34 | 2023 Investment Outlook | December 12, 2022 ƒ We are taking advantage of the arbitrage between public and private markets and funds in need of liquidity. We are seeking the highest quality assets that meet post-COVID-19 occupier requirements. We are looking to leverage asset management expertise to drive income growth. Moreover, we are targeting ESG retrofit opportunities to optimize asset energy efficiencies. What We Are Watching ƒ We are observing how economic, employment, inflation and interest rate signals may inform cyclical market turning points. We are on the lookout for signs of distress or forced selling in the weakening environment. ƒ We are anticipating increased M&A activity between public and private companies. ƒ We see potential for heightened regulatory risks—such as rent control and real estate taxes—from the shifting global political environment. We have our eyes on global dislocation, divergent recovery cycles and different opportunities by region and market. U.S./China geopolitical tensions and the impact on global growth and supply chains continue to add pressure across equities, and we are waiting to see how that impacts private real estate. “We are observing how economic, employment, inflation and interest rate signals may inform cyclical market turning points. We are on the lookout for signs of distress or forced selling in the weakening environment.” Risk Considerations: Historical performance information is not indicative of future results. Alternative investments are speculative and include a high degree of risk. Investors could lose all, or a substantial amount, of their investment. Alternative instruments are suitable only for long-term investors willing to forgo liquidity and put capital at risk for an indefinite period of time. Alternative investments are typically highly illiquid— there is no secondary market for private funds, and there may be restrictions on redemptions or the assignment or other transfer of investments in private funds. Alternative investments often utilize leverage and other speculative practices that may increase volatility and risk of loss. Financial intermediaries are required to satisfy themselves that the information in this document is suitable for any person to whom they provide this document in view of that person’s circumstances and purpose. Morgan Stanley Investment Management (MSIM), its affiliates and its and their respective directors, officers, members, partners, employees, agents, advisors, representatives, heirs and successors shall have no liability whatsoever with respect to any person’s or entity’s receipt, use of or reliance upon this document or any information contained herein. If such a person considers an investment, she/he should always ensure that she/he has satisfied herself/himself that she/he has been properly advised by that financial intermediary about the suitability of an investment.