Nuveen Global Cities REIT Portfolio Update

Richard M. Kimble
Portfolio Management, Americas
Gracie Coburn
Assistant Portfolio Manager, Global Cities REIT
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Nuveen Global Cities REIT, Inc.’s strategy continues to focus on durable income, diversification across global cities and property sectors, and achieving long-term appreciation through active investment and asset management while also providing a hedge against inflation.

Performance highlights

December returns were driven by valuation decreases in Nuveen Global Cities REIT’s direct property portfolio combined with a 4.7% decrease in listed REITs. These negative returns were partially offset by positive income and currency movements. Overall, portfolio fundamentals remain strong as evidenced by the REIT’s high occupancy and rent collections. Valuation decreases were driven by disruptions in capital markets leading to expansion in investment rates, not real estate fundamentals. Management believes these market disruptions will provide attractive buying opportunities in 2023.

Nuveen Global Cities REIT’s portfolio consists of a combined 62% allocation to industrial, housing, and healthcare, all of which have strong long-term fundamentals due to increased reliance on ecommerce, technology, healthcare, and housing, which will provide long-term resiliency to the REIT.

Investment Highlight – Off-Market European Single-Family Rental

In December, the GCREIT purchased a $34 million residential rental portfolio, consisting of 84 individual units located in four submarkets outside of Copenhagen, Denmark. The deal was purchased off-market, directly from the developer of the portfolio. This purchase represents 1.3% of the REIT’s Gross Asset Value at time of acquisition, bringing the REIT’s housing exposure to 26%, and international exposure to 6%.

Delivered between 2019-2022, the class A housing portfolio is 100% occupied, with mid-level rental rates, consistent with the REIT’s housing strategy to focus on middle-income renters and capture a wide demographic. The properties are located within 30 minutes of Copenhagen’s city centre and are in walking distance to highly rated schools and public transportation. This purchase is the REIT’s first direct European investment, with prior European exposure consisting solely of a $72 million investment in Nuveen’s European Cities Fund. Additional direct European investments will be considered, if consistent with the REIT’s strategy of acquiring high quality properties in target markets that meet the REIT’s return requirements. From a short-term perspective, the U.S dollar’s rapid appreciation since 2021 may provide an additional lift to returns of European assets, according to Nuveen’s Research team.

Copenhagen is a highly favorable investment market given Denmark’s strong economy – the country has a AAA credit rating, one of the lowest unemployment rates in Europe, and the highest GDP per capita in Europe. Copenhagen, population of two million, has one of the most robust demographic growth forecasts of any city in Europe. The 30-44 age group is projected to have the highest population growth rates, further fueling demand for rental housing over the medium-term. Lastly, more than 60% of Copenhagen’s real estate investment activity occurs in the housing sector and has seen the highest transaction volume of any asset class over the past decade.

Nuveen Real Estate, remains fully capable of investing and supporting all of its client portfolios and is committed to the welfare of its employees and clients. We have the benefit of the resources, preparations, and strategy across Nuveen Real Estate and its parent, TIAA, a 100-year-old company with more than $1.1 trillion of assets under management as of 30 Sep 2022. TIAA’s $300 million investment into the Nuveen Global Cities REIT remains a key feature, providing true co-alignment and attention from Nuveen Real Estate and its leadership team.

We believe that the Nuveen Global Cities REIT’s commitment to quality, diversification, and strategic portfolio construction will continue to offer investors a competitive advantage and value for stockholders.

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Certain information contained in this document constitutes “forward-looking statements” within the meaning of the federal securities laws and the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of forward-looking terminology, such as “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” “likely,” or the negative versions of these words or other comparable words thereof. These may include our ability to successfully navigate through the current economic uncertainty, our financial projections and estimates and their underlying assumptions, statements about plans, objectives and expectations with respect to future operations, and statements regarding future performance. Such forward-looking statements are inherently uncertain and there are or may be important factors that could cause actual outcomes or results to differ materially from those indicated in such statements. We believe such factors include the financial condition of our company and our portfolio in light of the COVID-19 pandemic, the state of financial markets, and the impact of the pandemic on our tenants and the general economy. We believe these factors also include but are not limited to those described under the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended 31 Dec 2021, and any such updated factors included in our periodic filings with the Securities and Exchange Commission. Except as otherwise required by federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

Performance data shown represents past performance and does not predict or guarantee future results.

1 Returns shown are preliminary. Net total returns are calculated by share class using the time weighted return formula and derived by dividing (1) the respective aggregate share class’s monthly net operating income (after appreciation, fees and expenses) by (2) the share class’s previous month’s ending NAV plus the proceeds from share issuances for the current month. Actual individual investor performance may differ from the aggregated share class performance. All returns shown assume reinvestment of distributions pursuant to Nuveen Global Cities REIT Inc.’s (“GCREIT” or “NREIT”) distribution reinvestment plan, are derived from unaudited financial information and are net of all GCREIT expenses, including general and administrative expenses, transaction related expenses, management fees, and share class specific fees, but exclude the impact of early repurchase deductions on the repurchase of shares that have been outstanding for less than one year. Class T shares and Class S shares listed as (With sales load) reflect the returns after the maximum upfront selling commission and dealer manager fees of 3.5%. Class D shares listed as (With sales load) reflect the returns after the maximum upfront selling commission of 1.5%. Class T shares, Class S shares, and Class D shares listed as (No sales load) exclude up-front selling commissions and dealer manager fees. Returns are annualized for periods longer than one year. The returns have been prepared using unaudited data and valuations of the underlying investments in GCREIT’s portfolio, which are estimates of fair value and form the basis for GCREIT’s NAV. Valuations based upon unaudited reports from the underlying investments may be subject to later adjustments, may not correspond to realized value and may not accurately reflect the price at which assets could be liquidate. Performance data shown represents past performance and does not predict or guarantee future results. . For the year ended 31 Dec 2021 the nine months ended 30 Sep 2022, we reported GAAP net income (loss) of $19.1 million and ($46.6) million, respectively.

2 NAV is calculated in accordance with the valuation guidelines approved by our board of directors. NAV is not a measure used under generally accepted accounting principles in the United States (“GAAP”), and you should not consider NAV to be equivalent to stockholders’ equity or any other GAAP measure. As of 30 Sep 2022, our NAV per share was approximately, $13.06, $12.92, $13.09 and $13.04 per Class T, Class S, Class D and Class I share, respectively, and total stockholders’ equity per share was approximately $9.89, $9.79, $9.92 and $10.17 per Class T, Class S, Class D and Class I share, respectively. For a full reconciliation of NAV to stockholders’ equity and a discussion of the limitations and risks associated with our valuation methodology, please see the “Management’s Discussion and Analysis of Financial Condition and Results of Operation - NAV Per Share” section of our annual and quarterly reports filed with the SEC, which are available at www.nuveen.com/gcreit. For information on how we calculate NAV, see the “Net Asset Value Calculation and Valuation Guidelines” section of our prospectus.

3 Distribution rate reflects the most recently approved monthly annualized distributions divided by the prior month’s net asset value. Distributions paid during the year ended 31 Dec 2021 and the nine months ended 30 Sep 2022 were covered 56% and 81%, respectively, from GAAP cash flow from operations and 44% and 19%, respectively, from debt and financing proceeds.

4 Total asset value is measured as the gross asset value of real estate properties (based on fair value), the investment in our real estate-related securities measured at fair value, the equity investment in unconsolidated International Affiliated Funds (which includes the allocable share of the International Affiliated Funds’ income and expense, realized gains and losses and unrealized appreciation or depreciation), any investments in commercial mortgage loans measured at fair value, plus cash and other assets, excluding restricted cash.

5 GCREIT directly owns 459 properties, including 384 single family homes, and has exposure to 35 additional properties owned by the International Affiliated Funds in which we have made an investment.

6 Leverage is measured using, as the numerator, property-level and entity-level debt and as the denominator, the gross asset value of real estate assets (calculated using the greater of fair value and cost of gross real estate assets including investment in our securities portfolio, our loan portfolio, and our allocable share of investments in unconsolidated International Affiliated Funds), inclusive of property-level and entity-level debt, plus cash, other assets and excluding restricted cash.

7 Inception dates for each share class are: 01 Jan 2019 for Class T shares, 01 Dec 2019 for Class S shares, 01 Jun 2018 for Class D shares, and 01 May 2018 for Class I shares.

8 Allocation by region/asset type includes investments owned directly by the REIT and investments in affiliated funds.

9Allocation by U.S. region and by sector includes only investments owned directly by the REIT.

The information provided does not take into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. Financial professionals should independently evaluate the risks associated with products or services and exercise independent judgment with respect to their clients. All information is as of 31 Dec 2022, unless otherwise disclosed.

Nuveen Real Estate is a real estate investment management holding company owned by Teachers Insurance and Annuity Association of America (TIAA). Nuveen Securities, LLC, member FINRA and SIPC, is the dealer manager for the Nuveen Global Cities REIT, Inc. offering.