Summit Strategies Group 8182 Maryland Avenue, 6th Floor St. Louis, Missouri

Summit Strategies Group 8182 Maryland Avenue, 6th Floor St. Louis, Missouri 63105 314.727.7211 Real Estate Review City of Jacksonville Police & Fire Fund September, 2014

BACKGROUND Since the last meeting, the System s Investment Staff has asked Summit to explore Real Estate as a potential diversifying asset class for the System s portfolio. Real Estate typically offers greater liquidity than other alternative asset classes depending on the investment vehicle, but is less liquid than traditional asset classes. For an open end investment vehicle: The manager will typically accept the entire desired investment amount on day one, if capacity exits. The investment product will typically offer quarterly liquidity with a 60 90 day notice requirement. For a closed end investment vehicles: The manager will typically accept the desired commitment amount and draw down and invest that commitment amount over a 3 4 year period. Closed end products typically do not offer liquidity (other than selling the interest on the secondary market). The purpose of today s presentation is to continue the discussion regarding Real Estate and present potential investment opportunities in the space. 1

REAL ESTATE INVESTMENT RATIONALE Good diversifier relative to stocks and bonds 30 year correlation of 0.12 to stocks and 0.11 to bonds. Long term inflation hedge Replacement costs (land value and labor) are inputs into property values. Property leases tend to rise with CPI over the long term. Current Income Core Real Estate has an average yield spread of 3% above U.S. Treasuries for the last 20 years. Core funds currently have annual income distribution yields ranging from 4 5%. Smoothed return stream There is no continuous trading market for private real estate; the appraisal based valuation methodology used in private real estate results in a smoothed and lagged return time series. Inefficient Markets While many properties are sold using intermediaries/brokers, a significant number of properties are traded off market. 2

PRIVATE REAL ESTATE STRATEGY OVERVIEW Opportunistic Value Added Distressed Sellers, Development, Significant Redevelopment, Emerging Sectors Return Core Repositioning, Moderate Redevelopment, Re leasing Return: 10%+ Leverage: 65%+ Fully Leased Multi Tenant Property Return: 8 10% Leverage: 55 65% Return: 6 8% Leverage: 0 35% Risk 3

REAL ESTATE IMPLEMENTATION Implementation Considerations 1. Liquidity private real estate quarterly liquid (Core Real Estate), and illiquid (Non Core Partnership) options. 2. Risk/Return Profile Core Real Estate (low) up to Opportunistic (high). 3. Emphasis of Current Income determines mix of Core vs. Non Core Real Estate. 4. Allocation vs. Manager Selection allocation decision more important for Core Real Estate, while the manager decision is more important for Non Core Real Estate. Non Core Real Estate Core Diversified Value Added Opportunistic Risk Low Medium High Definition A portfolio comprised of well leased buildings. Assets are purchased with cash flows in place from generally highgrade tenants. Portfolios are diversified by geographic region and property type (office, retail, multifamily, and industrial). A portfolio that generally includes a mix of non stabilized investments that have less reliable income streams than core assets. The portfolio will have moderate to high leasing risk and have higher leverage. A portfolio of non stabilized investments with higher risk characteristics such as exposure to development, significant leasing risk, higher leverage, or a combination of each. Expected Return 6 8% 8 10% 10%+ Return Component Income component will be primary source of return Income present, but majority of return from asset appreciation Income is not a focus; appreciation will comprise most of the total return Portfolio Leverage < 35% 55% 65% > 65% Fee Structure 1.0% management fee only 1.5% + 20% (pref return 8 9%) 1.5% + 20% (pref return 8 9%) Lifecycle Operating Operating, Leasing Renovation, Leasing, Development 4

CURRENT RISK/RETURN EXPECTATIONS 9.0% 8.0% Total Return vs. Risk Private Non Core Real Estate Emerging Markets Rate of Return 7.0% 6.0% 5.0% 4.0% 3.0% Cash Core Fixed Income Private Core Real Estate Large Cap International Small Cap International Large Cap Small Cap 2.0% 1.0% 0.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Standard Deviation Asset Class Expected Return Expected Alpha Standard Deviation Comments Regarding Return Assumptions Large Cap 5.5% 0.5% 16.8% Long term Expected, Fundamental Components Small Cap 5.3% 0.8% 20.5% Long term Expected, Fundamental Components International Large Cap 6.8% 0.8% 20.0% Long term Expected, Fundamental Components International Small Cap 6.8% 1.0% 23.3% Long term Expected, Fundamental Components Emerging Markets 8.5% 1.0% 25.3% Long term Expected, Fundamental Components Private Non Core Real Estate 8.5% n/a 23.0% Current Cap Rate + NOI Growth + Liquidity Premium + Leverage Adj Cash 2.8% n/a 1.8% Current Yield Curve Core Fixed Income 3.3% 0.3% 3.5% Current Yield Curve Private Core Real Estate 6.5% n/a 12.0% Current Cap Rate + NOI Growth + Leverage Adj 5

REAL ESTATE INVESTMENT OPTIONS Prudential Real Estate: PRISA II *Core Plus Clarion Partners: Lion Properties Fund Harrison Street: Core Property Fund RREEF: America II Principal: U.S. Property Account Heitman: Heitman America Realty Trust "HART" Net Asset Value $6.4 billion $5.0 billion $568 million $6.1 billion $4.8 billion $3.4 billion Gross Asset Value $9.1 billion $6.9 billion $854 million $8.0 billion $6.04 billion $4.5 billion Overview A more opportunistic type venture than its sister fund "PRISA". PRISA II will have a larger non core component (currently 22%) that focuses on new development and value add type assets. The fund recently announced it would take ~$500 million in new subscriptions which will be drawn down by 9/30/14. The fund is underweight to Retail and Office, and overweight to Multi Family, Industrial and Hotels (one of few core funds with a large hotel exposure). The fund is actively working to reduce its exposure in the Washington, D.C. market as well as its allocation towards Hotels which currently makes up 8% of its total portfolio. Launched in December of 2011, Harrison Street's fund offering is one of the newer core funds on the ODCE index. This fund is quite differentiated than most core funds in that it invests exclusively outside the four primary property types. This Fund will invest in Student Housing, Medical Office, Senior Living facilities, and Self Storage assets. The fund has long maintained an overweight position (relative to peers) to the Industrial property sector and the West Coast. The fund generated significant NOI growth in 2013 and ranks well relative to peers. Core property occupancy which constitutes for 97% of the fund is currently 92% leased. One of the larger Core Funds on the NFI ODCE that is sponsored by a Global Insurance Group. 95% of the funds holdings are in the four main property types with an above average allocation to office (40%). The fund seeks Alpha returns by having a small component of development and valueadd properties in its portfolio. HART fund will invest in the four major property types as well as Self Storage. The fund is overweight in Multi Family, Industrial, and Self Storage, and underweight in Office and Retail. 14% of portfolio is in Self Storage versus its peers at just 5%. The fund maintains leverage in the 20 30% range. Fees Base Mgmt. Fee based on client commitment and GP performance. Fee's are capped between 1.00% and 1.30%. $5 to $10 million 1.25% $10 to $25 million 1.00% > $25 million 0.85% First $25 million 1.15% $25 to $50 million 1.05% $50 to $75 million 0.95% $75 to $100 million 0.90% > $100 million 0.85% 0.95% Flat Fee (effective 9/30/13) <$10 million 1.10% $10 to $25 million 1.00% $25 to $100 million 0.95% >$100 million 0.80% $5 to $15 million 1.10% $15 to $25 million 1.00% $25 to $50 million 0.90% $50 to $100 million 0.80% Over $100 million 0.70% Contribution Queue None $55.5 million 3 months to clear $342 million 4 to 6 months to clear $198 million 3 months to clear $301 million 6 months to clear $1 billion 9 to 12 months to clear 6

REAL ESTATE INVESTMENT OPTIONS (CONTINUED) Prudential Real Estate: PRISA II *Core Plus Clarion Partners: Lion Properties Fund Harrison Street: Core Property Fund RREEF: America II Principal: U.S. Property Account Heitman: Heitman America Realty Trust "HART" Previous 12 Month Dividend Yield 3.0% 4.3% 5.1% 6.1% 5.0% 5.7% Cash (as % of NAV) 1% 8% 10% 4% 3% 3% Portfolio Occupancy 85% 94% 95% 90% 92% 94% Current LTV 31% 28% 31% 25% 17% 22% 3 Largest Prop Types Office (37%) Multifamily (23%) Retail (22%) Office (31%) Multifamily (30%) Industrial (17%) Senior Housing (40%) Student Housing (36%) Medical Office(18%) Office (31%) Industrial (29%) Multifamily (20%) Office (42%) Retail (19%) Apartments (17%) Multifamily (28%) Retail (20%) Office (19%) 3 Largest MSAs San Francisco (11%) Jersey City (10%) Washington D.C. (9%) Washington DC (18%) New York (12%) Los Angeles (12%) New York, Northern NJ (38%) Washington, D.C. (15%) Minneapolis/St. Paul (13%) Seattle (9%) Los Angeles (8%) Washington D.C. (8%) New York (8%) Cambridge, MA (7%) Seattle (7%) New York (17%) Chicago (13%) San Francisco (9%) 1Q 2014 1 Year 3 Years 5 Years 3.3% 16.6% 16.0% 8.5% 1.9% 12.7% 12.5% 6.1% 3.1% 13.2% n/a n/a 2.9% 15.5% 13.4% 9.2% 2.3% 13.7% 14.3% 7.3% 2.3% 15.0% 13.7% 10.5% Long Term Return Objective Provide an annual gross return between 8.5% and 11%. The fund will use the NFI ODCE plus 100 bps as an annual benchmark. Outperform NFI ODCE and be a consistent top performer fund among peer groups 9% 10% Provide an annual dividend yield of 6% 6.75% Equal or outperform NFI ODCE Outperform NFI ODCE by 100 basis points over rolling 5 year periods * Returns are gross of fees 7

PRUDENTIAL REAL ESTATE: PRISA II General Fund Information Fund Diversification Structure Inception Date Termination Date L/T Return Objective Eligible Property Types # of Investors Maximum Leverage Limited Partnership 1/4/2007 Infinite Life Excess Return relative to NFI ODCE Office, Residential, Industrial, Retail, Storage 74 30% Property Type 20.3% 19.0% 19.6% 28.5% 12.6% Geographic Region 21.8% 35.4% 27.7% 15.1% 37.9% Property Size 2.3% 7.3% 19.1% 33.4% Fund Characteristics Office Multifamily Industrial East South Midwest < $25 million $25 50 million # of Investments / Assets Fund NAV ($) 74 $3,435,173,970 Retail Hotel Storage $50 100 million $100 200 million Other West Non U.S. > $200 million Fund GAV ($) $4,529,952,104 Performance (%, gross of fees) Top Six MSAs Cash & Equivalents (% of NAV) 3% Fund NCREIF Property Index MSA % of GMV Portfolio Leverage (%) 25% Income Apprec Total Income Apprec Total New York, NY 16.3% Occupancy % 94% Quarter 1.3% 2.1% 3.4% 1.3% 1.2% 2.5% Chicago, IL 12.8% # of Metro Areas Invested 33 YTD 5.7% 9.4% 15.5% 5.6% 5.2% 11.0% San Francisco, CA 9.1% Wtd Avg Cost of Debt 4.3% 1 Year 5.7% 9.4% 15.5% 5.6% 5.2% 11.0% Miami, FL 9.0% % Debt that is Fixed 82% 3 Years 6.0% 8.0% 14.3% 5.9% 5.5% 11.9% Los Angeles, CA 8.6% Net Investor Flows this Qtr ($) $145.3 million 5 Years 6.2% 2.5% 8.8% 6.1% 0.4% 5.7% Seattle, WA 5.7% Size of Contribution Queue ($) $792.9 million Ten Largest Investments (GMV) Quarterly Fund Activity Contact Information Investment Name GMV ($) MSA Type % Acquisitions Portfolio Manager Blaise Keane Storage Post $307,601,066 New York, NY Storage 6.9% # of Investments 4 PM Tenure January 2013 Chicago Ind. Port. $293,800,000 Chicago, IL Industrial 6.6% Total GMV ($) $782.0 million Address 191 N. Wacker Dr. Suite 2500 West Coast Ind. Port. $272,222,700 Various Industrial 6.1% Chicago, IL 60606 Sovran II $208,719,495 Various Storage 4.7% Dispositions Phone 312 541 6748 15 Bank $206,000,000 New York, NY MF 4.6% # of Investments 0 Email blaise.keane@heitman.com Pacific Commons $204,744,694 San Fran, CA Retail 4.6% Total GMV ($) $0 Foundry Square IV $203,000,000 San Fran, CA Office 4.5% General Firm Information Shops at Pembroke $188,194,500 Miami, FL Retail 4.2% Marked to Market Year Founded 1966 AO Santa Monica $181,000,000 Los Angeles, CA MF 4.0% # Written Up 24 AUM ($) $29.1 billion Sovran I $164,872,237 Various Storage 3.7% # Written Down 16 8

CLARION PARTNERS: LION PROPERTIES FUND General Fund Information Fund Diversification Structure Inception Date Termination Date L/T Return Objective Eligible Property Types # of Investors Maximum Leverage Private REIT 4/1/2000 Infinite Life 8% 10% Residential, Industrial, Office, Retail, Hotel, Storage, Land 216 n/a Property Type 8.0% 0.2% 13.8% 31.3% 17.0% 29.7% Geographic Region 38.1% 39.9% 8.2% 13.8% Property Size 11.9% 11.3% 19.8% 31.9% 25.1% Fund Characteristics Office Multifamily Industrial East South Midwest < $25 million $25 50 million Retail Hotel Storage $50 100 million $100 200 million # of Investments / Assets Fund NAV ($) Fund GAV ($) 132 $5.0 billion $6.9 billion Other Performance (%, gross of fees) West Non U.S. > $200 million Top Six MSAs Cash & Equivalents (% of NAV) 8% Fund NCREIF Property Index MSA % of GMV Portfolio Leverage (%) 28% Income Apprec Total Income Apprec Total Washington, D.C. 18.0% Occupancy % 94% Quarter 1.1% 0.8% 1.9% 1.3% 1.4% 2.7% New York, NY 12.2% # of Metro Areas Invested 35 YTD 1.1% 0.8% 1.9% 1.3% 1.4% 2.7% Los Angeles, CA 11.8% Wtd Avg Cost of Debt 5.6% 1 Year 4.8% 7.6% 12.7% 5.5% 5.4% 11.2% San Francisco, CA 7.5% % Debt that is Fixed 91% 3 Years 5.2% 7.0% 12.5% 5.8% 5.7% 11.7% Chicago, IL 6.8% Net Investor Flows this Qtr ($) $55.5 million 5 Years 5.5% 0.5% 6.1% 6.1% 1.7% 7.9% Houston, TX 6.2% Size of Redemption Queue ($) $0 Ten Largest Investments (GMV) Quarterly Fund Activity Contact Information Investment Name GMV ($) MSA Type % Acquisitions Portfolio Manager Jeb Belford 600 N. Michigan Ave. $278,000,000 Chicago, IL Retail 3.8% # of Investments 0 PM Tenure January 2013 100 Fifth Avenue $242,000,000 New York, NY Office 3.3% Total GMV ($) $0 Address 230 Park Avenue Sand Hill Commons $198,000,000 Arlington, VA Office 2.7% New York, NY 10169 The Gramercy $193,000,000 Menlo Park, CA MF 2.6% Dispositions Phone 212 883 2535 475 Brannan St. $176,000,000 San Francisco, CA Office 2.4% # of Investments 0 Email jeb.belford@clarionpartners.com Arboretum Gateway $159,000,000 Santa Monica, CA Office 2.1% Total GMV ($) $0 The Millennium $135,000,000 Arlington, VA MF 1.8% General Firm Information Veritas Office Bldg. $133,700,000 Houston, TX Office 1.8% Marked to Market Year Founded 1982 (includes predecessors) Eastchester Heights $133,200,000 Bronx, NY MF 1.8% # Written Up 19 AUM ($) $30.0 billion (4Q13) Columbia Town Ctr. $133,000,000 Columbia, MD MF 1.8% # Written Down 5 9

HARRISON STREET: CORE PROPERTY FUND General Fund Information Fund Diversification Structure Inception Date Limited Partnership 11/9/2011 Property Type Geographic Region Property Size Termination Date L/T Return Objective Eligible Property Types # of Investors Maximum Leverage Infinite Life 9 10% Total Return Storage, Senior Housing, Medical Office, Student Housing 33 40% LTV 30.8% 4.0% 28.4% 36.7% 17.5% 15.6% 6.4% 60.6% 34.2% 8.5% 32.1% 25.2% Fund Characteristics Office Multifamily Industrial East South Midwest < $25 million $25 50 million Retail Hotel Storage $50 100 million $100 200 million # of Investments / Assets 47 Other West Non U.S. > $200 million Fund NAV ($) Fund GAV ($) $898,678,012 $1,552,158,961 Performance (%, gross of fees) Top Six MSAs Cash & Equivalents (% of NAV) 2.3% Fund NCREIF Property Index MSA % of GMV Portfolio Leverage (%) 31.0% Income Apprec Total Income Apprec Total New York, Northern NJ 38.3% Occupancy % 95.2% Quarter 1.5% 1.7% 3.1% 1.3% 1.4% 2.7% Washington, D.C. 14.6% # of Metro Areas Invested 17 YTD 1.5% 1.7% 3.1% 1.3% 1.4% 2.7% Minneapolis, MN 13.4% Wtd Avg Cost of Debt 4.9% 1 Year 6.0% 6.9% 13.2% 5.5% 5.4% 11.2% Orlando, FL 8.5% % Debt that is Fixed 93.0% 3 Years Philadelphia, PA 3.4% Net Investor Flows this Qtr ($) $0 5 Years Chicago, IL 3.3% Size of Contribution Queue ($) $483,060,000 Ten Largest Investments (GMV) Quarterly Fund Activity Contact Information Investment Name GMV ($) MSA Type % Acquisitions Portfolio Manager Joey Lansing Sterling Central $110,100,000 Orlando, FL Student 8.5% # of Investments 9 PM Tenure November 2011 Bristal at N. Hills $93,955,000 New York, NY Student 7.3% Total GMV ($) $220,554,766 Address 71 S. Wacker Drive, Suite 3575 490 Fulton $65,826,000 New York, NY Student 5.1% Chicago, IL 60606 WestHealth Med. $60,500,000 Minneapolis, MN Med. Off. 4.7% Dispositions Phone 312 920 0500 Bristal at Westbury $59,090,000 New York, NY Student 4.6% # of Investments 0 Email jlansing@harrisonst.com Bristal at E. Meadow $55,100,000 New York, NY Student 4.3% Total GMV ($) $0 Bristal at E. Northport $53,675,000 New York, NY Student 4.2% General Firm Information Bristal at Massapeq. $53,105,000 New York, NY Student 4.1% Marked to Market Year Founded 2005 Bristal at N. Woodmer $48,545,000 New York, NY Student 3.8% # Written Up 26 AUM ($) $5.8 billion Stadium Village Flats $43,200,000 Minneapolis, MN Student 3.3% # Written Down 11 10

RREEF: RREEF AMERICA II General Fund Information Fund Diversification Structure Inception Date Private REIT 7/28/1998 Property Type Geographic Region Property Size Termination Date L/T Return Objective Eligible Property Types Infinite Life 6% 6.75% (Real) Office, Residential, Industrial, Retail, Land, Other 19.9% 0.1% 28.9% 47.8% 32.3% 13.6% 29.4% 6.8% 13.5% # of Investors Maximum Leverage 216 ~30% 30.1% 20.9% 9.1% 10.8% 36.6% Fund Characteristics Office Multifamily Industrial East South Midwest Retail Hotel Storage # of Investments / Assets Fund NAV ($) 124 $5.8 billion Other West Non U.S. Fund GAV ($) $7.7 billion Performance (%, gross of fees) Top Six MSAs Cash & Equivalents (% of NAV) 3% Fund NCREIF Property Index MSA Portfolio Leverage (%) 25% Income Apprec Total Income Apprec Total Los Angeles, CA Occupancy % 90% Quarter 1.3% 1.0% 2.3% 1.3% 1.2% 2.5% Seattle, WA # of Metro Areas Invested 37 YTD 5.8% 8.8% 15.0% 5.6% 5.2% 11.0% Orange County, CA Wtd Avg Cost of Debt 4.8% 1 Year 5.8% 8.8% 15.0% 5.6% 5.2% 11.0% % Debt that is Fixed 89% 3 Years 5.9% 7.6% 13.9% 5.9% 5.8% 11.9% Net Investor Flows this Qtr ($) $226.2 million 5 Years 6.4% 1.5% 4.7% 6.1% 0.4% 5.7% Size of Contribution Queue ($) $0 Washington, D.C. Boston, MA Baltimore, MD < $25 million $25 50 million $50 100 million $100 200 million > $200 million % of GMV 9.1% Ten Largest Investments (GMV) Quarterly Fund Activity Contact Information Investment Name GMV ($) MSA Type % Acquisitions Portfolio Manager Kevin Howley Riverfront Off. Park $381,000,000 Boston, MA Office 5.0% # of Investments 2 PM Tenure November 2002 Manhattan Village $225,000,000 Los Angeles, CA Retail 2.9% Total GMV ($) $107.2 million Address 101 California Street, 26th Floor Centergate King $223,900,000 Washington, D.C. MF 2.9% San Francisco, CA 94111 Villa Marina $210,400,000 Los Angeles, CA Retail 2.7% Dispositions Phone 415 781 3300 MetroCenter $200,000,000 Orange Cnty, CA Office 2.6% # of Investments 2 Email kevin.howley@rreef.com 901 Fifth Avenue $182,000,000 Seattle, WA Office 2.4% Total GMV ($) $14.1 million 505 Montgomery $165,000,000 San Fran, CA Office 2.2% General Firm Information San Fran. Design $165,000,000 San Fran, CA Retail 2.2% Marked to Market Year Founded 1975 California Corp. Ctr. $160,830,000 San Fran, CA Office 2.1% # Written Up 55 AUM ($) $47.3 billion (3Q13) Summerwood Apts $158,000,000 San Fran, CA MF 2.1% # Written Down 64 8.9% 8.4% 7.9% 7.2% 7.0% 11

PRINCIPAL: U.S. PROPERTY ACCOUNT General Fund Information Fund Diversification Structure Inception Date Insurance Co. Separate Account 1/31/1982 Property Type Geographic Region Property Size Termination Date L/T Return Objective Eligible Property Types # of Investors Maximum Leverage Infinite Life Returns = NFI ODCE Equal Weight Office, Residential, Industrial, Retail, Hotel, Land 9,793 33% 2.8% 1.7% 18.6% 17.3% 17.2% 42.3% 38.5% 9.6% 24.7% 27.3% 16.0% 27.6% 10.3% 16.9% 29.1% Office Multifamily Industrial Fund Characteristics East South Midwest < $25 million $25 50 million Retail Hotel Storage $50 100 million $100 200 million # of Investments / Assets Fund NAV ($) Fund GAV ($) 116 $4.8 billion $6.0 billion Other Performance (%, gross of fees) West Non U.S. > $200 million Top Six MSAs Cash & Equivalents (% of NAV) 3% Fund NCREIF Property Index MSA % of GMV Portfolio Leverage (%) 17% Income Apprec Total Income Apprec Total New York, NY 7.4% Occupancy % 94.5% (core); 92% (total portfolio) Quarter 1.3% 2.0% 3.3% 1.3% 1.2% 2.5% Cambridge, MA 7.3% # of Metro Areas Invested 39 YTD 5.7% 8.6% 14.6% 5.6% 5.2% 11.0% Wtd Avg Cost of Debt 4.0% 1 Year 5.7% 8.6% 14.6% 5.6% 5.2% 11.0% % Debt that is Fixed 74% 3 Years 5.8% 8.5% 14.7% 5.9% 5.8% 11.9% Net Investor Flows this Qtr ($) $15.7 million 5 Years 6.1% 1.9% 4.1% 6.1% 0.4% 5.7% Size of Contribution Queue ($) $321.5 million Seattle, WA Chicago, IL Houston, TX Phoenix, AZ Ten Largest Investments (GMV) Quarterly Fund Activity Contact Information Investment Name GMV ($) MSA Type % Acquisitions Portfolio Manager John Berg 1370 Ave. Americas $288,600,000 New York, NY Office 4.9% # of Investments 6 PM Tenure January 1994 Watermark E. & W. $248,700,000 Cambridge, MA MF/Ret. 4.2% Total GMV ($) $255.6 million Address 801 Grand Avenue 112th at 12th Street $203,900,000 Seattle, WA Office 3.5% Des Moines, IA 50392 Burbank Empire Ctr. $201,000,000 Los Angeles, CA Retail 3.4% Dispositions Phone 515 248 8261 Eldridge at I 10 $183,600,000 Houston, TX Off./Land 3.1% # of Investments 5 Email berg.john@principal.com Charles Park $182,300,000 Cambridge, MA Office 3.1% Total GMV ($) $49.8 million West Campus $164,800,000 Austin, TX MF/Ret. 2.8% General Firm Information J.W. Marriott Resort an $164,358,120 San Antonio, TX Hotel 2.8% Marked to Market Year Founded 1998 Capitol Plaza $164,000,000 Washington, D.C. Office 2.8% # Written Up AUM ($) $48.8 billion (Real Estate) 420 W. 42nd Street $144,000,000 New York, NY MF 2.4% # Written Down 66 4 7.1% 6.3% 6.1% 6.0% 12

HEITMAN: HEITMAN REAL ESTATE AMERICA TRUST General Fund Information Fund Diversification Structure Inception Date Termination Date L/T Return Objective Eligible Property Types # of Investors Maximum Leverage Limited Partnership 1/4/2007 Infinite Life Excess Return relative to NFI ODCE Office, Residential, Industrial, Retail, Storage 74 30% Property Type 20.3% 19.0% 19.6% 28.5% 12.6% Geographic Region 21.8% 35.4% 27.7% 15.1% 37.9% Property Size 2.3% 7.3% 19.1% 33.4% Fund Characteristics Office Multifamily Industrial East South Midwest < $25 million $25 50 million # of Investments / Assets Fund NAV ($) 74 $3,435,173,970 Retail Hotel Storage $50 100 million $100 200 million Other West Non U.S. > $200 million Fund GAV ($) $4,529,952,104 Performance (%, gross of fees) Top Six MSAs Cash & Equivalents (% of NAV) 3% Fund NCREIF Property Index MSA % of GMV Portfolio Leverage (%) 25% Income Apprec Total Income Apprec Total New York, NY 16.3% Occupancy % 94% Quarter 1.3% 2.1% 3.4% 1.3% 1.2% 2.5% Chicago, IL 12.8% # of Metro Areas Invested 33 YTD 5.7% 9.4% 15.5% 5.6% 5.2% 11.0% Wtd Avg Cost of Debt 4.3% 1 Year 5.7% 9.4% 15.5% 5.6% 5.2% 11.0% % Debt that is Fixed 82% 3 Years 6.0% 8.0% 14.3% 5.9% 5.5% 11.9% Net Investor Flows this Qtr ($) $145.3 million 5 Years 6.2% 2.5% 8.8% 6.1% 0.4% 5.7% Size of Contribution Queue ($) $792.9 million San Francisco, CA Los Angeles, CA Ten Largest Investments (GMV) Quarterly Fund Activity Contact Information Investment Name GMV ($) MSA Type % Acquisitions Portfolio Manager Blaise Keane Storage Post $307,601,066 New York, NY Storage 6.9% # of Investments 4 PM Tenure January 2013 Chicago Ind. Port. $293,800,000 Chicago, IL Industrial 6.6% Total GMV ($) $782.0 million Address 191 N. Wacker Dr. Suite 2500 West Coast Ind. Port. $272,222,700 Various Industrial 6.1% Chicago, IL 60606 Sovran II $208,719,495 Various Storage 4.7% Dispositions Phone 312 541 6748 15 Bank $206,000,000 New York, NY MF 4.6% # of Investments 0 Email blaise.keane@heitman.com Pacific Commons $204,744,694 San Fran, CA Retail 4.6% Total GMV ($) $0 Foundry Square IV $203,000,000 San Fran, CA Office 4.5% Miami, FL Seattle, WA General Firm Information Shops at Pembroke $188,194,500 Miami, FL Retail 4.2% Marked to Market Year Founded 1966 AO Santa Monica $181,000,000 Los Angeles, CA MF 4.0% # Written Up AUM ($) $29.1 billion Sovran I $164,872,237 Various Storage 3.7% # Written Down 24 16 9.1% 9.0% 8.6% 5.7% 13

NON CORE REAL ESTATE FUNDS INVESTMENT PIPELINE MAY, 2014 Fund Category Due Diligence Fund Description Q2 2014 Q3 2014 Q4 2014 Closing Schedule Comments Savanna Real Estate Fund III Value Added Real Estate Onsite in October 2013 Savanna is a New York based real estate firm focusing on value added and opportunistic investments within the New York City area. Similar to its previous two funds, Fund III will purchase older buildings mostly in Lower Manhattan, add new required infrastructure and re lease to the growing number of new tenants currently relocating towards downtown. The firm's senior management professionals are all from Manhattan and have over 21 years of combined experience investing New York real estate. Targeting $520 million, the fund had its first close in September 2013, raising $120 million all from previous investors. Next close is scheduled for mid June. AEW Partners Group VII Value Added Real Estate Attended annual meeting in April 2014 A Value Add / Opportunistic real estate group that will invest in key gateway and various secondary markets throughout the U.S. The fund will only do Joint Venture transactions utilizing a local operating partner for every investment. Partners VII has closed $250 million with a target raise of $500 million. To date the fund has drawn $69 million for 13 different transactions. Seeded transactions include two multi family projects, one in Los Angeles and the other in Brooklyn, New York as well as a portfolio of industrial properties throughout the Southeast. Final close for Partners Fund VII is scheduled for August, 2014. RockBridge Hospitality Fund VI Opportunistic Real Estate Onsite required Originates/structures debt and equity investments across the capital structure of institutional quality hotels, emphasizing income generating properties. The fund will focus on hotels with $10 50 million in capitalization and diversify by brand, owner/operator partners, and hotel service level, avoiding luxury brands, destination resorts, and economy hotels. Targeting $400 million. Initial final close date has been pushed back from May to August, 2014. SquareMile Credit Partners Credit/Debt Onsite visit in October 2013 SquareMile Credit Partners originates and purchases Senior and Subordinated Debt. The company is owned by Principals of SquareMile Capital Management (51%) and USAA RealCo (49%). The fund will target 10% 12% gross returns with an emphasis on originating mezzanine debt for stable transitional assets. The fund is looking to raise $750 million. Will hold rolling closes after its first close in June, 2014. Madison Realty Capital Opportunistic Onsite required NYC metro focus. Half of the portfolio will be new loan originations; the other half will consist of distressed loan purchases from banks, hedge funds, and special servicers. Given the amount of debt coming due in the next few years, a number of which are "under water," and the need for new financing, this fund is well positioned. Targeting $600 with a hard cap of $750 million. First close to occur mid June, second close will occur later summer early fall, 2014. Legend Open for Commitments Potentially Open for Commitments Having Final Closing 14

NON CORE REAL ESTATE FUNDS INVESTMENT PIPELINE MAY, 2014 Fund Category Due Diligence Fund Description Q2 2014 Q3 2014 Q4 2014 Closing Schedule Comments True North High Yield III Distressed Real Estate Distressed oriented real estate fund that targets smaller properties, primarily in suburban Onsite visit communities around the U.S. The dominant strategy is to acquire non performing first made in mortgage loans from banks and engage with the original borrower to initiate a friendly September 2013 foreclosure. The average capital deployed for each property is $15 20 million, and True North's cost basis is typically 30 50% less that the peak asset value. First close to occur 1Q 2014 Final close likely to occur 4Q 2014. Crow Holdings VII Value Added Real Estate Onsite required Crow Holdings is a Dallas based real estate firm that was formed as a separate entity after its parent company Tramell Crow was purchased by CBRE, Inc. The group will invest in transitional assets half of which are within the "traditional" property type sector while the other half will are more non traditional like gas and convenience stores and medical office. First close to occur in 4Q 2014. Contrarian Capital III Credit/Distressed Real Estate Launching in Summer 2014 Distressed/credit real estate fund that targets smaller properties and smaller metropolitan areas in the US, where pricing is better in both as compared to larger cities. The team is still accessing properties through debt or REOs from lenders. Fund II is off to a great start, having realized 9 transactions and generating a 19%+ return since inception. Launching the official fundraising campaign for Fund III in summer 2014. Angelo, Gordon & Co. Fund IX Opportunistic Truly an opportunistic real estate fund that invests globally, with an emphasis on the US Attended annual and Asia (which is limited to 20% of the total fund). AG leverages its broader investment meeting in April platform to help source and structure investments. The fund will look to raise $1.5 billion 2014 of aggregate capital. Angelo Gordon has a history of providing consistent returns with limited leverage. Will likely hold rolling closes through year end 2014. Legend Open for Commitments Potentially Open for Commitments Having Final Closing Note: Summit Strategies Group (Summit) has prepared this report for the exclusive use by its clients. The information herein was obtained from various sources,which Summit believes to be reliable,and may contain opinions developed by Summit. Summit does not guarantee the accuracy or completeness of the opinions, observations or other information contained in this report. The opinions, market commentary, portfolio holdings and characteristics are as of the date shown and are subject to change. Past performance is no guarantee of future performance. No graph, chart, or formula can, in and of itself, be used to determine which managers or investments to buy or sell. Any forward looking projection contained herein is based on assumptions that Summit believes may be reasonable, but are subject to a wide range of risks, uncertainties and the possibility of loss. Accordingly, there is no assurance that any estimated performance figures will occur in the amounts and during the periods indicated, or at all. Actual results and performance will differ from those expressed or implied by such forward looking projections. Any information contained in this report is for information purposes only and should not be construed to be an offer to buy or sell any securities, investment consulting or investment management. 15