SVN Markets to Watch 2016

RETAIL Market Outlook

DISCOVERING A NEW NORMAL

The retail real estate market continues to face some of the most difficult challenges as the basic business model of many retailers changes from physical storefront to online sales with direct to consumer delivery. Simultaneously, the broad macro economic recovery has created more employed
consumers with large disposable incomes available to spend at retail merchants than ever in history. This dichotomy will make certain retail properties excel whilerendering others nearly obsolete in 2016 and beyond.

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INDUSTRIAL Market Outlook

GLOBAL PRESSURES WEIGH ON GROWTH

Industrial real estate made significant progress in 2015 as nationwide vacancies fell to 8.5%, a level not seen since 2000 according to commercial real estate research firm REIS®. This is the result of a steady, consistently growing economy that has set new records in GDP almost every year since the end of the recession. At the start of 2016, there is ever-growing concern that economic declines and slow growth in markets like Asia and Europe will cause declines in domestic manufacturing and trade operations. Thus, this sector will face unique risks in the coming years.

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OFFICE Market Outlook

SLOW GROWTH AND STEADY GAINS

With many key office-using sectors of the economy in expansion mode, the office space market appears relatively healthy and poised for growth in 2016 and beyond. The space market is improving with overall asking rents growing at over 3% and vacancies falling slightly nationwide, according
to commercial real estate research firm REIS®. These factors combined with still relatively low levels of new supply projected should mean growth in fundamentals for most of 2016.

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MULTIFAMILY Market Outlook

NEW SUPPLY MEETING DEMAND

The national multifamily market is experiencing peak levels of new supply as developers, investors, and lenders continue to start new projects in many metros across the nation. Thus, this sector, more than any other, is the subject of speculation about the potential for a bubble in pricing or
physical oversupply or both. However, demographic data and economic indicators both show an increasing need for apartment units across the nation and new supply is meeting new demand. In fact, many markets are prone to undersupply as population and job growth are moving faster than
developers can deliver units.

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