Real Estate Inestment uarterly ighlights - TIAA · 2016. 6. 3. · Real Estate Investment Quarterly Highlights Real Estate Quarterly Highlights | Second Quarter 2016 3 Leading indicators

Real Estate Investment Quarterly Highlights

Second Quarter 2016

What’s Inside?

Real Estate Investment Quarterly Highlights features overviews of the following:

U.S. Commercial Real Estate Cycle and Recessions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

Pricing and Probability of a Downturn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

Leading Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

Capital Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

Debt Availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

Labor Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Commercial Real Estate (CRE) Fundamentals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

U.S. Commercial Real Estate Performance Update . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Apartments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Industrial. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Office. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

U.S. Commercial Real Estate Prospects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11


Real Estate Quarterly Highlights | Second Quarter 2016 2

U.S. commercial real estate cycle and recessions W NPI posted 6 consecutive calendar years of

double-digit total returns…Cycle is mature in a historical context

W Commercial real estate (CRE) total returns, capital flows, and price indices moderated in 1Q16

W NPI posted a 2.21% total return in 1Q16; the lowest quarterly total return since 1Q10

W CRE sales (RCA) declined by 20% in 1Q16 from a year earlier

W CRE prices (Moody’s/RCA CPPI) declined slightly in January and February, but had a modest uptick in March

W Some softening is not unexpected at this point in the cycle, especially with the transition to NOI-driven total returns

Sources: NBER; NCREIF, as of 1Q16; Real Capital Analytics; Moody’s Analytics, as of March 2016; US Board of Governors of the Federal Reserve System; TIAA.

NCREIF Property Index (NPI)1 total returns and U.S. recessions

1Q90–1Q16 W NBER recession W Total return (positive capital return) W Total return (negative capital return)

1Q141Q121Q101Q081Q061Q041Q021Q001Q981Q961Q941Q921Q90-10

-8-6-4-202468% 1Q96–2Q01

22 Quarters

1Q90–4Q9524 Quarters





1Q16

Moody’s/RCA Commercial Property Price Index (CPPI)

Dec 2000–Mar 2016

50

100

150

200

250

2016201520142013201220112010200920082007200620052004200320022001

NPI-derived1 initial yield spreads

Basis points, 1Q92–1Q16 W Negative capital return quarters W Initial yield spread - - - Long-term average initial yield spread

-500

50100150200250300350400450

1Q161Q142Q121Q101Q081Q061Q041Q021Q001Q981Q961Q941Q92

Probability of U.S. commercial real estate downturn in 4 quarters2

2Q92–1Q17 W Negative capital return quarters W Probability of CRE downturn - - - Forecast

0

20

40

60

80

100%

4Q164Q144Q124Q104Q084Q064Q044Q024Q004Q984Q964Q942Q92

Pricing and probability of a downturn W NPI-derived initial yield is a gauge of CRE

pricing that is akin to a backward-looking cap rate

W NPI-derived initial yield spread, i.e., initial yield less the 10-year Treasury, is a gauge of relative value

W Initial yield spread increased in 1Q16 due to flat initial yield and declining Treasury

W With spread above its long-term historical average, current property pricing is still attractive with potential for further gains… Real estate is holding the line on relative value

W Initial yield spread can also act as a “canary in the coal mine” for U.S. CRE downturns; see gray-shaded areas

W Estimated probability of downturn in 4 quarters declined to 20%; a level still characterized as moderate risk…40% to 50% is worrisome



Leading indicators

W Leading indicators suggest a continued positive foundation for property operational performance

W Good enough economic growth…Solid labor market… Low interest rates…Readily available commercial mortgage financing…Strong investor appetite…Generally well-balanced real estate fundamentals

W With all indicators in the “green” zone, conditions are supportive of solid NOI growth

W Primary concerns: Investor risk appetite, rising new construction, and unevenness in labor market recovery

Leading indicators of U.S. commercial real estate performance (2Q16)

Indicators Position Stall Overheat

Capi

tal

Mar

kets

Interest rates10-year Treasury yields remain below 2% amid sluggish global growth concerns; Lower-rates-for-longer continue to make real estate investment appealing

Investor risk appetiteWhen high-yield bond spreads shift up, cap rate spreads have tended to follow; Bond spreads increased materially since mid-’14, no cap rate spread impact yet

Deb

t Av

aila

bilit

y Debt for investorsCommercial real estate financing is readily available, no sign of credit bubble; Competitive environment with some lenders becoming more selective and aggressive

Debt for constructionConstruction lending supporting a growing supply pipeline that bears watching; Recourse loans and moderate loan-to-cost ratios prevail

Labo

r M

arke

t

Employment growthJob situation has recovered on a national basis, benefiting real estate demand; But, demographic and geographic employment recovery has been uneven

Unemployment rateToday’s unemployment rate above FOMC’s median estimate of 4.7% for 2016; Improvement in labor force participation rate, but only modest gains in wages

CRE

Fu

ndam

enta

ls Vacancy ratesEven with rising new construction, fundamentals generally remain balanced; Vacancy rates are expected to remain in proximity of long-term averages

Commercial property rentsRent growth trends are mixed across property types depending on new supply; APT have absorbed elevated deliveries, moderating rent growth expected

Source: TIAA, as of 2Q16.



Leading indicators (cont.)

Capital markets W Capital markets drive commercial real estate

pricing through Treasury rates and risk spreads

W FOMC held interest rates steady at 0.25%–0.50% at its March and April meetings; any near-term increases are likely to be modest and gradual

W Yield on the 10-year Treasury remains low, ending the quarter below 2.0%

W U.S. high-yield (HY) bond spreads are strongly associated with U.S. real estate pricing

W When HY bond spreads shift up, cap rate spreads tend to follow

W HY spreads have increased materially since mid-2014, but cap rates haven’t been affected yet

Sources: US Board of Governors of the Federal Reserve System, Moody’s Analytics, as of 1Q16; BofA Merrill Lynch; Bloomberg, as of 1Q16; Federal Reserve Board, Flow of Funds, as of March 10, 2016; TIAA.

U.S. 10-Year Treasury yields and Fed funds target rates

1Q98–1Q16 W U.S. 10-Year Treasury yield W Fed funds target rate (midpoint)

1Q161Q141Q121Q101Q081Q061Q041Q021Q001Q980

1

2

3

4

5

6

7%

NPI1,3 transaction cap rate spreads and high-yield bond spreads

1Q98–1Q16 W NPI transaction cap rate spread W BAML B OAS

0

300

600

900

1,200

1,500

1,800

1Q161Q151Q141Q131Q121Q111Q101Q091Q081Q071Q061Q051Q041Q031Q021Q011Q001Q991Q98

Debt availability W Debt flows affect the amount of new

construction and sales volume of existing properties

W Credit market bubble was evident when total credit market borrowing peaked at over 35% of GDP in 3Q07

W U.S. went through a period of significant deleveraging and then experienced a slow and steady rise through the recovery

W Total credit market borrowing has increased…But, there is no sign of a credit bubble

W Borrowing conditions have been favorable during current recovery and lending conditions are competitive

W CMBS lenders are facing some challenges and are currently experiencing negative net borrowing

W New risk retention rules, anticipated to go into effect in December 2016, have created more uncertainty for CMBS pricing and issuer profitability

W Ample availability of commercial mortgage financing is a positive for real estate investors

W But, too much credit in construction lending can produce excess building

Total credit market borrowing

As % of GDP, 1Q01–4Q15 W Total borrowing - - - Total borrowing long-term average

1Q151Q141Q131Q121Q111Q101Q091Q081Q071Q061Q051Q041Q031Q021Q01

Credit bubble

Deleveraging

Slow and steady rise

-10

0

10

20

30

40%

Commercial mortgage debt flows

US$ billions, 1Q01–4Q15 W Total net borrowing W Commercial banks net borrowing W Life insurance companies net borrowing W ABS issuers net borrowing

-600

-400

-200

0

200

400

1Q151Q141Q131Q121Q111Q101Q091Q081Q071Q061Q051Q041Q031Q021Q01

Positive net borrowing for most lenders



Leading indicators (cont.)

Labor market W Employment growth drives the demand for

space and is a proxy for the macro economy

W Total employment has recovered…Average monthly job growth of 210,000 jobs over the past four years has been more than enough to absorb increases in the working-age population

W Recent employment reports have shown signs of modest wage gains

W Unemployment rate of 5.0% is above the FOMC’s 2016 median estimate of 4.7%

W Labor force participation rate has started to improve, but it remains well below its long-term average

W Geographic and demographic job recovery has been uneven

W Population cohorts based on educational attainment have had very different experiences in the labor market

Total nonfarm employment

Jan 2000–Apr 2016

125

130

135

140

145M

2016201520142013201220112010200920082007200620052004200320022001

5 million more jobs than previous peak

Labor force participation rate

1Q00–1Q16 W Labor force participation rate - - - Long-term average

1Q161Q151Q141Q131Q121Q111Q101Q091Q081Q071Q061Q051Q041Q031Q021Q011Q0062

63

64

65

66

67

68%Labor participation rate �nally beginning to improve

Sources: BLS, Moody’s Analytics, as of Apr 2016; BLS, Current Population Survey, Moody’s Analytics, as of 1Q16; NCREIF, as of 1Q16; TIAA.

Commercial real estate fundamentals W Commercial real estate market fundamentals

drive net operating income growth

W Current vacancy rates for each of the property types are at or below their long-term historical averages; APT and OFF are near their averages, IND and RET are well below their averages

W New construction pipeline requires monitoring…Pecking order of supply concerns from greatest to least among the four major property types goes from APT to OFF and IND to RET

U.S. real estate downturns and NPI1 vacancy rates by property type

1Q90–1Q16 W Negative capital return quarters W APT W OFF W IND W RET

0

2

4

6

8

10

12

14

16

18%

1Q161Q141Q121Q101Q081Q061Q041Q021Q001Q981Q961Q941Q921Q90



U.S. commercial real estate performance update W NPI has posted 22 consecutive quarters of

double-digit 4-quarter rolling total returns

W Positive 1-year total returns were recorded in all markets

W Average current value cap rate was 4.5% in 1Q16, roughly 36 basis points below its past low

W But, cap rate spread over 10-year Treasury remains slightly above its historical average, suggesting that real estate is holding the line on relative value

W Buyers are accepting historically low cap rates, but they are also receiving solid NOI growth

W NPI’s 4-quarter NOI growth rate increased to 6.7% in 1Q16 vs. 6.1% in 1Q15

W RCA reported a sizable drop in sales of commercial properties in 1Q16 as compared to 1Q15, largely attributable to fewer portfolio and large individual sales transactions

NPI1 rolling 4-quarter total, income, and capital returns

1Q90–1Q16 W Income return–ALL W Capital return–ALL W Total return–ALL

-10

-20

-30

0

10

20

30%

1Q161Q141Q121Q101Q081Q061Q041Q021Q001Q981Q961Q941Q921Q90

1Q16 NPI ReturnsIncome: 4.9%Capital: 6.7%Total: 11.8%

NPI1 current value cap rates and 4-quarter NOI growth rates

1Q90–1Q16 W 4-quarter NOI growth rate–ALL (L-axis) W Current value cap rate–ALL (R-axis)

-5

-10

0

10

5

15% 10%

8

6

4

2

01Q161Q141Q121Q101Q081Q061Q041Q021Q001Q981Q961Q941Q921Q90

Sources: NCREIF, as of 1Q16; TIAA.



Apartments (APT)Performance and pricing W APT’s 10.9% 1-year total return ranked third of

the four major property types in 1Q16

W Positive 1-year total returns were recorded in all APT markets

W Current value cap rate was 4.5% in 1Q16, roughly 24 basis points above its past low

W Current APT cap rate spread over 10-year Treasury remains well above its historical average, suggesting that APT sector still offers good relative value despite its low cap rate

W NPI–APT’s 4-quarter NOI growth rate was 9.5% in 1Q16, however, supply pipelines are still growing and expectations are for NOI growth to slow considerably

W RCA reported that the APT sector was the only property type to record a year-over-year sales increase in 1Q16; volume increased by 12% over 1Q15

Fundamentals outlook W Of the four major property types, APT sector

is likely the furthest along in the CRE cycle

W Most APT markets have absorbed recent deliveries without adversely impacting fundamentals

W Looking forward, APT sector faces the greatest concerns regarding new supply and expectations are for rent growth and vacancy improvements to moderate

W Forecast completions, as of 1Q16, are expected to exceed historical completions in 27 of 50 markets

W Forecast vacancy rates, as of 1Q16, are expected to exceed historical vacancy rates in 27 of 50 markets


1Q90–1Q16 W Income return–APT W Capital return–APT W Total return–APT

-10

-20

-30

0

10

20

30%

1Q161Q141Q121Q101Q081Q061Q041Q021Q001Q981Q961Q941Q921Q90

1Q16 NPI–APT ReturnsIncome: 4.7%Capital: 6.0%Total: 10.9%


1Q90–1Q16 W 4-quarter NOI growth rate–APT (L-axis) W Current value cap rate–APT (R-axis)

-5

-15

-10

0

10

5

15% 10%

8

6

4

2

01Q161Q141Q121Q101Q081Q061Q041Q021Q001Q981Q961Q941Q921Q90

Historical and forecast completions for 50 largest APT markets4

1996–2020

APT

aver

age

fore

cast

com

plet

ions

(% o

f sto

ck, 2

016–

2020

)

APT average historical completions (% of stock, 1996–2015)

Forecast > Historical

Forecast < Historical0

2

3

4

1

5%

0% 1 432 5

Historical and forecast vacancy rates for 50 largest APT markets4

1996–2020

APT

aver

age

fore

cast

vac

ancy

rate

(201

6–20

20)

APT average historical vacancy rate (1996–2015)



6

8

4

10%

2% 4 1086

Sources: NCREIF, as of 1Q16; CBRE-EA, as of 1Q16; TIAA.



Industrial (IND)Performance and pricing W With a 14.3% total return, IND was the best

performing sector

W Positive 1-year total returns were recorded in all markets

W Average current value cap rate was 5.0% in 1Q16, roughly 60 basis points below its past low

W But, current IND cap rate spread over 10-year Treasury remains slightly above its historical average, suggesting that the IND sector offers fair relative pricing

W NPI–IND’s 4-quarter NOI growth rate has followed a general pattern of acceleration throughout the recovery, reaching 8.2% in 1Q16

W According to RCA, sales of IND properties declined 38% in 1Q16 from the same period last year, but still remain strong on a historical basis

Fundamentals outlook W IND markets have benefitted from healthy

consumer spending and growth in imports which drive space demand

W Construction has increased in response to historically low availability rates in some markets


W Forecast availability rates, as of 1Q16, are expected to exceed historical availability rates in 24 of 50 markets; in these instances, most market forecasts are only slightly above historical averages


1Q90–1Q16 W Income return–IND W Capital return–IND W Total return–IND

-10

-20

-30

0

10

20

30%

1Q161Q141Q121Q101Q081Q061Q041Q021Q001Q981Q961Q941Q921Q90

1Q16 NPI–IND ReturnsIncome: 5.4%Capital: 8.5%Total: 14.3%


1Q90–1Q16 W 4-quarter NOI growth rate–IND (L-axis) W Current value cap rate–IND (R-axis)

-5

-10

0

10

5

15% 12%

8

10

6

4

2

01Q161Q141Q121Q101Q081Q061Q041Q021Q001Q981Q961Q941Q921Q90

Historical and forecast completions for 50 largest IND markets4

1996–2020

IND

aver

age

fore

cast

com

plet

ions

(% o

f sto

ck, 2

016–

2020

)

IND average historical completions (% of stock, 1996–2015)



2

3

4

1

5%

0% 1 432 5

Historical and forecast availability rates for 50 largest IND markets4

1996–2020

IND

aver

age

fore

cast

avai

labi

lity

rate

(201

6–20

20)

IND average historical availability rate (1996–2015)



12

14

16

10

8

6

18%

4% 86 10 12 181614




Office (OFF)Performance and pricing W With a 10.8% 1-year total return, OFF

performance placed last place among the four major property types

W Positive 1-year total returns were recorded in all OFF markets except Riverside, CA (-1.8%) and Silver Spring, MD (-0.2%)

W Average current value cap rate was 4.3% in 1Q16, 30 basis points below its past low

W But, current OFF cap rate spread over 10-year Treasury is slightly above its historical average, offering fair relative pricing

W Improving after a recent downward trend, NPI–OFF’s 4-quarter NOI growth rate was roughly 6.5% in 1Q16

W RCA data indicates that transactions of OFF properties declined 15% in 1Q16 from 1Q15

Fundamentals outlook W OFF has been among the slowest of the 4

major property types to recover, but progress is continuing

W Given current job growth trends in many metro areas, OFF market demand conditions should improve

W New construction is also starting to percolate in some markets, causing some supply-side concerns


W Forecast vacancy rates, as of 1Q16, are expected to exceed historical vacancy rates in 16 of 50 markets


1Q90–1Q16 W Income return–OFF W Capital return–OFF W Total return–OFF

-10

-20

-30

0

10

20

30%

1Q161Q141Q121Q101Q081Q061Q041Q021Q001Q981Q961Q941Q921Q90

1Q16 NPI–OFF ReturnsIncome: 4.7%Capital: 5.9%Total: 10.8%


1Q90–1Q16 W 4-quarter NOI growth rate–OFF (L-axis) W Current value cap rate–OFF (R-axis)

-5

-10

-15

0

10

15

5

20% 12%

8

10

6

4

2

01Q161Q141Q121Q101Q081Q061Q041Q021Q001Q981Q961Q941Q921Q90

Historical and forecast completions for 50 largest OFF markets4

1996–2020

OFF

ave

rage

fore

cast

com

plet

ions

(% o

f sto

ck, 2

016–

2020

)

OFF average historical completions (% of stock, 1996–2015)



2

3

4

5

6

1

7%

0% 1 5432 6 7

Historical and forecast vacancy rates for 50 largest OFF markets4

1996–2020

OFF

ave

rage

fore

cast

vac

ancy

rate

(201

6–20

20)

OFF average historical vacancy rate (1996–2015)



16

18

20

10

12

14

8

22%

6% 10 12 148 16 18 20 22




Retail (RET)Performance and pricing W RET was the second highest performing sector

of the four major property types

W Positive 1-year total returns were recorded in all but one market, St. Louis, MO (-0.9%)

W Average current value cap rate was 4.7% in 1Q16, almost 90 basis points below its past low

W But, current RET cap rate spread over 10-year Treasury remains well above its historical average, suggesting that RET sector still offers good relative value

W NPI–RET’s 4-quarter NOI growth rate has held fairly steady as of late; as of 1Q16, it was 3.8%

W According to RCA, sales of RET properties decreased during 1Q16; transaction volume declined 31% from 1Q15

Fundamentals outlook W Retail sales growth was modest to begin the

year; sales excluding motor vehicles and parts increased 2.3% in 1Q16 compared to 1Q15

W Benefits from lower gas prices, a strong job market, and improved credit availability should support stronger retail sales growth and more meaningful improvements in availability rates

W Looking forward, RET sector faces the fewest concerns regarding new supply

W Forecast completions, as of 1Q16, are not expected to exceed historical completions in any of the 50 examined markets

W Forecast availability rates, as of 1Q16, are expected to exceed historical availability rates in 32 of 50 markets


1Q90–1Q16 W Income return–RET W Capital return–RET W Total return–RET

-10

-20

-30

0

10

20

30%

1Q161Q141Q121Q101Q081Q061Q041Q021Q001Q981Q961Q941Q921Q90

1Q16 NPI–RET ReturnsIncome: 5.1%Capital: 7.7%Total: 13.1%


1Q90–1Q16 W 4-quarter NOI growth rate–RET (L-axis) W Current value cap rate–RET (R-axis)

-5

-10

0

10

5

15% 10%

8

6

4

2

01Q161Q141Q121Q101Q081Q061Q041Q021Q001Q981Q961Q941Q921Q90

Historical and forecast completions for 50 largest RET markets4

1996–2020

RET

aver

age

fore

cast

com

plet

ions

(% o

f sto

ck, 2

016–

2020

)

RET average historical completions (% of stock, 1996–2015)



2

3

4

1

5%

0% 1 432 5

Historical and forecast availability rates for 50 largest RET markets4

1996–2020

RET

aver

age

fore

cast

avai

labi

lity

rate

(201

6–20

20)

RET average historical availability rate (1996–2015)



11

13

15

9

7

5

17%

3% 75 9 11 171513




U.S. commercial real estate prospectsMarket volatility + mature real estate cycle = anxious times

W Some softening is not unexpected at this point in the cycle, especially with the transition to NOI-driven total returns

W No indications of an imminent downturn…Our model indicates moderate risk of a real estate downturn

W Volatility indicates heightened sensitivity to macro-economic and financial market shocks

W U.S. real estate markets are generally well-balanced…Shock would likely be well-tolerated were it to hit

Our “house view” regarding real estate performance has not changed…

W Total returns are facing constraints…Not all components of total return likely to be material contributors

W Low yields, limited potential for further cap rate compression, and capital expenditure drag

W NOI growth is expected to be the driver of total returns going forward

W New construction is anticipated to be a key determinant of NOI growth performance

No clear “buy”, “sell”, or “hold” recommendations…view depends on investor’s perspective, risk appetite, and time horizon

W Buyers will focus on solid economic growth prospects, balanced fundamentals, and attractive spreads

W Sellers will focus on low absolute cap rates, appreciation to date, and opportunity to exit

W Holders will focus on uncertainty and do nothing

W Longer horizons can better tolerate today’s volatility…Shorter horizons may need more defensive actions

W Defensive actions can include investment strategies and market focus

1. It is not possible to invest in an index. Performance for indices does not reflect investment fees or transactions costs.

2. Probabilities are for the quarter indicated and are calculated using data from 4 quarters prior.

3. Cap rate spreads are the difference between NPI transaction cap rates and 10-year Treasury yields. High-yield bond spreads are represented by the BofA Merrill Lynch B OAS.

4. Largest 50 markets are determined by ranking markets according to existing stock. Data for 1996 through 2015 are actuals; data for 2016 to 2020 are forecasts.

Real Estate Investment Quarterly Highlights: Second Quarter 2016 is prepared by TIAA Global Asset Management and represents the views of TIAA Global Real Estate Group as of March 2016. These views may change in response to changing economic and market conditions. Past performance is not indicative of future results. The material is for informational purposes only and should not be regarded as a recommendation or an offer to buy or sell any product or service to which this information may relate. Certain products and services may not be available to all entities or persons. Data is as of 3/31/2016 unless noted otherwise.

Real estate investing risks include fluctuations in property values, higher expenses or lower income than expected, higher interest rates which affect leveraged investments, and potential environmental problems and liability. Investment, insurance and annuity products are not FDIC insured, are not bank guaranteed, are not deposits, are not insured by any federal government agency, are not a condition to any banking service or activity, and may lose value.

TIAA Global Asset Management provides investment advice and portfolio management services through TIAA and over a dozen affiliated registered investment advisers.

©2016 Teachers Insurance and Annuity Association of America-College Retirement Equities Fund, 730 Third Avenue, New York, NY 10017

For institutional investor use only. Not for use with or distribution to the public.

C31715 521321_666211(05/16)


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Real Estate Inestment uarterly ighlights - TIAA · 2016. 6. 3. · Real Estate Investment Quarterly Highlights Real Estate Quarterly Highlights | Second Quarter 2016 3 Leading indicators