Real Estate Investing “Now More Than Ever” 2013 IBEW Eighth District Progress Meeting Jackson Hole, Wyoming May

A New Reality World Emerging from the Worst Economic Crisis Since the Inception of “Globalization” Most Developed and Developing Economies Inextricably Linked Prosperity Lifts All Boats but No One is Immune From Geo-political and/or Financial Contagions

The Search for a New Equilibrium U.S. Economy is Facing a Protracted Economic Slump, One that Could Last a Decade or More The Recent Rally in the “Dow” has been Accompanied by the Weakest U.S. GDP Growth of All the Bull Markets since 1949 Paul Volcker Predicts that U.S. Structural Employment will Eventually Stabilize Significantly Above the Historical* Rate of 5.81% Warren Buffett Warns that Bond Prices are a Terrible Investment Today with Prices Artificially Inflated due to the FED Buying $85 Billion of Bonds a Month This Suggests a Challenging Investment Environment Especially for Those Programs with Actuarial Targets such as Pension Funds * Year 1948 through 2012

Not-So-Great Expectations Expected Real Returns on 60/40 Equity/Bond Portfolios (%) Source: AQR Capital Management

Typical Pension Fund Asset Allocation FIXED INCOME PUBLIC EQUITY ALTERNATIVES PRIVATE EQUITY REAL ESTATE OTHER ALTERNATIVES

10-Year Forward * Inflation-adjusted Returns Annual % Change, Low/High ASSETUNITED STATESEUROPEBRITAIN Cash-0.25/ / /2.50 Government Bonds-4.00/ / /0.50 Credit **-3.00/ / /2.50 Equities-1.00/ / /9.00 Property0.25/ / /8.00 * 12/31/12 ** Investment-grade Corporate Bonds Source: Standard Life Investments

Volatility * 20 YEAR PERFORMACE & RISK NCREIF ODCE NAREITS&P 500 Return7.9%10.7%8.5% Risk7.0%22.3%18.2% Private Real Estate has Lower Expected Risk/Return Profile than Publically Traded Equities Source: FTSE NAREIT All REITS, NCREIF (Open-end CORE Equity Index), Morningstar, as of 9/30/12 * METRIC: Units of Return for Unit of Risk

Diversification Correlation Coefficient Large CAP Stocks.17 Core Bonds(.07) T-Bills.37 Commodities.22 Low Correlations to Publicly Traded Equities and Fixed income Source: Morningstar, Data as of 9/30/12

Inflation Hedge Total Return is a Function of Income + Appreciation Construction Costs Tend to Increase with Inflation Lease Provisions Tend to Allow Rents to Move with Inflation

Collateral Benefits Job Creation for Plan Beneficiaries Support for Contributing Employers Contributions to Benefit Plans

A Significant Asset Class 2012 Total US Real Estate Investing and New Construction Equals $2.3 Trillion This Activity Created Jobs for 6.9 Million Domestic Workers in 2012 This Activity Generates 15% of US Gross Domestic Product Sources: U.S Bureau of Economic Analysis / U.S. Bureau of Labor Statistics

Pension Fund Commitments Increase In 2012 US Pension Funds Increased Equity Commitments to Real Estate Investments by 29% This Represents a $31 Billion Increase in Total Investment over 2011 Commingled Funds Accounted for 58% of all Equity Committed Commingled, Open-ended Funds Became Much More Popular in Second-half of 2012 When They Accounted for 20% of All Investments Source: FPL Associates Consulting

Progressive NEBF Pension has been Investing in Real Estate since 1947 This is 20 years before Real Estate was Recognized as an Acceptable “Asset Class” for Pension Plans NEBF Real Estate, an In-house team of Real Estate Professionals, was established in 2000

Foresight In 2010 NEBF Real Estate Transitioned to National Real Estate Advisors LLC NREA is a Wholly-owned Subsidiary of NEBF NREA Now is Able, Under SEC Regulations, to Offer its Advisor Services to the Electrical Industry At-large This includes IBEW Local Plans

$1.4 Billion

12.04% * * Past Performance is No Guarantee of Future Success

$5.25 Billion in New Construction in New Construction 14 Million SF of New Projects 27 Million Man-hours of Work

$1.0 Billion

BUILD-TO-CORE

The Confluence Denver, CO 34-story High-Rise 291-Unit Class A Units 8,300 GF Retail 300 Above Ground Parking Spaces NREA = $34.5 Million Equity TPC = $98.6 Million

Sabey Data Centers Across the U.S.A. Largest Privately Held Domestic Data Center Company 1.5 Million SF of Stabilized Property 2.0 Million SF under Development $125 Million Preferred-Equity Investment $100 Million Debt Investment