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1 Glenn R. Mueller, Ph.D. Professor University of Denver Franklin L. Burns School of Real Estate & Construction Management & Real Estate Investment Strategist

2 Supply The new supply of space was down in 2006 and 2007 and the forecast is for moderate supply growth well below the long-term average Commercial Real Estate Supply Growth Source: Property & Portfolio Research & Dividend Capital Research.

3 Occupancy Cycle and Rent Growth Office Source: Property and Portfolio Research, Grubb & Ellis, Mueller 2008.

4 Occupancy Cycle and Rent Growth Office Source: Property and Portfolio Research, Grubb & Ellis, Mueller 2010.

5 Atlanta-1 Baltimore Boston-1 Chicago Cincinnati Cleveland Columbus Detroit Ft. Lauderdale Hartford Jacksonville Kansas City Las Vegas Long Island Los Angeles Miami Milwaukee N. New Jersey New Orleans New York Norfolk Orange County-1 Orlando Philadelphia Phoenix Pittsburgh Portland Raleigh-Durham Office Market Cycle FORECAST Austin+1 Denver East Bay Houston Indianapolis Oklahoma City Wash DC 4 5 3rd Quarter, 2010 Estimates LT Average Occupancy Richmond Riverside Sacramento Salt Lake San Antonio San Diego San Francisco-1 San Jose Stamford St. Louis Tampa W. Palm Beach NATION Charlotte Dallas FW Honolulu Memphis Minneapolis Nashville+1 Seattle+1 Source: Mueller, 2009

6 Occupancy Cycle and Rent Growth Industrial Source: Property and Portfolio Research, Grubb & Ellis, Mueller 2008.

7 Occupancy Cycle and Rent Growth Industrial Source: Property and Portfolio Research, Grubb & Ellis, Mueller 2010.

8 Atlanta Baltimore Boston Charlotte Chicago-1 Cleveland Detroit Ft. Lauderdale Hartford Jacksonville Kansas City Las Vegas Long Island Los Angeles Miami Milwaukee Minneapolis New York N. New Jersey Norfolk Oklahoma City Orange County Orlando Philadelphia 1 3 Industrial Market Cycle FORECAST 4 5 3rd Quarter, 2010 Estimates LT Average Occupancy Dallas FW New Orleans 1 Phoenix Pittsburgh Portland Raleigh-Durham Richmond Sacramento-1 Salt Lake San Diego San Francisco San Jose Seattle St. Louis Stamford Tampa Wash DC W. Palm Beach NATION Austin Cincinnati+1 Columbus Denver-1 East Bay-1 Honolulu-2 Houston+1 Indianapolis Memphis Nashville Riverside San Antonio Source: Mueller, 2009

9 Occupancy Cycle and Rent Growth Apartment Source: Property and Portfolio Research, Grubb & Ellis, Mueller 2008.

10 Occupancy Cycle and Rent Growth Apartment Source: Property and Portfolio Research, Grubb & Ellis, Mueller 2008.

11 1 Atlanta Baltimore-1 Charlotte-1 Cincinnati Cleveland Columbus Dallas FW-1 Denver-1 Detroit East Bay Hartford Houston Indianapolis Kansas City-1 Long Island Los Angeles-1 Memphis Milwaukee Minneapolis-1 Oklahoma City-1 N. New Jersey-1 Orange County New York-1 Raleigh-Durham Philadelphia-1 Sacramento San Diego-1 San Antonio San Francisco-1 Seattle Stamford St. Louis Tampa NATION Boston-1 Honolulu-1 Nashville-1 Portland-1 San Jose-1 Pittsburgh Wash DC+3 Apartment Market Cycle FORECAST 3rd Quarter, 2010 Estimates Source: Mueller, LT Average Occupancy Austin Chicago+1 Ft. Lauderdale Jacksonville Las Vegas Miami New Orleans Norfolk Orlando Phoenix Richmond Riverside Salt Lake W. Palm Beach 1

12 Occupancy Cycle and Rent Growth Retail Source: Property and Portfolio Research, Grubb & Ellis, Mueller 2008.

13 Occupancy Cycle and Rent Growth Retail Source: Property and Portfolio Research, Grubb & Ellis, Mueller 2008.

14 Retail Market Cycle FORECAST Atlanta Austin Charlotte Cincinnati Cleveland Columbus Denver Detroit East Bay -1 Hartford Indianapolis Jacksonville Kansas City Las Vegas Los Angeles Memphis Milwaukee Minneapolis N. New Jersey Nashville Philadelphia 3rd Quarter, 2010 Estimates LT Average Occupancy Baltimore Boston Chicago Ft. Lauderdale Honolulu Long Island Miami New York Norfolk Oklahoma City Orange County Orlando Phoenix Richmond Sacramento San Diego San Francisco Seattle St. Louis Tampa Pittsburgh Portland -1 Raleigh- Durham-1 Riverside Salt Lake San Antonio-1 San Jose Stamford W. Palm Beach NATION Dallas FW Houston+1 New Orleans+1 Wash DC+1 Source: Mueller, 2009

15 Occupancy Cycle and Rent Growth Hotel Source: Property and Portfolio Research, Grubb & Ellis, Mueller 2008.

16 Occupancy Cycle and Rent Growth Hotel Source: Property and Portfolio Research, Grubb & Ellis, Mueller 2008.

17 1 Baltimore Boston Chicago Cleveland Columbus Dallas FW Denver East Bay Jacksonville Las Vegas+1 Memphis Milwaukee+1 Minneapolis N. New Jersey Nashville Oklahoma City Orange County Phoenix Portland Pittsburgh Richmond San Antonio San Diego San Jose+1 San Francisco Seattle 2 Hotel Market Cycle FORECAST 3rd Quarter, 2010 Estimates 3 Austin Honolulu-1 Houston Wash DC LT Average Occupancy Source: Mueller, Atlanta Charlotte Cincinnati Detroit Ft. Lauderdale Hartford Indianapolis Kansas City Long Island Miami New Orleans New York+1 13 Los Angeles Norfolk Orlando Philadelphia Raleigh-Durham Riverside Sacramento Salt Lake Stamford St. Louis Tampa W. Palm Beach NATION

18 Real Estate Financial Cycles Capital Flows Affect Prices

19 Property Price Movements Historic Cap Rates 8.5 Office - CBD 8.9 Office - suburban 8.5 Industrial - Warehouse 9.0 Industrial - R&D 8.0 Apartments Source: Real Estate Research Corporation - Chicago Office - CBD Office - suburban Industrial - Warehouse Industrial - R&D Apartments

20 Property Price Movements Hotels Power Center Source: Real Estate Research Corporation - Chicago Historic Cap Rates Regional Mall Neighborhood Comm Hotels 7.9 Regional Mall 8.9 Power Center 8.7 Neighborhood Comm

21 Pricing Average Cap Rates Source: Real Capital Analytics, 2009.

22

23 2010 Physical Cycle 2008 Physical and Financial Demand & supply affect occupancies drives rental growth GDP growth resumed 3Q2009? Employment resumes mid 2010? Demand growth resumes mid 2010? Home building employment less than 2% of all U.S. labor Supply very slow balanced absorption Recovery phase 2011, growth phase in 2013, 2014, 2015? 2010 Financial Cycle Capital flows affect prices stock market fear? Real estate safest investment alternative ? Real estate price drops in 2008, 2009 present buying opportunity! BUT -Debt financing hard in 2009/10 creating buying opportunity for cash buyers Differentiate residential versus commercial real estate to your investors!

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