In early 2016, current pricing levels, cycle longevity concerns and a heightened sensitivity to risk brought volatility into the real estate capital markets and drove an 11.2 percent decline in first quarter volumes. Explore the seven major trends that contributed to these dynamics.

1. Seven key commercial real estate
investment themes for 2016
U.S. Investment Outlook Q1 2016

2. Sectors at a glance
Effects of recent capital markets volatility were felt in early 2016

3. 3
1.
After a bumpy January and February
spur heightened caution in markets,
signs of stability emerged late in Q1

4. 4
Volatility in the public markets drops after a bumpy six months
Source: JLL Research, CBOE, Bloomberg (data as of 4/6/16)

5. 5
2.
CMBS pricing follows the wave of
market volatility with recent signs of
needed stability

6. CMBS issuance takes a hit
with market volatility
6
Source: JLL Research, Bloomberg, Commercial Mortgage Alert (through 3/31/16)
Equity market volatility causes
gradual increase in CMBS
spreads
Source: JLL Research, Commercial Mortgage Alert (through 4/1/16)

7. 7
3.
Capital deployment pressures heighten
with increased caution, decline in deal
flow and continued discipline

8. Following three elevated
years, fundraising slowing in
2016
8
Source: JLL Research, Preqin (Data includes North American closed funds as of 4/12/16)
Record levels of global dry
powder in the markets
Source: JLL Research, Preqin (Global data is an aggregate of historic closed funds as of 4/1/16)

9. 9
4.
Slow start to 2016 in debt and equity
markets parallels cautious investor
sentiment

10. Heightened sensitivity to risk
spurs early slowdown in 2016
10
Source: JLL Research, Real Capital Analytics (Transactions larger than $5.0m; Includes portfolio,
entity-level transactions)
Excluding multifamily, slow
start felt across sectors
Source: JLL Research, Real Capital Analytics (Transactions larger than $5.0m;
Includes portfolio, entity-level transactions)

11. 11
5.
Meeting the gap: REIT performance
pressures benefitting dry powder in
markets

12. 12
REIT disposition efforts benefitting dry powder in markets
Source: JLL Research, Real Capital Analytics (Transactions larger than $5.0m; Excludes hotels)
81.3%
57.8%
34.5%
15.2%
10.7%
38.0%
6.0%
25.3%
31.6%
47.1%
21.3%
14.5%
21.0%
20.9%
21.6%
20.3% 20.5%
4.2%
15.1%
13.6%
30.7% 14.4%
17.6%
5.7% 7.6%Hotels
Multifamily
Office
Retail
Industrial
Overall
AcquirersofREITproduct,2015–Q12016
Other
Public
Private
Institutional investors / SWFs
Private equity / Investment funds

13. 13
6.
Cross-border investment is down, but
far from diminished

14. Cross-border investment
normalizing in 2016
14
Source: JLL Research, Real Capital Analytics (Transactions larger than $5.0m)
Where is the capital focused?
Q1 sees a shift from industrial
back to office product
Source: JLL Research, Real Capital Analytics (Transactions larger than $5.0m)

15. 15
7.
Fear factor remains despite market
rebound and lower volatility

16. Fear Barometer reflecting concern of a market sell off
16
Source: JLL Research, Credit Suisse, CBOE, Bloomberg (data as of April 12, 2016)
10
15
20
25
30
35
40
45
50
55
60
Jan-
15
Feb-
15
Mar-
15
Apr-15
May-
15
Jun-
15
Jul-15
Aug-
15
Sep-
15
Oct-15
Nov-
15
Dec-
15
Jan-
16
Feb-
16
Mar-
16
Apr-16
Fear Barometer Volatility Index

17. U.S. investment themes
17
Learn more about
these Q1 2016
trends, plus read
sector-specific
takeaways for office,
industrial, lodging
and others.
Download JLL’s latest U.S.
Investment Outlook
www.us.jll.com/investment-outlook