case study (2-3 paragraphs)

H2 2020

U.S. MULTIFAMILY INBOUND INVESTMENT TRENDS

H 2 2 0 2 0

U . S . M U L T I F A M I L Y I N B O U N D I N V E S T M E N T T R E N D S

EXECUTIVE SUMMARY

2

• International investment in U.S. multifamily assets in H2 2020 fell by just 5% year-over-year to $5.7 billion, despite continued COVID- 19 international travel restrictions and market uncertainty.

• For the full year, international investment in U.S. multifamily assets fell by 22% to $9.7 billion. Considerably lower hedging costs made global capital more competitive, helping to mitigate the decline from 2019 levels.

• The largest deal in H2 2020 was London-based GSA Group’s acquisition of a 27-asset student housing portfolio in 18 states and reportedly valued at $700 million. Student housing assets accounted for 43% of total international U.S. multifamily investment in H2 and 30.2% for the full year.

• International capital accounted for 6.4% of all U.S. multifamily investment in H2 2020 and 6.7% for full-year 2020—below the 2015- 2019 average of 8.6%.

• Canada, the perennial leader in U.S. inbound multifamily capital, accounted for 64.1% of international U.S. multifamily investment in H2. The U.K., Switzerland, Germany, Bahrain, South Korea and Japan were distant followers.

• Pension funds accounted for 33.8% of total inbound capital in H2—an increase of 75.4% year over year—followed by investment managers at 26.7% and private buyers at 24%.

• Washington, D.C., Atlanta, Dallas/Ft. Worth, Phoenix and Seattle were the leading destinations for international capital in H2, together comprising 40.3% of total international volume targeting multifamily.

• Among the 11 markets with at least $100 million of international investment, San Diego had the largest year-over-year gain (+371%), followed by Phoenix (+260%) and Dallas/Ft. Worth (+80%).

• One-third of H2 international investment was in multifamily assets priced at $100 million or more, double the share of domestic investment. International investors also preferred mid-/high-rise assets over garden properties (67.8% vs. 32.2% share).

• International investment in U.S. multifamily assets is expected to increase in 2021, aided by continued historically low hedging costs. We anticipate activity picking up next year, especially in the second half, fueled by strengthening market fundamentals and an easing of international travel.

H 2 2 0 2 0

U . S . M U L T I F A M I L Y I N B O U N D I N V E S T M E N T T R E N D S

Note: Based on real estate transactions valued at $2.5 million or more. Volume includes direct multifamily property acquisitions only (excludes other

types of investment, such as land acquisitions, development, investment funds, REIT stocks, etc.). Portfolios include assets acquired through entity-

level deals. Totals include student housing. All figures in U.S. dollars.

Source: CBRE Research, Real Capital Analytics, Q4 2020. 3

$3.0 B Individual Assets

$2.7 B Portfolios

$5.7 B Total

H2 2020

-5.0% Decrease from

H2 2019

$6.2 B Individual Assets

$3.5 B Portfolios

$9.7 B Total

FY 2020

-22.3% Decrease from

2019

INTERNATIONAL INVESTMENT IN U.S. MULTIFAMILY ASSETS H2 2020 & FY 2020

H 2 2 0 2 0

U . S . M U L T I F A M I L Y I N B O U N D I N V E S T M E N T T R E N D S

4

0

2

4

6

8

10

12

14

16

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 H2 2019 H2 2020

Individual Portfolio$ Billions

Source: CBRE Research, Real Capital Analytics, Q4 2020.

INTERNATIONAL INVESTMENT IN U.S. MULTIFAMILY ASSETS BY DEAL TYPE

H 2 2 0 2 0

U . S . M U L T I F A M I L Y I N B O U N D I N V E S T M E N T T R E N D S

Source: CBRE Research, Real Capital Analytics, Q4 2020. 5

8.6

6.7

9.5

0

2

4

6

8

10

12

14

16

18

20

Q4 2008 Q4 2010 Q4 2012 Q4 2014 Q4 2016 Q4 2018 Q4 2020

All Commercial Real Estate Multifamily CRE w/o Multifamily% of Trailing 12-Month Total

INTERNATIONAL INVESTMENT IN U.S. MULTIFAMILY ASSETS PERCENTAGE RELATIVE TO TOTAL INVESTMENT

H 2 2 0 2 0

U . S . M U L T I F A M I L Y I N B O U N D I N V E S T M E N T T R E N D S

Note: % refers to each region's share of total cross-border multifamily investment volume for year indicated.

Source: CBRE Research, Real Capital Analytics, Q4 2020. 6

36%

38% 61%

51% 53%

53% 64%

18%

22% 18%

16% 25%

22% 26%

20%

8% 5%

18%

26%

31%

12%

13%

13%

17% 4%

0

5

10

15

20

25

2016 2017 2018 2019 2020 H2 2019 H2 2020

Canada Europe Middle East Asia Pacific Latin America$ Billions

INTERNATIONAL INVESTMENT IN U.S. MULTIFAMILY ASSETS ANNUAL BY GLOBAL REGION

H 2 2 0 2 0

U . S . M U L T I F A M I L Y I N B O U N D I N V E S T M E N T T R E N D S

Note: Sums may not total to 100 due to rounding.

Source: CBRE Research, Real Capital Analytics, Q4 2020. 7

Canada 64.1

U.K. 13.7

Switzerland 6.6

Germany 4.3

Bahrain 3.4

South Korea 1.9

Japan 1.0

Other 4.9

%

INTERNATIONAL INVESMENT IN U.S. MULTIFAMILY ASSETS LEADING COUNTRY SOURCES, H2 2020

H 2 2 0 2 0

U . S . M U L T I F A M I L Y I N B O U N D I N V E S T M E N T T R E N D S

Note: Pension funds and investment managers are considered institutional investors. Other types of institutional investors include equity funds,

insurance companies, banks and sovereign wealth funds. Private companies include high net worth groups, non-traded REITs, developers and

other non-public property companies.

Source: CBRE Research, Real Capital Analytics, Q4 2020.

8

INTERNATIONAL INVESTMENT IN U.S. MULTIFAMILY ASSETS BY BUYER TYPE, H2 2020

27% $1.5 B

Investment Manager

34% $1.9 B

Pension Fund

6% $345 M

Other Institutional

9% $533 M

REIT/Public Company

24% $1.4 B

Private Company

H 2 2 0 2 0

U . S . M U L T I F A M I L Y I N B O U N D I N V E S T M E N T T R E N D S

Source: CBRE Research, Real Capital Analytics, Q4 2020. 9

0

5

10

15

20

25

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 H2 2019 H2 2020

Pension Fund Investment Manager Other Institutional Private Company REIT/Public Company$ Billions

INTERNATIONAL INVESTMENT IN U.S. MULTIFAMILY ASSETS ANNUAL BY BUYER TYPE

H 2 2 0 2 0

U . S . M U L T I F A M I L Y I N B O U N D I N V E S T M E N T T R E N D S

Y-O-Y CHANGE

Note: Market tier designation based on CBRE Cap Rate Survey.

Source: CBRE Research, Real Capital Analytics, Q4 2020. 10

108

155

312

412

531

121

172

184

413

420

503

0 200 400 600

11. Los Angeles/So. Cal.

10. Baltimore

9. New York

8. Tampa

7. Austin

6. San Diego

5. Seattle

4. Phoenix

3. Dallas/Ft. Worth

2. Atlanta

1. Washington, D.C.

$ Millions

Tier I Tier II

-13.4

-7.1

80.0

260.2

-43.3

370.9

-6.4

18.1

-51.2

*

-10.1

INTERNATIONAL INVESTMENT IN U.S. MULTIFAMILY ASSETS TOP MARKET DESTINATIONS, H2 2020

H 2 2 0 2 0

U . S . M U L T I F A M I L Y I N B O U N D I N V E S T M E N T T R E N D S

1 NEW YORK CITY 7.2

BOSTON 1.7

3 WASHINGTON, D.C. 4.3

4 ATLANTA 4.1

5

8

DALLAS/FT.WORTH 2.9

AUSTIN 2.4

7

6 2

SAN FRANCISCO 2.5

PHOENIX 2.8

LOS ANGELES 4.9

HOUSTON 1.8

13

11

9 SEATTLE 2.2

CHICAGO 1.9

DENVER 1.9

11

10

TAMPA 1.8

12

14

Source: CBRE Research, Real Capital Analytics, Q4 2020.

INTERNATIONAL INVESTMENT IN U.S. MULTIFAMILY ASSETS TOP MARKET DESTINATIONS, 2016 THROUGH 2020

$ Billions

H 2 2 0 2 0

U . S . M U L T I F A M I L Y I N B O U N D I N V E S T M E N T T R E N D S

MULTIFAMILY SUBTYPES

MULTIFAMILY ASSET SIZE

12

Domestic International

68%

32%

Mid/High-Rise

Garden

31%

69%

Source: CBRE Research, Real Capital Analytics, Q4 2020.

4% 12%

34% 23%

27% 17%

22%

29%

23%

9% > 200

100 - 200

50 - 100

25 - 50

< 25

Domestic International

DOMESTIC VS. INTERNATIONAL INVESTMENT IN U.S. MULTIFAMILY ASSETS PREFERENCES BY SUBTYPES & ASSET SIZE, H2 2020

$ Millions

H 2 2 0 2 0

U . S . M U L T I F A M I L Y I N B O U N D I N V E S T M E N T T R E N D S

13

0

2

4

6

8

10

12

14

16

18

20

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 H2 2019

H2 2020

Mid/High-Rise Garden$ Billions

Source: CBRE Research, Real Capital Analytics, Q4 2020.

INTERNATIONAL INVESTMENT IN U.S. MULTIFAMILY ASSETS ANNUAL BY STRUCTURAL SUBTYPES

H 2 2 0 2 0

U . S . M U L T I F A M I L Y I N B O U N D I N V E S T M E N T T R E N D S

14

0

2

4

6

8

10

12

14

16

18

20

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 H2 2019

H2 2020

Student Housing Conventional$ Billions

Source: CBRE Research, Real Capital Analytics, Q4 2020.

INTERNATIONAL INVESTMENT IN U.S. MULTIFAMILY ASSETS ANNUAL BY USE SUBTYPES

FOR MORE INFORMATION, PLEASE CONTACT:

Disclaimer: Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently

its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.