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. is continuing to seek value for our investors on a global scale, while constructing and managing a portfolio that can provide resilience through both short-term and long-term market impacts. While virtually no asset class is completely immune from the negative effects of market volatility or recession, we believe certain sectors and strategies are better positioned in these uncertain times. Our strategy continues to focus on durable income, diversification across global markets and property sectors, and achieving long-term appreciation through active investment and asset management while also providing a hedge against inflation.

Performance highlights

Sector allocation continues to be a paramount investment decision in 2022 as the continued economic environment is affecting sectors and industries by varying degrees. Nuveen Global Cities REIT’s portfolio consists of a combined 88% allocation to industrial, housing, and healthcare, all of which have strong long-term fundamentals due to increased reliance on ecommerce, technology, healthcare, and housing. In addition, market selection is more important than ever given the current macroeconomic uncertainties. We utilize a market disciplined approach designed to identify cities best positioned for structural growth over the long term.

Investment Highlight – Wilsonville Logistics Center

Nuveen Global Cities REIT has found a number of compelling buying opportunities recently, as higher interest rates and choppy market conditions have tempered the competitive buying environment. This includes another industrial asset acquired in June, Wilsonville Logistics Center. The property is a 508,000 sq. ft. bulk distribution building located near the I-5 freeway in the Wilsonville submarket of Portland, OR, which is currently at an all-time low vacancy rate of 1.6% and benefitted from 8.1% year-over-year rent growth. The submarket typically attracts higher skill/cost labor with an array of manufacturing and distribution users, as there are several affluent communities which provides desirable executive housing options in the surrounding area including Lake Oswego, Tualatin, Tigard and Sherwood.

There are limited industrial sites suitable for development of bulk distribution throughout the Portland market due to land scarcity, the Urban Growth Boundary, and municipalities prioritizing adding residential over industrial. Portland’s population has grown at 1.5% annual growth rate since 2000 and has 2.54 mm residents as of January 2022. Its population has grown at nearly triple the rate of U.S. national population growth over the previous 5, 10, and 20-year periods, according to StratoDem Analytics. With increasing demand, yet limited new supply, rent continues to push upward in the industrial market in Portland making Wilsonville Logistics Center an exciting acquisition for the GCREIT and another opportunity to add the REIT’s overweight to industrial of 31%.

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 Jun 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 T shares and Class S 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. Past performance does not predict or guarantee future results. For the year ended 31 Dec 2021 the six months ended 30 Jun 2022, we reported GAAP net income (loss) of $19.1 million and ($32.6) 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 June 30, 2022, our NAV per share was approximately, $13.11, $12.98, $13.15, and $13.10 per Class T, Class S, Class D and Class I share, respectively, and total stockholders’ equity per share was approximately $10.21, $10.10, $10.23 and $10.19 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.

3Distribution 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 six months ended 30 Jun 2022 were covered 56% and 84%, respectively, from GAAP cash flow from operations and 44% and 16%, 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 441 properties, including 383 single family homes, and has exposure to 31 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.

7Inception 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.

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 Aug 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.