Investment Trends Quarterly, Sales Volume and Pricing Are Starting to Decline

Second Quarter 2008 Report Investment Trends Vol. 4, No. 2 Quarterly

Spotlight on Portland

Sponsored by: InThisVolume

Now Available! National Overview Caught in the Storm Economic Background & Investment Environment A Focus on Real Estate Cap Rate & Yield Rate Expectations Seeking Shelter from the Storm Effect on Real Estate National Market Analysis & Property Sector Highlights “Sustainable Development Shapes Portland Past and Future” Contributors Scope & Methodology

Regional and Metro-Level Analyses Coming Soon!

East Region Baltimore, Boston, Charlotte, Hartford, Norfolk, Northern New Jersey, New York City, Pittsburgh, Philadelphia, Raleigh, Richmond, Washington, D.C.

South Region Atlanta, Austin, Dallas/Ft. Worth, Houston, Memphis, Miami, Nashville, New Orleans/Baton Rouge, Oklahoma City, Orlando, San Antonio, Tampa

Midwest Region Chicago, Cincinnati, Cleveland, Columbus, Detroit, Indianapolis, Kansas City, Milwaukee, Minneapolis, Omaha, St. Louis, Toledo

West Region Denver, Honolulu, Las Vegas, Los Angeles, Phoenix, Portland, Sacramento, Salt Lake City, San Diego, San Francisco, Seattle, Tucson

April 2008

Dear Readers,

Property fundamentals for commercial real estate are beginning to reflect the new economic and capital market storm we find ourselves in. Vacancies are up for all property types on a national level, and as noted in the second quarter 2008 RERC/CCIM Investment Trends Quarterly, sales volume and pricing are starting to decline. What’s more, the National Association of REALTORS® (NAR) forecasts that until confidence levels return, commercial real estate investment will remain as much as 40 percent below transaction levels seen in 2007, when a record $427.2 billion of commercial real estate traded hands.

Despite this softening, commercial real estate is holding up reasonably well compared to other investments, and CCIM designees and candidates who responded to RERC’s survey remain optimistic about this asset class. While we see a great deal of turbulence in the commercial real estate debt market, according to anecdotal information gathered at the mid-year CCIM Institute business meeting, most CCIM members are expecting only an approximate 10-percent adjustment for commercial real estate this year.

Given the turmoil in the markets, return expectations are of special interests—thus our special analysis on yield rates, capitalization rates, and spreads. We hope you find this, and our other analysis of the capital markets, of interest.

To make this research report even more valuable to CCIM members, we encourage you to share your completed sales transactions. Here’s how:

• At www.ccim.com, go to the Member Services category,

• Click on the CCIM Transactions link (you’ll be prompted to enter your regular username & password),

• Under the Professional Profile section, click the Manage CompletedTransactions link, and

• Enter the transaction.

Thank you to all who completed and returned our surveys, communicated your transaction information, or shared reports or other details about the various property sectors and markets. We appreciate your information and insights.

Sincerely,

Kenneth P. Riggs, Jr., CCIM, CRE, MAI Timothy S. Hatlestad, CCIM President & CEO 2008 CCIM Institute President Real Estate Research Corporation (RERC) President, RE/MAX Commercial Investment

Few, if any, could have anticipated how much the financial markets and the economy could change over the last 12 months. The commercial real estate market had reached a new pinnacle in early 2007, with The Blackstone Group’s acquisition of Equity Office Properties (EOP), plenty of cheap capital, and a belief that we were on the cusp of a new era of investing with limited downside volatility. The storm clouds then began to roll in with the subprime mortgage meltdown, followed by declining home values, sustained high oil prices, and a slowing economy. The winds began to shift, and we saw the credit markets pause as the rating agencies finally started to sound a warning. Questions arose in the financial arenas about the underlying risk of securitized pools of mortgages involving a string of investors and elements that were unknown to even the most informed. By late 2007, there was a recognized credit crisis and we knew there were rough times ahead for the U.S. economy. Once the broad debt markets seized up and the eventual buyout of Bear Stearns (fifth largest investment bank in the world) occurred, the finger-pointing began in earnest, and even the past two Federal Reserve chairmen were pulled into the fray to comment on the state of the financial markets.

These are the shifting conditions that are darkening the climate in which commercial real estate finds itself. The reach of the storm is global, and there is no end in sight. Further, the ripple effect of this storm is immense, with those sitting on the front lines either gone or forever changed in the way they conduct their business or approach the financial world. However, as we have pointed out in the past, the impact on the various investments and the magnitude of the change in investment conditions depend on your perspective and where you are sitting as this storm plays out for the balance of 2008.

Real Estate Research Corporation’s (RERC’s) view, from a commercial real estate equity standpoint, is that low-leveraged commercial real estate is doing reasonably well relative to investment alternatives, and we see the market dynamics for this style of low-leverage equity investment from a credit disruption perspective rather than a credit crisis. Although Wall Street may challenge us on this optimistic approach to a world in crisis, RERC has remained focused on commercial real estate investing from a low-leverage equity perspective, and how investors can best cope with the turbulent conditions surrounding us all. This report will lay out our perspective for commercial real estate returns as we are tested and challenged to navigate through a tempest that most of us have never seen before. Economic Background & Investment Environment

The year 2007 will be remembered for the many storm clouds in our economy—the global financial markets, the Exhibit 1. Historical Housing Prices U.S. residential housing market, gasoline prices, and geo- political risk, among others. While the storm clouds have been hovering over the commercial real estate arena and the turbulence has affected the debt markets, the commercial real estate low-leverage equity market has not been as negatively affected as the residential market.

Although the global credit crisis ripped apart the most so- phisticated leveraged structures from a financial perspective, we did not see a collapse of home prices. As can be seen in Exhibit 1, even though home prices fell around 8 percent in 2007, they were still 70 percent higher than in first quarter 2000. We recognize that then was then and now is now, but it demonstrates that the undoing of the housing market lies in the financial package and not in the Source: National Association of REALTORS® (NAR), 4q 2007.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. Quarterly fundamental value of the asset. There is clear downward are not willing to sell at a discount, and buyers are not home re-pricing taking place in parts of the U.S. that ex- willing to buy at the ask price, given the uncertainty in the perienced the most speculation, and we still have some economy and financial markets. tough realities to face before the market stabilizes. This is important to keep in mind when we examine the financial The profound shift in the sell sentiment can be found in side of the commercial real estate market versus the as- the historical buy, sell, or hold recommendations shown set side. in Exhibit 2. The sell recommendation during first quarter 2003 through first quarter 2007 hovered around 8.0 on a The inability of investors to sort though the financial in- scale of 1 to 10, indicating that it was a good time to sell struments that were created over the past decade has (prices were viewed as strong relative to value). Today, caused them to become more risk averse, and has however, the sell recommendation is about half that level, brought established underwriting and investment criteria back to appropriate standards that focus on the funda- Exhibit 2. RERC Historical Buy, Sell, Hold Recommendations mental value of the asset. Getting back to basics is not 9 9 a bad thing, but one should not overreact to this situa- Buy Sell Hold tion. It is important to avoid the old pendulum paradigm of 8 8 swinging from a sentiment of greed to a sentiment of fear. 7 7 We see this happening on a limited basis, and it tends to 6 6 guide commercial real estate to spots where one needs the pendulum to swing in the opposite direction, although Rating 5 5 commercial real estate did not experience the broad- 4 4 based overselling and overleveraging that we saw in the residential sector. Investors are seeing a bifurcation rela- 3 3 tive to repricing issues in commercial real estate between 1Q 1999 1Q 2000 1Q 2001 1Q 2002 1Q 2003 1Q 2004 1Q 2005 1Q 2006 1Q 2007 1Q 2008 top-quality, low-leveraged assets, versus average-quality, Source: RERC. high-leveraged assets (75+ percent), although each set of assets is facing some level of re-pricing. indicating that it fell quickly alongside the credit market concerns and now is not a good time to sell (properties Investors have a wait-and-see attitude, given the disar- are viewed as underpriced relative to what buyers will ray and disappointment seen in the economy and finan- pay). This reversal occurred right after the Blackstone/ cial markets, but who can blame them? However, despite EOP deal, which will go down in history as a major mar- what one hears in the news, investors are not totally out- ket coup and pricing velocity watermark. The message of-sorts with commercial real estate. It is no surprise that the market is sending is that commercial real estate is a we continue to see the bid/ask spread widen, as sellers good investment and the pricing is not viewed as being too far ahead of the fundamentals, especially from a risk perspective and compared to alternative investments.

We have noted during the last year that the market has been going through a re-pricing phase and that investor sentiment is shifting to reflect the changing nature of the clouds that exist in today’s turbulent environment. This is a clear signal that the commercial real estate capital markets recognized the credit crisis and that commercial mortgage-backed securities (CMBS) are temporarily on the sidelines.

Given the big picture, commercial real estate is reacting appropriately to the alarm. If it had continued with the levels of first quarter 2007 CMBS underwriting that pos- sessed aggressive pricing of high loan-to-value ratios and high valuations, commercial real estate would have un-

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. Quarterly dergone a fate similar to that of the subprime market, and toward commercial real estate. Clearly, the respondents we would all be suffering. Oddly, this current commercial see many clouds above, and while preparing for a storm, real estate market disruption (or crisis, for those on Wall are establishing strategies toward safer harbor. Street) is better for long-term investment prospects for commercial real estate, and provides us with a more solid Exhibit 4 tells what investors are facing in a world of investment foundation without having to suffer a broad- downside volatility. The only positive realized returns dur- based market failure like the residential securitized mar- ing first quarter 2008 are those reflected by the National ket. However, we know that it is not over yet, and there Council of Real Estate Investment Fiduciaries (NCREIF) will be casualties along the way. and the National Association of Real Estate Investment Trusts (NAREIT). The 10-year treasury bonds reflect ex- As shown in Exhibit 3, CCIM designees and candidates pected returns versus realized returns. NCREIF and NA- rated commercial real estate at 6.7 on a scale of 1 to 10, REIT show almost no capital (appreciation) return, indi- indicating it is a better investment relative to the alterna- cating that values flattened in first quarter 2008, and we tives of stocks, bonds, and cash. This does not come as likely are entering a time of potential value adjustments or a surprise to commercial real estate investors, but they re-pricing of the underlying assets. However, while com- have always been a group that was somewhat biased mercial real estate is not performing at a level witnessed a year ago, it is still delivering positive returns.

Exhibit 3. CCIM Respondents Rate Investments As we head into the second quarter 2008 and beyond, we need to assess the economy and what it holds in store 1Q 2008 4Q 2007 for commercial real estate. If a recession takes hold and unemployment increases, vacancy rates are likely to in- Commercial Real Estate 6.7 6.0 crease, rents will deteriorate, and values will be affected Stocks 4.3 3.9 by these strong undercurrents. With respect to the pricing of commercial real estate, the key thing is to assess Bonds 4.5 4.7 where prices have settled on a price per square foot/unit Cash 5.7 5.9 basis, and what direction capitalization rates and yield rates are heading. Source: RERC Institutional Investment Survey, 1Q 2008.

Exhibit 4. What Do the Financial Markets Tell Us? Compounded Annual Rates of Return as of 4/1/2008 Market Indices 1Q 2008 1-Year 3-Year 5-Year 10-Year 15-Year Consumer Price Index 1.16% 3.98% 3.37% 3.00% 2.79% 2.68% 10-Year Treasury Bond* 3.66% 4.38% 4.52% 4.39% 4.81% 5.34% Dow Jones Industrial Average -3.06% -0.74% 5.30% 8.94% 3.37% 8.85% NASDAQ Composite -6.75% -6.11% 3.56% 10.83% 2.39% 8.27% NYSE Composite -3.60% -5.02% 7.07% 13.21% 3.80% 8.36% S&P 500 -4.05% -6.91% 3.86% 9.29% 1.84% 7.43% NCREIF Index 1.60% 13.56% 16.84% 15.17% 12.70% 11.29% NAREIT Index** 1.40% -17.37% 11.69% 18.34% 10.69% 11.66% *Based on Average End of Month T-Bond Rates. **Based on FTSE NAREIT US Real Estate Index Equity REITs, Total Return. Sources: Economy.com, Federal Reserve Board, BLS, NYSE, NCREIF, NAREIT, compiled by RERC.

Exhibit 5. RERC Yield Rates vs. 10-Year Treasuries Yield Rates As a starting point in examining return expectations, it is important to focus on the spreads of commercial real estate yields (total returns) versus 10-year and 5-year treasuries rather than reviewing these returns strictly on a nominal basis. In our evaluation, we are using both 10- and 5-year durations, because the holding periods for commercial real estate have shortened from the traditional 10-year holding periods, and because the durations of average leases that create these cash flows are probably something between Sources: RERC, Federal Reserve. that of 5-year and 10-year bonds. Regardless, we can see that the spreads in 2003 in both cases were huge, which meant that commercial real estate was a very attractive risk-adjusted investment and that capital was bound to flow Exhibit 6. RERC Yield Rates vs. 5-Year Treasuries into this arena. As one survey respondent stated, “It was a no-brainer to invest in real estate.” Then the market started to aggressively bid up real estate prices to bring this spread down to its lowest level in 10 years in the first quarter 2007. Since then, we have seen yield spreads for commercial real estate reach around 450 basis points over 10-year treasuries (refer to Exhibit 5), and 550 basis points over 5-year treasuries (refer to Exhibit 6). We recognize that spreads for other financial instruments have widened much more and at a more rapid pace during this credit crisis.

Sources: RERC, Federal Reserve. Since second quarter 2007, the market has been re-pricing commercial real estate risk relative to treasuries. On historical terms and given the dynamics of commercial real estate today, the spread is at least recognizing market risk vaga- Exhibit 7. RERC Yield Rates vs. 10-Year Treasuries ries. This shift in attitude is demonstrated in Exhibit 7, show- ing the significant upward percentage change in commercial real estate yield expectations during the second quarter 2007 from a 10-percent decline to a net upward shift of over 25 percent (-10 percent versus +15 percent).

Are we there yet? Probably not across the board, but for the low-leverage, high-quality deals, we are getting close. From our vantage point, the biggest question that the market is wrestling with today is: How do you price risk for commercial real estate when there are fewer transactions to Sources: RERC, Federal Reserve. measure investor behavior?

The market tends to talk about pricing in terms of capitaliza- re-pricing for the asset class than most market observers are tion rates on a nominal basis. Cap rates are a simple perfor- recognizing. mance measure and an easy metric to extract from actual transactions; however, a cap rate does not give you the full Exhibit 10 shows that yields (total returns, or IRRs/discount picture like a yield rate or internal rate of return (IRR) can rates) also have increased slightly more than cap rates since provide. During the last few years, RERC and others have second quarter 2007. The spread between yields and re- commented on this “era of cap rate compression,” as depict- quired cap rates (refer to Exhibit 11) showed a spike during ed in Exhibit 8. Since 2004, cap rates have declined by 200 the latter part of 2007, which has settled down to a 160-basis- basis points, much of which is attributable to spreads over point spread in first quarter 2008. As with cap rate compres- treasuries, as seen in Exhibit 9. Cap rate compression has sion, we see a 200-basis-point decline in yield expectations been reflecting the attractiveness of commercial real estate over the past 3 years until first quarter 2007, and an increase from an overall investment appeal perspective, a world with in yield expectations from that point in time. This downward lower return expectations, and significantly improved trans- trend in yield expectations is reflecting the attractiveness of parency. Although required cap rates have increased only commercial real estate from an overall investment appeal around 25 basis points, the spreads over treasuries have (improved transparency and attractive investment) and a increased significantly and have incorporated more upward world with lower return expectations.

*RERC Required Cap Rates are used and reported onin the RERC Real Estate Report.

Exhibit 9. RERC Required Going-in Cap Rates Exhibit 8. RERC Required Going-in Cap Rates vs. 5-Year Treasuries

Source: RERC. Sources: RERC, Federal Reserve.

Exhibit 11. RERC Yield Rates vs. Required Going-in Exhibit 10. RERC Yield Rates Cap Rates

Source: RERC. Source: RERC.

It is becoming harder and harder for the U.S economy to find shelter, as conditions have changed dramatically over the past 15 months and there is no near-term relief in sight. The credit crisis continues, and the International Monetary Fund (IMF) predicts that before it is over, an overwhelming $945 billion of credit-related losses will have occurred. Oil prices have topped $120 per barrel and are still climbing, which continues to exact a heavy toll on consumers and businesses. The labor markets are succumbing to the pressure of rising costs and abating demand, with approximately 260,000 jobs lost in the first 4 months of 2008 (although this is relatively good news in the short term, when one compares this total to the 2001 recession when at times we lost 300,000 jobs per month). The 1-year expected inflation readings are approaching 5.0 percent, up from the prior month’s level of around The Federal Reserve indicated that while the economy 4.5 percent, according to published reports. However remains under stress, the “substantial” rate cuts and other devastating, our financial system and the economy have measures it has taken to provide liquidity to the financial remained relatively resilient given the storms in our path, markets have tempered the risk of a severe recession. but how long can we hold on? On Wall Street, the turmoil that has devastated market conditions for the stock and bond markets now shows signs Home prices continue to deteriorate, and a turnaround in of improving. It is still too early to be certain, but there are the housing market is not on the near-term horizon. The some believers that the worst of the credit crisis may be S&P/Case-Shiller® Home Price Index that measures past. Gold prices, which had surged to a record high of home prices in 20 major metropolitan areas dropped 12.7 more than $1,000 an ounce, have dropped below $900. percent in February 2008 from year-ago prices, which is the largest decline in the 20-year history of the Index. Tighter In addition, the global economy appears to be re-entering lending terms for mortgages and broader weakness in the an era when governments are harboring more protectionist economy, particularly in the labor market, are depressing attitudes and are reasserting those views through their demand, and with a large inventory of unsold homes, policies and opinions related to world trade. Once again, prices are likely to fall further. barriers are rising. “The era of easy globalization is certainly over,” says Pulitzer Prize-winning author Daniel Yergin, The Federal Reserve has stepped up in a big way to make whose 1998 book, “Commanding Heights: The Battle for sure that capital is available, although more expensive in the World Economy,” detailed the triumph of markets over most cases. The Federal Reserve cut interest rates in late nations, starting with British deregulation under Margaret April for the seventh time in 8 months, but signaled that one of Thatcher. “The power of the state is reasserting itself.” its most aggressive rate-cutting campaigns in a generation may be nearing an end. The Federal Reserve also lowered Interestingly, it is U.S. consumers, although burdened with its target for the federal funds rate to 2.0 percent from 2.25 high food and gasoline costs, who may be best equipped to percent, bringing the cumulative reduction in interest rates help stave off recession. By most accounts, approximately since September 2007 to 3.25 percentage points. That $110 billion will be injected into the U.S. economy this exceeds even the aggressive rate posture set by former spring through the economic stimulus program. Some Federal Reserve Chairman Alan Greenspan in the first 8 pundits are suggesting that how Americans spend the months of 2001, before the economy was shocked by the tax rebate checks they began receiving in early May is a terrorist attacks of September 11. good predictor of whether consumers can continue to hold

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. Quarterly on during this economic storm. If consumers use most or has not been enough upward adjustment on these return all of their tax rebate checks for discretionary purchases, expectations, given the global credit crisis and particularly like flat-screen TVs, new furniture, or vacations, it is a sign in the CMBS debt market, RERC believes that the market that the economy may make it through this storm without is working toward figuring out the malaise but there is much more damage. On the other hand, if consumers use not enough clarity to make a confident adjustment. The most or all of their tax rebate checks for non-discretionary message we offer from the equity commercial real estate purchases like food or energy, or to pay down credit cards market is that of selectivity, caution, and the need to or other bills, consumer strength may be more at risk than keep a watchful eye on the rest of the financial markets. anyone thought. Low-leverage, high-quality commercial real estate is in a relatively positive position compared to investment How accurate this projection is as an indication of things alternatives. to come is anyone’s guess. Nor do we know how long this storm will go on. But we do know that we have often As demonstrated in Exhibit 12, commercial real estate’s doubted the strength of the U.S. consumer in years past— investment performance on a realized basis has exceeded during the 2000-2001 recession, after the terrorist attacks investor expectations. However, we can clearly see that of September 11, through corporate and accounting performance has changed dramatically over the past year scandals, with the war on terror, during the jobless recovery, and that it continues to deteriorate. RERC expects this trend through rising gas prices, with the housing bubble and the to continue until the write-down adjustments are taken in bursting of that bubble, the subprime lending crisis, and the NCREIF Index. We are using the NCREIF Index as the most recently, through the weakness in the capital and basis for the realized return in this performance analysis, financial markets. So far, U.S. consumers have held on. and we recognize the lag in data relative to the timing of We will see if they will be able to continue to do so through capital adjustments. The impact of the credit crisis has this current storm. not fully played itself out in this data. Commercial real estate will be challenged by continued storm clouds in According to CCIM designees and candidates, commercial the form of a tough economy, tighter credit standards, real estate is the most preferred investment alternative, tougher underwriting criteria, and an uncertain world. In with cash as the second-most preferred investment vehicle. the end, “institutional” commercial real estate will weather RERC maintains that as the economy, financial markets, this storm battered but in relatively good shape, but we and capital markets continue to go through troubled times, are being pulled into market dynamics that few have ever commercial real estate will remain a relatively strong experienced, and adjustments to our expectations will investment option, given the nature of the asset and need to be made. where it has been over the past year as compared to other investment prospects. Exhibit 12. Annualized Quarterly Investment Performance First quarter 2008 commercial real estate fundamentals remained relatively steady, although vacancy rates are 25% 25% Market Equilibrium Apartments Industrial inching upward for office, industrial, apartment, and 20% Hotels Retail Office 20% retail properties. As pressures from the economy and the financial markets increase, low investor confidence is 15% 15% keeping the volume of sales down. 10% 10% 5% 5% The considerations and analyses of yield and cap rate 0% 0% expectations included herein reflect much more of a risky undercurrent than one would surmise by looking at -5% -5% nominal returns—they reflect and incorporate the dynamic 3Q 2006 4Q 2006 1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 changes that we have seen in the financial markets over the past year. Although some pundits would argue there Sources: RERC, NCREIF.

w Residential real estate construction remained weak while scale of 1 to 10, with 10 being high, for first quarter 2008, commercial real estate construction activity was mixed indicating that investors believe the office sector is offering during first quarter 2008, according to the April 16, 2008 a lower return relative to risk. Beige Book. Continued slowing of residential construction was expected as the economy slowed, and is needed w Commercial real estate received a slightly higher value for the housing market to strike a better balance between versus price rating in first quarter 2008 than it received supply and demand. during fourth quarter 2007. However, at 4.8 on a scale of 1 to 10, with 10 being high, investors still believe the value of w Total construction for first quarter 2008 was $121.2 billion, commercial properties is generally less than the price paid down 19 percent from a year ago according to McGraw-Hill for them. Construction. Total new construction starts were down 8 percent for March 2008. Non-residential building declined w At 5.3 on a scale of 1 to 10, with 10 being high, the hotel by 23 percent in March, after increasing by 36 percent in sector received the highest value versus price rating dur- January and February. Residential building dropped by 1 ing first quarter 2008. The apartment and industrial sectors percent in March. weren’t far behind, with ratings of 5.1 each. These ratings indicate that respondents feel the value of the properties is w Sales of commercial real estate have been slowing and slightly higher than the price. prices are seeing downward pressure in most districts, according to the April 16, 2008 Beige Book. Rental conditions are weakening in the New York, Philadelphia, Richmond, w In first quarter 2008, both the office and retail sectors Atlanta, Chicago, St. Louis, Minneapolis, and San Fran- earned a value versus price rating of less than 5.0 on a cisco districts, while conditions are steady in the Boston, scale of 1 to 10, with 10 being high, indicating that survey Kansas City, and Dallas districts. respondents feel the value of the property is less than the price paid. Except for the apartment sector, all property w CCIM designees and candidates rated commercial real es- types received a higher value versus price rating than they tate as the top investment alternative compared to stocks, received during fourth quarter 2007. bonds, and cash. With the volatility in the stock market, stocks earned the lowest rating overall. On a scale of 1 to 10, with 10 being high, survey Historical Return/Risk and Value/Price Ratings respondents gave commercial real estate a rat- 1Q 2008 4Q 2007 3Q 2007 2Q 2007 1Q 2007 ing of 6.7, cash a rating of 5.7, bonds a rating of Return vs. Risk 4.5, and stocks a rating of 4.3. Office 4.9 4.6 5.4 5.6 6.3 w Survey respondents rated the return versus risk Indusrial 5.9 5.4 6.0 6.0 6.3 for commercial real estate during first quarter Retail 5.5 4.7 5.7 5.9 6.3 2008 at 6.2 on a scale of 1 to 10, with 10 being Apartment 6.8 7.0 6.3 6.2 6.7 high, nearly a full point higher than the rating for fourth quarter 2007, indicating that respondents Hotel 5.6 5.5 6.0 5.9 6.7 expect a slightly higher return on commercial Overall 6.2 5.3 5.6 5.8 6.2 real estate versus the amount of risk taken. Value vs. Price Office 4.6 4.3 4.8 5.0 5.0 w The apartment sector received a return versus risk rating of 6.8 on a scale of 1 to 10, with 10 Indusrial 5.1 4.6 5.4 5.5 5.7 being high, for first quarter 2008. This was the Retail 4.8 4.4 4.6 4.8 5.0 highest rating received by any of the property Apartment 5.1 6.0 5.3 5.3 5.1 types covered in this report. The industrial mar- Hotel 5.3 5.1 5.2 5.3 5.2 ket received the second highest rating at 5.9. Overall 4.8 4.5 5.0 4.8 5.3 w The office sector was the only property type to *Ratings are based on a scale of 1 to 10, where 1 is poor and 10 is excellent. Source: RERC. receive a return versus risk rating below 5.0 on a

w With housing starts at historic lows, home foreclosures at In Summary all-time highs, increasing residential vacancy rates, and tighter restrictions on credit for those purchasing a home, w In first quarter 2008, CCIM designees and candidates not- the majority of first quarter 2008 survey respondents said ed that the commercial real estate market is mostly sta- that the apartment sector offers the greatest opportunity ble but it is beginning to soften. Many respondents were for investment during 2008. Survey respondents also not- seeing trends such as slightly rising vacancies among all ed that the industrial sector offers good investment oppor- property types, flat rental rates, and a gradual increase in tunity due to the stable income, growing demand, and low capitalization rates. For now, most respondents are taking vacancy rates associated with this property type. a “wait and see” approach to commercial investment. w Many first quarter 2008 survey respondents stated that the w For the most part, fundamentals for commercial real estate retail sector offers the lowest investment potential as com- remained relatively steady in first quarter 2008, although pared to the other property types. This is due in large part vacancy rates are inching upward for office, industrial, to the impact of the slowing economy on the retail property retail, and apartment properties. Investor confidence has type. In addition to higher unemployment, increased en- been declining as pressures from the economy and the ergy costs, and inflation, the retail sector overall is over- financial markets increase. However, the majority of sur- priced and overbuilt. vey respondents state that there is still ample credit and interest for quality assets, but low confidence is keeping the volume of sales down.

NAR U.S. Economic Outlook: April 2008 2007 Quarterly 2008 Quarterly 2009 Quarterly Annual

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2006 2007 2008 2009 Annual Growth Rate Real GDP 3.8 4.9 0.6 -0.1 0.3 2.2 2.0 2.8 2.6 2.8 2.9 2.2 1.4 2.4 Nonfarm Payroll Employment 0.9 0.8 0.8 -1.2 0.3 0.6 0.9 1.1 1.3 1.4 1.8 1.1 0.2 1.1 Consumer Prices 4.6 2.8 5.0 4.2 2.8 1.0 1.4 2.7 2.5 2.7 3.2 2.9 3.4 2.2 Real Disposable Income -0.8 4.0 0.1 0.6 0.6 2.1 2.3 4.1 3.2 3.1 3.1 3.1 1.2 3.0 Consumer Confidence 107 106 91 76 63 68 72 79 85 86 106 103 70 85 Unemployment 4.5 4.7 4.8 4.9 5.3 5.6 5.7 5.7 5.6 5.6 4.6 4.6 5.4 5.6 Interest Rates, Percent Fed Funds Rate 5.3 5.1 4.5 3.0 2.3 2.3 2.3 2.5 3.0 3.3 5.0 5.0 2.4 3.0 3-Month T-Bill Rate 4.7 4.3 3.4 2.5 2.1 2.1 2.2 2.6 3.0 3.2 4.7 4.4 2.2 3.0 Prime Rate 8.3 8.2 7.5 6.0 5.3 5.3 5.3 5.5 6.0 6.3 8.0 8.1 5.4 6.0 Corporate Aaa Bond Yield 5.6 5.8 5.5 5.0 4.9 4.9 5.0 5.1 5.3 5.4 5.6 5.6 5.0 5.3 10-Year Government Bond 4.8 4.7 4.3 3.6 3.6 3.7 3.8 3.9 4.1 4.2 4.8 4.6 3.7 4.1 30-Year Government Bond 5.0 4.9 4.6 4.0 4.0 4.1 4.2 4.3 4.4 4.6 4.9 4.8 4.1 4.5 Source: Forecast produced using Macroeconomic Advisers quarterly model of the U.S. economy. Quarterly figures are seasonally-adjusted annual rates. Assumptions and simulations by NAR's Dr. Lawrence Yun.

2007 2008

II III IV I II III IV 2006 2007 2008 OFFICE Vacancy Rate (%) 12.4 12.5 12.5 12.7 13.0 13.2 13.3 12.6 12.5 13.3

Net Absorption (’000 sq. ft.) 21,202 14,766 15,414 9,179 8,690 9,468 11,193 81,183 57,265 38,530 Office Employment (thousands) 16,795 16,826 16,875 16,915 16,950 16,997 17,066 16,648 16,875 17,066 Completions (’000 sq. ft.) 14,732 16,476 17,380 17,380 23,442 17,338 16,252 51,606 61,102 74,412 Inventory (millions sq. ft.) 3,362 3,378 3,398 3,416 3,439 3,456 3,472 3,326 3,398 3,472 Rent Growth (%) 1.2 3.5 1.3 1.0 0.9 0.8 0.8 5.2 8.0 3.5 INDUSTRIAL Vacancy Rate (%) 9.3 9.2 9.4 9.5 9.6 9.6 9.6 9.4 9.4 9.6 Net Absorption (’000 sq. ft.) 35,402 29,390 19,733 32,899 33,299 33,035 35,429 205,365 120,231 134,662 Industrial Employment (thousands) 10,236 10,238 10,238 10,244 10,252 10,255 10,261 10,235 10,238 10,261 Completions (’000 sq. ft.) 35,695 28,033 40,330 52,874 46,020 36,627 38,520 173,979 126,765 174,041 Inventory (millions sq. ft.) 12,330 12,358 12,399 12,451 12,497 12,534 12,573 12,233 12,399 12,573 Rent Growth (%) 1.2 0.8 0.7 0.6 0.8 0.9 0.9 1.4 3.6 3.3 RETAIL Vacancy Rate (%) 9.0 8.8 9.2 9.1 9.1 8.9 8.8 8.0 9.2 8.8 Net Absorption (’000 sq. ft.) -169 9,199 -621 6,756 6,368 6,000 5,636 10,526 11,081 24,760 Completions (’000 sq. ft.) 8,002 7,454 5,807 6,269 6,300 3,094 4,659 28,455 29,733 20,322 Inventory (millions sq. ft.) 1,566 1,574 1,580 1,586 1,592 1,595 1,600 1,550 1,580 1,600 Rent Growth (%) 0.8 0.8 0.8 0.4 0.3 0.3 0.3 3.9 3.2 1.4 MULTIFAMILY Vacancy Rate (%) 5.7 5.7 5.1 5.4 5.3 5.1 4.8 5.9 5.4 5.1 Net Absorption (Units) 70,705 41,348 111,734 10,612 71,751 82,375 91,707 229,452 234,399 245,786 Completions (Units) 57,798 58,384 57,436 57,314 56,275 54,573 53,999 224,170 230,932 216,880 Inventory (Units in Millions) 13.8 13.9 14.0 14.0 14.1 14.1 14.2 13.8 14.0 14.2 Rent Growth (%) 0.7 0.7 0.8 0.9 1.0 1.3 1.4 4.1 3.1 5.3 Sources: NAR, CBRE/Torto Wheaton Research.

Vacancy Rates

Source: Torto Wheaton Research. Source: Torto Wheaton Research.

Source: Torto Wheaton Research. Source: Reis.

Performance Indicator Recent Data Impact on Commercial Real Estate

Office - 3.0% to 3.2% Rental Rates Industrial - 2.8% to 2.9% Rental rate expectations for first quarter 2008 for all the property types (RERC’s surveyed rent Retail - 2.6% increased by 20 to 30 basis points, as compared to the previous quar- growth expectations) Apartment - 3.1% ter’s rates. Hotel - 3.0%

RERC’s Required Returns: NCREIF Realized Returns: RERC’s required return expectations for office, retail, and apartment sec- Office - 7.9% to 8.4% Office - 14.6% - 21.9% tors increased during first quarter 2008. Expected returns for the hotel Industrial - 8.1% to 8.5% Industrial - 12.4% - 15.2% sector decreased slightly, while those for the industrial sector remained Real Estate Returns Retail - 7.8% to 8.5% Retail - 7.4% - 14.5% about the same as the previous quarter. NCREIF’s realized returns de- Apartment - 8.2% Apartment - 9.6% creased across the board as compared to the previous quarter. Hotel - 9.2% Hotel -15.6%

RERC’s Realized Cap Rates: NCREIF Implied Cap Rates: Office - 5.6% Office - 4.9% - 5.6% RERC’s realized capitalization rates for first quarter 2008 remained Industrial - 6.7% Industrial - 5.9% - 6.2% steady for all property types, except for hotels, which increased 20 basis Capitalization Rates Retail - 6.4% Retail - 5.7% - 5.9% points. NCREIF’s implied capitalization rates decreased slightly for all Apartment - 5.8% Apartment - 4.6% property sectors. Hotel - 7.9% Hotel - 7.1%

Gross domestic product (GDP) increased at an annual rate of 0.6 percent during first quar- The Federal Open Market Committee (FOMC) lowered the federal funds rate and the ter 2008. Although GDP was not negative, as is required in the traditional definition of a discount rate by 25 basis points, on April 30, 2008. Economic activity remains weak ac- recession, the National Bureau of Economic Research (NBER) determines a recession as cording to the FOMC, and inflation is still a concern. The last time the federal funds rate a “significant decline in economic activity spread across the economy, lasting more than a was this low was in November 2004. few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.”

Source: Bureau of Labor Statistics. Source: Federal Reserve. The unemployment rate has been climbing during the last year, settling at a seasonally- The manufacturing utilization rate dropped for the fourth consecutive month. Although adjusted rate of 5.1 percent in March 2008. Nonfarm payroll contracted during first quarter the rate has been on an upward trend since the 2001 recession, it began declining in 2008, falling by 80,000 during March, primarily in construction, manufacturing, and em- July 2007, ending at 78.6 percent in March 2008. Industrial production slowed during ployment services. Continued increases in unemployment indicate that commercial real first quarter 2008, with the decline attributable to the decline in motor vehicles and parts estate vacancies may be on the rise. manufacturing.

Source: Bureau of Labor Statistics. Source: Census Bureau. Consumer Price Index (CPI) inflation increased by 0.3 percent in March 2008, while con- Consumer spending appears to be slowing. Retail sales increased 2.0 percent year-over- sumer prices for the first quarter increased at a seasonally-adjusted annual rate of 3.1 year in March 2008 as compared to an increase of 2.9 percent in February. The March percent, as compared to the 4.1 percent for all of 2007, according to the Bureau of Labor increase was the lowest year-to-year increase since October 2002. Retail sales peaked Statistics. The largest increases in consumer prices came from food and energy, which in November 2007, and have been declining since then, due mostly to decreased sales are contributing greatly to lower consumer confidence overall. by furniture and home furnishing stores, building material and garden equipment/supplies dealers, and motor vehicle and parts dealers.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 14 Quarterly Source: The Conference Board. Source: Census Bureau. Consumer confidence has dropped significantly since July 2007. The Consumer Confi- New residential construction was down sharply by 11.9 percent, or 947,000 units, in March dence Index stood at 64.5 in March 2008, lower than it has been at any time during the last 2008. The downward trend in construction started after peaking in January 2006. While 5 years. The declining housing market, increasing energy costs, financial market instabil- all of the regions also posted declines for March, the largest decline in new residential ity, and job losses are taking their toll, with declining consumer confidence and slower construction ocurred in the Midwest region at 21.4 percent. spending expected to eventually affect the the hotel and retail property sectors.

Source: S&P. Source: NAR. The Standard & Poor (S&P) 500 peaked in October 2007, and declined until starting to Approximately 4.93 million existing homes were sold in March 2008, a decline of 19.8 increase again in March 2008. percent on an annualized basis from year-ago sales. The peak for existing home sales was 7.35 million units in June 2005. Now that the financial market has tightened the standards on home loans, it is harder to qualify for mortgages. In addition, buyers are wary of purchasing homes that may continue to decrease in value.

Source: NAR. Source: NAR.

The Commercial Leading Indicator (CLI) fell by 0.4 percent to 120.1 during fourth quarter The median sales price of existing single-family homes increased slightly in March 2008 2007. This is the second consecutive decrease after the index reached its historical high to $198,200. Despite the increase, single-family home prices are down approximately of 120.7, suggesting a slowdown for commercial real estate in the coming months. The 8.3 percent from a year earlier. The West region was the only area in the U.S. to see a index factors in 13 variables affecting commercial real estate, such as unemployment, price decrease in March, due largely to the increased number of foreclosures in that area, retail sales, and the NAREIT Price Index. which usually sell at a discounted price and tend to bring down the value of other “for sale” homes in the area.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 15 Quarterly Commercial Real Estate Index Eases in NAR Commercial Forecast (March 2008) Commercial Fourth Quarter Time Leading % Change from % Change from The latest reading of the Commercial Leading Indicator (CLI) for Brokerage Activity Period Indicator 1 Quarter Ago 1 Year Ago suggests reduced business opportunities for commercial real estate practitioners 2007 in the months ahead, reports Lawrence Yun, chief economist for the National As- 120.1 -0.4 0.1 sociation of REALTORS® (NAR). 4Q 3Q 120.6 -0.1 0.7 The CLI slipped 0.4 percent to an index of 120.1 in the fourth quarter from a reading 2Q 120.7 0.5 1.1 of 120.6 in the third quarter, but remains 0.1 above the fourth quarter of 2006 when it stood at 119.9. 1Q 120.3 0.2 0.8 2006 This is the second straight quarterly dip after reaching a record of 120.7 in the second quarter of 2007. The index showed nine consecutive quarterly gains prior 4Q 120.1 0.1 1.7 to these declines; NAR’s track of the index dates back to 1990. 3Q 120.0 0.3 2.8 119.5 0.2 2.6 “The decline in the index implies that commercial activity, as measured by net ab- 2Q sorption and the completion of new commercial buildings, is likely to contract mod- 1Q 119.2 1.0 3.1 erately over the next six to nine months, which is consistent with an expectation for 2005 slower overall economic expansion in upcoming quarters,” Yun said. 4Q 118.1 1.1 1.9 Rising unemployment insurance claims and falling durable goods shipments were 3Q 116.7 0.2 2.2 the key factors in lowering the CLI, but a weaker rate of return on investment as measured by the National Association of Real Estate Investment Trust (NAREIT) 2Q 116.5 0.7 2.6 Price Index was also a factor. The only positive contributors to the index were 1Q 115.7 -0.1 2.5 growth in wholesale and retail trade, and rising personal income. 2004

“The latest data imply that investment in private nonresidential structures, which 4Q 115.8 1.4 3.5 rose a solid 13.2 percent in 2007 according to a preliminary GDP estimate, could 3Q 114.2 0.6 3.0 show only minimal growth or even decline in 2008,” Yun said. “REALTOR® members who specialize in office and industrial properties indicated in a separate survey 2Q 113.6 0.7 3.3 that they anticipate a measurably lower level of business activity in the upcoming 1Q 112.8 0.8 2.3 quarters.” 2003 The commercial leading indicator is a tool to assess market behavior in the major 4Q 111.9 0.9 1.2 commercial real estate sectors. The index incorporates 13 variables that reflect 110.9 0.9 -0.6 future commercial real estate activity, weighted appropriately to produce a single 3Q indicator of future market performance, and is designed to provide early signals of 2Q 109.9 -0.3 -1.7 turning points between expansions and slowdowns in commercial real estate. 1Q 110.3 -0.3 -1.0 The 13 series in the index are industrial production, the NAREIT Price Index, the 2002 National Council of Real Estate Investment Fiduciaries (NCREIF) total return, 4Q 110.6 -0.8 -0.6 personal income minus transfer payments, jobs in financial activities, jobs in professional business service, jobs in temporary help, jobs in retail trade, jobs in 3Q 111.5 -0.3 -1.1 wholesale trade, initial claims for unemployment insurance, manufacturers’ durable Source: NAR. goods shipment, wholesale merchant sales, and retail sales and food service. Commercial Leading Indicators 125 Nearly 140,000 NAR members offer commercial services, and 73,000 of those are currently members of the REALTORS® Commercial Alliance, NAR’s commercial 120 division. 115 This information is reproduced in part from the March 2008 “Commercial Real Estate Out- look,” a newsletter published by the REALTORS® Commercial Alliance and with their per- 110 mission. 105

100 2002 2003 2004 2005 2006 2007 Source: NAR.

National Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $2 Million Volume (Mil) $2,757 $4,386 $4,809 $2,483 $169 Size Weighted Avg. ($ per sf/unit) $98 $56 $93 $56,231 $25,725 Price Weighted Avg. ($ per sf/unit) $135 $88 $135 $77,450 $32,441 Median ($ per sf/unit) $100 $63 $92 $60,667 $27,273 $2 - $5 Million Volume (Mil) $5,384 $7,596 $8,452 $5,909 $1,489 Size Weighted Avg. ($ per sf/unit) $133 $64 $143 $67,450 $39,915 Price Weighted Avg. ($ per sf/unit) $200 $107 $251 $112,958 $52,156 Median ($ per sf/unit) $173 $85 $219 $92,582 $42,546 > $5 Million Volume (Mil) $157,273 $39,444 $46,654 $69,844 $57,580 Size Weighted Avg. ($ per sf/unit) $254 $79 $176 $106,620 $191,307 Price Weighted Avg. ($ per sf/unit) $407 $134 $303 $177,141 $501,945 Median ($ per sf/unit) $200 $91 $188 $100,766 $114,372 All Transactions Volume (Mil) $165,414 $51,426 $59,915 $78,236 $59,238 Size Weighted Avg. ($ per sf/unit) $240 $74 $159 $99,431 $171,778 Price Weighted Avg. ($ per sf/unit) $396 $126 $282 $169,129 $489,300 Median ($ per sf/unit) $152 $75 $135 $83,333 $103,488 Capitalization Rates (All Transactions) Range (%) 3.0 - 12.6 3.7 - 11.7 3.0 - 11.7 2.6 - 10.9 2.9 - 13.2 Weighted Avg. (%) 5.6 6.7 6.4 5.8 7.9 Median (%) 6.7 7.0 6.6 6.0 9.0 Source: RERC.

Investment Conditions Ratings* - 1Q 2008 1Q 2008 4Q 2007 3Q 2007 2Q 2007 1Q 2007 Office 5.1 5.6 6.1 6.0 6.5 Industrial 5.9 5.1 6.1 6.4 6.8 Retail 5.4 5.2 6.3 6.5 6.9 Apartment 7.0 7.1 6.9 6.8 7.1 Hotel 5.9 6.4 6.6 6.7 7.0 *Ratings are averages based on responses to surveys from CCIM designees and candidates for first quarter 2008.

w CCIM designees and candidates who responded to RERC’s survey rated investment conditions for the office market at 5.1 on a scale of 1 to 10, with 10 being high, for first quarter 2008. This is a decline from the previous quarter’s rating, and is the lowest rating this quarter among the five property types covered in the survey.

w According to RERC’s recent sales transaction analysis, average prices for office properties decreased slightly during first quarter 2008, while average and median capitalization rates remained stable.

w For the second consecutive quarter, survey respondents rated the office sector the lowest among the major property types for both “return versus risk” as well as “value versus price,” indicating that the return on office property investment generally is less than the amount of risk taken, and that the value of office space is less than the price of the property.

w According to Torto Wheaton Research, the overall vacancy rate for the office sector increased to 12.9 percent during first quarter 2008. In addition, overall net absorption of office space in first quarter 2008 was the lowest posted RERC Weighted Average Capitalization Rate since 2003. 7.5% East South Midwest West National CCIM members who responded to RERC’s survey noted that 7.0% office vacancies are increasing in most areas and that “the office market, particularly the suburban office market, is still 6.5% very soft.” However, opportunities are available in the future, 6.0% with one respondent advising investors to “hold cash and wait for risk/reward and value/price corrections in all property types; 5.5% office will concede first.” Medical office space is in demand, regardless of region, and in some of the southern metros (Dallas, 5.0% 1Q07 2Q07 3Q07 4Q07 1Q08 San Antonio, New Orleans/Baton Rouge, Memphis, etc.), office space is in high demand with rent growth continuing.

RERC Size-Weighted Average PPSF RERC Price-Weighted Average PPSF $350 $700 West South National West National Midwest East Midwest $600 $300 South East $500 $250 $400 $200 $300

$150 $200

$100 $100 1Q07 2Q07 3Q07 4Q07 1Q08 1Q07 2Q07 3Q07 4Q07 1Q08

w CCIM designees and candidates who responded to RERC’s survey rated investment conditions for the industrial sector at 5.9 on a scale of 1 to 10, with 10 being high. This was significantly higher than last quarter’s rating, and indicates increased confidence in the investment potential of industrial properties overall.

w RERC’s first quarter 2008 sales transaction analysis indicates that like the other major property types, the sales volume of industrial property declined from the previous quarter. However, average sale prices per square foot of industrial space increased slightly, and average realized capitalization rates remained stable.

w Respondents to RERC’s survey rated “return versus risk” for industrial properties at 5.9, indicating that the return on industrial property is slightly more than the amount of risk involved in investment. Respondents rated “value versus price” of industrial property at 5.1, indicating that the value of the investment is about the same as the price.

w According to Torto Wheaton Research, the average availability rate for the industrial sector increased to 9.8 percent during first quarter 2008 from 9.4 percent in fourth quar- RERC Weighted Average Capitalization Rate ter 2007. Additionally, net absorption of industrial space 8.0% East South Midwest West National was -11 million square feet, the least amount of space ab- sorbed in about 5 years. 7.5% The industrial warehouse and flex sectors are favored by many 7.0% CCIM respondents, particularly in the port cities and in metros with access to highways and rail. “There is a premium being 6.5% placed on industrial properties with great locations,” reported one survey respondent. Another respondent noted that industrial remains a preferred investment, as it is “traditionally overvalued, 6.0% 1Q07 2Q07 3Q07 4Q07 1Q08 but consistently underserved.”

RERC Size-Weighted Average PPSF RERC Price-Weighted Average PPSF $120 $180 West South National West National Midwest East $160 Midwest South $140 East $90 $120

$100 $60 $80

$60

$30 $40 1Q07 2Q07 3Q07 4Q07 1Q08 1Q07 2Q07 3Q07 4Q07 1Q08

w CCIM Institute designees and candidates who responded to RERC’s survey rated investment conditions for the retail sector at 5.4 on a scale of 1 to 10, with 10 being high, for first quarter 2008, slightly higher than the previous quarter’s rating.

w RERC’s weighted average capitalization rate and the median capitalization rate for retail properties during first quarter 2008 remained stable.

w According to RERC’s analysis of recent retail sales, national transaction volume decreased notably in first quarter 2008 from fourth quarter 2007 volume.

w The availability rate for the retail sector increased to 9.2 percent, according to Torto Wheaton Research.

w Although the retail sector’s “return versus risk” and “price versus value” ratings increased for first quarter 2008 over the prior quarter’s rating, the “value vs. price” rating increased to only 4.8 on a scale of 1 to 10, with 10 being high, indicating that the value of retail properties is generally still less than the price listed.

RERC Weighted Average Capitalization Rate 7.50% East South Midwest West National Although retail space remains in demand in a few metros 7.25% mentioned in RERC’s survey, low consumer confidence and 7.00% spending, a fear of unemployment, and higher gasoline prices are taking a toll on this property type in most regions. Interestingly, 6.75% although discount store retail sales seem to be increasing and 6.50% higher-end shopping is starting to slow in most areas, one Dallas/ Ft. Worth CCIM respondent reminded investors to “expect the 6.25% high-end shops to experience a good year because the people 6.00% 1Q07 2Q07 3Q07 4Q07 1Q08 making good money will shop and flaunt.”

RERC Size-Weighted Average PPSF RERC Price-Weighted Average PPSF

$225 $400 West West South National National Midwest Midwest East $350 South $200 East $300 $175 $250 $150 $200

$125 $150

$100 $100 1Q07 2Q07 3Q07 4Q07 1Q08 1Q07 2Q07 3Q07 4Q07 1Q08

w CCIM designees and candidates rated investment conditions for the apartment sector at 7.0 on a scale of 1 to 10, with 10 being high, for first quarter 2008. This rating was similar to last quarter’s rating, and remained the highest score when compared to the other major property sectors.

w The first quarter 2008 weighted average capitalization rate for the apartment sector showed no change over fourth quarter 2008. However, during the past year, the average capitalization rate for the apartment sector increased 60 basis points.

w Total apartment transaction volume decreased notably during the past 2 quarters, although both the size- and price- weighted average prices per apartment unit declined only slightly during first quarter 2008.

w Average vacancy in the apartment sector increased to 5.9 percent in first quarter 2008, according to Reis, Inc. This increase in vacancy can be attributed in part to seasonality in the apartment cycles.

w Respondents to the first quarter 2008 survey rated the “return versus risk” for apartments higher than any of the RERC Weighted Average Capitalization Rate major property sectors tracked by RERC. The apartment 7.5% East South Midwest West National rating for “value versus price” decreased to 5.1, a significant decline from last quarter’s rating, and indicating a low- 6.5% er level of investor confidence in the value of apartments when weighed against their price.

5.5% CCIM members who responded to RERC’s survey generally expect apartments to be a good investment opportunity due to 4.5% tighter restrictions on credit for homebuyers and because “in good economic times or bad, people still have to have somewhere to live.” 3.5% 1Q07 2Q07 3Q07 4Q07 1Q08 There have been some reports of overpricing of this property type among speculators.

RERC Size-Weighted Average PPU RERC Price-Weighted Average PPU $175,000 $250,000 West South National West South National Midwest East Midwest East $150,000 $200,000

$125,000 $150,000 $100,000

$100,000 $75,000

$50,000 $50,000 1Q07 2Q07 3Q07 4Q07 1Q08 1Q07 2Q07 3Q07 4Q07 1Q08

w Over the past year, the investment conditions ratings for the hotel sector has been consistently declining. The first quarter 2008 rating was 5.9 on a scale of 1 to 10, with 10 being high, and although this rating was slightly lower than the previous quarter, it tied with the industrial sector for the second highest rating given to any of the property sectors tracked by RERC.

w With consumer confidence down and gasoline prices up, the first quarter 2008 average hotel occupancy -rate de clined to 64.7 percent, 3.7 percent lower than the year-ago average rate, according to Smith Travel Research. Reve- nue per available room (RevPAR) was $70.89, essentially unchanged from the same time one year ago.

w RERC’s first quarter 2008 average capitalization rate was 7.9 percent, 20 basis points higher than the previous quarter’s rate.

w Survey respondents rated first quarter 2008 “return versus risk” for hotel properties at 5.6 on a scale of 1 to 10, with 10 being high, indicating that the sector offers slightly more return when compared to the amount of risk involved in the investment. They also gave the sector a “value versus RERC Weighted Average Capitalization Rate price” rating of 5.3, indicating that the sector represents 9.5% East South Midwest West National slightly more value when compared to the price paid for hotel assets. 9.0%

8.5% Low consumer spending and high gasoline prices, along with

8.0% reduced business travel due to budget cutbacks, are a double-blow to this property type. One CCIM respondent to RERC’s survey 7.5% noted, “There are a lot of hospitality-related projects on the drawing boards right now. Investors should do their homework, know where 7.0% 1Q07 2Q07 3Q07 4Q07 1Q08 everyone else is going, and do their math a few times determining absorption.”

RERC Size-Weighted Average PPU RERC Price-Weighted Average PPU $300,000 $950,000 West National West National Midwest $850,000 Midwest $250,000 South $750,000 South East East $650,000 $200,000 $550,000 $450,000 $150,000 $350,000 $100,000 $250,000 $150,000 $50,000 $50,000 1Q07 2Q07 3Q07 4Q07 1Q08 1Q07 2Q07 3Q07 4Q07 1Q08

By Edward M. Bury, APR

Long known as one of the nation’s cades before it became fashionable. and quality of life are exemplified by most progressive urban centers, met- Today, the market of 2.2 million re- the city’s 5,000-acre Forest Park, the ropolitan Portland--Oregon’s largest mains at the vanguard of how to “go largest natural urban forest reserve in city and the fourth largest city on the green.” the nation, and numerous other parks West Coast--practiced sustainable and gardens. The Columbia River development, incorporated strict land Portland developers and planners Gorge and Mt. Hood, world-class out- use guidelines, and promoted eco- even export knowledge and exper- door wonders, are a short drive away. logically sound building practices de- tise to other markets. Gerding-Edlen And, Portland is the headquarters for Development Company, for example, such outdoor-oriented companies like had tremendous success converting Nike and Columbia sportswear. a defunct five-block property into the thriving Brewery Blocks mixed-use But strong development laws and development. Portland experts are green initiatives also have drawbacks. applying design and construction Portland’s development controls and principles to new properties in Los dedication to preserving the natu- Angeles and San Diego. ral environment have made it much more challenging and expensive for Clearly, city fathers and business new properties to be constructed or leaders have taken tremendous steps renovated, and for businesses want- forward to keep run-away growth in ing to grow. Also, controls have led to check and preserve the scenic beau- a shortage of housing, and they may ty of the Willamette Valley and sur- be a factor in curbing job growth; job rounding region, with its nearby snow- growth in 2007 was 1.2 percent, a capped mountain peaks, forests and drop from 2.4 percent the previous rivers. In the city limits, the outdoors year, and the unemployment rate

Despite pressures to relax guidelines, Portland remains steadfast on sustainability. Consider:

• In order to reduce urban sprawl, Portland operates on an 84-year- old, single-use zoning practice where land is zoned for a single use. This policy, which greatly re- duces development of mixed-use properties, is under scrutiny; pro- ponents of growth believe urban boundaries should be expanded to accommodate new development.

• All new commercial properties must be built to meet the Leadership in Energy and Environmental Design garden, condo prices will range from Integrated Corporate Property Ser- (LEED) silver rating from the U.S. $2.1 million to $328,000. vices, LLC, of Portland. “One reason Green Buildings Council. To meet is that developers and institutions these standards, buildings must “Portland has been very successful in such as Portland State University en- reach specified criteria for sustain- developing buildings that are on the gage directly with the community.” An ability, water and energy efficiency, leading edge of sustainability,” said innovative cooperative program with materials and resources selection, T.J. Newby, CCIM, vice president of Portland State University has helped indoor environment quality, and design innovation. Portland Transaction Breakdown (4/1/07 - 3/31/08) • This year, the City Council will de- Office Industrial Retail Apartment Hotel bate a “feebate” system, which will < $5 Million provide financial incentives for de- Volume (Mil) $67 $89 $53 $170 $12 velopments that exceed or match Size Weighted Avg. $140 $83 $160 $63,736 $52,257 high-level green building standards. Price Weighted Avg. $179 $102 $229 $71,101 $60,135 Median $148 $84 $152 $65,878 $56,959 Even with these challenging regula- > $5 Million tions, a wide range of large-scale Volume (Mil) $1,102 $422 $314 $836 $242 development has taken place in Port- land, and there are many properties Size Weighted Avg. $233 $95 $134 $113,242 $105,934 under development. One of the most Price Weighted Avg. $303 $122 $156 $137,254 $114,018 visible and successful redevelopment Median $175 $97 $148 $94,753 $92,026 projects is the Pearl District, a one- All Transactions time undesirable concentration of light manufacturing and warehouse Volume (Mil) $1,169 $510 $367 $1,007 $253 buildings converted during the late Size Weighted Avg. $225 $93 $137 $100,089 $101,093 1990s into Portland’s hippest district Price Weighted Avg. $295 $119 $167 $126,062 $111,506 for galleries, boutiques, restaurants, Median $161 $87 $150 $74,974 $91,219 and living. Green living is exemplified by the 937 Condominiums, a luxury Capitalization Rates (All Transactions) 16-story, 114-unit property that will be Weighted Average – – 6.8 5.6 – LEED-gold certified once completed. Median – – 6.4 6.0 – Featuring a 4,000-square-foot rooftop Source: RERC.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 24 Quarterly keep new construction and redevel- out causing a spike in vacancy rates. “Portland effectively has less than a opment projects on track, she noted. New Class A office rents would range 5-year supply of industrial land avail- And, with good reason: Portland from $33 to $35 per square foot. able, and most of that is in small par- State is the largest land owner down- cels,” Newby said. There is strong town, with 4 million square feet of Given the housing shortage, investors demand for industrial properties, and space spread out over 44 city blocks, have targeted Portland for apartment that is driving land prices and lease and the University’s Center for Real properties. Earlier this year, the 245- rates up. Warehouse and flex indus- Estate has a 30-year history of edu- unit Wyatt apartments sold for $111.5 trial availability in the metropolitan cating future urban planners and de- million, or $455,000 per apartment, area is under 7.5 percent , with ware- velopers. and a tower at the Harrison complex house monthly lease rates at $45 per sold for $45 million, or $245,000 per square foot and rising. “Portland’s Newby pointed out another “benefit” unit. Both properties were sold to ‘uber’ growth boundary won’t be ex- of Portland’s urban growth boundary– California-based companies. panding anytime soon,” Newby says. it helped insulate the market from of- “Metro and regional planners are not fice overbuilding during the dot-com Still, concern over how much land can expected to publish recommenda- bust of the late 1990s and the re- be developed to meet market needs tions for urban growth boundary ex- cent economic slowdown caused by remains a concern. Most major mar- pansion until sometime after 2010.” the sub-prime fallout. Today, Newby kets plan for future development; the In the meantime, industrial land pric- said, downtown Portland has “a lot of general standard is to have a 20-year es start at $7.50 per square foot and cranes in the air” at office construction supply of industrial land available warehouses are transacting around sites. According to a market report to promote economic development. $100 per square foot. from Portland State University, the Economic theory suggests that for downtown market can absorb from every base employment or traded 400,000 to 500,000 square feet of sector job, another 2.8 jobs are cre- new office construction by 2009 with- ated within that community.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 25 Quarterly RERC~CCIM Investment Trends Quarterly Advisory Board Members B.K. Allen, CCIM Duncan Patterson, CCIM B.K. Allen Real Estate Patterson-Woods Associates RERC Editorial Staff Potomac Falls, Virginia Greenville, Delaware Publisher Kenneth P. Riggs, Jr. Todd Clarke, CCIM Gary M. Ralston, CCIM, SIOR, CFA®, CRE, FRICS, MAI, CCIM New Mexico Apartments SRS, CPM, CRE Albuquerque, New Mexico Florida Retail Development, LLC Editor-in-Chief Barb Bush Winter Park, Florida Wayne D’Amico, CCIM Lead Analyst Property Politics Cynthia Shelton, CCIM Brian Velky Essex, Connecticut Colliers Arnold Research Analysts Orlando, Florida Greg Philipp Paul Fetscher, CCIM Cliff Carlson Great American Brokerage Frank Simpson, CCIM Morgan Even Long Beach, New York The Simpson Company Design Editor Gainesville, Georgia Michelle Houlgrave Stephen Furnary ING Clarion Partners Richard Sokolov Data Management New York, New York Simon Property Group Ben Neil Daniel Warner Indianapolis, Indiana Breck Hanson Production Committee LaSalle Bank, N.A. John Stone, CCIM Terri Cotter Chicago, Illinois John M. Stone Company Scott Hamerlinck Dallas, Texas Research Assistants Charles Lowrey Alicia Brown Prudential Investment Management Services Dewey Struble, CCIM Charles Gohr Parsippany, New Jersey Sperry Van Ness Jeffrey Harms David Kelly Reno, Nevada Herinomena Rakotoarivelo Dennis Martin Steven Schlange RREEF/DB Real Estate Julien Studley Anthony Tholkes New York, New York Julien Studley, Inc. New York, New York CCIM Institute Jeff Lyon, CCIM President GVA Kidder Mathews Allan Sweet Timothy S. Hatlestad, CCIM Seattle, Washington AMLI Residential Properties Trust President-Elect Chicago, Illinois Charles McClure, CCIM, CRE Buzz McCoy Buzz McCoy Associates, Inc. Garry Weiss, CCIM First Vice President Los Angeles, California First Industrial Realty Trust Richard E. Juge, CCIM, SIOR Chicago, Illinois Chief Executive Officer Tom Nordstrom, CCIM Jonathan Salk AEGON USA Realty Advisors, Inc. Sam Zell Cedar Rapids, Iowa Equity Group Investments Director of Public Relations Edward M. Bury, APR Chicago, Illinois Art Pasquerella CCIM Member Services Committee Berwind Property Group, Inc. Steve Moriera, CCIM, Chairman Philadelphia, Pennsylvania Brent Case, CCIM, Vice Chairman Immediate Past Chairman Copyright Notice for RERC~CCIM Investment Trends Quarterly CCIM Member Services Committee Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. All rights Nick Miner, CCIM reserved. No part of this publication may be reproduced, duplicated, or copied in any form, includ- Liason ing electronic forwarding or copying, xerography, microfilm, or other methods, or incorporated into CCIM Member Services Committee any information retrieval system, without the written permission of RERC and the CCIM Institute. Frank Simpson, CCIM

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REALTORS® Commercial Real Estate Research Corporation Alliance of the National ® Founded more than 75 years ago, Real Estate Research Corporation (RERC) Association of REALTORS was the nation’s first independent real estate firm that specialized in both real NAR President estate research and analysis. Recognized as a pioneer in the art of real es- Richard F. “Dick” Gaylord tate management and for monitoring key sectors of the economy that influence CRS, CRB, GRI, CIPS the real estate industry, RERC has retained its place as one of the industry’s leading real estate investment trends analysts through the publication of such NAR Executive Vice President/CEO reports as Expectations & Market Realities in Real Estate and the RERC Real Dale A. Stinton Estate Report. Today, RERC is known for its research publications and market studies, commercial property valuations, complex RCA Committee Representative consulting assignments, portfolio management Patricia A. Nooney and technology services, independent fiduciary CCIM, CPM, SIOR services, and corporate advisory services. NAR Vice President of Commercial Real Estate Jan M. Hope The CCIM Institute The CCIM Institute, headquartered in Chicago, confers the Certified Commer- cial Investment Member designation through an extensive curriculum of 200 classroom hours in addition to professional experience requirements. CCIMs are recognized experts in commercial real estate brokerage, leasing, asset management, valuation, and investment analysis, and form a business net- work encompassing more than 1,000 markets throughout North America, Eu- rope, Asia and the Caribbean. There currently are more than 8,600 CCIM designees, with an additional 8,200 professionals pursuing the designation. CCIM Institute is an affiliate of the National Association of REALTORS®. Visit www.ccim.com.

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Offices located throughout the U.S., with headquarters in Chicago

Contributors Gold

Trusted Advice. Proven Performance. Thank you to all who Bronze contributed to this report. Cushman & Kevin Casebier Advanco Atlanta, GA Kenneth Delvillar Orlando, FL Wakefield Michael Johnston Alain Pinel Realtors San Francisco, CA Dancor Commercial Daniel Huneke Louisville, KY Properties Berger-Epstein Jonathan Epstein Philadelphia, PA Associates, inc. Lon Lundberg, CCIM Discover Real Estate Boise, ID Bill Chess Duemelands Bill Chess Bastrop, TX Skip Duemeland Omaha, NE Real Estate Commerical Nancy Miller Bull Realty Atlanta, GA Eagle Commercial Nicholas Miner, CCIM Phoenix, AZ Realty Services Latchezar Boyadjiev California Realty San Diego, CA Eisner, Feldman & Natalie Feldman Tampa, FL Brian Bell Campana Resources Dallas, TX Grant, Inc. Eshenbaugh Land Bill Eshenbaugh Tampa, FL Gary Hunter Capital Financial, LLC Seattle, WA Company First American Tim Mehan CBCNRT Columbus, OH Matthew Curtis San Antonio, TX Commercial Ernest L Brown, IV, Grubb & Ellis Brandon Rodgers CBRE Tucson, AZ San Antonio, TX CCIM Company CenterPointe Real Barry Marotz Austin, TX Grubb & Ellis/Peebles Estate Group Pete Riehm Mobile, AL & Cameron Chris Schreiber Century 21 / Onpoint Sandpoint, ID Bill Overman GVA Advantis Norfolk, VA James W. Wright Century 21 All Islands Honolulu, HI Halo Realty & James T Saint, CCIM Las Vegas, NV Coldwell Banker Investments Corp. Thomas D. Burke Westlake, OH Hardy Commercial Commercial Stuart Hardy, Ph.D. Irvine, CA Coldwell Banker Real Estate Services Brady Collier Dallas, TX Commercial Glenn Thomas Hart County Realty Nashville, TN Coldwell Banker Mike Habib San Diego, CA Henry S. Miller Commercial Robert Stone Dallas, TX Commercial Coldwell Banker Tom Tolrud Tampa, FL Herman Walldorf & Commercial NRT Benjamin Pitts Chattanooga, GA Company, Inc. Coldwell Banker Jecoah E. Byrnes Denver, CO Commercial NRT Bruce Holmes HotelBrokerOne Oklahoma City, OK Coldwell Banker Industrial Commercial Daniel G. Mincher Commercial, The Sacramento, CA John Schutzius Realty and Chicago, IL Duncan Company Investment Corp Inter/Design John Seckerson Colliers Portland, OR William Griffiths Milwaukee, WI Investments inc. Colliers Bennett & Peter Kravaritis Chicago, IL Kahnweiler Michael G. Loveland Loveland Properties Wichita, KS Dan Colton Colton Commercial Phoenix, AZ

Bronze JADDA Capital Thomas E. Hankins, Realty Capital Paul Schapira Bloomfield, MI Orlando, FL Management, LLC CCIM SIOR Hankins Group Realty Diversified Jim Daniell JD Properties San Antonio, TX Mark Fontaine Washington, DC Services, INC. JM Padron JM Partners Realty Miami, FL REMAX Commercial Ed Mendence, SIOR San Francisco, CA Silicon Valley felix tang Jobin Metro Realty, llc Washington, DC ReMax Results Ferrell Blair LaGrange, GA Kenneth Krawczyk K.S.K. Services Inc. Milwaukee, WI LaGrange Jason Tuomey Rutledge Real Estate Dallas, TX Wes Waltenspiel Keller Realty Reno, NV Sealy & Falgoust Lang World Realty, Bill Jeansonne New Orleans, LA Dionne Lang Chicago, IL Real Estate INC. Larkin Commercial Helen Selig Selig Comm. R.E. Memphis, TN Jay Verro, CCIM Albany, NY Properties, Inc. Gerald Katz Shorewest Realtors Milwaukee, WI Legacy Property Blake Fletcher Gainesville, FL Development Pete Bine Sperry Van Ness Myrtle Beach, SC

Robert L. Smith, Jr. Lockard Companies Cedar Falls, IA Heather Konopka Sperry Van Ness Dallas, TX McLennan Comercial Charles Wiercinski Chicago, IL Properties Dewey Struble, CCIM Sperry Van Ness Reno, NV Milkes Realty Stephen Frank As- Joe Milkes Dallas, TX Sabina Holtzman St. Louis, MO Valuation sociates, Inc. Stephens Commer- David Miller Phoenix, AZ Steve Stephens Chicago, IL cial Real Estate Mizrach Realty Danny Zelonker Miami, FL Associates Emilio T & E Realty Denver, CO NM Apartment Todd Clarke CCIM Albuquerque, NM David da Cunha The ALCOR Group New Orleans, LA Advisors Inc The Blau & Bert Northern New Jersey, K. F. Crimmins Steven C. Longley Nortam Capital Dallas, TX Company NJ JP Newman PCF Austin, TX The LWIII Group at Lee Wheeler Foxworth Real Estate Beaumont, TX Roz Peterson Peterson Minneapolis, MN Company Platinum Property Jair Morselli The Manna Group McLean, VA Michael Cantwell Miami, FL Group, LLC Allen Nivens The Norton Agency Atlanta, GA ProVista Professional N. L. Martin Los Angeles, CA Services Greg Ruthven The Ruthvens Lakeland, FL Prudential CRES Robert Strickland Tampa, FL Commercial RE Omar Araim Uptown Realty, Inc Atlanta, GA Prudential Gardner Emile Tujague New Orleans, LA Dan Weil Weil Commercial Los Angeles, CA Realtors West Harlingen Tom Watson RE/MAX of Spokane Spokane, WA Ricardo Rubiano Harlingen, TX Partners LP Tomasz Dubiski Real Estate Agency Poland

The analysis provided in the RERC/CCIM Investment Trends Quarterly is conducted by Real Estate Research Corporation (RERC). The information is gathered in raw form from surveys sent to CCIM designees and candidates, and from sales transactions collected from various sources, including CCIM members, various key commercial information exchange organizations (CIEs), the media, assessors’ offices, RERC contacts in the marketplace, and other reliable public and private resources. All sales transactions are aggregated, analyzed, and reported on by RERC. Additional data and forecasts are provided courtesy of the REALTORS® Commercial Alliance and Torto Wheaton Research. Published quarterly, the RERC/CCIM Investment Trends Quarterly report provides timely insight into transaction volume, pricing, and capitalization rates for the core income-producing properties. RERC Definitions Capitalization Rate: The capitalization rate is defined as the first year “stabilized” net operating income (NOI) (NOI is before capital expenditures – tenant improvements, leasing commissions, reserves – and debt service) divided by the present value (or purchase price). Capitalization rates included are transaction-based medians and price-weighted averages. RERC Capitalization Rate and Ranges: Capitalization rates and ranges listed throughout this report are based on RERC’s proprietary realized capitalization rate model, which includes available transaction-based capitalization rates, survey responses, NCREIF Index Returns, and other market factors, but is heavily weighted toward transaction-based capitalization rates for each property type within each market. Price-Weighted Average: The price-weighted average is developed through weighting each asset based on the gross sales price. Therefore, larger dollar properties are given more weight than the smaller dollar properties, with the weighted average reflecting more weight towards institutional real estate. Size-Weighted Average: The size-weighted average is developed through weighting each asset based on its gross square footage – simply an aggregation of all the gross sales prices divided by the aggregation of the gross square footage. National/Regional Market Analysis: RERC ranks the investment potential of the metros and property types it covers based on various space market and financial market criteria, including pricing, capitalization rates, vacancy rates, and other factors. Investment Conditions Rating: A rating of 1 through 10 (with 10 being high) reflecting survey respondents’ collective views of the investment environment for a particular property type in comparison with other property types. The rating may take into account supply and demand, economic conditions, pricing, rental rates, or other factors. NCREIF Definitions NCREIF: The National Council of Real Estate Investment Fiduciaries (NCREIF) is an independent organization dedicated to the compilation, validation, and distribution of performance data for the institutional real estate investment community. Total Return: The total return includes appreciation (or depreciation), realized capital gain (or loss), and income. It is computed by adding the income and capital appreciation return on a quarterly basis. Implied Cap Rate (Income Return): The implied capitalization rate measures the portion of return attributable to each property’s NOI. It is computed by divid- ing the total NOI by the total quarterly investment. Capital Appreciation Return: The capital appreciation return measures the change in market value adjusted for any capital improvements/expenditures and partial sales divided by the average quarterly investment. Annual and Annualized Returns: Annual returns are computed by chain-linking quarterly rates of return to produce time-weighted rates of return for the annual and annualized periods under study. For time periods beyond 1 year, the annualized returns are expressed as the annual compounded rate of return. Allocation: The distribution, expressed as a percentage of the overall investment, in a particular geographic area by property type. For a detailed description of the proceeding returns, as well as the calculations used by NCREIF to derive these figures, please visit http://www.ncreif.org/indices. The combined returns are the weighted average of the returns for each property type according to the proportionate market value of properties surveyed relative to the total market values surveyed during a time period. RERC Defined Regions and MSAs West: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming Midwest: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin South: Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Oklahoma, Tennessee, Texas East: Connecticut, Delaware, Kentucky, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, Washington D.C., West Virginia Metropolitan Statistical Area (MSA): A geographic unit comprised of one or more counties around a central city or urbanized area with 50,000 or more population. Contiguous counties are included if they have close social and economic links with the area’s population nucleus. With a few exceptions, the MSAs within this report coincide with the U.S. Office of Management and Budget’s December 2005 definitions for each MSA. For example, St. Paul, Minn., and Bloomington, Minn., as well as many other suburbs, are included within the Minneapolis MSA. Note of Caution: It is imperative to exercise caution when comparing the data contained herein to previous reports published by RERC. The data herein is not “fixed,” and will be updated and changed as additional transaction information is gathered and analyzed. Disclaimer: This publication is designed to provide accurate information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal or accounting service. The publisher advises that no statement in this issue is to be construed as a recommendation to make any real estate investment or to buy or sell a security or as investment advice. The examples contained in the publication are intended for use as background on the real estate industry as a whole, not as support for any particular real estate investment or security. Although the RERC/CCIM Investment Trends Quarterly uses only sources that it deems reliable and accurate, Real Estate Research Corporation (RERC) does not warrant the accuracy of the information contained herein.

Baltimore • Boston • Charlotte • Hartford • New York City • Norfolk Northern New Jersey • Philadelphia • Pittsburgh • Raleigh • Richmond • Washington, D.C. EastRegionTransactionBreakdown

n CCIM Institute designees and candidates rated the eco- n The total dollar volume of commercial real estate trans- nomic performance in the East region at 5.8 on a scale of actions in the East region decreased during first quarter 1 to 10, with 10 being high, for first quarter 2008. While this 2008 for all property types. is lower than last quarter’s rating of 6.5 for the East region, each of the four regions received similar ratings during first n The weighted average capitalization rate declined by 10 quarter 2008 with only minor variations. The majority of basis points in first quarter 2008 in the East regional in- survey respondents from the East region believe the East dustrial, retail, and apartment sectors. This rate remained regional economy will continue to perform at its current unchanged from the previous quarter for the office sector, level in the near term. and increased 50 basis points for the hotel sector.

Regional Transaction Price Breakdown/Tiers East Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $2 Million “Vacancies have Volume (Mil) $616 $983 $1,230 $502 $21 increased slightly in Size Weighted Avg. ($ per sf/unit) $86 $48 $89 $58,268 $24,774 the commercial sectors, Price Weighted Avg. ($ per sf/unit) $120 $77 $128 $74,990 $29,028 and the delivery of new Median ($ per sf/unit) $88 $53 $88 $60,742 $27,767 construction continues $2 - $5 Million at too fast a pace.” Volume (Mil) $1,304 $1,819 $2,045 $1,992 $260 –Norfolk Size Weighted Avg. ($ per sf/unit) $117 $56 $145 $85,420 $33,503 Price Weighted Avg. ($ per sf/unit) $183 $102 $262 $133,911 $47,304 Median ($ per sf/unit) $145 $73 $229 $97,832 $34,091 > $5 Million “Apartment value Volume (Mil) $65,321 $11,264 $13,423 $23,910 $14,539 is expected to rise.” Size Weighted Avg. ($ per sf/unit) $327 $71 $175 $134,165 $178,485 –Northern New Jersey Price Weighted Avg. ($ per sf/unit) $534 $142 $300 $235,926 $284,906 Median ($ per sf/unit) $224 $78 $191 $116,182 $119,816 All Transactions Volume (Mil) $67,241 $14,065 $16,698 $26,404 $14,820 Size Weighted Avg. ($ per sf/unit) $309 $66 $160 $125,647 $164,534 “The hotel and Price Weighted Avg. ($ per sf/unit) $524 $132 $282 $225,173 $280,371 office sectors and Median ($ per sf/unit) $148 $64 $128 $97,222 $108,534 the heavy industrial Capitalization Rates (All Transactions) areas are presenting Range (%) 3.0 - 12.6 3.7 - 10.3 4.6 - 9.5 2.6 - 8.7 4.1 - 10.8 weak investment Weighted Avg. (%) 5.3 6.8 6.5 5.5 7.9 opportunities.” Median (%) 6.6 7.5 6.7 5.7 8.5 –Washington, D.C. Source: RERC.

RERC Weighted Avg. Cap Rate - 1Q 2008 8.5% East U.S. Total Avg. Capitalization Rate 7.5% n The total dollar volume of office transactions in the East region during first quarter 2008 was about 40 percent less 6.5% than that for fourth quarter 2007.

n 5.5% The first quarter 2008 size- and price-weighted average prices per square foot were up slightly for properties that sold in the less than $2 million and the $2 to $5 million vol- 4.5% ume categories, but were down slightly for the more than $5 million and all volume categories as compared to the Baltimore Boston Charlotte New York Northern NJ Philadelphia previous quarter. Washington, D.C.

RERC Size-Weighted Avg. PPSF - 1Q 2008 RERC Price-Weighted Avg. PPSF - 1Q 2008 $600 $1000 East East U.S. Total U.S. Total $500 Size-Weighted Average PPSF $800 Price-Weighted Average PPSF

$400 $600 $300 $400 $200

$200 $100

$0 $0

Boston Baltimore Boston Charlotte Hartford New York Norfolk Raleigh Baltimore Charlotte Hartford New York Norfolk Raleigh Northern NJPhiladelphiaPittsburgh Richmond Northern NJPhiladelphiaPittsburgh Richmond Washington, D.C. Washington, D.C.

East Office Transactions (4/1/07 - 3/31/08) Volume Size-weighted Price-weighted Median Average (millions) Average ($/sf) Average ($/sf) ($/sf) Cap Rate (%) Baltimore $1,257 $191 $262 $145 6.5 Boston $6,888 $275 $394 $155 5.3 Charlotte $1,171 $168 $211 $136 7.8 Hartford $131 $117 $158 $87 – New York $33,781 $554 $719 $384 5.1 Norfolk $239 $153 $195 $139 – Northern NJ $1,746 $148 $195 $145 6.7 Philadelphia $2,206 $141 $168 $131 7.5 Pittsburgh $353 $82 $110 $62 – Raleigh $794 $144 $169 $134 – Richmond $374 $127 $164 $113 – Washington, D.C. $14,440 $365 $420 $312 5.5 East Total $67,241 $309 $524 $148 5.3 U.S. Total $165,414 $240 $396 $152 5.6 Source: RERC.

RERC Weighted Avg. Cap Rate - 1Q 2008 8.5% East U.S. Total Avg. Capitalization Rate 7.5% n The size- and price- weighted average prices for industrial 6.5% properties in the East region increased slightly during first quarter 2008 over last quarter’s rates, while the average 5.5% capitalization rate declined slightly and the median capitalization rate increased 30 basis points. 4.5% n Transaction volume for industrial properties in the East re- 3.5% gion was about 10 percent lower in first quarter 2008 when compared to fourth quarter 2007. Boston Charlotte Northern NJ

RERC Size-Weighted Avg. PPSF - 1Q 2008 RERC Price-Weighted Avg. PPSF - 1Q 2008 $340 $200 East East U.S. Total $300 U.S. Total Price-Weighted Average PPSF $165 Size-Weighted Average PPSF $260

$220 $130 $180

$95 $140

$100 $60 $60

$25 $20

Boston Norfolk Raleigh Baltimore Boston Charlotte Hartford New York Norfolk Raleigh Baltimore Charlotte Hartford New York Pittsburgh Richmond Northern NJPhiladelphiaPittsburgh Richmond Northern NJPhiladelphia Washington, D.C. Washington, D.C.

East Industrial Transactions (4/1/07 - 3/31/08) Volume Size-weighted Price-weighted Median Average (millions) Average ($/sf) Average ($/sf) ($/sf) Cap Rate (%) Baltimore $649 $65 $78 $69 – Boston $1,981 $90 $141 $83 4.8 Charlotte $533 $44 $68 $53 7.4 Hartford $229 $47 $59 $52 – New York $2,439 $177 $326 $139 – Norfolk $178 $64 $87 $64 – Northern NJ $1,076 $72 $98 $93 6.5 Philadelphia $675 $65 $89 $57 – Pittsburgh $157 $34 $46 $44 – Raleigh $406 $64 $75 $66 – Richmond $145 $40 $58 $41 – Washington, D.C. $652 $113 $142 $115 – East Total $14,065 $66 $132 $64 6.8 U.S. Total $51,426 $74 $126 $75 6.7 Source: RERC.

RERC Weighted Avg. Cap Rate - 1Q 2008 7.5% East U.S. Total

Avg. Capitalization Rate 7.0% n The size-weighted average price per square foot for retail space in the East region during first quarter 2008 com-

6.5% pared closely with the size-weighted average price for this sector on a national level. The weighted average capitalization rate for the retail sector in the East region was simi- 6.0% lar to the national average.

5.5% n The dollar volume of retail property transactions in first quarter 2008 was significantly less than previous quarter

Baltimore Boston Charlotte New York Norfolk Raleigh Northern NJ Philadelphia Pittsburgh volume. Washington, D.C.

RERC Size-Weighted Avg. PPSF - 1Q 2008 RERC Price-Weighted Avg. PPSF - 1Q 2008 $350 $550 East East U.S. Total U.S. Total Size-Weighted Average PPSF $450 Price-Weighted Average PPSF $275

$350 $200 $250

$125 $150

$50 $50

Boston Hartford Norfolk Raleigh Baltimore Boston Charlotte Hartford New York Norfolk Raleigh Baltimore Charlotte New York Pittsburgh Richmond Northern NJPhiladelphiaPittsburgh Richmond Northern NJPhiladelphia Washington, D.C. Washington, D.C. East Retail Transactions (4/1/07 - 3/31/08) Volume Size-weighted Price-weighted Median Average (millions) Average ($/sf) Average ($/sf) ($/sf) Cap Rate (%) Baltimore $276 $132 $183 $112 6.2 Boston $1,495 $182 $277 $152 6.0 Charlotte $468 $121 $172 $103 6.9 Hartford $251 $104 $132 $75 – New York $4,192 $318 $520 $236 6.3 Norfolk $253 $166 $220 $134 6.3 Northern NJ $821 $218 $269 $181 6.7 Philadelphia $1,150 $156 $199 $114 6.6 Pittsburgh $156 $131 $230 $113 6.7 Raleigh $469 $154 $190 $158 6.9 Richmond $173 $104 $143 $92 – Washington, D.C. $1,112 $178 $300 $211 6.5 East Total $16,698 $160 $282 $128 6.5 U.S. Total $59,915 $159 $282 $135 6.4 Source: RERC.

RERC Weighted Avg. Cap Rate - 1Q 2008

6.5% East U.S. Total Avg. Capitalization Rate

5.5% n The dollar volume of apartment transactions on both a regional level and a national level decreased during first quarter 2008. However, as expected, the size- and price- 4.5% weighted average prices remain much higher in the East region than the nation as a whole. 3.5% n The first quarter 2008 weighted average and median apart-

2.5% ment capitalization rates in the East region were 30 basis points less than those for the national market.

Charlotte New York Raleigh Philadelphia Washington, D.C.

RERC Size-Weighted Avg. PPU - 1Q 2008 RERC Price-Weighted Avg. PPU - 1Q 2008 $250,000 $350,000 East East U.S. Total U.S. Total $300,000 Price-Weighted Average PPU $200,000 Size-Weighted Average PPU $250,000

$150,000 $200,000

$100,000 $150,000 $100,000 $50,000 $50,000

$0 $0

Baltimore Boston Charlotte Hartford New York Norfolk Raleigh Baltimore Boston Charlotte Hartford New York Norfolk Raleigh Northern NJPhiladelphiaPittsburgh Richmond Northern NJPhiladelphiaPittsburgh Richmond Washington, D.C. Washington, D.C. East Apartment Transactions (4/1/07 - 3/31/08) Volume Size-weighted Price-weighted Median Average (millions) Average ($/unit) Average ($/unit) ($/sf) Cap Rate (%) Baltimore $823 $123,408 $183,350 $71,342 – Boston $1,454 $166,939 $196,356 $135,334 – Charlotte $1,025 $67,400 $79,934 $55,789 5.4 Hartford $80 $75,373 $151,490 $52,252 – New York $10,711 $187,332 $336,559 $125,000 4.8 Norfolk $272 $109,786 $124,864 $82,193 – Northern NJ $1,628 $127,967 $172,022 $113,540 – Philadelphia $1,814 $95,066 $109,439 $85,395 5.9 Pittsburgh $77 $65,385 $86,481 $37,951 – Raleigh $1,154 $78,361 $87,737 $69,087 5.6 Richmond $132 $73,448 $93,209 $59,091 – Washington, D.C. $3,394 $193,715 $244,340 $128,152 5.2 East Total $26,404 $125,647 $225,173 $97,222 5.5 U.S. Total $78,236 $99,431 $169,129 $83,333 5.8 Source: RERC.

n The average price per unit of hotel space in the East re- n Both the East regional size- and price-weighted average gion dipped below the national average price during first prices per hotel unit declined during first quarter 2008. In quarter 2008. (This is due in part to some recent huge ho- addition, the weighted average capitalization rate for hotel transactions in the West region.) The weighted average tels in the East region increased by 50 basis points during capitalization rate for hotel properties in the East region the quarter. was equal to the national rate during this time period.

RERC Size-Weighted Avg. PPU - 1Q 2008 RERC Price-Weighted Avg. PPU - 1Q 2008 $400,000 $525,000 East U.S. Total $450,000 East Size-Weighted Average PPU U.S. Total $300,000 Price-Weighted Average PPU $375,000

$300,000 $200,000 $225,000

$150,000 $100,000 $75,000

$0 $0

East Hotel Transactions (4/1/07 - 3/31/08) Volume Size-weighted Price-weighted Median Average (millions) Average ($/unit) Average ($/unit) ($/sf) Cap Rate (%) Baltimore $752 $173,559 $189,845 $143,916 8.5 Boston $1,578 $190,223 $247,653 $123,888 – Charlotte $170 $70,441 $85,986 $74,931 – Hartford $78 $78,709 $94,823 $67,368 – New York $4,441 $359,687 $479,832 $210,047 7.3 Norfolk $289 $105,001 $143,799 $88,235 – Northern NJ $1,174 $144,634 $186,825 $101,334 7.0 Philadelphia $735 $143,121 $196,098 $109,357 – Pittsburgh $208 $112,780 $152,198 $90,239 – Raleigh $269 $78,801 $93,115 $74,843 – Richmond $212 $87,893 $103,832 $83,986 – Washington, D.C. $2,149 $198,549 $273,780 $117,731 – East Total $14,820 $164,534 $280,371 $108,534 7.9 U.S. Total $59,238 $171,778 $489,300 $103,488 7.9 Source: RERC.

East Region Space Market

Trusted Advice. Proven Performance. Office - 1Q-2008 Inventory SF (000s) Vacancy Rate (%) Net Absorption SF (000s) Asking Rents ($/SF) CBRE/Torto Wheaton Research is a Baltimore 51,497 12.9 638 $22.62 Gross full-service research and investment Boston 158,092 10.7 484 $25.90 Gross advisory firm, specializing in commercial real estate markets. Charlotte 39,438 11.2 16 $18.58 Gross Hartford 26,317 16.4 -113 $18.62 Gross With over 20 years of experience, New York 433,825 6.0 -1,207 $57.38 Gross our industry leading research, mar- Newark 43,973 14.8 -656 $24.81 Gross ket expertise, and strategic partner- Philadelphia 103,720 11.3 359 $22.45 Net ships provide clients with tactical ad- Pittsburgh 66,333 13.7 872 $18.40 Gross vice and strategic direction to identify Raleigh 38,733 12.5 24 $20.21 Gross market opportunities that enhance Washington, DC 273,043 10.6 695 $33.17 Gross performance and manage risk. Industrial - 1Q-2008

CBRE/TWR is internationally rec- Inventory SF (000s) Availability Rate (%) Net Absorption SF (000s) Asking Rents ($/SF) ognized for our solid foundation in Baltimore 200,414 13.2 247 $6.26 Net economics, accurate forecasts, ana- Boston 400,652 14.7 -1,377 $6.91 Net lytical expertise, and providing clients Charlotte 181,960 9.3 -26 $4.96 Net with unparalleled insight into the dy- Hartford 69,086 10.7 -243 $4.90 Net namics of the real estate market that New York 304,441 8.7 348 $7.23 Net impact performance. Newark 213,672 7.6 629 $7.08 Net Philadelphia 427,762 10.0 -232 $5.90 Net Pittsburgh 114,595 14.1 1,380 $4.57 Gross Raleigh 66,547 10.8 358 $6.18 Net Washington, DC 189,058 12.0 -702 $10.18 Net Retail - 1Q-2008 Inventory SF (000s) Availability Rate (%) Net Absorption SF (000s) TWR Rent Index ($/SF) Baltimore 34,765 8.5 -382 $18.88 Boston 60,514 7.9 160 $17.41 Charlotte 16,065 7.9 -131 $19.03 New York 33,917 7.2 -68 $32.40 William Wheaton Jon Southard James Costello Newark 13,548 5.1 41 $25.53 Ph.D., Principal Principal Principal Philadelphia 56,422 9.5 293 $19.98 Washington, DC 61,155 4.7 51 $27.26 Space Market Data has been provided courtesy of Torto Wheaton Research. Analysis within this report is solely compiled and produced by the Real Estate Research Corporation, and in no way reflects the interpretations, opinions, or conclusions of Torto Wheaton Research.

RERC extends its appreciation to CBRE/Torto Wheaton Research, which contributed all of the space market information on this page.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 40 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Baltimore MSA 2.7 million Baltimore2 3.8% Office Baltimore Growth1 0.72% Maryland2 3.7% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate  – Household Income & Value Industrial Per Capita Income $31,850 2007 Households 1.0 million Size-Weighted Average PPSF   1-year Job Growth – Household Growth 0.77% 1-Year Job Additions – Median Home Price $305,618 Weighted Average Cap Rate – – Major Employers Retail Northrup Grumman Electronic Systems Size-Weighted Average PPSF   John Hopkins Hospital Weighted Average Cap Rate   H & S Bakery Apartment Lifebridge Health Size-Weighted Average PPU   John Hopkins School of Medicine Weighted Average Cap Rate – –

BaltimoreSources: Bureau of Labor Statistics, NAR, STDB Online. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Hotel Noteworthy Transactions Size-Weighted Average PPU   Sale Date Sale Price Sq. Ft./Units PPSF/PPU Weighted Average Cap Rate   Office * 311 N. Charles St. 2-08 $1,395,000 7,025 $199 Metro Cap Rate Comparison Current Quarter North Ridge Professional 3-08 $5,300,000 42,433 $125 Office Industrial vs. East Region  1810 Portal St. 1-08 $19,291,132 244,000 $79 vs. Nation  Retail Industrial 21 & 23 N. Howard St. 2-08 $410,000 5,064 $81 vs. East Region – Apartment Rodgers Forge 1-08 $45,000,000 508 $88,583 vs. Nation – Dulaney Crescent 3-08 $56,100,000 264 $212,500 Retail Hotel vs. East Region  Embassy Suites 2-08 $49,400,000 223 $221,525 vs. Nation  Residence Inn 2-08 $41,664,615 188 $221,620 Hotel Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. vs. East Region  Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated vs. Nation  Type Refurbished(R) Ft./Units Delivery *Comparison of current quarter weighted average capitalization rates. Source: RERC. Nursery Road Plaza Retail N 22,000 N/A Forest Hill Business Mixed Use N 8,600 2008 Center Route 175 Office N 2,500,000 N/A ARC Properties at Mixed Use N 1,600,000 N/A McCormick Spice Mechanic Theater Mixed Use R 110,000 N/A Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 41 Quarterly Baltimore Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $65 $62 $57 $23 – Size Weighted Avg. ($ per sf/unit) $128 $63 $109 $59,310 – Price Weighted Avg. ($ per sf/unit) $185 $97 $170 $64,434 – Baltimore Median ($ per sf/unit) $125 $64 $96 $57,681 – > $5 Million Volume (Mil) $1,192 $586 $220 $800 $749 Size Weighted Avg. ($ per sf/unit) $196 $66 $140 $127,355 $173,987 Price Weighted Avg. ($ per sf/unit) $267 $76 $186 $186,760 $190,176 Median ($ per sf/unit) $157 $69 $143 $89,213 $143,916 All Transactions Volume (Mil) $1,257 $649 $276 $823 $752 Size Weighted Avg. ($ per sf/unit) $191 $65 $132 $123,408 $173,559 Price Weighted Avg. ($ per sf/unit) $262 $78 $183 $183,350 $189,845 Median ($ per sf/unit) $145 $69 $112 $71,342 $143,916 Capitalization Rates (All Transactions) Weighted Average (%) 6.5 – 6.2 – 8.5 Median (%) 6.5 – 7.0 – 8.8 Source: RERC.

Historical Median Price per Square Foot Historical Median Price per Square Foot (12 month trailing) – OFFICE (12 month trailing) – INDUSTRIAL

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Historical Median Price per Square Foot Footnotes: (12 month trailing) – RETAIL 1The large increase in average price was due in great part to the sale of 1 Westview Center for $60.2 million.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 42 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Boston MSA 4.5 million Boston2 4.3% Office Boston Growth1 0.37% Massachusetts2 4.8% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate   Household Income & Value Industrial Per Capita Income $38,631 2007 Households 1.7 million Size-Weighted Average PPSF   1-year Job Growth 1.20% Household Growth 0.43%  1-year Job Additons 29,000 Median Home Price $383,167 Weighted Average Cap Rate – Major Employers Retail Risk Consultants Size-Weighted Average PPSF  

Boston Boston University Weighted Average Cap Rate =  Fidelity Investments Life Insurance Apartment John Hancock Life Insurance Co. USA Size-Weighted Average PPU   Northeastern University Hotel Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Boston Region – 2007” ©2007 NATIONAL ASSOCIATION OF REAL- TORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form Size-Weighted Average PPU   (electronic media included) is prohibited without written permission. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Metro Cap Rate Comparison* Current Quarter Noteworthy Transactions Office Sale Date Sale Price Sq. Ft./Units PPSF/PPU vs. East Region = Office vs. Nation  Fleet Center 1-08 $402,975,873 777,000 $519 Exchange Place 1-08 $570,493,514 1,100,000 $519 Industrial Industrial vs. East Region  285 Summer St. 1-08 $15,500,000 54,000 $287 vs. Nation  160 University Ave. 2-08 $13,500,000 47,680 $283 Retail Retail vs. East Region  125 Newbury St. 2-08 $6,864,000 8,994 $763 vs. Nation  Walgreens & Beverly 3-08 $11,200,000 21,487 $521 National Bank *Comparison of current quarter weighted average capitalization rates. Source: RERC. Apartment 351 Massachusetts Ave. 1-08 $10,400,000 52 $200,000 55 Revere St. 2-08 $2,000,000 10 $200,000 Hotel Residence Inn 2-08 $49,000,000 221 $221,719 Hilton Garden Inn Burlington 2-08 $39,700,000 179 $221,788 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Wellington Business Park Mixed Use N 6,098,325 2009 Two Financial Center Office N 214,200 2009 416 N. Howard St. Multifamily N 80 2009 301 Binney St. Office N 500,000 N/A Franklin St. Luxury Tower Mixed Use R 1,186,000 2011 Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 43 Quarterly Boston Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $186 $316 $231 $93 $22 Size Weighted Avg. ($ per sf/unit) $102 $74 $116 $97,968 $45,809 Price Weighted Avg. ($ per sf/unit) $130 $95 $180 $167,521 $51,221 Boston Median ($ per sf/unit) $103 $77 $104 $92,668 $44,271 > $5 Million Volume (Mil) $6,702 $1,665 $1,264 $1,361 $1,556 Size Weighted Avg. ($ per sf/unit) $289 $93 $203 $175,345 $199,132 Price Weighted Avg. ($ per sf/unit) $401 $150 $294 $198,319 $250,441 Median ($ per sf/unit) $233 $94 $210 $173,313 $134,318 All Transactions Volume (Mil) $6,888 $1,981 $1,495 $1,454 $1,578 Size Weighted Avg. ($ per sf/unit) $275 $90 $182 $166,939 $190,223 Price Weighted Avg. ($ per sf/unit) $394 $141 $277 $196,356 $247,653 Median ($ per sf/unit) $155 $83 $152 $135,334 $123,888 Capitalization Rates (All Transactions) Weighted Average (%) 5.3 4.8 6.0 – – Median (%) 6.3 7.8 6.5 – – Source: RERC.

Historical Median Price per Square Foot Historical Median Price per Square Foot Historical Median Price per Square Foot (12 month trailing) – OFFICE (12 month trailing) – INDUSTRIAL (12 month trailing) – RETAIL

1 2

Historical Median Price per Unit Historical Median Price per Unit Footnotes: (12 month trailing) – APARTMENT (12 month trailing) – HOTEL 1This increase was partly due to the sale of the property at 121 Brookline for $442/sf. 2This hike was partly due to several high- end property sales, including two retail centers at 123 and 360 Newbury St. which sold for $1,000/sf each.

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 44 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Charlotte MSA 1.6 million Charlotte2 5.2% Office Charlotte Growth1 2.88% North Carolina2 5.2% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate   Household Income & Value Industrial Per Capita Income $31,670 2007 Households 631,000 Size-Weighted Average PPSF   1-year Job Growth 2.60% Household Growth 2.96%   1-Year Job Additions 21,600 Median Home Price $170,186 Weighted Average Cap Rate Major Employers Retail Construction Equipment Guide Size-Weighted Average PPSF   Weyerhaeuser Weighted Average Cap Rate   Bank Of America Apartment Wachovia Corporation Size-Weighted Average PPU   Duke Energy Corp. Weighted Average Cap Rate   Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Charlotte Region – 2007” ©2007 NATIONAL ASSOCIA-

Charlotte Hotel TION OF REALTORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form (electronic media included) is prohibited without written permission. Size-Weighted Average PPU   1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Noteworthy Transactions Metro Cap Rate Comparison* Current Quarter Sale Date Sale Price Sq. Ft./Units PPSF/PPU Office Office vs. East Region  Granville Office Building 2-08 $8,351,000 57,365 $146  Industrial vs. Nation Greylyn Business Park 3-08 $57,095,000 648,156 $88 Industrial Coffey Creek Int. Bus. Center 3-08 $33,050,707 397,751 $83 vs. East Region  Retail vs. Nation  Harris Teeter & Suntrust Bank 3-08 $12,664,911 45,000 $281 Retail CarMax 1-08 $9,900,000 18,697 $529 vs. East Region  Apartment vs. Nation  University Walk 2-08 $12,700,000 120 $105,833 901 Place 1-08 $19,000,000 158 $120,253 Apartment Hotel vs. East Region  Hampton Inn & Suites 1-08 $11,300,000 92 $122,826 vs. Nation  Mainstay Suites 3-08 $3,900,000 77 $50,649 *Comparison of current quarter weighted average capitalization rates. Source: RERC. Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Bank Of America Office N 800,000 2009 Matthews Township Office N 40,000 2009 Parkway Belgate Retail N 400,000 2009 Hillsborough & Mixed Use N N/A 2010 Dawson St. Royal Court Multifamily N 112 2009 Condominiums Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 45 Quarterly Charlotte Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $69 $164 $147 $48 $21 Size Weighted Avg. $104 $48 $89 $34,299 $32,748 Price Weighted Avg. $160 $74 $156 $39,745 $34,641 Charlotte Median $97 $50 $84 $35,122 $30,789 > $5 Million Volume (Mil) $1,102 $369 $321 $977 $148 Size Weighted Avg. $175 $42 $145 $70,761 $84,514 Price Weighted Avg. $214 $66 $180 $81,912 $93,414 Median $146 $64 $148 $65,212 $91,089 All Transactions Volume (Mil) $1,171 $533 $468 $1,025 $170 Size Weighted Avg. $168 $44 $121 $67,400 $70,441 Price Weighted Avg. $211 $68 $172 $79,934 $85,986 Median $136 $53 $103 $55,789 $74,931 Capitalization Rates (All Transactions) Weighted Average 7.8 7.4 6.9 5.4 – Median 7.9 7.1 6.8 5.5 – Source: RERC.

Historical Median Price per Square Foot Historical Median Price per Square Foot (12 month trailing) – OFFICE (12 month trailing) – INDUSTRIAL

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each Historical Median Price per Unit property type and do not carry (12 month trailing) – APARTMENT over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 46 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Hartford MSA 1.2 million Hartford2 5.7% Office Hartford Growth1 0.61% Connecticut2 5.5% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Industrial Household Income & Value Size-Weighted Average PPSF   Per Capita Income $34,879 2007 Households 468,000 Retail 1-year Job Growth 0.50% Household Growth 0.70% Size-Weighted Average PPSF =  1-Year Job Additions 2,700 Median Home Price $263,044 Major Employers Apartment Aetna Inc. Size-Weighted Average PPU   Hartford Hospital Hotel Hartford Financial SVC Group Size-Weighted Average PPU  

Hartford Travelers Indemnity Source: RERC. Uniprise Inc. Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Hartford Region – 2007” ©2007 NATIONAL ASSOCIATION OF REALTORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form (electronic media included) is prohibited without written permission. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Noteworthy Transactions Sale Date Sale Price Sq. Ft./Units PPSF/PPU Office 81 Gillett St. 2-08 $18,000,000 281,000 $64 43 Western Blvd. 1-08 $5,300,000 47,403 $112 Industrial Bristol Business Center 2-08 $60,500,000 1,160,000 $52 Retail School Street Square 1-08 $19,200,000 147,358 $130 East Brook Mall 3-08 $30,100,000 244,186 $123 Apartment 45 & 86 Webster St. 1-08 $5,434,234 103 $52,760 Vintage at The Grove 3-08 $45,300,000 322 $140,683 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Hartford Financial Office N 450,000 2008 Services Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 47 Quarterly Hartford Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $27 $82 $39 $19 – Size Weighted Avg. ($ per sf/unit) $80 $54 $75 $45,446 – Price Weighted Avg. ($ per sf/unit) $100 $83 $88 $51,567 – Hartford Median ($ per sf/unit) $81 $55 $67 $50,000 – > $5 Million Volume (Mil) $105 $147 $212 $60 $66 Size Weighted Avg. ($ per sf/unit) $132 $43 $111 $95,610 $97,963 Price Weighted Avg. ($ per sf/unit) $173 $46 $141 $183,606 $105,516 Median ($ per sf/unit) $183 $45 $118 $74,277 $88,051 All Transactions Volume (Mil) $131 $229 $251 $80 $78 Size Weighted Avg. ($ per sf/unit) $117 $47 $104 $75,373 $78,709 Price Weighted Avg. ($ per sf/unit) $158 $59 $132 $151,490 $94,823 Median ($ per sf/unit) $87 $52 $75 $52,252 $67,368 Capitalization Rates (All Transactions) Weighted Average (%) – – – – – Median (%) – – – – – Source: RERC.

Historical Median Price per Square Foot Historical Median Price per Square Foot (12 month trailing) – OFFICE (12 month trailing) – INDUSTRIAL

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and Historical Median Price per Square Foot (12 month trailing) – RETAIL for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 48 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year New York MSA 19.1 million New York2 4.6% Office New York Growth1 0.57% New York2 5.1% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate =  Household Income & Value Industrial Per Capita Income $34,906 2007 Households 6.9 million Size-Weighted Average PPSF   1-year Job Growth – Household Growth 0.56% 1-Year Job Additions – Median Home Price $433,590 Retail Major Employers Size-Weighted Average PPSF   Merrill Lynch & Co. Inc. Weighted Average Cap Rate =  Mount Sinai Medical Center Apartment Pfizer Inc. Size-Weighted Average PPU   Bear Sterns Co. Inc. Weighted Average Cap Rate =  American Express Co. Hotel Sources: Bureau of Labor Statistics, NAR, STDB Online. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Size-Weighted Average PPU   Noteworthy Transactions Weighted Average Cap Rate   Sale Date Sale Price Sq. Ft./Units PPSF/PPU Metro Cap Rate Comparison* Current Quarter Office 650 Madison Ave. 2-08 $695,000,000 600,000 $1,158 Office 31 W. 52nd St. 1-08 $547,500,000 729,011 $751 vs. East Region  Industrial vs. Nation  305 E. 61st St. 2-08 $28,000,000 65,835 $425 Retail New York511 City W. 25th St. 2-08 $49,503,999 83,612 $592 vs. East Region  Retail vs. Nation  Gramercy by Stark Retail 1-08 $22,032,500 13,850 $1,591 206 E. 14th St. 2-08 $17,500,000 8,000 $2,188 Apartment Apartment vs. East Region  Stonehenge 65 1-08 $126,666,667 158 $801,688 vs. Nation  1000 Jefferson 2-08 $117,600,000 217 $541,935 Hotel Hotel vs. East Region  Hotel 57 1-08 $99,000,000 220 $450,000 vs. Nation  Duane St. Hotel 1-08 $24,750,000 45 $550,000 *Comparison of current quarter weighted average capitalization rates. Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Source: RERC. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Atlantic Yards Project Mixed Use N 8,000,000 2009/2017 Tower of the World Office R 1,300,000 2013 Trade Center 44 Berry St. Retail R 45,000 N/A 162-184 Myrtle Ave. Mixed Use N 240,000 2009 Georgica Multifamily N 58 2009 Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 49 Quarterly New York Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $296 $567 $901 $1,646 – Size Weighted Avg. ($ per sf/unit) $186 $120 $204 $108,053 – Price Weighted Avg. ($ per sf/unit) $265 $176 $314 $144,908 – New York Median ($ per sf/unit) $194 $134 $183 $98,000 – > $5 Million Volume (Mil) $33,485 $1,871 $3,291 $9,065 $4,431 Size Weighted Avg. ($ per sf/unit) $564 $206 $375 $216,131 $362,980 Price Weighted Avg. ($ per sf/unit) $723 $371 $576 $371,365 $480,726 Median ($ per sf/unit) $518 $164 $538 $165,387 $211,830 All Transactions Volume (Mil) $33,781 $2,439 $4,192 $10,711 $4,441 Size Weighted Avg. ($ per sf/unit) $554 $177 $318 $187,332 $359,687 Price Weighted Avg. ($ per sf/unit) $719 $326 $520 $336,559 $479,832 Median ($ per sf/unit) $384 $139 $236 $125,000 $210,047 Capitalization Rates (All Transactions) Weighted Average (%) 5.1 – 6.3 4.8 7.3 Median (%) 4.9 – 6.4 5.7 7.1 Source: RERC.

Historical Median Price per Square Foot Historical Median Price per Square Foot (12 month trailing) – INDUSTRIAL (12 month trailing) – RETAIL 1 Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Historical Median Price per Unit Footnotes: (12 month trailing) – APARTMENT 1This quarter was substantially higher than recent quarters, partly due to the sale of the retail property at 714 Lex- ington Ave., which sold for $1,429/sf.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 50 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Norfolk MSA 1.7 million Norfolk2 4.1% Office Norfolk Growth1 0.99% Virginia2 3.9% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate –  Household Income & Value Industrial Per Capita Income $26,184 2007 Households 633,000 Size-Weighted Average PPSF   1-year Job Growth – Household Growth 1.14% Weighted Average Cap Rate –  1-Year Job Additions – Median Home Price $238,312 Major Employers Retail Sentara Norfolk General Hospital Size-Weighted Average PPSF  

Norfolk Landmark Inc. Weighted Average Cap Rate   Old Dominion University Apartment BAE Systems Size-Weighted Average PPU   Norfolk Ship Repair Hotel Sources: Bureau of Labor Statistics, NAR, STDB Online. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Size-Weighted Average PPU   Noteworthy Transactions Metro Cap Rate Comparison* Current Quarter Sale Date Sale Price Sq. Ft./Units PPSF/PPU Office Retail 3415 Azalea Garden 2-08 $2,150,000 29,500 $73 vs. East Region  Hampton North II 1-08 $5,100,000 67,749 $75 vs. Nation  Industrial *Comparison of current quarter weighted average capitalization rates. Source: RERC. 508 E. Indian River Road 2-08 $3,400,000 4,275 $795 AmeriCold 3-08 $7,900,000 106,205 $74 Retail Jefferson Commons 2-08 $77,000,000 306,249 $251 FMR Bloom Brothers 1-08 $7,800,000 50,400 $155 Apartment Watermans Crossing 2-08 $29,700,000 260 $114,231 Hotel Radisson 3-08 $10,000,000 350 $28,571 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Hilton Hotel N 235 2009 Wachovia Center Office/Retail N 300,000 2010 Ghent Station Office/Retail N 130,000 2009 Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 51 Quarterly Norfolk Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $54 $43 $31 $4 – Size Weighted Avg. ($ per sf/unit) $130 $64 $116 $48,689 – Price Weighted Avg. ($ per sf/unit) $211 $132 $210 $49,060 – Norfolk Median ($ per sf/unit) $135 $63 $92 $49,019 – > $5 Million Volume (Mil) $185 $135 $222 $268 $286 Size Weighted Avg. ($ per sf/unit) $162 $64 $176 $111,669 $110,655 Price Weighted Avg. ($ per sf/unit) $190 $74 $222 $125,883 $144,962 Median ($ per sf/unit) $146 $66 $185 $105,800 $88,962 All Transactions Volume (Mil) $239 $178 $253 $272 $289 Size Weighted Avg. ($ per sf/unit) $153 $64 $166 $109,786 $105,001 Price Weighted Avg. ($ per sf/unit) $195 $87 $220 $124,864 $143,799 Median ($ per sf/unit) $139 $64 $134 $82,193 $88,235 Capitalization Rates (All Transactions) Weighted Average (%) – – 6.3 – – Median (%) – – 6.3 – – Source: RERC.

Historical Median Price per Square Foot Historical Median Price per Square Foot (12 month trailing) – OFFICE (12 month trailing) – INDUSTRIAL

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Historical Median Price per Square Foot Footnotes: (12 month trailing) – RETAIL 1This large increase is due partially to the sale of the property at 12531 Jef- 1 ferson Ave. for $79.6 million.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 52 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Newark MSA 2.1 million Newark2 – Office Newark Growth1 – New Jersey2 5.1% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate = – Household Income & Value Industrial Per Capita Income – 2006 Households – Size-Weighted Average PPSF   1-year Job Growth 3.00% Household Growth – Weighted Average Cap Rate  – 1-Year Job Additions 3,500 Median Home Price $409,300 Major Employers Retail Continental Airlines Size-Weighted Average PPSF   University of Medicine/Dentistry Weighted Average Cap Rate   Prudential Financial Inc. Apartment Mt. Carmel Guild-Mental Health Service Size-Weighted Average PPU   Newark Beth Israel Medical Center Hotel Sources: Bureau of Labor Statistics, NAR. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Size-Weighted Average PPU   Noteworthy Transactions Metro Cap Rate Comparison* Current Quarter Sale Date Sale Price Sq. Ft./Units PPSF/PPU Office Office 540 Broad St. 2-08 $35,000,000 427,720 $82 vs. East Region  9-11 Hill Drive 1-08 $4,000,000 52,000 $77 vs. Nation  Industrial Industrial Pearl Court 1-7 3-08 $42,700,000 368,863 $116 vs. East Region  380 Middlesex Ave. 1-08 $51,300,000 859,000 $60 vs. Nation  Retail Retail 45-77 Central Ave. 2-08 $22,300,000 74,380 $300 54-74 South St. 2-08 $13,000,000 45,761 $284 vs. East Region  Apartment vs. Nation  Parkwood Place 1-08 $22,000,000 293 $75,085 Hotel 1000 Jefferson St. 2-08 $117,600,000 217 $541,935 vs. East Region  Hotel vs. Nation  Sheraton Mahwah 2-08 $60,800,000 228 $266,667 *Comparison of current quarter weighted average capitalization rates. Courtyard Newark Airport 2-08 $45,000,000 203 $221,675 Source: RERC. Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Northern New Jersey Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Wall Commercial Park Office N 312,000 N/A AMB Pulaski Industrial R 878,000 N/A Distrubution Center Amboy Corporate Center Industrial N 1,100,000 2008 Montgomery Promenade Retail N 325,000 2008 (Montgomery Township) Mixed 1 million sf & The Richwood Village Use N 1,200 units 2010 Sources: CBRE, RE Business

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 53 Quarterly Northern NJ Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $138 $174 $155 $90 – Size Weighted Avg. ($ per sf/unit) $115 $75 $161 $80,805 – Northern NJ Price Weighted Avg. ($ per sf/unit) $159 $91 $217 $96,936 – Median ($ per sf/unit) $152 $92 $163 $78,210 – > $5 Million Volume (Mil) $1,608 $902 $666 $1,538 $1,174 Size Weighted Avg. ($ per sf/unit) $151 $71 $238 $132,506 $144,634 Price Weighted Avg. ($ per sf/unit) $198 $99 $281 $176,429 $186,825 Median ($ per sf/unit) $144 $93 $269 $116,182 $101,334 All Transactions Volume (Mil) $1,746 $1,076 $821 $1,628 $1,174 Size Weighted Avg. ($ per sf/unit) $148 $72 $218 $127,967 $144,634 Price Weighted Avg. ($ per sf/unit) $195 $98 $269 $172,022 $186,825 Median ($ per sf/unit) $145 $93 $181 $113,540 $101,334 Capitalization Rates (All Transactions) Weighted Average (%) 6.7 6.5 6.7 – 7.0 Median (%) 6.9 6.4 6.6 – 7.0 Source: RERC.

Historical Median Price per Unit Footnotes: (12 month trailing) – APARTMENT 1This price increase was partially the result of the sale of the apartment property at 300 1 Grand St. for $337,634/unit.

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 54 Quarterly Demographics & Economics Last Previous Metro Trends Analysis Population Unemployment Rate (March 2008) Quarter Year Philadelphia MSA 5.9 million Philadelphia2 4.9% Office Philadelphia Growth1 0.59% Pennsylvania2 5.3% Size-Weighted Average PPSF =  1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate   Household Income & Value Industrial Per Capita Income $32,067 2007 Households 2.2 million Size-Weighted Average PPSF =  1-year Job Growth 1.10% Household Growth 0.66% Retail 1-Year Job Additions 30,500 Median Home Price $250,621 Major Employers Size-Weighted Average PPSF   Philadelphia International Airport Weighted Average Cap Rate   Temple University Physicians Apartment U.S. Post Office Size-Weighted Average PPU   ACE International Weighted Average Cap Rate =  Cigna Group Insurance Hotel Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Philadelphia Region 2007” ©2007 NATIONAL ASSOCIATION OF REAL- Size-Weighted Average PPU   TORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form (electronic media included) is prohibited without written permission. Metro Cap Rate Comparison* Current Quarter 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Noteworthy Transactions Office Sale Date Sale Price Sq. Ft./Units PPSF/PPU vs. East Region  Philadelphia Office vs. Nation  1400 Spring Garden St. 1-08 $25,200,000 299,000 $84 Retail 123 S. Broad St. 3-08 $57,700,000 636,000 $91 vs. East Region  Industrial 10098 Sandmeyer Lane 2-08 $960,000 14,400 $67 vs. Nation  2455 Blvd. of the Generals 1-08 $6,000,000 110,422 $54 Apartment Retail vs. East Region  Logan Square 1-08 $18,400,000 350,000 $53 vs. Nation 

Cambridge Square 1-08 $8,000,000 58,883 $136 *Comparison of current quarter weighted average capitalization rates. Apartment Source: RERC. University Crossings 2-08 $27,509,069 260 $105,804 College Manor 2-08 $8,600,000 85 $101,176 Hotel Sheraton Great Valley 2-08 $48,900,000 198 $246,970 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Cira Centre South Mixed Use N 733,000 Mid-2010 Uptown Worthington Mixed Use N 1,600,000 2009 Pennsylvania Mixed Use R 1,000,000 2009 Convention Center Horizon Corporate Office N 200,000 2012 Center II Le Meridien Hotel Hotel N 202 2009 Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 55 Quarterly Philadelphia Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $167 $193 $151 $75 – Size Weighted Avg. ($ per sf/unit) $113 $55 $109 $64,461 – Philadelphia Price Weighted Avg. ($ per sf/unit) $142 $72 $172 $73,253 – Median ($ per sf/unit) $125 $57 $99 $68,798 – > $5 Million Volume (Mil) $2,038 $482 $999 $1,739 $732 Size Weighted Avg. ($ per sf/unit) $144 $70 $167 $97,062 $146,765 Price Weighted Avg. ($ per sf/unit) $170 $96 $203 $111,005 $196,851 Median ($ per sf/unit) $143 $64 $163 $116,182 $111,497 All Transactions Volume (Mil) $2,206 $675 $1,150 $1,814 $735 Size Weighted Avg. ($ per sf/unit) $141 $65 $156 $95,066 $143,121 Price Weighted Avg. ($ per sf/unit) $168 $89 $199 $109,439 $196,098 Median ($ per sf/unit) $131 $57 $114 $85,395 $109,357 Capitalization Rates (All Transactions) Weighted Average (%) 7.5 – 6.6 5.9 – Median (%) 7.7 – 6.5 6.0 – Source: RERC.

Historical Median Price per Square Foot Historical Median Price per Square Foot (12 month trailing) – OFFICE (12 month trailing) – INDUSTRIAL

Please note that in order to more accurately reflect 12-month trailing average trends, scales Historical Median Price per Unit are unique to each chart and (12 month trailing) – APARTMENT for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 56 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Pittsburgh MSA 2.4 million Pittsburgh2 5.2% Office Pittsburgh Growth1 -0.18% Pennsylvania2 5.3% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Industrial Household Income & Value Size-Weighted Average PPF   Per Capita Income $27,465 2007 Households 999,000 Retail 1-year Job Growth 0.40% Household Growth -0.06% Size-Weighted Average PPSF   1-Year Job Additions 4,400 Median Home Price $126,544 Major Employers Weighted Average Cap Rate   University of Pittsburgh Medical Center Health System Apartment Highmark Inc. Size-Weighted Average PPU   University of Pittsburgh Hotel Mellon Financial Corp. Size-Weighted Average PPU   The PNC Financial Service Group Inc. * Sources: Bureau of Labor Statistics, NAR, STDB Online. Metro Cap Rate Comparison Current Quarter “Home Price Analysis Report for Pittsburgh Region – 2007” ©2007 NATIONAL ASSOCIATION OF REAL- Pittsburgh TORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form Retail (electronic media included) is prohibited without written permission. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Vs. East Region  Noteworthy Transactions Vs. Nation  Sale Date Sale Price Sq. Ft./Units PPSF/PPU *Comparison of current quarter weighted average capitalization rates. Source: RERC. Office Union Trust 2-08 $24,108,527 594,984 $41 Twin Towers 2-08 $8,300,000 93,000 $89 Industrial 4100 Steubenville Pike 2-08 $2,400,000 121,928 $20 Thorn Hill Industrial 2-08 $8,100,000 148,000 $55 Hotel Al Monzo’s Place Inn 2-08 19,000,000 278 $68,345 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Cranberry Town Office N 775,000 2009-2010 Center 5000 Town Center Office N 120,000 2009 Way-Southpointe II Dick’s Sporting Office N 610,000 2009 Goods Westinghouse Office N 775,000 2009 Electric Corporation Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 57 Quarterly Pittsburgh Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $41 $42 $43 $7 – Size Weighted Avg. ($ per sf/unit) $54 $30 $94 $19,232 – Price Weighted Avg. ($ per sf/unit) $62 $46 $168 $25,790 – Pittsburgh Median ($ per sf/unit) $59 $36 $105 $32,458 – > $5 Million Volume (Mil) $311 $116 $113 – $198 Size Weighted Avg. ($ per sf/unit) $87 $35 $155 – $130,923 Price Weighted Avg. ($ per sf/unit) $116 $46 $253 – $157,914 Median ($ per sf/unit) $86 $54 $377 – $130,645 All Transactions Volume (Mil) $353 $157 $156 $77 $208 Size Weighted Avg. ($ per sf/unit) $82 $34 $131 $65,385 $112,780 Price Weighted Avg. ($ per sf/unit) $110 $46 $230 $86,481 $152,198 Median ($ per sf/unit) $62 $44 $113 $37,951 $90,239 Capitalization Rates (All Transactions) Weighted Average (%) – – 6.7 – – Median (%) – – 6.6 – – Source: RERC.

Historical Median Price per Square Foot Historical Median Price per Square Foot (12 month trailing) – OFFICE (12 month trailing) – INDUSTRIAL

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 58 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Raleigh MSA 1.0 million Raleigh2 4.0% Office Raleigh Growth1 3.61% North Carolina2 5.2% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Industrial Household Income & Value Size-Weighted Average PPSF   Per Capita Income $33,794 2007 Households 395,000 Retail 1-year Job Growth 2.30% Household Growth 3.64% Size-Weighted Average PPSF   1-Year Job Additions 11,400 Median Home Price $193,070 Major Employers Apartment North Carolina State University Size-Weighted Average PPU   Wake Medical North Healthplex Weighted Average Cap Rate   Raleigh Rex Hospital Hotel Wake County Government Size-Weighted Average PPU   Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Raleigh Region – 2007” ©2007 NATIONAL ASSOCIATION OF REAL- Metro Cap Rate Comparison* Current Quarter TORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form (electronic media included) is prohibited without written permission. Retail 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Noteworthy Transactions vs. East Region  Sale Date Sale Price Sq. Ft./Units PPSF/PPU vs. Nation  Office Apartment Hillsborough Place 2-08 $17,500,000 107,200 $163 vs. East Region  Somerset Park 1-08 $28,700,000 224,000 $128 vs. Nation  Industrial *Comparison of current quarter weighted average capitalization rates. 1400 Nowell Road 2-08 $1,175,000 6,534 $180 Source: RERC. Retail Preston Corners 3-08 $28,300,000 93,090 $304 Indigo Corners 1-08 $10,500,000 29,373 $357 Apartment Bexley at Briar Creek 1-08 $50,840,000 410 $124,000 Lodge at Crossroads 1-08 $50,000,000 432 $115,741 Hotel Hampton Inn 1-08 $9,350,000 131 $71,374 Marriott Townplace Suites 3-08 $7,400,000 98 $75,510 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Intersection of N.C. Mixed Use N 12,000 2015 54 & South Columbia Crossroads Retail R 784,070 2009 Fairfield Corporate Multifamily N 350 2009 Center Apartments Hotel Sierra Hotel N 140 N/A CAPTRUST Tower at Office N 302,400 2009 North Hills Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 59 Quarterly Raleigh Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $130 $77 $93 $30 $18 Size Weighted Avg. ($ per sf/unit) $121 $57 $142 $54,133 $29,693 Price Weighted Avg. ($ per sf/unit) $148 $70 $205 $75,270 $31,239 Raleigh Median ($ per sf/unit) $130 $60 $161 $64,078 $33,835 > $5 Million Volume (Mil) $663 $330 $376 $1,124 $251 Size Weighted Avg. ($ per sf/unit) $150 $67 $157 $79,309 $89,492 Price Weighted Avg. ($ per sf/unit) $173 $76 $187 $88,070 $97,584 Median ($ per sf/unit) $147 $73 $148 $69,087 $85,048 All Transactions Volume (Mil) $794 $406 $469 $1,154 $269 Size Weighted Avg. ($ per sf/unit) $144 $64 $154 $78,361 $78,801 Price Weighted Avg. ($ per sf/unit) $169 $75 $190 $87,737 $93,115 Median ($ per sf/unit) $134 $66 $158 $69,087 $74,843 Capitalization Rates (All Transactions) Weighted Average (%) – – 6.9 5.6 – Median (%) – – 6.9 5.6 – Source: RERC.

Historical Median Price per Square Foot Historical Median Price per Square Foot (12 month trailing) – INDUSTRIAL (12 month trailing) – RETAIL

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and Historical Median Price per Unit for each property type and do (12 month trailing) – APARTMENT not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 60 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Richmond MSA 1.2 million Richmond2 4.1% Office Richmond Growth1 1.39% Virginia2 3.9% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Industrial Household Income & Value Size-Weighted Average PPSF   Per Capita Income $30,263 2007 Households 473,000 Retail 1-year Job Growth 1.20% Household Growth 1.46% Size-Weighted Average PPSF   1-Year Job Additions 7,600 Median Home Price $211,182 Major Employers Apartment Virginia Commonwealth University Size-Weighted Average PPU   Virginia Commonwealth University Health System Hotel Richmond City Offices Size-Weighted Average PPU  – Philip Morris USA Source: RERC. Museum of Fine Arts Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Richmond Region – 2007” ©2007 NATIONAL ASSOCIA-

RichmondTION OF REALTORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form (electronic media included) is prohibited without written permission. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Noteworthy Transactions Sale Date Sale Price Sq. Ft./Units PPSF/PPU Office 705 E. Main 1-08 $34,400,000 323,500 $106 Waterford I 3-08 $6,900,000 46,929 $147 Industrial 1500 Roseneath Road 1-08 $4,500,000 109,460 $41 Retail 7221 Hull St. Road 2-08 $2,400,000 56,000 $43 Beaufont Center 2-08 $17,000,000 314,898 $54 Apartment Courthouse Green 3-08 $17,000,000 266 $63,910 Hotel Mariott Richmond 3-08 $53,300,000 401 $132,918 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Rolls-Royce Testing Industrial N N/A 2009 Facility Meadwestvaco Office N 310,000 2009 Headquarters Reynolds Crossing Office N 300,000 N/A Bldg 1&2 Watkins Centre Office N 156,810 N/A Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 61 Quarterly Richmond Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $46 $72 $30 $21 $16 Size Weighted Avg. ($ per sf/unit) $80 $30 $90 $45,317 $37,662 Price Weighted Avg. ($ per sf/unit) $102 $42 $130 $49,428 $44,094 Richmond Median ($ per sf/unit) $81 $33 $84 $55,357 $46,328 > $5 Million Volume (Mil) $328 $73 $143 $111 $196 Size Weighted Avg. ($ per sf/unit) $138 $59 $107 $83,226 $98,503 Price Weighted Avg. ($ per sf/unit) $172 $74 $146 $101,495 $108,656 Median ($ per sf/unit) $147 $58 $142 $71,476 $92,713 All Transactions Volume (Mil) $374 $145 $173 $132 $212 Size Weighted Avg. ($ per sf/unit) $127 $40 $104 $73,448 $87,893 Price Weighted Avg. ($ per sf/unit) $164 $58 $143 $93,209 $103,832 Median ($ per sf/unit) $113 $41 $92 $59,091 $83,986 Capitalization Rates (All Transactions) Weighted Average (%) – – – – – Median (%) – – – – – Source: RERC.

Historical Median Price per Square Foot Historical Median Price per Square Foot (12 month trailing) – OFFICE (12 month trailing) – INDUSTRIAL

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 62 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Washington, D.C. MSA 5.5 million Washington, D.C.2 3.4% Office Washington, D.C. Growth1 1.78% District of Columbia2 6.4% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate   Household Income & Value Industrial Per Capita Income $40,751 2007 Households 2.0 million Size-Weighted Average PPSF   1-year Job Growth 1.60% Household Growth 1.77% Retail 1-Year Job Additions 47,600 Median Home Price $430,688 Major Employers Size-Weighted Average PPSF   George Washington University Weighted Average Cap Rate   Washington Met. Area Transit Authority Apartment Federal Bureau of Investigation Size-Weighted Average PPU   Multilateral Investment Guarantee Agency Weighted Average Cap Rate  = Georgetown University Hotel Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Washington, D.C. Region – 2007” ©2007 NATIONAL ASSO- Size-Weighted Average PPU   CIATION OF REALTORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form (electronic media included) is prohibited without written permission. Metro Cap Rate Comparison* Current Quarter 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Noteworthy Transactions Office Sale Date Sale Price Sq. Ft./Units PPSF/PPU vs. East Region  Office vs. Nation  1333 H St. NE 1-08 $130,000,000 269,000 $483 Retail 1111 19th St. 1-08 $115,000,000 252,000 $456 vs. East Region = Industrial vs. Nation  6250 Chillum Place NW 2-08 $3,535,000 40,800 $87 Apartment Apartment 1631 S. St. NW 2-08 $8,170,299 64 $127,661 vs. East Region  Hotel vs. Nation 

Washington,Hilton D.C. Garden Inn 2-08 $66,486,087 300 $221,620 *Comparison of current quarter weighted average capitalization rates. Source: RERC. Washington Terrace Hotel 2-08 $48,756,464 220 $221,620 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery 401 M St. SE Office/Retail N 330,000 2010 Twinbrook Office N 487,000 2009 Commons I Watkins Mill Office N 487,000 2009 Town Center 1999 K St. NW Office N 88,000 2009 700 2nd St. NE Office N 515,000 2009 Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 63 Quarterly Washington, D.C. Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $160 $141 $185 $51 – Size Weighted Avg. ($ per sf/unit) $173 $89 $174 $85,226 – Washington, D.C. Price Weighted Avg. ($ per sf/unit) $261 $118 $293 $113,429 – Median ($ per sf/unit) $217 $105 $181 $82,551 – > $5 Million Volume (Mil) $14,279 $511 $927 $3,343 $2,145 Size Weighted Avg. ($ per sf/unit) $369 $121 $179 $197,516 $199,188 Price Weighted Avg. ($ per sf/unit) $422 $148 $301 $246,318 $274,171 Median ($ per sf/unit) $332 $132 $244 $185,915 $120,015 All Transactions Volume (Mil) $14,440 $652 $1,112 $3,394 $2,149 Size Weighted Avg. ($ per sf/unit) $365 $113 $178 $193,715 $198,549 Price Weighted Avg. ($ per sf/unit) $420 $142 $300 $244,340 $273,780 Median ($ per sf/unit) $312 $115 $211 $128,152 $117,731 Capitalization Rates (All Transactions) Weighted Average (%) 5.5 – 6.5 5.2 – Median (%) 6.0 – 6.5 5.4 – Source: RERC.

Historical Median Price per Unit Footnotes: (12 month trailing) – APARTMENT 1A large portfolio of office properties selling at a price of $429/sf occurred, significantly increasing the median price.

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Atlanta • Austin • Dallas/Ft. Worth • Houston • Memphis • Miami • Nashville New Orleans/Baton Rouge • Oklahoma City • Orlando • San Antonio • Tampa SouthRegionTransactionBreakdown

n CCIM Institute designees and candidates rated the eco- n Sales volume declined for all commercial property types nomic performance in the South region at 5.9 on a scale in the South region during first quarter 2008. However, the of 1 to 10, with 10 being high, for first quarter 2008, well median price per square foot/unit increased slightly or re- above the national average rating of 4.4. In addition, about mained steady for all property types during first quarter as three-fourths of respondents expect the South region to compared to the previous quarter. continue to perform at a similar or higher level over the next year. n The first quarter 2008 South region median capitalization rates for all property sectors remained steady or fluctuated only slightly from the previous quarter.

Regional Transaction Price Breakdown/Tiers “Invest in professional South Transaction Breakdown (4/1/07 - 3/31/08) office buildings, especially related to the Office Industrial Retail Apartment Hotel healthcare industry. < $2 Million This is NOT going Volume (Mil) $822 $1,107 $1,574 $390 $43 to go away and NOT Size Weighted Avg. ($ per sf/unit) $97 $50 $88 $39,132 $24,983 going down in value.” – Memphis Price Weighted Avg. ($ per sf/unit) $129 $73 $127 $52,306 $32,518 Median ($ per sf/unit) $99 $56 $84 $39,167 $26,429

$2 - $5 Million “Full-service multi- Volume (Mil) $1,184 $1,470 $2,605 $891 $447 family is resurging in Size Weighted Avg. ($ per sf/unit) $119 $52 $123 $35,397 $38,471 this market.” Price Weighted Avg. ($ per sf/unit) $179 $79 $220 $52,501 $49,840 –Tampa Median ($ per sf/unit) $153 $62 $192 $35,507 $41,293 > $5 Million Volume (Mil) $20,054 $7,053 $13,461 $16,680 $11,003 “The best investment Size Weighted Avg. ($ per sf/unit) $151 $66 $151 $72,807 $134,910 opportunities have to do Price Weighted Avg. ($ per sf/unit) $197 $93 $222 $95,114 $194,985 with buying foreclosed Median ($ per sf/unit) $147 $75 $159 $68,182 $112,295 or distressed deals that had ARM financing All Transactions and now can’t get new Volume (Mil) $22,060 $9,630 $17,641 $17,961 $11,493 financing.” –Dallas Size Weighted Avg. ($ per sf/unit) $146 $61 $137 $67,976 $121,097 Price Weighted Avg. ($ per sf/unit) $194 $89 $213 $92,072 $188,729 Median ($ per sf/unit) $128 $61 $115 $55,556 $102,771 Capitalization Rates (All Transactions) “Avoid retail. It is the most overbuilt in Range (%) 3.7 - 11.0 5.0 - 10.8 4.0 - 11.7 4.3 - 10.9 2.9 - 13.0 our area, and most Weighted Avg. (%) 6.6 7.2 6.7 6.5 7.6 impacted by the slowing Median (%) 7.1 7.5 6.9 6.7 9.0 economy.” Source: RERC. –San Antonio

RERC Weighted Avg. Cap Rate - 1Q 2008 8.5% South U.S. Total Avg. Capitalization Rate n Average and median prices per square foot of office space in 7.5% the South region are well below national averages.

n 6.5% As compared to the previous quarter, first quarter 2008 average prices for office space in the South region increased in the less than $2 million and the $2 to $5 million sale price 5.5% categories, but declined slightly in the more than $5 million or higher sale price category.

4.5% n The first quarter 2008 weighted average capitalization rate for the South region office market decreased 10 basis points Atlanta Austin Dallas/ Houston Miami Orlando Tampa Ft. Worth from the previous quarter, and is 100 basis points higher than the weighted average capitalization rate for the national office market. RERC Size-Weighted Avg. PPSF - 1Q 2008 RERC Price-Weighted Avg. PPSF - 1Q 2008 $300 $500 South South U.S. Total U.S. Total $250 Size-Weighted Average PPSF Price-Weighted Average PPSF $400

$200 $300 $150 $200 $100

$100 $50

$0 $0

Dallas/ Austin Miami Atlanta Austin Dallas/ Miami Tampa Atlanta Houston Nashville Orlando Tampa Houston Memphis Nashville Orlando Ft. Worth Memphis San Antonio New Orleans/Oklahoma City San Antonio Ft. Worth New Orleans/Oklahoma City Baton Rouge Baton Rouge South Office Transactions (4/1/07 - 3/31/08) Volume Size-weighted Price-weighted Median Average (millions) Average ($/sf) Average ($/sf) ($/sf) Cap Rate (%) Atlanta $3,186 $154 $187 $121 6.4 Austin $1,515 $279 $298 $206 5.0 Dallas/Ft. Worth $3,598 $128 $159 $120 6.4 Houston $3,166 $134 $163 $113 6.9 Memphis $147 $118 $140 $86 – Miami $2,457 $193 $257 $178 6.8 Nashville $324 $99 $126 $112 – New Orleans/ Baton Rouge $168 $105 $127 $85 – Oklahoma City $194 $63 $86 $68 – Orlando $1,299 $171 $187 $180 6.8 San Antonio $148 $130 $142 $120 – Tampa $1,303 $148 $178 $136 6.8 South Total $22,060 $146 $194 $128 6.6 U.S. Total $165,414 $240 $396 $152 5.6 Source: RERC.

RERC Weighted Avg. Cap Rate - 1Q 2008 10% South U.S. Total 9% Avg. Capitalization Rate n Many CCIM respondents stated that they felt the indus-

8% trial sector holds the best investment opportunities in the South region for the coming year. When compared to na-

7% tional transaction results, the weighted average and median price per square foot of industrial space is lower in the

6% South region.

5% n Although transaction prices increased slightly and the weighted average capitalization rate declined slightly in Dallas/ Atlanta Houston Miami Tampa Ft. Worth San Antonio the South regional industrial sector during first quarter 2008, transaction dollar volume decreased by about one- fourth.

RERC Size-Weighted Avg. PPSF - 1Q 2008 RERC Price-Weighted Avg. PPSF - 1Q 2008

$100 South $175 South U.S. Total U.S. Total Size-Weighted Average PPSF $145 Price-Weighted Average PPSF

$75 $115

$85 $50

$55

$25 $25

Dallas/ Dallas/ Austin Miami Austin Miami Atlanta Houston Nashville Orlando Tampa Atlanta Houston Nashville Orlando Tampa Ft. Worth Memphis Ft. Worth Memphis New Orleans/Oklahoma City San Antonio New Orleans/Oklahoma City San Antonio Baton Rouge Baton Rouge South Industrial Transactions (4/1/07 - 3/31/08) Volume Size-weighted Price-weighted Median Average (millions) Average ($/sf) Average ($/sf) ($/sf) Cap Rate (%) Atlanta $1,495 $54 $71 $56 7.5 Austin $115 $81 $87 $82 – Dallas/Ft. Worth $1,134 $77 $113 $52 7.3 Houston $582 $50 $65 $50 8.2 Memphis $328 $38 $43 $30 – Miami $1,415 $91 $112 $91 6.2 Nashville $517 $56 $76 $55 – New Orleans/ Baton Rouge $3 $54 $62 $61 – Oklahoma City $134 $46 $58 $45 – Orlando $525 $63 $94 $80 – San Antonio $235 $67 $83 $46 7.6 Tampa $578 $72 $94 $70 7.2 South Total $9,630 $61 $89 $61 7.2 U.S. Total $51,426 $74 $126 $75 6.7 Source: RERC. Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 68 Quarterly SouthRetailPropertySector

RERC Weighted Avg. Cap Rate - 1Q 2008 8% South U.S. Total Avg. Capitalization Rate n Based on responses from the first quarter 2008 survey, CCIM respondents indicated that the weakening economy 7% has had a significant negative impact on retail stores as consumers put the brakes on discretionary spending.

6% n The average size- and price-weighted average and median prices of retail space in the less than $2 million and the $2 to $5 million sale price categories increased during first quarter 2008, and was mixed in the more than 5% $5 million sale price category. Likewise the weighted aver-

Dallas/ age capitalization rate in the South regional retail sector Miami Atlanta Houston Nashville Orlando Tampa Ft. Worth increased slightly when compared to the previous quarter, but is lower now than it was 1 year ago.

RERC Size-Weighted Avg. PPSF - 1Q 2008 RERC Price-Weighted Avg. PPSF - 1Q 2008 $250 $300 South U.S. Total South U.S. Total Size-Weighted Average PPSF $250 $200 Price-Weighted Average PPSF

$200 $150 $150

$100 $100

$50 $50

South Retail Transactions (4/1/07 - 3/31/08) Volume Size-weighted Price-weighted Median Average (millions) Average ($/sf) Average ($/sf) ($/sf) Cap Rate (%) Atlanta $1,815 $147 $201 $157 7.2 Austin $233 $171 $223 $145 – Dallas/Ft. Worth $2,733 $148 $240 $115 6.7 Houston $1,178 $128 $179 $113 7.0 Memphis $248 $106 $190 $74 – Miami $1,858 $208 $279 $175 6.1 Nashville $351 $98 $157 $98 6.3 New Orleans/ Baton Rouge $93 $89 $124 $115 – Oklahoma City $269 $79 $127 $63 – Orlando $641 $130 $169 $131 6.1 San Antonio $612 $132 $190 $112 – Tampa $1,096 $172 $245 $144 6.1 South Total $17,641 $137 $213 $115 6.7 U.S. Total $59,915 $159 $282 $135 6.4 Source: RERC.

RERC Weighted Avg. Cap Rate - 1Q 2008 10% South U.S. Total 9% Avg. Capitalization Rate n Some CCIM respondents think that apartments hold the most favorable opportunities right now, due to difficulties 8% in the housing industry generally and to tightened lending guidelines that are making it more difficult for homebuyers 7% to obtain financing.

6% n The size- and price-weighted average and median prices per unit for apartment properties in the South region were well below prices found at the national level during first 5% quarter 2008. The weighted average capitalization rate for

Dallas/ apartment properties in the South region was unchanged, Atlanta Houston Miami Orlando Tampa Ft. Worth Memphis Oklahoma City although the median capitalization rate decreased 10 basis points during first quarter 2008.

RERC Size-Weighted Avg. PPU - 1Q 2008 RERC Price-Weighted Avg. PPU - 1Q 2008 $125,000 $225,000 South South U.S. Total $200,000 U.S. Total Size-Weighted Average PPU Price-Weighted Average PPU $100,000 $175,000

$150,000

$75,000 $125,000

$100,000

$50,000 $75,000

$50,000

$25,000 $25,000

Dallas/ Atlanta Austin Miami Orlando Tampa Houston Memphis Nashville Austin Dallas/ Miami Tampa Ft. Worth New Orleans/ San Antonio Atlanta Houston Memphis Nashville Orlando Oklahoma City San Antonio Baton Rouge Ft. Worth New Orleans/Oklahoma City Baton Rouge South Apartment Transactions (4/1/07 - 3/31/08) Volume Size-weighted Price-weighted Median Average (millions) Average ($/unit) Average ($/unit) ($/sf) Cap Rate (%) Atlanta $3,804 $79,218 $91,877 $71,250 5.7 Austin $680 $80,777 $98,027 $65,393 – Dallas/Ft. Worth $2,431 $57,292 $83,560 $42,763 6.8 Houston $1,816 $57,048 $73,320 $39,645 6.8 Memphis $320 $38,361 $51,960 $27,588 7.2 Miami $780 $104,006 $137,932 $87,980 5.9 Nashville $814 $71,372 $86,333 $54,688 – New Orleans/ Baton Rouge – – – – – Oklahoma City $221 $37,712 $53,754 $32,143 8.8 Orlando $870 $87,378 $103,832 $71,833 6.4 San Antonio $427 $62,603 $77,382 $45,385 – Tampa $924 $80,379 $92,305 $64,431 6.7 South Total $17,961 $67,976 $92,072 $55,556 6.5 U.S. Total $78,236 $99,431 $169,129 $83,333 5.8 Source: RERC.

RERC Weighted Avg. Cap Rate - 1Q 2008 10.5% South 10.0% U.S. Total Avg. Capitalization Rate 9.5% n The weighted average capitalization rate for hotels in the 9.0% South region decreased to 7.6 percent during first quarter 8.5% 2008, continuing its downward trend. 8.0% n Transaction volume in the South regional hotel sector de- 7.5% creased during first quarter 2008 when compared to the 7.0% prior quarter. However, size- and price-weighted aver- 6.5% age and median prices per hotel unit for the more than $5 6.0% million sale price category was slightly higher during first quarter. Atlanta Dallas/ Miami Ft. Worth

RERC Size-Weighted Avg. PPU - 1Q 2008 RERC Price-Weighted Avg. PPU - 1Q 2008 $250,000 $550,000 South U.S. Total $500,000 South Size-Weighted Average PPU $450,000 $200,000 U.S. Total $400,000 Price-Weighted Average PPU $350,000 $150,000 $300,000 $250,000 $200,000 $100,000 $150,000 $100,000 $50,000 $50,000

Dallas/ Austin Miami Tampa Austin Dallas/ Miami Tampa Atlanta Houston Memphis Nashville Orlando Atlanta Houston Memphis Nashville Orlando Ft. Worth San Antonio San Antonio New Orleans/Oklahoma City Ft. Worth New Orleans/Oklahoma City Baton Rouge Baton Rouge

South Hotel Transactions (4/1/07 - 3/31/08) Volume Size-weighted Price-weighted Median Average (millions) Average ($/unit) Average ($/unit) ($/sf) Cap Rate (%) Atlanta $1,670 $122,495 $153,405 $108,286 8.5 Austin $241 $168,937 $237,010 $134,318 – Dallas/Ft. Worth $895 $128,460 $153,789 $113,631 8.9 Houston $952 $153,487 $205,380 $93,264 – Memphis $245 $81,363 $93,455 $71,509 – Miami $1,517 $194,053 $374,065 $115,000 – Nashville $458 $126,123 $157,617 $98,599 – New Orleans/ Baton Rouge $270 $72,629 $114,666 $93,867 – Oklahoma City $135 $84,231 $105,297 $96,124 – Orlando $496 $85,113 $100,367 $86,093 – San Antonio $570 $173,822 $296,049 $115,563 – Tampa $658 $93,914 $137,048 $74,045 – South Total $11,493 $121,097 $188,729 $102,771 7.6 U.S. Total $59,238 $171,778 $489,300 $103,488 7.9 Source: RERC.

South Region Space Market

Trusted Advice. Proven Performance. Office - 1Q-2008 Inventory SF (000s) Vacancy Rate (%) Net Absorption SF (000s) Asking Rents ($/SF) CBRE/Torto Wheaton Research is a Atlanta 129,012 16.5 155 $20.27 Gross full-service research and investment Austin 34,474 15.8 462 $18.55 Net advisory firm, specializing in com- Dallas 142,503 21.6 967 $19.84 Net mercial real estate markets. Houston 138,532 11.5 1,299 $18.29 Gross Miami 41,729 11.8 129 $30.99 Gross With over 20 years of experience, Nashville 29,808 11.0 145 $18.28 Gross our industry leading research, mar- Orlando 32,631 13.4 -267 $22.18 Gross ket expertise, and strategic partner- Tampa 37,176 15.6 -80 $21.71 Gross ships provide clients with tactical advice and strategic direction to identify Industrial - 1Q-2008 market opportunities that enhance Inventory SF (000s) Availability Rate (%) Net Absorption SF (000s) Asking Rents ($/SF) performance and manage risk. Atlanta 578,013 13.3 -1,640 $3.91 Net Austin 72,699 10.6 300 $8.06 Net CBRE/TWR is internationally rec- Dallas 464,002 11.3 1,264 $4.61 Net ognized for our solid foundation in Houston 440,507 7.2 1,403 $6.11 Net economics, accurate forecasts, ana- Miami 229,933 7.8 1,312 $9.27 Gross lytical expertise, and providing clients Nashville 156,792 9.9 -278 $4.01 Net with unparalleled insight into the dy- Orlando 154,421 9.2 -2,386 $7.82 Net namics of the real estate market that Tampa 163,432 7.3 -1,254 $6.96 Net impact performance. Retail - 1Q-2008 Inventory SF (000s) Availability Rate (%) Net Absorption SF (000s) TWR Rent Index ($/SF) Atlanta 82,129 10.8 -577 $21.88 Austin 18,469 10.2 284 $23.93 Dallas 58,800 14.2 -102 $14.73 Houston 60,907 12.7 667 $19.42 Miami 22,577 4.1 131 $19.68 Nashville 20,670 6.5 83 $18.23 Oklahoma City 18,693 11.8 37 $11.17 Orlando 29,875 8.0 261 $18.04 Tampa 30,422 7.9 122 $14.65 William Wheaton Jon Southard James Costello Ph.D., Principal Principal Principal Space Market Data has been provided courtesy of Torto Wheaton Research. Analysis within this report is solely compiled and produced by the Real Estate Research Corporation, and in no way reflects the interpretations, opinions, or conclusions of Torto Wheaton Research.

RERC extends its appreciation to CBRE/Torto Wheaton Research, which contributed all of the space market information on this page.

Investment Trends Copyright® 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 72 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Atlanta MSA 5.3 million Atlanta2 5.1% Office Atlanta Growth1 2.99% Georgia2 5.3% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate   Household Income & Value Industrial Per Capita Income $35,361 2007 Households 1.9 million Size-Weighted Average PPSF   1-year Job Growth 2.20% Household Growth 2.94%   1-year Job Additions 52,700 Median Home Price $190,129 Weighted Average Cap Rate Major Employers Retail Delta Airlines Size-Weighted Average PPSF   Emory University Weighted Average Cap Rate   Atlanta Hewlett - Packard Apartment U.S. Disease Control Center Size-Weighted Average PPU   CNN Center Weighted Average Cap Rate   Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Atlanta Region – 2007” ©2007 NATIONAL ASSOCIA- Hotel TION OF REALTORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form (electronic media included) is prohibited without written permission. Size-Weighted Average PPU   1Projected annual growth over 5 years (2006-2011). 2Rates are non-seasonally adjusted. Weighted Average Cap Rate  = Noteworthy Transactions Sale Date Sale Price Sq. Ft./Units PPSF/PPU Metro Cap Rate Comparison* Current Quarter Office Office Lakeside Commons 2-08 $102,800,000 514,000 $200 vs. South Region  One Buckhead Plaza 2-08 $51,700,000 461,700 $112 vs. Nation  Industrial Perimeter Place Business Park 1-08 $8,545,000 103,070 $83 Industrial 1950 Vaughn Road 1-08 $10,400,000 162,651 $64 vs. South Region  Retail vs. Nation  Station at Vinings 2-08 $13,233,333 33,877 $391 Retail Noble Farms 1-08 $12,000,000 44,000 $273 vs. South Region  Apartment vs. Nation  Westchester at Buckhead 3-08 $48,200,000 249 $193,574 Apartment Veranda 1-08 $32,000,000 400 $80,000 Hotel vs. South Region  Marriot 2-08 $63,605,023 287 $221,620 vs. Nation  Doubletree 2-08 $34,351,145 155 $221,620 Hotel Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. vs. South Region  Market Construction/Redevelopment Activity vs. Nation  Property New(N)/ Total Sq. Estimated *Comparison of current quarter weighted average capitalization rates. Type Refurbished(R) Ft./Units Delivery Source: RERC. Terminus 200 Office N 565,000 2009 Peachtree Center Mixed Use R 2,500,000 2012 Trump Tower Multifamily N 563 2010 The Streets of Buckhead Mixed Use N 800,000 Fall 2009 Whirlpool Distribution Industrial N 1,500,000 Mid-2009 Center Sources: CBRE, RE Business. Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 73 Quarterly Atlanta Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $159 $338 $389 $85 $31 Size Weighted Avg. ($ per sf/unit) $100 $46 $139 $34,951 $37,463 Price Weighted Avg. ($ per sf/unit) $129 $61 $198 $45,281 $50,830 Atlanta Median ($ per sf/unit) $106 $57 $149 $41,709 $35,486 > $5 Million Volume (Mil) $3,027 $1,157 $1,426 $3,719 $1,640 Size Weighted Avg. ($ per sf/unit) $158 $57 $149 $81,570 $127,908 Price Weighted Avg. ($ per sf/unit) $190 $74 $201 $92,938 $155,317 Median ($ per sf/unit) $139 $55 $179 $73,924 $108,691 All Transactions Volume (Mil) $3,186 $1,495 $1,815 $3,804 $1,670 Size Weighted Avg. ($ per sf/unit) $154 $54 $147 $79,218 $122,495 Price Weighted Avg. ($ per sf/unit) $187 $71 $201 $91,877 $153,405 Median ($ per sf/unit) $121 $56 $157 $71,250 $108,286 Capitalization Rates (All Transactions) Weighted Average (%) 6.4 7.5 7.2 5.7 8.5 Median (%) 7.0 8.0 7.1 5.7 9.6 Source: RERC.

Historical Median Price per Unit (12 month trailing) – APARTMENT

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 74 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Austin MSA 1.6 million Austin2 3.6% Office Austin Growth1 3.01% Texas2 4.2% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate =  Household Income & Value Industrial Per Capita Income $32,358 2007 Households 588,948 Size-Weighted Average PPSF   1-year Job Growth 4.60% Household Growth 2.95% Retail 1-year Job Additions 25,500 Median Home Price $179,500 Major Employers Size-Weighted Average PPSF   Austin Freescale Semiconductor Incorporated Apartment Clinical Pathology Association Size-Weighted Average PPU   Advanced Micro Devices Incorporated Hotel Federal Government Size-Weighted Average PPU   IBM Corporation * Sources: Bureau of Labor Statistics, NAR, STDB Online. Metro Cap Rate Comparison Current Quarter “Home Price Analysis Report for Austin Region – 2007” ©2007 NATIONAL ASSOCIATION OF REALTORS®. Used with permission. Reproduction, reprinting, or retransmission of this Office document in any form (electronic media included) is prohibited without written permission. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. vs. South Region  Noteworthy Transactions vs. Nation  Sale Date Sale Price Sq. Ft./Units PPSF/PPU *Comparison of current quarter weighted average capitalization rates. Source: RERC. Office Canyon Hills Office Center 1-08 $10,700,000 68,533 $156 5508 Parkcrest Drive 2-08 $7,000,000 40,936 $171 Industrial 9705 Reservoir Court 2-08 $655,000 12,000 $55 Braker Center 6, 7, 11 3-08 $21,000,000 217,504 $97 Retail River Wild 3-08 $7,200,000 20,000 $360 Anna Plaza 2-08 $9,700,000 58,528 $166 Apartment University Estates 3-08 $51,500,000 498 $103,414 Colonial Grand at Canyon Creek 1-08 $38,000,000 336 $113,095 Hotel 909 E. Koenig Lane 3-08 $2,900,000 89 $32,584 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Andaz Hotel N 210 2010 Summer Palisades West Office N 360,000 2008 Alexan Ribelin Multifamily N 350 2009 Residences at Oak Hill Multifamily N 276 2009 Summer 8206 Cross Park Drive Industrial R 112,000 2008 Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 75 Quarterly Austin Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $22 $19 $72 $48 – Size Weighted Avg. ($ per sf/unit) $139 $69 $134 $50,322 – Price Weighted Avg. ($ per sf/unit) $177 $76 $219 $61,317 – Austin Median ($ per sf/unit) $152 $70 $131 $59,418 – > $5 Million Volume (Mil) $1,493 $96 $162 $632 $235 Size Weighted Avg. ($ per sf/unit) $283 $84 $195 $84,641 $182,831 Price Weighted Avg. ($ per sf/unit) $300 $90 $225 $100,796 $242,076 Median ($ per sf/unit) $286 $96 $188 $74,187 $134,318 All Transactions Volume (Mil) $1,515 $115 $233 $680 $241 Size Weighted Avg. ($ per sf/unit) $279 $81 $171 $80,777 $168,937 Price Weighted Avg. ($ per sf/unit) $298 $87 $223 $98,027 $237,010 Median ($ per sf/unit) $206 $82 $145 $65,393 $134,318 Capitalization Rates (All Transactions) Weighted Average (%) 5.0 – – – – Median (%) 6.0 – – – – Source: RERC.

Historical Median Price per Square Foot Historical Median Price per Unit (12 month trailing) – RETAIL (12 month trailing) – APARTMENT

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 76 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Dallas/Ft. Worth MSA 6.1 million Dallas/Ft. Worth2 4.2% Office Dallas/Ft. Worth Growth1 2.40% Texas2 4.2% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate =  Household Income & Value Industrial Per Capita Income $23,645 2007 Households 2.2 million Size-Weighted Average PPSF   1-year Job Growth 3.20% Household Growth 2.34% Weighted Average Cap Rate   1-year Job Additions 91,000 Median Home Price $132,585 Major Employers Retail Lockheed Martin Corp. Size-Weighted Average PPSF   University of Texas Southwestern Medical Center Weighted Average Cap Rate   Parkland Health and Hospital Systems Apartment Southwest Airlines Co. Size-Weighted Average PPU   Aston Ambulatory Care Center Weighted Average Cap Rate  = Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Dallas Region – 2007” ©2007 NATIONAL ASSOCIATION OF REAL- TORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form Hotel (electronic media included) is prohibited without written permission. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Size-Weighted Average PPU   Noteworthy Transactions Weighted Average Cap Rate   Sale Date Sale Price Sq. Ft./Units PPSF/PPU Metro Cap Rate Comparison* Current Quarter Office Office 1-3 Galleria Tower 1-08 $300,000,000 1,418,470 $211 JP Morgan International Plaza 1-08 $80,000,000 351,240 $228 vs. South Region  Industrial vs. Nation  Best Brands 3-08 $31,800,000 331,200 $96 Industrial Verizon Building 1-08 $9,100,000 68,676 $133 vs. South Region 

Dallas/Ft.Retail Worth vs. Nation  425 W. Jefferson Blvd. 3-08 $5,600,000 52,000 $108 Retail Lake Worth Shopping Center 3-08 $11,500,000 76,409 $151 vs. South Region = Apartment Gardens at Vail 2-08 $56,912,033 580 $98,124 vs. Nation  Wilson Building 2-08 $19,900,000 143 $139,161 Apartment Hotel vs. South Region  Blackstone 2-08 $45,000,000 203 $221,675 vs. Nation  Adams Mark 2-08 $159,300,000 1,840 $86,576 Hotel Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. vs. South Region  Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated vs. Nation  Type Refurbished(R) Ft./Units Delivery *Comparison of current quarter weighted average capitalization rates. Ritz-Carlton at Pearl St. & Source: RERC. Multifamily N 96 2009 Cedar Springs Road Terraces at Las Colinas Mixed Use N 1,000,000 2011 Saint Ann Court Office N 315,000 Spring 2009 Forest Park Medical Center Office N 66,100 2009 Midtown Mixed Use N 1,300,000 N/A Sources: CBRE, RE Business. Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 77 Quarterly Dallas Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $132 $120 $507 $203 – Size Weighted Avg. ($ per sf/unit) $91 $40 $105 $28,366 – Dallas/Ft. Worth Price Weighted Avg. ($ per sf/unit) $131 $53 $172 $34,100 – Median ($ per sf/unit) $77 $45 $98 $31,458 – > $5 Million Volume (Mil) $3,466 $1,014 $2,225 $2,228 $882 Size Weighted Avg. ($ per sf/unit) $130 $86 $163 $63,152 $132,979 Price Weighted Avg. ($ per sf/unit) $160 $120 $255 $88,061 $155,535 Median ($ per sf/unit) $131 $80 $147 $61,905 $115,639 All Transactions Volume (Mil) $3,598 $1,134 $2,733 $2,431 $895 Size Weighted Avg. ($ per sf/unit) $128 $77 $148 $57,292 $128,460 Price Weighted Avg. ($ per sf/unit) $159 $113 $240 $83,560 $153,789 Median ($ per sf/unit) $120 $52 $115 $42,763 $113,631 Capitalization Rates (All Transactions) Weighted Average (%) 6.4 7.3 6.7 6.8 8.9 Median (%) 7.0 7.1 7.2 7.0 8.8 Source: RERC.

Historical Median Price per Unit (12 month trailing) – APARTMENT

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 78 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Houston MSA 5.6 million Houston2 4.1% Office Houston Growth1 2.20% Texas2 4.2% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate =  Household Income & Value Industrial Per Capita Income $28,188 2007 Households 2.0 million Size-Weighted Average PPSF   1-year Job Growth 3.40% Household Growth 2.13% Weighted Average Cap Rate   1-year Job Additions 82,000 Median Home Price $120,986 Major Employers Retail Universtiy of Texas MD Anderson Center Size-Weighted Average PPSF   MD Anderson Cancer Center Weighted Average Cap Rate =  University of Houston Apartment Houston Continental Airlines Inc. Size-Weighted Average PPU   Houston City Engineering Weighted Average Cap Rate   Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Houston Region – 2007” ©2007 NATIONAL ASSOCIATION Hotel OF REALTORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form (electronic media included) is prohibited without written permission. Size-Weighted Average PPU   1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Noteworthy Transactions Metro Cap Rate Comparison* Current Quarter Sale Date Sale Price Sq. Ft./Units PPSF/PPU Office Office vs. South Region  Northborough Tower 3-08 $32,900,000 206,553 $159 vs. Nation  Sage Plaza 1-08 $38,488,888 198,688 $194 Industrial Industrial 8705 City Park Loop 3-08 $6,900,000 191,537 $36 vs. South Region  Dow Chemical Campus 1-08 $20,000,000 262,241 $76 vs. Nation  Retail Retail North Oaks 3-08 $46,100,000 418,888 $110 vs. South Region  League City Marketplace 2-08 $14,900,000 51,744 $288 vs. Nation  Apartment Apartment Bayou Park 1-08 $52,500,000 688 $76,308 Meyer Park 2-08 $33,852,847 345 $98,124 vs. South Region  Hotel vs. Nation  Marriot Houston W. Loop 1-08 $41,000,000 304 $134,868 *Comparison of current quarter weighted average capitalization rates. Source: RERC. Homewood Suites 2-08 $35,902,487 162 $221,620 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery 811 Main St. Office N 1,000,000 2011 Discovery Tower Office N 871,000 2010 Energy Crossing I & II Office N 240,000 2009 MainPlace Office N 1,000,000 2010 Fallbrook Distribution Industrial N 615,000 2008 Center Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 79 Quarterly Houston Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $98 $219 $278 $75 $59 Size Weighted Avg. ($ per sf/unit) $81 $42 $108 $27,570 $47,265 Price Weighted Avg. ($ per sf/unit) $106 $52 $170 $30,822 $51,188 Houston Median ($ per sf/unit) $82 $47 $94 $28,958 $54,945 > $5 Million Volume (Mil) $3,068 $363 $900 $1,741 $893 Size Weighted Avg. ($ per sf/unit) $137 $57 $136 $59,791 $180,418 Price Weighted Avg. ($ per sf/unit) $164 $72 $182 $75,143 $215,621 Median ($ per sf/unit) $124 $65 $199 $62,389 $144,496 All Transactions Volume (Mil) $3,166 $582 $1,178 $1,816 $952 Size Weighted Avg. ($ per sf/unit) $134 $50 $128 $57,048 $153,487 Price Weighted Avg. ($ per sf/unit) $163 $65 $179 $73,320 $205,380 Median ($ per sf/unit) $113 $50 $113 $39,645 $93,264 Capitalization Rates (All Transactions) Weighted Average (%) 6.9 8.2 7.0 6.8 – Median (%) 7.1 8.0 7.0 6.9 – Source: RERC.

Historical Median Price per Unit (12 month trailing) – APARTMENT

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 80 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Memphis MSA 1.3 million Memphis2 6.2% Office Memphis Growth1 1.14% Tennessee2 5.9% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Industrial Household Income & Value Size-Weighted Average PPSF   Per Capita Income $25,755 2007 Households 494,000 Retail 1-year Job Growth 1.00% Household Growth 1.25% Size-Weighted Average PPSF   1-year Job Additions 6,600 Median Home Price $113,727 Major Employers Apartment International Paper Co. Size-Weighted Average PPU   Regions Bank Weighted Average Cap Rate   Baptist Memorial Hospital Hotel U.S. Post Office Size-Weighted Average PPU  

Memphis Concord EFS Inc. * Sources: Bureau of Labor Statistics, NAR, STDB Online. Metro Cap Rate Comparison Current Quarter “Home Price Analysis Report for Memphis Region – 2007” ©2007 NATIONAL ASSOCIA- TION OF REALTORS®. Used with permission. Reproduction, reprinting, or retransmission of this Industrial document in any form (electronic media included) is prohibited without written permission. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. vs. South Region = Noteworthy Transactions vs. Nation  Sale Date Sale Price Sq. Ft./Units PPSF/PPU Apartment Office vs. South Region  2076 Union Ave. 3-08 $1,950,000 15,000 $130 vs. Nation  Industrial *Comparison of current quarter weighted average capitalization rates. Memphis Distribution Source: RERC. 3-08 $6,297,000 248,317 $25 Center Stateline Business Park 1-08 $55,000,000 1,400,000 $39 Retail Raleigh Springs Market 1-08 $7,116,667 113,978 $62 Place Houston Levee Galleria 1-08 $15,800,000 65,592 $241 Apartment Autumnwood Village 2-08 $9,744,361 324 $30,075 Emerald Park 3-08 $12,600,000 124 $101,613 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Boyle Investments Office N 150,571 2008 Wyndham Garden Hotel R 230 N/A Legacy Center Office N 60,000 2009 Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 81 Quarterly Memphis Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $53 $71 $79 $61 $18 Size Weighted Avg. ($ per sf/unit) $81 $31 $63 $22,474 $34,502 Price Weighted Avg. ($ per sf/unit) $93 $38 $143 $24,425 $36,822 Memphis Median ($ per sf/unit) $82 $31 $63 $23,717 $35,560 > $5 Million Volume (Mil) $95 $257 $170 $259 $226 Size Weighted Avg. ($ per sf/unit) $159 $40 $155 $46,056 $91,532 Price Weighted Avg. ($ per sf/unit) $166 $44 $212 $58,469 $98,087 Median ($ per sf/unit) $182 $29 $174 $48,261 $77,289 All Transactions Volume (Mil) $147 $328 $248 $320 $245 Size Weighted Avg. ($ per sf/unit) $118 $38 $106 $38,361 $81,363 Price Weighted Avg. ($ per sf/unit) $140 $43 $190 $51,960 $93,455 Median ($ per sf/unit) $86 $30 $74 $27,588 $71,509 Capitalization Rates (All Transactions) Weighted Average (%) – – – 7.2 – Median (%) – – – 7.7 – Source: RERC.

Historical Median Price per Unit Footnotes: (12 month trailing) – APARTMENT 1The recent decline in median pricing is due in part to the increased number of smaller office transactions.

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 82 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Miami MSA 5.6 million Miami2 4.3% Office Miami Growth1 1.43% Florida2 4.7% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate   Household Income & Value Industrial Per Capita Income $28,264 2007 Households 2.1 million Size-Weighted Average PPSF   1-year Job Growth 1.50% Household Growth 1.38% Weighted Average Cap Rate  = 1-year Job Additions 37,000 Median Home Price $298,129 Major Employers Retail Miami Jackson Memorial Hospital Size-Weighted Average PPSF   Miami Studio Rentals Weighted Average Cap Rate   Baptist Hospital of Miami Apartment University of Miami School of Medicine Size-Weighted Average PPU   Miami-Dade Community College Weighted Average Cap Rate   Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Miami Region – 2007” ©2007 NATIONAL ASSOCIATION OF REAL- Hotel TORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form (electronic media included) is prohibited without written permission. Size-Weighted Average PPU   1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Noteworthy Transactions Metro Cap Rate Comparison* Current Quarter Sale Date Sale Price Sq. Ft./Units PPSF/PPU Office Office vs. South Region  Dadeland Towers North 2-08 $41,000,000 244,176 $168 vs. Nation  12496 NW 25th St. 1-08 $24,900,000 109,000 $228 Industrial Industrial Miami Lakes Operations vs. South Region  3-08 $11,400,000 143,384 $80 Center vs. Nation  PMG Office Warehouse Bldg. 2-08 $10,900,000 80,775 $135 Retail Retail vs. South Region  Airpark Plaza 2-08 $37,000,000 172,093 $215 vs. Nation  CVS 1-08 $5,100,000 11,512 $443 Apartment Apartment Lanai 3-08 $7,900,000 31 $254,839 vs. South Region  291 Bal Bay Drive 1-08 $9,600,000 36 $266,667 vs. Nation  Hotel *Comparison of current quarter weighted average capitalization rates. Source: RERC. Hotel Nash 3-08 $12,500,000 54 $231,481 Majestic Hotel 1-08 $12,000,000 50 $231,481 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery 1000 Waterford Office N 247,000 2009 Hilton Garden Inn Hotel N 213 2010 Andalusia Corporate Plaza Office N 170,000 2009 Off-Brickell Office N 86,000 2010 Brickell Financial Centre Mixed Use N 600,000 2009 Sources: CBRE, RE Business. Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 83 Quarterly Miami Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $275 $461 $320 $165 $45 Size Weighted Avg. ($ per sf/unit) $162 $79 $161 $81,811 $81,557 Price Weighted Avg. ($ per sf/unit) $218 $97 $239 $109,292 $105,762 Miami Median ($ per sf/unit) $177 $89 $157 $80,000 $75,000 > $5 Million Volume (Mil) $2,182 $955 $1,538 $615 $1,473 Size Weighted Avg. ($ per sf/unit) $198 $98 $222 $112,187 $202,564 Price Weighted Avg. ($ per sf/unit) $262 $119 $288 $145,631 $382,238 Median ($ per sf/unit) $184 $98 $209 $110,915 $134,188 All Transactions Volume (Mil) $2,457 $1,415 $1,858 $780 $1,517 Size Weighted Avg. ($ per sf/unit) $193 $91 $208 $104,006 $194,053 Price Weighted Avg. ($ per sf/unit) $257 $112 $279 $137,932 $374,065 Median ($ per sf/unit) $178 $91 $175 $87,980 $115,000 Capitalization Rates (All Transactions) Weighted Average (%) 6.8 6.2 6.1 5.9 – Median (%) 7.0 6.1 6.5 5.7 – Source: RERC.

Historical Median Price per Unit Historical Median Price per Unit (12 month trailing) – APARTMENT (12 month trailing) – HOTEL

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 84 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Nashville MSA 1.5 million Nashville2 4.9% Office Nashville Growth1 2.03% Tennessee2 5.9% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Industrial Household Income & Value Size-Weighted Average PPSF   Per Capita Income $29,370 2007 Households 595,000 Retail 1-year Job Growth 0.90% Household Growth 2.11% Size-Weighted Average PPSF   1-year Job Additions 6,700 Median Home Price $172,910 Major Employers Weighted Average Cap Rate   Vanderbilt University Medical Center Apartment Saint Thomas Hospital Size-Weighted Average PPU   Gaylord Opryland Hotel Baptist Hospital Size-Weighted Average PPU   Saturn Corporation Nashville * Sources: Bureau of Labor Statistics, NAR, STDB Online. Metro Cap Rate Comparison Current Quarter “Home Price Analysis Report for Nashville Region – 2007” ©2007 NATIONAL ASSOCIATION OF REAL- TORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form Retail (electronic media included) is prohibited without written permission. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. vs. South Region  Noteworthy Transactions vs. Nation  Sale Date Sale Price Sq. Ft./Units PPSF/PPU *Comparison of current quarter weighted average capitalization rates. Source: RERC. Office 3354 Perimeter Hill Drive 3-08 $3,000,000 64,337 $47 Harding Medical Center 1-08 $5,700,000 30,440 $187 Industrial 120 SE Parkway Drive 3-08 $38,500,000 289,330 $133 AmeriCold 3-08 $16,900,000 226,423 $75 Retail 5621 Charlotte Pike 2-08 $1,498,750 16,126 $93 Apartment Lexington at Bellevue 1-08 $52,500,000 598 $87,793 Park Manor 1-08 $12,600,000 146 $86,301 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery The Pinnacle at Office N 500,431 2009 Symphony Place West End Summit Mixed Use N 1,600,000 2009 Hill Center at Belle Retail N 288,000 2008 Meade Couchville Pike Industrial N 700,000 2008 Business Center Gaylord Opryland Mixed Use R 1,000,000 2010 Resort Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 85 Quarterly Nashville Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $87 $94 $116 $67 $24 Size Weighted Avg. ($ per sf/unit) $94 $45 $91 $38,704 $37,020 Price Weighted Avg. ($ per sf/unit) $137 $69 $146 $56,871 $39,241 Nashville Median ($ per sf/unit) $112 $55 $91 $36,514 $35,714 > $5 Million Volume (Mil) $237 $422 $235 $747 $435 Size Weighted Avg. ($ per sf/unit) $101 $59 $102 $77,224 $145,206 Price Weighted Avg. ($ per sf/unit) $122 $78 $163 $88,978 $164,080 Median ($ per sf/unit) $108 $63 $175 $87,793 $112,764 All Transactions Volume (Mil) $324 $517 $351 $814 $458 Size Weighted Avg. ($ per sf/unit) $99 $56 $98 $71,372 $126,123 Price Weighted Avg. ($ per sf/unit) $126 $76 $157 $86,333 $157,617 Median ($ per sf/unit) $112 $55 $98 $54,688 $98,599 Capitalization Rates (All Transactions) Weighted Average (%) – – 6.3 – – Median (%) – – 6.4 – – Source: RERC.

Historical Median Price per Unit Footnotes: (12 month trailing) – APARTMENT 1Two properties (200 and 220 Athens Way) sold for $143/sf. 2 2There were two large property transactions for $216,475/unit that contributed to the price increase.

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 86 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year NO/BR MSA 763,000/1.1 mil NO/BR2 3.8% Office NO/BR Growth1 1.16/0.91% Louisiana2 4.3% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Industrial Household Income & Value Size-Weighted Average Price/SF   Per Capita Income $22,138 2007 Households 692,000 Retail 1-year Job Growth – Household Growth 1.12% Size-Weighted Average PPSF   1-year Job Additions – Median Home Price $141,701 Major Employers Hotel Louisana State University Medical Center Size-Weighted Average PPU  

Charity Hospital of Louisana Source: RERC. Harrah’s New Orleans Casino Tulane University JCC Holding Co. II LLC. Sources: Bureau of Labor Statistics, NAR, STDB Online. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Noteworthy Transactions Sale Date Sale Price Sq. Ft./Units PPSF/PPU Office East Jefferson Medical 1-08 $19,800,000 123,184 $161 Plaza Hotel JW Marriot New Orleans 1-08 $55,000,000 494 $111,336 Hyatt Regency New 1-08 $32,000,000 1,184 $27,027 Orleans Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Trump Towers New Office N 1,600,000 2009 Orleans 3925 Burgundy St. Multifamily N 105 2009 Tracage Multifamily N 136 2009 Condominium The Canal Medical Mixed Use N 124,000 2008 and Tech Center Sealy Business Industrial N 49,800 N/A Center III Sources: CBRE, RE Business. New Orleans/Baton Rouge

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 87 Quarterly New Orleans Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $9 $3 $13 – – Size Weighted Avg. ($ per sf/unit) $48 $54 $127 – – New Orleans/ Price Weighted Avg. ($ per sf/unit) $74 $62 $170 – – Median ($ per sf/unit) $72 $61 $115 – – Baton Rouge > $5 Million Volume (Mil) $160 – – – $268 Size Weighted Avg. ($ per sf/unit) $113 – – – $73,486 Price Weighted Avg. ($ per sf/unit) $130 – – – $115,335 Median ($ per sf/unit) $138 – – – $115,735 All Transactions Volume (Mil) $168 $3 $93 – $270 Size Weighted Avg. ($ per sf/unit) $105 $54 $89 – $72,629 Price Weighted Avg. ($ per sf/unit) $127 $62 $124 – $114,666 Median ($ per sf/unit) $85 $61 $115 – $93,867 Capitalization Rates (All Transactions) Weighted Average (%) – – – – – Median (%) – – – – – Source: RERC.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 88 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Oklahoma City MSA 1.2 million Oklahoma City2 3.3% Office Oklahoma City Growth1 1.28% Oklahoma2 3.2% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Industrial Household Income & Value Size-Weighted Average PPSF   Per Capita Income $24,798 2007 Households 476,000 Retail 1-year Job Growth 3.80% Household Growth 1.40% Size-Weighted Average PPSF   1-year Job Additions 21,100 Median Home Price $110,227 Major Employers Apartment U.S. Federal Aviation Administration Size-Weighted Average PPU   Express Travel Services Inc. Weighted Average Cap Rate   General Motors Corporation Hotel UPS Size-Weighted Average PPU   Chesapeake Energy Corp. * Sources: Bureau of Labor Statistics, NAR, STDB Online. Metro Cap Rate Comparison Current Quarter “Home Price Analysis Report for Oklahoma City Region – 2007” ©2007 NATIONAL ASSOCIA- TION OF REALTORS®. Used with permission. Reproduction, reprinting, or retransmission of this Apartment document in any form (electronic media included) is prohibited without written permission. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. vs. South Region  Noteworthy Transactions vs. Nation  Sale Date Sale Price Sq. Ft./Units PPSF/PPU *Comparison of current quarter weighted average capitalization rates. Source: RERC. Office Hertz Financial Center 1-08 $22,000,000 268,800 $82 The Registry 3-08 $6,300,000 93,176 $68 Industrial

Oklahoma5200 City SW 36th St. 3-08 $10,950,000 210,600 $52 5500 W Reno Ave. 2-08 $7,900,000 336,750 $23 Retail The Wild Coyote 2-08 $1,300,000 26,000 $50 Apartment 1301 W. Hefner Road 2-08 $6,220,000 152 $40,921 The Commons on 2-08 $26,900,000 254 $105,906 Oak Tree Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Commons on Office N 50,188 N/A Broadway Centennial Plaza Office N 48,682 N/A Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 89 Quarterly Oklahoma City Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $31 $77 $100 $32 – Size Weighted Avg. ($ per sf/unit) $76 $44 $52 $25,646 – Oklahoma City Price Weighted Avg. ($ per sf/unit) $142 $57 $95 $27,856 – Median ($ per sf/unit) $66 $45 $56 $29,643 – > $5 Million Volume (Mil) $163 $57 $168 $189 $132 Size Weighted Avg. ($ per sf/unit) $61 $50 $112 $40,951 $92,537 Price Weighted Avg. ($ per sf/unit) $75 $60 $146 $58,108 $107,504 Median ($ per sf/unit) $68 $52 $135 $36,592 $96,203 All Transactions Volume (Mil) $194 $134 $269 $221 $135 Size Weighted Avg. ($ per sf/unit) $63 $46 $79 $37,712 $84,231 Price Weighted Avg. ($ per sf/unit) $86 $58 $127 $53,754 $105,297 Median ($ per sf/unit) $68 $45 $63 $32,143 $96,124 Capitalization Rates (All Transactions) Weighted Average (%) – – – 8.8 – Median (%) – – – 8.5 – Source: RERC.

Historical Median Price per Unit Footnotes: (12 month trailing) – APARTMENT 1The decline in the median average price per square foot was due in part to the sale of the properties at 14000 Quail Springs Parkway for $27/sf and at 123 S. Kerr Ave. for $29/sf.

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 90 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Orlando MSA 2.1 million Orlando2 4.5% Office Orlando Growth1 3.49% Florida2 4.7% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate   Household Income & Value Industrial Per Capita Income $30,907 2007 Households 801,000 Size-Weighted Average PPSF =  1-year Job Growth 2.70% Household Growth 3.51% Retail 1-year Job Additions 26,973 Median Home Price $238,309 Major Employers Size-Weighted Average PPSF   Hulett Environmental Services Weighted Average Cap Rate   Florida Hospital Orlando Apartment Orlando Regional Healthcare Size-Weighted Average PPU  

Orlando Lockheed Martin Corporation Weighted Average Cap Rate   University of Central Florida Hotel Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Orlando Region – 2007” ©2007 NATIONAL ASSOCIATION OF REAL- Size-Weighted Average PPU   TORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form (electronic media included) is prohibited without written permission. Metro Cap Rate Comparison* Current Quarter 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Noteworthy Transactions Office Sale Date Sale Price Sq. Ft./Units PPSF/PPU vs. South Region  Office vs. Nation  Gateway Center 1-08 $55,000,000 228,000 $241 Retail Ocwen Boulevard 1-08 $24,500,000 125,000 $196 vs. South Region  Industrial vs. Nation  Cypress Park E. 2-08 $25,350,000 340,036 $75 4122 Metric Drive 1-08 $5,200,000 36,957 $141 Apartment Retail vs. South Region  International Distribution Center 2-08 $14,000,000 52,938 $264 vs. Nation 

Tuscawilla Bend 3-08 $11,900,000 83,377 $143 *Comparison of current quarter weighted average capitalization rates. Source: RERC. Apartment Andover Place 3-08 $26,084,622 400 $65,212 Copper Terrace 1-08 $25,000,000 300 $83,333 Hotel Hawthorn Suites 1-08 $19,900,000 135 $147,407 Hampton Inn Lake Buena Vista 2-08 $14,100,000 147 $95,918 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Staghorn Villas Multifamily N 58 2011 Darden Restaurants HQ Mixed Use N 450,000 2009 Phillips Crossing Retail N 145,000 2008 The Current at Lee Vista Mixed Use N 800000 2009

Orlando Premium Outlets Retail R 115,000 2008 Expansion Sources: CBRE, RE Business. Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 91 Quarterly Orlando Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $103 $136 $138 $21 $23 Size Weighted Avg. ($ per sf/unit) $155 $65 $147 $57,284 $25,796 Price Weighted Avg. ($ per sf/unit) $208 $92 $213 $59,400 $28,210 Orlando Median ($ per sf/unit) $174 $81 $127 $61,182 $32,231 > $5 Million Volume (Mil) $1,196 $390 $502 $850 $474 Size Weighted Avg. ($ per sf/unit) $173 $62 $126 $88,516 $95,639 Price Weighted Avg. ($ per sf/unit) $185 $94 $156 $104,920 $103,821 Median ($ per sf/unit) $183 $74 $143 $79,901 $87,921 All Transactions Volume (Mil) $1,299 $525 $641 $870 $496 Size Weighted Avg. ($ per sf/unit) $171 $63 $130 $87,378 $85,113 Price Weighted Avg. ($ per sf/unit) $187 $94 $169 $103,832 $100,367 Median ($ per sf/unit) $180 $80 $131 $71,833 $86,093 Capitalization Rates (All Transactions) Weighted Average (%) 6.8 – 6.1 6.4 – Median (%) 6.9 – 6.1 6.3 – Source: RERC.

Historical Median Price per Unit (12 month trailing) – APARTMENT

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 92 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year San Antonio MSA 2.0 million San Antonio2 3.9% Office San Antonio Growth1 2.07% Texas2 4.2% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Industrial Household Income & Value Size-Weighted Average PPSF   Per Capita Income $23,176 2007 Households 696,000 Weighted Average Cap Rate =  1-year Job Growth 2.00% Household Growth 2.12% Retail 1-year Job Additions 16,200 Median Home Price $109,611 Major Employers Size-Weighted Average PPSF   USAA Apartment University of Texas Health Science Size-Weighted Average PPU   University of Texas at San Antonio Hotel West Telemarketing Size-Weighted Average PPU   University Health System * Sources: Bureau of Labor Statistics, NAR, STDB Online. Metro Cap Rate Comparison Current Quarter “Home Price Analysis Report for San Antonio Region – 2007” ©2007 NATIONAL ASSOCIA- TION OF REALTORS®. Used with permission. Reproduction, reprinting, or retransmission of this Industrial document in any form (electronic media included) is prohibited without written permission. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. vs. South Region  Noteworthy Transactions vs. Nation  *Comparison of current quarter weighted average capitalization rates.

San Antonio Sale Date Sale Price Sq. Ft./Units PPSF/PPU Source: RERC. Office 911 Central Parkway 1-08 $18,000,000 102,413 $176 Industrial 4230 Milling Road 2-08 $654,000 9,000 $73 Retail 745 E. Mulberry Ave. 2-08 $16,691,500 261,620 $64 Thousand Oaks 3-08 $17,900,000 162,882 $110 Apartment Palmero 3-08 $30,976,652 314 $98,652 Legacy Townhomes at 2-08 $9,900,000 149 $66,443 Castle Hill Hotel Hilton Garden 2-08 $25,929,574 117 $221,620 Northwoods Comfort 2-08 $9,200,000 95 $96,842 Suites Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery FAMSA Distribution Center Industrial N 198,000 2008 Bentwood Apartments LLC Multifamily R 360 N/A Gulf Coast Paper Co. Bldg. Industrial N 52,000 2008 2222 W. Malone Ave. Industrial N 114,000 2008 Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 93 Quarterly San Antonio Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $38 $34 $232 $62 – Size Weighted Avg. ($ per sf/unit) $108 $41 $112 $38,848 – San Antonio Price Weighted Avg. ($ per sf/unit) $125 $46 $180 $55,729 – Median ($ per sf/unit) $102 $44 $102 $40,000 – > $5 Million Volume (Mil) $109 $200 $380 $365 $556 Size Weighted Avg. ($ per sf/unit) $139 $75 $147 $69,831 $188,375 Price Weighted Avg. ($ per sf/unit) $148 $89 $196 $81,048 $301,982 Median ($ per sf/unit) $148 $69 $159 $67,114 $119,049 All Transactions Volume (Mil) $148 $235 $612 $427 $570 Size Weighted Avg. ($ per sf/unit) $130 $67 $132 $62,603 $173,822 Price Weighted Avg. ($ per sf/unit) $142 $83 $190 $77,382 $296,049 Median ($ per sf/unit) $120 $46 $112 $45,385 $115,563 Capitalization Rates (All Transactions) Weighted Average (%) – 7.6 – – – Median (%) – 7.5 – – – Source: RERC.

Historical Median Price per Square Foot Historical Median Price per Square Foot (12 month trailing) – INDUSTRIAL (12 month trailing) – RETAIL

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and Historical Median Price per Unit (12 month trailing) – APARTMENT for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 94 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Tampa MSA 2.8 million Tampa2 5.1% Office Tampa Growth1 2.16% Florida2 4.7% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate =  Household Income & Value Industrial Per Capita Income $27,461 2007 Households 1,158,693 Size-Weighted Average PPSF =  1-year Job Growth 1.20% Household Growth 2.12% Weighted Average Cap Rate  – 1-year Job Additions 15,300 Median Home Price $203,722 Major Employers Retail St. Joseph’s Hospital Size-Weighted Average PPSF  

Tampa Childbirth Center Weighted Average Cap Rate   Tampa General Hospital Apartment University of South Florida Size-Weighted Average PPU   Hillsborough County Government Weighted Average Cap Rate   Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Tampa Region – 2007” ©2007 NATIONAL ASSOCIATION OF REAL- Hotel TORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form (electronic media included) is prohibited without written permission. Size-Weighted Average PPU   1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. * Noteworthy Transactions Metro Cap Rate Comparison Current Quarter Sale Date Sale Price Sq. Ft./Units PPSF/PPU Office Office vs. South Region  Bridgeport Center 1-08 $29,500,000 171,000 $173 vs. Nation  REO Center 2-08 $10,660,000 76,414 $140 Industrial Industrial Tampa International Center 2-08 $25,423,200 566,000 $45 vs. South Region = 11316 N. 46th St. 3-08 $17,000,000 379,884 $45 vs. Nation  Retail Retail Westside Centre 3-08 $6,200,000 15,010 $413 vs. South Region  2200 Gulf To Bay Blvd. 1-08 $9,600,000 12,900 $744 vs. Nation  Apartment Apartment Laurel Oaks 3-08 $15,300,000 192 $79,688 vs. South Region  Campus Lodge 2-08 $42,600,000 312 $136,538 Hotel vs. Nation  *Comparison of current quarter weighted average capitalization rates. TownPlace Suites 2-08 $13,400,000 95 $141,053 Source: RERC. Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery ProLogis Park Madison Industrial N 350000 N/A Connerton Commerce Office N 100,000 2009 Park Grove at Wesley Chapel Retail N 800,000 2008 Corporate Center Four Office N 247,000 2008 IKEA Retail N 323,000 2009 Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 95 Quarterly Tampa Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $210 $197 $222 $79 $32 Size Weighted Avg. ($ per sf/unit) $124 $64 $149 $45,960 $35,161 Price Weighted Avg. ($ per sf/unit) $161 $78 $234 $56,030 $39,727 Tampa Median ($ per sf/unit) $125 $67 $141 $59,233 $35,729 > $5 Million Volume (Mil) $1,094 $381 $874 $845 $626 Size Weighted Avg. ($ per sf/unit) $153 $77 $179 $86,443 $102,704 Price Weighted Avg. ($ per sf/unit) $181 $101 $247 $95,703 $142,033 Median ($ per sf/unit) $149 $75 $155 $75,227 $81,800 All Transactions Volume (Mil) $1,303 $578 $1,096 $924 $658 Size Weighted Avg. ($ per sf/unit) $148 $72 $172 $80,379 $93,914 Price Weighted Avg. ($ per sf/unit) $178 $94 $245 $92,305 $137,048 Median ($ per sf/unit) $136 $70 $144 $64,431 $74,045 Capitalization Rates (All Transactions) Weighted Average (%) 6.8 7.2 6.1 6.7 – Median (%) 7.3 7.2 6.8 6.5 – Source: RERC.

Historical Median Price per Unit (12 month trailing) – APARTMENT

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Chicago • Cincinnati • Cleveland • Columbus • Detroit • Indianapolis Kansas City • Milwaukee • Minneapolis • Omaha • St. Louis • Toledo MidwestRegionTransactionBreakdown

n CCIM Institute designees and candidates rated the eco- dition, the weighted average capitalization rates for each nomic performance in the Midwest region at 5.6 on a scale property sector in the Midwest region, with the exception of 1 to 10, with 10 being high, for first quarter 2008. This of the retail sector, were higher than the national averag- was the lowest rating of the four regions, but was higher es. than the rating given to the nation as a whole. n In contrast to trends where slow consumer spending is n The size- and price-weighted average prices per square negatively affecting retail property fundamentals, retail foot or unit of space in the Midwest regional commercial space showed the most improvement among the major real estate market were well below those same averages property sectors in the Midwest region during first quarter for the nation during first quarter 2008, except for several 2008. of the higher-volume averages in the retail sector. In ad-

Regional Transaction Price Breakdown/Tiers Midwest Transaction Breakdown (4/1/07 - 3/31/08) “Small industrial properties on the edge of Office Industrial Retail Apartment Hotel residential development < $2 Million offer good investment Volume (Mil) $386 $757 $786 $361 $43 opportunities.” Size Weighted Avg. ($ per sf/unit) $75 $39 $76 $34,951 $20,612 -Chicago Price Weighted Avg. ($ per sf/unit) $99 $56 $116 $44,074 $23,973 Median ($ per sf/unit) $75 $42 $74 $36,100 $21,734 $2 - $5 Million Volume (Mil) $643 $1,238 $1,288 $554 $309 “It looks like apart- Size Weighted Avg. ($ per sf/unit) $93 $46 $113 $40,207 $35,093 ments are starting to Price Weighted Avg. ($ per sf/unit) $149 $71 $214 $59,547 $39,667 fill up because of the Median ($ per sf/unit) $115 $55 $180 $46,528 $37,006 mortgage crisis.” > $5 Million – Milwaukee Volume (Mil) $15,246 $5,760 $7,185 $6,083 $5,739 Size Weighted Avg. ($ per sf/unit) $153 $58 $175 $75,448 $146,757 Price Weighted Avg. ($ per sf/unit) $201 $84 $324 $115,594 $448,736 Median ($ per sf/unit) $133 $60 $159 $66,967 $104,008 “Office is overbuilt.” All Transactions – Columbus Volume (Mil) $16,274 $7,755 $9,258 $6,998 $6,092 Size Weighted Avg. ($ per sf/unit) $146 $53 $147 $66,812 $121,770 Price Weighted Avg. ($ per sf/unit) $196 $79 $291 $107,461 $424,935 Median ($ per sf/unit) $106 $49 $106 $46,267 $72,871 “Small retail centers Capitalization Rates (All Transactions) that cater to ‘mom and Range (%) 4.3 - 9.6 5.4 - 11.7 5.0 - 11.0 4.5 - 10.0 6.8 - 12.0 pop’ shops should be Weighted Avg. (%) 6.6 7.7 6.3 6.5 8.2 avoided at all costs.” Median (%) 7.5 8.1 7.0 7.2 9.5 - Chicago Source: RERC.

RERC Weighted Avg. Cap Rate - 1Q 2008 9.0% Midwest U.S. Total 8.5% Avg. Capitalization Rate n Survey respondents had mixed opinions about the Mid- 8.0% west region’s office market. Several respondents stated 7.5% that the sector is among the worst for investment opportu-

7.0% nities due to over-supply, while others stated that it offered good opportunities (specifically medical offices). 6.5%

6.0% n Office transaction volume declined during first quarter 2008. Although size- and price-weighted average prices 5.5% in the less than $2 million and $2 to $5 billion volume categories increased, average prices in the greater than $5 Chicago Cleveland Milwaukee Kansas City Minneapolis million volume category declined.

RERC Size-Weighted Avg. PPSF - 1Q 2008 RERC Price-Weighted Avg. PPSF - 1Q 2008 $300 $550 Midwest Midwest U.S. Total U.S. Total Size-Weighted Average PPSF Price-Weighted Average PPSF $250 $450

$200 $350

$150 $250

$100 $150

$50 $50

Detroit Toledo Detroit Toledo Chicago Cleveland Omaha St. Louis Chicago Omaha St. Louis Cincinnati Columbus IndianapolisKansas CityMilwaukeeMinneapolis Cincinnati Cleveland Columbus IndianapolisKansas CityMilwaukeeMinneapolis

Midwest Office Transactions (4/1/07 - 3/31/08) Volume Size-weighted Price-weighted Median Average (millions) Average ($/sf) Average ($/sf) ($/sf) Cap Rate (%) Chicago $8,058 $202 $250 $150 6.1 Cincinnati $122 $97 $118 $85 – Cleveland $756 $106 $116 $84 8.0 Columbus $370 $104 $134 $111 – Detroit $616 $84 $120 $105 – Indianapolis $283 $99 $108 $97 – Kansas City $771 $147 $169 $120 7.1 Milwaukee $413 $116 $144 $87 7.4 Minneapolis $2,042 $124 $139 $127 6.8 Omaha $190 $87 $126 $84 – St. Louis $1,448 $131 $156 $124 – Toledo $118 $67 $108 $74 – Midwest Total $16,274 $146 $196 $106 6.6 U.S. Total $165,414 $240 $396 $152 5.6 Source: RERC.

RERC Weighted Avg. Cap Rate - 1Q 2008

10% Midwest U.S. Total Avg. Capitalization Rate n Many survey respondents stated that the Midwest region’s 9% industrial sector (along with the apartment sector) showed the greatest opportunity for investment during the next 8% year due to the amount of established infrastructure typi- cally in place and stable rent income.

7% n The industrial sector saw small increases in both size- and price-weighted average prices per square foot during first 6% quarter 2008. The weighted average capitalization rate increased 30 basis points from fourth quarter 2007. Chicago Detroit Cleveland Minneapolis

RERC Size-Weighted Avg. PPSF - 1Q 2008 RERC Price-Weighted Avg. PPSF - 1Q 2008

$100 Midwest $150 Midwest U.S. Total U.S. Total Price-Weighted Average PPSF Size-Weighted Average PPSF $125 $75 $100

$50 $75

$50 $25 $25

$0 $0

Detroit Toledo Detroit Toledo Chicago Cleveland Omaha St. Louis Chicago Cleveland Omaha St. Louis Cincinnati Columbus IndianapolisKansas CityMilwaukeeMinneapolis Cincinnati Columbus IndianapolisKansas CityMilwaukeeMinneapolis

Midwest Industrial Transactions (4/1/07 - 3/31/08) Volume Size-weighted Price-weighted Median Average (millions) Average ($/sf) Average ($/sf) ($/sf) Cap Rate (%) Chicago $2,859 $60 $86 $63 7.2 Cincinnati $404 $47 $58 $45 7.7 Cleveland $443 $49 $69 $42 7.2 Columbus $266 $37 $45 $41 – Detroit $520 $63 $92 $51 8.2 Indianapolis $94 $39 $47 $42 – Kansas City $298 $69 $115 $54 – Milwaukee $285 $40 $58 $47 – Minneapolis $542 $60 $86 $58 – Omaha $64 $45 $70 $49 – St. Louis $488 $52 $71 $54 – Toledo $13 $36 $45 $32 – Midwest Total $7,755 $53 $79 $49 7.7 U.S. Total $51,426 $74 $126 $75 6.7 Source: RERC.

RERC Weighted Avg. Cap Rate - 1Q 2008 8.0% Midwest U.S. Total n The majority of survey respondents from the Midwest region 7.5% Avg. Capitalization Rate stated that the retail sector offers the least favorable invest- 7.0% ment conditions over the next year due to the weakening economy, national uncertainty prior to elections, and small 6.5% businesses with marginal profits being forced to shut their doors. 6.0% n Despite the adverse outlook highlighted by survey respon- 5.5% dents, the Midwest region’s retail sector performed compara- tively well during first quarter 2008. The weighted average 5.0% and median capitalization rates remained steady, while both size- and price-weighted average prices per square foot in- Detroit Chicago Cleveland Cincinnati Columbus Kansas City Milwaukee Minneapolis creased from the previous quarter. Notably, the Midwest region’s price-weighted average price per square foot of retail space crept above the national average. RERC Size-Weighted Avg. PPSF - 1Q 2008 RERC Price-Weighted Avg. PPSF - 1Q 2008 $200 $350 Midwest Midwest U.S. Total U.S. Total $175 Size-Weighted Average PPSF $300 Price-Weighted Average PPSF

$150 $250

$125 $200

$100 $150

$75 $100

$50 $50

Chicago Detroit Omaha St. Louis Toledo Chicago Detroit Omaha St. Louis Toledo Cincinnati Cleveland Columbus IndianapolisKansas CityMilwaukeeMinneapolis Cincinnati Cleveland Columbus IndianapolisKansas CityMilwaukeeMinneapolis Midwest Retail Transactions (4/1/07 - 3/31/08) Volume Size-weighted Price-weighted Median Average (millions) Average ($/sf) Average ($/sf) ($/sf) Cap Rate (%) Chicago $4,271 $218 $418 $163 5.7 Cincinnati $227 $114 $154 $106 6.7 Cleveland $276 $104 $135 $81 – Columbus $316 $120 $158 $103 – Detroit $341 $138 $174 $112 7.7 Indianapolis $69 $82 $128 $85 – Kansas City $436 $133 $180 $97 – Milwaukee $211 $117 $185 $82 7.0 Minneapolis $393 $112 $172 $88 7.0 Omaha $65 $88 $202 $111 – St. Louis $990 $182 $206 $111 – Toledo $24 $81 $126 $81 – Midwest Total $9,258 $147 $291 $106 6.3 U.S. Total $59,915 $159 $282 $135 6.4 Source: RERC.

RERC Weighted Avg. Cap Rate - 1Q 2008 8.0% Midwest 7.5% U.S. Total Avg. Capitalization Rate n The majority of survey respondents from the Midwest 7.0% region believe the apartment sector shows the greatest 6.5% investment opportunity for the next year, primarily due to

6.0% the ever-present need for housing (and especially when foreclosures are high) and the reduced availability of loans 5.5% at or near 100-percent loan-to-value ratios. 5.0% 4.5% n The volume of apartment sales in the Midwest region de- 4.0% clined by about 30 percent during first quarter 2008 from the previous quarter. In addition, both the size- and price-

Chicago Detroit Cleveland Columbus Indianapolis Kansas City Minneapolis weighted average prices per apartment unit declined during first quarter.

RERC Size-Weighted Avg. PPU - 1Q 2008 RERC Price-Weighted Avg. PPU - 1Q 2008 $150,000 $250,000 Midwest Midwest U.S. Total U.S. Total $125,000 Size-Weighted Average PPU Price-Weighted Average PPU $200,000

$100,000 $150,000 $75,000 $100,000 $50,000

$50,000 $25,000

$0 $0

Detroit Toledo Detroit Omaha Toledo Chicago Cleveland Omaha St. Louis Chicago Cincinnati Cleveland Columbus St. Louis Cincinnati Columbus IndianapolisKansas CityMilwaukeeMinneapolis IndianapolisKansas CityMilwaukeeMinneapolis

Midwest Apartment Transactions (4/1/07 - 3/31/08) Volume Size-weighted Price-weighted Median Average (millions) Average ($/unit) Average ($/unit) ($/sf) Cap Rate (%) Chicago $2,383 $116,363 $179,017 $71,181 5.7 Cincinnati $258 $42,551 $53,140 $29,130 – Cleveland $253 $47,120 $61,001 $38,307 6.8 Columbus $637 $50,169 $59,425 $41,000 6.8 Detroit $460 $51,494 $64,333 $42,639 7.1 Indianapolis $306 $61,873 $73,657 $71,725 6.4 Kansas City $273 $55,803 $67,091 $37,781 7.0 Milwaukee $195 $78,027 $107,818 $52,544 – Minneapolis $362 $76,909 $87,959 $65,708 6.6 Omaha $197 $69,386 $78,502 $45,619 – St. Louis $179 $50,666 $60,830 $37,042 – Toledo $96 $58,687 $69,539 $41,735 – Midwest Total $6,998 $66,812 $107,461 $46,267 6.5 U.S. Total $78,236 $99,431 $169,129 $83,333 5.8 Source: RERC.

n Both size- and price-weighted average prices per hotel n The Midwest hotel transaction volume increased by unit in the Midwest region increased during first quar- about a third during first quarter 2008. ter 2008 when compared to the previous quarter in the more $5 million transaction price category. The weighted average capitalization rate declined 70 basis points from the previous quarter.

RERC Size-Weighted Avg. PPU - 1Q 2008 RERC Price-Weighted Avg. PPU - 1Q 2008

$250,000 $600,000 Midwest U.S. Total $500,000 $200,000 Size-Weighted Average PPU Midwest U.S. Total $400,000 Price-Weighted Average PPU $150,000 $300,000 $100,000 $200,000

$50,000 $100,000

$0 $0

Detroit Toledo Chicago Detroit Toledo Chicago Cleveland St. Louis Cincinnati Cleveland Columbus Milwaukee St. Louis Cincinnati Columbus IndianapolisKansas City Milwaukee Minneapolis IndianapolisKansas City Minneapolis

Midwest Hotel Transactions (4/1/07 - 3/31/08) Volume Size-weighted Price-weighted Median Average (millions) Average ($/unit) Average ($/unit) ($/sf) Cap Rate (%) Chicago $2,848 $229,137 $760,034 $107,085 7.2 Cincinnati $347 $108,924 $146,091 $103,065 – Cleveland $423 $107,911 $162,764 $82,561 – Columbus $268 $74,555 $103,589 $61,667 – Detroit $299 $81,935 $96,137 $76,982 – Indianapolis $164 $99,018 $139,583 $81,266 7.4 Kansas City $301 $91,549 $118,652 $84,802 – Milwaukee $129 $88,988 $97,430 $80,667 – Minneapolis $194 $99,325 $160,362 $63,263 – Omaha – – – – – St. Louis $301 $90,493 $113,464 $72,059 9.4 Toledo $40 $49,177 $53,475 $49,176 – Midwest Total $6,092 $121,770 $424,935 $72,871 8.2 U.S. Total $59,238 $171,778 $489,300 $103,488 7.9 Source: RERC.

Midwest Region Space Market

Trusted Advice. Proven Performance. Office - 1Q-2008 Inventory SF (000s) Vacancy Rate (%) Net Absorption SF (000s) Asking Rents ($/SF) 219,952 15.0 272 $18.68 Net CBRE/Torto Wheaton Research is a Chicago full-service research and investment Cincinnati 33,997 17.1 320 $14.61 Gross advisory firm, specializing in com- Cleveland 37,253 16.0 188 $16.12 Gross mercial real estate markets. Columbus 30,245 16.0 -110 $11.46 Net Detroit 71,558 21.6 -611 $19.23 Gross With over 20 years of experience, Indianapolis 31,154 16.5 -227 $17.62 Gross our industry leading research, mar- Kansas City 47,405 13.5 715 $17.43 Gross ket expertise, and strategic partner- Minneapolis 63,894 15.2 -269 $13.58 Net ships provide clients with tactical ad- St. Louis 39,522 14.2 482 $18.71 Gross vice and strategic direction to identify Toledo 15,181 16.3 53 $11.02 Net market opportunities that enhance Industrial - 1Q-2008 performance and manage risk. Inventory SF (000s) Availability Rate (%) Net Absorption SF (000s) Asking Rents ($/SF) CBRE/TWR is internationally rec- Chicago 1,037,634 10.9 -1,066 $5.31 Net ognized for our solid foundation in Cincinnati 281,630 7.6 1,269 $4.08 Net economics, accurate forecasts, ana- Cleveland 302,870 9.4 -902 $4.12 Net lytical expertise, and providing clients Columbus 243,541 13.5 -67 $3.61 Net with unparalleled insight into the dy- Detroit 477,733 17.3 -2,936 $5.14 Net namics of the real estate market that Indianapolis 267,315 10.6 -277 $4.38 Gross impact performance. Kansas City 232,598 7.8 799 $4.16 Gross Minneapolis 320,130 8.5 302 $6.09 Net St. Louis 267,256 10.5 -157 $4.43 Net Retail - 1Q-2008 Inventory SF (000s) Availability Rate (%) Net Absorption SF (000s) TWR Rent Index ($/SF) Chicago 94,397 13.0 -467 $22.00 Cincinnati 21,302 14.6 128 $11.66 Cleveland 14,687 15.3 29 $18.57 Columbus 18,247 15.7 -134 $13.15 Detroit 31,710 15.4 -238 $19.34 Indianapolis 20,550 16.6 -257 $17.83 William Wheaton Jon Southard James Costello Kansas City 27,092 12.8 29 $17.98 Ph.D., Principal Principal Principal Minneapolis 26,993 6.3 54 $21.02 St. Louis 33,211 12.7 -166 $22.20 Space Market Data has been provided courtesy of Torto Wheaton Research. Analysis within this report is solely compiled and produced by the Real Estate Research Corporation, and in no way reflects the interpretations, opinions, or conclusions of Torto Wheaton Research.

RERC extends its appreciation to CBRE/Torto Wheaton Research, which contributed all of the space market information on this page.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 104 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Chicago MSA 9.7 million Chicago2 5.6% Office Chicago Growth1 1.03% Illinois2 5.7% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate   Household Income & Value Industrial Per Capita Income $31,498 2007 Households 3.5 million Size-Weighted Average PPSF   1-year Job Growth 0.90% Household Growth 0.99% Weighted Average Cap Rate   1-year Job Additions 40,300 Median Home Price $252,751 Major Employers Retail Deloitte Size-Weighted Average PPSF   Exelon Corp. Weighted Average Cap Rate   University of Chicago Apartment Northern Trust Bank FSB Size-Weighted Average PPU   Chicago CNA Financial Corp. Weighted Average Cap Rate   Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Chicago Region – 2007” ©2007 NATIONAL ASSOCIATION Hotel OF REALTORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form (electronic media included) is prohibited without written permission. Size-Weighted Average PPU   1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Weighted Average Cap Rate   Noteworthy Transactions Sale Date Sale Price Sq. Ft./Units PPSF/PPU Metro Cap Rate Comparison* Current Quarter Office Office UBS Tower 2-08 $540,000,000 1,250,000 $432 vs. Midwest Region  SBC 1-08 $276,000,000 800,000 $345 vs. Nation  Industrial Industrial O’Hare Logistics Center 1-08 $22,200,000 188,160 $118 222-230 Sivert Court 2-08 $13,100,000 187,200 $70 vs. Midwest Region  Retail vs. Nation  Westfield North Bridge 1-08 $515,000,000 680,933 $756 Retail 730 N. Michigan Ave. 1-08 $350,000,000 217,000 $1,613 vs. Midwest Region  Apartment vs. Nation  Belmont House 1-08 $56,000,000 269 $208,178 Apartment Park Evanston 1-08 $100,000,000 283 $353,357 vs. Midwest Region  Hotel James Hotel 1-08 $124,866,667 297 $420,426 vs. Nation  Marriot Medical District 2-08 $25,043,093 113 $221,620 Hotel Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. vs. Midwest Region  Market Construction/Redevelopment Activity vs. Nation  Property New(N)/ Total Sq. Estimated *Comparison of current quarter weighted average capitalization rates. Type Refurbished(R) Ft./Units Delivery Source: RERC. IKEA Distribution Center Industrial N 650,000 2009 208 S. LaSalle Hotel R 610 2010 Jewish Federation Building Hotel N 241 Fall 2008 155 N. Wacker Drive Office N 1,100,000 2009 Sunrise of Lombard Multifamily N 140 2009 Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 105 Quarterly Chicago Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $224 $629 $557 $260 $42 Size Weighted Avg. ($ per sf/unit) $114 $53 $135 $66,192 $32,168 Price Weighted Avg. ($ per sf/unit) $175 $75 $225 $80,162 $37,065 Chicago Median ($ per sf/unit) $121 $63 $142 $65,401 $31,563 > $5 Million Volume (Mil) $7,834 $2,230 $3,715 $2,123 $2,806 Size Weighted Avg. ($ per sf/unit) $206 $62 $239 $128,272 $252,046 Price Weighted Avg. ($ per sf/unit) $252 $89 $447 $191,127 $770,766 Median ($ per sf/unit) $165 $63 $191 $102,834 $109,233 All Transactions Volume (Mil) $8,058 $2,859 $4,271 $2,383 $2,848 Size Weighted Avg. ($ per sf/unit) $202 $60 $218 $116,363 $229,137 Price Weighted Avg. ($ per sf/unit) $250 $86 $418 $179,017 $760,034 Median ($ per sf/unit) $150 $63 $163 $71,181 $107,085 Capitalization Rates (All Transactions) Weighted Average (%) 6.1 7.2 5.7 5.7 7.2 Median (%) 6.7 7.2 6.9 5.8 8.2 Source: RERC.

Historical Median Price per Unit Footnotes: (12 month trailing) – APARTMENT 1The property at 1 North Wacker sold for 2 $432/sf and that at 225 W. Randolph St. sold for $345/sf, raising the average and median prices. 2This sharp increase is due in part to the sale of the apartment building at 345 E. Ohio St., which sold for $440,748/unit.

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 106 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Cincinnati MSA 2.1 million Cincinnati2 5.2% Office Cincinnati Growth1 0.84% Ohio2 6.1% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Industrial Household Income & Value Size-Weighted Average PPSF   Per Capita Income $29,902 2007 Households 833,000 Weighted Average Cap Rate –  1-year Job Growth 0.10% Household Growth 0.92% Retail 1-year Job Additions 1,500 Median Home Price $149,375 Major Employers Size-Weighted Average PPSF   Procter & Gamble Co. Weighted Average Cap Rate =  University of Cincinnati Apartment GE Aviation Size-Weighted Average PPU   Valentine Research Inc. Hotel RJS Sales & Marketing Size-Weighted Average PPU  – Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Cincinnati Region – 2007” ©2007 NATIONAL ASSOCIA- TION OF REALTORS®. Used with permission. Reproduction, reprinting, or retransmission of this Metro Cap Rate Comparison* Current Quarter document in any form (electronic media included) is prohibited without written permission. 1 2 CincinnatiProjected annual growth over 5 years (2007-2012). Rates are non-seasonally adjusted. Industrial Noteworthy Transactions vs. Midwest Region = Sale Date Sale Price Sq. Ft./Units PPSF/PPU vs. Nation  Office Retail Ridgewood Corporate 1-08 $13,000,000 196,055 $66 Center vs. Midwest Region  Liberty Falls Medical Plaza 3-08 $8,100,000 44,000 $184 vs. Nation  Industrial *Comparison of current quarter weighted average capitalization rates. 8752 Jacquemin Drive 1-08 $15,300,000 394,480 $39 Source: RERC. 401 Fujitec Drive 3-08 $16,000,000 225,000 $71 Retail Dillards at W. Towne Center 2-08 $9,100,000 178,400 $51 Houston Lakes 1-08 $5,400,000 73,145 $74 Apartment Charleston at Blue Ash 1-08 $23,000,000 242 $95,041 Hawk’s Landing 2-08 $12,900,000 122 $105,738 Hotel 4501 Eastgate Blvd. 2-08 $3,250,000 237 $13,713 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery 540 MW Lima Energy Industrial N 75,000 Late 2008 Queen City Square Tower Office N 825,000 2011 Summer ProLogis Park 275 Industrial N 415,000 2008 300,000 Office The Banks Mixed Use N 70,000 Retail 2010 400-unit Mult. Sources: CBRE, RE Business. Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 107 Quarterly Cincinnati Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $31 $91 $54 $63 – Size Weighted Avg. ($ per sf/unit) $79 $38 $99 $25,883 – Price Weighted Avg. ($ per sf/unit) $115 $49 $176 $29,793 – Cincinnati Median ($ per sf/unit) $78 $41 $80 $26,563 – > $5 Million Volume (Mil) $91 $313 $174 $194 $337 Size Weighted Avg. ($ per sf/unit) $105 $50 $120 $53,876 $126,781 Price Weighted Avg. ($ per sf/unit) $119 $60 $147 $60,760 $149,708 Median ($ per sf/unit) $120 $56 $143 $54,741 $103,112 All Transactions Volume (Mil) $122 $404 $227 $258 $347 Size Weighted Avg. ($ per sf/unit) $97 $47 $114 $42,551 $108,924 Price Weighted Avg. ($ per sf/unit) $118 $58 $154 $53,140 $146,091 Median ($ per sf/unit) $85 $45 $106 $29,130 $103,065 Capitalization Rates (All Transactions) Weighted Average (%) – 7.7 6.7 – – Median (%) – 7.8 6.7 – – Source: RERC.

Historical Median Price per Unit Footnotes: (12 month trailing) – APARTMENT 1One retail property sold for $303/sf, well above the median price of $106.

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 108 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Cleveland MSA 2.2 million Cleveland2 6.3% Office Cleveland Growth1 0.05% Ohio2 6.1% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate =  Household Income & Value Industrial Per Capita Income $28,763 2007 Households 866,000 Size-Weighted Average PPSF   1-year Job Growth – Household Growth 0.15% Weighted Average Cap Rate = = 1-year Job Additions – Median Home Price $147,596 Major Employers Retail Cleveland Clinic Foundation Size-Weighted Average PPSF   University Hospital of Cleveland Apartment Key Bank Size-Weighted Average PPU   Progressive Corp. Weighted Average Cap Rate   Money Mart Facsimile Express Hotel Sources: Bureau of Labor Statistics, NAR, STDB Online. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Size-Weighted Average PPU  

Cleveland Noteworthy Transactions Metro Cap Rate Comparison* Current Quarter Sale Date Sale Price Sq. Ft./Units PPSF/PPU Office Office North Point Tower 2-08 $114,100,000 1,000,000 $114 vs. Midwest Region  55 Public Square 1-08 $45,000,000 425,000 $106 vs. Nation  Retail Industrial Madison Square 1-08 $5,800,000 124,167 $47 vs. Midwest Region  CVS 3-08 $7,400,000 47,738 $155 vs. Nation  Apartment Apartment Richmond Park 1-08 $25,620,000 736 $34,810 Hillwood II 2-08 $17,800,000 240 $74,167 vs. Midwest Region  Hotel vs. Nation  Embassy Suites 2-08 $47,869,983 216 $221,620 *Comparison of current quarter weighted average capitalization rates. Source: RERC. Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Estancia Executive Office N 90,000 2009 Center Phase III The Plaza at Retail N 300,000 N/A SouthPark The Sun Life Bldg. Industrial N 583,000 N/A Bridgeview Commons Retail N 558,000 N/A Avon Crossing Retail N 270,000 N/A Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 109 Quarterly Cleveland Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $91 $155 $112 $58 – Size Weighted Avg. ($ per sf/unit) $66 $37 $84 $37,587 – Price Weighted Avg. ($ per sf/unit) $97 $50 $135 $43,934 – Cleveland Median ($ per sf/unit) $69 $39 $72 $35,714 – > $5 Million Volume (Mil) $665 $288 $164 $195 $421 Size Weighted Avg. ($ per sf/unit) $116 $60 $125 $50,967 $109,832 Price Weighted Avg. ($ per sf/unit) $119 $80 $136 $66,080 $163,552 Median ($ per sf/unit) $120 $62 $128 $43,518 $86,026 All Transactions Volume (Mil) $756 $443 $276 $253 $423 Size Weighted Avg. ($ per sf/unit) $106 $49 $104 $47,120 $107,911 Price Weighted Avg. ($ per sf/unit) $116 $69 $135 $61,001 $162,764 Median ($ per sf/unit) $84 $42 $81 $38,307 $82,561 Capitalization Rates (All Transactions) Weighted Average (%) 8.0 7.2 – 6.8 – Median (%) 8.3 7.4 – 7.7 – Source: RERC.

Historical Median Price per Unit (12 month trailing) – APARTMENT

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 110 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Columbus MSA 1.8 million Columbus2 4.9% Office Columbus Growth1 1.46% Ohio2 6.1% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Industrial Household Income & Value Size-Weighted Average PPSF   Per Capita Income $29,785 2007 Households 710,000 Retail 1-year Job Growth 0.60% Household Growth 1.54% Size-Weighted Average PPSF   1-year Job Additions 6,000 Median Home Price $156,003 Major Employers Apartment Ohio State University Size-Weighted Average PPU   State of Ohio Department of Corrections Weighted Average Cap Rate   Riverside Methodist Hospital Hotel Defense Supply Center Size-Weighted Average PPU   Hines Interest LTD Partnership * Sources: Bureau of Labor Statistics, NAR, STDB Online. Metro Cap Rate Comparison Current Quarter “Home Price Analysis Report for Columbus Region – 2007” ©2007 NATIONAL ASSOCIA- ColumbusTION OF REALTORS®. Used with permission. Reproduction, reprinting, or retransmission of this Apartment document in any form (electronic media included) is prohibited without written permission. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. vs. Midwest Region  Noteworthy Transactions vs. Nation  Sale Date Sale Price Sq. Ft./Units PPSF/PPU *Comparison of current quarter weighted average capitalization rates. Source: RERC. Office OSU Physicians Center 1-08 $16,000,000 109,000 $147 4653 E. Main St. 2-08 $14,000,000 259,046 $54 Industrial 1525 Industrial Drive 2-08 $1,195,000 35,120 $34 6000 Green Pointe Road 1-08 $19,100,000 612,452 $31 Retail 1611 Polaris Parkway 2-08 $1,650,000 6,171 $267 Apartment Sycamore Ridge 2-08 $24,600,000 270 $91,111 Britton Woods 3-08 $28,700,000 352 $81,534 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Franklin County Office N 325,000 2010 Courthouse 2842 Spiegel Drive Industrial N 936,000 N/A Rickenbacker Industrial N 407,000 N/A Parkway Building Albany Park Retail N 300,000 2009 Westerville Medical Office N 165,000 Mid-2008 Campus Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 111 Quarterly Columbus Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $86 $87 $96 $47 $36 Size Weighted Avg. ($ per sf/unit) $80 $43 $118 $25,302 $39,745 Price Weighted Avg. ($ per sf/unit) $122 $58 $201 $32,442 $44,450 Columbus Median ($ per sf/unit) $105 $45 $99 $30,938 $41,549 > $5 Million Volume (Mil) $284 $180 $219 $590 $232 Size Weighted Avg. ($ per sf/unit) $114 $35 $121 $54,415 $86,448 Price Weighted Avg. ($ per sf/unit) $138 $39 $140 $61,567 $112,879 Median ($ per sf/unit) $136 $38 $128 $64,976 $78,971 All Transactions Volume (Mil) $370 $266 $316 $637 $268 Size Weighted Avg. ($ per sf/unit) $104 $37 $120 $50,169 $74,555 Price Weighted Avg. ($ per sf/unit) $134 $45 $158 $59,425 $103,589 Median ($ per sf/unit) $111 $41 $103 $41,000 $61,667 Capitalization Rates (All Transactions) Weighted Average (%) – – – 6.8 – Median (%) – – – 7.2 – Source: RERC.

Historical Median Price per Square Foot Historical Median Price per Square Foot (12 month trailing) – INDUSTRIAL (12 month trailing) – RETAIL

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 112 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Detroit MSA 4.6 million Detroit2 8.1% Office Detroit Growth1 0.26% Michigan2 7.9% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Industrial Household Income & Value Size-Weighted Average PPSF   Per Capita Income $31,352 2007 Households 1.8 million Weighted Average Cap Rate   1-year Job Growth – Household Growth 0.36% Retail 1-year Job Additions – Median Home Price $161,717 Major Employers Size-Weighted Average PPSF   DTE Energy Co. Weighted Average Cap Rate   Detroit General Motors Corp. Apartment MotorCity Casino Size-Weighted Average PPU   Rehabilitation Institute of Michigan Weighted Average Cap Rate   Compuware Corp. Hotel Sources: Bureau of Labor Statistics, NAR, STDB Online. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Size-Weighted Average PPU   Noteworthy Transactions Metro Cap Rate Comparison* Current Quarter Sale Date Sale Price Sq. Ft./Units PPSF/PPU Office Industrial ThyssenKrupp vs. Midwest Region  3-08 $15,400,000 64,607 $238 Materials HQ vs. Nation  Daimler Chrysler 2-08 $8,400,000 54,250 $155 Retail Industrial vs. Midwest Region  3200 Cross Creek 1-08 $5,600,000 30,060 $186 Parkway vs. Nation  150 Stephenson Highway 2-08 $8,767,470 103,253 $85 Apartment Retail vs. Midwest Region  35103 Grand River Ave. 1-08 $5,000,000 38,600 $130 vs. Nation  125 W. William St. 2-08 $1,800,000 9,494 $190 *Comparison of current quarter weighted average capitalization rates. Apartment Source: RERC. Willowtree 2-08 $33,010,883 312 $105,804 New King St. Tower Drive 1-08 $42,900,000 1,135 $37,797 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery MotorCity Casino Retail R 45,000 Mid-2008 Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 113 Quarterly Detroit Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $66 $100 $72 $42 $24 Size Weighted Avg. ($ per sf/unit) $99 $40 $115 $29,179 $31,527 Price Weighted Avg. ($ per sf/unit) $129 $73 $197 $35,029 $33,849 Detroit Median ($ per sf/unit) $108 $46 $102 $36,206 $30,202 > $5 Million Volume (Mil) $550 $419 $269 $418 $274 Size Weighted Avg. ($ per sf/unit) $83 $73 $146 $55,806 $95,569 Price Weighted Avg. ($ per sf/unit) $119 $97 $168 $67,293 $101,695 Median ($ per sf/unit) $98 $72 $178 $59,170 $99,027 All Transactions Volume (Mil) $616 $520 $341 $460 $299 Size Weighted Avg. ($ per sf/unit) $84 $63 $138 $51,494 $81,935 Price Weighted Avg. ($ per sf/unit) $120 $92 $174 $64,333 $96,137 Median ($ per sf/unit) $105 $51 $112 $42,639 $76,982 Capitalization Rates (All Transactions) Weighted Average (%) – 8.2 7.7 7.1 – Median (%) – 8.7 7.3 7.2 – Source: RERC.

Historical Median Price per Square Foot Historical Median Price per Square Foot (12 month trailing) – OFFICE (12 month trailing) – INDUSTRIAL

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 114 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Indianapolis MSA 1.7 million Indianapolis2 4.8% Office Indianapolis Growth1 1.63% Indiana2 5.6% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Industrial Household Income & Value Size-Weighted Average PPSF   Per Capita Income $30,942 2007 Households 673,000 Retail 1-year Job Growth 1.60% Household Growth 1.68% Size-Weighted Average PPSF   1-year Job Additions 14,600 Median Home Price $143,711 Major Employers Apartment Eli Lilly & Co. Size-Weighted Average PPU   Peyton Manning Children’s Hospital Weighted Average Cap Rate =  Indiana University Hotel Indy Honda Size-Weighted Average PPU   Rolls-Royce Corp. * Sources: Bureau of Labor Statistics, NAR, STDB Online. Metro Cap Rate Comparison Current Quarter “Home Price Analysis Report for Indianapolis Region – 2007” ©2007 NATIONAL ASSOCIA- TION OF REALTORS®. Used with permission. Reproduction, reprinting, or retransmission of this Apartment document in any form (electronic media included) is prohibited without written permission. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. vs. Midwest Region  Noteworthy Transactions vs. Nation 

Indianapolis Sale Date Sale Price Sq. Ft./Units PPSF/PPU Hotel Office vs. Midwest Region  Indiana Plaza 1-08 $36,000,000 423,107 $85 vs. Nation  One & Two Park Fletcher 3-08 $13,100,000 164,325 $80 *Comparison of current quarter weighted average capitalization rates. Industrial Source: RERC. Rockville Business Center 2-08 $15,600,000 632,054 $25 AmeriCold 3-08 $23,200,000 427,159 $54 Retail Rivers Edge Shopping 2-08 $18,300,000 110,896 $165 Center Southport Plaza 1-08 $20,100,000 85,062 $236 Apartment Bristol 2-08 $15,700,000 211 $74,408 Hotel Adams Mark 2-08 $77,000,000 406 $189,655 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Ralston Square Mixed Use N 41,000 2009 Prime Distribution Industrial N 1,200,000 N/A SMC Corporation of Industrial N 668,000 N/A America Cosmopolitan on the Multifamily N 218 N/A Canal 70 W. Commerce Park Industrial N 2,000,000 N/A Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 115 Quarterly Indianapolis Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $13 $8 $18 – – Size Weighted Avg. ($ per sf/unit) $45 $33 $108 – – Indianapolis Price Weighted Avg. ($ per sf/unit) $78 $37 $171 – – Median ($ per sf/unit) $94 $37 $68 – – > $5 Million Volume (Mil) $270 $85 $51 $303 $151 Size Weighted Avg. ($ per sf/unit) $106 $40 $76 $62,274 $116,546 Price Weighted Avg. ($ per sf/unit) $110 $48 $113 $73,923 $148,425 Median ($ per sf/unit) $104 $44 $102 $71,725 $102,056 All Transactions Volume (Mil) $283 $94 $69 $306 $164 Size Weighted Avg. ($ per sf/unit) $99 $39 $82 $61,873 $99,018 Price Weighted Avg. ($ per sf/unit) $108 $47 $128 $73,657 $139,583 Median ($ per sf/unit) $97 $42 $85 $71,725 $81,266 Capitalization Rates (All Transactions) Weighted Average (%) – – – 6.4 7.4 Median (%) – – – 7.2 9.0 Source: RERC.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 116 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Kansas City MSA 2 million Kansas City2 5.5% Office Kansas City Growth1 1.20% Missouri2 6.1% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate  = Household Income & Value Industrial Per Capita Income $30,026 2007 Households 786,000 Size-Weighted Average PPSF   1-year Job Growth 2.10% Household Growth 1.25% Retail 1-year Job Additions 20,400 Median Home Price $148,450 Major Employers Size-Weighted Average PPSF   Hallmark Cards Inc. Apartment Kansas City City Hall Size-Weighted Average PPU   U.S. Health & Human Services Department Weighted Average Cap Rate   University of Missouri-Kansas (UMKC) Hotel DST Technologies Size-Weighted Average PPU   Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Kansas City Region – 2007” ©2007 NATIONAL ASSOCIA- * TION OF REALTORS®. Used with permission. Reproduction, reprinting, or retransmission of this Metro Cap Rate Comparison Current Quarter document in any form (electronic media included) is prohibited without written permission. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Office

Kansas City Noteworthy Transactions vs. Midwest Region  Sale Date Sale Price Sq. Ft./Units PPSF/PPU vs. Nation  Office Apartment 2555 Grand Blvd. 2-08 $155,800,000 595,607 $262 vs. Midwest Region  Doctor’s Medical Building 2-08 $13,600,000 63,000 $216 vs. Nation  Industrial *Comparison of current quarter weighted average capitalization rates. Best Brands 3-08 $14,400,000 150,000 $96 Source: RERC. Metro Kansas City 1-08 $15,000,000 253,440 $59 Distribution Retail 800 Broadway Blvd. 2-08 $3,900,000 31,200 $125 1301-1667 NE Douglas St. 3-08 $12,300,000 59,436 $207 Apartment 819 E. 42nd St. 2-08 $339,000 12 $28,250 Hotel Residence Inn 2-08 $10,700,000 90 $118,889 SpringHill Suites by Marriott 3-08 $9,400,000 102 $92,157 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery 167th St. and Lone Industrial N 592,000 Fall 2008 Elm Road Corporate Woods Office N 350,000 2009 Building 83 Corbin Park Retail N 1,100,000 Fall 2008 Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 117 Quarterly Kansas City Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $34 $89 $151 $37 $20 Size Weighted Avg. ($ per sf/unit) $94 $37 $93 $31,458 $40,185 Kansas City Price Weighted Avg. ($ per sf/unit) $137 $77 $168 $35,492 $44,129 Median ($ per sf/unit) $83 $50 $86 $31,061 $37,202 > $5 Million Volume (Mil) $737 $209 $284 $237 $281 Size Weighted Avg. ($ per sf/unit) $151 $110 $171 $63,420 $100,554 Price Weighted Avg. ($ per sf/unit) $170 $131 $186 $71,995 $123,873 Median ($ per sf/unit) $134 $61 $177 $46,377 $106,357 All Transactions Volume (Mil) $771 $298 $436 $273 $301 Size Weighted Avg. ($ per sf/unit) $147 $69 $133 $55,803 $91,549 Price Weighted Avg. ($ per sf/unit) $169 $115 $180 $67,091 $118,652 Median ($ per sf/unit) $120 $54 $97 $37,781 $84,802 Capitalization Rates (All Transactions) Weighted Average (%) 7.1 – – 7.0 – Median (%) 7.3 – – 7.2 – Source: RERC.

Historical Median Price per Unit Footnotes: (12 month trailing) – APARTMENT 1The substantial increase in median price is due in part to the sale of the property at 2555 Grand Blvd., which sold for $262/sf.

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 118 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Milwaukee MSA 1.5 million Milwaukee2 5.4% Office Milwaukee Growth1 0.27% Wisconsin2 5.6% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate   Household Income & Value Industrial Per Capita Income $30,635 2007 Households 615,000 Size-Weighted Average PPSF   1-year Job Growth 1.50% Household Growth 0.43% Retail 1-year Job Additions 12,800 Median Home Price $209,602 Major Employers Size-Weighted Average PPSF   University of Wisconsin Weighted Average Cap Rate =  General Mitchell International-Milwaukee Apartment Northern Chocolate Co. Size-Weighted Average PPU   Northwestern Mutual Investment Hotel Rockwell Automation Inc. Size-Weighted Average PPU  – Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Milwaukee Region – 2007” ©2007 NATIONAL ASSOCIA- * TION OF REALTORS®. Used with permission. Reproduction, reprinting, or retransmission of this Metro Cap Rate Comparison Current Quarter document in any form (electronic media included) is prohibited without written permission.

Milwaukee1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Office Noteworthy Transactions vs. Midwest Region  Sale Date Sale Price Sq. Ft./Units PPSF/PPU vs. Nation  Office Retail 310 E. Knapp 2-08 $14,800,000 57,000 $260 vs. Midwest Region  Park Place 3-08 $16,000,000 229,586 $70 vs. Nation  Industrial *Comparison of current quarter weighted average capitalization rates. 4410 N. 132nd St. 3-08 $5,500,000 100,000 $55 Source: RERC. 1200 W. Sunset Drive 2-08 $11,300,000 599,939 $19 Retail 801 Layton Ave. 2-08 $4,200,000 28,119 $149 10855 W. Park Place 2-08 $3,375,000 21,901 $154 Apartment 700 E. Stonegate Drive 1-08 $5,900,000 65 $90,769 Meadowmere Northshore 1-08 $9,200,000 60 $153,333 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Pabst Farms Town Retail N 1,000,000 2010 Centre 1200 W. Sunset Dr. Retail N 4,500,000 2009 Liberty Corporate Industrial N 240,000 N/A Preserve Staybridge Suites Multifamily N 31 N/A Hyatt Summerfield Hotel N 102 N/A Suites Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 119 Quarterly Milwaukee Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $41 $92 $92 $41 – Size Weighted Avg. ($ per sf/unit) $71 $41 $89 $49,768 – Price Weighted Avg. ($ per sf/unit) $87 $53 $162 $56,819 – Milwaukee Median ($ per sf/unit) $73 $49 $72 $49,000 – > $5 Million Volume (Mil) $372 $193 $119 $154 $126 Size Weighted Avg. ($ per sf/unit) $124 $39 $153 $92,030 $92,410 Price Weighted Avg. ($ per sf/unit) $150 $60 $202 $121,484 $98,888 Median ($ per sf/unit) $114 $39 $211 $102,041 $80,667 All Transactions Volume (Mil) $413 $285 $211 $195 $129 Size Weighted Avg. ($ per sf/unit) $116 $40 $117 $78,027 $88,988 Price Weighted Avg. ($ per sf/unit) $144 $58 $185 $107,818 $97,430 Median ($ per sf/unit) $87 $47 $82 $52,544 $80,667 Capitalization Rates (All Transactions) Weighted Average (%) 7.4 – 7.0 – – Median (%) 7.8 – 7.0 – – Source: RERC.

Historical Median Price per Unit Footnotes: (12 month trailing) – APARTMENT 1This sharp increase is due in part to the sale of the property at 2920 E. Hampshire 1 Ave., which sold for $95,000/unit.

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 120 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Minneapolis MSA 3.3 million Minneapolis2 4.8% Office Minneapolis Growth1 1.55% Minnesota2 5.4% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate = – Household Income & Value Industrial Per Capita Income $35,445 2007 Households 1.3 million Size-Weighted Average PPSF   1-year Job Growth 0.90% Household Growth 1.59% Retail 1-year Job Additions 15,700 Median Home Price $242,442 Major Employers Size-Weighted Average PPSF   University of Minnesota Weighted Average Cap Rate  – Fairview University Medical Center Apartment UPS Size-Weighted Average PPU   Target Stores Inc. Weighted Average Cap Rate =  Best Buy Company Inc. Hotel Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Minneapolis Region – 2007” ©2007 NATIONAL ASSOCIA- Size-Weighted Average PPU   TION OF REALTORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form (electronic media included) is prohibited without written permission. Metro Cap Rate Comparison* Current Quarter 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Noteworthy Transactions Office Sale Date Sale Price Sq. Ft./Units PPSF/PPU vs. Midwest Region  Minneapolis Office vs. Nation  Reliastar Complex 1-08 $124,174,000 987,855 $126 Retail 800 Washington Ave. N. 1-08 $26,772,000 346,000 $77 vs. Midwest Region  Industrial vs. Nation  3000 Broadway St. NE 2-08 $4,750,000 40,990 $116 Excelsior Crossings Phase 1 1-08 $50,200,000 250,000 $201 Apartment Retail vs. Midwest Region  Victor Marketplace 1-08 $11,800,000 69,433 $170 vs. Nation 

14075-14151 Hwy. 13 3-08 $14,100,000 87,181 $162 *Comparison of current quarter weighted average capitalization rates. Source: RERC. Apartment Grandmarc at Seven Corners 2-08 $19,679,565 186 $105,804 Cosmoplitan Apartment 1-08 $23,600,000 256 $92,188 Hotel Country Inn & Suites 1-08 $6,100,000 90 $67,778 Best Western Bandana 2-08 $6,500,000 110 $59,091 Square Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery The Manning Ave. Project Mixed Use N 25,264,486 2030 Maple Grove Retail N 550,000 N/A Plaza 15 Mixed Use N 220 Units N/A Excelsior Crossings in Hopkins Office N 450,000 Fall 2008 AMB Distribution Center Industrial N 154,000 N/A Sources: CBRE, RE Business. Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 121 Quarterly Minneapolis Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $115 $187 $160 $35 $18 Size Weighted Avg. ($ per sf/unit) $100 $56 $90 $60,015 $29,883 Minneapolis Price Weighted Avg. ($ per sf/unit) $135 $79 $150 $73,073 $33,439 Median ($ per sf/unit) $113 $58 $77 $52,941 $33,020 > $5 Million Volume (Mil) $1,927 $356 $233 $327 $176 Size Weighted Avg. ($ per sf/unit) $125 $63 $134 $79,303 $130,394 Price Weighted Avg. ($ per sf/unit) $140 $90 $188 $89,555 $173,376 Median ($ per sf/unit) $133 $68 $133 $78,472 $101,420 All Transactions Volume (Mil) $2,042 $542 $393 $362 $194 Size Weighted Avg. ($ per sf/unit) $124 $60 $112 $76,909 $99,325 Price Weighted Avg. ($ per sf/unit) $139 $86 $172 $87,959 $160,362 Median ($ per sf/unit) $127 $58 $88 $65,708 $63,263 Capitalization Rates (All Transactions) Weighted Average (%) 6.8 – 7.0 6.6 – Median (%) 7.6 – 6.8 6.9 – Source: RERC.

Historical Median Price per Square Foot Historical Median Price per Square Foot (12 month trailing) – INDUSTRIAL (12 month trailing) – RETAIL

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 122 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Omaha MSA 843,000 Omaha2 3.6% Office Omaha Growth1 1.37% Nebraska2 3.2% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Industrial Household Income & Value Size-Weighted Average PPSF   Per Capita Income $28,096 2007 Households 327,000 Retail 1-year Job Growth – Household Growth 1.47% Size-Weighted Average PPSF   1-year Job Additions – Median Home Price $135,634 Major Employers Apartment First Data Resources Inc. Size-Weighted Average PPU  

Mutual of Omaha Insurance Co. Source: RERC.

Omaha Con Agra Foods Inc. Union Pacific Railroad Co. Oriental Trading Co. Inc. Sources: Bureau of Labor Statistics, NAR, STDB Online. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Noteworthy Transactions Sale Date Sale Price Sq. Ft./Units PPSF/PPU Industrial 10101 J. St. 2-08 $415,000 7,440 $56 Retail 2340 Paul St. 2-08 $1,100,000 10,442 $105 14304 W. Maple Road 3-08 $8,300,000 70,032 $119 Apartment Brandeis Lofts 3-08 $15,400,000 140 $110,000 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Midtown Crossing at Mixed Use N 1,000,000 2009 Turner Park ACI Worldwide Office N 160,000 N/A Coventry Insurance Office N 90,000 N/A Aksarben Village Office N 154,000 N/A Ameriprise Office N 86,000 N/A Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 123 Quarterly Omaha Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $19 $35 $53 $18 – Size Weighted Avg. ($ per sf/unit) $58 $42 $82 $49,624 – Price Weighted Avg. ($ per sf/unit) $91 $60 $219 $59,847 – Omaha Median ($ per sf/unit) $56 $47 $109 $42,500 – > $5 Million Volume (Mil) $170 – – $178 – Size Weighted Avg. ($ per sf/unit) $92 – – $72,362 – Price Weighted Avg. ($ per sf/unit) $131 – – $80,428 – Median ($ per sf/unit) $101 – – $78,788 – All Transactions Volume (Mil) $190 $64 $65 $197 – Size Weighted Avg. ($ per sf/unit) $87 $45 $88 $69,386 – Price Weighted Avg. ($ per sf/unit) $126 $70 $202 $78,502 – Median ($ per sf/unit) $84 $49 $111 $45,619 – Capitalization Rates (All Transactions) Weighted Average (%) – – – – – Median (%) – – – – – Source: RERC.

Historical Median Price per Square Foot Footnotes: (12 month trailing) – RETAIL 1This large spike was due to three property sales, each for over $500/sf. 1 Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 124 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year St. Louis MSA 2.8 million St. Louis2 6.4% Office St. Louis Growth1 0.77% Missouri2 6.1% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Industrial Household Income & Value Size-Weighted Average PPSF   Per Capita Income $28,844 2007 Households 1.1 million Retail 1-year Job Growth 1.30% Household Growth 0.85% Size-Weighted Average PPSF   1-year Job Additions 18,000 Median Home Price $148,988 Major Employers Apartment St. Louis University Size-Weighted Average PPU   U.S. Post Office Hotel

St. Louis Anheuser-Busch Co. Inc. Size-Weighted Average PPU   ABM Industries Weighted Average Cap Rate  – A. G. Edwards & Sons Inc. * Sources: Bureau of Labor Statistics, NAR, STDB Online. Metro Cap Rate Comparison Current Quarter “Home Price Analysis Report for St. Louis Region – 2007” ©2007 NATIONAL ASSOCIATION OF REAL- TORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form Hotel (electronic media included) is prohibited without written permission. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. vs. Midwest Region  Noteworthy Transactions vs. Nation  Sale Date Sale Price Sq. Ft./Units PPSF/PPU *Comparison of current quarter weighted average capitalization rates. Source: RERC. Office Old Town Executive 1-08 $33,700,000 185,973 $181 Offices United Health 2-08 $31,800,000 188,500 $169 Industrial 1203 Ambassador Blvd. 2-08 $1,660,000 33,245 $50 Keefe Supply Co. 3-08 $8,300,000 171,637 $48 Retail 31-35 N. Gore 2-08 $1,700,000 11,000 $155 Hilltop Plaza 2-08 $23,200,000 302,921 $77 Apartment Village Green 1-08 $20,000,000 252 $79,365 The Vinnings of Bordeaux 3-08 $8,300,000 93 $89,247 Hotel Adams Mark 2-08 $71,000,000 910 $78,022 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery 75,000 sf & Lemp Brewery Complex Mixed Use R 2012 400 Units University Center Mixed Use N 115,880 2008 6177 Delmar Blvd. Hotel N 124 2009 Villa Lighting Warehouse Industrial N 206,288 2009 Wal-Mart Supercenter Retail R 190,617 2008 Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 125 Quarterly St. Louis Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $58 $144 $102 $42 $20 Size Weighted Avg. ($ per sf/unit) $83 $49 $113 $31,803 $46,106 Price Weighted Avg. ($ per sf/unit) $126 $76 $163 $38,717 $48,961 St. Louis Median ($ per sf/unit) $87 $56 $107 $35,750 $50,000 > $5 Million Volume (Mil) $1,390 $344 $888 $137 $280 Size Weighted Avg. ($ per sf/unit) $134 $54 $196 $61,941 $97,318 Price Weighted Avg. ($ per sf/unit) $157 $69 $210 $67,617 $118,163 Median ($ per sf/unit) $152 $53 $161 $68,512 $80,886 All Transactions Volume (Mil) $1,448 $488 $990 $179 $301 Size Weighted Avg. ($ per sf/unit) $131 $52 $182 $50,666 $90,493 Price Weighted Avg. ($ per sf/unit) $156 $71 $206 $60,830 $113,464 Median ($ per sf/unit) $124 $54 $111 $37,042 $72,059 Capitalization Rates (All Transactions) Weighted Average (%) – – – – 9.4 Median (%) – – – – 8.9 Source: RERC.

Historical Median Price per Unit (12 month trailing) – APARTMENT

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 126 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Toledo MSA 667,000 Toledo2 7.2% Office Toledo Growth1 0.15% Ohio2 6.1% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Industrial Household Income & Value Size-Weighted Average PPSF   Per Capita Income $26,105 2007 Households 267,000 Retail 1-year Job Growth – Household Growth 0.30% Size-Weighted Average PPSF   1-year Job Additions – Median Home Price $119,364 Major Employers Apartment St. Vincent Mercy Medical Center Size-Weighted Average PPU   Toledo Toledo Hospital Hotel Bowling Green State University Size-Weighted Average PPU  – Daimler Chrysler Corp. Source: RERC. University of Toledo Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Toledo Region – 2007” ©2007 NATIONAL ASSOCIATION OF REAL- TORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form (electronic media included) is prohibited without written permission. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Noteworthy Transactions Sale Date Sale Price Sq. Ft./Units PPSF/PPU Office 3242 Executive Parkway 2-08 $1,550,000 16,380 $95 1730 Holloway Road 1-08 $6,700,000 8,741 $767 Retail Toledo Neighborhood 1-08 $2,250,000 85,829 $26 Center Apartment University Enclave 2-08 $12,700,000 120 $105,833 The Cloisters 3-08 $24,800,000 506 $49,012 Hotel Studio 6 1-08 $5,800,000 96 $60,417 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Fed Ex Hub- Industrial N 400,000 2009 Perrysburg Township GM Powertrain Industrial N 400,000 2009 Facility Menards Retail N 240,000 2008 Bass Pro Shop Retail N 150,000 2008 Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 127 Quarterly Toledo Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $17 $13 $24 $17 $14 Size Weighted Avg. ($ per sf/unit) $75 $36 $81 $34,636 $36,921 Price Weighted Avg. ($ per sf/unit) $86 $45 $126 $37,151 $39,740 Toledo Median ($ per sf/unit) $74 $32 $81 $31,568 $39,441 > $5 Million Volume (Mil) $101 – – $80 – Size Weighted Avg. ($ per sf/unit) $66 – – $68,535 – Price Weighted Avg. ($ per sf/unit) $111 – – $76,241 – Median ($ per sf/unit) $94 – – $68,097 – All Transactions Volume (Mil) $118 $13 $24 $96 $40 Size Weighted Avg. ($ per sf/unit) $67 $36 $81 $58,687 $49,177 Price Weighted Avg. ($ per sf/unit) $108 $45 $126 $69,539 $53,475 Median ($ per sf/unit) $74 $32 $81 $41,735 $49,176 Capitalization Rates (All Transactions) Weighted Average (%) – – – – – Median (%) – – – – – Source: RERC.

Historical Median Price per Square Foot (12 month trailing) – OFFICE

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Historical Median Price per Unit Footnotes: (12 month trailing) – APARTMENT 1A two-part property sold for $105,804/unit, more than twice the 1 median price, contributing to this quarterly increase.

Denver • Honolulu • Las Vegas • Los Angeles • Phoenix • Portland • Sacramento Salt Lake City • San Diego • San Francisco • Seattle • Tucson WestRegionTransactionBreakdown

n CCIM Institute designees and candidates gave the West average capitalization rates and higher size-weighted av- regional economy a rating of 5.7 on a scale of 1 to 10, erage prices for all property types in the West region dur- with 10 being high, higher than the national rating of 4.4. ing first quarter 2008. Nearly 40 percent of respondents stated that they expect the West regional economy to continue to perform at a n The quarterly dollar volume of property transactions for similar level over the next year, while an equal number of all property types decreased during first quarter 2008 in respondents expect the economy to perform at a lower the West region. With the exception of hotels, the average level. weighted capitalization rate for all property types in the West region changed only slightly during first quarter 2008 n Investment conditions for commercial real estate are gen- from the previous quarter. The hotel capitalization rate, erally more competitive in the West region as compared to however, increased 60 basis points since fourth quarter the rest of the nation, as noted by overall lower weighted 2007.

Regional Transaction Price Breakdown/Tiers “Multi-family and West Transaction Breakdown (4/1/07 - 3/31/08) stand-along commercial owner/user properties Office Industrial Retail Apartment Hotel are the best investment < $2 Million opportunities.” –Seattle Volume (Mil) $932 $1,540 $1,218 $1,231 $61 $126 $93 $125 $80,644 $32,626 Size Weighted Avg. ($ per sf/unit) “Availability rates Price Weighted Avg. ($ per sf/unit) $164 $122 $166 $96,204 $39,608 have dropped to low- Median ($ per sf/unit) $134 $106 $125 $83,333 $35,628 and mid-single digits in Silicon Valley $2 - $5 Million for most warehouse Volume (Mil) $2,253 $3,069 $2,514 $2,471 $473 and industrial flex Size Weighted Avg. ($ per sf/unit) $179 $103 $202 $97,587 $51,878 properties, causing spiked rental rates and Price Weighted Avg. ($ per sf/unit) $235 $139 $293 $129,842 $65,180 sales prices.” Median ($ per sf/unit) $218 $129 $253 $119,024 $60,000 –San Francisco > $5 Million Volume (Mil) $56,652 $15,367 $12,495 $23,171 $26,209 “Commercial real Size Weighted Avg. ($ per sf/unit) $301 $112 $217 $138,636 $267,108 estate has peaked, and Price Weighted Avg. ($ per sf/unit) $390 $166 $382 $191,686 $764,176 will soften over the next year.” Median ($ per sf/unit) $261 $119 $261 $123,864 $117,226 –Honolulu All Transactions Volume (Mil) $59,838 $19,976 $16,227 $26,873 $26,743 “Net-leased restaurants Size Weighted Avg. ($ per sf/unit) $287 $109 $204 $129,370 $245,114 should be avoided. Price Weighted Avg. ($ per sf/unit) $381 $158 $352 $181,625 $750,165 As the economy has slowed, fewer Median ($ per sf/unit) $210 $116 $187 $105,804 $104,260 Americans have the Capitalization Rates (All Transactions) disposable income Range (%) 3.2 - 10.3 3.7 - 9.1 3.0 - 10.5 3.1 - 10.2 4.0 - 13.2 required to dine-out on a frequent enough basis Weighted Avg. (%) 5.4 6.2 6.2 5.5 8.1 to keep the big chains Median (%) 6.3 6.4 6.3 5.6 8.5 alive.” Source: RERC. – Denver

RERC Weighted Avg. Cap Rate - 1Q 2008 8.0% West U.S. Total 7.5% n Many CCIM Institute designees and candidates who respond- Avg. Capitalization Rate ed to the first quarter 2008 investment survey stated the West 7.0% regional office sector offers poor investment opportunities for 6.5% the coming year when compared to other property sectors due to high vacancies in this property sector, overbuilding of 6.0% CBD office, financial pressures, more telecommuting among 5.5% persons employed by office-using industries, and the possi- bility of too much sublease space coming into the market. 5.0% n 4.5% During first quarter 2008, the average and median capitalization rates in the West regional office sector remained the

Denver Seattle same as the prior quarter, although they are down from year- Las Vegas Phoenix Portland San Diego Los Angeles SacramentoSalt Lake City San Francisco ago rates. The size-weighted average and median prices per square foot for office space in the region increased during first quarter as compared to both fourth quarter 2007 prices, as well as those from the previous year. RERC Size-Weighted Avg. PPSF - 1Q 2008 RERC Price-Weighted Avg. PPSF - 1Q 2008 $450 $600 West West U.S. Total U.S. Total $400 Size-Weighted Average PPSF Price-Weighted Average PPSF $500 $350

$300 $400

$250 $300 $200 $200 $150

$100 $100

Denver Seattle Tucson Denver Seattle Tucson Honolulu Las Vegas Phoenix Portland San Diego Honolulu Las Vegas Phoenix Portland San Diego Los Angeles SacramentoSalt Lake City San Francisco Los Angeles SacramentoSalt Lake City San Francisco West Office Transactions (4/1/07 - 3/31/08) Volume Size-weighted Price-weighted Median Average (millions) Average ($/sf) Average ($/sf) ($/sf) Cap Rate (%) Denver $3,615 $157 $214 $124 7.5 Honolulu $281 $249 $273 $265 – Las Vegas $917 $264 $300 $249 6.9 Los Angeles $14,282 $322 $373 $267 5.3 Phoenix $4,563 $196 $231 $166 6.3 Portland $1,169 $225 $295 $161 – Sacramento $2,041 $265 $283 $287 6.8 Salt Lake City $588 $176 $250 $111 – San Diego $4,659 $348 $433 $256 6.0 San Francisco $17,989 $401 $507 $276 5.0 Seattle $7,936 $300 $342 $243 5.4 Tucson $325 $145 $171 $152 7.2 West Total $59,838 $287 $381 $210 5.4 U.S. Total $165,414 $240 $396 $152 5.6 Source: RERC. Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 131 Quarterly WestIndustrialPropertySector

RERC Weighted Avg. Cap Rate - 1Q 2008 8.0% West U.S. Total 7.5% Avg. Capitalization Rate n Multiple respondents labeled the industrial sector as the 7.0% best commercial property investment opportunity in the West region due to the apparent lack of functional and 6.5% modern industrial space available, the sector’s perceived stability when compared to other property types, and ap- 6.0% parent stronger demand than supply of industrial space. 5.5% n The size- and price-weighted average and median prices 5.0% per square foot of West regional industrial space were significantly higher than national levels during first quarter Denver Phoenix Seattle Tucson 2008. In addition, both the weighted average and median Las Vegas Los Angeles Sacramento San Diego Salt Lake City San Francisco capitalization rates for the industrial sector within the West region were lower than national averages.

RERC Size-Weighted Avg. PPSF - 1Q 2008 RERC Price-Weighted Avg. PPSF - 1Q 2008 $200 $250 West West U.S. Total $225 U.S. Total $175 Size-Weighted Average PPSF Price-Weighted Average PPSF $200 $150 $175 $125 $150

$100 $125 $100 $75 $75 $50 $50 $25 $25

Denver Phoenix Seattle Tucson Denver Phoenix Portland Seattle Tucson Honolulu Las Vegas Portland San Diego Honolulu Las Vegas San Diego Los Angeles SacramentoSalt Lake City Los Angeles SacramentoSalt Lake City San Francisco San Francisco West Industrial Transactions (4/1/07 - 3/31/08) Volume Size-weighted Price-weighted Median Average (millions) Average ($/sf) Average ($/sf) ($/sf) Cap Rate (%) Denver $786 $71 $90 $78 7.5 Honolulu $127 $175 $244 $190 – Las Vegas $675 $144 $176 $158 6.3 Los Angeles $5,725 $130 $181 $141 5.7 Phoenix $3,088 $86 $114 $106 6.9 Portland $510 $93 $119 $87 – Sacramento $207 $84 $105 $84 6.6 Salt Lake City $198 $63 $85 $65 6.9 San Diego $2,088 $167 $230 $160 6.2 San Francisco $2,886 $126 $181 $137 6.4 Seattle $2,217 $117 $145 $120 5.6 Tucson $233 $80 $90 $77 7.3 West Total $19,976 $109 $158 $116 6.2 U.S. Total $51,426 $74 $126 $75 6.7 Source: RERC.

RERC Weighted Avg. Cap Rate - 1Q 2008 7.0% West U.S. Total n Avg. Capitalization Rate Many of those responding to the first quarter 2008 in- 6.5% vestment survey stated that the retail sector showed the weakest investment potential in the West region during the coming year due to continuing low consumer confidence, 6.0% less disposable income than previously, and high availability rates in the sector.

5.5% n The dollar volume of retail property sales in the West region was down during first quarter 2008 when compared 5.0% to the previous quarter. In addition, while the size- and price-weighted average and median prices per square foot

Denver Phoenix Portland Seattle Tucson of retail space fluctuated slightly, the weighted average Las Vegas Los Angeles Sacramento San Diego Salt Lake City San Francisco retail capitalization rate in the West region was 20 basis points lower than that on a national level. RERC Size-Weighted Avg. PPSF - 1Q 2008 RERC Price-Weighted Avg. PPSF - 1Q 2008 $350 $550 West West U.S. Total U.S. Total $300 Price-Weighted Average PPSF Size-Weighted Average PPSF $450

$250 $350 $200 $250 $150

$150 $100

$50 $50

West Retail Transactions (4/1/07 - 3/31/08) Volume Size-weighted Price-weighted Median Average (millions) Average ($/sf) Average ($/sf) ($/sf) Cap Rate (%) Denver $973 $161 $208 $141 6.9 Honolulu $251 $291 $511 $376 – Las Vegas $1,187 $324 $408 $266 6.3 Los Angeles $4,309 $287 $572 $244 5.9 Phoenix $1,647 $162 $215 $181 6.4 Portland $367 $137 $167 $150 6.8 Sacramento $544 $231 $281 $233 6.3 Salt Lake City $216 $119 $170 $130 7.3 San Diego $1,123 $235 $333 $212 6.1 San Francisco $1,619 $239 $337 $238 6.2 Seattle $1,064 $215 $305 $200 6.1 Tucson $97 $159 $222 $135 6.7 West Total $16,227 $204 $352 $187 6.2 U.S. Total $59,915 $159 $282 $135 6.4 Source: RERC.

RERC Weighted Avg. Cap Rate - 1Q 2008 7.0% West n In keeping with the national consensus, a majority of sur- U.S. Total 6.5% Avg. Capitalization Rate vey respondents believe the West regional apartment sector offers the strongest investment potential for the coming 6.0% 4 quarters due to undervaluing of this property type, the simple fact that housing is always necessary, the lower risk 5.5% of this property type due to their multi-tenant nature, and

5.0% tighter mortgage requirements for homebuyers.

4.5% n The dollar volume of apartment property transactions in the West region decreased during first quarter 2008, ending the 4.0% sector’s consistently even volume in the previous 4 quarters. However, both the size- and price-weighted average Denver Seattle Tucson Las Vegas Phoenix Portland San Diego Los Angeles SacramentoSalt Lake City San Francisco prices per unit increased in the more than $5 million sale price category during the quarter when compared to the previous quarter. RERC Size-Weighted Avg. PPU - 1Q 2008 RERC Price-Weighted Avg. PPU - 1Q 2008 $250,000 $250,000 West West U.S. Total U.S. Total Size-Weighted Average PPU Price-Weighted Average PPU $200,000 $200,000

$150,000 $150,000

$100,000 $100,000

$50,000 $50,000

Denver Seattle Tucson Denver Seattle Tucson Honolulu Las Vegas Phoenix Portland San Diego Honolulu Las Vegas Phoenix Portland San Diego Los Angeles SacramentoSalt Lake City San Francisco Los Angeles SacramentoSalt Lake City San Francisco West Apartment Transactions (4/1/07 - 3/31/08) Volume Size-weighted Price-weighted Median Average (millions) Average ($/unit) Average ($/unit) ($/sf) Cap Rate (%) Denver $1,820 $91,875 $110,497 $65,000 5.1 Honolulu $218 $150,980 $156,113 $149,397 – Las Vegas $896 $105,581 $114,538 $81,967 5.5 Los Angeles $8,163 $192,772 $248,501 $126,450 5.2 Phoenix $3,431 $92,472 $107,661 $71,869 5.6 Portland $1,007 $100,089 $126,062 $74,974 5.6 Sacramento $488 $101,417 $122,947 $82,039 5.5 Salt Lake City $361 $86,578 $90,834 $80,000 6.6 San Diego $1,593 $166,734 $202,807 $118,816 5.4 San Francisco $3,911 $214,057 $245,468 $154,545 5.3 Seattle $2,649 $121,194 $155,079 $111,562 5.4 Tucson $338 $64,682 $79,409 $46,603 5.8 West Total $26,873 $129,370 $181,625 $105,804 5.5 U.S. Total $78,236 $99,431 $169,129 $83,333 5.8 Source: RERC.

n For the second consecutive quarter, the West regional n Both the size- and price-weighted average prices per hotel weighted average hotel capitalization rate increased, this unit in the West region declined during first quarter 2008 time by 70 basis points from last quarter’s rate. when compared to the previous quarter and the previous year.

RERC Size-Weighted Avg. PPU - 1Q 2008 RERC Price-Weighted Avg. PPU - 1Q 2008 $700,000 $1,500,000 West West U.S. Total U.S. Total $600,000 $1,250,000 Price-Weighted Average PPU Size-Weighted Average PPU $500,000 $1,000,000 $400,000 $750,000 $300,000 $500,000 $200,000

$100,000 $250,000

$0 $0

Seattle Denver Phoenix Seattle Tucson Denver Honolulu Phoenix Portland Tucson Honolulu Las Vegas Portland San Diego Las VegasLos Angeles Sacramento San Diego Los Angeles SacramentoSalt Lake City San Francisco Salt Lake City San Francisco

West Hotel Transactions (4/1/07 - 3/31/08) Volume Size-weighted Price-weighted Median Average (millions) Average ($/unit) Average ($/unit) ($/sf) Cap Rate (%) Denver $643 $131,085 $156,673 $109,484 – Honolulu $2,393 $394,441 $469,190 $248,780 – Las Vegas $11,118 $486,341 $1,334,846 $180,100 – Los Angeles $3,438 $187,616 $313,025 $115,669 8.2 Phoenix $2,395 $260,655 $499,448 $117,998 – Portland $253 $101,093 $111,506 $91,219 – Sacramento $324 $110,513 $129,486 $96,314 – Salt Lake City $97 $84,024 $85,646 $77,484 – San Diego $371 $118,385 $126,329 $114,583 – San Francisco $2,502 $204,943 $297,830 $112,673 – Seattle $1,062 $156,490 $255,260 $103,500 – Tucson $390 $152,675 $249,915 $101,111 – West Total $26,743 $245,114 $750,165 $104,260 8.1 U.S. Total $59,238 $171,778 $489,300 $103,488 7.9 Source: RERC.

West Region Space Market

Trusted Advice. Proven Performance. Office - 1Q-2008 Inventory SF (000s) Vacancy Rate (%) Net Absorption SF (000s) Asking Rents ($/SF) CBRE/Torto Wheaton Research is a Denver 88,582 14.8 -15 $20.25 Gross full-service research and investment Honolulu 11,596 9.6 -32 $20.58 Net advisory firm, specializing in com- Las Vegas 30,016 15.5 440 $25.92 Gross mercial real estate markets. Los Angeles 175,525 10.6 -894 $32.58 Gross Phoenix 69,719 18.1 -52 $25.34 Gross With over 20 years of experience, Portland 41,845 12.5 132 $21.60 Gross our industry leading research, mar- Sacramento 42,500 16.2 -130 $24.65 Gross ket expertise, and strategic partner- Salt Lake City 28,712 12.1 177 $18.26 Gross ships provide clients with tactical ad- San Diego 55,491 14.9 -169 $30.42 Gross vice and strategic direction to identify 84,419 8.6 500 $37.93 Gross market opportunities that enhance San Francisco performance and manage risk. Seattle 79,367 9.8 55 $30.64 Gross Tucson 8,040 12.6 -151 $21.66 Gross CBRE/TWR is internationally rec- Industrial - 1Q-2008 ognized for our solid foundation in Inventory SF (000s) Availability Rate (%) Net Absorption SF (000s) Asking Rents ($/SF) economics, accurate forecasts, ana- Denver 232,824 10.3 -291 $6.17 Net lytical expertise, and providing clients Las Vegas 84,235 7.5 -503 $9.09 Net with unparalleled insight into the dy- Los Angeles 919,313 4.9 -2,918 $7.96 Net namics of the real estate market that Phoenix 260,865 11.6 -1,520 $8.17 Net impact performance. Portland 190,287 6.5 -369 $6.11 Net Sacramento 162,192 11.6 1,315 $6.99 Net Salt Lake City 125,916 6.6 -97 $5.52 Net San Diego 196,534 9.5 155 $11.77 Net San Francisco 101,212 5.9 -188 $14.84 Net Seattle 279,425 6.2 1,154 $7.66 Net Tucson 34,188 5.2 92 $8.23 Gross Retail - 1Q-2008 Inventory SF (000s) Availability Rate (%) Net Absorption SF (000s) TWR Rent Index ($/SF) Denver 41,653 12.1 145 $21.85 Honolulu 11,150 5.9 87 $27.39 William Wheaton Jon Southard James Costello Las Vegas 25,812 5.4 341 $28.90 Ph.D., Principal Principal Principal Los Angeles 67,059 6.0 -162 $32.63 Phoenix 63,189 9.0 -174 $23.89 Portland 22,895 10.2 172 $23.09 Sacramento 24,123 10.9 -70 $30.19 Salt Lake City 10,553 8.6 55 $13.07 San Diego 40,367 6.2 87 $28.32 RERC extends its appreciation to San Francisco 10,177 2.8 10 $22.51 CBRE/Torto Wheaton Research, Seattle 27,063 7.7 -121 $22.93 12,433 10.3 23 $18.44 which contributed all of the space Tucson Space Market Data has been provided courtesy of Torto Wheaton Research. market information on this page. Analysis within this report is solely compiled and produced by the Real Estate Research Corporation, and in no way reflects the interpretations, opinions, or conclusions of Torto Wheaton Research.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 136 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Denver MSA 2.5 million Denver2 4.8% Office Denver Growth1 1.64% Colorado2 4.7% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate   Household Income & Value Industrial Per Capita Income $34,982 2007 Households 961,000 Size-Weighted Average PPSF =  1-year Job Growth 1.50% Household Growth 1.54% Weighted Average Cap Rate   1-year Job Additions 17,900 Median Home Price $249,144 Major Employers Retail Denver International Airport Size-Weighted Average PPSF   CU School of Medicine Weighted Average Cap Rate  = Denver Transportation Safety Office Apartment Printers Personnel Size-Weighted Average PPU   Molson Coors Brewing Company Weighted Average Cap Rate   Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Denver Region – 2007” ©2006 NATIONAL ASSOCIATION OF REAL- TORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form Hotel (electronic media included) is prohibited without written permission. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Size-Weighted Average PPU   Noteworthy Transactions Metro Cap Rate Comparison* Current Quarter Sale Date Sale Price Sq. Ft./Units PPSF/PPU Office Office vs. West Region  1400 Wewatta 1-08 $32,550,000 295,000 $110 UCD Business School 3-08 $23,800,000 98,407 $242 vs. Nation  Industrial Industrial The Denver Post Site 2-08 $17,100,000 321,276 $53 vs. West Region  Chaparral Business Park 2-08 $12,800,000 146,175 $88 vs. Nation  Retail Retail 605 Grant 3-08 $2,730,000 10,873 $251 vs. West Region  Walgreens 1-08 $6,900,000 14,744 $468 vs. Nation  Apartment District at Southmore Station 1-08 $60,875,000 276 $220,562 Apartment Estates at Mira Vista 2-08 $30,175,000 240 $125,729 vs. West Region  Hotel vs. Nation 

Adams Mark 2-08 $176,095,300 1225 $143,751 *Comparison of current quarter weighted average capitalization rates. Source: RERC. Hampton Inn Downtown 2-08 $32,799,803 148 $221,620 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Four Seasons Hotel N 230 2010 Ritz-Carlton Hotel N 202 2010 W Hotel Hotel N 171 2010 Embassy Suites Hotel N 250 2010 Hilton Garden Inn Hotel N 225 2010 1515 Wynkoop Office N 150,000 N/A 1400 Wewatta Office N 210,000 N/A Sources: CBRE, RE Business. Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 137 Quarterly Denver Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $254 $317 $277 $164 $22 Size Weighted Avg. ($ per sf/unit) $107 $67 $142 $56,049 $38,588 Price Weighted Avg. ($ per sf/unit) $137 $84 $190 $61,448 $45,450 Denver Median ($ per sf/unit) $111 $78 $127 $60,000 $42,469 > $5 Million Volume (Mil) $3,361 $469 $696 $1,655 $622 Size Weighted Avg. ($ per sf/unit) $162 $74 $170 $98,102 $142,974 Price Weighted Avg. ($ per sf/unit) $220 $94 $216 $115,368 $160,531 Median ($ per sf/unit) $156 $79 $174 $88,779 $111,065 All Transactions Volume (Mil) $3,615 $786 $973 $1,820 $643 Size Weighted Avg. ($ per sf/unit) $157 $71 $161 $91,875 $131,085 Price Weighted Avg. ($ per sf/unit) $214 $90 $208 $110,497 $156,673 Median ($ per sf/unit) $124 $78 $141 $65,000 $109,484 Capitalization Rates (All Transactions) Weighted Average (%) 7.5 7.5 6.9 5.1 – Median (%) 7.2 7.3 7.2 5.9 – Source: RERC.

Historical Median Price per Unit (12 month trailing) – APARTMENT

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 138 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Honolulu MSA 911,000 Honolulu2 2.7% Office Honolulu Growth1 0.52% Hawaii2 3.0% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Industrial Household Income & Value Size-Weighted Average PPSF   Per Capita Income $28,096 2007 Households 303,000 Retail 1-year Job Growth 1.20% Household Growth 0.65% Size-Weighted Average PPSF   1-year Job Additions 5,500 Median Home Price $654,067 Major Employers Apartment Bank of Hawaii Size-Weighted Average PPU   Queen’s Medical Center Hotel Aloha Airlines Size-Weighted Average PPU   Honolulu Police Department Source: RERC. Honolulu Oahu Transit Service Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Honolulu Region – 2007” ©2006 NATIONAL ASSOCIA- TION OF REALTORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form (electronic media included) is prohibited without written permission. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Noteworthy Transactions Sale Date Sale Price Sq. Ft./Units PPSF/PPU Office Honolulu Club Feb. 08 $18,000,000 78,928 $228 Liliha Medical Plaza Feb. 08 $35,000,000 92,560 $378 Retail 740 Haleauwila St. Feb. 08 $8,500,000 22,792 $373 Apartment 810 University Ave. Feb. 08 $3,600,000 18 $200,000 526 N School St. Feb. 08 $5,200,000 35 $148,571 Hotel 415 Nahua St. Feb. 08 $7,550,000 125 $60,400 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Kapolei Spectrum Industrial N 200,000 N/A Phase II Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 139 Quarterly Honolulu Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $19 $49 $23 $52 – Size Weighted Avg. ($ per sf/unit) $145 $171 $359 $150,220 – Price Weighted Avg. ($ per sf/unit) $201 $235 $383 $168,266 – Honolulu Median ($ per sf/unit) $149 $190 $380 $147,944 – > $5 Million Volume (Mil) $262 $78 $229 $165 $2,393 Size Weighted Avg. ($ per sf/unit) $262 $177 $286 $151,222 $396,428 Price Weighted Avg. ($ per sf/unit) $278 $249 $524 $152,270 $469,309 Median ($ per sf/unit) $265 $223 $373 $161,518 $277,962 All Transactions Volume (Mil) $281 $127 $251 $218 $2,393 Size Weighted Avg. ($ per sf/unit) $249 $175 $291 $150,980 $394,441 Price Weighted Avg. ($ per sf/unit) $273 $244 $511 $156,113 $469,190 Median ($ per sf/unit) $265 $190 $376 $149,397 $248,780 Capitalization Rates (All Transactions) Weighted Average (%) – – – – – Median (%) – – – – – Source: RERC.

Historical Median Price per Square Foot (12 month trailing) – INDUSTRIAL

1 Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Historical Median Price per Square Foot Footnotes: (12 month trailing) – RETAIL 1This large increase is due primarily to the sale of the office building at 500 Al- 2 akaw St., which sold for $401/sf. 2Despite the increase shown by the 12- month trailing median, quarterly prices for the most part have been falling over recent quarters. The property at 1958 Kalakaua Ave. sold for $1,568/sf.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 140 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Las Vegas MSA 1.9 million Las Vegas2 5.6% Office Las Vegas Growth1 4.05% Nevada2 5.8% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate  = Household Income & Value Industrial Per Capita Income $27,543 2007 Households 705,000 Size-Weighted Average PPSF   1-year Job Growth 1.50% Household Growth 4.00% Weighted Average Cap Rate   1-year Job Additions 13,900 Median Home Price $302,825 Major Employers Retail Bellagio Hotel Size-Weighted Average PPSF   Wynn Las Vegas Weighted Average Cap Rate   MGM Grand Las Vegas Apartment Mirage Size-Weighted Average PPU   Venetian Resort Hotel & Casino Weighted Average Cap Rate =  Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Las Vegas Region - 2007” ©2006 NATIONAL ASSOCIA- Hotel

Las VegasTION OF REALTORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form (electronic media included) is prohibited without written permission. Size-Weighted Average PPU   1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. * Noteworthy Transactions Metro Cap Rate Comparison Current Quarter Sale Date Sale Price Sq. Ft./Units PPSF/PPU Office Office vs. West Region  Marnell Corporate Center 1-08 $54,050,000 173,237 $312 vs. Nation  Del E. Webb Medical Plaza 2-08 $32,000,000 84,666 $378 Industrial Industrial vs. West Region  6160 Stevenson Way 2-08 $10,000,000 102,000 $98 Park West 1-08 $9,383,120 72,048 $130 vs. Nation  Retail Retail The Shoppes at the Palazzo 3-08 $290,800,000 536,000 $543 vs. West Region  Imperial Plaza 3-08 $14,500,000 62,644 $231 vs. Nation  Apartment Apartment Rancho Destino 2-08 $24,471,333 184 $132,996 vs. West Region = Copper Hills 2-08 $32,900,000 272 $120,956 vs. Nation  Hotel *Comparison of current quarter weighted average capitalization rates. Stratosphere Casino Hotel Source: RERC. & Tower 2-08 $597,920,489 2,444 $244,648 Arizona Charlie’s Boulder 2-08 $73,394,495 300 $244,648 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery MGM Mirage Retail Center Retail N 500,000 2009 Spencer Street Distribution Industrial N 86,000 2008 Deer Springs Crossing Retail N 325,000 Mid-2008 Crowne Plaza Hotel N 386 2010 Arroyo South Office Office N 135,000 2008 Sources: CBRE, RE Business. Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 141 Quarterly Las Vegas Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $119 $188 $120 $38 $15 Size Weighted Avg. ($ per sf/unit) $236 $133 $182 $73,888 $57,436 Price Weighted Avg. ($ per sf/unit) $263 $166 $261 $97,079 $72,152 Las Vegas Median ($ per sf/unit) $249 $156 $200 $69,375 $66,667 > $5 Million Volume (Mil) $798 $487 $1,067 $858 $11,103 Size Weighted Avg. ($ per sf/unit) $268 $149 $355 $107,620 $491,371 Price Weighted Avg. ($ per sf/unit) $305 $181 $425 $115,309 $1,336,577 Median ($ per sf/unit) $246 $159 $369 $105,224 $237,136 All Transactions Volume (Mil) $917 $675 $1,187 $896 $11,118 Size Weighted Avg. ($ per sf/unit) $264 $144 $324 $105,581 $486,341 Price Weighted Avg. ($ per sf/unit) $300 $176 $408 $114,538 $1,334,846 Median ($ per sf/unit) $249 $158 $266 $81,967 $180,100 Capitalization Rates (All Transactions) Weighted Average (%) 6.9 6.3 6.3 5.5 – Median (%) 6.8 7.0 6.6 5.8 – Source: RERC.

1 2

Historical Median Price per Unit Historical Median Price per Unit Footnotes: 1This large increase is partly attributable to (12 month trailing) – APARTMENT (12 month trailing) – HOTEL the sale of the properties at 8311-8395 West Sunset Road for $306/sf and 1505 South Pa- 3 vilion Center Drive for $505/sf. 2The steady increase in median prices is partially due to the sale of the properties at 4080 Paradise Road for $900/sf and 9719 W. Fla- mingo Road for $732/sf. 3This drastic increase is mainly due to a portfolio transaction involving 17 casino properties at a price of $1,832,994/unit.

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 142 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Los Angeles MSA 13.2 million Los Angeles2 5.5% Office Los Angeles Growth1 0.72% California2 6.4% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate =  Household Income & Value Industrial Per Capita Income $27,830 2007 Households 4.2 million Size-Weighted Average PPSF   1-year Job Growth 0.70% Household Growth 0.60% Weighted Average Cap Rate   1-year Job Additions 38,100 Median Home Price $620,934 Major Employers Retail UCLA Size-Weighted Average PPSF =  University of Southern California Weighted Average Cap Rate =  Los Angeles Police Department Apartment Women & Childrens Hospital Size-Weighted Average PPU   Kaiser Foundation Hospital Weighted Average Cap Rate   Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Los Angeles Region – 2007” ©2006 NATIONAL ASSOCIATION OF REAL- Hotel TORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form (electronic media included) is prohibited without written permission. Size-Weighted Average PPU   1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Weighted Average Cap Rate   Noteworthy Transactions Los Angeles Sale Date Sale Price Sq. Ft./Units PPSF/PPU Metro Cap Rate Comparison* Current Quarter Office Office Sunset Media Tower 1-08 $125,000,000 314,435 $398 vs. West Region  Chase Plaza 1-08 $49,800,000 206,000 $242 vs. Nation  Industrial Industrial Liz Claiborne 2-08 $68,000,000 608,220 $112 Gateway Mission 71 vs. West Region  3-08 $53,700,000 789,996 $68 Business Park vs. Nation  Retail Retail 154-156 S. Robertson Blvd. 1-08 $10,500,000 6,100 $1,721 vs. West Region  TJ Maxx 2-08 $12,200,000 31,500 $387 vs. Nation  Apartment 7950 W. Sunset 1-08 $101,200,000 183 $553,005 Apartment 1015 Kingsley Drive 3-08 $21,500,000 120 $179,167 vs. West Region  Hotel vs. Nation  1727 N. Western 2-08 $2,100,000 20 $105,000 Hotel Ritz Carlton Huntington Hotel 1-08 $165,000,000 392 $420,918 vs. West Region  Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. vs. Nation  Market Construction/Redevelopment Activity *Comparison of current quarter weighted average capitalization rates. Property New(N)/ Total Sq. Estimated Source: RERC. Type Refurbished(R) Ft./Units Delivery LA Live Mixed Use N 4,000,000 Early 2010 Grand Avenue Project Mixed Use N 3,800,000 2010 The Americana at Brand Mixed Use N N/A Mid-2008 Village at Playa Vista Retail N 150,000 2009 NoHo Commons Phase III Retail N 222,000 N/A Sources: CBRE, RE Business. Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 143 Quarterly Los Angeles Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $676 $1,374 $1,007 $1,532 $86 Size Weighted Avg. ($ per sf/unit) $218 $132 $220 $120,903 $59,158 Los Angeles Price Weighted Avg. ($ per sf/unit) $275 $158 $318 $140,008 $75,312 Median ($ per sf/unit) $233 $145 $214 $116,458 $76,599 > $5 Million Volume (Mil) $13,606 $4,351 $3,301 $6,631 $3,352 Size Weighted Avg. ($ per sf/unit) $330 $129 $317 $223,454 $198,646 Price Weighted Avg. ($ per sf/unit) $378 $188 $649 $273,562 $319,103 Median ($ per sf/unit) $298 $121 $336 $180,782 $125,875 All Transactions Volume (Mil) $14,282 $5,725 $4,309 $8,163 $3,438 Size Weighted Avg. ($ per sf/unit) $322 $130 $287 $192,772 $187,616 Price Weighted Avg. ($ per sf/unit) $373 $181 $572 $248,501 $313,025 Median ($ per sf/unit) $267 $141 $244 $126,450 $115,669 Capitalization Rates (All Transactions) Weighted Average (%) 5.3 5.7 5.9 5.2 8.2 Median (%) 5.5 6.0 6.1 5.3 9.0 Source: RERC.

Historical Median Price per Unit Historical Median Price per Unit (12 month trailing) – APARTMENT (12 month trailing) – HOTEL

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 144 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Phoenix MSA 4.2 million Phoenix2 3.5% Office Phoenix Growth1 3.62% Arizona2 3.9% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate   Household Income & Value Industrial Per Capita Income $29,049 2007 Households 1.5 million Size-Weighted Average PPSF   1-year Job Growth 2.90% Household Growth 3.58% Weighted Average Cap Rate =  1-year Job Additions 54,100 Median Home Price $269,845 Major Employers Retail Phoenix Sky Harbor International Airport Size-Weighted Average PPSF   Intermodal Transportation Division Weighted Average Cap Rate =  Barrow Neurological Institute Phoenix Apartment Deer Valley Unified School District Size-Weighted Average PPU   Honeywell Aerospace Weighted Average Cap Rate  = Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Phoenix Region – 2007” ©2006 NATIONAL ASSOCIATION OF REAL- Hotel TORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form (electronic media included) is prohibited without written permission. Size-Weighted Average PPU   1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. * Noteworthy Transactions Metro Cap Rate Comparison Current Quarter Sale Date Sale Price Sq. Ft./Units PPSF/PPU Office Office vs. West Region  Phelps Dodge Tower 3-08 $127,000,000 409,889 $310 vs. Nation  Anchor Centre I & II 2-08 $96,000,000 336,939 $285 Industrial Industrial Durango St. & 75th Ave. 3-08 $40,542,334 682,291 $59 vs. West Region  Van Buren & 71st Ave. 3-08 $34,171,405 575,074 $59 vs. Nation  Retail Retail Bell Rd. Center 3-08 $6,640,000 38,897 $171 vs. West Region  28325 N. Tatum Blvd. 1-08 $5,496,610 15,660 $351 vs. Nation = Apartment Apartment La Serena at Toscana 1-08 $40,000,000 324 $123,457 vs. West Region  La Cascadas/Circle K 2-08 $12,000,000 157 $76,433 Hotel vs. Nation  *Comparison of current quarter weighted average capitalization rates. Hilton Suites 2-08 $50,086,186 226 $221,620 Source: RERC. Hawthorn Suites 2-08 $10,400,000 100 $104,000 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Gilbert Spectrum Center Mixed Use N 56,000 2009 Mesa Riverview Mixed Use N 10,889,865 2015 Deer Valley Medical Office Office N 75,000 2009 CityScape Center Mixed Use N 2,500,000 2009 Riverwalk Arizona Mixed Use N 1,500,000 N/A Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 145 Quarterly Phoenix Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $442 $584 $388 $166 $14 Size Weighted Avg. ($ per sf/unit) $143 $95 $163 $52,466 $36,020 Price Weighted Avg. ($ per sf/unit) $194 $120 $231 $61,303 $37,589 Phoenix Median ($ per sf/unit) $149 $103 $171 $57,197 $37,120 > $5 Million Volume (Mil) $4,121 $2,503 $1,259 $3,264 $2,380 Size Weighted Avg. ($ per sf/unit) $204 $84 $162 $96,210 $270,934 Price Weighted Avg. ($ per sf/unit) $235 $112 $210 $110,023 $502,258 Median ($ per sf/unit) $200 $113 $223 $89,100 $118,992 All Transactions Volume (Mil) $4,563 $3,088 $1,647 $3,431 $2,395 Size Weighted Avg. ($ per sf/unit) $196 $86 $162 $92,472 $260,655 Price Weighted Avg. ($ per sf/unit) $231 $114 $215 $107,661 $499,448 Median ($ per sf/unit) $166 $106 $181 $71,869 $117,998 Capitalization Rates (All Transactions) Weighted Average (%) 6.3 6.9 6.4 5.6 – Median (%) 7.0 6.8 6.6 5.9 – Source: RERC.

Historical Median Price per Unit Historical Median Price per Unit (12 month trailing) – APARTMENT (12 month trailing) – HOTEL

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 146 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Portland MSA 2.2 million Portland2 5.6% Office Portland Growth1 1.63% Oregon2 6.3% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Industrial Household Income & Value Size-Weighted Average PPSF =  Per Capita Income $30,298 2007 Households 831,000 Retail 1-year Job Growth 1.50% Household Growth 1.59% Size-Weighted Average PPSF   1-year Job Additions 15,500 Median Home Price $304,693 Major Employers Weighted Average Cap Rate   Portland Community College Apartment Portland State University Size-Weighted Average PPU   Portland International Airport Weighted Average Cap Rate   Doernebecher Children’s Hospital Portland Hotel Standard Insurance Co. Size-Weighted Average PPU  – Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Portland Region – 2007” ©2006 NATIONAL ASSOCIATION OF REAL- * TORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form Metro Cap Rate Comparison Current Quarter (electronic media included) is prohibited without written permission. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Retail Noteworthy Transactions vs. West Region  Sale Date Sale Price Sq. Ft./Units PPSF/PPU vs. Nation  Office Apartment Pacwest Center 1-08 $161,500,000 522,000 $309 vs. West Region  Port of Portland HQ 1-08 $29,200,000 160,000 $183 vs. Nation  Industrial *Comparison of current quarter weighted average capitalization rates. Five Oaks West 1-08 $20,000,000 183,315 $109 Source: RERC. 205 Airport Way Business 2-08 $24,000,000 290,000 $83 Center Retail Morgan Boulevard 2-08 $27,500,000 156,984 $175 Berry Hill Shopping Center 2-08 $8,600,000 41,229 $209 Apartment Bridgewaters at Redhawk 3-08 $25,000,000 224 $111,607 King Tower 2-08 $26,000,000 190 $136,842 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Lovejoy Building Office N 83,000 2008 Bldg. W1 at I-5 Corp. Office N 105,000 N/A Center Gerding Edlen Office R 200,000 2009 First & Main Building Office N 346,500 N/A Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 147 Quarterly Portland Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $67 $89 $53 $170 $12 Size Weighted Avg. ($ per sf/unit) $140 $83 $160 $63,736 $52,257 Price Weighted Avg. ($ per sf/unit) $179 $102 $229 $71,101 $60,135 Portland Median ($ per sf/unit) $148 $84 $152 $65,878 $56,959 > $5 Million Volume (Mil) $1,102 $422 $314 $836 $242 Size Weighted Avg. ($ per sf/unit) $233 $95 $134 $113,242 $105,934 Price Weighted Avg. ($ per sf/unit) $303 $122 $156 $137,254 $114,018 Median ($ per sf/unit) $175 $97 $148 $94,753 $92,026 All Transactions Volume (Mil) $1,169 $510 $367 $1,007 $253 Size Weighted Avg. ($ per sf/unit) $225 $93 $137 $100,089 $101,093 Price Weighted Avg. ($ per sf/unit) $295 $119 $167 $126,062 $111,506 Median ($ per sf/unit) $161 $87 $150 $74,974 $91,219 Capitalization Rates (All Transactions) Weighted Average (%) – – 6.8 5.6 – Median (%) – – 6.4 6.0 – Source: RERC.

Historical Median Price per Square Foot Historical Median Price per Square Foot (12 month trailing) – OFFICE (12 month trailing) – INDUSTRIAL

1 Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Historical Median Price per Unit Footnotes: (12 month trailing) – APARTMENT 1This increase was partly due to a few large transactions, including the sale of 2 properties at 1115 and 1210 NW Ben- nett St. for $560/sf. 2This sharp increase is due in part to the sale of the apartment complex at 901 SW King Ave. for $136,842/unit.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 148 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Sacramento MSA 2.1 million Sacramento2 6.5% Office Sacramento Growth1 2.22% California2 6.4% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate  = Household Income & Value Industrial Per Capita Income $28,863 2007 Households 789,000 Size-Weighted Average PPSF   1-year Job Growth 1.40% Household Growth 2.21% Weighted Average Cap Rate   1-year Job Additions 12,500 Median Home Price $385,642 Major Employers Retail University of California at Davis Size-Weighted Average PPSF   Sacramento County Water Quality Weighted Average Cap Rate  = Social Services Department Apartment Intel Corporation Size-Weighted Average PPU   Hewlett-Packard Co. Weighted Average Cap Rate   Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Sacramento Region – 2007” ©2006 NATIONAL ASSOCIA- Hotel TION OF REALTORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form (electronic media included) is prohibited without written permission. Size-Weighted Average PPU   1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. * Noteworthy Transactions Metro Cap Rate Comparison Current Quarter Sale Date Sale Price Sq. Ft./Units PPSF/PPU Office Sacramento Office vs. West Region  Renaissance Tower 1-08 $87,500,000 336,000 $260 vs. Nation  Barclay’s Global Investors 3-08 $15,700,000 129,000 $122 Service Center Industrial Industrial vs. West Region  8553 Weyand Ave. 3-08 $1,260,000 9,600 $131 vs. Nation  104 Woodmere 2-08 $18,000,000 88,300 $204 Retail Retail vs. West Region  Norwood Shopping Center 1-08 $16,000,000 88,815 $180 vs. Nation  Walerga Plaza 2-08 $11,000,000 22,493 $489 Apartment Apartment The Verge 2-08 $30,471,584 288 $105,804 vs. West Region = Royal Riverwood Manor 2-08 $26,451,028 250 $105,804 vs. Nation  Hotel *Comparison of current quarter weighted average capitalization rates. Source: RERC. Sheraton Grand 3-08 $130,000,000 503 $258,449 Comfort Inn & Suites 1-08 $8,200,000 70 $117,143 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery U.S. Bank Office N 360,000 2008 Bank of the West Office N 430,000 Mid-2009 Capital Unity Center Retail N 32,529 N/A Fountains Lifestyle Center Retail N 320,000 2009 Palladio Lifestyle Center Retail N 770,000 2009 Sources: CBRE, RE Business. Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 149 Quarterly Sacramento Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $114 $67 $71 $45 $24 Size Weighted Avg. ($ per sf/unit) $192 $76 $219 $70,026 $47,090 Sacramento Price Weighted Avg. ($ per sf/unit) $225 $94 $273 $78,166 $62,489 Median ($ per sf/unit) $185 $86 $207 $70,417 $45,464 > $5 Million Volume (Mil) $1,928 $140 $473 $444 $300 Size Weighted Avg. ($ per sf/unit) $271 $88 $232 $106,204 $123,573 Price Weighted Avg. ($ per sf/unit) $287 $110 $282 $127,450 $134,744 Median ($ per sf/unit) $311 $77 $262 $103,784 $104,662 All Transactions Volume (Mil) $2,041 $207 $544 $488 $324 Size Weighted Avg. ($ per sf/unit) $265 $84 $231 $101,417 $110,513 Price Weighted Avg. ($ per sf/unit) $283 $105 $281 $122,947 $129,486 Median ($ per sf/unit) $287 $84 $233 $82,039 $96,314 Capitalization Rates (All Transactions) Weighted Average (%) 6.8 6.6 6.3 5.5 – Median (%) 6.6 6.5 6.3 5.7 – Source: RERC.

Historical Median Price per Unit (12 month trailing) – APARTMENT

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 150 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Salt Lake City MSA 1.1 million Salt Lake City2 3.3% Office Salt Lake City 1.43% Utah2 3.5% Size-Weighted Average PPSF   Growth1 Industrial National Growth1 1.30% National2 5.2% Size-Weighted Average PPSF   Household Income & Value Per Capita Income $27,021 2007 Households 355,000 Weighted Average Cap Rate   1-year Job Growth 4.50% Household Growth 1.45% Retail 1-year Job Additions 27,900 Median Home Price $236,525 Size-Weighted Average PPSF   Major Employers Weighted Average Cap Rate  = Huish Detergents Inc. Apartment O. C. Tanner Co. Size-Weighted Average PPU   University of Utah Weighted Average Cap Rate  – Staker & Parson Co. UTA Rideshare Hotel Sources: Bureau of Labor Statistics, NAR, STDB Online. Size-Weighted Average PPU   “Home Price Analysis Report for Salt Lake City Region – 2007” ©2006 NATIONAL ASSOCIA- TION OF REALTORS®. Used with permission. Reproduction, reprinting, or retransmission of this Metro Cap Rate Comparison* Current Quarter document in any form (electronic media included) is prohibited without written permission. 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Industrial Noteworthy Transactions vs. West Region  Sale Date Sale Price Sq. Ft./Units PPSF/PPU vs. Nation  Office

Salt Lake City Retail 1650 E. 3300 S. 2-08 $2,545,369 8,024 $317 Industrial vs. West Region  3150 S. 900 W. 3-08 $6,500,000 86,722 $75 vs. Nation  369 Orange St. 3-08 $5,700,000 135,600 $42 Apartment Retail vs. West Region  Lincoln Plaza 1-08 $6,900,000 60,312 $114 vs. Nation 

Sunset Square 1-08 $6,800,000 112,789 $60 *Comparison of current quarter weighted average capitalization rates. Apartment Source: RERC. 945 E. 4500 S. 3-08 $4,870,000 83 $58,675 Settlers Point 1-08 $34,900,000 416 $83,894 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery 222 South Main St. Office N 355,000 Fall 2009 City Creek Center Mixed Use N N/A 2011 Bangerter Crossing Industrial N 325,000 2008 Freeport West- Industrial N N/A 2008 Landmark Bldg. 4 Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 151 Quarterly Salt Lake City Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $102 $73 $73 $38 – Size Weighted Avg. ($ per sf/unit) $103 $64 $150 $70,517 – Salt Lake City Price Weighted Avg. ($ per sf/unit) $124 $88 $240 $72,748 – Median ($ per sf/unit) $104 $66 $133 $74,932 – > $5 Million Volume (Mil) $486 $125 $142 $323 $97 Size Weighted Avg. ($ per sf/unit) $206 $62 $108 $88,950 $84,024 Price Weighted Avg. ($ per sf/unit) $277 $83 $133 $92,951 $85,646 Median ($ per sf/unit) $179 $59 $114 $83,925 $77,484 All Transactions Volume (Mil) $588 $198 $216 $361 $97 Size Weighted Avg. ($ per sf/unit) $176 $63 $119 $86,578 $84,024 Price Weighted Avg. ($ per sf/unit) $250 $85 $170 $90,834 $85,646 Median ($ per sf/unit) $111 $65 $130 $80,000 $77,484 Capitalization Rates (All Transactions) Weighted Average (%) – 6.9 7.3 6.6 – Median (%) – 6.9 6.9 6.1 – Source: RERC.

Historical Median Price per Unit Footnotes: (12 month trailing) – APARTMENT 1This large increase is partly due to the transaction of the property at 1050 E. 2100 S., which sold for $270/sf.

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 152 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year San Diego MSA 3.1 million San Diego2 5.3% Office San Diego Growth1 0.82% California2 6.4% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate   Household Income & Value Industrial Per Capita Income $29,468 2007 Households 1.1 million Size-Weighted Average PPSF   1-year Job Growth 0.90% Household Growth 0.80% Weighted Average Cap Rate   1-year Job Additions 11,900 Median Home Price $503,538 Major Employers Retail 32nd St. Naval Station Size-Weighted Average PPSF   Sharp Memorial Hospital Weighted Average Cap Rate   City of San Diego Apartment County of San Diego Size-Weighted Average PPU   Scripps Health Weighted Average Cap Rate   Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for San Diego Region – 2007” ©2006 NATIONAL ASSOCIATION OF REAL- Hotel TORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form

San Diego(electronic media included) is prohibited without written permission. Size-Weighted Average PPU   1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Noteworthy Transactions Metro Cap Rate Comparison* Current Quarter Sale Date Sale Price Sq. Ft./Units PPSF/PPU Office Office vs. West Region  University Pac Centre 3-08 $42,000,000 96,581 $435 vs. Nation  9242 & 9246 Lightware Ave. 3-08 $30,500,000 130,000 $235 Industrial Industrial The Crossroads at 45 Ranch 2-08 $15,700,000 93,646 $168 vs. West Region = 5825 Oberlin Drive 3-08 $11,400,000 57,200 $199 vs. Nation  Retail Retail 511 F. St. 2-08 $7,500,000 24,745 $303 vs. West Region  9254 Seranto Road 2-08 $7,100,000 12,012 $591 vs. Nation  Apartment Apartment Aztec Corner 2-08 $18,938,936 179 $105,804 vs. West Region  Pebble Cove 2-08 $16,700,000 89 $187,640 Hotel vs. Nation  *Comparison of current quarter weighted average capitalization rates. Quality Inn 3-08 $15,593,103 133 $117,241 Source: RERC. Holiday Inn Express 3-08 $8,200,000 70 $117,143 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery The Nolen Office N N/A 2009 Merrill Gardens at Bankers Hill Multifamily N 84 2009 Horizon Tech Center Office N 158,000 N/A Sunroad Centrum Phase 1,2,3 Office N 1,000,000 N/A Venture Commerce Center Industrial N 111,000 2008 Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 153 Quarterly San Diego Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $193 $288 $175 $208 $28 Size Weighted Avg. ($ per sf/unit) $191 $137 $207 $112,013 $84,461 Price Weighted Avg. ($ per sf/unit) $220 $161 $265 $119,189 $86,168 San Diego Median ($ per sf/unit) $207 $156 $203 $110,541 $81,967 > $5 Million Volume (Mil) $4,467 $1,800 $948 $1,385 $343 Size Weighted Avg. ($ per sf/unit) $361 $173 $241 $179,963 $122,382 Price Weighted Avg. ($ per sf/unit) $442 $241 $345 $215,389 $129,594 Median ($ per sf/unit) $295 $168 $276 $136,283 $117,241 All Transactions Volume (Mil) $4,659 $2,088 $1,123 $1,593 $371 Size Weighted Avg. ($ per sf/unit) $348 $167 $235 $166,734 $118,385 Price Weighted Avg. ($ per sf/unit) $433 $230 $333 $202,807 $126,329 Median ($ per sf/unit) $256 $160 $212 $118,816 $114,583 Capitalization Rates (All Transactions) Weighted Average (%) 6.0 6.2 6.1 5.4 – Median (%) 6.6 6.3 6.0 5.5 – Source: RERC.

1 2

Historical Median Price per Unit Historical Median Price per Unit Footnotes: (12 month trailing) – APARTMENT (12 month trailing) – HOTEL 1The sale of the property at 11085 N. Tor- rey Pines Road for $558/sf raised the median price overall. 2The property located at 6008 Paseo Deli- cias sold for $1,216/sf, the highest price in the last year for San Diego retail

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 154 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year San Francisco MSA 4.3 million San Francisco2 5.0% Office San Francisco Growth1 0.55% California2 6.4% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate   Household Income & Value Industrial Per Capita Income $42,085 2007 Households 1.6 million Size-Weighted Average PPSF   1-year Job Growth 1.60% Household Growth 0.47% Weighted Average Cap Rate   1-year Job Additions 31,700 Median Home Price $750,208 Major Employers Retail Pacific Telesis Group Size-Weighted Average PPSF   UPS Supply Chain Solutions Weighted Average Cap Rate   California State Auto Association Apartment UCSF Medical Center Size-Weighted Average PPU   San Francisco State University Weighted Average Cap Rate   Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for San Francisco Region – 2007” ©2006 NATIONAL ASSOCIA- Hotel TION OF REALTORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form (electronic media included) is prohibited without written permission. Size-Weighted Average PPU   1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. * Noteworthy Transactions Metro Cap Rate Comparison Current Quarter Sale Date Sale Price Sq. Ft./Units PPSF/PPU Office Office vs. West Region  199 Fremont 1-08 $259,000,000 396,000 $654 vs. Nation 

San FranciscoAAA HQ Complex 1-08 $118,500,000 597,574 $198 Industrial Industrial vs. West Region  2650 18th St. 1-08 $6,700,000 51,000 $131 1101 Chess Drive 2-08 $7,800,000 31,620 $247 vs. Nation  Retail Retail Whole Foods 2-08 $16,900,000 40,516 $417 vs. West Region = Roosevelt Shopping 1-08 $8,200,000 21,867 $375 vs. Nation  Center Apartment Apartment Sequoia 1-08 $12,300,000 64 $192,188 vs. West Region  Chateau El Camino 3-08 $18,800,000 85 $221,176 vs. Nation  Hotel *Comparison of current quarter weighted average capitalization rates. Source: RERC. 725 Pine St. #208 2-08 $555,000 23 $24,130 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery Millennium Tower Multifamily N N/A 2009 Alameda Landing Retail N 300,000 N/A Jack London Market Mixed Use N 170,000 2009 555 Mission Office N 555,000 2008 Emerald Place Retail N 300,000 N/A Sources: CBRE, RE Business.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 155 Quarterly San Francisco Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $306 $533 $329 $468 $27 Size Weighted Avg. ($ per sf/unit) $212 $121 $222 $139,209 $70,717 San Francisco Price Weighted Avg. ($ per sf/unit) $253 $151 $294 $160,225 $92,714 Median ($ per sf/unit) $222 $141 $217 $140,000 $60,139 > $5 Million Volume (Mil) $17,682 $2,353 $1,290 $3,443 $2,475 Size Weighted Avg. ($ per sf/unit) $407 $127 $244 $230,936 $209,314 Price Weighted Avg. ($ per sf/unit) $511 $188 $347 $257,056 $300,086 Median ($ per sf/unit) $303 $125 $338 $196,696 $114,603 All Transactions Volume (Mil) $17,989 $2,886 $1,619 $3,911 $2,502 Size Weighted Avg. ($ per sf/unit) $401 $126 $239 $214,057 $204,943 Price Weighted Avg. ($ per sf/unit) $507 $181 $337 $245,468 $297,830 Median ($ per sf/unit) $276 $137 $238 $154,545 $112,673 Capitalization Rates (All Transactions) Weighted Average (%) 5.0 6.4 6.2 5.3 – Median (%) 5.5 6.5 5.9 4.9 – Source: RERC.

Historical Median Price per Unit Historical Median Price per Unit Footnotes: (12 month trailing) – APARTMENT (12 month trailing) – HOTEL 1This large increase is due in part to three transactions of industrial space selling at more than $500/sf.

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 156 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Seattle MSA 3.3 million Seattle2 4.2% Office Seattle Growth1 1.20% Washington2 5.3% Size-Weighted Average PPSF   1 2 National Growth 1.30% National 5.2% Weighted Average Cap Rate   Household Income & Value Industrial Per Capita Income $34,819 2007 Households 1.3 million Size-Weighted Average PPSF   1-year Job Growth 3.40% Household Growth 1.24% Weighted Average Cap Rate   1-year Job Additions 57,600 Median Home Price $365,552 Major Employers Retail University of Washington Size-Weighted Average PPSF  

Seattle Swedish Medical Center Weighted Average Cap Rate   University of Washington OB/GYN Apartment South Seattle Community College Size-Weighted Average PPU   Varilite Weighted Average Cap Rate  = Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Seattle Region – 2007” ©2006 NATIONAL ASSOCIATION OF REAL- Hotel TORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form (electronic media included) is prohibited without written permission. Size-Weighted Average PPU   1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. * Noteworthy Transactions Metro Cap Rate Comparison Current Quarter Sale Date Sale Price Sq. Ft./Units PPSF/PPU Office Office vs. West Region = 18000 International Blvd. 1-08 $79,000,000 532,000 $148 vs. Nation  1915 Terry Ave. 1-08 $35,940,000 251,095 $143 Industrial Industrial vs. West Region  Quadrant Parkside Center 1-08 $17,600,000 101,430 $174 4650 S. 134th Place 2-08 $8,000,000 29,000 $276 vs. Nation  Retail Retail Harvard Market 3-08 $16,750,000 44,126 $380 vs. West Region  1100 Plum St. SE 1-08 $12,600,000 26,749 $471 vs. Nation  Apartment Apartment Expo 62 2-08 $47,892,343 114 $420,108 vs. West Region  Archstone Harbour Pointe 2-08 $41,000,000 230 $178,261  Hotel vs. Nation *Comparison of current quarter weighted average capitalization rates. Ameritel Inn 3-08 $15,400,000 125 $123,200 Source: RERC. Comfort Inn 2-08 $10,000,000 99 $101,010 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. Market Construction/Redevelopment Activity Property New(N)/ Total Sq. Estimated Type Refurbished(R) Ft./Units Delivery South Lake Union Office N 75,000 2011 Centralia N Corp. Park Phase I Industrial N 1,000,000 N/A 7th and Madison Office N 204,000 2009 Olive 8 Hotel N 350 2009 The Summit III Office N 350,000 2009 Sources: CBRE, RE Business. Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 157 Quarterly Seattle Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $288 $324 $304 $367 $24 Size Weighted Avg. ($ per sf/unit) $183 $111 $176 $94,961 $69,038 Price Weighted Avg. ($ per sf/unit) $229 $139 $244 $112,583 $83,247 Seattle Median ($ per sf/unit) $202 $120 $168 $99,854 $61,111 > $5 Million Volume (Mil) $7,648 $1,892 $760 $2,282 $1,038 Size Weighted Avg. ($ per sf/unit) $308 $118 $235 $126,833 $161,118 Price Weighted Avg. ($ per sf/unit) $346 $146 $329 $161,919 $259,161 Median ($ per sf/unit) $284 $120 $286 $124,806 $103,589 All Transactions Volume (Mil) $7,936 $2,217 $1,064 $2,649 $1,062 Size Weighted Avg. ($ per sf/unit) $300 $117 $215 $121,194 $156,490 Price Weighted Avg. ($ per sf/unit) $342 $145 $305 $155,079 $255,260 Median ($ per sf/unit) $243 $120 $200 $111,562 $103,500 Capitalization Rates (All Transactions) Weighted Average (%) 5.4 5.6 6.1 5.4 – Median (%) 6.0 6.3 6.3 5.5 – Source: RERC.

Historical Median Price per Unit Historical Median Price per Unit Footnotes: (12 month trailing) – APARTMENT (12 month trailing) – HOTEL 1This increase is due in part to the sale of two properties that sold for more than 2 $1,000/sf. 2This spike is partially due to the sale of the Seattle Hilton Airport Hotel for approximately $153 million, or $386,360/unit.

Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 158 Quarterly Demographics & Economics Last Previous Metro Trend Analysis Population Unemployment Rate (March 2008) Quarter Year Tucson MSA 977,000 Tucson2 3.9% Office Tucson Growth1 2.09% Arizona2 3.9% Size-Weighted Average PPSF =  1 2 National Growth 1.30% National 5.2% Industrial Household Income & Value Size-Weighted Average PPSF   Per Capita Income $26,496 2007 Households 386,000 Weighted Average Cap Rate = – 1-year Job Growth 2.60% Household Growth 2.15% Retail 1-year Job Additions 9,600 Median Home Price $207,213 Major Employers Size-Weighted Average PPSF   University of Arizona Weighted Average Cap Rate   Tucson Raytheon Missle Systems Apartment University Medical Center Size-Weighted Average PPU   Tuscon Medical Center Weighted Average Cap Rate =  Southwest Emergency Association Hotel Sources: Bureau of Labor Statistics, NAR, STDB Online. “Home Price Analysis Report for Tucson Region – 2007” ©2006 NATIONAL ASSOCIA- Size-Weighted Average PPU   TION OF REALTORS®. Used with permission. Reproduction, reprinting, or retransmission of this document in any form (electronic media included) is prohibited without written permission. Metro Cap Rate Comparison* Current Quarter 1Projected annual growth over 5 years (2007-2012). 2Rates are non-seasonally adjusted. Noteworthy Transactions Office Sale Date Sale Price Sq. Ft./Units PPSF/PPU vs. West Region  Office vs. Nation  Williams Centre 1-08 $37,742,000 196,179 $192 Industrial Technology Campus 9318-32 N. 95th Way 2-08 $11,000,000 74,908 $147 vs. West Region  Industrial vs. Nation  Commerce Center Place 2-08 $21,600,000 135,760 $159 Retail Retail vs. West Region  Broadway Village 1-08 $5,016,667 35,819 $140 vs. Nation  Apartment Apartment Tucson East Apartments 3-08 $4,000,000 52 $76,923 vs. West Region  Cornerstone 1-08 $9,900,000 230 $43,043 Compiled by RERC for the RERC/CCIM Investment Trends Quarterly report. vs. Nation = *Comparison of current quarter weighted average capitalization rates. Source: RERC.

Investment Trends Copyright© 2008 by Real Estate Research Corporation (RERC) and the CCIM Institute. 159 Quarterly Tucson Transaction Breakdown (4/1/07 - 3/31/08) Office Industrial Retail Apartment Hotel < $5 Million Volume (Mil) $60 $78 $61 $24 $13 Size Weighted Avg. ($ per sf/unit) $140 $73 $157 $48,138 $30,003 Price Weighted Avg. ($ per sf/unit) $174 $85 $216 $52,558 $30,342 Tucson Median ($ per sf/unit) $149 $78 $129 $50,000 $28,885 > $5 Million Volume (Mil) $266 $155 $36 $315 $377 Size Weighted Avg. ($ per sf/unit) $146 $84 $162 $66,408 $177,082 Price Weighted Avg. ($ per sf/unit) $170 $92 $233 $81,439 $257,317 Median ($ per sf/unit) $176 $77 $192 $46,398 $121,929 All Transactions Volume (Mil) $325 $233 $97 $338 $390 Size Weighted Avg. ($ per sf/unit) $145 $80 $159 $64,682 $152,675 Price Weighted Avg. ($ per sf/unit) $171 $90 $222 $79,409 $249,915 Median ($ per sf/unit) $152 $77 $135 $46,603 $101,111 Capitalization Rates (All Transactions) Weighted Average (%) 7.2 7.3 6.7 5.8 – Median (%) 7.0 7.1 6.6 6.4 – Source: RERC.

Historical Median Price per Square Foot Historical Median Price per Square Foot (12 month trailing) – OFFICE (12 month trailing) – INDUSTRIAL 1 Please note that in order to more accurately reflect 12-month trailing average trends, scales are unique to each chart and for each property type and do not carry over from one chart to another.

Historical Median Price per Square Foot Footnotes: (12 month trailing) – RETAIL 1The spike is partly due to the sale of the office property at 5401 E. Williams Blvd., which sold for $192/sf.