Labor Market Impact on Real Estate

United States Economy Strong Through Early 2019

•Labor market added 820K jobs in first four months of the year, a slight slowdown from 2018’s robust pace

•Unemployment fell to 3.6% in April, a 50-year low

Tight Labor Market Poses Headwinds for Further Hiring

•Low unemployment to restrain job growth as employers struggle to find qualified talent

•Challenge of skills mismatch – 5.8M Unemployed vs. 7.5M Job Openings

Healthy Job Growth Creates Favorable CRE Outlook

•Historically low unemployment puts upward pressure on wages – Boosts consumption to support Retail and Industrial sectors

•Strong labor market accelerating household formation, fueling underlying Apartment demand

Office vacancy compressing as companies add space to accommodate larger staffs