
2016
2017
$0
Source: InternetRetailer.com, Forrester Inc.
Source: InternetRetailer.com, Forrester Inc.
– In 2012, U.S. e-commerce sales amounted to $225.5 billion, up by 15.8 percent from 2011, with total retail sales
increasing 5.0 percent year-over-year, according to the U.S. Census Bureau.
– The Census Bureau survey also showed that e-commerce retail sales reached $59.5 billion in fourth quarter 2012 alone.
– The growth in online retail sales is three times faster than overall retail sales growth. Retailers that do not have significant
online sales are missing a major opportunity for growth.
– U.S. consumers made $8.0 billion worth of retail purchases via smartphone in 2012, accounting for 3.0 percent of total ecommerce sales, according to Forrester Research Inc.
– Forrester Research Inc. also predicts, smartphone based retail sales are forecast to hit $12.0 billion, 5.0 percent of total
e-commerce in 2013; $17.0 billion, 6.0 percent, in 2014; $22.0 billion, 7.0 percent, in 2015; $27.0 billion, 8.0 percent, in
2016; and $31.0 billion, 9.0 percent, in 2017.
CUSHMAN & WAKEFIELD
81