Individual vs. Institutional Q. Can you tell me about your work with individual as well as institutional investors? Are there different strategies for each? A. W hen we started out in the United States in the mid-1970s, German investors wanted to move capital out of cold war Europe into the safe haven of the United States. And so, initially, we were working more as a family wealth advisor, not only with Metzler capital, but also with other high-net-worth investors. Over the years, as we’ve expanded our platform, we’ve worked more and more with institutional investors. Institutional Investors Institutional investors, such as pension schemes and insurance companies, usually need to generate current cash flow in their portfolios in order to meet current liabilities to their pensioners and beneficiaries. What they need is a reliable and steady income stream. Many of these groups have a long history of direct investment in real estate in their home country and maintain significant in-house real estate teams. They also need to make sure they are not putting their principal at risk. They are really driven toward core or core-plus investment as their primary strategy. They may have a portion of their allocation available for higher-risk strategies, but it’s usually confined to improving overall portfolio returns. The majority of what they’ve been looking for has been in core investment. That is exactly what we’ve helped institutional investors accomplish. In the same way that our parent company, the Bankhaus, looks at passing wealth on to the next generation, or even the next two or three generations, our high-net-worth clients typically bring that perspective to the table as well. They’re not in a hurry to make money quickly. They typically are very familiar with, and have a much longer view of real estate investment. Many take a very personal pride in the assets they own. In fact, much of the wealth they have built up over the centuries in Germany has been centered on real estate, either timberland or farmland. So they have a rich heritage and a rich tradition in real estate investment. There’s no set pattern. Some of our institutional investors will take on risk and do development as well as significant redevelopment of existing assets. Some of our high-net-worth investors want to make sure they are invested in a core portfolio. Each strategy is independent and based on their objectives. We approach each investor as a unique client, not as one of a group, but as a client with their own specific objectives. Don Wise President & CEO Steve Franceschina Chief Operating Officer Individual Investors The high-net-worth investors are, for the most part, working with legacy wealth. This is wealth that has been created over centuries in many cases. One of our high-net-worth investors traces his family back 900 years. Metzler Real Estate 700 Fifth Avenue, 61st Floor Seattle, Washington 98104-5071 Phone (206) 623-2700 Fax (206) 623-4864 www.metzlerna.com Zeb Bradford Chief Investment Officer