PowerPoint Presentation...the United States, the United Kingdom, and Europe, considerable...
14
6/6/2021 1 AUSTRALIA ■ BRAZIL ■ CANADA ■ CHINA ■ DENMARK ■ FINLAND ■ FRANCE ■ GERMANY ■ GREECE ■ INDIA ■ IRELAND ■ ITALY ■ JAPAN ■ LUXEMBOURG ■ MEXICO ■ NETHERLANDS ■ PANAMA ■ POLAND ■ RUSSIA ■ SOUTH KOREA ■ SPAIN ■ UNITED KINGDOM ■ UNITED STATES FOR INSTITUTIONAL USE ONLY. Not for distribution to the public. Seeking Opportunity in Global Real Estate: A Look at Trends Shaping the Investment Landscape Today This is neither an offer to sell nor a solicitation of an offer to buy any securities which can only be made by means of a prospectus. Neither the Securities and Exchange Commission, the Attorney General of the State of New York nor any other state securities regulator has passed on or endorsed the merits of the offering of any securities offered by Hines Securities, Inc. Any representation to the contrary is unlawful. Not for use in Ohio or New Jersey. Hines Securities, Inc. Member FINRA, SIPC, is the dealer manager. 6/2021 AUSTRALIA ■ BRAZIL ■ CANADA ■ CHINA ■ DENMARK ■ FINLAND ■ FRANCE ■ GERMANY ■ GREECE ■ INDIA ■ IRELAND ■ ITALY ■ JAPAN ■ LUXEMBOURG ■ MEXICO ■ NETHERLANDS ■ PANAMA ■ POLAND ■ RUSSIA ■ SOUTH KOREA ■ SPAIN ■ UNITED KINGDOM ■ UNITED STATES FOR INSTITUTIONAL USE ONLY. Not for distribution to the public. Alternative investments involve a high degree of risk. Your clients should purchase these securities only if they can afford the complete loss of their investment. Risks will vary by investment, but in general risks include, but are not limited to: ▪ There is not a public market for shares of alternative investments so it will be difficult for your client to sell their shares and, if they are able to sell their shares, they will likely sell them at a substantial discount; ▪ These offerings may be conducted on a “best efforts” basis and as such, there is a risk that the program will not be able to accomplish its business objectives if substantial funds are not raised in the offering; ▪ The availability and timing of distributions is uncertain and cannot be assured; ▪ Alternative investments may offer share redemption programs; however, there are significant restrictions and limitations on your client’s ability to have all or any portion of their shares redeemed under such programs; if redemptions occur, they may be at a price that is less than the price your clients paid for the shares and/or the then-current market value of the shares; ▪ Distributions may be paid from sources such as proceeds from debt financings, proceeds from the offering, cash advances by the advisor, cash resulting from a waiver or deferral of fees and/or proceeds from the sale of assets; distributions may exceed earnings; if distributions are paid from sources other than cash flow from operations, there will be less funds available for investment, and your client’s overall return may be reduced; ▪ Alternatives offered by Hines Securities, Inc. (“Hines Securities”) may invest outside of the U.S. or in specific sectors which increases risk; in particular, international investment risks, include the burden of complying with a wide variety of foreign laws and the uncertainty of such laws, the tax treatment of transaction structures, political and economic instability, foreign currency fluctuations, and inflation; ▪ Alternatives offered by Hines Securities are sponsored by Hines and these programs generally pay substantial fees to Hines and its affiliates for day-to-day operations and investment selection. These affiliates are subject to conflicts of interest. General Risk Considerations Hines Securities, Inc. Member FINRA, SIPC, is the dealer manager. 6/2021 1 AUSTRALIA ■ BRAZIL ■ CANADA ■ CHINA ■ DENMARK ■ FINLAND ■ FRANCE ■ GERMANY ■ GREECE ■ INDIA ■ IRELAND ■ ITALY ■ JAPAN ■ LUXEMBOURG ■ MEXICO ■ NETHERLANDS ■ PANAMA ■ POLAND ■ RUSSIA ■ SOUTH KOREA ■ SPAIN ■ UNITED KINGDOM ■ UNITED STATES FOR INSTITUTIONAL USE ONLY. Not for distribution to the public. Alternative investments are not suitable for all investors. Please refer to the suitability standards set forth in the prospectus or offering memorandum of the particular investment. The photos shown in this presentation are for illustrative purposes only and are not part of any offering available through Hines Securities. The Coronavirus (COVID 19) pandemic has had an adverse impact on global commercial activity. Investments in real properties and real estate related securities have not been immune to the impact of the pandemic. Although the outlook is improving in certain areas of the world, including the United States, the United Kingdom, and Europe, considerable uncertainty still surrounds the Coronavirus and its potential effects on the population, which makes it difficult to ascertain the long-term impact it will have on commercial real estate markets. This material contains forward-looking statements (such as those concerning investment objectives, strategies, economic updates, other plans and objectives for future operations or economic performance, or related assumptions or forecasts) that are based on our current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties. Any of the assumptions underlying the forward-looking statements could prove to be inaccurate and results of operations could differ materially from those expressed or implied. You are cautioned not to place undue reliance on any forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements The views represented here are the opinions and beliefs of Hines and Hines Research and should not be viewed as legal, financial or tax advice. General Risk Considerations Continued Please see the “About the Indexes and Sources” slides at the end of the presentation for an explanation of the differences between the investments reflected in the indexes and investments in non-traded REITs, including how distributions are paid, as well as for a description of each index. Hines Securities, Inc. Member FINRA, SIPC, is the dealer manager. 6/2021 2 0 1 2
PowerPoint Presentation...the United States, the United Kingdom, and Europe, considerable uncertainty still surrounds the Coronavirus and its potential effects on the population, which
PowerPoint Presentation6/6/2021
1
AU STR ALI A BR AZ I L C AN AD A C H I N A D EN MAR K F I N LAN D F
R AN C E GER MAN Y GR EEC E I N D I A I R ELAN D I TALY J APAN LU
XEMBOU R G MEXI C O N ETH ER LAN D S PAN AMA POLAN D R U SSI A SOU
TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
Seeking Opportunity
Landscape Today
This is neither an offer to sell nor a solicitation of an offer to
buy any securities which can only be made by means of a prospectus.
Neither the Securities and Exchange Commission, the Attorney
General of the State of New York nor any other state securities
regulator has passed on or endorsed the merits of the offering of
any securities offered by Hines Securities, Inc. Any representation
to the contrary is unlawful.
Not for use in Ohio or New Jersey.
Hines Securities, Inc. Member FINRA, SIPC, is the dealer manager.
6/2021
AU STR ALI A BR AZ I L C AN AD A C H I N A D EN MAR K F I N LAN D F
R AN C E GER MAN Y GR EEC E I N D I A I R ELAN D I TALY J APAN LU
XEMBOU R G MEXI C O N ETH ER LAN D S PAN AMA POLAN D R U SSI A SOU
TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
Alternative investments involve a high degree of risk. Your clients
should purchase these securities only if they can afford the
complete loss of their investment. Risks will vary by investment,
but in general risks include, but are not limited to:
There is not a public market for shares of alternative investments
so it will be difficult for your client to sell their shares and,
if they are able to sell their shares, they will likely sell them
at a substantial discount;
These offerings may be conducted on a “best efforts” basis and as
such, there is a risk that the program will not be able to
accomplish its business objectives if substantial funds are not
raised in the offering;
The availability and timing of distributions is uncertain and
cannot be assured;
Alternative investments may offer share redemption programs;
however, there are significant restrictions and limitations on your
client’s ability to have all or any portion of their shares
redeemed under such programs; if redemptions occur, they may be at
a price that is less than the price your clients paid for the
shares and/or the then-current market value of the shares;
Distributions may be paid from sources such as proceeds from debt
financings, proceeds from the offering, cash advances by the
advisor, cash resulting from a waiver or deferral of fees and/or
proceeds from the sale of assets; distributions may exceed
earnings; if distributions are paid from sources other than cash
flow from operations, there will be less funds available for
investment, and your client’s overall return may be reduced;
Alternatives offered by Hines Securities, Inc. (“Hines Securities”)
may invest outside of the U.S. or in specific sectors which
increases risk; in particular, international investment risks,
include the burden of complying with a wide variety of foreign laws
and the uncertainty of such laws, the tax treatment of transaction
structures, political and economic instability, foreign currency
fluctuations, and inflation;
Alternatives offered by Hines Securities are sponsored by Hines and
these programs generally pay substantial fees to Hines and its
affiliates for day-to-day operations and investment selection.
These affiliates are subject to conflicts of interest.
General Risk Considerations
Hines Securities, Inc. Member FINRA, SIPC, is the dealer manager.
6/2021 1
AU STR ALI A BR AZ I L C AN AD A C H I N A D EN MAR K F I N LAN D F
R AN C E GER MAN Y GR EEC E I N D I A I R ELAN D I TALY J APAN LU
XEMBOU R G MEXI C O N ETH ER LAN D S PAN AMA POLAN D R U SSI A SOU
TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
Alternative investments are not suitable for all investors. Please
refer to the suitability standards set forth in the prospectus or
offering memorandum of the particular investment.
The photos shown in this presentation are for illustrative purposes
only and are not part of any offering available through Hines
Securities.
The Coronavirus (COVID 19) pandemic has had an adverse impact on
global commercial activity. Investments in real properties and real
estate related securities have not been immune to the impact of the
pandemic. Although the outlook is improving in certain areas of the
world, including the United States, the United Kingdom, and Europe,
considerable uncertainty still surrounds the Coronavirus and its
potential effects on the population, which makes it difficult to
ascertain the long-term impact it will have on commercial real
estate markets.
This material contains forward-looking statements (such as those
concerning investment objectives, strategies, economic updates,
other plans and objectives for future operations or economic
performance, or related assumptions or forecasts) that are based on
our current expectations, plans, estimates, assumptions and beliefs
that involve numerous risks and uncertainties. Any of the
assumptions underlying the forward-looking statements could prove
to be inaccurate and results of operations could differ materially
from those expressed or implied. You are cautioned not to place
undue reliance on any forward-looking statements. We undertake no
obligation to publicly update or revise any forward-looking
statements The views represented here are the opinions and beliefs
of Hines and Hines Research and should not be viewed as legal,
financial or tax advice.
General Risk Considerations Continued
Please see the “About the Indexes and Sources” slides at the end of
the presentation for an explanation of the differences between the
investments reflected in the indexes and investments in non-traded
REITs, including how distributions are paid, as well as for a
description of each index.
Hines Securities, Inc. Member FINRA, SIPC, is the dealer manager.
6/2021 2
0
1
2
6/6/2021
2
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
Why Real Estate?
Hines Securities, Inc. Member FINRA, SIPC, is the dealer manager.
6/2021 3
AU STR ALI A BR AZ I L C AN AD A C H I N A D EN MAR K F I N LAN D F
R AN C E GER MAN Y GR EEC E I N D I A I R ELAN D I TALY J APAN LU
XEMBOU R G MEXI C O N ETH ER LAN D S PAN AMA POLAN D R U SSI A SOU
TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
The “Optionality” of Real Estate: Offering Potential for Yield
& Growth
1,2
Market Capitalization
Sources: Bank of International Settlements, Hines Research and
World Federation of Exchanges.
There is no assurance that real estate investments will achieve
capital appreciation or provide regular distributions. 1Market
capitalizations: as of Q3 2020 for fixed income; as of December
2020 for global real estate (includes U.S. and international real
estate); and as of December 2020 for equities. 2The value of an
investment in global real estate may seem less volatile because its
value is not subject to the market pricing forces to which publicly
traded investments are subject.
An investment in global real estate is significantly less liquid
than publicly traded investments and is not immune to fluctuations.
Asset allocation/diversification does not guarantee a profit or
eliminate the risk of loss.
Hines Securities, Inc. Member FINRA, SIPC, is the dealer manager.
6/2021 4
AU STR ALI A BR AZ I L C AN AD A C H I N A D EN MAR K F I N LAN D F
R AN C E GER MAN Y GR EEC E I N D I A I R ELAN D I TALY J APAN LU
XEMBOU R G MEXI C O N ETH ER LAN D S PAN AMA POLAN D R U SSI A SOU
TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
0
500
1000
1500
2000
2500
3000
3500
4000
4500
+106% -49% +101% -57%
Source: Bloomberg as of April 2021.
Past performance cannot guarantee comparable future results.
S&P 500 Index (SPX Index) - widely regarded as the best single
gauge of large-cap U.S. equities. The index includes 500 leading
companies and captures approximately 80%
coverage of available market capitalization. The SPX Index is meant
to illustrate general market performance; it is not possible to
invest directly in an index. Non-traded REIT shares
are significantly less liquid than fixed income and equities.
Please see the end of the presentation for "About the Indexes and
Sources in this Presentation".
Hines Securities, Inc. Member FINRA, SIPC, is the dealer manager.
6/2021 5
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4
5
6/6/2021
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AU STR ALI A BR AZ I L C AN AD A C H I N A D EN MAR K F I N LAN D F
R AN C E GER MAN Y GR EEC E I N D I A I R ELAN D I TALY J APAN LU
XEMBOU R G MEXI C O N ETH ER LAN D S PAN AMA POLAN D R U SSI A SOU
TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
Income Options Are Limited 1
Asset Classes Yield
U.S. 10-Year Treasuries3 1.47%
U.S. Corporate Investment Grade Bonds5 2.17%
S&P 500 Stocks6 1.38%
1Data from May, 2020 through May 14, 2021. Past performance cannot
guarantee comparable future results. 2U.S. investment-grade bonds
are represented by the Bloomberg Barclays U.S. Aggregate Bond
Index. 3U.S. Treasuries are represented by the Bloomberg Barclays
10-Year Treasury Index. 4Municipal bonds are represented by the
Bloomberg Barclays 10-Year Municipal Bond. 5U.S. corporate
investment grade bonds are represented by the Bloomberg Barclays
U.S. Corporate Investment Grade Index. 6Stocks are represented by
the dividend yield of the S&P 500 Index.
An investment cannot be made directly in an index. Please see the
end of the presentation for "About the Indexes and Sources in this
Presentation".
Hines Securities, Inc. Member FINRA, SIPC, is the dealer manager.
6/2021 6
AU STR ALI A BR AZ I L C AN AD A C H I N A D EN MAR K F I N LAN D F
R AN C E GER MAN Y GR EEC E I N D I A I R ELAN D I TALY J APAN LU
XEMBOU R G MEXI C O N ETH ER LAN D S PAN AMA POLAN D R U SSI A SOU
TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
Real Estate: Stable Total Returns Even When Other Risk Assets* Were
Suffering In Public Markets
Sources: NCREIF, Standard & Poor’s, Bloomberg Barclays, NAREIT,
Hines Research. Data is presented for the period from 4Q 1977
through 1Q 2021. The analysis uses quarterly
data. Hines Research identified the 10 most negative price returns
for US Equities since 1977 and ranked them. Then Hines Research
analyzed the total returns for the three asset classes shown over
each of those 10 quarters. “Risk assets” refers to investments
where the dividend pay-out is not fixed, as with fixed income
bonds, but is set at the discretion of
the either the company (equities) or asset manager (real estate);
moreover, return of capital is not guaranteed, unlike bonds, where
return of capital is guaranteed if held to maturity.
Levered US real estate is represented by the NCRIEF Fund Index –
Open-End Diversified Core Equity Value-Weighted Index (NFI-ODCE).
To provide contextual information, we note that the leverage is the
percentage of the gross asset value for the constituent funds, in
aggregate, that consists of debt capital and is incorporated into
the calculation of equity
returns. We provide the leverage as of 4Q 2020 as that was the
recent update (22.3%). US Equities are represented by the S&P
500 Total Return Index. An investment cannot be
made directly in an index. Please see the end of the presentation
for "About the Indexes and Sources in this Presentation". Past
performance cannot guarantee comparable future results.
-45%
-40%
-35%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
4Q 1987 4Q 2008 1Q 2020 3Q 2002 3Q 2001 3Q 1990 3Q 2011 4Q 2018 2Q
2002 1Q 2001
To ta
s
PERFORMANCE BY ASSET CLASS OVER THE 10 WORST PRICE DECLINES FOR US
EQUITIES SINCE 1977
US Levered Real Estate (ODCE) US REITS (NAREIT Equity REIT) US
Equities (S&P500)
Hines Securities, Inc. Member FINRA, SIPC, is the dealer manager.
6/2021 7
AU STR ALI A BR AZ I L C AN AD A C H I N A D EN MAR K F I N LAN D F
R AN C E GER MAN Y GR EEC E I N D I A I R ELAN D I TALY J APAN LU
XEMBOU R G MEXI C O N ETH ER LAN D S PAN AMA POLAN D R U SSI A SOU
TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
Global Real Estate Historically Has Enhanced a Traditional
Portfolio Returns and Volatility1
1/1/2001 - 12/31/2020 | Annualized
40% Bonds
60% Stocks
35% Bonds
55% Stocks
Past performance cannot guarantee comparable future results. The
financial markets have experienced volatility as a result of
COVID-19, also called the Coronavirus. Investments in
global real estate have not been immune to the impact of the
pandemic. Although the outlook is improving in certain areas of the
world, considerable uncertainty still surrounds the Coronavirus and
its potential effects on the population, which makes it difficult
to ascertain the long-term impact it will have on commercial real
estate markets. Global real estate is
represented by the MSCI Global Annual Property Index ("MSCI Global
Annual"). Please see the “About the Indexes and Sources” slides at
the end of the presentation for an explanation
of the differences between an investment in MSCI Global Annual and
non-traded REITs, including how distributions are paid, as well as
for a description of each index. *Sources: MSCI, Inc. and Hines
Research; Period ended December 31, 2020. Portfolios with and
without commercial real estate are hypothetical and this is not a
recommendation of how
to allocate a portfolio. Volatility is presented on an annualized
basis.
Stocks are represented by the S&P 500 Index. Bonds are
represented by the Bloomberg Barclays Global Aggregate Bond
Index.
The S&P 500 Index and the Bloomberg Barclays Global Aggregate
Bond Index are meant to illustrate general market performance; it
is not possible to invest directly in an index. Non-
traded-REIT shares are significantly less liquid than stocks and
bonds. In addition, asset allocation/diversification does not
guarantee or eliminate the risk of loss. 1A non-traded REIT’s
offering price per share may be subject to less volatility than
publicly-traded stocks and bonds because its NAV per share is based
on the value of its real estate
assets and is not subject to market pricing forces. However, the
value of a non-traded REIT’s underlying investments may fluctuate
and may be worth less than the non-traded REIT initially
paid for them. Although the offering price is subject to less
volatility than publicly-traded equities and REITs, a non-traded
REIT's shares are significantly less liquid, and are not immune to
fluctuations in value.
Hines Securities, Inc. Member FINRA, SIPC, is the dealer manager.
6/2021 8
6
7
8
6/6/2021
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FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
Big Picture: The Cycle
Hines Securities, Inc. Member FINRA, SIPC, is the dealer manager.
6/2021 9
AU STR ALI A BR AZ I L C AN AD A C H I N A D EN MAR K F I N LAN D F
R AN C E GER MAN Y GR EEC E I N D I A I R ELAN D I TALY J APAN LU
XEMBOU R G MEXI C O N ETH ER LAN D S PAN AMA POLAN D R U SSI A SOU
TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
Sources: Hines Research. As of 2021Q1. This image is intended to be
illustrative so is not based on any one formal forecast for global
GDP growth moving forward but represents a
view from Hines Research of the likely trajectory (shape only) and
timing of declines and gains in output. Please note that the
forecasts presented in this presentation were made by Hines
Research, are about the respective markets and asset classes
generally and are not intended to forecast the performance of any
investment opportunities offered by Hines
Securities. These are forecasts and predictions based on Hines
Research's reasonable assumptions and beliefs, which are based in
part on a review of historical data and trends.
Actual results likely will vary. Great Financial Crisis (GFC) is an
alternative label for the recession of 2008.
We now have strong conviction that the Early Recovery scenario is
more probable.
Initial impacts to employment and output have been shockingly sharp
but should be followed by sequential growth to soften subsequent
year-over-year (y/y) growth rates.
There are relatively few systemic issues – as we had in the Great
Financial Crisis (GFC) – to dramatically hinder a return to
economic expansion if economies open up.
In an Early Recovery scenario, y/y growth would trough in mid- 2020
following a decline in COVID-19 cases in the US and Europe; we
envisage the initial recovery to wax and wane in terms of strength
(% growth) as COVID-19 cases also wax and wane. We would expect
Asia to come back “on-line” with the strongest relative recovery
but would need renewed demand from developed economies to fully
recover.
In a Protracted Downturn scenario, the ultimate loss of output
could be worse than in the Early Recovery scenario, but more
critically, the recovery would be delayed and weaker.
Global Pandemic Scenario Analysis: GDP Impact
Y ea
r- o
ve r-
Y ea
4Q 2021 or
Early
Recovery
Protracted
Downturn
Hines Securities, Inc. Member FINRA, SIPC, is the dealer manager.
6/2021 10
AU STR ALI A BR AZ I L C AN AD A C H I N A D EN MAR K F I N LAN D F
R AN C E GER MAN Y GR EEC E I N D I A I R ELAN D I TALY J APAN LU
XEMBOU R G MEXI C O N ETH ER LAN D S PAN AMA POLAN D R U SSI A SOU
TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
-2.7% -3.6%
Avg. Correction Average +/- 1 Standard Deviation
The Amplitude of a Price Correction Typically Dependent on Pricing
Heading into Downturn
Sources: PMA, JLL, CBRE, CoStar, NCREIF, Hines Research. As of
2020Q4. Hines Research uses it proprietary view on pricing, the
Composite Capital Markets Score (CCMS), to
categorize markets in the manner shown. The CCMS is an aggregate
score based on five proprietary factors utilized in 5-year forward
price forecasts produced by Hines Research for the markets under
coverage. The CCMS is calculated as a percentile relative to each
market’s own history. “Very expensive” refers to markets with
composite prices in the 85-100th
percentiles of their history; “expensive” refers to markets with
composite prices in the 70-85th percentiles of their history; “Near
Intrinsic Value” refers to markets with composite prices
in the 30-70th percentiles of their history, considered fair value;
“Inexpensive” refers to markets with composite prices in the
15-30th percentiles of their history; and “Very inexpensive” refers
to markets with composite prices in the 0-15th percentiles of their
history.
Hines Securities, Inc. Member FINRA, SIPC, is the dealer manager.
6/2021 11
9
10
11
6/6/2021
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AU STR ALI A BR AZ I L C AN AD A C H I N A D EN MAR K F I N LAN D F
R AN C E GER MAN Y GR EEC E I N D I A I R ELAN D I TALY J APAN LU
XEMBOU R G MEXI C O N ETH ER LAN D S PAN AMA POLAN D R U SSI A SOU
TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
Sources: CoStar, NCREIF, PMA, CBRE, JLL, Oxford Economics, Hines
Research. As of 2020Q1, but using Q4 2019 as the starting point for
the forecasting given that 2019 is
considered Year 0, and the forecasts are annual beginning from the
end of 2019, i.e. pre-crisis. The analysis averages results for the
423 markets for which forecasts are published by Hines Research.
CAGR is Compound Annual Growth Rate.
Comparing Implications for Prices for Early Recovery and Protracted
Downturn Scenarios
-6.7%
-10.1%
-18.0%
-4.5%
-10.3%
-6.7%
-12.0%
-22.6%
-4.5%
-11.8%
GLOBAL PROPERTY 5-YEAR PRICE FORECAST BY SCENARIO
Early Recovery ("ER")-Cumulative Declines Protracted Downturn
("PD")-Cumulative Declines ER Price Growth CAGR PD Price Growth
CAGR
Hines Securities, Inc. Member FINRA, SIPC, is the dealer manager.
6/2021 12
AU STR ALI A BR AZ I L C AN AD A C H I N A D EN MAR K F I N LAN D F
R AN C E GER MAN Y GR EEC E I N D I A I R ELAN D I TALY J APAN LU
XEMBOU R G MEXI C O N ETH ER LAN D S PAN AMA POLAN D R U SSI A SOU
TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
Sources: CoStar, NCREIF, PMA, CBRE, JLL, Oxford Economics, Hines
Research. As of Q4 2020. The Composite Capital Market Score
(“CCMS”) is an aggregate score (0-100)
derived from the following metrics: Price to Trend, Cap Rate
Spreads, Growth-Adjusted Spreads, Trailing Price Growth, and
Trailing Total returns. The CCMS is calculated as a percentile
relative to each market’s own history. Higher scores indicate that
the market is expensive relative to its history. “Very expensive”
refers to markets with composite
prices in the 85-100th percentiles of their history; “expensive”
refers to markets with composite prices in the 70-85th percentiles
of their history; “Near Intrinsic Value” refers to
markets with composite prices in the 30-70th percentiles of their
history, considered fair value; “Inexpensive” refers to markets
with composite prices in the 15-30th percentiles of their history;
and “Very inexpensive” refers to markets with composite prices in
the 0-15th percentiles of their history. This chart buckets all
markets covered by Hines Research
by period according to the ranges provided above. This chart also
displays that bucketing through 2021Q4 based on estimated future
pricing given the assumption that Hines
Research price forecasts come to fruition. .
With Corrections Comes Opportunity
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
12 13 14 15 16 17 18 19 20 21 22 23 24 25
GLOBAL PRICING ENVIRONMENT: 2020Q4
Forecast
Hines Securities, Inc. Member FINRA, SIPC, is the dealer manager.
6/2021 13
AU STR ALI A BR AZ I L C AN AD A C H I N A D EN MAR K F I N LAN D F
R AN C E GER MAN Y GR EEC E I N D I A I R ELAN D I TALY J APAN LU
XEMBOU R G MEXI C O N ETH ER LAN D S PAN AMA POLAN D R U SSI A SOU
TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
Sources: MSCI, Inc., NCREIF, Hines Research. As of Q4 2020 but
using bi-annual data in France. This is the last data point that is
consistently available across the markets shown.
Note that NL refers to Netherlands. Past performance cannot
guarantee comparable future results. Cycles are defined as the
change in values from a trough to a cycle peak (uninterrupted
positive change). For markets with sufficient history to show a
full long-cycle, generally covering the 1990’s to 2008, we show
this as “Cycle 1,” i.e. the first long-cycle.
The horizontal axis shows the number of the year associated with
the length of the cycle, so the year following the Cycle 1 tough
would be Y1, the second year after the trough would
be Year 2, numbering all the way to the year of the Cycle 1 peak.
The current cycle, generally starting in 2008, starts a new
long-cycle, in our view (Cycle 2). We begin this new cycle from its
trough and line up its progression as with Cycle 1 with the years
as numbered here. Some markets have insufficient history to show
both cycle (1 & 2), but their Cycle 2
progress is shown as comparison to the previous long-cycle as
represented by the markets that have sufficient data to calculate
that cycle (as noted above).
Looking through Current Uncertainty to the Long Cycle
% Property Total Returns Indexed
0
100
200
300
400
500
600
Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Y14 Y15 Y16 Y17
Y18
A ll-
Pr o
p er
ty T
o ta
Cycle 1-US Cycle 2-US Cycle 1-Australia Cycle 2-Australia
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public.
Going Global
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XEMBOU R G MEXI C O N ETH ER LAN D S PAN AMA POLAN D R U SSI A SOU
TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
4.5%
United States Other Americas Europe Asia Pacific Africa &
Middle East
The U.S. Is Becoming a Smaller Piece of the Global Investible
Universe
Sources: Data set from 1993 – 2020, using annual data. Hines
Research estimates the size of the investable real estate universe
in each country by averaging that country's share of
global GDP, as sourced from Oxford Economics, and that country's
share of global real estate transaction volume, as sourced from
Real Capital Analytics, to estimate each country's share of the
real estate universe. By blending the share of global transaction
volume with the share of global GDP, Hines research believes it is
able to produce estimates that
incorporate where real estate investors are actually allocating
funds around the world.
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XEMBOU R G MEXI C O N ETH ER LAN D S PAN AMA POLAN D R U SSI A SOU
TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
Flows Matter: Fixing the Great Imbalance
Source: Oxford Economics, MSCI, Inc., NCREIF, ANREV, JLL, IPE,
Hines Research. As of Q4 2020. Hines Research has used NCREIF’s
NFI-ODCE Fund Index as representative of
the net equity invested in open-ended core equity funds. Net equity
and number of funds are measures tracked by this index. For Europe,
Hines Research uses the same measures from MSCI’s sub-index of
“Balanced” funds, which are Europe’s version of the US “core” fund.
The net equity figures shown here are in USD. While the European
index starts in 2006
with 3 funds, prior to that start date there were 3 funds in the
general Pan-European Index (as distinct from the Balanced Fund).
The number of Pan-Asian Core funds and assets
under management come from an IPE/Real Assets article in the
March/April 2020 magazine. Note, Hines Research extended the his
tory of Pan-Asian investing back to 2006 (putting it in its 14th
year of development) based on the statement by IPE/Real Assets in
its article, “Asia-Pacific: APAC finds its core values,” from the
May/June 2017 magazine that M&G’
Asia Fund is Asia’s largest and oldest open-ended core fund having
been founded in 2006. The years as shown number the years over
which we have history for the US fund series
(starting in 1978). For the other regions, the starting year of the
respective representative data series utilized is Year 1 (2004 in
Europe and 2006 in Asia) and subsequent progress is aligned with
the subsequent years (as noted above).
With Pan-European open-ended core funds in their 20th year of
development, and Pan-Asian open-ended core funds in their 15th
year, both net equity invested and the number of funds for the two
regions look similar to the US open-ended core fund universe in the
early years of its development.
Net Equity
PAN-REGIONAL OPEN-ENDED CORE FUNDS
US Open-Ended Core Funds-Net Equity $B Europe Balanced Funds-Net
Equity $B Asia-GAV $B
# of US Funds # of Europe Funds # of Pan Asian Open-Ended
Funds
$208B
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TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
Global Institutional Investors Targeting ex-US 1
Institutional investors invest on substantially different terms,
including lower fees and expenses, than those offered by
Hines-sponsored non-traded REITs, which do not have and do
not expect to have a material number of institutional investors.
Note that totals may not add up to 100% due to rounding. *Source:
2021 PREA Investor Intentions Survey. PREA = Pension Real Estate
Association. Survey respondents included 84 institutional investors
with $743.8 billion of real estate
assets under management. Used with permission. 1Diversification
does not guarantee a profit or protect against a loss.
95.0%
5.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Surveyed Institutional Investors
INTENTION TO DEPLOY NEW CAPITAL TO REAL ESTATE SECTOR IN 2021
Yes No
68%
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TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
The USD Has Strengthened = Purchasing Power
Sources: Oxford Economics, Hines Research. As of Q1 2021. Using
quarterly exchange rates for each currency compared to the USD,
Hines Research created a z-score (distance
from average expressed in units that are equal to the historical
volatility of the currency in question) to show how strong or weak
each currency’s current exchange rate is compared to its own
history. Hines Research calculated the z-scores in such a way so
that a positive z-score means that the currency is stronger and a
negative equates to weaker. The start
date used for this analysis was thirty years as a default, but for
currencies with histories shorter than thirty years that had
movements of over 2 standard deviations since inception of
the currency, the start date was adjusted. The base starting point
was end-of-year (“EOY”)1989; Russia starts EOY1993, Poland and
Korea EOY1999, Czech Republic EOY2004, China, India and Mexico
EOY2008.
(2.50)
(2.00)
(1.50)
(1.00)
(0.50)
Kingdom
S ta
n d
a rd
w a y F
WEAK
STRONG
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What to Buy (or not)
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TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
US Apartments
Fo re
ca st
C u
m u
la ti
ve R
ec o
ve ry
GLOBAL MARKETS: RECESSION MODELING PRICE DECLINES AND SUBSEQUENT
RECOVERY
Markets May Offer Upside If/When We Get Forecast Declines
Sources: CoStar, NCREIF, PMA, CBRE, JLL, Oxford Economics, Hines
Research. As of Q1 2020. The analysis is not updated as it i s
meant to show what
expectations were at the start of the recession. The orange
diamonds represent averages for sectors by region, while blue
circles represent averages by sector for countries. The vertical
axis shows the average annual price return expected if the
forecasts for cumulative declines (Early Recovery scenario) come to
fruition. As
the Early Recovery assumes losses occur over the first year of the
5-year forecast period, the Recovery CAGR is the average annual
return required over the
remaining four years if, inclusive of price declines, the final
5-year average annual return is to equate to the pre-COVID Hines
Research 5-year forecast by market. The analysis averages results
for the 423 markets for which forecasts are published by Hines
Research.
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XEMBOU R G MEXI C O N ETH ER LAN D S PAN AMA POLAN D R U SSI A SOU
TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
$-
Transaction Volumes turned up in Asia first
Sources: Real Capital Analytics, Hines Research. As of Q1 2021.
“All Property” means all asset classes are included in the volume
trends.
€ 0
€ 50
€ 100
€ 150
€ 200
€ 250
$-
Asia All Property Volume Trends
APAC 1-Year Avg 3-Yr Average
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public.
US Property Price Decline is Advanced = Opportunity
Price
Composite Capital Markets Score
Sources: CoStar, NCREIF, PMA, CBRE, JLL, Oxford Economics, Hines
Research. As of 2020Q4.
The analysis averages results for over 400 markets covered by Hines
Research by region. The Composite Capital Market Score (“CCMS”) is
an aggregate score based on five proprietary factors utilized in
5-year forward price forecasts produced by Hines Research for the
markets under coverage. The CCMS is calculated as a percentile
relative to each market’s own
-
US Europe Asia
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public.
Largest concerns are the amount of supply coming (particularly in
the US), and potential
eviction protections which could come into place as the crisis
wears on.
There remains heightened increased regulatory risk for this sector
as well as potential dilution
to net rents as local property taxes could see increases in some
markets.
That said, if industrial is the obvious winner in this cycle,
Living may be the second winner –
more time spent at home has increased consumer willingness to spend
more on housing, and
given annual re-gearing of rents, the asset class has repriced
quickly from a downturn.
Given the urban exodus that has started, Hines Research expects
rents to be hardest hit in
traditionally expensive cities where units are small and employees
will have a season of
working remotely anywhere.
Class A will be impacted as rental softness hits the general
market, but cap rate movement
should be minimal compared to B and C product. Hines expects cap
rate expansion reflecting
greater risk in lower-end product.
Hines View: Current circumstances support core acquisitions.
Sector Views: Living
NEAR-TERM VOLATILITY, long-term still good to own. High-end product
not
immune. Likely second place after industrial.
L I V I N G /
H O U S I N G
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public.
US Renters Moving to the Suburbs
Sources: CoStar, NCREIF, Hines Research. As of Q1 2021.
Net Absorption (% Change in Occupied Units)
Relative Density Score (Higher = More Dense):
(20,000.00)
(15,000.00)
(10,000.00)
(5,000.00)
5,000.00
10,000.00
15,000.00
20,000.00
3-Year Average 5-Year Average 10-Year Average 2020Q1 2020Q2 2020Q3
2020Q4 2021Q1
All Classes - US National Absorption By Density Score
80 To 100 60 To 80 40 To 60 20 To 40 0 To 20
More Dense Less Dense
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XEMBOU R G MEXI C O N ETH ER LAN D S PAN AMA POLAN D R U SSI A SOU
TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
Sources: PMA, Oxford Economics, Hines Research. As of Q4 2019 as
these studies were done to show the impact of COVID post 2019Q4
compared to pre-COVID expectations. (1)
COVID-19 Special Report #5: Supply Chain Shifts Poised to Generate
Substantial New Demand (2) Prologis reported in an October 2015
research paper posted to its website, “European E-Commerce,
E-Fulfilment, and Job Creation,” that for every €1 billion EURO of
online sales, 77,000 square meters of logistics facilities is
required. Bottom Chart: Hines
Research metro-level estimates of online sales in European metros
where Hines Research has Logistics coverage. The acceleration
assumption is that average online sales increases
from approximately 10% in 2019 to 30% in 2029.
Sector Views: Warehouse
0.0%
1.5%
3.4%
1.4%
2.6%
5.0%
-1%
0%
1%
2%
3%
4%
5%
6%
EUROPE LOGISTICS: RENT GROWTH BOTH HISTORICAL AND IMPLIED BY
ACCELERATION SCENARIO
General Logistics Urban Logistics
Next 10 Years Required New Supply @ Current Online Sales
Penetration %
Next 10 Years Required New Supply: Assuming Online Sales
Penetration
US: For every 1% increase in online sales, there is
additional need for 45 million square feet of warehouse
space.1
US: If inventory increased by 5%, it is estimated the
market might need about another 300 million square feet
of warehouse. 1
EU: If country-level online sales increased from 9% in
2019 to about 25% by 2029, it would create the need for
just over 650 million square feet of logistics space in just
10 major economies (62 million square meters). 2
EU: For a similar acceleration scenario at the metro
level, annual average rental growth rates for logistics
could double over the next 10 years. Current disruption
to labor supply will push occupiers to accelerate move to
automation.
acquisitions.
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public.
Sector Views: Office
IMPACTED BUT RESILIENT – Class A outperforms.
O F F I C E
While a new world will have more flexibility and remote workers
than before; Hines Research
thinks the best office offerings will continue to do well
post-COVID.
Space needs will evolve, with a strong focus on office space as
additive to business
objectives: fostering collaboration, showcasing brand, etc. –
landlords who provide simplicity,
flexibility, and high standards of service will win.
Hines Research expects cumulative loss of demand of 5%-15%
depending on the market;
however, much of this can be offset by lower supply/withdrawals of
obsolescent space as
well as potential additional space required for “Flexible Design”
objectives (collaborative
space)
Renewed focus on health and safety, emphasizing need for modern
product. Expectations
for quality in developing markets will increase.
Urban exodus could cause capital markets and fundamental
dislocation over the next two
years, but expect that to be a temporary phenomenon that ultimately
reverses. The reverse
is true for suburban node properties.
Hines View: Current circumstances support core acquisitions ONLY
where rent
underwriting reflects decline in fundamentals.
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public.
Office: Outdated in US/EU; Lack of Supply in Asia
All charts as of Q4 2020. Left Chart: CoStar, Moody’s, Hines
Research. Middle Chart: PMA, CBRE, Oxford Economics, Hines
Research. The European average covers 42 office markets/submarkets
covered by Hines Research. The Developed Europe average excludes
Prague, Budapest, Warsaw and Moscow. Right Chart: CoStar, JLL-REIS,
Oxford Economics, Hines Research. The inventory (“stock”) figures
for all metros are best estimates for A/B quality. This quality
breakdown is available for the US (where Hines Research used CoStar
5/4-star to be conservative) and Australia. In Asia, most figures
are “Investible Stock,” which is generally aligned with Class A in
a developing market context, but Class A/B if comparing to a
Developed Market. GMP (Gross Metro Product) is in USD in order to
be comparable across markets. It is adjusted by metro by
multiplying by the percentage share for Financial and Business
Services of Total Employment. US stock and Asia outside of
Australia are gross floor area (GFA); Australia is net leasable
(NLA). As data was available for Asia Pacific-ex Australia for both
gross and net, Hines Research used the ratio for the developed
markets in Asia Pacific-ex Japan to gross up both Europe and
Australia. Asia includes India (Mumbai, Bangalore and Delhi). Hines
Research did not include Europe in this analysis as PMA data is for
all quality of property and is not available broken out by grade.
The US total office inventory figure is aggregated for 54 US
markets covered by Hines Research.
561
217
138
79
Current Asia Office
)
IMPLIED ADDITIONAL OFFICE INVENTORY FOR ASIA AT US AVERAGE (Sqm per
GMP)
5%
10%
15%
20%
25%
30%
35%
DEVELOPED EUROPE AVERAGE
US OFFICE: MODERN AVAILABILITY
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public.
Sector Views: Retail
R E T A I L
Acceleration of all previous trends including ‘rightsizing’ of
retailers’ footprints through
bankruptcies and closings; faster transition to omnichannel;
near-term mall closings;
densification & redevelopment of existing centers.
As pool of willing tenants drops, vast majority of retail assets
will have trouble backfilling
vacancies. High Street will not be immune but should hold up
relative to other subtypes ONCE
tourism, both domestic and international, is back.
Expect pain to continue for tenants and landlords long after
re-opening as tenants work through
inventory, hiring, and lower footfall issues.
Decline of US mall sector to accelerate; malls should remain more
relevant in regions where
density of retail is well below US levels or where alternative
forms of leisure is lacking.
Winners will be highest performing centers as retailers consolidate
in best locations.
Opportunity for high quality investments at discounted
pricing.
Retail amenitization for mixed-use development (creating “place”)
will always have a role.
Hines View: Current circumstances do not support core acquisitions
. . . yet.
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public.
How to Invest
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TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
Sources: PERE, Family Office Real Estate Magazine Survey, Hines
Research. Sourced from a PERE website article published on August
6, 2019 and authored by Lisa Fu.
Family Offices Appear to Prefer Private Equity/Direct Real Estate
Exposure both for Equity and Debt
0.0%
0.0%
3.2%
3.6%
6.4%
6.8%
9.6%
11.4%
12.3%
16.8%
29.6%
45.0%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Mutual Fund
Direct Real Estate
Non-traded REIT
REAL ESTATE INVESTMENT VEHICLES FAMILY OFFICES EXPECTED TO USE IN
2019
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TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
Structural Enhancements: Finite versus Perpetual REITs
1
1The information provided reflects the structure that has been
adopted by some non-traded REITs, but does not reflect the
structure of all non-traded REITs.
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TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
Structural Enhancements: Finite versus Perpetual REITs
The information provided is not a projection or forecast of future
results. 1The information provided reflects the structure that has
been adopted by some non-traded REITs, but does not reflect the
structure of all non-traded REITs. 2The availability and timing of
distributions that may be paid is uncertain and cannot be assured.
3While these fees are more closely aligned with investment
performance, some REITs still reimburse its advisor for expenses it
pays on its behalf. These expense reimbursements are not
tied to investment performance. 4The board of directors may
terminate, suspend or amend the share redemption program without
shareholder approval; stockholders may not be able to redeem their
shares.
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public.
About the Indexes and Sources in this Presentation
This presentation contains information in the form of charts,
graphs and/ or statements that we indicate were obtained by us from
published sources or provided to us by independent third parties,
some of whom we pay fees for such information. We consider such
sources to be reliable. It is possible that data and assumptions
underlying such third-party information may have changed materially
since the date referenced. Your client should not rely on such
third-party information as predictions of future results. None of
Hines, its affiliates or any third-party source undertakes to
update any such information contained herein. Further, none of
Hines, its affiliates or any third-party source purports that such
information is comprehensive, and, while it is believed to be
accurate, it is not guaranteed to be free from error, omission or
misstatement. Hines and its affiliates have not undertaken any
independent verification of such information. Finally, your client
should not construe such third-party information as investment,
tax, accounting or legal advice.
Past performance cannot guarantee future results.
Global real estate, as represented by the MSCI Global Annual
Property Index differs significantly from an investment in
non-traded real estate investment trusts (REITs) and
Hines-sponsored non-traded REITs.
Global real estate as represented by the MSCI Global Annual
Property Index (MSCI Global).
The MSCI Global Annual reports the market rebalanced returns of the
25 most mature markets (including the U.S.). The index began
tracking markets in 2001 and reporting results starting with the
year ended December 31, 2001. Results are reported annually.
• The index tracks performance of 59,914 property investments, with
a total capital value of USD 1,993.8 billion as at December 2020
and is comprised of all property sectors (retail, office,
industrial, residential, hotel and other), direct ownership
structures and interests. The index is computed at the building
level and excludes properties held indirectly through investment in
other funds, the impact of debt, fund management fees, taxation and
cash. The MSCI Global Annual is used to gauge the performance of
the global real estate market. The countries included in the MSCI
Global Annual will be subject to change as the MSCI Global Annual’s
coverage extends to more countries and as more accurate estimates
of the value of each investment market become available.
• The MSCI Global reflects the results of direct investments in
real estate. It reflects income as cash flow from operations.
Hines Securities, Inc. Member FINRA, SIPC, is the dealer manager.
6/2021 34
AU STR ALI A BR AZ I L C AN AD A C H I N A D EN MAR K F I N LAN D F
R AN C E GER MAN Y GR EEC E I N D I A I R ELAN D I TALY J APAN LU
XEMBOU R G MEXI C O N ETH ER LAN D S PAN AMA POLAN D R U SSI A SOU
TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
About the Indexes and Sources in this Presentation –Continued
Hines-sponsored non-traded REITs also differ from the MSCI Global
in several respects, including: they use debt; they require the
payment of up-front selling commissions and other fees that
typically exceed those of institutional programs, as well as the
payment of expenses related to being a public company; investors in
Hines-sponsored non-traded REITs will be investing in securities of
a company and not directly in real estate; and the value of an
investment in Hines-sponsored non-traded REITs may not be based
solely on the appraised value of the underlying properties. The
prices of the shares offered by Hines-sponsored non-traded REITs
equal the then-current transaction price, which generally will be
equal to the most recently determined NAV per share for each class
of shares, plus, in the case of shares sold in the primary
offering, applicable up-front selling commissions and dealer
manager fees. The selling commissions and fees reduce the amount
available for investment.
Additionally, the MSCI Global reflects income as cash flow from
operations. Hines-sponsored non-traded REITs may pay distributions
from cash flow from operations of the properties the REIT owns, as
well as from other sources, including borrowings and offering
proceeds, which may lower returns. The availability and timing of
distributions Hines-sponsored non-traded REITs may pay is uncertain
and cannot be assured. Additionally, Hines Global is subject to
significant fees and expenses, which may lower returns. The
Hines-sponsored non- traded REITs board of directors determine the
timing and amount of distributions. There is no guarantee that
distributions will be paid or that the distribution rate will be
maintained.
The MSCI Global does reflect the impact of entity level expenses;
however, it does not reflect the fees and expenses associated with
raising capital to which an investment in Hines-sponsored
non-traded REITs are subject, which may lower returns.
International investment risks, including the burden of complying
with a wide variety of foreign laws and the uncertainty of such
laws, the tax treatment of transaction structures, political and
economic instability, foreign currency fluctuations, and inflation
and governmental measures to curb inflation may adversely affect
Hines-sponsored non-traded REIT’s operations and its ability to
make distributions.
While funds used in the MSCI Global have characteristics that
differ from Hines-sponsored non-traded REITs (including differing
management fees and leverage), Hines-sponsored non-traded REIT’s
management believes that the MSCI Global is an appropriate and
accepted index for the purpose of evaluating the historic yields of
global commercial real estate, respectively.
Hines Securities, Inc. Member FINRA, SIPC, is the dealer manager.
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AU STR ALI A BR AZ I L C AN AD A C H I N A D EN MAR K F I N LAN D F
R AN C E GER MAN Y GR EEC E I N D I A I R ELAN D I TALY J APAN LU
XEMBOU R G MEXI C O N ETH ER LAN D S PAN AMA POLAN D R U SSI A SOU
TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
About the Indexes and Sources in this Presentation —Continued
Public real estate (U.S.) is measured by the FTSE NAREIT All Equity
REITs Index, which is a free-float adjusted, market
capitalization-
weighted index of U.S. equity REITs that are listed on an exchange.
Constituents of the index include all tax-qualified REITs with more
than 50 percent of total assets in qualifying real estate assets
other than mortgages secured by real property. An investment in a
traded REIT differs from an investment in a non-traded REIT in that
non-traded REITs do not trade on an exchange, have limited
redemption programs, and are subject to fees that may be higher
than those paid with respect to traded REITs.
Levered US real estate is represented by the NCRIEF Fund Index
–Open-End Diversified Core Equity Value-Weighted Index (NFI-ODCE).
The NFI ODCE, a capitalization weighted, gross of fee, time
weighted return index with an inception date of December 31, 1977.
Other supplemental data such as equal weight and net of fee returns
are also provided by NCREIF for information purposes and additional
analysis. To be eligible for NFI ODCE membership, each member fund
must be marketed as an open end fund with a diversified core
investment strategy primarily investing in private equity real
estate. All members funds must adhere to the following index
inclusion criteria (1) At least 80 of market value of net assets
must be invested in real estate 20 cap on cash and equivalents);
(2) At least 80 of market value of real estate net assets must be
invested in private equity real estate properties 20 cap on real
estate assets invested in but not limited to, property debt, public
company equity/debt or private company equity/debt); (3) At least
95 of real estate net assets must be located in U S markets; (4) At
least 80 of market value of real estate net assets must be invested
in office, industrial, apartment and retail property types; (5) No
more than 65% (+/- for market force)s of market value of real
estate net assets in one property type or region as defined by
NCREIF Property Index (6) No more than 40% leverage. Each member
fund must also comply with the NCREIF PREA Reporting standards. A
benchmark index is not professionally managed. Investors cannot
invest directly in an index.
US Unlevered Real Estate is measured by the MSCI U.S. Quarterly
Property Index (Unfrozen). The MSCI Property Indexes are primarily
based on real estate valuations, and where available, property
transacted prices, supplied by its data providers. Groupings of
MSCI property indexes include regional and market indexes and
sector indexes.
The prices of real estate securities represented by these indices
may change in response to factors including: the historical and
prospective earnings of issues, the value of assets, general
economic conditions, interest rates and investor perceptions.
However, stocks, including stocks of traded REITs and T-Bills are
easily traded and provide ready liquidity. An investment in direct
real estate or a non-traded REIT does not. Additionally, stock
investments are not subject to the fees and expenses, to which
direct real estate and non-traded REITs would be subject.
Past performance cannot guarantee comparable future results. All
indexes are unmanaged. An investment cannot be made directly in an
index.
Hines Securities, Inc. Member FINRA, SIPC, is the dealer manager.
6/2021 36
AU STR ALI A BR AZ I L C AN AD A C H I N A D EN MAR K F I N LAN D F
R AN C E GER MAN Y GR EEC E I N D I A I R ELAN D I TALY J APAN LU
XEMBOU R G MEXI C O N ETH ER LAN D S PAN AMA POLAN D R U SSI A SOU
TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
About the Indexes and Sources in this Presentation —Continued
Stocks are represented by the S&P 500 Index. The prices of
equity securities represented by the index may change in response
to factors
including: the historical and prospective earnings of the issuer,
the value of its assets, general economic conditions, interest
rates and investor perceptions. Stocks are easily traded and
provide ready liquidity.
Stocks (Global) are represented by the MSCI World Index, a global
equity benchmark that represents large and mid-cap equity
performance across 23 developed markets countries. The index is
reviewed quarterly with the objective of reflecting change in the
underlying equity markets in a timely manner, while limiting undue
index turnover.
Large cap stocks (U.S.) are represented by the S&P 500 Index,
widely regarded as the best single gauge of large-cap U.S.
equities. The index includes 500 leading companies and captures
approximately 80% coverage of available market
capitalization.
Global equity is represented by the MSCI World Index, which is part
of is a broad global equity benchmark that represents large and
mid-cap equity performance across 23 developed markets countries.
The index is reviewed quarterly with the objective of reflecting
change in the underlying equity markets in a timely manner, while
limiting undue index turnover. During the May and November semi-
annual index reviews, the index is rebalanced and the large- and
mid-capitalization cutoff points are recalculated. Stocks are
easily traded and provide ready liquidity.
The prices of equity securities represented by these indices may
change in response to factors including: the historical and
prospective earnings of issues, the value of assets, general
economic conditions, interest rates and investor perceptions.
Stocks, including stocks of traded REITs, are easily traded and
provide ready liquidity. An investment in direct real estate or a
non-traded REIT does not. Additionally, stock investments are not
subject to the fees and expenses, to which direct real estate and
non-traded REITs would be subject.
Past performance cannot guarantee comparable future results. All
indexes are unmanaged. An investment cannot be made directly in an
index.
Hines Securities, Inc. Member FINRA, SIPC, is the dealer manager.
6/2021 37
AU STR ALI A BR AZ I L C AN AD A C H I N A D EN MAR K F I N LAN D F
R AN C E GER MAN Y GR EEC E I N D I A I R ELAN D I TALY J APAN LU
XEMBOU R G MEXI C O N ETH ER LAN D S PAN AMA POLAN D R U SSI A SOU
TH KOR EA SPAI N U N I TED KI N GD OM U N I TED STATES
FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
About the Indexes and Sources in this Presentation —Continued
Treasury Bills (T-Bills) are represented by Bank of America Merrill
Lynch 0-3 Month U.S. Treasury Bill Index, which tracks the
performance
of the U.S. dollar denominated U.S. Treasury Bills publicly issued
in the U.S. domestic market with a remaining term to final maturity
of less than three months. Treasury bills and Treasury notes are
guaranteed as to timely repayment of principal and interest by the
U.S. government.
Corporate bonds (Global) are represented by the Bloomberg Barclays
Global Aggregate Corporate Index, which is a flagship measure of
global investment-grade, fixed-rate corporate debt. This
multi-currency benchmark includes bonds from developed and emerging
markets issuers within the industrial, utility and financial
sectors. The Global Aggregate Corporate Index is a component of the
Global Aggregate and Multiverse Indices. Index history is available
through January 2001.
High Yield Corporate Bonds (U.S.) are represented by Bloomberg
Barclays US HY Corporate Bond Index, which measures high-yield
corporate bonds rated Ba1/BB+ or below.
Aggregate Bonds (U.S) are measured by Bloomberg Barclays Aggregate
US Bond Index, which is a broad based, market capitalization-
weighted bond market index representing intermediate term
investment grade bonds traded in the United States.
Investment Grade Corporate Bonds (U.S.) are measured by Bloomberg
Barclays US Investment Grade Corporate Bond Index, which measures
the investment grade, fixed-rate, taxable corporate bond market. It
includes USD-denominated securities publicly issued by US and
non-US industrial, utility and financial issuers.
Corporate Bonds (U.S.) the Bank of America Merrill Lynch U.S.
Corporate Master Index, which tracks the performance of U.S. dollar
denominated investment grade rated corporate debt publicly issued
in the U.S. domestic market.
The Bloomberg Barclays 10-Year Municipal Bond Index is a
broad-based index comprised of approximately 5,000 bonds.
The Bloomberg Barclays 10-Year Treasury Index measures the
performance of 10-year U.S. Treasury notes.
Corporate bonds are debt instruments issued by corporations that
pay a fixed amount of interest. Bonds are subject to interest rate
risk, which refers to the risk that bond prices generally fall when
interest rates rise and vice versa. Bonds are easily traded and
provide ready liquidity. An investment in debt instruments, such as
corporate bonds, may be secured by collateral and are repaid first
should a company be liquidated, while an investment in a REIT is an
investment in equity which will not be secured by collateral and
the interest of shareholders of a REIT are subordinate to the
REIT’s lenders should a REIT be liquidated. Investments in
non-traded REITs or direct real estate may be subject to more
expenses than a direct investment in bonds, including management
fees and entity-level expenses.
Inflation is represented by the Consumer Price Index (CPI).
Past performance cannot guarantee comparable future results. All
indexes are unmanaged. An investment cannot be made directly into
an index.
Hines Securities, Inc. Member FINRA, SIPC, is the dealer manager.
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FOR INSTITUTIONAL USE ONLY. Not for distribution to the
public.
Thank You
at 888.446.3773
Hines Securities, Inc. Member FINRA, SIPC, is the dealer manager.
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