Macro outlook and indicators

Markets “climbing a wall of worry” Presentation by Ben Breslau,

Director of Research, JLL

ULI Fall Conference, Dallas

October 27, 2016

The headlines have been unsettling

2

Source: JLL Research

L OW P RODUCT I V I T Y

E M CURRE NCY S WI NGS

Economic policy uncertainty at all-time highRecord uncertainty due to Brexit, China, and the Fed, and upcoming U.S. elections

Source: LaSalle, “Measuring Economic Policy Uncertainty” by Scott Baker, Nicholas Bloom and Steven J. Davis at www.PolicyUncertainty.com. Data to July 2016.

Global Policy Uncertainty Index

GDP Weighted Composite of US, UK, Europe, and China (Trailing Six Month Average)

0

50

100

150

200

250

300

350

Ind

ex L

evel

Where are we in the cycle? Office rental clock shows

that depends on where you look

The JLL Property Clocks SMBased on rents for Grade A space in CBD or equivalent. In local currency. As of Q3 2016

Americas EMEA Asia Pacific

Q3 2016

Rental Value

growth slowing

Rental Value

growth

accelerating

Rental Values

bottoming

out

Rental Values

falling

Moscow

Berlin, Paris, Stockholm

Dubai

Washington DC

Amsterdam, Milan

Frankfurt, Beijing

Singapore

Brussels, Mumbai

Boston

Sydney

Hong Kong, Dallas, San FranciscoLondon

Houston

Mexico City

New York, Chicago

Q3 2015

Istanbul

Shanghai

Sao Paulo

Madrid

Tokyo, Los Angeles

Rental Value

growth slowing

Rental Value

growth

accelerating

Rental Values

bottoming

out

Rental Values

falling

Sao Paulo

London, Hong Kong

Los Angeles

Berlin, Dallas

Brussels, Istanbul, Dubai

Mumbai

Washington DC

Paris

ChicagoMoscow

San Francisco

Tokyo, Beijing

Amsterdam, Sydney

Frankfurt

Milan

Singapore, Houston

Toronto

Mexico City

Shanghai

Seoul

Boston, New York

Stockholm

Madrid

Toronto

Seoul

U.S. economic expansion in perspective…room to run?

Growth more likely to last 3-4 years than only 1-2

Source: Bureau of Economic Analysis; JLL Research

100

105

110

115

120

125

130

135

140

145

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39

Rea

l GD

P, I

nd

exed

Val

ue;

Yea

r 0

= 1

00

Duration of expansion in number of quarters

1990s Expansion

2000s Expansion

2010s Expansion

Election impact - “pray for gridlock”

Fed Funds Rate

Source: Bloomberg, Federal Reserve Updated 30 September 2016.

Fed now expected to hike in December, but path certainly

likely to remain dovish

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

2009

Q3

2010

Q1

2010

Q3

2011

Q1

2011

Q3

2012

Q1

2012

Q3

2013

Q1

2013

Q3

2014

Q1

2014

Q3

2015

Q1

2015

Q3

2016

Q1

2016

Q3

2017

Q1

2017

Q3

2018

Q1

2018

Q3

2019

Q1

2019

Q3

Fed Forward Guidance (Sept. 2016) Fed Futures (31 August 2016)

Fed Futures (30 September 2016) Oxford Economics Forecast (20 Sept. 2016)

September 2016 Median Forward Guidance from Fed

Open Market Committee (“dot plot”)

Fed Fund FuturesDashed line is August 31st

Oxford Economics ForecastForecast Updated Sept. 13th

U.S. inventory growth is muted outside of apartments

8

Year-over-year change

Sources: Reis; CoStar; JLL Research

-100

-50

0

50

100

150

200

250

0

100

200

300

400

500

600

700

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Uni

ts, T

hous

ands

Squ

are

Fee

t, M

illio

ns

Commerical (L) Apartment (R)

Forecast

And the usage of debt has been relatively restrained

9

Total commercial and multifamily mortgages outstanding

Sources: Federal Reserve; JLL Research

Forecast

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

1980

Q1

1980

Q4

1981

Q3

1982

Q2

1983

Q1

1983

Q4

1984

Q3

1985

Q2

1986

Q1

1986

Q4

1987

Q3

1988

Q2

1989

Q1

1989

Q4

1990

Q3

1991

Q2

1992

Q1

1992

Q4

1993

Q3

1994

Q2

1995

Q1

1995

Q4

1996

Q3

1997

Q2

1998

Q1

1998

Q4

1999

Q3

2000

Q2

2001

Q1

2001

Q4

2002

Q3

2003

Q2

2004

Q1

2004

Q4

2005

Q3

2006

Q2

2007

Q1

2007

Q4

2008

Q3

2009

Q2

2010

Q1

2010

Q4

2011

Q3

2012

Q2

2013

Q1

2013

Q4

2014

Q3

2015

Q2

2016

Q1

$, M

illio

ns

+8.3%

Academy 2016

Unlock the Power of JLL

In addition to the economic and real estate cycles, the

demographic cycle will be critical for growth

14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0

0-45-9

10-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-7980-84

85+

Millions

AgePopulation of U.S. by age and sex, 2015

Males Females

Source: United Nations, Department of Economic and Social Affairs, Population Division (2015), JLL

Structural shift into alternative investments, real assets,

and real estate create another long-term tailwind

11

Pension fund Strategic Asset Allocation (SAA) for largest Pension Fund countries

Source: Towers Watson, IPE

49% 44%

40%

29%

6%5%

24%

1995 2015

Equities Bonds Cash Alternatives

Alternative Investments% Alt.

%

AUM

Direct RE funds 33% 8%

PE FoFs 10% 2%

Direct PE funds 22% 6%

Direct HFs 23% 6%

Direct infrastructure funds 4% 1%

FoHFs 6% 2%

Illiquid credit 3% 1%

Total 100% 25%

12

AboutJLL

JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual fee revenue of

$4.0 billion and gross revenue of $4.5 billion, JLL has more than 200 corporate offices, operates in 75 countries and has a global workforce of approximately 53,000. On behalf of its clients, the firm provides management and real estate

outsourcing services for a property portfolio of 3.0 billion square feet, or 280.0 million square meters, and completed $99.0 billion in sales, acquisitions

and finance transactions in 2013. Its investment management business, LaSalle Investment Management, has $53.0 billion of real estate assets under

management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.