Own the Hard Assets Driving · In 2012, Best Buy lost $1.2 Billion - The problem was the Internet. Customers were comparison shopping and finding lower prices online. Sometimes they

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Own the Hard Assets Driving

the eCommerce Revolution

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third party product offerings.

• Benchmark Investments is an investment intelligence firm based in the Flatiron District in NYC

• Inaugural index series divides the real estate market into seven distinct and investable sectors by

property type, tenant type, and revenue type and not by tax classification.

• Allow investors to target or track specific real estate sectors using public real estate

Real Estate SCTR™ Indexes

Industrial

INDSSCTR

Office

DESKSCTR

Retail

RTLSCTR

Housing

PADSCTR

Healthcare

RXRESCTR

Hotel/ Lodging

HOTLSCTR

Data/ Infrastructure

SRVRSCTR

• Historical performance since March 2007

• Data available via Nasdaq, FactSet, BloombergIndex Calculation

Benchmark brings institutional

real estate to individual investors

INDS Index SRVR Index RTL Index

Three-Pronged Approach to e-Commerce: In order to succeed in the digital age, businesses must be able to network online

(SRVR), deliver products (INDS), and maintain brick-and-mortar storefronts (RTL),

all while extending their reach into similar industries to better meet the needs of the

consumer:

Industrial Real Estate Data & Infrastructure

Real EstateRetail Real Estate

ERE – eCommerce Real Estate

Industrial Warehouses, Logistics and

Distribution Centers

Class A Regional Malls and Shopping

CentersData Centers, Cellphone Towers, and Media

Infrastructure

INDS SRVR RTL

• Amazon has one of the most advanced

fulfillment networks in the world.

• Amazon's fulfillment centers pick, pack,

ship, and provide customer service for

Amazon and third party products.

• Prime members love free Two-Day

Shipping, and all Amazon.com customers

can get free shipping on eligible orders.

• Amazon Web Services (AWS) offers a broad set of

global compute, storage, database, analytics,

application, and deployment services that help

organizations move faster, lower IT costs, and

scale applications.

• AWS powers a wide variety of workloads including:

web and mobile applications, cost management,

customer engagement, data processing, artificial

intelligence, IoT and warehousing.

• Amazon has three physical retail avenues:

Amazon 4-Star, Amazon Pop-Up, and

Amazon Books with more than 100 Amazon

store locations in 22 states.

• Amazon bought Whole Foods for their 431

physical locations to fully offer doorstep

delivery and convenient pick up.

• Whole Foods Market offers free two-hour

delivery through Prime Now.

ERE – “Amazon Effect”

Indus t r i a lRea l Es ta te

INDS

INDS Index

Engines of eCommerce

Benchmark constituents are leaders in providing

high-quality, productivity-enhancing, best-in-class

warehouse/distribution facilities.

The insatiable e-commerce demand to receive

packages in a day or less has led to an era of ‘last

mile’ revolution. It’s an arms race for space.

Companies have to satisfy consumer's insatiable

appetite for rapid delivery right to their doorstep.

INDS meets those needs along with being able to

serve more traditional tenants in light

manufacturing and distribution.

INDS Index

UNPRECEDENTED

GROWTH

E-commerce as a % of Total Retail Sales

• Growth in e-commerce sales expected to double

over the next ten years – JLL

• e-commerce sales have gone up 15% every year since

2010 – CityLab

• Lack of new supply has driven industrial real estate

vacancy levels down to a historic low of 4.3% - CBRE

• Online sales grew 15.5% through the first three

quarters of 2018 - U.S. Commerce Dept.

• 2018 eCommerce sales during the five-day period from

Thanksgiving Day through Cyber Monday grew

19% - Internet Retailer

• November through the end of December 2018, online

shopping saw a 17.4% increase from 2017 - Internet

Retailer

INDS Index

3X Logistics Space• Product variety. Online retailers have significantly

greater product variety (stock keeping units) on

average, requiring a broader set of goods carried

within logistics facilities.

• Inventory levels. As the point of sale shifts from in-

store to the logistics facility, greater levels of buffer

stocks must be carried within logistics facilities,

requiring customized facilities.

• B2C shipping. Individual order picking, packing and

shipping direct to consumers requires more space

than store distribution. Instead of efficient palletizing

for store distribution, B2C requires an individual box

for each order.

• Reverse logistics. Many e-commerce logistics

facilities accept returns, and floor space must be

allocated to returns processing and restocking

activities.

E-commerce users require 3x the logistics

space, or more, as compared with brick-and-

mortar.

INDS Index EVOLUTION OF GROWTH

Amazon’s use of smaller deliver

stations and Prime Now Hubs

are growing, but are still a very

small part of their distribution

network. Growth opportunities

are still far larger in their more

traditional and larger

distribution centers.

INDS Index

“Customers expect delivery to be free, they

expect it to be timely […] Sometimes they

want it fast, and are willing to pay for that.

Sometimes they want it free, and they’re

willing to wait for it. We need to have the

right options there.”

MARK HOLIFIELD, HOME DEPOT

EXECUTIVE VICE PRESIDENT OF SUPPLY CHAIN AND PRODUCT DEVELOPMENT

REACHING CUSTOMERS IN 2 HOURS OR LESS

INDS Index

Holdings & Characteristics

Symbol Security Name Weight

PLD Prologis Inc 14.89%

DRE Duke Realty 14.74%

LPT Liberty Property 12.66%

IIPR Innovative Industrial Properties 5.19%

LXP Lexington Realty Trust 4.62%

EGP EastGroup Properties 4.54%

COLD Americold Realty 4.53%

REXR Rexford Industrial 4.53%

STAG Stag Industrial 4.52%

TRNO Terreno Realty 4.47%

Weighted Average Market Cap ($mil) 8,897.13

Dividend Yield (%) 3.88

Price to Funds from Operations (FFO) 18.01

As of 2/18/19

As of 12/31/18

12

Techno logy Rea l Es ta te

SRVR

SRVR Index

Foundation of Tech

Our economy depends on an increasingly

sophisticated backbone of servers, fiber optic

cable, satellites and network switches to move

critical information and analytic algorithms in

and out of the citadels of digital power

including data centers, wireless towers, and

fiber optic networks.

SRVR Index

UNPRECEDENTED

DEMAND • 75 Billion Internet of Things Devices by 2025 –

Gartner

• 94% of workloads and compute instances will be

processed by cloud data centers by 2021 – Cisco

• 4000 Data Centers needed by 2020 to meet

current demand – Bisnow

• The cloud accounts for only 5% of the $3.7

Trillion spent on IT around the world – Microsoft

An eight-rack pod of Google's liquid-cooled TPU version 3 servers

for artificial intelligence workloads

FOUNDATION OF THE

FUTURE FOUR HORSEMEN

• Pokemon Go got 50 million users in 19 days.

• Amazon Sumerian creates and runs virtual reality (VR), augmented

reality (AR), and 3D applications quickly and easily without

requiring any specialized programming or 3D graphics expertise.

• iOS 12 and ARKit 2 take advantage of the powerful hardware in the

iPhone.

• IKEA Place AR: Lets users imagine how products will look, feel, and

fit in the home.

SRVR Index

• As more data gets generated, processed and analyzed at the edge, there

will be a direct impact on AI architectures.

• Amazon has excelled at AI in bringing voice technology to the home via

Alexa and plans on turning Alexa into a massive developer platform

making it the de facto voice technology for future apps.

• AI-powered, customer-service chatbots are better equipped to meet the

expectations of customers for a real-time touchpoint and customized

assistance, while fulfilling a company’s need to cut costs.

• Autonomous driving vehicles, watches, refrigerators are going to

lead to unparalleled connectivity as we already have more than four

billion internet users globally.

• Telematics-based car insurance, in which insurance rates are

influenced by a customer’s actual driving frequency and habits

(reckless vs. safe), relies on IoT sensors to supply the data for the

analytics to help determine “good driver” rates.

• Smart home monitoring systems enable homeowners to optimize

security.

• Equifax will not be hacked going forward if they use multiple cloud

datacenters to validate user permissions.

• Blockchain will be used in expediting multi-party transactions, as well as

providing a secure, private meeting place.

• New innovative products like Equinix SmartKey.

• For instance, a life insurance smart contract could immediately release

funds to a beneficiary upon the death of a policyholder through electronic

checking of death certificates.

Virtual Reality /

Augmented Reality

Artificial

Intelligence

Blockchain / Distributed

Ledgers (Private)

The Internet of

Things / 5G

SRVR Index EVOLUTION OF GROWTH

SRVR Index

“What we're seeing is a

transition, the beginning of

an S curve of growth for the

data center industry.”

Dave Crowley, Microsoft Chief Technical Advisor

INVESTING IN THE INTELLIGENCE REVOLUTION

SRVR Index



EQIX Equinix Inc 15.57%

AMT American Tower Corp 15.45%

CCI Crown Castle International 14.93%

QTS QTS Realty 4.68%

SBAC SBA Communications 4.63%

COR Coresite Realty 4.50%

INXN Interxion Holding 4.45%

IRM Iron Mountain 4.44%

OUT Outfront Media 4.40%

LAMR Lamar Advertising 4.39%




As of 2/18/19

As of 12/31/18

Reta i l Rea l Es ta te

RTL

RTL Index

Gateway to the Consumer

The storefront is the gateway to the consumer with

commercial real estate serving as an ideal medium

for connecting with established shoppers and

attracting new ones.

The fusion of retail and entertainment has

increasingly been taken on in the digital age. This

fusion is making tenants utilize the experiential

concept to compel consumers to visit their stores.

Physical retail stores are transitioning from being

primarily a distribution channel for products to

becoming a powerful media channel for branded

experiences and stories.

RTL Index

UNPRECENDENTED

TURNAROUND• June 16, 2017: Amazon buys Whole Foods for $13.2 billion, plus $22

billion in future contract obligations, because of the irreplaceable 431

upper-income, prime real estate locations.

• July 9, 2018: Nordstrom expands inventory-free retail stores called

Nordstrom Local. In lieu of stocked shelves, clients shop at home or on

their mobile phone and pick up their online orders.

• July 17, 2018: Walmart establishes strategic partnership with Microsoft

to further accelerate digital innovation in retail leveraging a broad

base of cloud, AI and IoT solutions.

• U.S. retail real estate has posted 20 consecutive quarters of rent

growth despite the gloom-and-doom narrative about bricks and mortar.

- CBRE

• 95% of Gen Z consumers had visited a mall in the previous three

months as of January 2019. Gen Z will represent 40% of all consumers

by 2020. – ICSC

• Over the next five years, about 850 stores with roots as digitally native

brands will open brick-and-mortar shops nationwide. - JLL

West Hollywood Nordstrom Local experiential location (above)

offers: Tailoring, Manicures, Returns, Same-day Online Pick-Up, and

Personal Stylists.

“Smart retailers are turning their stores into beloved gathering points at

the hearts of their communities” - Doug Stephens, Retail Prophet

RTL Index

RETAIL

RENAISSANCEOMNICHANNEL MAKING EVERYTHING POSSIBLE

RTL Apocalypse

In 2012, Best Buy lost $1.2 Billion - The problem was the Internet.

Customers were comparison shopping and finding lower prices online.

Sometimes they checked from a smartphone right in the aisles of a Best

Buy store after sizing up the real merchandise. Analysts predicted that the

phenomenon, dubbed "showrooming,” could destroy Best Buy.

RTL Renaissance

By December 2018, Best Buy was selling 2 of the top 5 televisions on

Amazon.com. The TV deal gave Best Buy access to Amazon’s massive

online customer base, while Amazon gains a brick-and-mortar presence

and additional products that can attach to its Alexa home assistant, which

competes against similar devices from Google and Apple. The two Fire TVs,

one made by Toshiba and the other from Best Buy house brand Insignia,

are also available in Best Buy stores and on their website.

Best Buy has managed to repair their online stores and tie their online

presence more tightly to their network of more than 1,400 locations, in

ways that it may have neutralized the "showrooming" threat.

The idea in omnichannel is to reach customers wherever they are - in a

store, online or via their phones—and use technology to turn costly

physical stores into an advantage. One deceptively simple step Best Buy

took was to add a “Store Pickup” button to its online shop.

RTL Index

“Our local market strategy is reflective of that more

often today, customers don’t see Nordstrom as a

website or a store or a salesperson. They see

Nordstrom as a combination of all three of those.

Our ambition is to serve customers in the local

markets where they live and work, really agnostic of

channel store–digital or physical.”

SHEA JENSEN, NORDSTROM

SENIOR VICE PRESIDENT OF CUSTOMER EXPERIENCE

STORE FRONT AS THE GATEWAY TO THE CONSUMER

RTL Index



O Realty Income 15.85%

SPG Simon Property 14.31%

REG Regency Centers 9.76%

BRX Brixmor Property 4..73%

KIM Kimco Realty 4.72%

NNN National Realty 4.55%

FRT Federal Realty 4.46%

WRI Weingarten Realty 3.97%

MAC Macerich 3.78%

TCO Taubman Centers 3.17%




As of 2/18/19

As of 12/31/18

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Data quoted represents past performance, which is no guarantee of future results. The information presented above does not reflect

the performance of any fund or account managed or serviced by Benchmark Investments, and there is no guarantee that investors will

experience the type of performance reflected above. There is no guarantee that any historical trend illustrated herein will be repeated

in the future, and there is no way to predict precisely when such a trend will begin. There is no guarantee that any market forecast

made in this commentary will be realized. The mention of specific securities is not a recommendation or solicitation for any person to

buy, sell or hold any particular security and should not be relied upon as investment advice. The views and opinions in the preceding

commentary are as of the date of publication and are subject to change without notice. This material represents an assessment of the

market environment at a specific point in time, should not be relied upon as investment advice, is not intended to predict or depict

performance of any investment and does not constitute a recommendation or an offer for a particular security. We consider the

information in this presentation to be accurate, but we do not represent that it is complete or should be relied upon as the sole source

of suitability for investment.

Publication Date: Spring 2019

I n ves tBenchmark . com

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Own the Hard Assets Driving · In 2012, Best Buy lost $1.2 Billion - The problem was the Internet. Customers were comparison shopping and finding lower prices online. Sometimes they