Imperial County Employees' Retirement System 19 August 2015

REAL ESTATE INVESTMENT MANAGEMENT WWW.CLARIONPARTNERS.COM

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REAL ESTATE INVESTMENT MANAGEMENT

│ 19 August 2015

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Imperial County Employees' Retirement System


Important Legal Information

2

Copyright ©2015, Clarion Partners and/or its affiliates. All rights reserved.

This is not an offer to sell, or solicitation of offers to buy, securities. Investments in Clarion Lion Properties Fund (the “Fund”) can be made only pursuant to the Fund’s subscription documents and private placement memorandum. Investment in the Fund entails significant risks and is suitable only for certain investors as part of an overall diversified investment strategy and only for investors able to withstand a total loss of investment. This report is for distribution only to prospective investors who meet statutory qualifications as “accredited investors” and “qualified purchasers” under the U.S. Securities Act of 1933, as amended and the U.S. Investment Company Act of 1940, as amended, respectively. Investment in the Fund entails significant risks and is suitable only for certain investors as part of an overall diversified investment strategy and only for investors able to withstand a total loss of investment. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Clarion Partners. This presentation is strictly confidential and is not intended for distribution without the express permission of Clarion Partners. Unless otherwise indicated, returns are presented on a gross basis and do not reflect any expenses, management fees or incentive allocations which in the aggregate may be substantial and have the effect of reducing returns. References to indices and NCREIF benchmarks are hypothetical illustrations of aggregate returns and do not reflect the performance of any actual investment. Investors cannot invest in an index. Past performance is not indicative of future results and a risk of loss exists. Any investor’s actual returns may vary significantly from the aggregate returns set forth in this presentation. Please see additional important information regarding returns and references to indexes at the end of this presentation. Statements regarding forecasts and projections rely on a number of economic and financial variables and are inherently speculative. Opinions, estimates, forecasts and statements of financial market trends are based on current market conditions. They are not guaranteed and are subject to change without notice. Forecasts are based on complex calculations and formulas that contain substantial subjectivity and no express or implied prediction is made be interpreted as investment advice, as an offer or solicitation for the purchase or sale of Clarion funds. There can be no assurance that market conditions will perform according to any forecast or that the Fund will achieve its objectives or that investors will receive a return of their capital. The projections or other forward looking information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future investment results. There can be no assurance that unrealized investments will be realized at the valuations shown or in accordance with any return projections. Actual realized returns depend on, among other factors, future operating results, the value of the assets and market conditions at the time of disposition, related transaction costs and the timing and manner of sale, all of which may differ from the assumptions on which the valuations and projections contained herein are based. The information contained in this presentation, including information supporting forecasts and projections, has been obtained or derived from independent third party sources believed to be reliable but the Fund cannot guarantee the accuracy or completeness of such information and has not reviewed the assumptions on which such information is based. This presentation contains forward-looking statements relating to the plans, objectives, opportunities, future performance and business of the Fund and the future performance of the U.S. market generally. Such statements are forward-looking in nature and involve a number of known and unknown risks, uncertainties and other factors, and accordingly, actual results may differ materially from those reflected or contemplated in such forward-looking statements. Investors are cautioned not to place undue reliance on any forward-looking statements or examples included in this presentation and none of the Fund, Clarion or any of their respective affiliates assumes any obligation to update any forward-looking statements. This material does not constitute investment advice and should not be viewed as a current or past recommendation to buy or sell any securities or to adopt any investment strategy. Any specific investments referenced may or may not be held by accounts managed by Clarion Partners or its affiliates and may not represent all of the investments purchased, sold or recommended for any particular investment portfolio. It should not be assumed that any investments in properties described were or will be profitable. Clarion Partners Europe Ltd is authorized and regulated by the UK Financial Conduct Authority.


Lion Properties Fund Disclosure

3

The purchase of shares offered entails certain risks that investors should consider before making a decision to invest in the Fund. There can be no assurance that the Fund will be profitable or, if it is profitable, that any particular yield or rate of return will be obtained or other investment objective will be realized. An investor should only invest in the Fund as part of an overall investment strategy and only if the investor is able to withstand total loss of investment.

Investment Considerations and Risk Factors

Risk Factors that should be considered in making an investment are: Risks of leverage, including possible inability to repay current indebtedness or to source new debt; possible inability to refinance; variable interest rate; impact of borrowing covenants; general economic conditions; problematic and non-performing assets; illiquidity of securities and underlying assets; investing in unspecified assets; uncertainty of net asset values; losses on appraisals; negative pricing in redemption transactions; lack of liquidity; non-availability of suitable investments; sector and/or geographic concentration; diverse shareholder group; investment company act; short-term interim investments; exculpation and indemnification; and changes in ownership in Clarion.

Risks Related to Real Estate Investing

Investment in real estate generally; environmental matters; possible inability to sell properties; Americans with Disabilities Act; possible inability to complete renovation and development on advantageous terms; possibility of future terrorist activity; insurance may not cover all losses; financial condition of tenants; uninsured losses from seismic activity; partial ownership interests; and investments in securities.


Table of Contents

4

Section Page

Section I Lion Properties Fund 5

Appendix

Appendix A Recent Transaction Activity 22 Appendix B List of Investments 33 Appendix C Client Statement 36 Appendix D Summary of Terms 38 Appendix E Biographies 40 Appendix F Clarion Partners Overview 46 Appendix G Notes to Performance 54

CLARION PARTNERS


200 NEWPORT AVENUE: QUINCY, MASSACHUSETTS

LION PROPERTIES FUND

WWW.CLARIONPARTNERS.COM FOR USE WITH INSTITUTIONS ONLY. NOT FOR USE WITH THE INVESTING PUBLIC.


Section II


Key Fund Statistics

6

36.3

36.3

18.8

8.6 GEOGRAPHIC DIVERSIFICATION %

East

West

South

Midwest

33.7

27.0

18.7

16.9 3.6

0.1 Office

Apartment

Retail

Industrial

Hotel

Other

PROPERTY TYPE DIVERSIFICATION %

As of June 30, 2015. Please refer to the important disclosures at the beginning of this presentation. 1 As of July 1, 2015.

6/30/2015

Gross Asset Value $8.3 billion

Net Asset Value $5.8 billion

Management Co-investment1 $25.1 million

Number of Investments 132

Number of Markets 34

Average Investment Size $60.0 million

Portfolio Occupancy 94.6%

Leverage Ratio 26.7%

Stabilized / Value-Add Assets 95.2% / 4.8%

Entry / Exit Queue None


7

LPF Investment Performance – Rolling Time Periods

As of June 30, 2015. Chart returns are presented before fee. NFI-ODCE Equal Weight Index presented as benchmark. Past performance is not indicative of future results and a risk of loss exists.

AS OF JUNE 30, 2015 2Q15 1-YEAR 3-YEAR 5-YEAR 10-YEAR

Income Return 1.18% 4.73% 4.88% 5.31% 5.41% Appreciation Return 3.50% 12.07% 8.07% 10.11% 0.16% LPF Total Return Before Fees 4.68% 17.22% 13.25% 15.81% 5.57% NFI-ODCE Total Return Before Fees 3.91% 14.61% 12.91% 14.28% 6.58% LPF Total Return After Fees 4.45% 16.20% 12.26% 14.80% 4.60%

4.7%

17.2%

13.3%

15.8%

5.6% 7.3%

3.8%

14.4% 13.1%

14.4%

6.9% 8.7%

0%

5%

10%

15%

20%

2Q15 1-Year 3-Year 5-Year 10-Year SinceInception

RET

URN

RATE

TIME PERIOD

Lion Properties Fund NFI-ODCE Equal Weight Index


Geographic Diversification

8 8

S.F. / Bay Area, 9.7%

New York, 13.7%

Washington DC, 12.4%

So. California, 15.4%

South Florida, 7.4%

Office

Apartment

Industrial

Retail

Hotel

Land Houston, 6.3%

Chicago, 6.9%

Remainder, 18.5%

As of June 30, 2015. Percentages represent Gross Real Estate Value. Arrows indicate intended portfolio diversification targets. Please refer to the important disclosures at the beginning of this presentation.

Boston, 5.8%

Seattle, 3.9%

Denver 2.6%

Austin 2.7%

Raleigh 1.6%

Dallas 0.9%

Phoenix 2.3%

Tech, Energy, Healthcare 30.4%

Urban/Transit 58.8%

West

36.3%

South

18.8%

East

36.3% Midwest

8.6%


Property Type Diversification

9

33.7%

27.0%

18.7% 16.9%

3.6%

0.1%

39.1%

25.4%

19.1%

12.2%

1.3% 2.9%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Office Apartment Retail Industrial Hotel Other

SEC

TOR D

IVER

SIF

ICAT

ION

SECTOR

Lion Properties Fund NFI-ODCELion Properties Fund Target Range

LPF information is as of June 30, 2015; all other data is as of March 31, 2015. Percentages represent Gross Real Estate Value. Arrows indicate intended portfolio diversification targets. Please refer to the important disclosures at the beginning of this presentation.


10

Strategic Picks: Office

1. Creative Office

− Total GAV: $940 mm

− Percent of LPF Office: 35%

Examples: • 100 Fifth Avenue (Midtown South, NY)

• 475 Brannan Street (SoMa, San Francisco, CA)

• Arboretum Gateway (Santa Monica, LA)

• 60 Spear (San Francisco, CA)

2. Urban Infill / Nodes

− Total GAV: $1.3 bn GAV

− Percent of LPF Office: 48%

Examples: • 101 Arch Street (Boston, MA)

• One Liberty Square (Boston, MA)

• Waterway Plaza I & II (The Woodlands, TX)

• Plaza East (Bellevue, WA)

NFI-ODCE Chart percentages as of March 31, 2015. All other information as of June 30, 2015. Chart percentages represent Gross Real Estate Value. Arrows indicate intended portfolio diversification targets. Please refer to the important disclosures at the beginning of this presentation.

60 Spear, San Francisco

101 Arch Street, Boston

33.7% 39.1%

0%10%20%30%40%

LPF ODCE


Strategic Picks: Apartment

1. Urban Infill

− Total GAV: $1.0 bn

− Percent of LPF Apartments: 48%

Examples: • Printhouse Lofts/44 Berry (Brooklyn, NY)

• Station at Riverfront Park (LoDo, Denver)

• 1000 Jefferson (Hoboken, NJ)

2. Transit-Oriented, High Growth Suburbs


− Percent of LPF Apartments: 40%

Examples: • Parkway Lofts (Bloomfield, NJ)

• Lantana Ridge (Austin, TX)

• Avignon Townhomes (Redmond, WA)

Printhouse Lofts, Williamsburg, Brooklyn

Avignon Townhomes, Redmond, WA

27.0% 25.4%

0%

10%

20%

30%

11

LPF ODCE



Strategic Picks: Retail

1. Urban Infill / “High-Street” Retail


− Percent of LPF Retail: 41% Examples: • 600 North Michigan Avenue (Chicago, IL) • West Hollywood Gateway (Los Angeles, CA) • Chevy Chase Pavilion (Washington, DC)

2. Grocery-Anchored Retail


− Percent of LPF Retail: 27% Examples: • Marketplace at the Outlets (West Palm Beach, FL) • Whole Foods at the Domain (Austin, TX)

3. Outlet Centers


− Percent of LPF Retail: 18% Examples: • Palm Beach Outlets (West Palm Beach, FL)

600 North Michigan Avenue, Chicago

Palm Beach Outlets, West Palm Beach

18.7% 19.1%

0%

10%

20%

12

LPF ODCE



Strategic Picks: Industrial

1. Primary Markets


− Percent of LPF Industrial: 59%

Examples: • Redlands Business Center (Redlands, CA)

• 16850 Heacock Street (Moreno Valley, CA)

• Pacific Coast Park II (Fife, WA)

2. Top Secondary Markets


− Percent of LPF Industrial: 31%

Examples: • Research Tri-Center (Durham, NC)

• Mile High Distribution Center (Denver, CO)

• Crossroads Corporate Center (Salt Lake City, UT)

16850 Heacock Street, Moreno Valley, CA

Mile High Distribution Center, Denver

16.9% 12.2%

0%

10%

20%

13

LPF ODCE



14

Recent Acquisition Activity

As of June 30, 2015. The activity described above includes all transactions consummated by the Fund since 1/1/2014. For new investments, estimated market capitalization rates and IRRs are derived from Clarion Partners’ underwriting projections. Forecasts have certain inherent limitations and are based on complex calculations and formulas that contain substantial subjectivity and should not be relied upon as being indicative of future performance. Please refer to important information at the beginning of this presentation regarding the valuation of unrealized assets.

2014 ACQUISITIONS

2015 ACQUISITIONS

1 Stabilized cap rate (development property). 2 Stabilized cap rate (strategic lease-up property).

PROPERTY PROPERTY TYPE METRO MARKET CLOSE

DATE PURCHASE PRICE (M) CAP RATE PROJECTED

IRR Mira Vista Office Austin 05/01/14 $38.8 5.6% 7.3% The Overlook Office Austin 05/01/14 $12.6 6.4% 8.1% University Park Tech III & IV Office San Antonio 05/01/14 $26.8 8.9% 8.8% Whole Foods at the Domain Retail Austin 05/08/14 $34.1 4.9% 6.4% Plainfield Park II Industrial Indianapolis 06/19/14 $14.9 6.8%1 8.6% 2901 Patrick Henry Drive Office Santa Clara 06/24/14 $26.0 6.9% 7.9% Research Tri-Center Industrial Raleigh 08/06/14 $115.0 6.5% 7.7% The Station at Riverfront Park Apartment Denver 08/07/14 $66.6 5.6%2 7.0% 60 Spear Office San Francisco 08/19/14 $107.0 5.2%2 6.9% Parkway Lofts Apartment New York 10/30/14 $104.0 6.3%2 8.0% Printhouse Lofts Apartment New York 11/06/14 $30.5 4.5% 6.2% Marketplace at the Outlets Retail West Palm Beach 12/17/14 $116.7 5.5% 6.5% Palm Beach Outlets Retail West Palm Beach 12/17/14 $254.7 5.4% 8.4% TOTAL $947.7 5.8% 7.6%


DATE PURCHASE PRICE (M) CAP RATE PROJECTED

IRR Perry Brooks Tower Office Austin 04/24/15 $65.5 5.8% 7.6% Plaza East Office Seattle 04/28/15 $75.1 5.1% 6.8% The Paxon Apartment Minneapolis 05/06/15 $38.8 5.6% 7.4% TOTAL $179.4 5.4% 7.2%


15

12.1% 11.3% 11.4%

12.6% 11.9% 11.4%

16.5%

14.1% 13.1% 13.6%

11.7% 11.2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

1 Year 2 Year 3 year

RET

URN

RATE

TIME PERIOD

IPD 2012-YTD 2015 Acquisitions IPD LPF 2012-YTD 2015 Acquisitions LPF Total Property Return

LPF Investment Performance – Properties Acquired 2012-YTD 2015

TOTAL UNLEVERED PROPERTY RETURN

− The Fund’s investments since 2012 have been accretive to the portfolio, whereas the overall ODCE’s recent investments have been slightly decretive • 29 acquisitions, $2.2 billion, 28.3% of current portfolio

• Three apartment development projects, $301.2 million, 3.8% of current portfolio

− This reflects the Fund’s strict adherence to its clearly defined strategy, as well as its pricing discipline

As of June 30, 2015. Chart returns are presented before fee. Past performance is not indicative of future results and a risk of loss exists. Please refer to the important disclosures at the beginning and end of this presentation. Source: IPD


16

Recent Disposition Activity

As of July 10, 2015. The activity described above includes all transactions consummated by the Fund since 1/1/2014. 1 Last appraised value and sale price shown at LPF’s 49% interest sold. 2 Realized IRRs are unlevered unless property has property level debt. The Fund does not allocate unsecured debt to unencumbered properties for purposes

of Realized IRR calculations. 3 Sale price presented gross of preferred loan LPF provided to its JV partner in conjunction with the transaction. Total cash proceeds net of the preferred loan

were $70.6 million.

2014 DISPOSITIONS

2015 DISPOSITIONS


DATE LAST APPRAISED

VALUE (M) SALE

PRICE (M) REALIZED

IRR2

Fifth Street Industrial Industrial Phoenix 04/14/14 $9.5 $9.0 8.7% Pleasant Shops Retail Boston 07/24/14 $23.0 $23.4 12.9% Lion ES Hotels Hotel Various 08/12/14 $298.4 $300.0 (0.5%) Gwinnett Medical Office Atlanta 08/13/14 $10.6 $11.1 (13.3%) Banyan Grove at Towne Square Apartment Virginia Beach 09/04/14 $44.0 $41.0 6.1% Geneva Industrial Industrial Phoenix 10/03/14 $4.4 $3.8 6.3% Specialty Labs Office Building Office Santa Clarita 12/12/14 $98.4 $96.0 15.8% Vero Medical Suites Office Vero Beach 12/18/14 $11.1 $11.6 5.3% TOTAL $499.4 $495.9 3.9%


DATE LAST APPRAISED

VALUE (M) SALE

PRICE (M) REALIZED

IRR2

Platinum Southside Apartment Austin 01/06/15 $30.3 $28.5 12.1% Sand Hill Commons1,3 Office Silicon Valley 01/07/15 $102.9 $117.6 12.7% The Gramercy at Met Park Apartment Washington DC 03/13/15 $185.9 $186.9 (4.9%) Village on the Green Apartment Riverside 04/28/15 $49.5 $49.5 8.5% Northport Center Industrial San Francisco 05/13/15 $11.4 $12.8 2.3% Pioneer 360 Industrial Dallas 05/28/15 $60.0 $76.0 7.0% Dulles Woods III Industrial Washington DC 06/16/15 $13.0 $15.2 7.0% Chantilly Distribution Center Industrial Washington DC 06/16/15 $38.9 $47.8 8.5% The Met at Reston Town Center Apartment Washington DC 06/30/15 $121.0 $125.0 2.5% Conroe Medical Office Houston 07/10/15 $17.0 $17.0 5.3% Legacy Medical Village Office Austin 07/10/15 $39.0 $39.0 12.9% TOTAL $668.9 $715.3 4.7%


17

Same Property NOI Growth Same Property NOI Growth

PROPERTY TYPE

2012 V. 2011

2013 V. 2012

2014 V. 2013

2015P V. 2014

2016P V. 2015P

2017P V. 2016P

2Q 2015 OCC1

1Q 2015 OCC1

Industrial 1.1% 6.2% 2.7% 8.8% 10.7% 4.6% 97.0% 96.7%

Office 3.4% 6.0% 4.9% 0.6% 9.2% (0.5%) 94.6% 93.6%

Apartment 5.6% 2.3% 3.0% 5.8% 4.3% 4.0% 94.5% 95.2%

Retail 3.6% 6.4% (4.2%) 16.7% 7.8% 7.5% 92.5% 93.7%

Hotel 9.6% 7.6% (10.6%) 12.2% 17.7% 12.8% 75.9% 76.3%

Weighted Average 4.2% 5.3% 1.9% 6.4% 9.7% 4.1% 94.6% 94.7%

1 Total occupancy excludes hotel portfolio. 2Q15 hotel occupancy represents trailing-twelve month average through March 2015. 2Q15 hotel occupancy represents trailing twelve-month average through May 2015.

As of June 30, 2015. NOI = Net Operating Income. Past performance is not indicative of future results and a risk of loss exists. Excludes any projected NOI growth from new investments made in the previous year, and properties under major renovation. The Fund’s current budget projections are based on assumptions about future operating results and a wide range of factors outside of the Fund’s control; forecasts have certain inherent limitations and are based on complex calculations and formulas that contain substantial subjectivity. Accordingly, there can be no assurance that NOI growth will occur in accordance with the budget presented and readers are cautioned not to place undue reliance on the Fund’s budget projections. Furthermore, growth in the Fund’s Same Property NOI does not represent the performance of any investor’s investment in the Fund. Please see important information at the beginning of this presentation regarding target returns, forecasts and projections.

Actual vs. Budget YTD +1.6%


Value Drivers: Core Portfolio

18

As of June 30, 2015. Estimated market capitalization rates and future values are derived from Clarion Partners’ underwriting projections. Forecasts have certain inherent limitations and are based on complex calculations and formulas that contain substantial subjectivity and should not be relied upon as being indicative of future performance and no express or implied prediction is made to be interpreted as investment advice. Totals may not tie due to rounding. 1 Budgeted NOI is as of Year 2020 to fully reflect anchor tenant’s large scheduled rent increase in mid-2019.

Significant future value creation is projected within the core portfolio, largely resulting from NOI increases due to below market rents and contractual rent bumps

Projected % change in value from 2H2015-2018: 22.3%

PROPERTY PROPERTY TYPE

METRO MARKET

2015 BUDGET NOI ($M)

2019 BUDGET NOI ($M)

CAP EX – 2015-2018 ($M)

ESTIMATED MARKET

CAP RATE

ESTIMATED FUTURE

VALUE ($M)

06/30/15 APPRAISAL VALUE ($M)

ESTIMATED VALUE PICKUP

($M)

600 North Michigan Ave Retail Chicago 14.4 17.1 7.5 4.25% 394.2 339.0 55.2 Palm Beach Outlets Retail West Palm Beach 14.2 19.6 24.4 5.50% 332.3 264.9 67.4 100 Fifth Avenue Office New York 10.1 16.3 6.5 4.25% 377.7 279.0 98.7 475 Brannan Street Office San Francisco 8.2 13.4 9.9 4.50% 287.1 213.0 74.1 Waterway Plaza I & II1 Office Houston 8.3 10.6 2.7 5.50% 190.0 159.7 30.3 101 Arch Street Office Boston 7.7 12.0 12.5 5.00% 226.9 172.0 54.9 60 Spear Office San Francisco 5.7 7.0 2.2 4.75% 145.3 120.0 25.3 One Del Mar Office San Diego 2.9 4.5 3.2 5.00% 86.5 65.8 20.7 Columbia Town Center Apartment Baltimore 7.1 8.6 7.1 5.00% 164.3 141.0 23.3 Station at Riverfront Apartment Denver 3.4 4.5 5.6 5.00% 83.6 70.3 13.3 LA Industrial Portfolio Industrial Los Angeles 25.0 31.8 8.3 5.11% 614.5 552.1 62.4 Dallas/Ft Worth Industrial Industrial Dallas-Ft Worth 2.3 2.8 0.7 5.50% 49.6 36.2 13.4 TOTAL $109.3 $148.2 $90.6 4.87% $2,952.0 $2,413.0 $539.0


19

Value Drivers: Non-Core Portfolio

As of June 30, 2015. Estimated market capitalization rates and stabilized values are derived from Clarion Partners’ underwriting projections. Forecasts have certain inherent limitations and are based on complex calculations and formulas that contain substantial subjectivity and should not be relied upon as being indicative of future performance. Please refer to important information at the beginning of this presentation regarding the valuation of unrealized assets. 1 Untrended from current rents.


METRO MARKET

06/30/15 CARRYING VALUE (M)

REMAINING COST (M)

ALL-IN BASIS (M)

STABILIZED NOI (M)

EST. SALE CAP RATE

EST. STABILIZED

VALUE (M) OCC.

Plainfield Park 1 Industrial Indianapolis $15.5 $0.6 $16.1 $1.1 6.5% $17.6 50.0% 140 North Mitchell Ctr. Industrial Chicago $11.2 $0.6 $11.8 $0.7 5.5% $12.5 40.5% West 10 Business Ctr. Industrial Phoenix $7.4 $0.5 $7.8 $0.5 5.5% $9.4 0.0% TOTAL $34.1 $1.7 $35.7 $2.3 5.9% $39.5

DEVELOPMENT PIPELINE

LEASING


METRO MARKET


REMAINING COST (M)

ALL-IN BASIS (M)

STABILIZED NOI (M)

EST. MKT CAP RATE

EST. STABILIZED

VALUE (M) Harvest Creek Land Tampa $10.5 N/A $10.5 N/A N/A N/A Palm Beach Land Land W. Palm Beach $22.5 N/A $22.5 N/A N/A N/A TOTAL $33.0 $33.0

LAND


METRO MARKET


REMAINING COST (M)

ALL-IN BASIS (M)

STABILIZED NOI (M)1

EST. MKT CAP RATE

EST. STABILIZED

VALUE (M)

DELIVERY DATE

Balboa Park Apartment San Diego $44.6 $0.7 $45.3 $2.3 4.5% $51.5 3Q15 Moda at N. Bay Village Apartment Miami $92.0 $2.4 $94.4 $5.8 5.0% $116.9 3Q15 The Acadia at Met Park Apartment Washington DC $167.0 $15.5 $182.5 $8.8 4.5% $194.6 3Q15 Mile High 4 Industrial Denver $2.1 $9.9 $12.0 $0.8 5.0% $16.1 1Q16 TOTAL $305.7 $28.5 $334.2 $17.7 4.7% $379.1


20

Financial Management

1Represents the prevailing interest rates on the Fund’s existing loans calculated by the Fund’s Debt Valuation Firm pursuant to the Fund’s Debt Valuation Policy. As of June 30, 2015. Please see important information at the beginning of this presentation regarding target returns, forecasts and projections.

– Current leverage ratio: 26.7%

– 2015 maturities: $293 million (remaining)

– 2Q15 financings:

• Palm Beach Outlets JV mortgage: $148.5M (at share) o 12-year term at 3.63% fixed

• Line of credit recast - $350m commitment o 4-year term (June 2019) at L+100 o $110M outstanding at 6/30/2015

– Additional 2015 financings:

• $300m unsecured notes: funding July o 11-year term at ~3.4%

• Possible secured mixed-pool financing

– Fixed 89% / Floating 11%

– LTV expected to end year at 25-27%

– Mark-to-Market: cumulative negative $47M

$0 M$50 M

$100 M$150 M$200 M$250 M$300 M$350 M$400 M$450 M$500 M$550 M

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Property Mortgages Fund Level Notes

ANNUAL DEBT MATURITIES

AMOUNT CONTRACTUAL RATE

MARKET RATE1 YEARS

Property Mortgages $817 M 4.57% 3.95% 5.3

Fund Level Notes $1,250 M 5.25% 4.16% 3.4

Line of Credit $110 M 1.19% 1.19%

Total Debt (Par Value) $2,177 M 4.79% 3.93% 4.2

5.4% 5.7% 5.5% 5.8% 5.5% - 3.1% - - 4.7% - 4.8% 3.6% Avg Int Rate


21

Why Invest in the Lion Properties Fund?

600 N. Michigan Avenue Chicago, IL

- Disciplined strategy to invest in high-growth assets:

• Major U.S. Markets • Top locations and submarkets • Urban/transit-oriented properties • Growth oriented markets (technology, healthcare, etc.) • Highly functional assets

- High quality portfolio of existing properties

• New York apartments • San Francisco office • Southern California industrial

- Seasoned portfolio team

- Embedded value within portfolio:

• Significant NOI increases on key assets • Value-creation assets stabilizing in near-term

CLARION PARTNERS



RECENT TRANSACTION ACTIVITY



Appendix A


The Paxon 360 North 1st Street, Minneapolis, MN

23

Property Size: Current Cost: Occupancy: Year Acquired:

140 units $38,829,284

75.7% 2015

PROPERTY DESCRIPTION The Paxon is a 140-unit Class A, transit-oriented apartment building. Completed in December 2014, The Paxon is located just north of downtown Minneapolis in the North Loop’s desirable Warehouse District. Building amenities include a theater room, business center, fitness center, sauna, yoga studio, club room with bar and full-size kitchen, and an outdoor patio featuring a grilling station, fire pit, wading pool and hot tub. The units feature high-end finishes including stainless steel appliances, granite countertops, warehouse-style windows, balconies, and walk-in closets. INVESTMENT RATIONALE The Paxon is a newly built, high quality apartment building in one of the most desirable areas in Minneapolis. The Property provides convenient access to the city’s new Metro Green and Blue lines and the popular bus system, providing a 15 minute commute to the CBD. It is within walking distance of a number of restaurants, nightlife locales, retail centers, and art galleries and is in close proximity to the Mississippi River, offering several miles of scenic riverfront paths used for biking and running. The investment is consistent with the Fund’s focus on apartment assets in dynamic, walkable locations in high-growth, infill neighborhoods.

As of June 30, 2015. Investment case studies presented herein describe all of the Fund’s investments that were acquired since January 1, 2014, as well as select 2013 transactions. Acquisitions and properties under renovation are valued at their most recent independent appraisal with the exception of properties acquired during the current quarter, which are carried at cost. Please refer to important information at the beginning of this presentation regarding the valuation of unrealized assets.


Plaza East 11100 Northeast 8th Street, Bellevue, WA

24


159,259 SF $74,441,917

94.3% 2015

PROPERTY DESCRIPTION Plaza East is a Class A, LEED Silver, nine-story office building that recently underwent a significant capital investment program and modernization of tenant interiors to appeal to tech, consulting, creative, and financial tenants. The Property is well-located in Bellevue’s CBD, within walking distance of over 4.5 million sf of dining, hotel and entertainment options. The Property is situated at the intersection of I-405 and 8th Street, offering tenants direct access to the freeway. The Bellevue Transit Center is two blocks from the Property, offering bus and future light rail service to downtown Seattle and around the region. INVESTMENT RATIONALE Acquisition of Plaza East gives the Fund office exposure in the Seattle MSA, which the Fund believes is one of the top performing office markets over the long-term, given its strong demand drivers and exposure to the fast-growing tech sector. The Property is 94% occupied and has a tenant roster of next-generation technology and professional service tenants with an average remaining lease term of seven years. In addition, rents are approximately 14% below market, providing for potential upside as in-place leases expire.

As of June 30, 2015. Investment case studies presented herein describe all of the Fund’s investments that were acquired since January 1, 2014, as well as select 2013 transactions. Acquisitions and properties under renovation are valued at their most recent independent appraisal with the exception of properties acquired during the current quarter, which are carried at cost. Please refer to important information at the beginning of this presentation regarding the valuation of unrealized assets.


Perry Brooks Tower 720 Brazos Street, Austin, TX

25


136,585 SF $65,777,161

97.9% 2015

PROPERTY DESCRIPTION Perry Brooks Tower is a Class A-, 12-story office building that appeals to tech-oriented tenants seeking creative office space. The Property has been renovated to include exposed ceilings, sealed concrete flooring, rolling barn and glass garage doors, extensive window-lines and open office areas throughout. The Property is centrally located in Austin’s downtown CBD, just off of Austin’s famed 6th Street and within walking distance to a wide variety of restaurants and entertainment options, in an area that has limited opportunities for such space. INVESTMENT RATIONALE Led in part by the high-growth technology industry, Austin maintains strong office fundamentals, including low unemployment and high-wage jobs. The MSA has recently been one of the fastest growing U.S. cities, with office rents increasing 6.8% annually over the last three years and projected to increase 4%+ annually for the next five years. The Year 1 cap rate is 5.8%, providing the Fund with strong immediate in-place income. Average in-place rents are approximately 22% below current market rates, creating opportunity for solid future rent growth.

As of June 30, 2015. Past performance is not indicative of future results and a risk of loss exists. Investment case studies presented herein describe all of the Fund’s investments that were acquired since January 1, 2014, as well as select 2013 transactions. Acquisitions and properties under renovation are valued at their most recent independent appraisal with the exception of properties acquired during the current quarter, which are carried at cost. Please refer to important information at the beginning of this presentation regarding the valuation of unrealized assets and projections.


26

Palm Beach Outlets 1751 Palm Beach Lakes Boulevard, West Palm Beach, FL

PROPERTY DESCRIPTION Palm Beach Outlets is a recently built 460,025 square foot outlet center located in West Palm Beach, in which the Fund acquired a majority joint venture interest with the developer, New England Development. The Property is part of a larger overall project that includes the adjacent Marketplace at the Outlets, which was also acquired. With a diverse tenancy of over 120 retailers including brand favorites Saks Fifth Avenue Off 5th, J. Crew Factory, Ann Taylor Factory, Nike and Under Armour, the Property has quickly established itself as one of the premier shopping destinations in the Palm Beach area.

INVESTMENT RATIONALE The Fund has targeted the outlet space because it is a growth channel for retailers and appeals to budget-oriented customers. It is rare to be able to acquire an outlet center in an infill, dynamic location within a primary market, as they are typically located in secondary and tertiary markets. The Property offers stable, long term leases to top retailers. The Fund also acquired an adjacent land parcel that can be developed as a second phase of up to 105,000 square feet of outlets, representing a future growth opportunity. The combination of Palm Beach Outlets and Marketplace at the Outlets forms a dominant shopping node in the Palm Beach area.

Property Size: Real Estate Value: Occupancy: Year Acquired:

460,025 SF $296,200,000

96.3% 2014

As of June 30, 2015. Past performance is not indicative of future results and a risk of loss exists. Investment case studies presented herein describe all of the Fund’s investments that were acquired since January 1, 2014, as well as select 2013 transactions. Acquisitions and properties under renovation are valued at their most recent independent appraisal with the exception of properties acquired during the current quarter, which are carried at cost. Please refer to important information at the beginning of this presentation regarding the valuation of unrealized assets.


27

Marketplace at the Outlets 1801 Palm Beach Lakes Boulevard, West Palm Beach, FL

PROPERTY DESCRIPTION Marketplace at the Outlets is a brand new, Whole Foods-anchored shopping center located in West Palm Beach. The Property is part of a larger overall project that includes the recently developed Palm Beach Outlets, which the Fund also acquired. In addition to Whole Foods, the Property includes a diverse line-up of best in-class retailers including Nordstrom Rack, Sports Authority, Bed Bath & Beyond and TJ Maxx.

INVESTMENT RATIONALE The Property is leased to a strong line-up of national tenants on long-term leases with a weighted average lease term of 11.2 years. With over one-half mile of frontage along I-95, the Marketplace at the Outlets has one of the most visible and prominent locations for a large-scale retail center in Palm Beach County. The Property benefits from unique competitive positioning, as it is located one exit from downtown West Palm Beach with the nearest Whole Foods approximately 10 miles away. The combination of Marketplace at the Outlets and Palm Beach Outlets forms a dominant retail node with over 740,000 square feet of retail space.


294,849 SF $118,000,000

100.0% 2014



28

Printhouse Lofts 139 North 10th Street, Brooklyn, NY


36 Units $32,000,000

100.0% 2014

PROPERTY DESCRIPTION Printhouse Lofts is a 36-unit, Class A, six-story apartment building prominently located in the high-growth Williamsburg neighborhood of Brooklyn. Originally built in 1910 as a loft warehouse, the Property was recently converted into luxury apartments, designed to preserve the original industrial elements consisting of timber beam ceilings, exposed brick and ductwork, oversized windows, and 13-foot ceilings. Building amenities include a roof deck, ground floor garden and bike storage room. The units have high end finishes that feature hardwood floors, energy efficient stainless steel appliances, Caesarstone countertops and farmhouse sinks. INVESTMENT RATIONALE Printhouse Lofts benefits from an excellent location in the highly desirable Williamsburg neighborhood, which has seen very strong rent growth recently as it has become one of the top residential neighborhoods in all of New York City, known as an amenity-rich alternative to living in Manhattan. All of the Property’s units are at full market rates and are not subject to regulated rental increase restrictions typically found in this market. The Property is situated four blocks from the Bedford L subway station, which is one stop from Manhattan. This is the Fund’s second investment in Williamsburg: it acquired 44 Berry, two blocks away, in 2011. That asset has achieved 9% rent growth annually since acquisition.



29

Parkway Lofts 5 Lawrence Street, Bloomfield, NJ

PROPERTY DESCRIPTION Parkway Lofts is a 361-unit, Class A, transit-oriented apartment community located in Bloomfield, New Jersey. Originally constructed as a seven-story warehouse in 1897, the Property was completely redeveloped into luxury loft style residences in 2014. Building amenities include a 4,000 square foot fitness center, community lounge, rooftop terrace with gas fire pit, gated dog run, doorman, bike storage and media room. Unit amenities include fully-equipped kitchens with quartz countertops, stainless steel appliances, sun shades, washers and dryers in every unit, polished concrete floors, central HVAC, ceiling heights up to 17 feet, 14-foot windows, walk-in closets, views of Manhattan and private outdoor terraces. INVESTMENT RATIONALE Parkway Lofts is a newly redeveloped, high quality apartment community with a market leading amenity package. The Property is situated at an irreplaceable location adjacent to New Jersey Transit’s Watsessing Station, providing a 30-minute commute to midtown Manhattan. Parkway Lofts also benefits from prominent visibility and convenient access from the Garden State Parkway, the area’s main commercial thoroughfare. Given high barriers to entry for new construction in the submarket, the Property is expected to generate strong performance throughout its hold period.


361 Units $117,300,000

74.0% 2014



30

60 Spear 60 Spear Street, San Francisco, CA

PROPERTY DESCRIPTION 60 Spear is a Class A- office tower that appeals to tech-oriented tenants who seek creative office space. The Property was recently renovated to offer a dynamic modern lobby, efficient and open floor plans and new elevators. The building features exposed 14-foot ceilings, abundant natural light and protected views of the San Francisco Bay. The Property offers convenient access to public transportation including the BART, San Francisco Municipal Railway and The Ferry Building. The asset is located two blocks from the $4.7 billion Transbay Transit Center development, which will be the largest transportation hub on the West Coast upon completion in 2017. INVESTMENT RATIONALE San Francisco continues to exhibit very strong fundamentals, driven primarily by the high-growth technology sector. The South Financial District submarket commands the highest rental rates in the CBD, where net lease absorption has accelerated rapidly over the past year. The Property at the time of acquisition was only 78% leased. In the second quarter of 2015, the remaining space was leased to an existing tenant at rates which were above the underwritten rent. Additionally, the in-place rents for current tenants are more than 30% below average market rates, affording the opportunity to increase yields as tenants renew or roll.


154,700 SF $120,000,000

100.0% 2014



31

The Station at Riverfront Park 1460 Little Raven St, Denver, CO

PROPERTY DESCRIPTION The Station at Riverfront Park is a 273-unit, Class A, apartment community located in the Riverfront Park district of Denver, Colorado, immediately adjacent to the large-scale Union Station redevelopment in Lower Downtown (LoDo). Community amenities include a clubhouse and fitness center, as well as a recently renovated resort-style pool area which includes a hot tub, lounge, barbeque area, outdoor television and fire pit. Unit finishes include 9-foot ceilings, granite countertops, stainless steel appliances, private balconies, walk-in closets, washers and dryers in each unit and double-sided fire places.

INVESTMENT RATIONALE The Property is situated in an excellent, long-term location at the intersection of the established LoDo area within the trendy LoHi neighborhood, two blocks from the Union Station redevelopment, a transformative project that is converting the area into the intermodal transportation hub for the entire region. The opportunity for significant rent growth exists as The Station at Riverfront Park has recently completed major capital projects to its common areas. Additionally, the Property began a unit renovation plan in 2015, upgrading flooring, fixtures and lighting, which is expected to generate a rent premium.


273 Units $70,300,000

93.0% 2014



32

Research Tri-Center 2511 Old Cornwallis Rd, Durham, NC

PROPERTY DESCRIPTION Research Tri-Center is a ten-building, Class A industrial portfolio located in the high-growth Research Triangle of Raleigh, North Carolina. The portfolio totals over 1.5 million square feet and consists of eight warehouse buildings (90% of GLA), one laboratory building (6% of GLA), and one office building (4% of GLA). The buildings were constructed from 1991 to 1999 and are approximately 95% leased. INVESTMENT RATIONALE The portfolio is well-located within the Research Triangle, a supply-constrained industrial submarket with good access to regional highways and airports. The portfolio has a strong and diverse tenant base with over 50% of rental income generated from credit tenants. Raleigh is a top secondary market with a growing economy generating jobs at one of the fastest rates in the country. The Research Triangle is the top submarket in Raleigh and is home to three of the nation’s top universities, making it a hub for the technology, biotechnology and life/environmental sciences sectors.


1,534,024 SF $123,700,000

94.8% 2014


CLARION PARTNERS



LIST OF INVESTMENTS



Appendix B


List of Major Investments

34

As of June 30, 2015. The Fund’s Major Investments for purposes of this description include the Fund’s largest investments by property type. Please refer to the important disclosures at the beginning of this presentation. 1 Gross Market Value includes the Fund's preferred partnership interest of $96 million 2 Under development 3 Presently a loan investment, with an option to convert to equity

PROPERTY TYPE % OWNEDGROSS MARKET

VALUE ($)% OF

PORTFOLIO100 Fifth Avenue New York NY Office 100.0% 279,000,000 3.5%475 Brannan Street San Francisco CA Office 100.0% 213,000,000 2.7%Arboretum Gateway Santa Monica CA Office 100.0% 191,000,000 2.4%101 Arch Street Boston MA Office 100.0% 172,000,000 2.2%Sand Hill Commons1 Menlo Park CA Office 51.0% 169,486,000 2.1%Veritas Office Building Houston TX Office 100.0% 167,900,000 2.1%Waterway Plaza I & II The Woodlands TX Office 100.0% 159,700,000 2.0%10 Brookline Place Brookline MA Office 100.0% 140,000,000 1.8%60 Spear San Francisco CA Office 100.0% 120,000,000 1.5%

Office Total 1,612,086,000 20.4%

The Acadia at Metropolitan Park2 Arlington VA Apartment 100.0% 167,000,000 2.1%Eastchester Heights Bronx NY Apartment 90.0% 154,800,000 2.0%Columbia Town Center Columbia MD Apartment 100.0% 141,000,000 1.8%The Millennium at Metropolitan Park Arlington VA Apartment 100.0% 132,000,000 1.7%1000 Jefferson Hoboken NJ Apartment 100.0% 131,000,000 1.7%Avignon Townhomes Redmond WA Apartment 100.0% 118,000,000 1.5%Parkway Lofts Bloomfield NJ Apartment 100.0% 117,300,000 1.5%Infinity Harbor Point Stamford CT Apartment 100.0% 106,200,000 1.3%Westbrooke Place Washington DC Apartment 100.0% 106,000,000 1.3%

Apartment Total 1,173,300,000 14.8%600 North Michigan Avenue Chicago IL Retail 100.0% 339,000,000 4.3%Palm Beach Outlets West Palm Beach FL Retail 88.7% 264,864,000 3.3%West Hollywood Gateway Los Angeles CA Retail 100.0% 126,000,000 1.6%Marketplace at the Outlets3 West Palm Beach FL Retail 100.0% 100,500,000 1.3%Promenade at Sacramento Gateway Sacramento CA Retail 100.0% 94,200,000 1.2%

Retail Total 924,564,000 11.7%

LOCATION


List of Major Investments (cont’d)

35

List of Major Investments (cont’d)

As of June 30, 2015. The Fund’s Major Investments for purposes of this description include the Fund’s largest investments by property type. Please refer to the important disclosures at the beginning of this presentation.

PROPERTY TYPE % OWNEDGROSS MARKET

VALUE ($)% OF

PORTFOLIOResearch Tri-Center Durham NC Industrial 100.0% 123,700,000 1.6%Mile High Distribution Center Denver CO Industrial 100.0% 85,100,000 1.1%Redlands Business Center Redlands CA Industrial 100.0% 67,000,000 0.8%16850 Heacock Street Moreno Valley CA Industrial 100.0% 65,300,000 0.8%Carmel Mountain San Diego CA Industrial 100.0% 60,600,000 0.8%Knott Distribution Center Buena Park CA Industrial 100.0% 54,600,000 0.7%

Industrial Total 456,300,000 5.8%Alexandria Monaco Alexandria VA Hotel 100.0% 99,000,000 1.3%Hotel Allegro Chicago IL Hotel 100.0% 97,800,000 1.2%

Hotel Total 196,800,000 2.5%Chevy Chase Pavilion Washington DC Mixed Use 100.0% 263,600,000 3.3%

TOTAL MAJOR INVESTMENTS 4,626,650,000 58.4%

LOCATION


CLIENT STATEMENT



Appendix C

Fund Imperial County Employees' Retirement System

CurrentQuarter

ValuePer Share

Numberof Shares

CurrentQuarter

ValuePer Share

Numberof Shares

Investment⁽⁵⁾History

Net asset value March 31, 2015⁽¹⁾ $5,595,643,428 $1,193.4077 4,688,794.2802 $25,578,378 $1,193.4077 21,433.0586

Contributions 2Q15 $122,752,520 102,357.5435 - - $19,000,000

Distribution reinvestments April 01, 2015⁽²⁾ $19,364,843 16,226.5102 $186,103 155.9427 $3,981,348

Net asset value Beginning of Period $5,737,760,791 4,807,378.3339 $25,764,481 21,589.0013 $22,981,348

Investor interest in net asset value April 01, 2015 100% 0.4490%

Investment results:

Net income $67,399,641 $303,556 $6,090,040

Realized gain/(loss) on investments $23,651,529 $106,492 ($932,557)

Unrealized gain/(loss) on investments⁽³⁾ $176,716,287 $795,859 $4,107,422

Total Investment result $267,767,456 $1,205,907 $9,264,904

Distributions declared⁽⁴⁾ ($57,000,000) ($256,705) ($5,532,568)

Net asset value Jun. 30, 2015 (before redemptions) $5,948,528,247 $1,237.3747 4,807,378.3339 $26,713,684 $1,237.3747 21,589.0013 $26,713,684

Redemptions June 30, 2015 ($151,347,296) (122,313.2315) - - -

Net asset value Jun. 30, 2015 (after redemptions)⁽¹⁾ $5,797,180,951 $1,237.3747 4,685,065.1024 $26,713,684 $1,237.3747 21,589.0013 $26,713,684

Investor interest in net asset value June 30, 2015 100% 0.4608%

Fund⁽⁶⁾ Imperial County Employees' Retirement System

Investment Performance (Gross) Quarter One Year Since Inception⁽⁷⁾ Quarter One Year Since Inception

Income 1.18% 4.73% 6.28% 1.18% 4.73% 5.26%

Appreciation 3.50% 12.07% 0.99% 3.50% 12.07% (1.48%)

Total Return 4.68% 17.22% 7.31% 4.68% 17.22% 3.72%

IRR⁽⁸⁾ 17.27% 6.68%

Notes :(1) The Fund's net asset value does not include the REIT shareholders' contributions.

(2) Represents prior quarter distribution reinvestment net of fees and/or taxes, as applicable.

(3) The cumulative unrealized amount includes an adjustment for the implementation of ASC 825 recorded in 1Q08, if applicable.

(4) Amount will either be distributed in cash or reinvested net of fees and/or taxes, as applicable.

(5) Represents cumulative amounts over the investment period.

(6) Returns for the Fund include the effect of the REIT shareholders' contributions.

(7) April 1, 2000.

(8) IRRs are gross of fees and taxes paid, as applicable, and assume distributions are made on the last day of the quarter.

Clarion Lion Properties FundInvestor StatementQuarter Ending June 30, 2015 Investor Inception Date: 1Q07

CLARION PARTNERS



SUMMARY OF TERMS



Appendix D


Summary of Key Terms

39

Eligible Investors: Pension funds, foundations, endowments, non-U.S. institutions and taxable qualified investors

Cash Distributions: Quarterly with re-investment option

Redemptions: Quarterly with 90 days written notice; no withdrawal fee

Fee Structure: Asset Management Fees

First $10 million 1.25%

Next $15 million 1.00%

Greater than $25 million 0.85%

Cash Management Fees

0.10% Cash and marketable securities (in lieu of Asset Management fee)

As of June 30, 2015. This summary of key terms is not an exhaustive summary of the terms of an investment in the Fund and is qualified in its entirety by reference to the Fund’s private placement memorandum and definitive organizational documents. Asset Management and Cash Management fees are billed quarterly in arrears and are paid from each Limited Partner’s quarterly distribution.

CLARION PARTNERS



BIOGRAPHIES



Appendix E


Fund Management and Resources

41

As of June 30, 2015. Numbers in parentheses represent tenure with the firm/years in the industry. Staff counts are inclusive of administrative personnel. Chart excludes corporate support departments, including human resources and technology support services.

INVESTMENT COMMITTEE


DOUG WOLSKI (9/24)

Assistant Portfolio Manager Director

INVESTMENT RESEARCH ACQUISITIONS ASSET MANAGEMENT CLIENT CAPITAL

MANAGEMENT FINANCIAL

MANAGEMENT LEGAL &

COMPLIANCE DEBT INVESTMENT

Team – 8 Team – 26 Team - 65 Team - 19 Team – 75 Team - 4 Sr. Team - 2

JOSEPH LEAHY Portfolio Analytics Senior Associate

HARRIS MARKOWITZ Financial Analysis Senior Associate

JON GELB (8/10)

Assistant Portfolio Manager Director

JEB BELFORD (19/31)

Portfolio Manager Managing Director

BARBARA FLUSK (10/26)

Interim Chief Financial Officer Senior Vice President

ALICE MCAVOY Fund Administration

Associate

CONTROLLERS CUI TUNG

Vice President LYNN STATTEL Vice President

ASSISTANT CONTROLLERS GENEVA KING Sr. Associate

DETEISHA SMITH Sr. Associate

ACCOUNTANTS KATHY HANDLON, Sr. Associate

TIFFANY CHIU, Associate DIANA KAROTSERIS, Associate

WEI LIN, Associate CHRISTA SIKORSKI, Associate


Biographies

42

Prior Experience Winthrop Financial Associates, Boston, Massachusetts - Acquisitions and Asset Management (1984-1995)

Education Dartmouth College, B.A. - Mathematics and Religion (1983)

JEB BELFORD (212) 883-2535 [email protected] Managing Director, Lion Properties Fund Portfolio Manager

Jeb Belford is an equity owner and Managing Director with Clarion Partners as well as the Portfolio Manager of the Lion Properties Fund, the Firm‘s $8.1 billion flagship fund. As Portfolio Manager, Jeb has overall responsibility for Fund management and portfolio strategy. From 2005-2012, Jeb was the Portfolio Manager for the Lion Value Fund, the Firm's value-add investment program. Prior to becoming a portfolio manager, Jeb was an Acquisitions Manager at Clarion Partners, completing more than $3.5 billion in real estate acquisitions across a broad range of strategies. He joined Clarion Partners in 1995, and began working in the real estate industry in 1984. His background includes all key aspects of portfolio management, including acquisitions, financing and sales totaling over $5.0 billion in all property types and risk strategies, in markets across the U.S., Brazil and Mexico.


Biographies

43

DOUGLAS F. WOLSKI (212) 883-2772 [email protected] Director, Lion Properties Fund Assistant Portfolio Manager

Douglas Wolski is an equity owner, Director and Assistant Portfolio Manager for the Lion Properties Fund. Doug shares responsibility for all facets of Fund management including acquisitions and dispositions, asset management and investor communications. He joined Clarion Partners in 2006 as Assistant Portfolio Manager for Lion Properties Fund. Doug joined the finance industry in 1987 and began working in the real estate industry in 1991.

Prior Experience AIG Global Real Estate Investment Corporation, New York, NY - Vice President (2004-2006) Prudential Real Estate Investors, Parsippany, NJ - Vice President (1991-2003) Prudential Equity Management, Newark, NJ - Supervisor (1987-1991)

Education Rutgers University, B.A. (1990)


Biographies

44

JON GELB (212) 883-2733 [email protected] Director, Lion Properties Fund Assistant Portfolio Manager

Jon Gelb is an equity owner, Director and Assistant Portfolio Manager for the Lion Properties Fund. Jon shares responsibility for all facets of Fund management including acquisitions and dispositions, asset management and investor communications. Previously, Jon served as Assistant Portfolio Manager to Jeb Belford on an open end value added fund and had acquisitions and portfolio management responsibilities for other Clarion portfolios. Jon joined the Firm in 2007 and began working in the real estate industry in 2005.

Prior Experience Cushman & Wakefield, New York, NY – Transaction Consultant (2005-2007)

Education Harvard Business School, M.B.A. (2005) Wesleyan University, B.A. (1997)


Biographies

45

BARBARA FLUSK, C.P.A. (212) 883-2676 [email protected] Senior Vice President, Financial Operations

Barbara Flusk is Senior Vice President of Financial Operations at Clarion Partners. Barbara leads the single client accounting team and is responsible for developing financial reporting policy, instituting firm accounting procedures and managing internal controls. Barbara oversees staffing for the Portfolio Finance group. She joined Clarion Partners in 2004 and began working in the real estate industry in 1989. Barbara is a member of WX (New York Women Executives in Real Estate), is co-chair of the NCREIF Accounting Committee and is a member of the NCREIF/PREA Global workgroup.

Prior Experience RREEF, New Jersey - Vice President, Head of Property Management Accounting (1993–2004) Mack-Cali, New Jersey - Property Accounting (1989–1993)

Education & Professional Certification Thomas Edison State College, B.S. - Business Administration-Accounting (1999) Certified Public Accountant with the State of New Jersey

CLARION PARTNERS



CLARION PARTNERS OVERVIEW



Appendix F


Firm Highlights

47

Private real estate investment manager in the Americas

– 33-year track record of excellence

• Private ownership structure enhances performance, retention

– National operating platform

• 31 equity partners currently involved in management of the Firm

• Total of 81 specialists across acquisitions and asset management disciplines

• Scaled operations in all property sectors

• Significant acquisition capacity

– Long-term above-benchmark performance

• Research informs investment execution

• Successful management through market cycles

Staff count as of June 30, 2015; all other data as of March 31, 2015.

57% 27%

16%

49% 51% Funds $18.1Bn

Separate Accounts $17.8Bn

30%

23% 21%

21%

5%

INVESTMENT FORMAT

RISK PROFILE

PROPERTY TYPE

Core $20.4Bn

Value-Add/ Opportunistic

$5.6Bn

Core-Plus $9.8Bn

Hotel/Other $2.3Bn

Residential $7.5Bn

Retail $7.5Bn

Office $10.5Bn

Industrial $8.0Bn


48

National Investment Management Platform with Local Expertise

Staff counts are as of June 30, 2015; all other data is as of March 31, 2015. 1 In addition to its U.S. offices, Clarion Partners has additional offices in São Paulo, London and a sub-advisor in Mexico City. Staff counts above do not include administrative personnel. Please refer to the important disclosures at the beginning of this presentation.

Investment Research – 8 research specialists – Centralized in NY; leverages Clarion’s

national footprint to monitor and assess markets, develop investment themes and strategies, and produce detailed metropolitan, submarket and sector forecasts using its own proprietary models

Acquisitions – 23 specialists covering all strategies – Regionally located generalists;

specialist team in Dallas covering industrial nationally; local presence in Mexico and Brazil

Asset Management – 58 asset management specialists – Property sector specialists positioned

regionally – Sector heads are property type experts

and leaders in national and regional industry organizations; average over 30 years of industry, asset management and property type experience

$35.8 Bn AuM. 1,032 properties. 9 offices. 274 employees.

Seattle

Boston

New York

Washington, DC

Dallas

Los Angeles

Mexico City1

Atlanta

HEADQUARTERS

REGIONAL

AuM STATEWIDE

< $750 MM $ 75 0 M M — $ 1 ,5 0 0 M M $1,500 MM +

London

OFFICES

MEXICO

BRAZIL

UNITED KINGDOM

São Paulo


49

National Scale Across All Property Types

Scale of investment expertise and tenant relationships across all major sectors

30%

23% 21%

21%

5%

% OF FIRM AUM

As of March 31, 2015. Excludes cash and other assets.

Office: $10.5 billion, 96 properties – 1,400 tenant relationships – Investments in 24 MSAs nationwide

Industrial: $8.0 billion, 564 properties – Includes a $5.9 billion open-end, sector-focused fund – One of the largest private industrial funds in the U.S., and one of the few

“pure-play”

Retail: $7.5 billion, 115 properties – Proven execution through JVs with public companies and direct

investment – Partner relationships include GGP, Simon, Kimco & Federal Realty Trust

Multifamily: $7.5 billion, 139 properties – Spans spectrum: apartments, student housing, condominium projects – Includes Gables Residential Trust, a best-of-breed, 33-year old operating

company with over 50,000 owned/ managed units in the U.S.

Hotel: $1.7 billion, 73 properties – One of the largest owners of hotel assets in the U.S.


Clarion Partners Management: Proven Industry Leaders

50

EXECUTIVE BOARD

Stephen Furnary (31/41) Chairman & CEO

Stephen Hansen (15/30) Head of Separate Accounts

Craig Tagen (18/31) Head of Asset Management

David Gilbert (8/32) President & CIO

Hugh Macdonnell (3/24) Head of Client Capital

Management

Patrick Tully (17/21) Chief Financial Officer

PORTFOLIO MANAGEMENT

51 members

ASSET MANAGEMENT

65 members

INVESTMENT RESEARCH

8 members

DEBT INVESTMENT

2 members

CLIENT CAPITAL MANAGEMENT

19 members

FINANCIAL MANAGEMENT

75 members

LEGAL & COMPLIANCE

4 members

ACQUISITIONS

26 members

INVESTMENT COMMITTEE

David Gilbert (7/32) President & CIO

Doug Bowen (28/33) Senior Portfolio Manager

Hugh Macdonnell (3/24) Head of Client Capital

Management

Stephen Furnary (31/41) Chairman & CEO

Stephen Latimer (29/29) Senior Portfolio Manager

Craig Tagen (18/31) Head of Asset Management

Tim Wang (9/10) Head of Investment Research

Senior Management averages nearly 30 years of experience and 17 years tenure with the Firm

As of June 30, 2015. Numbers in parentheses represent tenure with the firm/years in the industry. Staff counts are inclusive of administrative personnel. Chart excludes corporate support departments, including human resources and technology support services.


51

Please refer to the important disclosures at the end of this presentation. Comparison of Clarion Partners’ NCREIF Equivalent Composite performance with that of the NCREIF Property Index. Past performance is not indicative of future results and a risk of loss exists.

History of Consistent Performance Through Market Cycles

CLARION PARTNERS NCREIF EQUIVALENT COMPOSITE BENCHMARK AS OF MARCH 31, 2015

94 basis point outperformance since inception (DeLevered)

16.4%

14.9%

17.8%

10.6% 9.8%

12.6% 11.4%

13.0%

8.8% 8.9%

12.7% 11.5%

12.8%

8.4% 8.0%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

1 Year 3 Year 5 Year 10 Year Since Inception (30.5 Years)

RET

URN

RATE

TIME PERIOD

CP Levered CP DeLevered NCREIF Property Index


Investment Style

52

As of June 30, 2015.

CORE CORE-PLUS VALUE-ADDED OPPORTUNISTIC


(2000) OPEN-END

– $8.3 Bn GAV, $5.8 Bn NAV

LION INDUSTRIAL TRUST

(2002) OPEN-END

– $6.3 Bn GAV, $4.1 Bn NAV

CLARION GABLES MULTIFAMILY TRUST (2014) OPEN-END

- $3.4 Bn GAV, $1.7 Bn NAV

DEBT INVESTMENT FUND (2013) – $500 mm equity target

CLARION VENTURES 4

– Fund IV (2015) $400 mm equity target

CLOSED TO NEW INVESTMENT

CAMPUS-CLARION STUDENT HOUSING PARTNERS (2015)

– $403 mm equity raised MEXICO FUND (2006)

– $650 mm equity raised

CLARION VENTURES SERIES – Fund III (2007) – Fund II (2004) – Fund I (2000)


53

2014 ACHIEVEMENTS GLOBAL REAL ESTATE SUSTAINABILITY BENCHMARK (GRESB) − Leading global benchmark of real estate fund

sustainability performance − Reported on three Clarion-managed funds (LPF, LIT,

Gables) − All three funds ranked in Upper Quartile among peer

group

ENERGY STAR − EPA-sponsored tool for tracking and benchmarking

building sustainability performance − Benchmarked Properties: 357 (37% of Portfolio) − Labeled Properties: 33 (45% of Office Portfolio) − Average Energy Star Score: 86 (of 100)

LEED & ACREDITED PROFESSIONALS − LEED Certified Properties: 33 (8% of Clarion Portfolio) − LEED Accredited Professionals: 19 (7% of Clarion

team)

SOCIAL RESPONSIBILITY − Employees volunteered nearly 1,000 hours in Clarion-

sponsored activities

Clarion Responsible Investing (CRI) Enhancing Value Through Responsible Investment

The CRI initiative strives to create exceptional value and enhance the communities in which we operate by investing in sustainable buildings

CREATE VALUE: Reduce operating expenses through strategic capital investment and active management of properties CONSERVE RESOURCES: Reduce energy and water consumption and waste creation through region-specific operating improvements INVEST IN SUSTAINABLE BUILDINGS: Integrate environmentally responsible practices throughout investment lifecycle LEAD BY EXAMPLE: Integrate CRI approach in all aspects of operations; benchmark and communicate results; actively participate in larger community and engage business partners, tenants, investors, and other stakeholders alike

As of December 31, 2014.

CLARION PARTNERS



NOTES TO PERFORMANCE



Appendix G


Clarion Partners NCREIF Equivalent Composite Notes to Performance

55

The NCRIEF Equivalent Composite Illustration includes performance information related to funds and separate accounts managed by Clarion Partners. This information is presented solely to familiarize you with Clarion Partners’ experience as a whole and is not necessarily related to the Fund’s specific objectives. These illustrations are subject to numerous limitations and should not be relied upon as an accurate measure of comparison of returns of any investment programs. The performance information presented does not track the aggregate performance of Clarion Partners or any of its other individual portfolios and does not reflect the complete investment cycle of any actual investment. There is no guarantee that any investment was or will be disposed of on favorable terms or at all.

All Clarion Partners performance information presented in the NCREIF Equivalent Composite Illustrations is shown gross of taxes, fees and fund expenses. On a net basis, the returns shown would be substantially lower due to relevant annual management fees and performance as well as other relevant costs and expenses. No investor in any Clarion Partners investment program has realized the returns shown for any particular period. Clarion Partners returns as shown in the NCREIF Equivalent Composite Illustration are based on the performance of assets in applicable portfolios that are considered by Clarion Partners to meet the selection criteria for inclusion in the NPI. Such selection criteria includes U.S. operating properties at 60% occupancy or greater and are accounted for at market value. A property may be removed from the applicable composite upon sale or conversion to a non-NPI use. Complete information regarding NCREIF’s inclusion methodology is available at http://ncreif.org/faqsproperty.aspx.

Substantial differences exist between NCREIF’s and Clarion Partners’ respective methods for calculating and time-weighting joint venture interests. For example, levered returns are calculated on an investment-level basis and include leverage, cash balances and interest income from short-term investments. Delevered returns are generally presented on an unlevered basis and compared to the NPI, which is an unlevered benchmark. By contrast, the NPI is a property-level index, shown before advisory fees and includes primarily core operating properties, excluding ownership and financing structures (i.e., returns are based on 100% of property operations and are unlevered.) Further, because Clarion Partners’ NCREIF Equivalent Composite Benchmark includes discretionary and non-discretionary investments, returns could differ materially if the investments included were all discretionary.

While the NCREIF data relied on in this presentation is widely considered to be the benchmark for commercial property returns in the United States, the comparisons set forth herein are for illustrative purposes only and readers are reminded that the asset values depicted do not represent the results of an actual investment and do not reflect the deduction of advisory fees or other expenses. Moreover, the economic and market circumstances that have had an impact on asset values over the past three decades may differ materially from the economic and market circumstances of the current real estate investment environment. Past performance is not indicative of future results and investors cannot invest in an index.

http://ncreif.org/faqsproperty.aspx


56

Investment Property Databank (IPD) Notes to Performance The IPD U.S. Core Open-End Index (“IPD Index”) is a benchmark maintained by the Investment Property Databank. The IPD Index is a peer group benchmark used by Lion Properties Fund and includes all investments owned by the peer group including real estate, cash and other investments (mezzanine loans receivable, notes receivable, forward commitments, etc.). The IPD Index is a composite of investment returns reporting on both a historical and current basis the results of its participating members, who must qualify as being open-end, core, diversified funds pursuing a core investment strategy. The IPD Index is capitalization-weighted and is reported gross of fees. Measurement is time-weighted. Unless otherwise noted, IPD Index returns are presented without leverage and before the deduction of portfolio level management fees and do not reflect the results of any actual investment portfolio. The index’s history is unfrozen; therefore any reconstitution would result in a revision to the index’s historical data. For comparative purposes, IPD calculates LPF returns using the same methodology as the IPD Index. Further information is available online at http://www.ipd.com. The comparisons set forth herein are for illustrative purposes only and readers are reminded that the asset values depicted do not represent the results of an actual investment and do not reflect the deduction of advisory fees or other expenses, which in the aggregate can be substantial and have the effect of reducing returns. Moreover, the economic and market circumstances that have had an impact on asset values since the Fund’s inception may differ materially from the economic and market circumstances of the current real estate investment environment. Past performance is not indicative of future results and investors cannot invest in an index.

http://www.ipd.com/

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Imperial County Employees' Retirement System 19 August 2015

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