The Weekly Briefing - February 1st, 2021

GDP Growth Cooled Last Quarter as Consumers Reined in Spending

U.S. Real GDP growth slowed last quarter as widely expected to an annualized rate of 4.0%. Though modestly robust for an economic recovery, these figures come in the context of 3Q20’s record-shattering 33.4% annualized pace of growth when many sectors of the economy hit the accelerator as officials lifted business restrictions. Total economic activity during the quarter finished 2.5% below one-year-prior figures, indicating that there is more to be done to fully recover from the pandemic-induced shutdown. Consumer spending, which accounts for more than two-thirds of the economy, tightened over the past two months, weighing on last quarter’s headline growth figure. Household expenditures declined 0.2% last month after falling 0.7% the month before. Spending on both durable and nondurable goods bore the brunt of last month’s decline, while the services sector nearly held steady. An uplift in household income last month due to higher wages and the year-end stimulus could support spending in early 2021, but consumers are likely to remain hesitant regarding nonessential purchases. Consumer sentiment indices are split about the overall health of U.S. consumers. After improving 2.2 points this month, consumer confidence still stands well below pre-pandemic levels, and the present conditions component is showing new weakness, especially in California. Meanwhile, the Univ. of Michigan’s consumer sentiment index edged down 1.7 points this month to 79.0. Real GDP (Trillions) & Annualized Real GDP Growth Fed Officials Leave Interest Rates Unchanged, Keep an Eye on Vaccine Rollout

Federal Reserve officials maintained course last week as they held interest rates unchanged at 0.25% and emphasized that the central bank’s asset purchasing program would continue. In their statement, the Federal Open Market Committee (FOMC) noted that the pace of recovery had “moderated in recent months” but also made clear that challenges were concentrated in a few sectors. The FOMC continued to stress that the strength of the recovery will depend on containing the virus, including the vaccination campaign. The vaccine rollout has proceeded more slowly than anticipated, but new coronavirus case counts have dropped sharply by a third over the past two weeks. The number of daily cases now stands at 48.5 per 100,000 people, the lowest level since November, according to Opportunity Insights data. Worldwide, major central banks continue to maintain accommodative policy stances. The European Central Bank and Bank of Japan have left interest rates at zero and below zero respectively since before the pandemic. The Bank of Canada has pegged rates at 0.25% for several months after slashing them last spring, and the Bank of England has held rates at 0.1% since early 2020, the lowest level in more than a decade. Major Central Bank Base Interest Rates Single-Family Home Prices Picked up Steam Last Year, Especially in the Final Quarter

The sales price for a typical single-family home in the U.S. jumped 8.5% last year to $265,000, the fastest pace of growth since the run-up that preceded the GFC, according to Zillow data. The price gains were widespread as the 50 largest markets all saw home prices rise 6.0% or more. San Jose, Phoenix, Salt Lake, and Seattle led the way with prices up at least 13.0%. It remains unclear how long the rapid price growth can be sustained. Many would-be homebuyers are likely getting priced out of the market despite record-low mortgage rates, which could dampen demand. In addition, every major market except Dallas, San Francisco, and Las Vegas saw above-trend price growth last year, suggesting the potential for pullback to long-run averages. Pricing momentum showed no signs of slowing, however, as the year closed. Zillow reports that the strongest seasonally adjusted month-on-month price growth last year took place during 4Q20. Single-Family Sales Price Growth: 50 Largest Markets

Disclosures and Disclaimers

This is a general analysis of the real estate market prepared by Bridge Investment Group LLC (“Bridge”) and is not related to any specific products or services of Bridge or any affiliate. Sources for statistics and other factual data included herein are maintained by Bridge Research. Such data has not been verified by Bridge and we can give no assurance that it is accurate or complete. Statements contained herein that are nonfactual constitute opinions of Bridge, which are subject to change. Financial projections contained herein are estimates only and are based on assumptions, including assumptions regarding future rent growth, the availability and cost of financing, changes in market capitalization rates, and various micro- and macro-economic trends. No assurance can be given that either the projections or the assumptions will prove to be accurate. Investment in real estate involves substantial risk of loss.

This analysis contains various forward-looking statements that are not historical in nature. You are cautioned not to place undue reliance on any of these forward-looking statements, which reflect our views as of the date of this presentation. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward-looking statements and we cannot guarantee future results or the successful implementation of the strategies discussed in this presentation. We are under no duty to update any of the forward-looking statements after the date of this presentation to conform these statements to actual results. Certain information contained herein has been obtained from published sources, agencies of the U.S. government and from third-parties, including without limitation, market forecasts, market research, publicly available information and industry publications. Although such information is believed to be reliable for the purposes used herein, Bridge does not assume any responsibility for the accuracy or completeness of such information. Similarly, forecasts or market research, while believed to be reliable, have not been independently verified and Bridge does not make any representation as to the accuracy or completeness of such information. All information is provided on an “as is” basis only. By using this information, the reader agrees that Bridge shall not have any liability for the accuracy of the information contained herein, for delays or omissions therein, or for any results based on your use of the information which are not consistent with your objectives. Without limiting the foregoing disclaimers, the information provided herein is not guaranteed to be accurate or complete, nor does Bridge take responsibility for it. The information contained herein has not been audited and Bridge does not guarantee its suitability for any purpose. All information is subject to change and/or withdrawal at any time without notice. Certain information included herein may refer to published indices. Indices that purport to present performance of certain markets or the performance of certain asset classes or asset managers may actually present performance that materially differs from the overall performance of such markets, asset classes or asset managers.

Past performance is not a reliable indicator of future results and should not be the sole factor of consideration when selecting a product or strategy. Any research in this document has been procured and may have been acted on by Bridge for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of Bridge or any of its affiliates and no assurances are made as to their accuracy.

This document is for information purposes only and does not constitute an offer or invitation to anyone to invest in any Bridge funds and has not been prepared in connection with any such offer.

Copyright 2020, Bridge Investment Group LLC. “Bridge Investment Group” and certain logos contained herein are trademarks owned by Bridge.