Second Quarter 2019 Real Estate Performance Update · 2019. 6. 30. · • With consumer spending...

For Institutional Investor use only. Proprietary & Confidential. For Institutional Investor use only. Proprietary & Confidential.

Second Quarter 2019 Real Estate Performance Update

Santa Barbara County Employees’ Retirement System

December 11, 2019

Invesco US Income Fund I

CityScape Residences

Phoenix, AZ

Moorfield Real Estate Fund III

Queens Dock Office Building

Liverpool, England

For Institutional Investor use only. Proprietary & Confidential.

Table of Contents

3 Real Estate Market Update

10 Second Quarter 2019 Real Estate Performance

21 Portfolio Summary

23 Detailed Portfolio Summary for the Period Ending

June 30, 2019

For Institutional Investor use only. Proprietary & Confidential. 3

Real Estate Market Update

Prologis Targeted US Logistics Fund

South Bay Distribution Center

Rancho Dominguez, CA

Stockbridge Smart Markets Fund

Novella Apartments

Redondo Beach, CA

Walton Street Fund VII

World Trade Center

Long Beach, CA


Market Overview

• NCREIF ODCE capital flows have continued to trend downward from its peak in 2015.

• Significant liquidity remains for U.S. core / stabilized real estate.

Source: NCREIF, as of June 2019

$(5)

$-

$5

$10

$15

$20

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 June2019YTD

$ B

illio

ns

NFI-ODCE Capital Flows

Contributions Distributions & Redemptions Net Cash Flow


Market Overview

• During the quarter, transaction volume for all commercial properties increased approximately 24.0% over

the prior quarter. Industrial transaction volume increased 7.5% while office increased 49.9%, retail

increased 35.4% and apartments increased 21.9%.

Source: Real Capital Analytics, as of June 2019.

$0.0

$100.0

$200.0

$300.0

$400.0

$500.0

$600.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 June2019YTD

$ billions Office Industrial Retail Apartments


Market Overview

• ORG continues to see increased demand for industrial assets as transaction volumes and cap rates reach

record levels. For the quarter, the average cap rate was 6.4% across all transactions.

Source: Real Capital Analytics, as of June 2019

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

5

10

15

20

25

30

35

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

$ BillionsIndustrial Transactions

Volume (Quarterly) Cap Rate


Market Overview

• With historically low vacancy rates the asking rents have continued to increased but the year-over-year

growth in rents has slowed to 5.7% compared to 6.4% a year ago.

Source: Costar as of June 2019

$3

$4

$5

$6

$7

$8

$9

-6%

-4%

-2%

0%

2%

4%

6%

8%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Industrial Rent Growth

Year-Over-Year Rent Change Asking Rent


Market Overview

• U.S. gross domestic product decelerated in the second quarter of 2019, growing at an estimated annualized

rate of 2.1% compared to 3.1% in the first quarter of 2019. A large portion of the U.S. gross domestic

product growth is attributed to consumer spending which currently accounts for 68% of the total.

• With consumer spending trends changing, with e-commerce, logistics has been one real estate sector that

has been one of the biggest beneficiaries. In 2010, e-commerce sales made up 4% of total retail sales,

while they currently account for 10% of sales and 43% of total growth.

Source: BEA,

CoStar 2Q19. Note: 2019 is YTD. The Logistics Index is an aggregation of 54 major U.S. major markets.


Market Overview

ABR Chesapeake Investors VI LP

• ORG identified this trend and heavily over weighted the industrial sector. As of 2Q19, the SBCERS

portfolio is 30% industrial whereas the ODCE index is 19%.

• In April 2019, SBCERS invested in ABR Chesapeake Investors VI L.P. which seeks to

primarily focus on investments in industrial, multifamily, hospitality, office and retail assets. A prime

example of this strategy is the firms relationship with CIP Real Estate (“CIP”). CIP focuses on the

acquisition, development and repositioning of office and industrial parks. The firm has invested

$82 million in 17 separate transactions with CIP since 1998. The strategy has revolved around acquiring

under-managed flex / office assets from institutional sellers at substantial discounts to replacement cost,

primarily in southern California.

• As of March 31, 2019, 13 transactions have been liquidated with CIP resulting with an average 31.7% IRR

and 2.0x equity multiple to the ABR funds.

• The below is a Fund V investment in a flex industrial / small office portfolio comprised of 17 buildings

totaling 313,417 square feet located in Upland, CA.

College Business Park


Second Quarter 2019 Real Estate Performance

Abacus Core Income Fund I

Alexander at The District Apartments

Atlanta, GA

Greenfield Acquisition Partners VI

413 Huron—Student Housing

Ann Arbor, MI

Patron Capital V

GSPP Cologne Office

Cologne, Germany


SBCERS Investment Return Snapshot

As of June 30, 2019

Investment Returns—Time Weighted, Gross of Fees Investment Returns—Time Weighted, Net of Fees

ORG /BNY Mellon Return Comparison—Time Weighted, Net of Fees (Mellon Report 9/30/2019)

Note: SBCERS Benchmark is a real rate of return (adjusted for inflation) of 4.5%, net of investment management fees.

2.4

%

9.3

% 10.4

%

11.1

%

7.1

%

0.8

%

5.5

% 6.6

%

8.8

%

5.9

%

1.9

%

6.3

%

6.7

%

6.1

%

6.6

%

Q T R 1 YEAR 3 YEARS 5 YEARS S I NCEI NCEP T I O N

SBCERS NFI ODCE, Net SBCERS Benchmark

3.0

%

11.3

%

12.5

%

13.1

%

8.6

%

1.0

%

6.4

% 7.6

%

9.8

%

6.9

%


SBCERS NFI ODCE, Gross

Total Portfolio

Since Inception

Date: 1-1-2006

Gross IRR: 9.9%

Net IRR: 8.8%

2.5%

2.4%

0% 1% 2% 3%

Private RE

ORG BNY Mellon

8.5%

9.1%

0% 5% 10% 15%

Private RE

ORG BNY Mellon


SBCERS Real Estate Attribution Analysis

Quarter Return data for June 30, 2019

Gross of Fees Total Return Attribution Net of Fees Total Return Attribution

• The attribution identifies the percent of each sector that contributes to the overall total return

• The Core sector, with 75% of the total portfolio, is the largest contributor to the total return of the portfolio.

1.7%

0.3%

1.1%

3.1%

0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50%

Core

Opportunistic

Value Added

Overall

1.5%

0.3%

0.9%

2.6%

0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00%

Core

Opportunistic

Value Added

Overall


SBCERS Property Type vs Index

Quarter Return data for June 30, 2019

Sector Returns—Time Weighted SBCERS—US Only Compared to Index

• Industrial sector returns are outperforming all other sectors. SBCERS portfolio is 30% industrial whereas the

ODCE Index is 19%.

• SBCERS retail portfolio is 10% whereas the ODCE index is 18%.

34%

18%

25%

19%

0.3%

4%

26%

10%

24%

30%

4% 1% 3% 2%0%

5%

10%

15%

20%

25%

30%

35%

40%

Office Retail Apartments Industrial Hotel Self Storage AssistedLiving

Other

NFI ODCE SBCERS

1.5

%

6.5

%

6.9

%

8.8

%

1.4

%

5.8

%

6.2

% 8.0

%

3.4

%

13.9

%

13.4

%

13.7

%

1.7

%

6.8

%

6.3

%

8.2

%

-0.1

%

1.8

%

4.4

%

7.7

%

Q T R 1 YR 3 YRS 5 YRS

NPI Apartment Sub-Index Industrial Sub-Index

Office Sub-Index Retail Sub-Index


SBCERS Portfolio Snapshot

As of June 30, 2019

• Of the $315.1 million committed to Private Real

Estate, 73.2% has been called through 6/30/2019.

• The equity multiple increased 0.1% from the prior

quarter and the Since Inception Internal Rate of

Return (“IRR”) had no change from the prior quarter.

• Both the Contributions and Distributions include the

impact of the dividend reinvestment programs in

many of the Core funds.

Note: All dollars are in millions.

Private Real Estate 6/30/2019 3/31/2019 Change

Funds

Number of Funds 31 31 0

Number of General Partner Relationships 16 16 0

Capital Committed $315.1 $315.1 $0.0

Unfunded Commitment $84.4 $99.1 ($14.7)

Total Private Real Estate

Quarterly Contributions $17.9 $6.4 $11.5

Quarterly Distributions ($7.7) ($6.4) ($1.3)

Total Market Value $290.4 $273.1 $17.3

Equity Multiple, Net of Fees 1.5x 1.5x 0.0x

Portfolio Since Inception of IRR, Net of Fees 8.8% 8.7% 0.1%


Progress Towards 2019 Strategic Plan Goals

2019 Recommendation 2019 Action Plans Progress

ORG will target to increase the

portfolio with new commitments of

$50 million

• Commit up to $20 million to Core investment strategies.

• Commit up to $40 million in Value Added and/or Opportunistic funds that will capitalize on

distress or other unique market conditions and manager capabilities.

• $10 million commitment to ABR Chesapeake Investors VI LP , Value-Added Fund, in July 2019.

• $10 million commitment to Alcion Real Estate Partners Fund IV, L.P. , Opportunistic Fund, in July

2019.

• $10 million commitment to Citymark Capital U.S. Apartment Fund II L.P. , Value-Added Fund, in

December 2019.

• As part of the new Value Added and/or Opportunistic funds, consider up to $20 million in

international opportunities.

ORG will continue to actively

manage the portfolio within the

guidelines of the Real Estate

Investment Policy.

• Considering redeeming out of selected open ended Core funds and reinvesting proceeds in new Core

Opportunities.

• Liquidated 90% of H/2 Credit Partners Ltd. for $13.8 million in November 2019 and remaining

balance will be liquidated in 2020. Original commitment was $10 million.

• Evaluate and consider ending the dividend reinvestment program in certain Core funds.

• ORG is evaluating the dividend reinvestment programs and has not elected to end any dividend

reinvestment programs at this time.

Present additional educational

seminar for the Trustees during

2019.

• Details of educational seminars will be agreed upon at a future date.


Progress Towards Strategic Plan for 2019

Value Added

$20.0

Opportunistic

$10.0

$0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50

Commitments in Millions

2019 Strategic Plan Progress

Target

Closing

Date Partnership Strategy Geographic Focus

Commitment

($ millions)

7/1/2019 ABR Chesapeake Investors VI LP Value-Added United States $10.0

7/31/2019 Alcion Real Estate Partners Fund IV, L.P. Opportunistic United States $10.0

Dec. 2019 Citymark Capital U.S. Apartment Fund II, LP Value-Added United States $10.0

Total $30.0

Commitment Activity - 2019 Commitments


Portfolio Summary

As of June 30, 2019

• The Private Real Estate Since Inception IRR has stayed consistent over the last four

quarters.

One Year

Ending

9/30/2018 12/31/2018 3/31/2019 6/30/2019 6/30/2019

Beginning Market Value $269.4 $269.6 $268.9 $273.1 $269.4

Contributions $5.2 $5.7 $6.4 $17.9 $35.2

Distributions ($11.8) ($11.8) ($6.4) ($7.7) ($37.7)

Net Income/Appreciation $6.8 $5.5 $4.2 $7.2 $23.6

Ending Market Value $269.6 $268.9 $273.1 $290.4 $290.4

Unfunded Commitments $77.1 $103.7 $99.1 $84.4 $84.4

Since Inception IRR - Net 8.8% 8.8% 8.7% 8.8% 8.8%

Private Real Estate

Quarter Ending

in $ Millions


Annual Cash Flow Summary

Historical Market Value and Cash Flows Projected Market

Value

and Cash Flows

• Between 2012 and the 2nd Quarter 2019, the capital calls have outpaced the distributions

by approximately $92.3 million.

($42.2)

($4.1) ($4.7) ($4.3)($18.8)

($28.0) ($54.4)($29.4)

($54.4)

($28.3) ($28.2) ($31.5) ($38.9)

($6.4) ($17.9)

($40.0) ($55.2)($46.8) ($38.0) ($35.2)

$4.4 $2.4 $4.1 $1.4 $2.9

$41.8

$8.2 $17.2 $13.5 $29.1 $22.3

$58.4

$34.2 $6.4 $7.7 $9.9 $19.5 $15.0 $15.5 $11.5

$42.7 $50.5 $43.7 $33.4

$57.3

$47.3 $102.5

$126.9

$187.8 $209.9

$237.6 $238.6

$268.9 $273.1 $290.4

$307.6

$346.3

$381.6 $407.9

$435.7

($300.0)

($200.0)

($100.0)

$0.0

$100.0

$200.0

$300.0

$400.0

$500.0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1Q2019 2Q2019 2019 2020 2021 2022 2023

($ i

n M

illio

ns)

Capital Calls Distributions Market Value Net Cash Flow


Strategy Diversification

Strategy Diversification By Market Value

As of June 30, 2019

• The SBCERS Real Estate Investment policy

has an allocation range of 40-80% for the Core

strategy. The total Core investments is 75% as

of June 30, 2019.

• The remaining portion of the portfolio is

divided between Value Added and

Opportunistic investments. Both are within the

Policy ranges.

Core75%

Value Added12%

Opportunistic13%

81%

55%58% 62%

65%65% 63%

72% 74% 74% 75%

60%

11%

14%

14%11% 10% 12%

19%

33%

24%14% 14%

13% 13%

12%12% 12%

12%

25%

1%4%

10% 10%12% 12%

16% 14% 14% 13%15%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

4Q10 4Q11 4Q12 4Q13 4Q14 4Q15 4Q16 4Q17 4Q18 1Q19 2Q19 ORG'sTarget

PortfolioCore Public Securities Value Added Opportunistic


Property Type Diversification

• Consistent with the SBCERS Real Estate

Investment Policy, Office, Retail, Industrial and

Apartments property types are within their

range.

• Investing in several types of real estate

minimizes the risk by diversification.

Property Type Diversification By Market Value

As of June 30, 2019

38% 25% 30% 31%25%

22%20%

23%26% 25% 26%

24%

17%

16%

14% 13%

14%

14%

13%11%

10%10%

10% 15%

26%

29% 23%21%

24%27%

26%28%

29% 31% 30% 25%

12%

15%18%

16% 20% 21%25%

25%

24%24% 24%

22%

6%4%

7%7%

7% 6%

5%4%

4% 4%

5%

3%

3% 4%4%

4% 5%4%

4% 3% 3%

4%2%1%

1% 1%1%

1% 1% 1%1%

7% 6%8%

6% 5% 4% 4% 3% 2% 2% 2%4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

4Q10 4Q11 4Q12 4Q13 4Q14 4Q15 4Q16 4Q17 4Q18 1Q19 2Q19 ORG'sTarget

Portfolio

Office Retail Industrial Apartments Hotel Assisted Living Self Storage Other

Industrial30%

Office26%

Retail10%

Hotel4%

Self Storage

1%

Assisted Living

3%

Apartments24%

Other2%


Geographic Diversification

Geographic Diversification By Market Value

As of June 30, 2019

18%16% 12% 14%

12%

8% 9%

17%13% 13%

16%18%

16%

8%

8%8% 11%

12% 10%

11%

10% 10%

10%

11%

4%

6%

3%

6%8%

8%7%

8%

8% 8%

7%

7%

4%

1%

1%

2%

1%

2%2%

2%

2% 2%2%

1%

8%

14%

20%

13%

14%14%

14%

15%

15%17%

16%15%

6%

9%12%

11%

13%

12%13%

11%

10%10%

10%11%2% 5%

3% 6%

5%

5% 6%

9%

8%7%

8% 5%

39%

27%

22%24%

21%24%

22%

24%

27%27%

27%

22%

3%

13%

18%15% 13%

11%13%

2%

1%1%

1%

5%

1% 1% 1% 2%4% 4%

1%6% 5%

3%5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

4Q10 4Q11 4Q12 4Q13 4Q14 4Q15 4Q16 4Q17 4Q18 1Q19 2Q19 ORG's

Target

PortfolioNortheast Mideast E.N. Central W.N. Central Southeast

Southwest Mountain Pacific Unspecified US International

• The portfolio is well diversified across the

United States with additional diversification in

Europe.

• Unspecified U.S. indicates the manager is

unable to easily identify the region such as

investments in debt mortgage tranches.


Portfolio Summary

Abacus Multi-Family Fund IV

Millennium West End Apartments

St. Louis Park, MN

Rubenstein Properties Fund III

Parkwood Crossing Office Building

Indianapolis, IN

Stockbridge Value Fund II

Preston Park Financial Center

Plano, TX


Portfolio Summary by Investments As of June 30, 2019

* Euro to US Dollar exchange rate as of 6/30/2019: 1.1374 nm: Not Meaningful + GBP to US Dollar exchange rate as of 6/30/2019: 1.2704

Vintage

Year

Investment

StrategyPrivate Real Estate Investments

Capital

Committed

Total

Contributions

Total

Distributions

6/30/2019

Market ValueNet IRR

Net Equity

Multiple

2009 Opportunistic Rockw ood Capital Real Estate Partners VIII, L.P. $0 $8,113,417 $15,044,705 $37,791 19.0% 1.9x

2010 Core H/2 Credit Partners, L.P. 10,000,000 10,000,000 0 15,165,888 5.1% 1.5x

2011 Core Prologis Targeted U.S. Logistics Fund, Inc. 15,000,000 19,589,488 6,904,674 40,302,571 15.9% 2.4x

Value Added Greenfield Acquisition Partners VI, L.P. 7,500,000 10,039,013 12,497,601 374,981 10.4% 1.8x

Opportunistic Blackstone Real Estate Partners VII, L.P. 7,500,000 10,298,269 11,585,720 4,620,149 17.0% 2.6x

2012 Core Harrison Street Core Property, L.P. 10,000,000 14,665,199 4,729,549 17,646,916 9.0% 1.6x

Stockbridge Smart Markets Fund, L.P. 20,000,000 28,341,498 8,341,498 39,641,108 10.6% 1.7x

Value Added Miller Global Real Estate Fund VII, LLC 7,500,000 9,820,985 11,699,331 381,624 14.6% 2.1x

Opportunistic Walton Street Fund VII, L.P. 10,000,000 9,098,427 8,933,774 3,892,680 12.1% 1.5x

2013 Core Invesco U.S. Income Fund, L.P. 20,000,000 27,421,730 8,138,218 34,862,527 11.9% 1.6x

Mesa West Core Lending Fund, L.P. 10,000,000 13,831,530 4,058,198 13,828,340 6.7% 1.3x

Mesa West Real Estate Income Fund III, L.P. 10,000,000 7,575,674 8,677,883 1,158,466 9.0% 3.3x

Value Added Greenfield Acquisition Partners VII, L.P. 10,000,000 11,301,493 8,977,403 7,683,509 13.6% 2.2x

Opportunistic Lubert-Adler Fund VII, L.P. 12,500,000 11,922,096 5,430,685 10,711,229 7.1% 1.3x

2014 Core Abacus Core Income Fund I, L.P. 10,000,000 8,913,368 2,374,616 11,054,434 11.7% 1.6x

Prologis Targeted Europe Logistics Fund * 5,000,000 5,304,339 1,272,831 6,804,325 10.0% 1.5x

Value Added Abacus Multi-Family Partners III, L.P. 7,500,000 7,129,690 7,341,904 4,069,312 26.9% 1.6x

Stockbridge Value Fund II, L.P. 7,500,000 6,978,568 5,828,639 4,472,089 14.3% 1.5x

Opportunistic Moorfield Real Estate Fund III, L.P. + 4,685,400 4,115,433 1,679,158 3,063,570 24.9% 1.6x

2015 Core Mesa West Real Estate Income Fund IV, L.P. 10,000,000 4,550,971 343,105 4,572,858 7.9% 1.1x

Opportunistic Patron Capital, L.P. V * 5,457,000 2,917,322 902,491 2,639,439 27.3% 1.7x

2016 Value Added Lubert-Adler Fund VII-B, L.P. 10,000,000 5,250,000 233,464 5,839,037 10.6% 1.2x

Opportunistic Rubenstein Properties III, L.P. 5,000,000 3,767,271 0 3,764,830 -0.1% 1.0x

2017 Core Blackstone Property Partners 30,000,000 30,788,920 788,920 32,277,291 7.5% 1.1x

Value Added Abacus Multi-Family Partners IV, L.P. 15,000,000 5,508,179 602,342 5,706,430 24.7% 1.2x

Miller Global Real Estate Fund VIII, LLC 5,000,000 4,000,200 1,974,647 2,139,054 3.2% 1.4x

Stockbridge Value Fund III, L.P. 10,000,000 3,166,471 109,020 2,936,178 -4.0% 1.0x

Opportunistic Walton Street Fund VIII, L.P. 10,000,000 7,026,017 1,348,084 6,813,200 12.6% 1.5x

2018 Core Walton Street Real Estate Debt Fund II, L.P. 10,000,000 500,000 0 511,720 n/a n/a

Value Added Longpoint Realty Fund I, L.P. 15,500,000 3,100,000 276,414 3,461,974 n/a n/a

Opportunistic Blackstone Real Estate Partners IX, L.P. 4,500,000 0 0 0 n/a n/a

$315,142,400 $295,035,569 $140,094,873 $290,433,520 8.8% 1.5xPrivate Real Estate Active Funds Total

Active Funds


Detailed Portfolio Summary for the Period Ending June 30, 2019

Blackstone Real Estate Partners VII

The Cosmopolitan

Las Vegas, NV

Abacus Multi-Family Fund IV

Sage Palmer Ranch

Sarasota, FL

Greenfield Acquisition Partners VII

TriWest Plaza

Dallas, TX



Executive Summary

Investment Returns—Time Weighted, Gross of Fees Investment Returns—Time Weighted, Net of Fees

ORG Portfolio Management Contact:

Edward Schwartz Phone: 216-910-9080

Partner

3733 Park East Dr.

Suite 210

Cleveland, OH 44122

E-Mail: [email protected]

Market Value

Portfolio Market Value $290,433,520 9.1%

Private $290,433,520

Public $0

Current Unfunded Commitments $84,399,064

$374,832,584 11.8%

$3,180,487,425

Total Allocation to Real Estate $318,048,743 10.0%

Total Loan-to-Value Ratio 41.4%

Financial Highlights

at June 30, 2019

Total Market Value and

Unfunded Commitments

Total Fund Market Value

Percent of

Fund

Note: SBCERS Benchmark is a real rate of return (adjusted for inflation) of 4.5%,

net of investment management fees.

3.0

%

11.3

%

12.5

%

13.1

%

8.6

%

1.0

%

6.4

% 7.6

%

9.8

%

6.9

%


SBCERS NFI ODCE, Gross

2.4

%

9.3

% 10.4

%

11.1

%

7.1

%

0.8

%

5.5

% 6.6

%

8.8

%

5.9

%

1.9

%

6.3

%

6.7

%

6.1

%

6.6

%


SBCERS NFI ODCE, Net SBCERS Benchmark

Gross IRR: 9.9%

Net IRR: 8.8%

Total Portfolio

Since Inception

Date: 1-1-2006


Property Type Diversification by Market Values

Geographic Diversification by Market Values

Compliance

Level

Reference Page

Portfolio Diversification ✓ Page 42

Property Type Diversification ✓ Page 43

Geographic Diversification ✓ Page 44

Investment Manager

Diversification ✓ Page 45

Vintage Year Diversification ✓ Page 46

Total Portfolio Leverage ✓ Page 47

Investment Size Limitation ✓ Page 48

Investment Policy Compliance

Investment Portfolio Commentary

• The portfolio continues to perform well with performance

exceeding the benchmarks while maintaining low risks.

• Property type and location diversification remain consistent with

policy.

NOTE: Unspecified U.S. indicates the manager is unable to easily

identify the region such as investments in debt tranches.


Executive Summary

Industrial30%

Office26%

Retail10%

Hotel4%

Self Storage

1%

Assisted Living

3%

Apartments24%

Other2%

*OTHER:

Mixed Use: 0.3% Residential: 1.2% Mortgages: 0.1%


Portfolio Summary, Gross of Fees For the Period Ended 6/30/2019

Market Value

Percent

of Real

Estate

Invested

Amount

Remaining

Capital to be

Called

Leverage

Ratio Qtr. 1 Year 3 Years 5 Years

Since

Incept.

Core Funds

Abacus Core I $11,054,434 $8,807,059 $1,192,941 45.4% 1.9% 17.4% 13.4% 14.2%

Blackstone Property Partners 32,277,291 30,000,000 0 49.1% 1.3% 7.9% 8.7%

H/2 Credit Partners 15,165,888 10,000,000 0 22.0% -0.3% -2.2% 5.5% 4.9% 7.1%

Harrison St. Core Property 17,646,916 10,000,000 0 25.6% 1.4% 7.2% 8.8% 9.6% 9.7%

Invesco US Income 34,862,527 20,000,000 0 36.7% 1.6% 10.0% 11.9% 13.6% 12.6%

Mesa West Core Lending 13,828,340 10,000,000 0 58.1% 1.9% 8.1% 7.9% 7.9% 8.0%

Mesa West Fund III 1,158,466 526,282 9,473,718 69.7% -0.4% 12.0% 12.4% 12.3% 12.5%

Mesa West Fund IV 4,572,858 4,500,000 5,500,000 58.4% 3.3% 13.0% 15.0%

Prologis Europe Logistics + 6,804,325 5,000,000 0 18.2% 3.4% 12.7% 16.3% 12.5% 12.3%

Prologis US Logistics 40,302,571 15,000,000 0 18.2% 4.7% 16.4% 20.5% 19.0% 18.2%

Stockbridge Smart Mkts. 39,641,108 20,000,000 0 22.7% 2.3% 8.5% 8.9% 10.3% 11.6%

Walton St. Debt II 511,720 500,000 9,500,000 56.4%

Total Core $217,826,444 75.0% $134,333,341 $25,666,659 35.8% 2.2% 9.8% 11.9% 12.0% 7.2%

Value Added Funds

Abacus Multi-Family III 4,069,312 6,979,636 520,364 51.8% 12.1% 32.7% 37.2% 43.4%

Abacus Multi-Family IV 5,706,430 5,063,513 9,936,487 54.9% 7.4% 95.1% 95.1%

Greenfield Acq. Prtnrs. VI 374,981 7,194,872 305,128 74.0% -23.5% -34.8% -16.5% -6.5% 1.9%

Greenfield Acq. Prtnrs. VII 7,683,509 8,556,885 1,443,115 44.0% 9.8% 16.4% 17.4% 18.6%

Longpoint I 3,461,974 3,100,000 12,400,000 30.1% 28.7% 28.7%

Miller Global VII 381,624 6,006,795 1,493,205 75.5% -12.9% -25.9% 6.8% 14.2% 15.1%

Miller Global VIII 2,139,054 3,134,322 1,865,678 51.3% 1.1% -2.0% 7.3%

Rubenstein III 3,764,830 3,734,513 1,265,487 62.3% 1.2% 1.5% 8.8%

Stockbridge Value II 4,472,089 6,882,216 617,784 52.7% 6.1% 17.4% 19.4% 19.7%

Stockbridge Value III 2,936,178 3,163,380 6,836,620 63.9% 1.9% -0.4% -0.4%

Total Value Added $34,989,981 12.0% $53,816,133 $36,683,867 50.1% 8.1% 19.2% 21.0% 21.2% 14.5%

Opportunistic Funds

Blackstone RE Fund VII 4,620,149 6,450,329 1,049,671 58.1% 4.0% 7.7% 11.1% 12.9% 18.9%

Blackstone RE Fund IX*** 0 0 4,500,000

Lubert-Adler VII 10,711,229 11,410,223 1,089,777 66.1% 0.4% 10.7% 9.8% 10.7% 6.6%

Lubert-Adler VII-B 5,839,037 5,250,000 4,750,000 63.0% 6.8% 17.9% 12.1%

Moorfield III * 3,063,570 4,685,400 0 35.0% -1.5% 26.8% 23.6% 24.2%

Patron V* 2,639,439 2,302,501 3,154,499 43.0% 6.7% 20.8% 24.5% 24.5%

Rockw ood Fund VIII 37,791 0 0 13.3%

Walton St. VII 3,892,680 6,817,308 3,182,692 61.5% -0.3% -0.4% 6.9% 11.5% 15.4%

Walton St. VIII 6,813,200 5,678,101 4,321,899 63.2% 3.4% 11.8% 17.3%

Total Opportunistic 37,617,095 13.0% 42,593,862 22,048,538 59.8% 2.5% 12.0% 12.1% 14.0% 18.7%

Total Portfolio Investments $290,433,520 100.0% $230,743,336 $84,399,064 41.4% 3.0% 11.3% 12.5% 13.1% 8.6%

NCREIF ODCE - Gross of Fees 1.0% 6.4% 7.6% 9.8% 6.9%

EPRA/NAREIT All Equity REIT Total Return 1.8% 12.6% 5.8% 10.6% 7.1%

+-Euro exchange rate as of 6-30-2019 - 1.1374 See Glossary for Index Definitions

***No capital called as of 6/30/2019.

Time Weighted Returns - Gross of Fees

Portfolio Investments

*-GBP exchange rate as of 6-30-2019 - 1.2704


Portfolio Summary, Net of Fees For the Period Ended 6/30/2019

Market Value

Manager

Projected

Net IRR

Current

Value

Net IRR

Manager

Projected

Net Equity

Multiple

Current

Value Net

Equity

Multiple Qtr. 1 Year 3 Years 5 Years

Since

Incept.

Core Funds

Abacus Core I $11,054,434 9.6% 11.7% 1.8x 1.6x 1.7% 14.6% 11.0% 11.7%

Blackstone Property Partners 32,277,291 * 7.5% * 1.1x 1.4% 6.9% 7.6%

H/2 Credit Partners Ltd. 15,165,888 * 5.1% * 1.5x -0.5% -3.1% 3.9% 3.5% 5.5%

Harrison St. Core Property 17,646,916 * 9.0% * 1.6x 1.2% 6.4% 8.0% 8.8% 8.9%

Invesco US Income 34,862,527 * 11.9% * 1.6x 1.4% 8.9% 10.8% 12.5% 11.4%

Mesa West Core Lending 13,828,340 * 6.7% * 1.3x 1.7% 7.2% 7.0% 7.1% 7.2%

Mesa West Fund III 1,158,466 9.0% 9.0% 1.3x 3.3x -0.3% 9.8% 9.9% 9.7% 7.0%

Mesa West Fund IV 4,572,858 14.0% 7.9% 1.1x 1.1x 2.1% 7.9% 7.6%

Prologis Europe Logistics + 6,804,325 * 10.0% * 1.5x 3.2% 9.7% 13.6% 9.4% 9.3%

Prologis US Logistics 40,302,571 * 15.9% * 2.4x 4.1% 14.4% 17.5% 16.4% 15.8%

Stockbridge Smart Mkts. 39,641,108 * 10.6% * 1.7x 2.1% 7.9% 8.3% 9.6% 10.9%

Walton St. Debt II 511,720 9.0% n/a 1.3x n/a

Total Core $217,826,444 * 7.1% * 1.5x 2.0% 8.5% 10.3% 10.5% 6.1%

Value Added Funds

Abacus Multi-Family III 4,069,312 26.2% 26.9% 1.6x 1.6x 9.4% 24.4% 27.0% 3.7%

Abacus Multi-Family IV 5,706,430 15.1% 24.7% 1.6x 1.2x 4.9% 45.6% 45.6%

Greenfield Acq. Ptrnrs. VI 374,981 10.8% 10.4% 1.4x 1.8x -20.4% -31.9% -15.5% -6.6% 0.4%

Greenfield Acq. Ptrnrs. VII 7,683,509 14.0% 13.6% 2.0x 2.2x 7.7% 12.6% 13.5% 13.6%

Longpoint I 3,461,974 15.0% 66.4% 1.9x 1.2x 20.7% 20.7%

Miller Global VII 381,624 14.7% 14.6% 1.4x 2.1x -9.2% -25.9% -4.8% 5.1% 4.3%

Miller Global VIII 2,139,054 9.0% 3.2% 1.3x 1.4x 0.2% -4.4% 0.9%

Rubenstein III 3,764,830 11.0% -0.1% 1.7x 1.0x 0.6% -1.2% -0.8%

Stockbridge Value II 4,472,089 14.5% 14.3% 1.5x 1.5x 4.9% 13.7% 15.4% 14.1%

Stockbridge Value III 2,936,178 19.9% -4.0% 0.9x 1.6x 0.9% -6.5% -6.5%

Total Value Added $34,989,981 15.3% 1.6x 5.9% 12.7% 14.6% 15.6% 9.2%

Opportunistic

Blackstone VII 4,620,149 16.3% 17.0% 1.8x 2.6x 3.7% 6.7% 10.0% 11.7% 16.8%

Blackstone IX # 0

Lubert-Adler VII 10,711,229 10.5% 7.1% 1.6x 1.3x 0.2% 9.8% 8.8% 4.5% -1.2%

Lubert-Adler VII-B 5,839,037 18.0% 10.6% 1.9x 1.2x 4.5% 14.6% 10.4%

Moorfield III ** 3,063,570 20.0% 24.9% 1.6x 1.6x -1.6% 26.2% 22.6% 22.9%

Patron V 2,639,439 15.0% 27.3% 1.6x 1.7x 6.7% 15.6% 6.5% 6.5%

Rockw ood Fund VIII 37,791 19.1% 19.0% 1.6x 1.9x 7.2%

Walton St. VII 3,892,680 12.0% 12.1% 1.6x 1.5x -0.9% -2.4% 5.0% 9.6% 13.5%

Walton St. VIII 6,813,200 14.0% 12.6% 1.5x 1.5x 3.0% 10.2% 14.6%

Total Opportunistic 37,617,095 14.8% 1.6x 1.9% 10.2% 10.4% 11.9% 12.9%

Total Portfolio Investments $290,433,520 8.8% 1.5x 2.4% 9.3% 10.4% 11.1% 7.1%

Total Net of ORG Fees 2.4% 9.1% 10.3% 11.1%

SBCERS Benchmark 1.9% 6.3% 6.7% 6.1% 6.6%

NCREIF ODCE Index - Net of Fees 0.8% 5.5% 6.6% 8.8% 5.9%

NOTES: ##-Performance not reported for partial periods nm-Not meaningful # - No capital calls as of 6-30-2019

**-GBP exchange rate as of 6-30-2019 -1.2704 +-Euro exchange rate as of 6-30-2019 -1.1374 See Glossary for Index Definitions

* - Open ended funds do not provide IRR or Equity Multiple data

Time Weighted Returns - Net of Fees



Distribution Yield—Core Funds Only

Qtr. 1 Year

Core Funds

Abacus Core I 1.3% 3.9%

Blackstone Property Partners 0.4% 2.1%

H/2 Credit Partners 0.0% 0.0%

Harrison Street Core 1.2% 5.2%

Invesco US Income 1.3% 5.4%

Mesa West Core Lending 1.6% 7.0%

Mesa West Fund III 0.9% 5.2%

Mesa West Fund IV 1.1% 6.1%

Prologis US Logistics 0.9% 3.9%

Prologis Europe Logistics 1.0% 4.1%

Stockbridge Smart Markets 1.1% 4.5%

Walton Street Debt II 0.0% 0.0%

Total Core 1.0% 4.2%

Total Open End Funds/Investments 0.9% 4.1%

Portfolio Investments Distribution Yield

SBCERS Current Portfolio-Based on Market Value

Portfolio Summary, Distribution Yield For the Period Ended 6/30/2019


Portfolio Cash Flows Summary For the Period Ended 6/30/2019

Return of Return ofPeriod Capital Operating Capital Capital Net InvestmentsEnding Contributions Contributions (Temporary) (Permanent) Income Distributions Appreciation Market Value

2006 $42,184,771 $0 $0 $0 $1,871,724 ($4,417,748) $3,075,051 $42,713,798

2007 4,086,337 2,225,620 (2,427,596) 3,890,806 50,488,965

2008 4,734,386 2,108,439 (4,093,031) (9,489,764) 43,748,995

2009 4,356,984 2,053,150 (1,374,884) (15,384,842) 33,399,403

2010 18,773,803 (521,748) 2,391,605 (2,390,499) 5,636,060 57,288,624

2011 27,931,807 23,311 (1,037,506) (39,781,153) 1,225,424 (959,538) 2,588,270 47,279,239

2012 54,276,203 97,253 (4,209,254) (2,133,163) 2,600,909 (1,890,510) 6,506,565 102,527,242

2013 29,194,174 197,389 (3,151,978) (8,665,590) 3,994,179 (5,367,606) 8,183,268 126,911,078

2014 53,741,963 643,052 (1,805,721) (3,890,052) 5,795,686 (7,793,644) 14,208,696 187,811,058

2015 28,155,052 579,733 (4,542,776) (10,821,692) 8,708,663 (14,087,633) 14,084,085 209,869,392

2016 27,583,760 678,820 (2,823,237) (7,271,366) 10,270,678 (12,284,756) 11,531,295 237,554,586

2017 30,399,695 1,152,660 (2,466,319) (44,032,113) 10,977,757 (12,392,728) 17,493,838 238,614,136

2018 37,862,416 1,058,539 (4,059,778) (16,052,046) 9,513,447 (14,114,886) 16,119,688 268,941,517

Q1 2019 6,081,859 318,028 (262,639) (2,749,008) 1,482,039 (3,420,224) 2,674,123 273,065,695

Q2 2019 17,693,487 236,131 (1,165,846) (2,875,953) 2,025,175 (3,670,441) 5,125,272 290,433,520

Q3 2019

Q4 2019

Total for

2019 23,775,345 554,159 (1,428,485) (5,624,961) 3,507,214 (7,090,666) 7,799,395 290,433,520

Total Cash

Flows $387,056,697 $4,984,917 ($25,525,054) ($138,793,883) $67,244,495 ($90,685,725) $86,242,411 $290,433,520

Portfolio Cash Flows

*Note: Totals prior to 2015 include CBRE Value 5. Starting in Q1 2015 the liquidated fund was removed.


Investments Cash Flows Summary For the Period Ended 6/30/2019

Quarterly Investment Cash Flows

Return of Return ofBeginning Capital Operating Capital Capital Net Ending

Investment Market Value Contributions Contributions (Temporary) (Permanent) Income Distributions Appreciation Market Value

Core Funds

Abacus Core I $11,019,948 $0 $0 $0 $0 $134,902 ($148,000) $47,584 $11,054,434

Blackstone Property Partners 21,971,194 10,112,030 - - - 44,041 (112,030) 262,056 32,277,291

H/2 Credit Partners 15,241,408 - - - - (105,306) - 29,786 15,165,888

Harrison St. Core Prop. 17,402,253 200,350 33,088 - - 178,623 (205,839) 38,441 17,646,916

Invesco US Income 34,415,728 357,004 88,319 - - 405,969 (465,060) 60,567 34,862,527

Mesa West Core Lending 13,603,672 225,786 - - - 225,624 (226,668) (74) 13,828,340

Mesa West Fund III 1,638,145 - - (465,147) - 16,280 (10,848) (19,964) 1,158,466

Mesa West Fund IV 3,167,103 1,388,889 - - - 72,701 (51,654) (4,181) 4,572,858

Prologis Europe Logistics 6,660,770 - - - - 77,161 (66,396) 132,790 6,804,325

Prologis US Logistics 39,010,027 - 49,915 - - 382,301 (350,940) 1,211,268 40,302,571

Stockbridge Smart Mkts. 38,814,357 415,938 - - - 415,938 (415,938) 410,813 39,641,108

Walton St. Debt II 0 500,000 - - - 11,720 - - 511,720

Total Core $202,944,605 $13,199,997 $171,322 ($465,147) $0 $1,859,954 ($2,053,373) $2,169,086 $217,826,444

Value Added Funds

Abacus Multi-Family III 3,535,304 185,185 - - - 39,126 - 309,697 4,069,312

Abacus Multi-Family IV 3,986,858 1,521,981 - - - 2,781 (21,952) 216,762 5,706,430

Greenfield Acq. Prtnrs. VI 832,299 - - - (40,164) (5,959) (291,523) (119,672) 374,981

Greenfield Acq. Prtnrs. VII 8,540,826 - - - (1,197,636) 3,275 (296,298) 633,342 7,683,509

Longpoint Realty I 2,612,364 - - - (151,199) 10,164 (125,215) 1,115,861 3,461,974

Miller Global VII 420,430 - - - - (11,075) - (27,731) 381,624

Miller Global VIII 1,913,782 225,540 - - - (23,775) (3,471) 26,978 2,139,054

Rubenstein III 2,859,941 884,956 - - - (42,102) - 62,035 3,764,830

Stockbridge Value II 3,871,736 463,339 - - - 48,381 (55,540) 144,173 4,472,089

Stockbridge Value III 2,927,941 - - - - 4,497 (18,140) 21,879 2,936,178

Total Value Added $31,501,481 $3,281,001 $0 $0 ($1,388,999) $25,313 ($812,139) $2,383,324 $34,989,981

Opportunistic

Blackstone RE Fund VII 4,999,835 51,648 12,857 - (329,187) 16,582 (299,190) 167,605 4,620,149

Lubert-Adler VII 10,688,789 - - - - 7,842 - 14,598 10,711,229

Lubert-Adler VII-B 5,588,887 - - - - (672) - 250,823 5,839,037

Moorfield III 3,113,781 - - - - 14,040 - (64,252) 3,063,570

Patron V 2,353,965 560,841 - - (425,591) (27,826) - 178,050 2,639,439

Rockwood Fund VIII 45,937 - - - - (552) - (7,594) 37,791

Walton Street VII 5,141,875 - 25,286 - (732,177) 93,747 (505,739) (130,312) 3,892,680

Walton Street VIII 6,686,540 600,000 26,666 (700,699) - 36,747 - 163,945 6,813,200

Total Opportunistic $38,619,609 $1,212,489 $64,809 ($700,699) ($1,486,954) $139,908 ($804,929) $572,861 $37,617,095

Total Portfolio $273,065,695 $17,693,487 $236,131 ($1,165,846) ($2,875,953) $2,025,175 ($3,670,441) $5,125,272 $290,433,520


Management Fee Savings

One Time

Savings

Annual

Savings Comments

Core Funds

Abacus Core I $25,000 $0 Three month fee break.

Blackstone Property Partners

H/2 Credit Partners

Harrison Street Core 30,000 30% reduction in fees over life of investment.

Invesco US Income 40,000 20% reduction in fees over life of investment.

Mesa West Core Lending 30,000 Founding investor fee of 0.75% on investeed capital for

initial 2 years and 0.80% on invested capital thereafter.

Standard fee is 1.10% on invested capital.

Mesa West Fund III 15,000 Reduced management fees by 0.15% over life of

investment. Savings of $15,000 per year during investmet

period and up to $10,000 per year afterwards.

Mesa West Fund IV 15,000 Reduced management fees by 0.15% over life of

investment. Savings of $15,000 per year during investmet

period and up to $10,000 per year afterwards.

Prologis US Logistics

Prologis Europe Logistics

Stockbridge Smart Markets 80,000 40% reduction in fees over life of investment.

Walton Street Debt II 306,025 No fees on commitment equals a savings of $270,000 and

.25 basis point discount for 3 years equals a savings of

$36,096.

Total Core $331,025 $210,000

Value Added Funds

Abacus Multi-Family III

Abacus Multi-Family IV

Greenfield Acquisition Partners VI 18,750 Founding investor fee reduction for first year of 0.25% of

committed capital.

Greenfield Acquisition Partners VII 18,750 Founding investor fee reduction for first year of 0.25% of

committed capital.

Longpoint Realty Fund I 77,500 Fee reduction of 0.50% of committed capital and invested

capital.

Miller Global VII

Miller Global VIII

Rubenstein III

Stockbridge Value II

Stockbridge Value III 35,000 Reduced management fees annually by 0.35% over life of

investment.

Total Value Added $37,500 $112,500

ORG Selected Investments

Management Fee Savings For the Period Ended 6/30/2019


Management Fee Savings—Continued

One Time

Savings

Annual

Savings Comments

Opportunistic Funds

Blackstone RE Fund VII $17,500 Three month fee break.

Blackstone RE Fund IX 50,000 Four month fee break.

Lubert-Adler VII 56,250 Reduced management fees by 0.25% during 3 year

commitment period.

Lubert-Adler VII-B 225,000 No fees on commitment for 18 months.

Moorfield III 37,500 50% reduction in fees over life of investment.

Patron V 96,200 Founding investor fee break and will not pay fees for the

first year (€87,500 with an exchange rate of 1.0994 as of

5/31/2015)

Walton Street VII 40,000 One time fee savings.

Walton Street VIII

Total Opportunistic $484,950 $37,500

Total Portfolio $853,475 $360,000

ORG Selected Investments

Management Fee Savings For the Period Ended 6/30/2019


Market Overview

For the Period Ended 6/30/2019

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

1Q11 4Q11 3Q12 2Q13 1Q14 4Q14 3Q15 2Q16 1Q17 4Q17 3Q18 2Q19

U.S. Real GDP: Percent Change From Preceding Quarter

Source: U.S. Bureau of Economic Analysis

3.7%4.2%

3.8%4.2%

4.6%

5.4%

6.4%5.9%

5.4% 5.3%

6.2%6.7%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

Source: NCREIF, as of June 30, 2019

1-year NCREIF NPI MSA Income Return

2007 2019

4.2%* 4.1%**

10.3%* 2.2%**

4.0% 2.0%

Overall 5.5% 4.8%

Office 5.3% 5.0%

Industrial 6.0% 4.8%

Retail 6.0% 5.3%

Apartments 5.2% 4.4%

150 basis points 180 basis points

LTV: Commercial Loans 70-75% 59%

DSCR: Debt Service Coverage Ratio 1.3x 1.7x

45% 17%

Office 87% 90%

Industrial 91% 97%

Retail 92% 93%

Apartments 94% 94%

*2007 Net ODCE Returns - 1 year ending 12/31/2007

**2Q 2019 Net ODCE Returns - 1 year ending 6/30/2019

CMBS% of New Originations

Occupancy:

Source: NCREIF, MSREI Strategy, Board of Fovernors of the Federal

Reserve System, Mortgage Bankers Association

Income Return

Appreciation Return

10 Year Treasury Rate

Cap Rates:

Cap Rate Spread over Treasuries

During the second quarter of 2019, U.S. Real GDP grew by 2.1% which was less than

the first quarter’s 3.1% GDP growth but still greater than 4Q 2018’s 1.1% GDP growth.

Core real estate returns continue to be increasingly income dependent as seen with the

NFI-ODCE where the 1.00% gross return for first quarter was comprised of 1.01%

income return and .01% appreciation return. The last time the NFI-ODCE Index reported

negative appreciation was 1Q 2010. Thus, this quarter marks the end of a 36-quarter run

of positive appreciation return for the index. The NFI-ODCE Index reported negative

investor cash flow ($73.7 million) for the third consecutive quarter as distributions and

redemptions ($3.77 billion) outpaced contributions ($3.7 billion).

Income returns in Gateway cities have

diminished compared to Secondary

markets as shown in the chart to the right.

Two primary factors impacting this

change is pricing is expensive in Gateway

markets and shifting demographic

preferences.ORG see’s opportunity in

other Secondary markets for defensive

income returns.

The debt markets remain open and accommodative, especially for more favorable property types

such as multifamily and industrial. Debt funds continue to provide capital for

transitional loans on value-add real estate. However, certain types of financing are difficult to

obtain, which includes speculative development or highly leveraged development. The debt

fundamentals today as compared to 2007 look conservative as shown in the chart to the right.


Market Overview


Office

The U.S. office market has been slowing due to increased construction costs

and the densification of office space. In 2018, construction costs on average

increased 5.7% nationally, according to the Rider Levett Bucknall report.

Increased construction costs has also resulted in increased tenant

improvement costs.

Asking rents continue to rise but at a slowing pace. Asking rents for the

quarter increased to $33.34 per square foot or 2.5% over the same quarter in

2018. Net absorption for the quarter was 24 million square feet along with just

12 million square feet of new supply. The vacancy rate decreased to 9.6%

which is a record low. (CoStar). ORG anticipates vacancy rates to increase as

construction activity normalizes and supply increases.

180

190

200

210

220

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Sq

ua

re F

oo

tag

e P

er

Em

plo

yee

Source: Cushman and Wakefield Note: 2018-2021 is a forecast

Densification of the Office

Brokerage data indicates flexible office represents approximately 2.0% of

office space today. Although, the net absorption has accounted for

approximately 25% to 30% of total U.S. office absorption over the past couple of

years.

Second quarter transaction activity increased 36% year-over-year compared to last

quarter 13% year-over-year decrease, according to Real Capital

Analytics. This was a significant increase over the prior quarters but it was largely

attributed to Time Warner’s $2.2 billion sale-leaseback at 30 Hudson Yards and

Blackstone’s $1.2 billion acquisition of a two-building portfolio in Seattle.


Market Overview


Retail

Total U.S. retail sales for the quarter were estimated at $1,361.8 billion, a quarterly increase

of 1.8%. U.S. retail e-commerce sales for the quarter were estimated at $146.2 billion

(10.7% of total U.S. retail sales). The $146.2 billion in U.S. retail e-commerce sales

represented a 4.2% quarterly increase. (U.S. Census Bureau)

As a result of increasing e-commerce market share, brick and mortar retailers have continued

to experience significant disruption and distress, especially with retailers selling goods that

can be easily sold online such as apparel. Dressbarn, the women’s clothing retailer,

announced it would close all 650 retail store after 57 years of business due to low levels of

profitability. Additionally, Payless announced that it would close all 2,100 U.S. stores earlier

this year after filing for bankruptcy protection in 2017. These along with other store closings

will continue to decrease demand and increase shadow supply. This has limited retail rent

growth to 1.8% for the past 12 months.

This evolving retail landscape continues to impact real estate values and strategies

regarding retail exposure. For example, during the second quarter, a large U.S. real

estate ODCE fund significantly wrote down the values of its retail properties by 16%

(retail cap rate increased by 100 bps). The fund has significant community center

and mall exposure which has encountered issues growing rents and retaining

tenants. The fund wrote down the value of its malls by 21%, community centers by

15% and power centers by 11%.

The retail sector has reported negative appreciation returns over the previous five

quarters(-0.09%, -0.16%, -0.13%, -0.74% and -2.68%, respectively), the second

quarter of 2019 reported a significant quarterly write-down. The regional (-7.74%)

and super-regional (-3.54%) malls were the primary detractors to retail appreciation,

while neighborhood centers had the smallest detraction from appreciation

performance of just five basis points (NCREIF).


Market Overview


Industrial

Apartments

The U.S. industrial market continues its strong run as the integration between retail and

industrial continues and e-commerce rises. As e-commerce continues to grow and

increase its market share, much of the value that was once placed on traditional retail

has been transferred to industrial. Companies continue to modernize their supply

chains in accordance.

Net absorption for the quarter was 34 million square feet which was a 49% increase

over the prior quarter. Completions totaled 60 million square feet for the quarter. The

vacancy rate increased 20 basis points over the last quarter to 5.0%. CoStar

estimates that the second quarter leasing volume will surpass 139 million square feet,

hitting all all-time high and outpacing last quarter by 46%. A significant lease during the

quarter included Amazon taking 2.5 million square feet for its custom-built,

4-story fulfillment center located in Tulsa, Oklahoma. Amazon signed another 2.6

million square foot lease in a second new fulfillment center located in Oklahoma City.

Second quarter transaction activity decreased 4% year-over-year compared to last

quarter 15% year-over-year decrease, according to Real Capital Analytics.

Apartment demand has continued as unemployment for March 2019 was 3.8% as compared to

4.4% at the same point in 2018. Over 2.5 million new jobs were added over the same 12-month

period, at an average of 210,000 per month, equating to a year-over-year growth rate of 1.7%.

(U.S. Bureau of Labor Statistics) While job growth saw a significant increase, the U.S.

homeownership rate decreased from 64.8% in fourth quarter 2018 to 64.2%. While this

decrease was partially seasonal, both the increase in employment and the decrease in

homeownership are generally accretive to the apartments sector.

As of first quarter 2019, rental growth continued to increase. Rental growth for the quarter was

1.3% which was on par with the 1.3% rent growth during first quarter 2018. (Costar) Certain

markets such as Oregon, New York City and California are currently going through rent control

legislation changes which will potentially limit apartment rental growth. During the quarter, the

State of Oregon passed a bill that would limit multifamily rent increases to 7% annually on

buildings more than 15 years old. While 7% rent increases would often be considered

aggressive by most underwriting standards, ORG believes that this added barrier to entry may

further limit reduce capital expenditures made on older multifamily units in the state.

60%

61%

62%

63%

64%

65%

66%

67%

68%

69%

70%

Homeownership Rate

Source: U.S. Census Bureau


Property Type Diversification—Compared to Indexes

Portfolio Composition by Market Values For the Period Ended 6/30/2019

SBCERS Current Portfolio

• The portfolio is well diversified by property type.

• Compared to the NCREIF - ODCE, SBCERS’ portfolio is overweighed in the

Industrial sector and underweighted in Office and Retail sectors.

• ORG expects to maintain overweight to industrial and underweight to retail and

office due to sector outlooks.

• ORG is considering increasing apartment exposure due to relative attractions of

the sector.

Residential: 1.2% Mixed Use: 0.3%

Mortgages: 0.1%

Other Diversification—2% Comments

SBCERS—US Only Compared to Indexes

Industrial30%

Office26%

Retail10%

Hotel4%

Self Storage

1%

Assisted Living

3%

Apartments24%

Other2%

34%

18%

25%

19%

0.3%

4%

26%

10%

24%

30%

4% 1% 3% 2%0%

5%

10%

15%

20%

25%

30%

35%

40%

Office Retail Apartments Industrial Hotel Self Storage AssistedLiving

Other

NFI ODCE SBCERS


Investments Property Type Diversification by Percent For the Period Ended 6/30/2019

Property Type Diversification (%)

Investment Apartments Industrial Office Retail Hotel Other

Core Funds

Abacus Core I 100% 0% 0% 0% 0% 0%

Blackstone Property Partners 27% 23% 39% 11% 0% 0%

H/2 Credit Partners 2% 1% 0% 38% 25% 34%

Harrison St. Core Property 21% 0% 42% 0% 0% 37%

Invesco US Income 27% 23% 35% 15% 0% 0%

Mesa West Core Lending 37% 1% 54% 5% 3% 0%

Mesa West Fund III 37% 0% 0% 0% 63% 0%

Mesa West Fund IV 40% 0% 48% 7% 5% 0%

Prologis US Logistics 0% 100% 0% 0% 0% 0%

Prologis Europe Logistics 0% 100% 0% 0% 0% 0%

Stockbridge Smart Mkts. 20% 36% 25% 19% 0% 0%

Walton Street Debt II 76% 0% 0% 0% 24% 0%

Total Core 23% 36% 24% 10% 2% 5%

Value Added Funds

Abacus III 100% 0% 0% 0% 0% 0%

Abacus IV 100% 0% 0% 0% 0% 0%

Greenfield Acq. Ptrns. VI 0% 0% 100% 0% 0% 0%

Greenfield Acq. Ptrns. VII 4% 32% 25% 0% 5% 34%

Longpoint Realty I 0% 52% 0% 48% 0% 0%

Miller Global VII 0% 0% 100% 0% 0% 0%

Miller Global VIII 0% 0% 93% 0% 7% 0%

Rubenstein III 0% 0% 99% 0% 0% 1%

Stockbridge Value II 26% 42% 28% 4% 0% 0%

Stockbridge Value III 28% 40% 27% 5% 0% 0%

Total Value Added 35% 21% 30% 6% 1% 7%

Opportunistic Funds

Blackstone RE Fund VII 0% 3% 29% 6% 42% 20%

Lubert-Adler VII 25% 0% 33% 17% 23% 2%

Lubert-Adler VII-B 37% 0% 9% 36% 6% 12%

Moorfield III 68% 16% 0% 0% 0% 16%

Patron V 0% 0% 17% 35% 13% 35%

Rockwood Fund VIII 0% 0% 0% 100% 0% 0%

Walton Street VII 1% 3% 38% 19% 30% 9%

Walton Street VIII 11% 1% 44% 8% 29% 7%

Total Opportunistic 21% 2% 28% 17% 22% 10%

Total Portfolio 24% 30% 26% 10% 4% 6%

NFI ODCE 25% 19% 34% 18% 0% 4%


Geographic Diversification—Compared to Indexes

• The portfolio is well diversified by geographic location.

• The International category should increase as capital is called. Uncalled capital

for Patron V is $3.2 million.

Europe 0.6% Multiple Countries 1.4%

India 0.2% United Kingdom 1.0%

International Diversification—3%


SBCERS—Current Portfolio SBCERS—US Only to Compare to Indexes

Comments

23%

8%7%

1%

10%9%

6%

36%

16%

10%

7%

2%

17%

10%

8%

28%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Northeast Mideast EN Central WN Central Southeast Southwest Mountain Pacific

NFI ODCE SBCERSUnspecified US: 2%


Investments Property Type Diversification by Percent For the Period Ended 6/30/2019

Geographic Diversification (%)

East North West North UnspecifiedInvestment Northeast Mideast Central Central Southeast Southwest Mountain Pacific U.S. International

Core Funds

Abacus Core I 0% 0% 19% 0% 25% 0% 48% 8% 0% 0%

Blackstone Property Partners 30% 3% 1% 0% 5% 3% 2% 44% 0% 12%

H/2 Credit Partners 9% 5% 8% 3% 9% 10% 17% 16% 23% 0%

Harrison St. Core 29% 9% 12% 10% 9% 11% 9% 11% 0% 0%

Invesco US Income 7% 12% 2% 0% 17% 20% 14% 28% 0% 0%

Mesa West Core Lending 35% 19% 9% 0% 4% 1% 0% 32% 0% 0%

Mesa West Fund III 37% 63% 0% 0% 0% 0% 0% 0% 0% 0%

Mesa West Fund IV 11% 15% 7% 8% 8% 13% 13% 25% 0% 0%

Prologis Targeted Europe 100% 0% 0% 0% 0% 0% 0% 0% 0% 0%

Prologis US Logistics 10% 6% 11% 0% 11% 12% 5% 45% 0% 0%

Stockbridge Smart Mkts. 3% 22% 4% 0% 21% 10% 0% 40% 0% 0%

Walton Street Debt II 0% 0% 0% 0% 31% 56% 0% 13% 0% 0%

Total Core 17% 11% 6% 1% 12% 10% 8% 32% 1% 2%

Value Added Funds

Abacus III 0% 0% 0% 15% 45% 7% 12% 21% 0% 0%

Abacus IV 0% 8% 6% 16% 15% 17% 7% 31% 0% 0%

Greenfield Acq. Ptrns. VI 33% 46% 21% 0% 0% 0% 0% 0% 0% 0%

Greenfield Acq. Ptrns. VII 10% 13% 0% 0% 41% 5% 14% 7% 10% 0%

Longpoint Realty I 2% 19% 0% 0% 54% 25% 0% 0% 0% 0%

Miller Global VII 0% 0% 0% 0% 0% 0% 47% 53% 0% 0%

Miller Global VIII 0% 0% 0% 0% 0% 11% 7% 82% 0% 0%

Rubenstein III 34% 12% 34% 0% 20% 0% 0% 0% 0% 0%

Stockbridge Value II 0% 9% 4% 7% 45% 6% 7% 22% 0% 0%

Stockbridge Value III 11% 0% 10% 0% 30% 42% 0% 7% 0% 0%

Total Value Added 7% 8% 6% 5% 33% 12% 8% 19% 2% 0%

Opportunistic Funds

Blackstone RE Fund VII 6% 2% 7% 1% 7% 3% 27% 19% 0% 28%

Lubert-Adler VII 45% 5% 10% 5% 22% 2% 7% 4% 0% 0%

Lubert-Adler VII-B 3% 6% 9% 8% 58% 5% 0% 0% 11% 0%

Moorfield III 0% 0% 0% 0% 0% 0% 0% 0% 0% 100%

Patron V 0% 0% 0% 0% 0% 0% 0% 0% 0% 100%

Rockwood Fund VIII 0% 100% 0% 0% 0% 0% 0% 0% 0% 0%

Walton Street VII 19% 13% 3% 14% 20% 9% 2% 16% 4% 0%

Walton Street VIII 1% 0% 38% 2% 24% 13% 4% 16% 0% 2%

Total Opportunistic 17% 4% 13% 4% 24% 5% 7% 8% 2% 16%

Total Portfolio 16% 10% 7% 2% 16% 10% 8% 27% 1% 3%

NFI ODCE 23% 8% 7% 1% 10% 9% 6% 36% 0% 0%


Portfolio Diversification

SBCERS Investment Life Cycle Diversification SBCERS Investment Structure Diversification

Comments

• The portfolio’s stability is shown by 86% being invested in operating or stabilized properties.

• The structure of the portfolio is well diversified with Wholly Owned and Joint Ventures comprising 93%

of the portfolio.


86%

1%6%

1%6%

0%

20%

40%

60%

80%

100%

Op

era

ting

or

Sta

bili

zed

Ren

ova

tion

Con

vers

ion

Exp

ansi

on

Initi

al L

eas

ing

Pre

-de

velo

pm

ent

Dev

elo

pm

ent

Fo

rwar

dP

urc

hase

69%

24%

2% 3% 1% 1%

0%

20%

40%

60%

80%

100%

Wh

olly

Ow

ne

d

Join

t V

entu

res

Bo

nds

Sr.

De

bt

Su

bord

ina

ted

Deb

t

Me

zzan

ine

De

bt

Pa

rtic

ipa

ting

Mo

rtg

age

s

CM

BS

Pu

blic

RE

Se

curi

ty

Pri

vate

RE

OC


Portfolio Diversification–Compared to Policy Target

SBCERS Current Portfolio—Based on Market Value

Compliance with

Policy:

Policy Target Compliance For the Period Ended 6/30/2019

Comments

• The portfolio is in compliance with its sector diversification and property type targets.

• All property types are within their range. Retail continues to be on the low end of the range.

Property Type Diversification–Compared to Policy Target

SBCERS Current Portfolio—Based on Market Value

75%

12% 13%

87%

13%0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Core Value Added Opportunistic RE Funds CommingledMortgages

PublicSecurities

Target Investment Range Current Investments

Investment Vehicle Sector Diversification

26%

10%

24%

30%

10%

0%

10%

20%

30%

40%

50%

Office Retail Apts. Industrial Other

Target Investment Range Current Investments


Geographic Diversification–Compared to Policy Target of 85% in U.S. Markets

SBCERS Current Portfolio–Based on Market Value—U.S. 97%


Compliance with

Policy:

Comments

• The portfolio is in compliance with the property location limits.

• ORG anticipates that there should be an increase in the international component with future capital calls. Uncalled

capital for Patron V is $3.2 million.


Investment Manager Diversification–Compared to Policy Target of 20% Committed to One Manager

SBCERS Current Portfolio–Based on Current Commitments

Portfolio Composition by Commitments For the Period Ended 6/30/2019

Compliance with

Policy:

Comments

• No investment manager exceeds the limit of

20% of the total commitment to real estate.

Investment ManagersCapital

Committed

Commitment

Percentage

Abacus Capital Group $32,500,000 10%

Blackstone Group 42,000,000 13%

Greenfield Partners 17,500,000 6%

H/2 Capital Partners 10,000,000 3%

Harrison Street Real Estate 10,000,000 3%

Invesco Real Estate 20,000,000 6%

Longpoint Realty Partners 15,500,000 5%

Lubert-Adler Group 22,500,000 7%

Mesa West Capital 30,000,000 10%

Miller Global Properties 12,500,000 4%

Moorfield Group 4,685,400 1%

Patron Capital Advisors 5,457,000 2%

Prologis 20,000,000 6%

Rubenstein Properties 5,000,000 2%

Stockbridge Core Value Advisors 37,500,000 12%

Walton Street Capital 30,000,000 10%

$315,142,400 100%

Abacus Capital Group10%

Blackstone Group13%

Greenfield Partners6%

H/2 Capital Partners3%

Harrison Street Real Estate

3%

Invesco Real Estate6%

Longpoint Realty Partners

5%Lubert-Adler Group

7%

Mesa West Capital10%

Miller Global Properties

4%

Moorfield Group1%

Patron Capital Advisors

2%

Prologis 6%

Rubenstein Properties

2%

Stockbridge Core Value Advisors

12%

Walton Street Capital10%


Vintage Year Diversification—Compared to Policy Target of 25% Maximum Commitment Per Year

SBCERS Current Portfolio–Based on Current Real Estate Allocation


Compliance with

Policy:

Comments

• Vintage Year represents the year SBCERS made its commitment to the investment based upon 3/31 portfolio real estate allocation.

• The over commitment in 2012 and 2013 resulted from the reinvestment of proceeds from the RREEF II liquidation in 2011.

Target 25%

14.7%

23.0%

30.7%

28.0%

22.6%

8.0% 7.7%

18.4%

15.5%

0.0%0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Leverage Ratio–Compared to Policy Target of 65% Aggregate Leverage

Leverage

Ratio

Policy

Maximum

Core Funds

Abacus Core I 45.4%

Blackstone Property Partners 49.1%

H/2 Credit Partners 22.0%

Harrison Street Core 25.6%

Invesco US Income 36.7%

Mesa West Core Lending 58.1%

Mesa West Fund III 69.7%

Mesa West Fund IV 58.4%

Prologis Targeted Europe I 18.2%

Prologis US Logistics 18.2%

Stockbridge Smart Markets 22.7%

Walton Street Debt II 56.4%

Total Core 35.8% 50.0%

Value Added Funds

Abacus III 51.8%

Abacus IV 54.9%

Greenfield Acquisition Partners VI 74.0%

Greenfield Acquisition Partners VII 44.0%

Miller Global VII 75.5%

Miller Global VIII 51.3%

Rubenstein III 62.3%

Stockbridge Value II 52.7%

Stockbridge Value III 63.9%

Total Value Added 50.1% 65.0%

Opportunistic Funds

Blackstone RE Fund VII 58.1%

Lubert-Adler VII 66.1%

Lubert-Adler VII-B 63.0%

Moorfield III 35.0%

Patron V 43.0%

Walton Street VII 61.5%

Walton Street VIII 63.2%

Total Opportunistic 59.8% 75.0% +

Total Portfolio 41.4% 65.0%


SBCERS Current Portfolio Leverage vs. Industry Standards

Comments

• The Portfolio is within the Leverage Policy’s Maximum levels for all

categories as well as the overall portfolio.


Compliance with

Policy:

SBCERS Current Portfolio-Based on Market Value

35.8

%

50.1

% 59.8

%

41.4

%50.0

%

65.0

% 75.0

%

65.0

%

C O R E V A L UE A D D E D O P P O R T UN I S T I C T O T A L

SBCERS Industry Benchmark


Investment Size Limitation—Compared to Policy Target of 15% Total Real Estate Allocation

SBCERS Current Portfolio–Based on Current Commitments


Compliance with

Policy:

• Investment size represents an investment to

an individual commingled fund or separate

account.

• No portfolio investment exceeds 15% of the

total real estate allocation.

Comments

Private Real Estate InvestmentsCapital

Committed

Commitment

Percentage

Abacus Core Income Fund I, L.P. $10,000,000 3%

Abacus Multi-Family Partners III, L.P. 7,500,000 2%

Abacus Multi-Family Partners IV, L.P. 15,000,000 5%

Blackstone Property Partners 30,000,000 10%

Blackstone Real Estate Partners VII, L.P. 7,500,000 2%

Blackstone Real Estate Partners IX, L.P. 4,500,000 2%

Greenfield Acquisition Partners VI, L.P. 7,500,000 3%

Greenfield Acquisition Partners VII, L.P. 10,000,000 3%

H/2 Credit Partners, L.P. 10,000,000 3%

Harrison Street Core Property, L.P. 10,000,000 3%

Invesco U.S. Income Fund, L.P. 20,000,000 6%

Longpoint Realty Fund I, L.P. 15,500,000 5%

Lubert-Adler Fund VII, L.P. 12,500,000 4%

Lubert-Adler Fund VII-B, L.P. 10,000,000 3%

Mesa West Core Lending Fund, L.P. 10,000,000 3%

Mesa West Real Estate Income Fund III, L.P. 10,000,000 3%

Mesa West Real Estate Income Fund IV, L.P. 10,000,000 3%

Miller Global Real Estate Fund VII, LLC 7,500,000 2%

Miller Global Real Estate Fund VIII, LLC 5,000,000 2%

Moorfield Real Estate Fund III, L.P. 4,685,400 2%

Patron Capital, L.P. V 5,457,000 2%

Prologis Targeted Europe Logistics Fund 5,000,000 2%

Prologis Targeted U.S. Logistics Fund, Inc. 15,000,000 5%

Rubenstein Properties III, L.P. 5,000,000 2%

Stockbridge Smart Markets Fund, L.P. 20,000,000 6%

Stockbridge Value Fund II, L.P. 7,500,000 2%

Stockbridge Value Fund III, L.P. 10,000,000 3%

Walton Street Debt II, L.P. 10,000,000 3%

Walton Street Fund VII, L.P. 10,000,000 3%

Walton Street Fund VIII, L.P. 10,000,000 3%

$315,142,400 100%

Abacus Capital Group10%

Blackstone Group13%

Greenfield Partners6%

H/2 Capital Partners3%

Harrison Street Real Estate

3%

Invesco Real Estate6%

Longpoint Realty Partners

5%Lubert-Adler Group

7%

Mesa West Capital10%

Miller Global Properties

4%

Moorfield Group1%

Patron Capital Advisors

2%

Prologis 6%

Rubenstein Properties

2%

Stockbridge Core Value Advisors

12%

Walton Street Capital10%


Real Estate Fund/Manager Monitoring

Fund Name

Certification

Checked

(Yes/No)

Significant

Events

(Yes/No)

Strategy

Change in

Investment

Last Meeting

by RE

Consultant

Comments

Abacus Core Income

Fund I, L.P. Yes No No 8/7/2019 Update meeting.

Abacus Multi-Family

Partners III, L.P. Yes No No 8/7/2019 Update meeting.

Abacus Multi-Family

Partners IV, L.P. Yes No No 8/7/2019 Update meeting.

Blackstone Property Partners Yes No No 11/13/2019 Annual meeting.

Blackstone Real Estate

Partners VII, L.P. Yes No No 11/13/2019 Annual meeting.

Greenfield Acquisition

Partners VI, L.P. Yes Yes No 2/6/2019 Annual meeting.

Greenfield Acquisition

Partners VII, L.P. Yes Yes No 2/6/2019 Annual meeting.

Harrison Street Core

Property, L.P. Yes No No 9/17/2019 Annual meeting.

Invesco U.S. Income

Fund, L.P. Yes No No 11/6/2019

Annual meeting. During 2Q19 Invesco Ltd. And Massachusetts

Mutual Life Company announced the completion of Invesco’s

acquisition of MassMutual’s asset management affiliate

Oppenheimer Funds.


Fund Name

Certification

Checked

(Yes/No)

Significant

Events

(Yes/No)

Strategy

Change in

Investment

Last Meeting

by RE

Consultant

Comments

Longpoint Realty Fund I, L.P Yes No No 10/28/2019 Update meeting.

Lubert-Adler Fund VII, L.P. Yes No No 10/17/2019 Update meeting.

Lubert-Adler Fund VII-B, L.P. Yes No No 10/17/2019 Update meeting.

Mesa West Core

Lending Fund, L.P. Yes No No 8/6/2019 Update meeting.

Mesa West Real Estate

Income Fund III, L.P. Yes No No 8/6/2019 Update meeting.

Mesa West Real Estate

Income Fund IV, L.P. Yes No No 8/6/2019 Update meeting.

Miller Global Real

Estate Fund VII, L.P. Yes No No 10/31/2019 Update meeting.

Miller Global Real

Estate Fund VIII, L.P. Yes No No 10/31/2019 Update meeting.

Moorfield Real

Estate Fund III, L.P. Yes No No 5/1/2019 Update meeting.

Patron Capital, L.P. V Yes No No 6/24/2019 Annual meeting.

Prologis European Logistics

Fund Yes No No 9/5/2019 Update meeting.




Fund Name

Certification

Checked

(Yes/No)

Significant

Events

(Yes/No)

Strategy

Change in

Investment

Last Meeting

by RE

Consultant

Comments

Prologis Targeted

U.S. Logistics Fund, Inc. Yes No No 11/18/2019 Update meeting.

Rubenstein Properties Fund

III, LP Yes No No 11/6/2019 Annual meeting.

Stockbridge Smart

Markets Fund, L.P. Yes No No 8/6/2019 Update meeting.

Stockbridge Value Fund II,

L.P. Yes No No 7/10/2019 Update meeting.

Stockbridge Value Fund III,

L.P. Yes No No 7/10/2019 Update meeting.

Walton Street Fund VII, L.P. Yes No No 9/6/2019 Update meeting.

Walton Street Fund VIII, L.P. Yes No No 9/6/2019 Update meeting.

For Institutional Investor use only. Proprietary & Confidential.

Second Quarter 2019 Real Estate Performance Update · 2019. 6. 30. · • With consumer spending...

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