Page 23 - Venture - State of the Market 2020

GIVEN THE CURRENT LOW-INTEREST RATE, DO YOU EXPECT THE INTEREST RATE TO KEEP
GETTING LOWER?

Difficult to predict, speculating that soon there will be a correction for a raise in federal tax rates. This
is due to an increase and stabilization of economic growth. The economy is doing well so it gives the
federal reserve wiggle room for interest rates. A concern of inflation, by decreasing interest rates.

Stay the same as they are due to an economic downturn of countries that are correlating with the US
economy such as Germany, France, China (quantitative easing)

There is a trend of getting lower. The interest rate is likely to be lower but it will not go back to the
level in 2008.

Due to the international factors, the interest rates could get lower but it will rise in a few years.

Personally, yes. The interest rate may even go negative. The current bond prices also indicate
the trend of interest rates getting lower.

AS THE ELECTION APPROACHES, WHAT DOES IT MEAN FOR THE REAL ESTATE MARKET
IN 2020 BASED ON THE OUTCOME OF THE ELECTION?

Positive: immigrant-friendly policy (liberal), economic growth, increase in the real estate sectors
Negative: conservative policies mostly, conservatives had a good idea for positive tariffs but it has
reached a point of diminishing returns because of the trade war.

The only concern for the real estate market is if Trump gets reelected as he is known to cause a
degree of uncertainty, impulsivity, and unpredictability. Businesses need a level of certainty and
predictability that makes sure trading between partners is not interrupted. Anybody other candidate
should mean stability. Democrats would want the tax rates to increase due to the economic growth
of 2019 leading up into 2020.

If Trump wins the election, it is not good for the economic environment overall. Also, the increase of
taxes also has some implications.

The election may affect other parts of the economy but I do not think it will affect
the real estate market.

F5 TOWER AND NEW AMAZON BUILDINGS WERE SOLD TO NEW YORK-BASED KKR IN
A $1.2B DEAL IN DECEMBER 2019. DO YOU SEE MORE BIG DEALS LIKE THIS HAPPEN-
ING IN THE YEARS TO COME?

Yes, we could expect more construction deals with the Rainier Tower, 1 to 2 more big deals in Seattle,
especially since the best returns in the country at the moment is Seattle (no oversaturation in tech
industry as right now it’s actually undersupplied). The multifamily real estate section is at equilibrium
right at this time.

Yes, I am positive about the great potential of Seattle. The tech industry in Seattle is in a good state.
If the company keeps growing well, it would expand its divisions, resulting in the big deals for sure.

VENTURE | 2020 STATE OF THE MARKET 21