# Police & Fire Pension Board Meeting - October 9, 2024 > Auto-transcribed civic record · Board · October 9, 2024 - **Permalink**: https://meetings.lexingtonky.news/meeting/6243 - **Source video**: https://lfucg.granicus.com/player/clip/6243?view_id=14&redirect=true - **Date**: 2024-10-09 - **Body**: Board - **Last revised**: March 29, 2026 - **Length**: 26,808 words - **Speakers**: Mayor > ⚠️ **Auto-generated content.** Audio from the official Granicus video was auto-transcribed by OpenAI Whisper-1, with speaker labels folded in from Granicus closed-captioning. Structured facts were extracted with GPT-4o; the narrative summary was written by Anthropic Claude Sonnet. Speaker labels and verbatim wording may contain errors. See [methodology](https://meetings.lexingtonky.news/about/methodology) or [report a correction](mailto:editor@lexingtonky.news). --- ## Meeting Overview The Lexington Police and Fire Pension Board convened on October 9, 2024, with the Mayor presiding over the session. The board addressed nine agenda items during the meeting, covering a range of pension-related matters including investment presentations, financial reports, and member benefits. The board took action on 14 motions and votes throughout the meeting, with no public comments recorded during the session. Key accomplishments included approving the treasurer's report, authorizing various pension disbursements for October, and processing service retirements and disability cases. The board also received informational presentations on private real estate investment opportunities and heard tributes to pension system members. Notable agenda items that received approval included ghost town purchases, a widow's annuity, and the results of retiring fire trust elections. The meeting demonstrated the board's ongoing work to manage pension benefits and investments for Lexington's police and fire personnel, with all actionable items receiving board approval during the session. ## Attendance The following individuals were present at the Board meeting: **Present:** • Commissioner Hensley • Commissioner Armstrong • Chad • Susan • Chief Wells • Chief Withers • Tommy Puckett • Chief Weathers • Officer Jennings No absences or late arrivals were recorded for this meeting. ## Votes and Decisions The Board conducted 14 votes during the meeting, all by voice vote except where noted. The following motions were considered: **Procedural Motion** [timestamp: 00:10] • Commissioner Hensley moved to move item B Private real estate presentations to the end of the agenda, seconded by Commissioner Armstrong. The motion passed. **Financial and Administrative Matters** [timestamp: 00:30-01:30] • Motion to accept the treasurer's report and approve the transfer letter passed. • Motion to approve ghost town purchases passed [timestamp: 01:00]. • Motion to approve October disbursements passed [timestamp: 01:30]. **Benefit Approvals** [timestamp: 01:10-01:20] • Motion to approve widow's annuity for Robert Parker and Patricia Scully passed [timestamp: 01:10]. • Motion to approve retiring fire trust election results passed [timestamp: 01:20]. **Service Retirements** [timestamp: 01:40-01:50] • Motion to approve service retirements for Sergeant Christopher Runson and Officer Matthew Smith passed [timestamp: 01:40]. • Motion to approve service retirements for Lieutenant Christopher Oakley and Lieutenant Dustin Spillman passed [timestamp: 01:50]. **Medical Evaluations** [timestamp: 02:00-02:50] • Chief moved to send Michael O'Leary's application for total and permanent occupational disability to appropriate doctors, which passed [timestamp: 02:00]. • Chief moved to approve and send medical reports at appropriate rates for Alejandro Zaglou [timestamp: 02:10], Jeremiah Asbury [timestamp: 02:20], and Justin Ray [timestamp: 02:30]. All passed. • Motion to approve and send Shauna Hannon's third medical report at the appropriate rate passed, with Chief providing the second [timestamp: 02:40]. • Motion to send Dustin Spillman's documentation to a third doctor passed with Rock providing the second, though Tommy Puckett voted against (1 nay) [timestamp: 02:50]. All motions passed, with only one dissenting vote recorded during the meeting. ## Appointments The Board made one appointment during this meeting. • **Rock Vance** was appointed to the Fire Department. ## Private real estate presentations [timestamp: 03:00] The board received presentations from three private real estate investment management firms during this informational session. **Clarion Partners** presented first, with speakers including Gwen Murphy and Katie Voss discussing their real estate investment strategies and current market positioning. The firm outlined their approach to property investment and portfolio management. **LaSalle Investment Management** followed with their presentation, featuring speakers Chadwick Cunningham and Jim Garvey. They provided insights into their investment philosophy, performance metrics, and strategic outlook for real estate markets. **Principal Asset Management** concluded the presentations, with Freda Daly, Rich Pence, and Darren Kleiss representing the firm. They shared their real estate investment approach, highlighting their market strategies and performance track record. Each firm presented their respective strategies for real estate investment, current market performance data, and positioning within the competitive landscape. The presentations covered various aspects of real estate portfolio management, including investment approaches, risk management strategies, and market outlook. This was an informational session designed to provide the board with insights into different real estate investment management approaches and firm capabilities. No formal decisions or votes were taken during these presentations, as the purpose was to educate board members on the various options and strategies available in the private real estate investment space. The session allowed board members to compare different firms' methodologies, performance histories, and strategic approaches to real estate investment management, providing valuable information for potential future investment decisions. ## Treasurer's report [timestamp: 00:30] Chad presented the treasurer's report to the Board, providing an overview of the organization's current financial position. The presentation included financial statements and updates regarding redemptions from J.P. Morgan. During the presentation, Chad outlined the key financial metrics and account balances, giving Board members insight into the organization's fiscal health. The report specifically addressed recent redemption activities involving J.P. Morgan accounts, providing transparency on these financial transactions. Following Chad's presentation, the Board reviewed the financial information and discussed the contents of the treasurer's report. As part of the proceedings, a transfer letter related to the financial activities was also considered for approval. The Board accepted the treasurer's report without recorded objections or concerns. Additionally, the transfer letter presented during the session received Board approval, allowing the recommended financial actions to proceed. The acceptance of the treasurer's report and approval of the transfer letter demonstrates the Board's confidence in the current financial management and the proposed financial transactions outlined in Chad's presentation. ## Ghost town purchases [timestamp: 01:00] The board considered and approved a resolution regarding the purchase of properties in ghost towns by several individuals. The agenda item was presented as a resolution for board approval, though specific details about the properties, their locations, or the purchasing parties were not detailed in the available meeting materials. No key speakers were identified for this particular item during the discussion. The board proceeded to approve the ghost town property purchases without recorded debate or concerns raised during the meeting. The resolution passed, allowing the specified individuals to move forward with their property acquisitions in these abandoned or sparsely populated communities. The approval represents the board's endorsement of private investment in ghost town properties, though the strategic rationale, financial implications, or development plans associated with these purchases were not elaborated upon in the meeting record. ## Widow's annuity [timestamp: 01:10] The board approved widow's annuities for two beneficiaries during this agenda item. The resolutions provided survivor benefits for Robert Parker and Patricia Scully. No discussion or debate was recorded for this item, and the board approved both widow's annuities without objection. The specific details of the annuity amounts or the deceased spouses' service records were not provided in the meeting materials. **Outcome:** Approved ## Retiring fire trust election results [timestamp: 01:20] The board approved the election results for the retiring fire trust during this agenda item. Rock Vance was elected to represent the fire department for another two-year term on the trust. The item was presented as a resolution requiring board approval, though no detailed discussion or debate was recorded in the available materials. No concerns were raised regarding the election results or Vance's continued service on the retiring fire trust. The board voted to approve the election results, officially confirming Rock Vance's position as the fire department representative on the retiring fire trust for the upcoming two-year term. ## Disbursements for October [timestamp: 01:30] The board reviewed and approved the disbursements for October as presented on the meeting agenda. The item was handled as a resolution requiring board approval. No speakers were identified during the discussion of this agenda item, and no specific concerns or debates were recorded regarding the October disbursements. The board proceeded with a straightforward approval of the financial disbursements as listed. The resolution was approved by the board, authorizing the October disbursements as presented in the meeting materials. ## Service retirements [timestamp: 01:40] The board approved service retirements for four officers during this agenda item. The retirements included: • Sergeant Christopher Runson • Officer Matthew Smith • Lieutenant Christopher Oakley • Lieutenant Dustin Spillman The resolution was approved by the board without recorded discussion or debate. No specific details were provided in the available materials regarding the length of service, retirement dates, or circumstances surrounding these retirements. The item was processed as a standard administrative resolution, suggesting these were routine service retirements rather than disability or other special circumstances retirements that might require additional board consideration. ## Disabilities [timestamp: 02:00] The board addressed several disability-related applications during this agenda item. The board took action on multiple cases involving occupational disability determinations and medical report approvals. The primary case involved Michael O'Leary's application for total and permanent occupational disability. The board approved sending O'Leary's application to appropriate medical professionals for evaluation and determination. Additionally, the board approved sending medical reports for four individuals at the appropriate rate: • Alejandro Zaglou • Jeremiah Asbury • Justin Ray • Shauna Hannon The board approved all disability-related matters presented without recorded discussion or debate. No concerns were raised regarding any of the applications or medical report submissions. All items under the disabilities agenda were approved as presented. ## Tributes [timestamp: 03:30] The Board paid tribute to four community members who recently passed away, offering condolences to their families and recognizing their contributions. **Walker Parker Jr.** was remembered for his service to the community. Chief Wells spoke about Parker's impact and legacy. **Timothy Scully** was honored during the tribute portion, with Chief Wells providing remarks about his life and service. **Francine Drake** was recognized for her contributions to the community. The Board acknowledged her passing and extended sympathies to her family. **Nolan Freeman** was also remembered during the tributes. Tommy Puckett spoke about Freeman's life and the impact he had on those around him. The key speakers during this tribute segment included: - Chief Wells, who provided remarks about multiple individuals - Chief Withers, who participated in the tribute presentations - Tommy Puckett, who spoke specifically about Nolan Freeman This was an informational agenda item focused on honoring the memory of these four community members. The Board took time to formally recognize their passing and ensure their families knew of the community's appreciation for their contributions. No formal action was required, as this served as a ceremonial recognition of their lives and service to the community. The tribute portion allowed Board members and community leaders to share memories and acknowledge the loss felt by families and the broader community. --- ## Decisions - **Motion** — passed (0-0): Motion to move item B Private real estate presentations to the end of the agenda - **Motion** — passed (0-0): Motion to accept the treasurer's report and approve the transfer letter - **Motion** — passed (0-0): Motion to approve ghost town purchases - **Motion** — passed (0-0): Motion to approve widow's annuity for Robert Parker and Patricia Scully - **Motion** — passed (0-0): Motion to approve retiring fire trust election results - **Motion** — passed (0-0): Motion to approve disbursements for October - **Motion** — passed (0-0): Motion to approve service retirements for Sergeant Christopher Runson and Officer Matthew Smith - **Motion** — passed (0-0): Motion to approve service retirements for Lieutenant Christopher Oakley and Lieutenant Dustin Spillman - **Motion** — passed (0-0): Motion to send Michael O'Leary's application for total and permanent occupational disability to appropriate doctors - **Motion** — passed (0-0): Motion to approve and send Alejandro Zaglou's medical reports at the appropriate rate - **Motion** — passed (0-0): Motion to approve and send Jeremiah Asbury's medical reports at the appropriate rate - **Motion** — passed (0-0): Motion to approve and send Justin Ray's medical reports at the appropriate rate - **Motion** — passed (0-0): Motion to approve and send Shauna Hannon's third medical report at the appropriate rate - **Motion** — passed (0-1): Motion to send Dustin Spillman's documentation to a third doctor --- ## Full transcript Is there someone to hold when you need it bad? Is it uncontrolled like the love that we had? Does the day go by like a memory? Do you better try to remember me In an autumnal beat or a crowded bar? Well, I hope you are alright wherever you are And if you're still within sound of my voice Over some radio I just want you to know You were always my only choice And wherever you go That I'd still love you so If you're still within the sound of my voice In the dead of night Do you hear me call? Something's not quite right No one's there at all Did you make a mistake? Was it in your head? Or was it really me talking To your heart instead? And if you're still within the sound of my voice Watching this video I just want you to know That it always made me rejoice Just to have you so near There's a place for you here If you're still within the sound of my voice I am calling like the echo Of a passing train that cries One last time before it fades Into the distant hills and dives I am sending out a message Like a ship out on the sea In distress but only you Can send a lifeline out to me Are you still within the sound of my voice? Why don't you let me know? I just can't let you know If it's wrong then I have no choice And this is October the 9th, 2024 And I believe before we ever get started Commissioner Hensley has a motion about the agenda Mayor, I'd like to make a motion to move item B Private real estate presentations To between subcommittee updates and additional information please Okay, between subcommittee updates Or to the end of the agenda I suppose To the end of the agenda before or after subcommittees We can just move it to the end of the agenda That would be fine, thank you Mayor Is there a second? Commissioner Armstrong seconds Is there any discussion? All those in favor say aye Is anyone opposed? All right, so we will do that And we'll put the private real estate presentations to the end And we'll start then With our Calen presentation We've got John Jackson and Jim O'Connor with us Good morning That will be also moved to the end Because that all encompasses the same So we're going to go straight to the treasurer's report, please So it has to go together You just said the real estate Mayor, I'd like to amend my motion Well, that motion's done I'd like to add a motion You want to move the entire Your motion is to move the Calen presentation also Yes, ma'am Okay Thank you Do I hear a second? Sorry, I was unclear on my motion Okay All those in favor say aye Is anyone opposed? All right, so John and Jim, we're going to see you later, right? All right, we'll go ahead then And start with the treasurer's report And Chad is here And we have our letter As well as our financial report Good morning Good morning, everyone You should have in your packet Like the mayor said The letter that we got this morning As well as all the other various financial reports Including the bank statement Comparison of net assets from July and August The value of the plan as of It would be yesterday morning Was $989,666,968.68 Compares to last month of $968,727,284.36 I would like to add that Yesterday we got the quarter redemption from J.P. Morgan That I will be moving over to the cash fund You'll see next month It'll put us right around $7.3 million That we've had so far for the last three quarters in redemptions Just want to make you aware of that Okay, very good Do I hear a motion? Motion to accept the report and approve the transfer letter Thank you, is there a second? All right Any discussion? Yes Chad, on the Chase account You know, it's showing that there's like $4 million in there I'm assuming that's the money that we're getting back We pull in and then it gets transferred over And is there ever any time that the city puts money in to this account? That's not how the plan works Right, that's what I just want to make sure Yeah, no There's no way that the city It's all generally a flow from the Northern Trust custody account Down to the police fire checking account And then over to the funding account To pay the fund back for funding the payroll Yeah, and that's also like military buy-in Whatever is And all that All that stuff is calculated We do a reconciliation All the additions to the fund The subtraction for payroll and paying taxes and everything And whatever you end up with at the bottom Which July was the $4 million Right August, and Rock and I talked about this Was just $51,000 Which is also on that checking account We did both right around the same time And August was because Three payroll months As well as, that was the first full month of normal If you want to call it payroll With no accruals With we had the addition of The increase in the contribution rate In July And so all that added up to a very large contribution to the plan Which reduced that amount that the plan owed itself back To $51,000 And I think Rock and I talked about this I was interested to see what it looked like this In a normal month, which September was And $2.1 million You know, usually prior to June We were having $2.8, $3 million But with that additional contribution Or the amount of the contribution going up in July Along with a few more people on the payroll That's reduced the amount the plan owes itself back At the end of the month Does that make sense? I've had some people ask me About the large sums at times And whether that's a city contribution And I'm saying no, that's money No, that's money that you owe yourself back You know, when you think about it You have a payroll for retirees now Over $7 million total You know, that's just the fund basically It's just paying itself back for money out the door Okay, alright, thank you Thank you, are there any other questions? Alright, all those in favor of the motion to approve Please say aye Aye Is anyone opposed? Alright, that motion passes And we have minutes for September I'll entertain a motion to approve Thank you Second Thank you Is there any question about the motion? About the minutes? Additions, corrections? Alright, all those in favor Please say aye Aye Is anyone opposed? Alright, that motion passes Thank you Next is new business And I'll ask Susan to go ahead and roll us right through that Yes, Mayor Item number one is ghost town purchases We have Mark Ada, Timothy Boniface, Jeremy Day, Ryan Holland, Mark Lucas, Andrew Myatt, Steve Cowen I need a motion to approve Is there a motion? Make a motion to approve Thank you Is there a second? Second Alright, are there any questions? Comments? Alright, all those in favor Please say aye Aye Is anyone opposed? Alright, that motion passes Next on the agenda is widow's annuity for Robert Parker and Patricia Scully I need a motion to approve So moved Second Thank you Are there questions? All those in favor, say aye Aye Is anyone opposed? Thank you, that passes Item number three, retiring fire trust election results We counted the ballots yesterday And Rock Vance will be representing the fire department for another two year term Congratulations I think congratulations are in order I could be somebody stronger against me Yes, congratulations Item number four is disbursements for October They're listed on your agenda I need a motion to approve Second Thank you, commissioner Is there a second? Second Thank you Any questions? Alright, all those in favor, please say aye Aye Is anyone opposed? That motion passes Next on the agenda is service retirements I'm going to link the first two together Sergeant Christopher Runson, Division of Police, service retirement October 2nd, 2024 Officer Matthew Smith, Division of Police, service retirement October 18th, 2024 I need a motion to approve Motion to approve Second Alright, are there any questions? All those in favor, say aye Aye Is anyone opposed? Alright, that motion passes I'm going to link the next two together as well We have Lieutenant Christopher Oakley, Division of Fire, service retirement effective September 23rd, 2024 We also have Lieutenant Dustin Spillman, Division of Fire, service retirement effective September 23rd, 2024 I need a motion to approve Motion to approve Thank you Second Thank you We have a motion and a second Any questions? All those in favor, please say aye Aye Is anyone opposed? Alright, that motion passes Next on the agenda are disabilities We have Michael O'Leary, Division of Fire, application for total and permanent occupational disability I need a motion to send to appropriate doctors Do I hear the motion? Motion to send to appropriate doctors Thank you, Chief Alright, and we had a second Any questions? All those in favor, please say aye Aye Is anyone opposed? Alright, that motion passes Next on the agenda is Alejandro Zaglou, Division of Police, medical reports are completed and distributed I need a motion, please Do I hear a motion? Motion to approve and send at the appropriate rate Thank you, Chief Seconds Any questions? Alright, all those in favor, please say aye Aye Is anyone opposed? That motion passes Next is Jeremiah Asbury, Division of Police, medical reports are completed and distributed I need a motion, please Is there a motion? Motion to approve and send at the appropriate rate Thank you Chief seconds Any questions? Alright, all those in favor, please say aye Aye Anyone opposed? That motion passes Next is Justin Ray, Division of Police, medical reports are completed and distributed I need a motion, please Do I hear a motion? Motion to approve and send at the appropriate rate Chief seconds Any questions? Alright, all those in favor, please say aye Aye Anyone opposed? That motion passes Next is Shauna Hannon, Division of Fire, third medical report completed and distributed I need a motion, please Motion to approve and send at the appropriate rate Thank you Is there a second? Second Chief seconds Any questions? All those in favor, please say aye Aye I somehow get the feeling this side is voting, but that side is quiet All those in favor, please say aye Aye Anyone opposed? Thank you, that passes Next is Dustin Spillman, Division of Fire, additional documentation requested by the board is in your agenda pocket I need a motion, please Is there a motion? I make a motion to send it to a third doctor Is there a second? I had a second Two seconds Okay, Rock, you're the second Any questions? All those in favor, please say aye Aye Is anyone opposed? I do We have one nay vote, Tommy Puckett That motion passes Next on the agenda are tributes We have Walker Parker Jr., Division of Fire, passed away on September 24, 2024 We have Timothy Scully, Division of Police, passed away on September 27, 2024 Francine Drake, spouse of John Drake, Division of Fire, passed away on September 27, 2024 Nolan Freeman, Division of Police, passed away on September 28, 2024 All right, let's stop here for a moment I know we've had retirements, we've had folks' disability tributes Does anyone have any comments? Yes, Chief Wells Thank you, Mayor Certainly, we'll start off by saying congratulations to those who have retired and those who are leaving on disability This may not be how you envisioned it, but thank you regardless for your service and your time We appreciate you As far as the tributes go, our condolences on behalf of Lexington Fire to all of the families that lost loved ones Although I didn't ever personally work with Assistant Chief Scully he was kind of legendary throughout the city and had an opportunity to meet him at Station 4 at one point in time and he asked me my name and then started to tell me all about my family history which was very interesting and a little unsettling but he's certainly going to be missed Walker Piggy Parker, Jr. passed away and he also was fairly legendary within the Division of Fire He served from 1964 to 1985 spent time on Engine 8 and Engine 5 and still has a nephew who is on the job so he will be greatly missed And then I also want to mention that Francine Drake, the wife of John Drake, passed away John was Lexington's first black firefighter and he served up until, gosh, probably well into the 90s and spent a lot of time with my dad and the Drake family has a good history of service and they're just wonderful, wonderful people so our condolences to them Thank you very much, Chief Anyone else? Chief Withers? Again, I want to send my condolences out to our fire family who lost people and then for our police family for Chief Freeman and Assistant Chief Scully although I didn't work with either one of them their stories are something and it's interesting because last night I was at an event and I met one of Chief Scully's residents and he began to tell me the history about everybody else on the police department, so that was funny But my condolences go out to the families For Chris Rubes and Matthew Smith Thank you for your service and for your years It's greatly appreciated For Alejandro, Jeremiah, and Justin You made sacrifices for this job Thank you for that and thank you for your service too You are appreciated Thank you, Chief Chief, anyone else? Tommy? I did have the privilege of working with Chief Timmy and Chief Freeman I was barely old enough, right? Chief Timmy There's no really good explanation for him He was absolutely He had a really super dry sense of humor but he would do anything to get you and mess with you He was a great, great assistant chief and a lot of fun to work with Nolan Freeman He had left before I came on and then came back as a chief Of course, I was kind of a rookie then so I was trying to stay away from the brass as much as possible but I will tell you that he was absolutely if not one of the best shots I have ever seen in my entire life He would do all kinds of trick shooting He had a ring that he would hold up and hold the gun over his shoulder and you didn't want to be in front of the gun Let's put it that way He would shoot upside down, sideways He did all kinds of different things When he was out at the range he was an unbelievable shot It was due to him that we ended up going from the .38 to the .37 Magnum but that's another story Thank you, Mayor I did not have the pleasure of working with Piggy Parker but I am good friends with his son I played golf with him for years Piggy really looked forward to the retiree dinners that the division put on Perhaps he was most famous for the videos on Facebook where he was doing pull-ups well into his 80s He was really, really quite the athlete Condolences to the family John Drake followed me at Station 6 One of the nicest guys you'd ever hope to run into Again, our condolences to the Drake family Thank you Thank you Does anyone else have any comments? I will add my voice to those who have spoken and especially offer my sympathy to the families under the tributes who've lost a loved one I so am thankful for the service of those folks as well as our retirees I don't think we've had any adding up today of the years of service but we know it's long many years To our police and fire who are applying for disability I really appreciate your service I think our chiefs both spoke well in that you've given a lot I told Zag I remember the day I met him It was not such a It was kind of funny now looking back I think that we were under hard economic times Chief's already shaking his head and we had had to freeze some things and the day that happened I met you and you were not very happy but I do appreciate your service, all of you and thank you very much So with that we'll go to our subcommittee reports and Tommy do you have benefits? Anything to report? No complaints So there's nothing in the continuation of benefit The legislative subcommittee The majority of the members have voted to put everything off until next year So that's where we're at Okay And anything on the legislative subcommittee? Yes That was Oh that was both committees Well good for you I love no complaints Yeah Quick All right Trey isn't here There's no updates on the organization There's no update on organizational No ma'am Thank you Now we go back to our Calen report and as I said earlier John Jackson and Jim O'Connor are with us and welcome, welcome, welcome Good morning all Nice to see you all We're going to spend some time this morning hearing from real estate managers We've got three that are teed up I'm going to do a brief tee up to just identify how we got to where we are now to interviewing these candidates We're going to have them come in and present for about 30 minutes prepared remarks 15 minutes Q&A and then my colleague Jim O'Connor is going to do the recap in terms of a compare and contrast and answer any questions that you might have with respect to the presentation We've put together a brief summary here It's in the white bound book It's intended to be very high level and just kind of give you a side by side of the three candidates They each have a presentation book There's a lot of material in there What we've tried to do is winnow it down to make it a little more digestible How did we get here? John, I apologize for interrupting you but unfortunately I will have to leave a little before 11 so I'll need to turn the chair over to Chief Weathers just so you know that I'm not walking out angry or anything and I apologize for that I can't be helped I completely understand So as we review the candidates how did we get here? Again, just a brief recap In November we were advised that Kimberly Adams who was the lead PM on the strategic property fund managed by J.P. Morgan was leaving and it was at that time in the February meeting that we recommended that a redemption be put in and a replacement candidate be selected In May of this year we presented five candidates In June we had a meeting with a subcommittee of the Lexington board to vet those five candidates and winnow them down to three candidates that we have today The candidates today are Clarion, LaSalle, and Principal and they're on your agenda We have representatives from each of the firms to present today in person What were we looking at? We wanted to look at a universe of candidates There's something called the Odyssey which is the open, diversified, core equity fund universe It's a collection of funds of about 25 and these three are constituents within that group that we've winnowed it down to They each have at least $2 billion in real estate They have a team structure and again, the idea here today is to select a single candidate to fill the role In terms of the allocation within the portfolio it's a 9% allocation which is approximately about $90 million at the most recent valuation that we saw which was from a few days ago So again, currently there's about $65 million in J.P. Morgan and an additional $30 million that has not been allocated So again, that rounds out to the 9% allocation for real estate As you may know, we do have a redemption in for J.P. Morgan So again, we'll be receiving funds In fact, as Chad just mentioned received a $3.3 million payout from J.P. Morgan just this week Turning to the page 2 Here we have the three candidates listed and what we have is we've got a side-by-side matrix to look at some of the characteristics and what I would highlight as you hear the presentations there's a few questions or things that you might think about asking if you have any questions but when we look at Clarion on a relative basis their performance in 2023 they had a tough year and again, the idea there was to ask them a little bit about explaining their performance in that particular period For all of the candidates we would ask them about their current allocation Within the four primary groups of investments office, industrial, retail and apartment office has been the soft spot in the market with respect to performance so one question to ask the candidates is what is their take on their portfolio positioning with respect to office and as you'll probably hear that's one area where the candidates differ principal tends to be much more aligned with the broad allocations of the index for office so that's certainly a question for them and then the other candidates take a bigger bet if you will against office another question that might be asked is entry and exit queues where do they currently stand with that so you will get differing answers and the question is why would there be a big exit queue or entry queue and how long would it take to get invested so that is the legal entity but I guess if I were going to whittle this down all three are commingled investments in other words your participation in this commingled vehicle you're owning a share of a bigger pool of assets some of this is legacy some of this is more recent vintage but that is kind of the shared characteristics that we are looking for all the groups and so we talked about sector allocation their outlook is another question you might ask them and that would explain why they're maybe overweight or underweight particular asset groups within the index so those are the highlights when you hear them speak you may consider using this as kind of a guide side by side or just listen to their presentations and then when jim comes back we'll kind of recap and talk about a side by side comparison of the three candidates to assist in your selection okay so with that I'll remind the members of the board the schedule is 30 minutes for each presentation and 15 for questions that's correct and typically if you they'll no doubt offer that if you have questions in the interim feel free to stop them and ask the question certainly in these presentations the more interactive that you are you don't have to reserve your questions until the last 15 minutes when things are top of mind or they're covering it within their presentations it's fair game to ask the question okay so in order to somewhat keep us on time we'll allocate 45 minutes for each group correct correct does that work for everyone I know it's easy in these things to keep asking questions and get on to an hour of questions I'm just trying to get a sense of whether our members would like to try to stick to the time frame yes ma'am yes okie doke okay very good thank you so let's bring in our first group and that's going to be Clarion Partners thank you and I'm leaving so thank you alright 9.30 9.30 9.30 9.30 good morning good morning we are well we're watching our time this morning so we want to welcome you and ask you to introduce yourselves please and if you would and we have 45 minutes total for your presentation and questions okay terrific good morning everyone it's great to be here with you I am Gwen Murphy from Clarion Partners pleased to be here with my colleague and partner Katie Voss and really appreciate the opportunity to talk to you more about our core fund and have the discussion today so thanks very much quickly to let you know that I've been with the firm 12 years and I'm focused on the investor side of our business so groups like yours and importantly a number of consultants Callan being one of the large relationships that I'm responsible for and work closely with Katie Voss also a partner at the firm is focused on the investment section or part of our business and so has for her 18 years at the firm been responsible for managing real estate investments and portfolios on behalf of some of our largest investors and she's currently the portfolio manager for the core fund our core fund is the line properties fund and that's the fund that we're talking to you about today very limited time so I just want to provide a few highlights as well to help you understand who Clarion Partners is as a firm so I'll direct you to page 5 just to point out a few highlights there I think most importantly we want you to know that Clarion is a partnership so Katie and I and many of our senior colleagues own a part of our business and we think that that really creates a lot of alignment with what we do alongside of our investors it's also a really important differentiator I think if you look at Clarion versus a number of our peers in this space there's a lot of data on this page very quickly we have 74 billion of assets under management again I'm looking at page 5 we own more than 1400 properties on behalf of our investors we have several offices around the country and in Europe and we have 356 employees today so that's a lot of data I think the key takeaway is that it is our job to make all of these resources come together and work hard to generate investment performance for our investors Clarion's been in the real estate space for 40 years so we have a lot of experience in good markets bad markets in this space and I think lastly I would just point you to the bottom of the page here just a few of our key team members we have a big research team a big acquisitions team a big asset management team so really the key professionals at work every day helping us guide strategy and management both at the property and portfolio level which Katie is going to focus on today while we manage a large platform other businesses across all kinds of real estate in the U.S. Katie's going to discuss with you today our flagship fund the Lion Properties Fund so thanks again for having us Thank you so much Welcome Thank you Hi everyone So nice to see you all here today We're very pleased to be considered in this search We have a lot of materials in this book I know it's a very thick book and I apologize for that It can be some great nighttime reading for you but we're only going to focus on a few key pages here today I will certainly not take you through every page of this book I'm going to start with the key aspects of the fund and then I'm going to talk a bit about performance and then most importantly about positioning of the fund how we think about where we invest and why we invest there and what that means for future performance So very quickly Gwen mentioned my background I've been at the firm a number of years almost 20 years now I've been sitting in a variety of functions across the firm but most recently for the last six years I have been working on the Lion Properties Fund so have a long amount of tenure both at the firm and on this product We have a really strong team that works on this fund We have 20 dedicated resources that work specifically on this fund within the firm I have a co-portfolio manager, John Gelb We have an assistant portfolio manager, Janet Lee and a CFO, John DeBaradinas Those are the senior members of the team and we all have a lot of tenure on this product which I think is really important Just on page 11 a very quick synopsis of what the fund is So this fund is a core open-end diversified fund It was formed in the year 2000 so we have a long track record as Gwen said, through a variety of different types of cycles in managing and running this type of product We compete within a benchmark of like-kind funds It's called the Odyssey It's the open-end diversified core equity index There are about 25 different funds in that space We're the fourth largest in that space today So we have scale, we have experience as a firm we have experience and a deep team of resources as a fund I think those are all really critically important things for investors in your seat to want to see in a fund like this So moving to slide 12 Again, we try to approach this from an investor's perspective If we were sitting in your seats what would we want to know about the fund? What differentiating aspects does the fund have versus its peer set? That's what we've tried to lay out on page 12 So we have these six boxes I'm going to go through each one of them fairly briefly and then we have some additional information throughout the presentation on some of these topics that I'll cover as well So just starting in the top left we've covered the platform the strength of the platform, the strength of the team I think that's critically important when you're investing in a product like this Gwen talked about the strength of our firm and the experience of our firm which is focused solely on real estate I think that's important We wake up every day and real estate is all we do The history of this fund and having run this fund since the year 2000 we have experience in this product and we have a deep team, as I mentioned We also have a very strong resource in our research team within the firm Research is a hallmark of the firm It has long been an integral piece of our business We really look to the research and the data to try to drive our investment decisions We think that allows us to be really disciplined with our decisions As you'll hear as I go through the presentation that's important to us and it allows us to try to think ahead of what may be happening in the market We try to look for themes in the broader economy the broader market and we try to translate those themes to how we can invest around them in real estate That's a critical piece of what we do on a daily basis that leads to our positioning as a fund which is really important Moving to the second box on the top Again, positioning Research is a hallmark of the firm We're taking that research, that data We're trying to position this fund in the best way possible for our investors for long-term performance We are looking for high conviction areas of investment focus For us, that's maybe looking at a theme in the market Over the past 15 years we've seen the growth of e-commerce, for instance That has driven performance of logistics centers logistics investments where we see warehouse space performing extremely well We were an early mover to move into that space because we saw the trends coming We saw e-commerce growing and as a result of that we made a move into that space More recently, we've been focused on shedding office investments Again, driven by that research focus driven by the data I'm sure you've all read the headlines in the newspapers about office and some of the challenges in that space Not every single office building is challenged but the world is different now, post-pandemic We've been an early mover to shed office as a result of that research-driven focus We think that's given us this high conviction growth-oriented portfolio that will stand the test of time over the long-term Again, speaking to long-term top box on the right that's led us to be able to deliver long-term outperformance for this fund If we look at the performance of this fund over the last 23 years we've been a strong outperformer over the long-term We actually also outperform our competitors in terms of income growth So that's another piece of data that we look at on an annual basis to see the income growth of our assets that we own how is that stacking up against our peers? When we look back over the history of this fund we've been able to deliver better income growth through our investments We think that speaks again to that positioning and quality of the investments On the bottom left None of that comes easily I would say that in this space you can't sit still We try every day to better the quality of this portfolio We think of ourselves and we hope that and we think that the industry and our investors think of us as a proactive manager We cannot sit on our hands and do nothing We have to always be thinking around the corner What is coming down the line in terms of macroeconomic trends? Where do we want to move the portfolio? We have tried to be very active in terms of our management of the portfolio to continually shed assets that might be underperforming and acquire new assets where we think we're going to have better performance Having that discipline and having that investment process just rooted in the bones of the firm and the fund we think is critically important That, I would say, is not necessarily true of every fund in our space We take that very seriously We think that's a critical part of what we do every day The middle bottom box, I would just say we think a lot about risk management We have tried and true practices within the firm for risk management that we have developed over 40 years We know our investors think of risk management This is a low-leverage strategy We have leverage in the mid-20s Again, not trying to do anything crazy or tricky with leverage or debt for this portfolio We have a high-quality balance sheet which we know is also really important We have the firm risk management resources and processes that we know our investors want to see and really trust us to run appropriately Finally, on the bottom right I would just mention we do have a small sleeve of the fund about 10% where we're doing development or build to core The majority of that is in the industrial space the logistic space, as I mentioned We have a very unique platform at Clarion We have a unique expertise in that warehouse space We're one of the largest owners and operators of industrial product in the country That gives us access to a lot of relationships and deal flow that this fund can take advantage of We have a small sleeve where we're actually looking to build industrial properties and hold them through the life of the fund That gives us a little incremental yield Again, that's attractive and a bit unique from our peer set I'm going to move forward now to performance I'm going to flip to 13 and 14 and speak to both of these together As I mentioned, we have been a long-term outperformer This top page that you see on 13 shows our rolling performance over time periods LPF, this fund, is the lighter blue bars on the left and our benchmark, which is the odyssey, are the darker bars on the right We have been fortunate, based on our positioning and strategy to be a long-term performer as a fund In fact, if you look down to slide 14 you'll see that we have actually outperformed every year of the past 10-year cycle Those outperforming years are highlighted in green except for 2023, last year That's a year where we underperformed because of that conviction and discipline around our office disposition strategy We made the decision to sell office assets and reduce our allocation to office Many of our peers did not follow that same path As a result, we have seen more recent underperformance over the past year or so Again, that was a deliberate and disciplined decision based on research We think it will position us, over the long-term as a fund, in a much better place We're thinking about long-term outperformance owning less office in this fund we think puts us in a much better place versus our peers We're about 500 basis points underweight to office today which we think is a really strong place to be Again, that's all deeply rooted in that research function that I described It's based on data and we continue to have conviction around that decision based on the forecast we see for the office sector today We think that's something that distinguishes us from our peers and frankly, now that we've completed that office disposition strategy we're in a really good place for go-forward outlook for performance We think it puts us in a really strong position on a go-forward basis which, hopefully sitting in your seat that's something you're thinking a lot about Moving ahead to 15 We've talked a bit about positioning I'm going to flip back and forth between 15 and 22 On slide 15, we call out our strategic overweights and underweights by sector When we think about positioning of the fund and how we can distinguish ourselves versus our peers this is really what we're talking about where we can follow themes and invest around those themes and do it a bit differently than our peer set As I mentioned, we have key overweights in a few areas One of those is industrial Industrial has been the best performing sector over the last 12 years We have a substantial overweight to industrial and as I mentioned, we were an early mover there so we made a decision based on research and conviction and that decision has paid off over time We remain about 400 basis points overweight to industrial today which sets us up again for good near-term performance Industrial continues to be the strongest performing sector for us in our space We're also overweight to a specific segment of multifamily or apartments that are slightly more affordable apartments Those again have been outperformers when we look at the data over the last 10 years So that's been another area where we've distinguished ourselves versus our peers That area has been especially interesting because it doesn't compete as much against new construction When you see new apartment communities being delivered in a certain market often if you have a newer existing apartment community that you own you're competing against those new deliveries in terms of rents We own slightly more seasoned apartments so think maybe 1990s, early 2000s vintage which are still extremely good quality but not necessarily competing for top of market rents So that's allowed us to be a little bit more resilient in our approach to multifamily which we think has been really important and unique And then alternatives We have had a long-term overweight to alternatives It's a growing area of our space Alternatives really means property types that aren't the main four property types So things like life sciences, self-storage, other areas of housing like student housing Right now we're overweight to the alternative sector by about 500 basis points and that's an area of growth for us in the future as well In terms of underweights I touched on our office underweight but I would say this is really the key strategic move that we've made over the past two years to move our office weighting down We were already underweight pre-pandemic We've long been underweight to office because it is a more volatile sector but once we came out of the pandemic we took a fresh look at our office allocation and the research around office and had a disciplined approach to reacting to that research and selling office assets to lower allocation We think that sets the fund up for longer-term outperformance So right now we're about 500 basis points underweight to our peers The portfolio that we have that remains is extremely high quality It's a more curated portfolio of office assets and it's in markets that we think stand the test of time May I ask quickly a curiosity question? No New York or Chicago office? Correct So we've Absolutely We've taken a hard look at office by markets as well and there are certainly markets that are less dynamic over time where we see less dynamic growth We've had a focus on following innovation as a fund So trying to track the main industries in the U.S. that are driving innovation and driving growth Those are the cities Those industries gravitate to certain cities and those are the cities where we want to invest When you look back historically over time New York and Chicago typically are less dynamic markets They're not necessarily areas of innovation It's more financial tenants, insurance tenants We don't see the same growth in those industries and in those places as we do in other areas around the country I would say D.C. falls into that category as well We have one very small position in D.C. but again have not been interested and invested in office in D.C. Okay, thank you Sure, of course The last comment I would make in terms of underweights here Obviously retail assets really over the past 5 to 7 years have faced headwinds We saw that coming with the shift of how people shop Just with the rise of e-commerce in the 2012-13 time frame We saw the shift from bricks and mortar retail to e-commerce and at the same time we went overweight to industrial We actually made a bold move and went underweight to retail So we've been underweight to retail for a period of time where retail has suffered many, many headwinds and we think that that was a really strong decision to make at the time We also own no malls Malls have been the most challenged Our focus has been on grocery anchored necessity based centers that tend to be more resilient over all cycles So that retail strategy has served us well and we think puts us in a good place relative to our peers Retail now has sort of come out the other side of that and grocery anchored retail is actually performing quite well today So we may see that tick up a little bit over time as we look to acquire some more grocery anchored assets but we still maintain our conviction to own no malls and to be slightly underweight So moving to 16 I just want to stress again This page sort of summarizes our active management as a fund and just our approach to running the fund over the past couple of years We have been in a down cycle where everything in our space has repriced over the past couple of years Transaction volume has been down It's been a different part of the cycle that we've been living through But we feel very firmly that it's just as important to actively manage the fund during that period of time as it is during an up cycle when things are blowing and going and people are acquiring a lot of properties So just call to your attention here In terms of acquisitions we've continued to be active on the acquisitions front We've had to get more creative about how we've done that And really that means trying to exercise a lot of judgment around underwriting transactions making sure we're finding transactions with appropriate returns and getting creative with structuring In terms of dispositions we've been active on that front as well As I said, we have a really strong strategy to try to continually evaluate the portfolio and sell what we think might be underperforming assets We do that on an annual basis Most recently we've done that with respect to office And we think that's critically important to maintain the quality of the fund over time Non-core, I mentioned We've continued over the past couple of years to create value through development where it makes sense So where we think we're getting the appropriate yield we've actually continued to develop industrial assets And we've been able to get a yield premium to do that And then coming to redemptions We do have a redemption queue like most others in our space That's not unique to us And we've been through this before We've had redemption queues two other times in the history of the fund So we're experienced at managing the queues We've taken an approach to the redemption queue in that we've been very responsive We've been one of the highest payers against the queue in our space So we've tried to be responsive to our investors We have paid close to the top amount in the odyssey both in terms of dollar amount and percent of requests We think that's really important to be responsive to our investors And I will say the redemption queue As I said, we've lived through this before We're getting to a period of inflection in our space And what we've seen in past time periods is that when you get to that period of inflection the queue starts to unwind itself We have many people in our queue today that we know have placeholder amounts in the queue and are waiting for that inflection point to make a decision about a rescission All or partial And we also have a lot of new capital on the sidelines looking to come into the fund speaks to the conviction about the fund strategy. If you look to the next bullet point, we've actually been one of the top capital raisers in the Odyssey over the last six quarters. We've raised about $850 million into the fund, which we think speaks to the support of the strategy that we have. We also have another $400 million in board-approved commitments to the fund. Those are investors that have gone through board approval and are looking to invest in the fund and just thinking about the right time to do that, given where we are in the cycle. I would just say that we have heard from other investors that sit in your seat that the discipline strategy that we have, the positioning that we have today, that resonates really well, thinking about future performance and where this fund is going to go over the long term. We really have a long-term view as a fund, and we always try to think in alignment with our investors, most of which are also long-term investors. So I know we're getting short on time. I may just flip to two more pages. I'm going to go to slide 20. And this is more of a market view of where we sit today in the cycle. What this really shows is, from 1990 through now, the history of our space, the private real estate space, and what we've seen in terms of trends. What I would say is this is a very opportune time for a search like this. When we look at the data and the history, we've just experienced a repricing in our space. We know from history that doesn't actually happen very often. You can see there are very few negative bars on this chart, going back over the last 30-year history. We also know from history that the periods after that downturn, or resetting of pricing, tend to be very strong in terms of appreciation. So if you look at the periods between the gray bars, you can see the average return in the space, if you're an investor, coming out of that downturn. So I think this is a great time to be in the market, and to be considering a search into a new investment. Flipping to page 21, I would say, we're feeling increasingly optimistic about where we sit in today's market, both respect to the broader market, and with respect to the fund. We are feeling like we're approaching an inflection point in the market. We're seeing that from the data, frankly. When we look at the income growth, or the NOI growth, in our sectors, and in our assets, that's quite strong. So what that tells us is that the fundamentals of our assets, and of our spaces, are actually quite healthy. For the fund, specifically, we're forecasting 5% income growth for this year, and we're tracking toward that through three quarters. On top of that, I would say that when we look at where new construction starts are today, because there aren't as many of them coming out of this last cycle, we actually sit in a really favorable position going into 2025 and 2026. There's not gonna be as much new construction delivering, which allows the opportunity for existing product to grow their income more than they otherwise might. So that feels like a really favorable part of the cycle to be going into from an income standpoint. From a valuation standpoint, I would say we're seeing increasing evidence that where the marks of the portfolio are today are consistent where things are trading in the market, in the transaction market. So that tells us that that repricing of our space should generally be behind us. I would say the exception to that might be an office where we still think that there's a lag, and we know that because we've been active sellers in that space, we still think there's room for the benchmark to move in terms of values, which really should only help us on a go-forward basis. And I would say that on values, too, when we look at our third-party appraisals, which get done for the fund every single quarter, we're seeing more positive movements in value quarter over quarter versus negative movements. So again, that trend feels like it's moving in the right direction, which may mean we're approaching that inflection point in our space, which I think is generally very good news for all of us. So maybe just to conclude, I know I want to leave some room for questions. I think what LPF offers is a firm background that has a long history of experience, a focus on real estate, a fund that has a deep and experienced team, real conviction around investment strategy, and discipline to act on that strategy, even when it might mean some short-term hurdles, and I think a positioning today with the right overweights and underweights to sectors that really put us in a good place to outperform on a go-forward basis. If you stack us up against any of our peers, I think you'll see that we look quite good when it comes to positioning of the portfolio. So I thank you for your time. I'm happy to answer any other questions or cover anything that maybe I didn't touch on that you want to hear about, and I'll open it up to you for questions. All right, thank you, Katie. I'm sure there will be questions, so we'll get a queue going here. Who has questions? Tommy? Okay, I've got several. What is life sciences? Yes. That term has escaped me. I'm happy to go into life sciences, and I apologize that we didn't cover that in the time that we had. So life sciences, they're buildings that on the outside you would think look like office buildings. On the inside, they're actually outfitted with laboratory space for drug development. So when you think about large pharmaceutical companies that are doing laboratory work for drug development and research, these are the buildings where they're looking to lease space. So our position in that space is really founded on the fact that one of the themes, one of the growth themes that we track as a firm is healthcare, and just the growth of healthcare. In the United States, we have an aging population, we have the constant need for new medicines, and life sciences is directly connected to that theme. It has been, for us, the second best performing sector, second only to industrial within our portfolio. We have a pretty defensive position in life sciences, and really what that means is we've been focused on only the key areas where life sciences happens around the country, and there are really only three or four of them. The main one is the Cambridge sub-market in Boston, adjacent to MIT. So these tenants, they want to be located next to major research centers and universities to be able to interact with those researchers. Those are the areas where we've invested in life sciences, and again, we've picked purpose-built buildings, so built specifically for life science tenants, which is important, and we've also focused on credit tenants, so those large household name pharmaceutical companies, rather than startup biotech companies who are also in that space. That's a differentiator for us as a fund, that life sciences exposure. As I said, it's been quite helpful to our past performance in Boston, it's also pretty unique in our space. You say you've gone down in office space. Yes. What was your position originally before 23? So we were always underweight, call it roughly around 20% of our allocation, and the peer group's allocation was maybe slightly higher, like 22, so we were about 200 basis points underweight. When you look back at the history of the fund, that's because offices tended to be more volatile over time, but when we lived through the pandemic and we're now living with the new dynamics of work from home and the changes and people's going into the office, we think the office sector has changed in a way that is not cyclical, it's more structural in nature, meaning it's gonna take many, many years to recover. We've seen a decrease in demand, we've seen a shift in the type of buildings people want to lease, just a change in people's perceptions coming out of COVID. So we took a hard look at that and said, yeah, we own a lot of office assets that we love and that continue to perform quite well, but everyone in our space now owns office buildings that frankly aren't what they used to be. They used to be outperformers, and now in this new environment, they're more challenged. So we went through our entire portfolio and re-underwrote every single asset and tried to sell the assets that we thought were not gonna perform on a go-forward basis. And we were able to do that at pricing that made sense for us and where we thought on a risk-adjusted basis was appropriate for the fund. Do you plan on shedding any more? So we have now sold 11 assets. We have one more that's expected to close in the next week, and that's really the culmination of our disposition program. That's not to say that over time, like in normal course, every asset in the fund is up for discussion, but this targeted program of selling assets is now complete. Okay, thank you. Yes. All right, other questions? Go ahead, Mr. Swiderski. My mind would be a little bit easier, but what about succession planning? Do you all have people in line so that the theory of the plan will stay consistent? Yes, so here, we can flip quickly. It's actually probably helpful to look at it on a visual basis. If you go to slide 53, sorry, it's way in the back. So as I mentioned, I'm one of two portfolio managers on the fund. John and I are both portfolio managers. Janet Lee, who has also been with the firm a long period of time, is an assistant portfolio manager on the fund. And then I mentioned John DeBaradinas, who's the chief financial officer. So we really have kind of a three-person PM team running this on a day-to-day basis. John, Janet, and I, we work very closely together. John and I have both been on the fund, John, about 10 or 11 years. I've been on the fund six years. And Janet has been at the firm a long time, although she just recently joined the fund in the last year. So the way that we think about it is, you know, God forbid something happened to any one of us. We do have redundancy in that we're all working collectively on the strategy of this fund on a daily basis. So we don't really separate roles and responsibilities. You know, it might be slightly inefficient, but we do try to really overlap and come to a consensus on all of our decisions. We think it's important, to your point, that we're all involved in that daily management of the fund. You know, I would say we're all very well-versed in the fund, we have a lot of experience with this fund and many other things at Clarion Partners. Sure. What other questions? Anybody who hasn't asked a question? Yes. Good morning. Officer Jennings. Thank you. You may have touched on it and perhaps I missed it. Apologies if so. I have a question about the entry and exit queues. Sure. Callen was kind enough to provide us a summary sheet of the portfolio. And it appears that there's no entry queue and a fairly large exit queue. Yes. To the uninitiated like myself, it appears that no one's coming in and everybody's getting out. Do you care to speak to that? Yes, absolutely. And let me just turn back to the page I was on where we have some of those stats on 16. So the entry, we haven't had an entry queue in the history of the fund. And all that really means, that doesn't mean we don't have money coming in, it just means we don't have money queued on the sidelines that can't come in. So when we have had contributions come into the fund over time, we have directly taken those contributions and put them to work in the fund. We have actually been one of the top two capital raisers in our benchmark space, in the Odyssey space, over the last year and a half. So we've raised about $850 million over the past year and a half, which is below our run rate. But frankly, no one has been raising at the normal run rate over the last couple of years. So that's pretty meaningful in terms of contributions at this moment in time. We have another 400 in board approved contributions that are also sitting, waiting to come into the fund that we know are gonna fund over the next several quarters, hopefully. And those are folks that are just trying to time their investment decisions. And maybe they're lagging in and putting a little bit in each quarter, or maybe they're saying, I wanna see some inflection point in the economy before I put my dollars to work in the fund. So we do have a very strong track record, even over the long term, of being one of the top capital raisers in our space. We do also have a redemption queue, as do most other funds in our space. As I mentioned, it's tough to know exactly how real that queue is. We've had many, what's different about this time and this cycle, this redemption queue, we have had many, many investors come to us and say, I'm putting in for a larger number than I need, or I have a number in as a placeholder, I don't want that money back, but I need to put that in the queue as a placeholder. So we know there's an element of that queue number that is somewhat unreal. I can't tell you how much that is, that's really hard to quantify. But what we've seen in the past when we've lived through these inflection points is you get to a point where that reverses itself pretty quickly. Folks like you are actually probably under allocated to real estate today, because they've been on pause for the past couple of years while the market corrects, and the equity markets have been running. So we're at a place now where we may have under allocations, there's capital on the sidelines waiting for the right point to come in, and we know a number of those investors in the queue are actually under allocated possibly, and kind of waiting for the right point to rescind. So what I would tell you is it's hard to know how much of that is real. We think through a combination of just that inflection point change, and people's change in their approach to real estate investment. You know, that typically in the past has reversed itself pretty quickly. Sure. May I ask, how do you determine if you invest in, I noticed on your page 23, if you invest in areas that tend to have more catastrophic weather- Yes. Related such as hurricanes or earthquakes? An opportune question. Is that? Yeah. And I noticed you have a larger percentage in the California earthquake area. Yes. So we do evaluate that physical climate risk very closely. I actually sit on our ESG committee, and I chair our resilience subcommittee. So we have access to a database where we evaluate all of our existing investments and any new investments for the physical climate risks associated with those assets. What I'll tell you is that, you know, you look anywhere in the country, and there is some physical risk to any place that you invest or live in the country. You know, it could be windstorm, it could be earthquake, it could be hurricane, it could be drought, water access. So there's a whole host of risks that we assess. And depending on the region, you know, each region has its own set of risks. Our focus has been on mitigation of those risks. So how, when we're assessing an asset, and we know that it has a certain physical risk, what are the mitigation plans that we can put in place, or what are the mitigation aspects of an asset that we want to have in order to help us defend against that risk? So we spend a lot of time on that during the investment process, and also with our existing assets to improve them over time. If we can take mitigation measures to protect us, we're doing that. We also have the benefit, obviously, sort of on a wraparound of our insurance program. We have a master insurance program across our entire firm that allows us to get better coverage and pricing because we have a large platform and we're leveraging the size of that platform. So that's kind of, you know, a wrap around that whole program. But yes, it is something we spend a lot of time on. You're right, it's been interesting in that a lot of the areas of growth, frankly, in the country have been areas that do have particular climate risks. And being able to weigh that tension and make sure that we're evaluating that tension between growth and risk management appropriately is something we spend a lot of time on. Okay. Do you own anything in Kentucky? We actually don't own anything in Kentucky. That's what the map looked like. No. You know, typically we've, you know, we have focused on larger metro areas. That doesn't mean we wouldn't own anything into Kentucky. We actually own a number of retail assets and even multifamily assets in some secondary and tertiary markets where we see good growth. So it's a possibility. We just don't have anything today. Okay. What other questions? We have a couple minutes left. Anybody who hasn't asked a question? All right, Tommy. Thank you. Well, we try to get everybody to have their voice heard. Do you foresee any movement in upper management in the next years? I mean, you know, change sometimes is good, but sometimes it's not good either. Yeah, I would say, you know, I don't, there's nothing that we know of today that we would speak to. But, you know, to that point, planning around succession and, you know, what that means for all of the levels within the firm is a really important focus and has been for many years. We have an executive board that really focuses on the management of that succession planning for all levels within the firm. And, you know, there is typically a very detailed plan in place. I'm not privy to all of them. So I can't speak to that in detail today, but there's nothing that I know of today that I can speak to. And one last question. Okay, we have 60 seconds. Well, this is very important. Okay, 60 seconds. Your fees. Yes. Is there any wiggle room in there, negotiate, you know? No, our fees are set and are consistent for all investors. So on page 51, you know, this is the same fee schedule that every investor would see. You know, I think you can see that it's a graduated schedule based on the amount of investment. Once you get above $100 million investment amount, you actually go to a flat rate based on your NAV. Anything lower than 100 is blended. But again, this is the same for every investor. There's not a negotiated schedule, so. Didn't hurt to ask. Yep. Thank you so much. I think that finishes us out, and we really appreciate your presentation, Ms. Murphy and Ms. Voss. Thank you. Thank you so much. Thank you very much for the time. We really appreciate it. Nice to meet you all. Nice to meet you. Thank you. One, two, one, two, one, two, one, two, one, two, one, two. I don't know. I don't know. Eric. Eric. She's not even. Well. They're not in mind. Okay. Mayor, is it possible for a five minute break so we can use the bathroom for the next presentator? Thank you. Might be something. Might miss something. Yes. Oh, man. You already left. You beat me. I'm gonna leave again. Yeah. It won't have anything to do with me in here. We'll be back in a minute. We'll be back in a minute. How's it going? Good. We're just getting some people in. And move some out so you can sit here. Sit here wherever you like. Great. And I think, are we just taking a minute? Just a quick break. Just a quick break. Just a quick front row. Yeah. Probably get started in just a minute or two. You got it. And I'm Chadwick Cunningham. Hey, Chadwick. Good to see you. Yeah. Doing well? You got a complaint? Yourself? Same. Good. Can't complain. Yeah. Were you the one who said? Leo, from Frankfort. Born in Frankfort. Yeah. First. I saw you by yourself. I did. I did. I'm sure you may hate me. Yeah. Right? Yeah. I'm curious. Yeah. Me too. I guess there's a little bit of a blue. There you go. I've got my birds. This is his first year. There you go. You're good. You're good. That's kind of my shoulder mount here. It was nice because I was able to fly a little through. I think we made it on the same flight. Oh, okay. All right. Yeah. Chicago. Yeah. Yeah. Thank you. You have to actually go down. Yeah. Which is rare. Growing up. What is that? It's sort of the alphabets. Big city. Yeah. But for them to come down to town. It's just really hard. Yeah. But mom was willing to do it. So that was good. Good. That was a long drive. Okay. We all get a role. Yeah. Yeah. Yeah. Yeah. Yeah. Okay. I'm sorry. I just want to make sure. Yeah. Just add. Yes. Okay. Let's see. Who are we missing here? Absolutely. We'll wait another minute. We're waiting on a couple of our members. Okay. That works. Okay. Okay. Okay. Well, yes. I created emails with Susan. So just let me. Okay. Sure. Yeah. I can read it right. Okay. I'm sorry. In terms of the slides, are those being projected anywhere? They just have the hard book. Okay. You got it. Okay. Okay. Okay. Yeah, you have to step up and talk to the mic. Yeah, we're still missing a couple. I'm Chadwick. Very nice to meet you in person. Yes. Yes, I was telling Talia that. I was like, I just want to make sure I introduce myself. So, yes. Nice to meet you as well. We have one more person who will be joining us, but I think we'd like to go ahead and get started. Good morning. And so, we will be going from 1030 until 1115, and I will apologize to you all that I will have to leave and turn the chair over to Chief Weathers. Okay, no worries. I'll be here till almost 11. So, welcome. Thank you. Thank you very much. Well, and good morning. My name is Chadwick Cunningham, and I am with the Investor Relations Team at LaSalle Investment Management. As my team name suggests, my responsibility is for building and maintaining relationships with institutional investors and consultants. And before I hand things over to my colleagues, Jim Garvey and Frida Daly, on behalf of them, myself, and our firm, thank you for this opportunity to speak with you this morning about LaSalle Property Fund, our firm's flagship open-ended U.S. core fund, and the largest commingled fund the firm manages. Like Jim and Frida, who I will formally introduce in one moment, I am based in Chicago, which is our global headquarters and is where I've been since joining the firm 19 years ago. Before moving to Chicago, I was in Boston for a few years. I worked there one year as a civil engineer and then spent two years at business school. And I share all of that because, as Jim and Frida can confirm, I am a proud but displaced Kentuckian since moving to Chicago, or to Boston, 22 years ago. It was actually 22 years ago this month. I was actually born and raised some 30 miles north and west of here, in Frankfort. It's where my parents still live to this day. I was able to grab dinner with them last night, which was great. And my in-laws, they're a bit farther down Interstate 64 in Louisville. After 36 years of service to the state of Kentucky, mom and dad are now both retired and they are pensioners with the Kentucky Public Pensions Authority. My dad is also a pensioner with the city of Lawrenceburg, which is where they are from. In the early 1970s, dad worked for Lawrenceburg police. He was a dispatcher for two years and a police officer for one year. And so while Jim, Frida, and I feel fortunate to have this opportunity with you today on a personal level, it is particularly meaningful to be able to speak with you this morning. Moving to LaSalle Property Fund, or LPF as we call it, I am joined this morning by my colleagues Jim Garvey and Frida Dely. Jim is President and Portfolio Manager for LaSalle Property Fund and has been with LaSalle for over 30 years. He's actually been with LPF since its inception 15 years ago. Frida is Deputy Portfolio Manager and is now in her 15th year with LaSalle. She's been with LPF as Deputy Portfolio Manager for the last five years. And I will add that while neither of them can claim Kentucky as their home state, they are from bordering states. Jim is from Ohio and Frida is from Virginia. So not quite Kentuckians, but close. So with that, I will concede the floor to Jim and Frida. Thank you. Thank you. Welcome. Thank you. Good. Well, we're going to start off really with covering performance, then get to a market outlook, and then finish with portfolio positioning. So hopefully that will address your concerns and interests. And on the first page here, I'm so used to looking at it. I'll be looking up so you're used to looking at a video screen. But on the first page we have, I would note, the second half of kind of that initial statement. And that is managing a portfolio with an emphasis on property types with strong growth potential and lesser risk of disruption from secular changes. So what we're really looking is to invest in properties where we can see the income going up, because ultimately that drives the value of our shares and of your investment up. And at the same time, those that have the least risks. This is a core portfolio. And we want to make sure that we're giving folks the stable investment that they have signed up for. So we have a full page that's a visual depiction of this and really places the property types in that page that our research group has done. And we'll get into that a little bit later in this presentation. But some key points are numbers on the page, 14 years for the fund. 88 investments, $8.3 billion. We started with zero, there were no seed assets at the beginning, so we started at $0 back in 2010. And $6 billion on the NAV, so just the difference between the gross and the net is the leverage in the fund. And then finally, and maybe the most striking number, is $155 million in the incoming queue to be placed. So we've had good flow of incoming interest in the fund. We are actually calling about $80 million, that $155 million, this week. And then also we brought in now, since this page was updated, another $55 million of new investments. So our incoming queue, contribution queue, will be at $130 million. And our redemption queue, which is really even more defining, is at zero. So what you would find amongst Odyssey funds is that generally a fund of our size in this market has an exit queue of about $1 billion. And so that, for us, has been a key differentiator, and I think it is a great endorsement by the investors that we do have, which total almost 100 investors. And then moving to the next page, what we've done is kind of try to give you why LaSalle Property Fund. What are the key differentiators? And I think that these key differentiators, in many ways, are the reasons why we have zero in the redemption queue. And the first one is we've had a long-term underweight to traditional office. Traditional office right now is the softest, has a lot of vacancies, and also has the most questions about what happens next with regard to where the direction of vacancy goes. In addition to having less exposure to that, we have good exposure to medical office, life science, self-storage, and single-family rentals. And these tend to be areas where there's growing capital coming in, and that growing capital coming in will help to push up pricing. We have no exposure to either regional malls or hotels. We've always viewed those as too risky. So when I say no exposure today, never have had exposure to either of those. And modest leverage. We've maintained leverage between 20 and 30 percent. Today we're at 26 percent. The senior fund management team, Chadwick introduced Freda and I. We also have one other senior team member, and that's Ryan DeRusse. He's our chief financial officer, has been with the fund since its inception. And the average tenure, really, for Freda, Ryan, and I is 24 years in real estate and 20 years with LaSalle. And I think you'll find, in addition to our redemption record, that level of stability is very unusual. Also we have the benefit of our parent company. Our parent company is a publicly traded, all real estate firm, 90,000 employees worldwide, $85 billion of assets, and we are able to gain a lot of insights from those groups. Effectively, we often refer to them as our boots on the ground, the folks that are in the field giving us information when we're looking to either buy or sell assets. And then lastly, we have good alignment. This is mostly investment by the firm, but also by the team, where the firm and the team have $20 million directly invested in the fund, and at the same terms of all of our investors. So the same limited partnership agreement is signed by both the firm and by Freda and I, as is signed by all of our investors. And then some advantages we have that we know as well as our research team is renowned. They are one of the leading research teams that have been, I'm going to say, for almost 30 years ago, and it was really founded by Jacques Gordon, who's a MIT PhD and one of the leaders in the real estate industry. We have two data scientists on the team, and we find this to be clearly a competitive advantage. Another thing that works well for us is we have a lot of relationships. About one-third of the investments in this fund is what we'd call off-market investments, meaning they weren't marketed broadly to a lot of buyers, only presented to either us or to a few. And that's because of the relationships we have in the industry. LaSalle has been around buying core properties for greater than 40 years. And then lastly, a note here is creating value. So we're not what you'd call financial engineers. There's a lot of folks who are financial engineers where they're not that close to the real estate, and for them, it's all about debt financing and other, let's say, financial strategies. We have active asset managers, and our active managers are working the assets very hard every day in the field. And when you come to LaSalle, you know you're working in real estate, because we're a real estate-only firm. So I do think that's a good point of distinction. You don't have someone working on your assets as an asset manager who maybe three years ago was on the bond side of the business and then decided they wanted to transfer into real estate. We are a real estate-only firm. And then finally, and very importantly, our track record of outperformance. So we've outperformed over all time frames, one, three, five, seven, ten years, and since inception. We outperform whether it's total return or income return consistently, and we outperform whether it's net or gross of fees. And the next two pages really just demonstrate that. The top page is our total return, so that encompasses both income and appreciation. The bottom page is income only. But what you'll consistently see is that the darker, that's bluish or purplish bar, which represents LPF, consistently outperforming the index that we compete against, the Odyssey Index. And I would note that our outperformance has been greater in the last three years. And we've been telling people that for a long time. We said, you know, when things get tough, you're going to be better off in our portfolio. And we believe this has proved it out. So if you have better quality, your outperformance tends to increase when the markets get tough. And the markets have been tough for the last two to three years. And then lastly, just a few thoughts, commentary just on valuations. As you know, real estate has been going through a lot of write-downs. So over the last seven quarters, we've had write-downs. The Odyssey has had write-downs. Notably, during each of those quarters, our income has grown. So if you want to think of that as price is going down, but at the same time, the income you're getting is going up. And that's a sign generally of a healthy market. The reason for the write-downs was because of the rising interest rates that came with the Fed seeking to quell inflation. And those rising interest rates caused us to have to change the valuation parameters, in this case discount rates and exit cap rates, which push values down. But generally, the health that you're seeing at the properties means that we're keeping occupancy high and rents are increasing and you have ultimately a healthy underlying investment. You can see the dramatic order of magnitude of the write-downs that have been already taken, and that is written down the portfolio by 20% from the peak, but also written down traditional office by 50%. So where are we going to go from here? And this is the discussion about market today. In the market today, as you can see, office, and these are, as you look at this, this is 20 plus years with the projections, 26 years of vacancy by property type. And the one thing that should be the hint that office is challenged is office has always had over this 25, 26 year period, the higher vacancy rate, and it is at its peak now. And so we've been a fund that's been underweight office for the entirety of the history of the fund for 14 years because of these characteristics. It felt ultimately too risky. But where we are today is peak vacancy roughly at about 18, 19%. And the question is, where does it go from here? And that's not an easy question to answer. Generally you'd expect an improvement as we continue to see improvement in employment, but questions of how AI impacts jobs and other things, we view this as one of the more secularly challenged spaces where the question is, how do you think about long-term demand? And it's much more challenging. The other three, the good news is, is that these are all healthy. In fact, you can see that each of the three are below their long-term vacancy average. And those three being industrial, residential, and retail. And so those three are all below their averages and all trending downwards. So very favorable. And generally the niche property types that we're invested in are generally favorable as well. And with that, I'm going to hand off to Frida Daly. Welcome. Hi. Good morning. Thanks, Jim. So turning to the next page, which is page 11, just digs a little bit deeper into the individual sectors that Jim had just mentioned regarding vacancy. So starting with office vacancy, as Jim had mentioned, has historically been elevated compared to the other sectors, currently at its peak around 18%. And if you look at the long-term average, it's been over 15%. So again, when we think about where this may be going, we do believe that office vacancy is going to continue to climb through the remainder of this year and through 2025. And perhaps comes down a little bit after that. But again, given the historical performance of office, we do believe that's going to continue to be elevated. And in more recent years, a lot of that has been driven by some of the work from home trends where tenants are really trying to understand their position in buildings, how much space they need to occupy. So we believe that trend is going to continue for the foreseeable for traditional office. Alternatively, if we look at the next page at medical office, which is a sector that LaSalle Property Fund is really focused on and overweights, we really like the trends within this subsector. Looking at it from the demographic side of things, medical office tenancy is largely driven by the over 65 age cohort. That's really the consumers that are visiting medical office buildings greater than the under 65 age cohort. And that's really the age group that's growing at a much faster pace within the US. Over 30 times faster than under 65 age group. And LaSalle, as a firm, has been investing in medical office since early 2000. And I think one thing that is very unique for the firm is that we have sector leaders for all the various sectors, but specifically for medical office as well. Given that we are focused on that, we have a sector leader that has been in this space for well over 20 years at LaSalle and even prior to LaSalle worked at a healthcare REIT. So really brings that expertise, that knowledge, that relationship base when we're looking at new acquisitions within medical office. And once we do own buildings, assisting in the asset management of that as well. So you can see that within the performance for the firm and within LaSalle property funds since our first investment in medical office in 2012. And then next looking at the apartment sector. So apartments have historically been really strong and had low vacancy. Over the last few years there has been peak vacancy and really that's been driven by excess of supply and a little bit softening of demand. But at the forward look forecast here is that with construction starts, given the challenges with being able to finance new apartment buildings, that's going to come down in the upcoming years in the near term. Which is going to have an impact in vacancy to bring that down. So we still do like the stability of the apartment sector. And with that we'll turn to look at industrial and retail. And then with regard to industrial, I would note that we were overweight industrial as a fund until about 2019. Prices started to skyrocket. And what appeared to be high prices caused us to pull back, I'd say, a little bit in new acquisition. Ultimately falling a little bit behind the odyssey in terms of industrial exposure. And the way to look at it is when that orange line dipped down to its lowest point, which was about 4% vacancy overall, but in some markets 1 or 2% vacancy, tenants were really paying rents that were probably non-supportable for them. And so we pulled back at that time and that's played out very well. Because what's happened is industrial prices have fallen 9 to 10% in the last 18 months. There's less competition right now for industrial properties and so we're actively buying industrial and what is a better environment. So we're at the point where you can see that orange line turning up and getting to about 8% vacancy. So at that position, a healthier market, but a little bit softer rents. And we're seeking to kind of increase exposure now ahead of what you see as this planned downturn. And the downturn is the downturn in vacancy, not a downturn in industrial. And that is, I would say, fairly certain because the amount of delivery, similar to what Freda said about apartments, the amount of new industrial coming to market is very low. And so you can see, if you look at those colored bars, what had been these dark blue bars that were the amount of new completions, now has fallen to a fraction of that. And you get a pretty good look at it. It's kind of like looking at demographics. You know that if buildings didn't start in 2024, they're not going to be delivered in 2025. So we're looking for this kind of rebound in the market to be something that will help stabilize that vacancy in industrial and view the current opportunity as an attractive buying time. With regard to retail, it's a little bit simpler of a story. Actually, if you look at demand, these numbers are pretty small, where you see that recently demand has been about 1 to 1.5% of inventory, so inventory being the total retail that's out there. There's been enough demand to fill about 1 to 1.5% a year, which you'd usually say, gosh, that's not that strong. And to be fair, it isn't. But yet what's happened, and this is important, on the lower right-hand side is actually the amount of retail space in the U.S. has declined and has been declining since about 2010 or so. Not to say there hasn't been any new retail space, but that retail space which has been removed because it is obsolescent actually has been greater than what's been added. So this has resulted in a very healthy, what we'd say vacancy ratio, and if you look at it on the left-hand side of the page, current vacancy for retail is 6.3%. And then you can go back and take a look at where it was roughly around 2010, it was up almost at 12%. So this process of not building much retail at all, some of it being taken out of the market because it's obsolescent, and just enough additional demand has resulted in a very healthy retail market. And fortunately for us, we have all of our investment in the type of properties that are on average 6% vacant. Our portfolio actually has a higher occupancy than that, in another way a lesser vacancy. But the malls still sit up at 10 or 11% vacancy, so we're very happy to not have any exposure to the mall market today. And then things that we're thinking about as we go forward, just topics of the market is, you know, how is the balance going to be? How much is the economy going to slow versus falling interest rates? And so, you know, the advantage for us is as interest rates fall, that helps the values in real estate, but a slowing economy helps slow demand, and that is not an advantage. And so we try to look and think about how in each market and each property those two are going to offset each other and seek those areas where there's a most favorable combination of the two. A cyclical turning point in real estate, and I think we're pretty nearly there. So you have a large portfolio that includes equities and bonds, and if you think of, you know, where the yields were on bonds a year ago, they were higher. They're now lower, not as good of a value. If you think of equities, the prices have gone up dramatically, and so not as good of a value. And conversely, what's happened to real estate, despite the fact that we're increasing income, the prices have gone down. So a lot of folks are looking at real estate now and saying, gee, this is the turning point. And turning points usually get to be pretty dramatic, you know, because you become ingrained in a way of thought, and the way of thought has been, oh, retail, real estate's been going down, and now you look at it and you say, gosh, there's really good, what we would call relative value there, and when that happens, there's usually a turning point and buying starts to increase. And we're, I would say, already seeing that as we talk about bids in the office. There are more bidders on every deal, and generally the bidding is just more competitive than it was four or five months ago. And a partial contributor would be the lending environment. The lending environment also has improved. So generally you're seeing the spreads, which produces the yields on borrowing, have come down. The amount of proceeds that lenders are willing to borrow is generally greater. And so we're seeing that improve, and that improves the overall health of the market, and will improve overall pricing. Not too important for us because we are a very low leveraged fund. So borrowing or financing is not a meaningful part of really our program. And then portfolio positioning, we'll get you started on that and then hand off to Freed in a few pages. But in the portfolio positioning side, we started on that first page, I mentioned, gee, we have this one page that depicts how you might think about where rents are likely to grow and where there's the risk of the market changing and things not performing well. And so the kind of poster child for where you don't want to be is in the bottom right, and that would be conventional, or what we call conventional or traditional office. Or commodity malls, which are those malls that are something less than the best of the best. You look at these, it's a very limited ability to grow the income for those. And also, there's some big issues of potential with regard to disruption. So you may end up having a worse situation than you think. And one of those examples would be, if AI means that there are fewer office employment jobs five, six, seven years from now, that will be a negative drag on demand. That's a secular change that makes the world different than it is today. Where we like to be, and where we've positioned our portfolio to be, is really in the upper right. And so as you look at those properties, warehouses, life sciences, single family rentals, self-storage, medical office apartments, everything really with the exception of manufactured housing we have in the portfolio, and then we have grocery retail as well. So we're very much focused on the green for these two reasons, good NOI growth, secular risks lesser, and then data centers are kind of a little bit in between. They have tremendous NOI growth potential now, but we believe there's significant long-term secular risks as to what a data center might look like 10 or 15 years from now. And so when you go to re-tenant that, when a lease is up, you can imagine when someone moves out of an apartment or an industrial building or even a retail space, the next tenant moving in will use it in a very similar fashion. But where we go with technology and data centers is hard to determine. So we view that as high growth on the NOI side, but one of the reasons we haven't invested is high risk on the secular risk side. And I think a lot of this page is, it really drives the belief and is the reason, again, why we have no redemptions in the fund, because people do believe in where we should be positioned and we're fortunate, quite frankly, to be ahead of most. And with that positioning, the next page really kind of summarizes it. So we've got about half the weight to office, so only 50%, roughly, with the underweight to office. Another strength of ours, we were an early investor, Freda talked about medical office, where we were very early, we were an early investor in life science, and that allowed us to get in, quite frankly, by the A-plus buildings, best location, best markets, long lease terms, well before those markets started to heat up and became more expensive. We have overweights, both to multifamily, for apartments, and single family rental. We believe that housing demand will continue to be strong and will be good to have an overweight. And on the retail side, we're basically at an equal weight, but with no exposure to malls, so happy to have that position. And then industrial, with the acquisitions made in the last 90 days, we're now approaching 30%, so even above the 28, because this picture is as of, I believe, June 30th. That will move up to close to 30, and we anticipate that we'll be in the low 30% range on industrial. And then finally, for us, other is predominantly self-storage. And that really is the portfolio positioning today. A thing that I'll note, because we got asked this question by an investor maybe six or eight months ago. They said, how did you get into all these places, and when did you get in? Did you just make all these investments recently? Because it seems like you're in all the right spots. And we said, no, let's put a timeline together. And so this page kind of provides the timeline of when we got into these things. So we were underweighting office as a strategic underweight back in 2010. And that gets back to that line that says office always has more vacancy than every property type. It just happens to be worse now. And then you can go through the different timings of these, but generally, the timing of them have been fortuitous, and the net result is we end up with a more diversified portfolio than your typical odyssey fund, and we have exposure to sectors that are more attractive by virtue of the fact that they have better rent growth potential and lesser secular risks. Thanks, Jim. Turning next to page 21 focuses on our LPF's geographical exposure across the U.S. So here we're showing where our top 10 market exposures are and showing where our competitors within the odyssey are in those same markets. So LPF has a slight overweight to the western region compared to our odyssey peers. And I just want to focus on some of the reasons why that might be. If you look at California and San Diego, we have nearly 7% more exposure compared to our peers, and a lot of that is driven by one of the niche strategies that Jim just mentioned in life sciences. So we have two of our larger investments in the fund are in life sciences, and again, we were an early mover into that sector, and we're focused on where we have tenants that are investment grade and really high market capitalization, so really the quality and stability of the tenants within life sciences, that's driving some of our exposure to San Diego. Another market I'd like to point out where we have a significant overweight compared to our peers and the reasons why are in Nashville and Tennessee. So that's a highlight of one of our medical office exposures in an asset called 100 Oaks. And our tenant there is an investment grade tenant, Vanderbilt University Medical Center, that has an extremely long term lease through 2035 that occupies most of that space there. So some of our overexposure, certainly very strategic reasons why we're invested, and it also highlights some of the niche strategies for the fund. Turning next, just a summary, most of the information we have gone over, but just to repeat, $8.3 billion fund with 26% portfolio leverage, which brings the net asset value down to $6 billion. In terms of the portfolio composition, as Jim had mentioned, I think a key highlight is that our portfolio occupancy is at 95%. And that has been consistent since the life of the fund and slightly above the occupancy level of our peers within the Odyssey as well. Which I think really is a testament to the quality of assets that we have within the fund to have such low vacancy. In terms of the fund investors within LPF, the majority of our investors are US based pension funds with about 24% of foreign investors in fund-to-funds and endowments rounding out the remaining capital within LaSalle Property Fund. And in terms of fund financing, again, we are 26% leveraged. The majority of our fund financings are fixed with about 14% that are floating rate and unhedged. Most of that is related to our line of credit that we use to fund opportunities outside of calling capital within the quarter. Today, we don't have any of our line of credit funded, because we do have available capital from other sources, so that is currently at zero. But we also have a variety, if you look at the chart of debt maturities, the dark blue bars are property level financings. Then we also have, at the fund level, various financings, one private placement with various tenors and term loans as well. So what we like to do within the fund is to provide staggered maturities, so that we don't have any significant maturity in a year that would cause an imbalance within the fund. And just the weighted average interest rate of the financing that we do have in the fund is at 4.4% with 3.3 years of maturity remaining. And then turning lastly to the fund investment, just going quickly over to the various strategies that we have. So for residential, just high level, we really do like transit oriented locations that are in major markets. So as an example, Senate Square, we highlighted here, which is in DC, is located directly across the street from Union Station train station. So we like that access and proximity. We also like suburban locations that have really high quality schools. Our research team has done analysis in terms of in greater school districts, they usually have higher performing assets. So an example of that is in Denver, in the suburbs of San Diego. And we also have our investments in single family rentals, which Jim had mentioned as well. We entered into that strategy just under three years ago today, and have a portfolio of over 1,000 units within SFR. I'm going to turn the chair over to Chief Weathers. Thank you so much. Thank you. And I understand from Chad that that was kind of the one minute warning. So I'm just going to wrap up real quickly on our investment summaries here before we head on over to questions. If you look at, just turning the page for me, industrial, primarily focused on large path of good markets. So we believe the major markets, Los Angeles, Atlanta, Chicago, disproportionately are a better place to be. And these are where we have heavy exposures to each. We also have something called truck terminals, which is a specialty we got into early and we've noticed that'd be a great investment because they're very hard to. And so those have been advantageous as well. On the retail side, you can kind of see the type of centers we have. It's generally the highest quality neighborhood centers with the best grocers in strong and affluent markets. So this is San Jose, Houston, Los Angeles, and Frederick, Maryland is just outside of D.C. And those have all done very well. You can see from an occupancy standpoint, three of the four are at 98.9% or better in terms of occupancy. And so we have very good, strong, consistent performance with this. And also very good, consistent, strong performance with the life science and medical office as well. And then I think we've got one traditional office in here on the right-hand side. But our life science and medical office really are best of the best buildings. So when you take a look at Illumina, Medical Hermann, 100 Oaks, these are all great tenants. Medical Hermann, I'm sorry, Memorial Hermann, Medical Plaza is occupied predominantly by Memorial Hermann, which is an investment grade and one of the largest hospital funds. And some of you may be familiar with the Texas Medical Center, because it is renowned with regard to the healthcare you get there. MD Anderson has its cancer-solving headquarters there, et cetera. Very highly sought-after areas. In 100 Oaks, Vanderbilt University is our primary tenant there. And so it is the largest grouping of medical that Vanderbilt University has outside of being on its campus. And they continue to expand with us. So each of these really is very strong. You can see, actually, a number of the ratings. I started to talk about them, but it isn't worth pointing out top ten is what the ratings are here. So you see ratings across the board, going from triple B, up actually to a double A minus, and then back to A. So that, in terms of credit, is exceptional. Most folks are happy if they have a good percentage of their portfolio in investment grade tenancy. In this case, it's the entirety, really, of what's represented on this page, and is indicative, in particular, of how strong our portfolio is. And ramping up, I'd say just a couple of things. We do work for many pension funds. We consider that a privilege. As Chadwick said, at some point it gets to be personal, as he noted. His parents are pensioneers. My father-in-law, police officer, 30 years with the Cleveland Police Department, was a sergeant there. 92 years old, and still collecting a pension. And I get to work on his pension, because we have Ohio Police and Fire as one of our investors. So we'd love to have the opportunity to work with Lexington Police and Fire. We have a great portfolio, and given the opportunity, we'll be good stewards of your capital. And with that, I think we're two minutes over, and we'd love to move to questions. And I think, yeah, we have questions for about 13 minutes. Does anybody have any questions? Commissioner. On page 25, it addresses the section of your portfolio as it applies to residential properties. When it talks about single-family rentals, the portfolio has approximately 1,061 of those. Are those yearly, monthly, vacation rentals? What exactly are those? Or is there a combination thereof? They are yearly. So it's a lot of folks who've decided to move from renting an apartment, they'd like to get into a house, and either because they just don't have the amount of money necessary for a down payment, or because they want flexibility, they're going to rent a home. They will rent for one year at a time. They typically renew at a higher rate, though, than apartments. So even though they rent a year at a time, they're staying, on average, more two or three years, where your average apartment renter's probably, let's say, about a year and a half. And the occupancy in our portfolio, to give you examples, our multifamily occupancy, the apartment occupancy, about 94%. We're at 97% for the occupancy in single-family. But it is longer. It's not vacation rentals or short-term. Thank you. Mr. Puppet. You sure? Absolutely. Okay. Your diversification, I just got a question. You got your 5% into others, and I know it says something about self-storage, but what is that sector? I mean, what is in that sector of other? Of other? It is, you know, I'm going to say 90% of the 5% is self-storage. The other half percent is we own two parking garages, one in downtown Miami and one in downtown San Francisco. And those were both bought as what we call covered land place, which just means they're earning income. But eventually, we intend to sell them to a developer for a much higher value than the value of the garage is today based on the income it earns. But it's really 90% of that is we just happen to have two parking garages in addition to the self-storage. The other question, and it was a question that was brought up by the mayor earlier. I noticed that you've got a large exposure to areas like, you know, California where you've got the earthquakes. I've got an exposure to Florida, and I'm right now getting my third hurricane in a little over two years. So you know, it obviously has a factor on values, obviously, or I think it does anyway. Yeah, no, we do a lot of work in both those areas. I'd say in particular with regard to earthquake, what you have when we buy a property is something called a probable maximum loss calculation. And if it doesn't have a low enough outcome, which means how much your property would be damaged in the instance of an earthquake, if it doesn't have a low enough outcome with regard to damage, we just won't buy it. The other thing is if it does have a low enough outcome with regard to damage, that makes it insurable. And there are folks, believe it or not, who choose not to insure their buildings in California. Certainly not institutional investors, but you know, our buildings are ones that have a low probable maximum loss, and that that loss is something that is an insurable risk for us. Similarly, we look at Florida, and you know, the keys for us are to not be near the coastline. Generally, we're not taking flooding risk in that regard. We do have some wind risk, but we spend a lot of time. The age of the building, the way it's constructed, the way the roofs are fastened on industrial buildings, all those things get into the resilience of that. There's something called, which is a little interesting, it's new, it's relatively new, called a value at risk measure for your entire portfolio, and that's how much your portfolio is at risk from these various risks. Our BAR is, gosh, I forget the exact percentage, but it is a fraction of the Odyssey's value at risk in general. So we spend a lot of time up front, you know, making sure that where we are taking risks, and you are taking risks in California with regard to earthquake, that we understand the risks that we're taking, we mitigate those, we make sure the buildings mitigate those, and then we insure as well. I know, you know, your exposure to office, which is low, which is good, and do you expect it to stay about 7% or are you going to, what's your thoughts on that? I mean, you know, I mean, the forecast is you think it's going to go up eventually, but I'm not so sure that it is, because things are working, the workers are working from home, are doing the work that they could do at an office, why pay the overhead, you know, and I get that. So what's your thoughts on that? Yeah, no, that's a good question. So within our portfolio at 7%, we only have 10 traditional office assets, we actually have one that's under contract for disposition at the end of this year. So that's going to reduce some of the exposure to smaller investment. But our focus for the fund going forward is really in increasing our industrial exposure. So as Jim had mentioned, we're at 28%, it's going to be close to 30% certainly by the end of this year. So increasing our exposure in the sectors that we like, like industrial, certainly we still like multifamily, self-storage is an area that we've been increasing, just naturally our exposure to office will come down. We don't have, we have high quality traditional office assets, so don't have a need right now to necessarily dispose of any, you know, particular asset in order to balance that out, other than the one that I said that is under contract for sale. Anybody else have any questions? Chief? Thank you very much for the presentation, and I was certainly impressed by the fact that you all seemed to put a lot into forecasting and your research into the markets. So if you could talk maybe just a little bit about the methodology that goes into the forecasting, and then potentially what you guys are going to be focusing on as a next future place of interest, things like data centers or things like that. It's interesting, I think on the forecasting side, you know, our research group is always tweaking their models. It's a multivariable model, probably has seven or eight models. One of the biggest things you need to forecast is rent growth. You know, a lot of the other things, discount rates, exit cap rates, largely get determined by the capital markets. And so with that, you know, they're usually looking at it and saying historically, how much supply has there been, how much variability in supply has there been in these markets, how much construction is currently underway, so they pulled the permits that are what you can see, so to speak, the permits that are in the pipeline, and they plug that all into a forecast and we get this kind of, you know, run of what is roughly five years of variability in potential income growth, and then that tends to stabilize in the sixth or tenth year just because it's harder to predict over the longer term. And that's, I would say, one of their, you know, key models that we do. They update continually, so gosh, it seems like in every quarter we get an update with a ranking. Usually they're covering 60 to 90 markets and you're getting one of three ratings where you're getting a, you know, favorable, a neutral, or an avoid. And that largely comes out of the model I talked about, which really relates to just rent growth. That comes out of then, okay, what do you have to pay in that market to get that rent growth? So in some markets you may have great rent growth, but what you have to pay actually makes it not a good deal. And so research does the hard job of kind of trying to put everything on even footing And then they share that information with the portfolio managers as well as with our acquisition officers. And the second half of the question? Just wondering what you sort of see coming as far as trends. I was just going to add to what Jim had mentioned. So for the analysis that research and strategy team does, they do that by sector. So it's looking at the various markets and it's ranking the industrial markets against one another, and then apartments, et cetera. And then that's at a broader level, and then on an individual asset basis. So if you're looking at to investing in an opportunity, then the research team digs even deeper to focus at the micro level for that specific asset in that sub market. So it really happens on every stage of it for research and strategy. And then so they also prepare, you know, where do we think the relative value is in certain markets and sectors that we should be focused on. As we mentioned, right now, you know, industrial is certainly an area that is of greater focus for us, just given the relative value of the returns that we could achieve in industrial compared to, say, even apartments today. So that is certainly an area of focus for us. In addition to self-storage, we have increased our self-storage exposure in 2024 as well, given the relative value. We got this kind of synopsis from Calum, because one of the things that Mary talked about, uninvested commitments, and said you all had $210 million. Do you agree with that? Yeah, it was $210 million on June 30th, but we called some of that capital right after June 30th, brought it down to 100 and I think 55. We've called some more of that capital just after October, and so that we're now at 130, because we've called capital to help us with new investments, but we've also had more new money coming in. So the $210 million number has moved to $130 million, and those are really just the recent investors, those that have invested since, I'm going to say late June, up until today. Their capital, we expect to call that shortly. So how long, like, we invest in Q, how long will our money sit in the Q before it starts to be invested? We expect to call the vast majority of the Q really at the end of the year, and then the next call after that would be about March 1, and so those who are making commitments in Q4, we'd expect to call, depending on how many other commitments come in in Q4, some are all of their capital, I shouldn't say March, it's actually about April 1, some are all of their capital on or about April 1. And also, can you discuss your fees a little bit? Yeah, our fees are, you know, we're designed to be good, and I think that when you look at the net versus gross, it indicates certainly better than the Odyssey on average, but as we flip to the fee page, which I guess is in the back in the appendix, so thank you. Page 34. Yeah, page 34. You know, it's very simply, it's just a grade down, so the more that you invest, the lower your fees go, so the first 10 million charged 100 basis points, the next 40 million is charged 90 basis points, and then once you get above 50 million, anything between 50 and 100 is charged 80 basis points. So as you increase in size, fees go down, but we also point out, we've done this at the bottom, because we didn't have this part at the bottom until more recently, but, because someone told us, they said, well, do you charge any acquisition fees, and we said no, and we don't charge disposition fees, and they said, why do you ask, and we said, well, some people do. So we'd just like to make clear, we don't charge any other fees, no financing, no acquisitions, no dispositions, we have singularly an asset management fee, and that follows this schedule of as you get larger, it migrates down with 100 basis points, or 1% for the first 10 million. We have about 30 seconds. Does anybody else have any questions? All right. I think that's it. Thank you all very much. Thank you. Thank you, sir. Thank you. That's always my last question. Is it only 40 million that we're going to allocate to real estate? Yeah. Yeah, because, I mean, we've got about 90, but we're in two different markets. Two different companies. Yeah, it's going to be roughly 40, 45 million. Yeah, we'll be in recess until about 11.20, so, in recess until about 11.20. Okay. That's not the first time you're not in the office. No, no. We're just going forward. Going forward. Going forward. We've never done it before. Thank you. Thank you. By the sea. Trying to find what is healing. Living in the land of the free. Some of them are running from lovers. Leaving no forward address. Some of them are running to Zaganjan. Some are running from the IRS. Late at night you will find them. In the cheap hotels and bars. Hustling the senoritas. While they dance beneath the stars. Spending those renegade pesos. On a bottle of rum and a lime. Sing and give me some words I can dance to. Or a melody that rhymes. First you learn the native customs. Soon a word of Spanish or two. You know that you cannot trust them. They know they can't trust you. Expatriated Americans. Feeling so all alone. Telling themselves the same lies. That they told themselves back home. Down to the banana republics. Things aren't as warm as they seem. None of the natives are buying. Any second hand American dream. Late at night you will find them. In the cheap hotels and bars. Hustling the senoritas. Do we have everybody here? Is Dave, are we waiting on Dave? Does he need to be here? No, okay. We are ready. Hello, how are you? Doing well, how are you? I'm over, I'm somewhere over here. I'm looking, I'm looking. I'm kind of scanning the room here. We're giving everybody 45 minutes so. Or less. Or less, no. The other two groups are long winded. So when you want to start, go ahead. Very good. Wait a minute, how are we missing? 30 minutes for the presentation and 15 minutes for questions. Got the shot clock, we got it. All right. Appreciate it. Appreciate it. Well, first, thank you for the time and thank you for the opportunity to speak with you. My name is Rich Pence. I reside in the north side of Indianapolis, a town called Fishers. I'm a client advisor with principal asset management. 21 years of experience, 12 of those with principal. I represent the suite of specialized investment boutiques across the platform. I would like to share with you a quick story. I work out with a couple of police officers. A good friend of mine owns a CrossFit gym. And every August, we always have a charity workout for fallen officers. So that's something that's certainly near and dear to my heart. We've been doing that for five years now. And I'm pretty proud of that because, you know, that's where we started. You know, which is pretty neat, right? As far as firefighters go, my son, three and a half years old. I feel like during the summer, it was probably every week, we would visit the local station. And they were so accommodating, you know, with my three and a half year old, right? Climbing up, you know, the sirens, everything. I will say, you know, look at my house. You know, fire trucks, you know, they actually shoot water. You know, so my son terrorizes our dogs. And also we got, you know, police vehicles that are always catching, as my son says, the bad dudes, right? So yeah, so he's into monster trucks, police, all police vehicles, and certainly fire trucks. So I say this because I appreciate what you do. So thank you. Thank you. Thank you. Joining me is Managing Director, Portfolio Manager, Darren Kleiss. Darren has 32 years of experience, 30 with principal. His responsibilities include portfolio strategy, investment activity, performance, asset management oversight, and meeting with fine folks like yourself, client engagement. If you would please flip to page four in the presentation deck. At Principal Asset Management, our investment capabilities span across all major asset classes, both private and public, totaling over $554 billion. Over $97 billion is managed by Principal Real Estate, which is our flagship boutique. As a top ten global real estate manager, we are one of the few that operate on the four quadrants of real estate. Demonstrated by our historical success, the depth of this platform gives us a competitive advantage and truly differentiates us from our peers. Now when I think about this team, when I think about this strategy, two words come to mind. Stability and consistency. And that's stability and consistency across the people, the process, and performance. And I would say there is no better person to tell our story and talk about this strategy than Darren Kleiss because he's been on this team since 2007. And now I'd like to turn it over to Darren. Again, appreciate your time. Thanks, Rich. Maybe draw your attention to slide number six in the book here. While I'm representing our team, supported by a good cast of characters back in the home office and that we travel around the portfolio with, there's five of us that are dedicated to the strategy here. I've been with the firm for 32 years. And Kyle Elfers, who's my co-portfolio manager, has been in the business for 25 years, been on this fund for 13 years. Bridget Lechtenberg for 18 years. So a long track record. And Principal's a very good place to do what we do and to run a real estate strategy. But supported by a number of other very talented professionals. Turning to slide seven gives you a real high-level view of the fund and kind of where it sits at the end of the second quarter. And I apologize, some of these materials are a little bit dated. We're just putting together our third quarter materials here, but I'll provide some updates where I can. So this fund's been around since 1982. Principal's one of the largest providers of 401K plans in the country, and this was one of the original investment opportunities for the 401K business back in 1982. So it's got a long track record of defined contribution investing, but really the bulk of the portfolio today of our investors, 75% of the portfolio, is groups like yourselves. Police and fire funds, local government, state pension plans. So really defined benefit plans are really the vast majority of our investor base. Our leverage ratio, and that's simply the amount of debt divided by the total assets of the portfolio, is just under 26%. A couple key indicators that we as a team pay a lot of attention to. One is our one-year net absorption, and that's simply the amount of square feet that are leased in the portfolio today that were not leased a year ago. So good track record of moving tenants into the portfolio, and those tenants, if they haven't started already paying rent, they will soon, at just under 900,000 square feet. So on a well-occupied, high-quality portfolio, it's hard to generate those big gains in occupancy, but good track record of the portfolio doing that. Finally, a couple updates on our investor cash flows at the bottom there. Our contribution queue at the end of the second quarter was 406 million. We've since called $100 million of that capital to fund, so this is down to just over 300 million today. That's primarily one large investor that's going to pace in. It's the New York Common, the public pension plan of the state of New York. They're going to pace in 100 million per quarter. And then the withdrawal limitation, we've since made a payment to the investors impacted by that in the amount of 300 million, so that sits at just over a billion dollars today as we sit. So it's quite likely that a lot of those investors that are in that withdrawal limitation, when they realize they'll probably get their money out at what may be the bottom of the market for core real estate, they'll probably rescind those requests. That's certainly what we saw in the global financial crisis. We're at a similar sized outbound queue, but we saw about $370 million of rescissions when investors, for the reasons they got into the queue, were that they were over allocated their real estate or they thought they could avoid some write downs that were coming in real estate. They rescinded those requests when it became clear that they were going to get their money out at what then was the bottom of the market. Turning to slide eight, a couple updates on our strategy for the portfolio. Very disciplined with our investment approach here. For the past two years, we've been pretty defensive with the portfolio, bringing down things like leverage and some of the intentional risk taking within the portfolio. We're really pivoting that. We see it as a great entry point into real estate and a good time to get back on offense here, so we're really pivoting our strategy to not only stay defensive, but also get more selectively and pivot onto the offensive. We think it's a great time to buy some great adds to the portfolio right now on very high quality real estate that's been repriced for this current real estate or interest rate environment. Continue to focus on monitoring and mitigating risk, not certainly doing away with all risk, but certainly just be very careful and intentional about the risk that we are taking and pay a lot of attention to that. And the last thing is there's a lot of things that affect real estate values that we can't control, like interest rates, but we just spend a lot of time at principle paying a lot of attention to the operations, whether it's rebidding insurance, overseeing the operational budgets at the property on a regular basis, and just really paying a lot of attention to lease negotiations with new tenants. We're very focused on that. You can see the vast majority of the portfolio is stabilized, well leased properties, but we do have a couple other areas for higher risk-taking, like buy an empty building and take some leasing risk or do some ground-up development risk, but that's a relatively small part of the portfolio. Slide nine gives you a sense where the portfolio is invested around the country. We don't have anything in Lexington, but we do have a number of warehouses in Louisville just outside of the UPS Worldport. Users love that location. They can get stuff to UPS at midnight and still have it anywhere in the country the next morning, and so it's one of the few locations in the country that they can do that, so we own a number of warehouses right outside the entrance to the UPS Worldport in Louisville. It's a great market for us. But it gives you a sense of the blue dots there. It gives you a sense of the markets that were overweight relative to our benchmark. We're part of the Odyssey benchmark. The other firms that you had in there are also data-contributing members to that. This is where we've taken intentionally larger weightings relative to those investments and those other funds are in the blue dots, so we don't see a lot of repositioning that we need to do with the portfolio. We don't see a need to sell out of a lot of markets or overweight other markets. We're really pretty happy with the way the portfolio is positioned today. Starting on slide 10, we step to the main four property types that are in the portfolio. Our highest conviction property sectors are industrial, and residential. We've got a slide on each of those, and we're already overweight to both of those sectors, so it's not like we're playing catch-up in any of those sectors. We've got very strong assets, and we would selectively look to add to the portfolio in those sectors as well. Turning to slide 12, one of the sectors or property types that's getting more attention and really the softest part of this portfolio, but also the overall commercial real estate market, is office. Our office portfolio is quite a bit different than the overall market for real estate funds within office. You can see we don't have any holdings in Boston, Chicago. We've got one small building in New York that's under contract to sell. It'll actually sell for above our appraised value in the fourth quarter here. Los Angeles, we don't have anything. San Francisco, we don't have anything. In Washington, D.C., we've got two buildings, one that's 70 percent lease to the city of Washington, D.C., and the other is Amazon and AT&T, our largest tenants. We're about a block from Capitol Hill. Both of those buildings are 99, 100 percent leased and very good buildings, but in a very difficult and challenging Washington, D.C., office market. We're clearly outperforming there. So it is a market that we're overweight, but we've got two very high-quality assets, and we'll probably look to pair that back, but right now is not a great time to sell performing office buildings, so we'll wait for a good time to do that. Slide 13, probably the surprise of the portfolio over the past couple of years is just how strong retail has been. It's a small part of our portfolio. We're equal weight, but most of our retail holdings in this account are grocery-anchored or what we call necessity-based retail or neighborhood and community centers. The property pictured here on the bottom right is actually in Fort Myers. It says Cape Coral, but it's in Fort Myers, Florida, so we're obviously watching the hurricane quite a bit, but we've had a lot of good things happen at that center. Nordstrom Rack opens next week. Capitol Grill just opened this summer, so it's a center that's really doing well. We had a bankruptcy of Bed Bath & Beyond there, and we replaced them immediately with Nordstrom Rack. So it's a good idea. The kind of retail we have in this portfolio stays well leased. Those necessity-based retail stays well leased, and we're seeing good what we call landlord pricing power and able to get good rental rates. In fact, when we replaced Nordstrom Rack for Bed Bath & Beyond, we more than doubled our rent that we were getting on that space. We had to put some money into the space, but we more than doubled our rent from Nordstrom Rack. So we've got an upgrade in tenancy, an upgrade in income, and for good real estate. So those are the main four property types. We've also got exposure where we're seeing more of some of the more interesting opportunities for what we call alternative sectors like data centers, manufactured housing, single-family rental, and we've got more exposure in this account than our peer group to some of those what we call niche sectors, and we've got some good in-place partners that we'd like to see that really grow from 14% of the portfolio today to 25%. Slide 15 gives you a sense of our top ten properties, and we've got a page on each of those properties further back in the materials with a picture and a map of each of those, but it gives you a good sense of the quality and the diversification we've got in the portfolio. And then on slide 16, we've got a very strong balance sheet. We've come through this current environment where a lot of real estate investors put a lot of stress with refinancing debt or outflows, and so we've really got a strong balance sheet. We've got a very level debt maturity schedule here, and we think this is one of our competitive advantages. It's really been a good time to be a low-leverage real estate operator in this environment where we haven't had to take out debt when it's very expensive in these higher interest rate environments, and so we don't have a lot of debt coming due in any one year. In fact, 86% of our debt is fixed, and we've got a very low cost of debt capital at 4.2%. We think this is going to be a competitive advantage and serve us well going forward as well. We present the returns a couple different ways on 17 and 18. You can see returns haven't been great in this environment where we've seen even good quality properties get repriced for the current interest rate environment, but we've weathered this better than the market or the benchmark that we participate in, and so you can see our relative return relative to both measures of the benchmark, either the value-weighted or the equal-weighted. Our returns are on the far left-hand side, the blue mark, so it's actually a really good time, and there's a number of investors that are doing what you're doing and considering an investment in commercial real estate. They see it as a very attractive entry point into a very high-quality, diversified portfolio that's been repriced for the current interest rate environment, so you can see we're outperforming the benchmark over all time periods, not only in terms of total return, which is what the graph shows, but also in terms of our income return, and so we're getting more of our return coming from income, not banking on appreciation, which tends to be more speculative in nature over all time periods as well, and we think that's going to continue, so we think our track record of outperformance is going to continue. We always thought interest rates would go up. We didn't think they would go up this much this fast, but we really built this portfolio with an eye toward growing our income and really outrunning the impacts of the higher interest rates, and you can see our projection on slide 19 there of what we think our income is going to do going forward. We see some pretty muted income growth here in 24, but we've got a number of opportunities in the portfolio where we expect to really grow our income by double digits kind of rent growth, and we've got a track record of doing that at twice the benchmark you can see at the top of slide 19. We've grown our income in this portfolio on an average over 10 years at 6.2%, whereas the benchmark has grown on an average of 3.1%. So that's part of the reason that we've been able to outperform is that we've got a portfolio of properties that we've been able to grow our income. A couple things that we've got more details on that income growth on slide 20, but slide 21 just gives you some things that resonate with some of our current investors and prospective investors here. Again, we don't have a lot of repositioning with the portfolio. It's a very high-quality portfolio that's been repriced for the current interest rate environment that's also doing very well in the current market. We've got a number of other pages in here. I'll maybe stop and see what questions that this group has. I'm happy to go into any more of the pages that I've covered but also the pages that I maybe skipped over here at the end. Anybody have any questions at this point? Commissioner. Referring to slide number 11, sir, you talked specifically about the current allocation that 3% is in single-family rental. Again, is that yearly rental or is that vacation rental or what is that? Yeah, it's two things. One is it's a scattered site single-family rental portfolio in growth markets where we own about 290 individual homes but also a purpose-built build-for-rent what we call community just north of Houston, Texas, just outside of the woodlands in Texas. So it's a purpose-built. It's like an apartment community but whereas everyone has their own home. So it's purpose-built. You have your own home. You have a backyard. You have an attached garage. You have shared amenities like a swimming pool and a fitness center and all the things that people like about apartment living. You can do lock and leave. They don't have to worry about lawn maintenance. We've got kind of a cut-through path to an elementary school. So it's two parts really. It's a small part of the portfolio but it's a part of the portfolio that's actually doing pretty well. In the current interest rate environment and elevated home prices, unfortunately more people are in the rental pool for longer and so we're providing just really a variety of residential solutions for the market. Okay, on that same page it refers to manufactured housing. What is that referring to? I know what a manufactured home is but how are you investing in that? Yeah, we've got a picture of one of them on slide 14. The top left of 14, this is a park that we have in Tucson, Arizona. It's called Rincon. We have two, Rincon East and Rincon West. It's 55 and older retirement, primarily retirement housing for people that, you know, snowbirds that want a warm place to go in the winter. It's a very affordable place where people on fixed incomes can go and still have a great place to be over the winter months. So that's really what it is. Most of our manufactured home communities are like this. They're mobile homes and they're not all ages mobile homes. They're primarily 55 and older communities. So think Arizona, think Sarasota, Florida. We have one RV park in Orlando. So like if you bought an RV during COVID, which the sales of RVs were off the chart, and you're looking to go to Orlando and take the family to Disney World, chances are you'll be staying in our park there. We've got a park there, a very high-quality RV park in Orlando, Florida. So it can be a number of things. But it's not a large part of the portfolio, but it's actually probably been one of the better-performing parts of the portfolio. So, again, it's a small part, and actually the pricing has remained very strong there, and we've seen great operational growth in that sector. Okay. Anybody else? You? Go ahead. Ready? Okay. I noticed you've got like $22.3 billion in private debt. What's the default on that? You know, I don't work in that space, but we don't. It's primarily debt for our life insurance, our parent company, our life insurance company. So I don't work in that, but it is a big part of our business, part of our four-quadrant approach. We're able to talk to, and one of the reasons we're able to get very low leverage rates on this portfolio is we communicate with those groups very regularly. But it's a very low level of default on that. I don't have the exact number, but it's a different group that handles that for me. We don't have any debt. We're not loaning other people money in this strategy. We're in the business of buying properties, and we actually get debt from other insurance companies for our properties in this portfolio. But that's really kind of the legacy of Principles Real Estate Businesses. We were a very strong real estate lender on behalf of our life insurance company. Well, you know, I was just looking at this. You know, it says commercial mortgages and high-yield debt. I mean, you know, for me that rings a little bit of a bell, you know. Usually you have considerable default in a lot of areas. Anyway, at least my portfolio does. Yeah, we're a very, you know, core real estate. We're a very high-quality real estate portfolio. There's none of that in this portfolio. The company participates and invests on behalf of various strategies in some of those other areas, but we don't have any of that in this fund. Another question I have is I noticed that you've got a lot of diversification, but there's like 49 percent of it's on the West Coast. You know, there's always the concerns of earthquakes and so forth, Florida. And by the way, I have property in Cape Coral, and my wife loves to go to your bell tower. That's great. And, you know, spend my hard-earned money. But, you know, there's also a concern there. I mean, you know, right now we're getting hit by the third hurricane in barely over two years and two in two weeks. You know, do you all look at those areas, you know, as a problem? Yeah, certainly there's risk no matter where you are in the country. I mean, so there are risks. There's just different kinds of risk, and we think that diversification, having a diversified portfolio across the country really minimizes some of the risks of a major disruption due to one thing. You know, some years it's windstorms in Texas, and that raises our insurance premiums. I'm guessing next year when our renewal comes up, we'll hear about, you know, losses that the insurers took in Florida. But, yeah, we carry a lot of insurance. We're a large buyer of insurance. That's one of the ways that we mitigate risk in the portfolio is we buy insurance for things like that. But, you know, we see that as the benefit of a diversified portfolio. It's like if we had the whole portfolio in some of these markets, we'd probably lose a lot more sleep than we do. Okay. You also hold, I believe it's like 15% in office space, I think is what it is. I mean, you know, obviously office space since the pandemic, you know, has been a very trying, is that a nice word, trying? It's the softest. You know, obviously. It's the softest part of the portfolio for sure. Yeah. And, you know, compared to some of the others that we've looked at in the past, you're a little higher than most at 15% of your portfolio. Why is that? Yeah. We were at one point office was actually one of the better performing property types. Back in 2013, we had 47% of this portfolio invested in office. Since then, we've sold $3 billion worth of office. And so in 2015, we were 47% office and we've sold $3 billion and now we're underweight office. And in addition to selling a number of properties at a good time, most of that was sold pre-COVID. We've actually written our office values down with our external appraisers. We've written it down 50%. So the office that we have in the portfolio has been written down 50% from pre-COVID levels. So from the end of 2019 to today, our office portfolio is down 50%. That's a huge amount. But it really reflects the realities of how challenging that business is. But while we've written down 50%, the benchmark that we compete against has only written down their office 40%. So investors going into those funds are buying office at 25% higher values than our office. So while we do have less office than the benchmark, probably the biggest differentiator is ours has been written down and that if you'd be coming into our fund, you'd be buying in at a lower price. And our office, as I said here, we don't have any office in a lot of those hardest hit markets. We've got the type of office, I mentioned that office building we have where Amazon does their government affairs in Washington, D.C. But our largest office building is here on the right side of slide 12 where 70% of that building is leased to Google, downtown Austin, Texas. We're 100% leased. We're leasing at some of the highest rents we've ever gotten in the building. We just signed a lease for $54 a square foot. We've never signed a lease for that high in the building right now. So we're seeing there's really a flight to quality kind of what we saw with retail in the late 2000s when everyone thought they'd never buy anything at a store and brick and mortar retail were dead. We're kind of seeing the same thing and would expect the same thing to happen with office where there's going to be a flight to quality. A number of the buildings are going to be torn down or converted to residential and the high quality office buildings will remain and do well. We're already starting to see that migration to the higher quality office buildings. So we've got Google, CBRE, Deloitte, the accounting firm, a very strong tenant roster. You walk in the lobby of this building and there's a ton of energy and that's really where the tenants want to be. They want to be in the higher quality. It might take less space, but they want to be in the higher quality buildings. And I think we're well positioned to benefit from that trend. So we've got Google there and Seattle. It shows we've got an office building in Seattle, but our building there is actually in Bellevue. It's on the east side of the lake from downtown Seattle. It's really where Amazon has said where they're going to grow and where their growth has been in the Pacific Northwest region is in Bellevue, Washington. And our largest tenant there is Salesforce, and we're just in the process of renewing them right now. So we have the Salesforce Tower in Bellevue, Washington, and we've got a number of other tenants as well. We've got Sony. They kind of administer the PlayStation platform. So if you've got Sony PlayStations, that group is in that building. In addition to Salesforce, we've got Visa credit cards in that building. And so a good, strong tenant roster, and I think we'll be well positioned to benefit from that flight to quality. That's really already happening, and some of these older buildings are probably going to be removed from the stock, and then we'll probably get healthy again in the office sector. But it'll be a while. So we're underway to office. We think it'll probably be an underperformer, but we think we've got it valued and marked right in the portfolio for our investors. In your property growth, I noticed that in 2020 you were down 2.8%. What happened? I'm sorry. What page are you looking at? This is page 19. That was really because we had a strong balance sheet in 2020. We worked with a lot of our tenants. We deferred rent during COVID, and so we knew we had to partner with a lot of those tenants to get them through. And so we went with them, and we made cut deals with them where we deferred rent in 2020 when their business was down, because we knew we wanted them to be with us when we kind of came out of that. And that's exactly what they did. And actually what happened with a lot of those tenants is they said, oh, no, we don't want to defer that rent. We want to pay it. Then we can get reimbursed from PPP or different things like that. And so just closely working with our tenants and understanding their business needs and just knowing that we had to partner with them, we had to walk through that period of time with them. And having a strong balance sheet, we were able to do things like that that made sense in the long term, even though it was kind of a setback in 2020. Okay. Anybody else have anything? Can you discuss your fees? Sure. I think it's like 27. We've got our fees there. We've got our chart with our fees. And probably a couple things to note here. So, you know, if you made a, you know, $25 million plus $1 investment, you'd be at the 95 basis point fee level. It would not be, you know, you wouldn't pay, you know, $110 on the first $10 million and then $100 on the next $15 million. All of your capital would be at that 95 basis point fee level. And this is an all-in fee for principal. And it's a little bit different than some of the other real estate offerings. We have no success fee. You know, you participate 100% in the upside of the fund. We don't take a success fee out of this, as well as we don't charge for acquisitions fees or disposition fees, financing fees, or bill our in-house legal to the fund like some real estate products do. It's really an all-in fee that you pay to principal, our investors pay, and then we run our business out of that fee. You don't pay travel costs or anything like that. It's an all-in fee. So that's maybe a little bit different than some real estate funds, but it's an all-in fee. One more question. Callen gave us a little cheat sheet on you all, and it talks about your entry queue. It says you have $406 million in entry queue. Can you discuss that and how long will our money be sitting in the queue and stuff like that? Yeah, I would say we'll probably call capital from that contribution queue within the next quarter. So I would say it's probably a one-quarter queue. As I mentioned, our largest investor is New York Common, and it's public information that they're in our contribution queue, and they're going to pace in $100 million per quarter. And so we've got a pacing plan. Our contribution queue is non-binding, so if you get in the queue and before you call the capital, you change your mind or something, the market drops out, you can change your mind. It's non-binding up until the time that you fund your capital. And kind of interesting, New York Common committed to our fund back in 2022 before we started seeing the run-up in interest rates. And we actually told them, we know you committed $500 million to the fund, but the last thing we want to do is call your capital and write it down. And that's kind of what we see happening. And so most of that capital in that contribution queue has been sitting there since 2022. If we don't think we're seeing good opportunities to invest that capital, we're not going to call that capital. So that's, again, maybe a little different stance than some real estate operators. But it is non-binding, and the last thing we want to do is call your capital and write it down. Anybody else got any questions? Go ahead and continue. That's all I had. I was just curious about a lot of your investments, particularly in California, and some of the projections about their economy that's going on there. Do you all make plans for that, or have you made plans? And what are they? Yeah, California's been a great place to be invested over the past several years. We've actually, like the concern you're raising, we've grown concerned. We pay a lot of attention to population and employment growth. And California benefited from those tailwinds for a number of years, but they're probably going to be hurting a little bit from that. So we'll be very selective in California. Most of our exposure in California is industrial in the Inland Empire. That's going to benefit the Port of Los Angeles and Long Beach. It's going to benefit, and there's going to be demand there, regardless of population growth. So we're very focused on owning the right buildings. But we've become concerned as well, and I think that you'll probably see us, on the margin, trim from California over the next couple of years. We just sold a mixed-use asset in San Diego in the third quarter of this year, again, for some of those same reasons. And we would like to reinvest that capital into some of the more growing markets. Nashville is an obvious place. We don't have any holdings in Nashville. We'd love to be in Nashville. We think we're probably missing out by not being in Nashville. So for new capital that we're getting into the fund, we want to make some investments in some markets like Nashville. We've got investments in Raleigh and Charlotte. But some markets like that that we see population and employment growth have been very good predictors of real estate returns. Kentucky might not be bad. What's that? Kentucky might not be bad. Kentucky has been very good to us. Yeah, Kentucky has been very good to us. Some of these more medium-sized cities, I live in a very medium-sized city, kind of like you guys are. Quality of life is very good, and I think a lot of people have kind of realized that. So absolutely, we would look. There's a lot of markets that have been growing faster than the national average that we would look at. Thank you very much. I appreciate it. Thank you. I guess we're going to close out. We're ready when you are. Okay. He's a pretty tall guy. I'm a tall guy, but he's quite tall. So I'm going to bring this down a little bit. Okay. So first off, I want to thank all of you for your participation today. I know this is probably some of y'all's first time doing an exercise like this. So thanks for your patience. Thanks for your questions. We did hear from three really high-quality candidates. I think what we'd like to do in closing is leave it a little bit open-ended. We've provided a sheet that some of you have referenced during the presentations. Really what we were trying to do is summarize some of the key features, both from a qualitative perspective and a quantitative perspective for the three candidates that we just heard from. I'm happy to go into more depth in sort of the first two pages, two to four, if you have any questions. If not, I wanted to just maybe cover the fees just for a second because I know there were some questions there. So on page five, what we have – and sorry, just to pause. If there aren't any questions about the firms, any questions about the data that's provided in here that you'd like me to address? I know we just heard from everyone, but yes. We have one about the firms themselves. You've listed on page eight – sorry. You've listed on page eight the Callan Client Disclosure and listed the three and have two categories, one being a client of Callan and one that's an investment manager client. Can you kind of describe? I'm not understanding what you're trying to tell me with that. Yeah, sure. So Callan is a consulting firm. That's all that we do. We do have a division within Callan called the Institutional Consulting Group. They make up less than 10% of our revenue, and they work directly with investment manager clients. They provide consulting, research, database access, all that. And so two of the firms are not clients of Callan, so they do not work with our Institutional Consulting Group, and those are Clarion and LaSalle. And Principal is the one that is a client of that group within Callan. So John and I, the consulting group is separate to that group, so we do not have any sort of insight or direct work modules with that group. Does that address your question? Yeah. Thank you. And a description there of a little bit goes into a little bit more depth of sort of the services that those firms receive. We've got one more question down here. Yes. Going over fees would be great, and I'd like to do that, but at the end I'm going to ask you if there's just anything immediately that rises to the top for you all, because you are our advisors, as anything that stands out pro or con for each one of them. Gut check on these sheets are great. There's a lot of information here. Is there anything that we need to be immediately aware of? Sure. This is a yay for us, we love this, or this is kind of a drawback for us. So just to keep in mind. That's a great question. I was going to kind of conclude with that when we go over the performance section and kind of weave in some comments.