Adelante (Public RE - REITs) Domestic Equity: Wilshire ...

Adelante (Public RE - REITs) Domestic Equity: Wilshire REIT Benchmark

For the month of:

Manager Performance Calculations

Adelante Total Return Wilshire REIT Index

Last Month -3.48% -4.55%

October

Last 3 Months -12.52% -13.31%

2023

Last 1 Year -2.95% -4.78%

* Annualized returns

Last

Last

3 Years*

5 Years*

5.81%

4.36%

4.98%

2.54%

Performance Attribution & Strategy Comments

For the month ended October 31, 2023 ? The Account outperformed the Wilshire US REIT Index by 107 basis points, gross of fees, as the REIT market declined 4.5%. ? Contributors: security selection within Apartments, the sector allocation to Storage (underweight) and the cash position. ? Detractors: security selection within Industrial, Storage and the sector allocation to Regional Retail (underweight). ? Best performing holding: American Tower Corp., +9.4%. ? Worst performing holding: Extra Space Storage, Inc., -14.9%.

For the trailing quarter ended October 31, 2023 ? The Account outperformed the Wilshire US REIT Index by 79 basis points, gross of fees, as the REIT market declined 13.3%. ? Contributors: the sector allocation to Diversified (underweight), Storage (underweight) and security selection within

Healthcare. ? Detractors: security selection within Industrial, Industrial Mixed, and Local Retail. ? Best performing holding: Welltower Inc., +2.5%. ? Worst performing holding: Extra Space Storage, Inc., -25.5%.

Comments ? Risk-off cross currents weighed on markets and raised the stakes on Q3 earnings. The onset of a second global conflict on October 7th only briefly interrupted the sell-off in bonds; the 10 year yield spiked to 5.0% - last seen 16 years ago. The rapid rise in interest rates and year-end tax loss selling punished select REIT property sectors like storage and sunbelt apartments that are experiencing a post-Covid hangover of too much supply. The property transaction market is now adjusting to Fedspeak unanimity and transaction volumes continue to fall; the bid/ask spread between willing buyers and sellers is now expected to weigh on property values into 2024. As reported last month, two new all-stock mergers were announced as Realty Income and Healthpeak Properties are bulking up.

Positive comments from the tech giants lifted the data center REITs within Industrial Mixed, the best performing sector, up 1.3%. Storage was the worst performing sector, crashing 11.3% after earnings announcements - demand is weak and supply is growing. Over the past 6 months, our storage sector exposure had been reduced and we were 176 bps underweight at month end.

During the month, we exited our trading position in Sabra Health Care REIT and introduced Healthpeak Properties; the position in Retail Opportunity Investments Corp was closed.

At month-end, the portfolio's dividend yield and cash positions stood at 4.0% and 1.3%, respectively.

Manager Style Summary Adelante (formerly Lend Lease Rosen) manages the public real estate portfolio, comprised of publicly-traded real estate companies, primarily real estate investment trusts (REITs). Investments will generally fall into one of three categories as described in the Portfolio Attributes section: Core holdings, Takeover/Privatization candidates, and Trading Opportunities. Typical portfolio characteristics include current pricing at a discount relative to the underlying real estate value, attractive dividend prospects, low multiple valuations (P/FFO), and expert management.

Adelante (Public RE - REITs) Domestic Equity: Wilshire REIT Benchmark

Portfolio Guideline Compliance

Portfolio Guideline:

Adelante Wilshire REIT Calc

Min

Max

B2. All securities are publicly-traded real estate companies, primarily real estate investment trusts

B3. Mkt Cap of Issuers of Securities in the Account

$250

B4. Single Security Positions ................
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