December 16 2020

Winners & Losers in the New Retail Ecosystem Service – A Niche Benefiting From Change

Any views and opinions expressed hereafter are those of CenterSquare, unless otherwise stated. Refer to important disclosures at the end of this document. The COVID-19 pandemic is rapidly developing globally, impacting the economy and investments for which the duration, scale and severity remain unknown. www.centersquare.com Alternative Real Estate – Does Retail have a “Niche”?

. Alternative property types that are benefitting from secular tailwinds have gained popularity with investors.

Public vs. Private Market Composition Alternative or Niche Sector Composition

OfficeOffice Residential Industrial Retail 18% 34% 55% 21% Life Single Family Cold Service 12% Sciences Rental Storage Property

25% 26% 12% Medical Student/Senior Last Mile 11% Office Housing 12% 9% 35% 17% 13% Manufactured Data Center Homes REIT Market in 2007 REIT Market Today Private Market Today

Office Residential Retail Industrial Alternative Sectors

Source: Bloomberg, NCREIF Property Index (Private Market), FTSE Nareit Equity REITs Index (REIT Market) as of September 2020.

2 Please see disclosure statements at the end of this document. A Brief History of Change

. Disruptive global events that have propelled certain niche real estate sectors to the investment forefront.

Global Financial Digital Age (2007+) E-Commerce (2015+) COVID-19 (2020) Crisis (2008-2009)

Event

“Essential” businesses Housing-led recession Mass adoption of 2-day / same-day defined, designating resulted in restrictive smart phones and e-commerce delivery providers of services as Impact lending practices tablets led to surging required retailers to be critical to society and and less expensive demand for bandwidth closer to its customers. bolstering position as a home prices. and connectivity. thriving retail sector.

Benefitting Data Centers and Cell Single Family Rentals Last Mile Industrial Service Niche Sector Towers

Source: CenterSquare as of December 2020.

3 Please see disclosure statements at the end of this document. The Retail Ecosystem . Different formats deliver different components of the consumer bundle.

Service Properties (8%) Grocery-Anchored Shopping Centers (52%)

Big Box Centers (15%) Malls (25%)

Source: CenterSquare Investment Management as of May 2020.

4 Please see disclosure statements at the end of this document. The Data – Collections & REIT Pricing

. Rent collections have remained the highest compared to other retail sectors. . REIT market pricing foreshadows significant differentiation.

100% Rent Collections Traditional vs. Service Property Implied Cap Rates (April - 3Q) (1997-Present) 95% 12%

90% 90% 10%

85% 83% 8%

80% 6% 77% 75% 4%

70% 2%

65% 64% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 60% CSIM Service Grocery-Anchored Big Box Center Malls Shopping Centers Malls Service Properties Property Portfolio

Source: REIT Company Reports, CSIM portfolio data, GreenStreet Strip Center Sector Source: CSIM, November 2020. Earnings Recap - Waiting Patiently for Answers, August 2020.

REITS selected for comparison based on CSIM Private Equity coverage. CSIM Service Property portfolio of shopping centers focused on the provision of services (food & beverages, fitness, beauty, health & medical, business services), built after 2000, between 20,000 to 40,000 square feet.

5 Please see disclosure statements at the end of this document. Changing Consumer Patterns

. How we shop matters – e-commerce penetration.

. What we shop for matters – shift of wallet share to services.

Tenants Resilient to Consumers Spend More on E-Commerce Penetration Services than Goods

80% $8,000

60% $7,000

$6,000 40% $5,000 20% Services $4,000

0% $3,000

Total $2,000 Beauty Fitness Apparel Furniture Groceries

Electronics $1,000 Pharmacies Consumer Spending(US$ Million)

$0 Building Materials Food And Beverage General Merchandise Sporting Goods/Music Business Services/Other Ecommerce penetration Peak Ecommerce penetration Durable Goods Consumer Services

Source: Consumers Spend More on Services than Goods, Board of Governors of the Federal Reserve Board as of January 1970 - November 2019. E-commerce penetration data as of January 2020. Updated and maintained by CenterSquare Investment Management.

6 Please see disclosure statements at the end of this document. How We Consume Services – Service Property . Institutional quality real estate leased to tenants whose customers must visit the store to consume the service.

• Un-anchored (no tenant > 25% of SF) • Size 10,000 - 50,000 SF Attributes • Greater than 5 tenants • Hard corner and lighted intersection • Built after 2000, Class A / Quality Asset Value • $7 million to $20 million (higher institutional quality for portfolios)

Tenant Mix • > 50% mix of national / 3-Mile Demographics • Population: > 70,000 or regional tenants • Income: > $70,000

Essential Tenant Mix Multi-Tenant Outparcels

Street Frontage Visibility Hard Corner Intersection

Source: CSIM, December 2020.

7 Please see disclosure statements at the end of this document. Essential Tenant Mix Says it All . The centers are occupied by “e-commerce resistant” higher quality tenants that cater to everyday dining and service needs of the surrounding residential neighborhoods. . Majority of the tenant mix qualifies as “essential” and was not required to close during the quarantine.

Essential Tenants Essential Tenant Mix 79% (as a % of Annualized Based Rent) 80% Food & Beverage Health & Medical 67% 70% 62% 59% 60% 49% 50% 43% 43% 42% 38% 40% 37% 35% 30% 30% 24% 20%

Beauty Professional Services

CSIM Tenant Uses (% of Net Rentable Area) CSIM Tenant Mix (% of Net Rentable Area)

Other 9% Local 10% Beauty 11%

Food & Beverage 43% Commercial Services… National, Regional & Guarantor Health/Medical Tenants 16% 90%

Source: REIT Company Reports and CenterSquare Investment Management portfolio data, as of September 30, 2020. REITs selected for comparison above based on CenterSquare Investment Management Private Equity coverage. CenterSquare’s Service Property portfolio consists of shopping centers focused on the provision of services (food & beverages, fitness, beauty, health & medical, and business services), built after 2000, between 20,000 to 40,000 square feet. 8 Please see disclosure statements at the end of this document. Strong Fundamentals

. Service Properties are benefitting from changing consumer patterns that have resulted in strong underlying real estate fundamentals.

Occupancy remains high Healthy tenants CSIM Portfolio - Historical 100% 82% + 80% Retention Avg. Ratio Leasing Spread 60%

40% Tenants % Who Have 20% 67 Contractual Essential Annual Rent 0% Tenants Increase

Source: CenterSquare Investment Management portfolio data, as of September 2020. Source: CenterSquare Investment Management portfolio data, as of September 2020.

Low leasing costs Stores are opening

100% Leasing Costs as a % of NOI # of Retail and Services Stores (% of total stores) $5.50 PSF 54% 53% 80% 53% 52% 60% 51% 50% 50% 40% Avg. Tenant Improvement 49% 48% 20% Cost 48% 47% 47% 0% 46% 2002 2007 2012 2017 Goods Services

Source: CenterSquare Investment Management portfolio data, as of September 2020. Source: ICSC Industry Insights as of January 15, 2020.

9 Please see disclosure statements at the end of this document. Mispriced?

. Due to negative consumer sentiment towards all retail, cap rates have increased despite strong performance, while the cost of debt has decreased, resulting in higher cash-on-cash returns.

Borrowing Spread Comparison Cap Rates have increased Cap Rate Interest Rate despite strong performance 7.5% 7.00% 7.0% 6.50% 6.5% Service Properties has most attractive risk-adjusted pricing 6.0% 5.50% 5.5% 5.00% 350 bps 5.0% 250 bps 4.75% 4.50%

4.5% 150 bps Borrowing Spread Borrowing 4.0% 125 bps 4.00% 4.00% 200 bps 3.5% 165 bps 3.50% 3.50% 3.0% Cost of debt has decreased 3.00% 2.5% 2.85% Pre COVID Post COVID Pre COVID Post COVID Pre COVID Post COVID

Service Properties Industrial

Source: CenterSquare Investment Management portfolio data, as of June 30, 2020. Please refer to cap rate methodology at the end of this presentation. CenterSquare’s Service Property portfolio consists of shopping centers focused on the provision of services (food & beverages, fitness, beauty, health & medical, and business services), built after 2000, between 20,000 to 40,000 square feet. Pre COVID is as of 2/28/2020; Post COVID is as of 9/16/2020.

10 Please see disclosure statements at the end of this document. Disclosures Disclosure Statements

General Disclosures General Real Estate Risks This material is provided for general information only and should not be construed as investment Because the investment strategies concentrate their assets in the real estate industry, an advice or a recommendation. You should consult with your advisor to determine whether any investment is closely linked to the performance of the real estate markets. Investing in the equity particular investment product or investment strategy is appropriate. securities of real estate companies entails certain risks and uncertainties. These companies experience the risks of investing in real estate directly. Real estate is a cyclical business, highly Material in this publication is for general information only and is not intended to provide specific sensitive to general and local economic developments and characterized by intense competition investment advice or recommendations for any purchase or sale of any specific security or and periodic overbuilding. Real estate income and values may also be greatly affected by commodity. Due to, among other things, the volatile nature of the markets and the investment demographic trends, such as population shifts or changing tastes and values. Companies in the areas discussed herein, investments may only be suitable for certain investors. real estate industry may be adversely affected by environmental conditions. Government actions, such as tax increases, law changes or environmental regulations, may also have Parties should independently investigate any investment area or manager, and should consult a major impact on real estate. Changing interest rates and credit quality requirements will also with qualified investment, legal, and tax professionals before making any investment. Some affect the cash flow of real estate companies and their ability to meet capital needs. information contained herein has been obtained from third party sources and has not been independently verified by CenterSquare Investment Management LLC (“CenterSquare”). This Investments are not guaranteed by or represent obligations of CenterSquare or its affiliates. material is not to be reproduced in whole or in part or used for any other purpose. CenterSquare assumes no responsibility for the accuracy or completeness of the above data and disclaims all expressed or implied warranties in connection therewith. This communication is not an offer of securities for sale in the United States, Australia, Canada, Japan or any other jurisdiction where to do so would be unlawful. 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12 Disclosure Statements

CenterSquare REIT Cap Rate Perspective Methodology commingled funds pursuing a core investment strategy, some of which have performance CenterSquare REIT Implied Cap Rates are based on a proprietary calculation that divides a histories dating back to the 1970s. The REIT ODCE Proxy is proprietary to CenterSquare and company’s reporting net operating income (“NOI”) adjusted for non-recurring items by the value uses gateway/infill names in apartments, retail, industrial and office, and then weights them of its equity and debt less the value of non-income producing assets. The figures above are according to the ODCE index to create a proxy. based on 3Q20 earnings reported in September 2020. Private Market Cap Rates represent the cap rate achievable in the private market for the The universe of stocks used to aggregate the data presented is based on CenterSquare’s property portfolio owned by each company, and are based on estimates produced by coverage universe of approximately 200 U.S. listed real estate companies. Sector cap rates are CenterSquare’s investment team informed by various market sources including broker estimates. market cap weighted. Sectors and market classifications are defined by the following: : REITs that own and manage multifamily residential rental properties; Industrial: This presentation may contain forward-looking statements within the meaning of the federal REITs that own and manage industrial facilities (i.e. warehouses, distribution centers); Office – securities laws. Forward-looking statements relate to expectations, beliefs, projections, future REITs that own and manage commercial office properties; Retail – REITs that own and manage plans and strategies, anticipated events or trends and similar expressions concerning matters retail properties (i.e. malls, shopping centers); Hotel – REITs that own and manage lodging that are not historical facts. In some cases, you can identify forward-looking statements by the properties; Healthcare – REITs that own properties used by healthcare service tenants (i.e. use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans, hospitals, medical office buildings); Gateway – REITs with portfolios primarily in the Boston, ”anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and Chicago, LA, NYC, SF, and DC markets; Non-Gateway – REITs without a presence in the phrases or similar words or phrases which are predictions of or indicate future events or trends gateway markets. and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements involve The REIT ODCE Proxy is a universe of REIT stocks built to resemble the NCREIF Fund Index – known and unknown risks, uncertainties, assumptions and contingencies, many of which are Open End Diversified Core Equity (ODCE). The ODCE, short for NCREIF Fund Index - Open beyond the CenterSquare’s control, and may cause the CenterSquare’s actual results to differ End Diversified Core Equity, is the first of the NCREIF Fund Database products and is an index significantly from those expressed in any forward-looking statement. of investment returns reporting on both a historical and current basis the results of 36 open-end

13 Definition of Indices

FTSE Nareit Equity REITs Index these benchmarks. There is no guarantee that any of the securities invested in by the portfolios The FTSE Nareit U.S. Real Estate Index includes all tax-qualified real estate investment trusts comprise these benchmarks. Also, performance results for benchmarks may not reflect payment ("REITs") that are listed on the New York Stock Exchange, the American Stock Exchange and of investment management/incentive fees and other expenses. Because of these differences, the NASDAQ National Market List. The index constituents span the commercial real estate benchmarks should not be relied upon as an accurate measure of comparison. space across the US economy and provides investors with exposure to all investment and A direct investment in an index is not possible. property sectors. The performance presented is based on total return calculations which adds the income a stock’s dividend provides to the performance of the index, and is gross of investment FTSE Data disclosure: Source: FTSE International Limited (“FTSE”) © FTSE 2020. FTSE® is a management fees. Effective December 20, 2010 the ticker for the FTSE Nareit U.S. Real Estate trade mark of the London Stock Exchange Group companies and is used by FTSE under licence. Index changed from FNERTR (total return) to FNRETR (total return). The old ticker (FNERTR) All rights in the FTSE indices and / or FTSE ratings vest in FTSE and/or its licensors. Neither has been reassigned to newly established FTSE Nareit All Equity REIT Index which is similar to FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and / or the existing benchmark in all regards except that timber REITS will comprise approximately 7% of FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s the new index and 0% in the FTSE Nareit Equity Real Estate Index. express written consent. "FTSE®" is a trade mark of the London Stock Exchange Group companies, "Nareit®" is a trade NFI ODCE: NCREIF Open End Diversified Core Equity (ODCE) Index mark of the National Association of Real Estate Investment Trusts ("Nareit”) and "EPRA®" is a The ODCE, short for NCREIF Fund Index - Open End Diversified Core Equity, is the first of the trade mark of the European Public Real Estate Association ("EPRA”) and all are used by FTSE NCREIF Fund Database products and is an index of investment returns reporting on both a International Limited ("FTSE”) under licence). historical and current basis the results of 36 open-end commingled funds pursuing a core investment strategy, some of which have performance histories dating back to the 1970s. "FTSE®" is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited ("FTSE") under licence. "Nareit®" is a trade mark of the National Association These benchmarks are broad-based indices which are used for illustrative purposes only and of Real Estate Investment Trusts ("Nareit"). have been selected as they are well known and are easily recognizable by investors. However, the investment activities and performance of an actual portfolio may be considerably more The FTSE Nareit Equity REITs Index is calculated by FTSE. Neither FTSE nor Nareit sponsor, volatile than and have material differences from the performance of any of the referenced indices. endorse or promote this product and are not in any way connected to it and do not accept any Unlike these benchmarks, the portfolios portrayed herein are actively managed. Furthermore, the liability. portfolios invest in substantially fewer securities than the number of securities comprising each of

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