East Region Baltimore • Boston • Charlotte • Hartford • New York City • Norfolk Northern New Jersey • Philadelphia • Pittsburgh • Raleigh • Richmond • Washington, D.C. EastRegionTransactionBreakdown n CCIM candidates and designees who responded to year, while one-fourth of respondents expect the economy RERC’s survey rated the East region’s economic perfor- to perform better during the next year. mance at 4.4 on a scale of 1 to 10, with 10 being high, during first quarter 2009. This rating was a slight increase n Along with lower volume of property sales, RERC’s trans- from the previous quarter’s rating, and tied the East region action analysis for the East region showed declining pric- with the Midwest for the highest ratings among the four es and increasing capitalization rates during first quarter regions. 2009. n Nearly two-thirds of the CCIM respondents expect the East regional economy to perform the same over the coming East Transaction Breakdown 12-Month Trailing Averages (04/01/08 - 03/31/09) Office Industrial Retail Apartment Hotel < $2 Million Volume (Mil) $498 $798 $1,012 $224 $15 Size Weighted Avg. ($ per sf/unit) $76 $47 $82 $55,932 $27,261 Price Weighted Avg. ($ per sf/unit) $114 $79 $128 $72,734 $42,822 Median ($ per sf/unit) $84 $56 $85 $62,500 $29,808 $2 - $5 Million Volume (Mil) $659 $1,172 $1,208 $765 $97 Size Weighted Avg. ($ per sf/unit) $114 $59 $123 $79,938 $37,844 Price Weighted Avg. ($ per sf/unit) $195 $108 $242 $119,362 $50,017 Median ($ per sf/unit) $143 $77 $185 $97,428 $40,806 > $5 Million Volume (Mil) $25,624 $4,020 $4,126 $8,371 $1,838 Size Weighted Avg. ($ per sf/unit) $371 $72 $160 $134,075 $147,936 Price Weighted Avg. ($ per sf/unit) $721 $118 $315 $329,584 $245,680 Median ($ per sf/unit) $193 $80 $212 $108,696 $106,571 All Transactions Volume (Mil) $26,781 $5,991 $6,345 $9,360 $1,949 Size Weighted Avg. ($ per sf/unit) $329 $65 $133 $123,140 $125,599 Price Weighted Avg. ($ per sf/unit) $697 $111 $271 $306,252 $234,440 Median ($ per sf/unit) $118 $65 $115 $90,689 $78,431 Capitalization Rates (All Transactions) Range (%) 2.2 - 9.5 6.0 - 8.0 5.7 - 9.5 4.5 - 7.4 – Weighted Avg. (%) 7.1 7.2 7.7 6.7 – Median (%) 7.3 7.7 7.8 7.0 – Source: RERC. Investment Trends Copyright© 2009 by Real Estate Research Corporation (RERC) and the CCIM Institute. 31 Quarterly EastRegionTransactionBreakdown Boston – Charlotte – Northern New Jersey – “Most savvy investors are in a wait- “There is discounting of all property “Invest in the best located property in any and-hold position. Leasing activity is types (primarily during negotiations) to sector. It will be the first to recover, and slow, and lack of comparables exists to prices below that justified by net income. should recover stronger. Buy quality.” estimate fair market.” This is creating value acquisitions for savvy investors with patient money.” East Transaction Breakdown Current Quarter Rates (01/01/09 - 03/31/09) Office Industrial Retail Apartment Hotel < $2 Million Volume (Mil) $98 $119 $111 $4 – Size Weighted Avg. ($ per sf/unit) $70 $56 $57 $44,495 – Price Weighted Avg. ($ per sf/unit) $110 $96 $99 $55,859 – Median ($ per sf/unit) $66 $65 $55 $47,083 – $2 - $5 Million Volume (Mil) $116 $217 $170 $48 – Size Weighted Avg. ($ per sf/unit) $96 $70 $99 $77,404 – Price Weighted Avg. ($ per sf/unit) $226 $112 $190 $122,244 – Median ($ per sf/unit) $127 $95 $130 $103,971 – > $5 Million Volume (Mil) $1,101 $438 $551 $214 $148 Size Weighted Avg. ($ per sf/unit) $193 $72 $107 $79,501 $112,452 Price Weighted Avg. ($ per sf/unit) $303 $113 $369 $103,671 $182,063 Median ($ per sf/unit) $147 $74 $147 $91,919 $76,056 All Transactions Volume (Mil) $1,314 $775 $832 $267 $149 Size Weighted Avg. ($ per sf/unit) $158 $68 $94 $78,101 $104,907 Price Weighted Avg. ($ per sf/unit) $282 $110 $297 $106,257 $180,478 Median ($ per sf/unit) $94 $76 $83 $92,390 $59,712 Capitalization Rates (All Transactions) Range (%) – – 6.4 - 9.5 6.8 - 7.4 – Weighted Avg. (%) – – 8.0 7.3 – Median (%) – – 8.2 7.1 – Source: RERC. Investment Trends Copyright© 2009 by Real Estate Research Corporation (RERC) and the CCIM Institute. 32 Quarterly EastOfficePropertySector RERC Weighted Avg. Cap Rate - 1Q 2009 10% 10% East U.S. Total Avg. Capitalization Rate 8% 8% n The 12-month trailing average volume of transactions de- clined by nearly 20 percent for the East office sector dur- 6% 6% ing first quarter 2009. The size-weighted and median price per square foot of office space declined from the previous 4% 4% quarter, while the price-weighted average increased. n The 12-month trailing weighted average capitalization rate 2% 2% for the office sector increased to 7.1 percent and the me- dian capitalization rate increased by 30 basis points to 7.3 Baltimore Boston Charlotte New York Norfolk Northern NJ Philadelphia Washington, D.C. percent. RERC Size-Weighted Avg. PPSF - 1Q 2009 RERC Price-Weighted Avg. PPSF - 1Q 2009 $700 $700 $1000 $1000 East East U.S. Total U.S. Total $600 $600 Price-Weighted Average PPSF Size-Weighted Average PPSF $800 $800 $500 $500 $400 $400 $600 $600 $300 $300 $400 $400 $200 $200 $200 $200 $100 $100 $0 $0 $0 $0 Boston Baltimore Boston Charlotte Hartford New York Norfolk Raleigh Baltimore Charlotte Hartford New York Norfolk Raleigh Northern NJPhiladelphiaPittsburgh Richmond Northern NJPhiladelphiaPittsburgh Richmond Washington, D.C. Washington, D.C. East Office Transactions (04/01/08 - 03/31/09) Volume Size-weighted Price-weighted Median Average (millions) Average ($/sf) Average ($/sf) ($/sf) Cap Rate (%) Baltimore $472 $187 $228 $116 6.4 Boston $1,601 $193 $344 $139 5.9 Charlotte $286 $121 $128 $121 7.7 Hartford $97 $66 $97 $96 – New York $12,326 $581 $877 $227 4.7 Norfolk $141 $114 $121 $98 8.2 Northern NJ $1,118 $222 $276 $153 6.2 Philadelphia $849 $120 $146 $116 6.4 Pittsburgh $119 $76 $164 $61 – Raleigh $428 $148 $163 $128 – Richmond $227 $121 $154 $88 – Washington, D.C. $3,752 $408 $515 $285 6.1 East Total $26,781 $329 $697 $118 7.1 U.S. Total $52,458 $233 $479 $134 7.1 Source: RERC. Investment Trends Copyright© 2009 by Real Estate Research Corporation (RERC) and the CCIM Institute. 33 Quarterly EastIndustrialPropertySector RERC Weighted Avg. Cap Rate - 1Q 2009 10% 10% East U.S. Total Avg. Capitalization Rate 8% 8% n The East industrial sector remained relatively stable as compared to the other property types during first quar- 6% 6% ter 2009. The 12-month trailing sales volume declined by more than 15 percent from the previous quarter. The size- 4% 4% weighted average and median price per square foot re- mained stable, while the price-weighted average declined slightly. 2% 2% n The weighted average and median capitalization rates for Baltimore New York Washington, D.C. the East regional industrial sector increased by 10 and 50 basis points, respectively. RERC Size-Weighted Avg. PPSF - 1Q 2009 RERC Price-Weighted Avg. PPSF - 1Q 2009 $150 $150 $200 $200 East East U.S. Total U.S. Total $125 $125 Price-Weighted Average PPSF Size-Weighted Average PPSF $150 $150 $100 $100 $100 $100 $75 $75 $50 $50 $50 $50 $25 $25 $0 $0 Boston Norfolk Baltimore Charlotte Hartford New York Raleigh Baltimore Boston Charlotte Hartford New York Norfolk Raleigh Northern NJPhiladelphiaPittsburgh Richmond Northern NJPhiladelphiaPittsburgh Richmond Washington, D.C. Washington, D.C. East Industrial Transactions (04/01/08 - 03/31/09) Volume Size-weighted Price-weighted Median Average (millions) Average ($/sf) Average ($/sf) ($/sf) Cap Rate (%) Baltimore $404 $69 $103 $62 7.0 Boston $675 $75 $145 $74 – Charlotte $281 $59 $94 $57 – Hartford $161 $63 $83 $49 – New York $953 $111 $166 $115 5.9 Norfolk $54 $74 $104 $71 – Northern NJ $466 $79 $92 $78 – Philadelphia $533 $74 $99 $65 – Pittsburgh $50 $29 $45 $35 – Raleigh $118 $62 $85 $70 – Richmond $43 $37 $84 $48 – Washington, D.C. $437 $132 $157 $118 7.5 East Total $5,991 $65 $111 $65 7.2 U.S. Total $22,914 $71 $130 $73 7.5 Source: RERC. Investment Trends Copyright© 2009 by Real Estate Research Corporation (RERC) and the CCIM Institute. 34 Quarterly EastRetailPropertySector RERC Weighted Avg. Cap Rate - 1Q 2009 9.0% East 9.0% U.S. Total 8.5% 8.5% Avg. Capitalization Rate 8.0% 8.0% n The 12-month trailing sales volume in the East regional 7.5% 7.5% retail sector declined by more than 15 percent during first quarter 2009. 7.0% 7.0% 6.5% 6.5% n The first quarter 2009 average and median prices per 6.0% 6.0% square foot of retail property declined from the previous 5.5% 5.5% quarter. In addition, the weighted average and median 5.0% 5.0% capitalization rates for the retail sector increased by 40 basis points and 80 basis points, respectively. Baltimore Boston Charlotte Hartford New York Norfolk Raleigh Northern NJPhiladelphia Pittsburgh Washington, D.C. RERC Size-Weighted Avg. PPSF - 1Q 2009 RERC Price-Weighted Avg. PPSF - 1Q 2009 $300 $300 $550 $550 East East U.S. Total U.S. Total $250 $250 Size-Weighted Average PPSF $450 $450 Price-Weighted Average PPSF $200 $200 $350 $350 $150 $150 $250 $250 $100 $100 $150 $150 $50 $50 $0 $0 $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.