This is an HTML version of an article that ran in Real Estate Forum. To see the story in its original format, click here. Real Estate Forum PARTICIPANTS Michael Desiato moderator ALM's Real Estate Media Group Carrie DeWees is a portfolio manager for Allstate , based in Chicago. *DeWees' comments have been omitted from the Roundtable because the firm could not verify the content in time for REF's press deadline. Jim Halliwell is a managing director with Principal Real Estate Investors , the real estate investment arm of the Principal Financial Group. He oversees private equity for the Des Moines-based group, which has approximately $67 billion of assets under management, covering public, private, debt and equity investments. Scott Kempton TIAA Global Asset Management Joe Miller Northwestern Mutual Real Estate Dirk Mosis USAA Real Estate Co. Steve Pumper moderator Transwestern Jim Street PGM Real Estate

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STEVE PUMPER: The pace and volume of sales have come down as compared to last year as entity-level and portfolio deals have declined in prevalence. Are we getting later into the cycle, or are investors taking a “time out”? JIM STREET: JOE MILLER: MICHAEL DESIATO: Speaking of office, Dirk, you've been active there, particularly with development. How has that been working out? DIRK MOSIS: JIM HALLIWELL: SCOTT KEMPTON: On the retail side, there's been a slowdown in sales, as everybody knows. On the regional mall front, we've seen tourism sales decline. The recent sales decline Macy's department stores have experienced is primarily due to the lack of spending in the tourist-based markets. Tourists are still coming to the US but are spending less because of the strong dollar and global economic concerns. Consumer confidence in the US has waned, too, because of global economic concerns and the lack of wage growth. PUMPER: Based on everything you all have said, for 2016, will you be net sellers or net buyers? HALLIWELL: MILLER: KEMPTON: STREET: In 2012-2014, we were a net buyer, generating an acquisition pipeline of about $5 billion a year, including our JV developments, as compared to an average annual disposition volume of approximately $3 billion. Last year, we were pretty even on acquisitions and dispositions with about $6 billion in each category. Maybe this was the peak of the cycle, but the reason we were able to hit that mark on the disposition side is because we had a couple of large-scale transactions that definitely impacted the numbers. MOSIS: DESIATO: Debt maturities this year and next total about $204 billion. On the CMBS special servicing side, if you put in a 10% percent number on deals that transfer back in, that puts you at about $20 billion in terms of average loan size, which may be perceived a little bit high. But even at $15 billion, that's a lot of real estate, so there will be opportunities. Last year's CMBS volume was roughly $100 billion, and it's projected that CMBS will end the year with roughly $50 billion in volume. That's half the amount of the prior year. It's having an impact in that CMBS debt won't be there to take out some of these players when the maturities come around. Is that playing into your strategies in any way? MOSIS: HALLIWELL: KEMPTON: PUMPER: When we were out in the market earlier this year, we heard a lot of folks say that you need to get your debt capital the first half of the year, because things might start to slow in the second half, as a lot of the debt might be already placed and people might hit their bogey for the year. What are you seeing? Did you hit your numbers for the year or do you have plenty to place in the second half? How about your competitors? MILLER: DESIATO: Some of you brought up foreign capital and many of you here have foreign partners. How is the inflow from international investors impacting you, in terms of either JVing with them, fund managing them, investment managing them, or just competing against them in the markets? STREET: KEMPTON: PUMPER: As always, we will wrap this discussion up by asking all of you what keeps you up at night? Things feel pretty good, but there also also some valid concerns out there. MILLER: STREET: KEMPTON: HALLIWELL: MOSIS: Northwestern Mutual
This is an HTML version of an article that ran in Real Estate Forum. To see the story in its original format, click here. Real Estate Forum PARTICIPANTS Michael Desiato moderator ALM's Real Estate Media Group New York Carrie DeWees is a portfolio manager for Allstate , based in Chicago. *DeWees' comments have been omitted from the Roundtable because the firm could not verify the content in time for REF's press deadline. Jim Halliwell is a managing director with Principal Real Estate Investors , the real estate investment arm of the Principal Financial Group. He oversees private equity for the Des Moines-based group, which has approximately $67 billion of assets under management, covering public, private, debt and equity investments. New York Scott Kempton TIAA Global Asset Management Joe Miller Northwestern Mutual Real Estate Dirk Mosis USAA Real Estate Co. Steve Pumper moderator Transwestern Jim Street PGM Real Estate

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STEVE PUMPER: The pace and volume of sales have come down as compared to last year as entity-level and portfolio deals have declined in prevalence. Are we getting later into the cycle, or are investors taking a “time out”? JIM STREET: JOE MILLER: MICHAEL DESIATO: Speaking of office, Dirk, you've been active there, particularly with development. How has that been working out? DIRK MOSIS: JIM HALLIWELL: SCOTT KEMPTON: On the retail side, there's been a slowdown in sales, as everybody knows. On the regional mall front, we've seen tourism sales decline. The recent sales decline Macy's department stores have experienced is primarily due to the lack of spending in the tourist-based markets. Tourists are still coming to the US but are spending less because of the strong dollar and global economic concerns. Consumer confidence in the US has waned, too, because of global economic concerns and the lack of wage growth. PUMPER: Based on everything you all have said, for 2016, will you be net sellers or net buyers? HALLIWELL: MILLER: KEMPTON: STREET: In 2012-2014, we were a net buyer, generating an acquisition pipeline of about $5 billion a year, including our JV developments, as compared to an average annual disposition volume of approximately $3 billion. Last year, we were pretty even on acquisitions and dispositions with about $6 billion in each category. Maybe this was the peak of the cycle, but the reason we were able to hit that mark on the disposition side is because we had a couple of large-scale transactions that definitely impacted the numbers. MOSIS: DESIATO: Debt maturities this year and next total about $204 billion. On the CMBS special servicing side, if you put in a 10% percent number on deals that transfer back in, that puts you at about $20 billion in terms of average loan size, which may be perceived a little bit high. But even at $15 billion, that's a lot of real estate, so there will be opportunities. Last year's CMBS volume was roughly $100 billion, and it's projected that CMBS will end the year with roughly $50 billion in volume. That's half the amount of the prior year. It's having an impact in that CMBS debt won't be there to take out some of these players when the maturities come around. Is that playing into your strategies in any way? MOSIS: HALLIWELL: KEMPTON: Northwestern Mutual PUMPER: When we were out in the market earlier this year, we heard a lot of folks say that you need to get your debt capital the first half of the year, because things might start to slow in the second half, as a lot of the debt might be already placed and people might hit their bogey for the year. What are you seeing? Did you hit your numbers for the year or do you have plenty to place in the second half? How about your competitors? MILLER: DESIATO: Some of you brought up foreign capital and many of you here have foreign partners. How is the inflow from international investors impacting you, in terms of either JVing with them, fund managing them, investment managing them, or just competing against them in the markets? STREET: KEMPTON: PUMPER: As always, we will wrap this discussion up by asking all of you what keeps you up at night? Things feel pretty good, but there also also some valid concerns out there. MILLER: STREET: KEMPTON: HALLIWELL: MOSIS: