NAI Global Market Report 2010 by NAI CIR

Investment

CIR

Commercial Real Estate Services, Worldwide.

Office

Industrial

Retail

Land

tel +1 609 945 4000 fax +1 609 945 4001 www.naiglobal.com 4 Independence Way Suite 400 Princeton NJ 08540 Jeffrey M. Finn President & Chief Executive Officer

January 2010 Dear Real Estate Executive: No matter where you look, 2009 was a very challenging year for commercial real estate. As the global recession took hold, local and regional economies stagnated or declined and market fundamentals eroded. Investors remained on the sidelines, cut off from the capital needed to finance acquisitions, while those with cash waited patiently for signs the market truly had bottomed. As the recession wore on, most major corporate tenants adopted a wait-and-see position, deferring major decisions. As expected, vacancy rates climbed and rental rates fell as a result. As the year progressed, government-led stimulus programs in the Unites States, Europe and elsewhere began to take hold and by year’s end we began seeing signs that the recession had finally ended. But not before US unemployment topped 10%. While we don’t expect much new demand in 2010 as companies recover, we are starting to see corporate tenants act by taking advantage of the tenants’ market to negotiate more favorable lease terms today in exchange for a longer commitment. We’ve come to call this practice “extend and blend,” and it’s a trend we expect will continue well into 2010. We also expect investment sales to increase in 2010 as banks and financial institutions clean up their balance sheets and move more aggressively to dispose of commercial real estate loans and financially distressed real estate assets. NAI Global is pleased to present its 2010 Global Market Report. Now in its 24th year, the Global Market Report provides comprehensive market data and overviews on over 200 property markets around the world. This year’s edition is our most comprehensive report ever, with coverage of all primary markets and most secondary and tertiary markets worldwide. Using both narrative market reports and statistical charts, we provide you with market highlights, trends, demographic and business profiles, rental rates, vacancy rates and land prices. The 2010 Global Market Report puts a wealth of market intelligence at your fingertips in a succinct and consistent market profile format. Dr. Peter Linneman, NAI Global’s Chief Economist and Principal of Linneman Associates, the leading real estate economics consulting firm, worked with us again this year to prepare the Global Outlook. Linneman Associates has added its expert economic analysis and insights to the detailed local market information from NAI professionals worldwide to deliver the information you need on commercial real estate costs and market conditions around the world. We are proud of our relationship with Dr. Linneman and are pleased to be able to share his insights with you. All of the market information in the 2010 Global Market Report is available online at www.naiglobal.com and major markets are updated periodically throughout the year. For the latest in commercial real estate industry news and trends, Global Economic Outlook briefings, market updates and much more, visit www.naiglobal.com. Just as NAI Global provides you with in-depth knowledge and insight on markets around the world, our global managed network can help you achieve your real estate objectives no matter how large or small, anywhere in the world. Our clients come to us for our deep local knowledge, which leads to results that are tangible, measurable and visible on their bottom line. We welcome the opportunity to serve you. If we can assist you with a current or future real estate requirement anywhere in the world, please contact us at + 1 609 945 4000 or call your local NAI professional.

Sincerely,

Jeffrey M. Finn President & Chief Executive Officer

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Table

of Contents

GENERAL INFORMATION NAI Global President's Letter ..........................................................1 Table of Contents...........................................................................2 Note from Dr. Peter Linneman ........................................................3 About Your Global Market Report ....................................................3 GLOBAL OUTLOOK Global Outlook ...............................................................................4 REGIONAL HIGHLIGHTS Northeast Highlights.....................................................................21 Southeast Highlights ....................................................................22 Midwest Highlights.......................................................................23 Southwest Highlights....................................................................24 West Highlights............................................................................25 ASIA PACIFIC Melbourne, Australia ....................................................................27 China

Beijing .....................................................................................27 Chengdu ..................................................................................28 Hong Kong ...............................................................................28 Shanghai..................................................................................29 Xiamen ....................................................................................29 Guam..........................................................................................30 India

Chennai ...................................................................................30 Delhi, Gurgaon .........................................................................31 Hyderabad, Pradesh..................................................................31 Kolkata.....................................................................................32 Pune, Maharashtra ...................................................................32 Punjab .....................................................................................33 Tokyo, Japan ...............................................................................33 Kuala Lumpur Malaysia ................................................................34 Singapore....................................................................................34 Seoul, South Korea ......................................................................35 Taipei, Taiwan ..............................................................................35 CANADA Alberta

Calgary ....................................................................................37 Edmonton ................................................................................37 British Columbia

Vancouver................................................................................38 Victoria ....................................................................................38 Nova Scotia

Halifax .....................................................................................39 Ontario

Ottawa.....................................................................................39 Toronto ....................................................................................40 Montreal ..................................................................................40 Regina, Saskatchewan...............................................................41 EUROPE MIDDLE EAST AFRICA Vienna, Austria.............................................................................43 The Baltics (Latvia/Estonia/Lithuania) ............................................43 Sofia, Bulgaria .............................................................................44 Prague, Czech Republic................................................................44 Copenhagen, Denmark.................................................................45 Finland ........................................................................................45 Paris, France ...............................................................................46 Frankfurt am Main, Germany ........................................................46 Atehens, Greece ..........................................................................47 Reykjavik, Iceland.........................................................................47 Tel Aviv, Isreal ..............................................................................48 Almaty, Kazakhstan ......................................................................48 Kuwait.........................................................................................49 Oslo, Norway ...............................................................................49 Doha, Qatar .................................................................................50 Bucharest, Romania .....................................................................50 Moscow, Russian Federation ........................................................51 St. Petersburg, Russian Federation................................................51 Belgrade, Serbia ..........................................................................52 Johannesburg South, Africa..........................................................52 Madrid, Spain ..............................................................................53 Stockholm, Sweden......................................................................53 Geneva, Switzerland.....................................................................54 Zurich, Switzerland.......................................................................54 Istanbul, Turkey............................................................................55 Kiev (Kyiv), Ukraine.......................................................................55 London, England United Kingdom..................................................56 LATIN AMERICA AND THE CARIBBEAN Buenos, Aires Argentina ...............................................................58 Nassau, Bahamas ........................................................................58 Brazil

Campinas.................................................................................59 Curitiba ....................................................................................59 Porto Alegre .............................................................................60 Rio de Janeiro ..........................................................................60 Sao Paulo.................................................................................61 Santiago, Chile.............................................................................61 San Jose, Costa Rica ...................................................................62 Kingston, Jamaica........................................................................62 Mexico

Ciudad Juarez, Chihuahua.........................................................63 Guadalajara..............................................................................63 Guanajuato, Guanajuato ............................................................64 Mexico City ..............................................................................64

Mexico (continued)

Matamoros, Tamaulipas ............................................................65 Mexicali, Baja California ............................................................65 Monterrey, Nuevo Leon .............................................................66 Querétaro, Querétaro ................................................................66 Reynosa...................................................................................67 Saltillo, Coahuila .......................................................................67 San Luis Potosi (SLP)................................................................68 Tijuana, Baja California..............................................................68 Torreon, Coahulia......................................................................69 Caracas, Venezuela ......................................................................69 UNITED STATES Alabama

Birmingham ..............................................................................71 Huntsville/Decatur County ..........................................................71 Mobile/Baldwin County ..............................................................72 Arizona

Phoenix ....................................................................................72 Arkansas

Jonesboro.................................................................................73 Little Rock.................................................................................73 California

Inland Empire (Riverside/San Bernardino) .................................74 Los Angeles County.................................................................74 Marin County ..........................................................................75 Monterey County.....................................................................75 Oakland..................................................................................76 Orange County........................................................................76 Sacramento ...........................................................................77 San Diego...............................................................................77 San Francisco County..............................................................78 San Mateo County...................................................................78 Santa Clara County (Silicon Valley) ...........................................79 Santa Cruz County ..................................................................79 Sonoma County.......................................................................80 Ventura County .......................................................................80 Colorado

Colorado Springs.....................................................................81 Denver....................................................................................81 Delaware

Delaware & Cecil County Maryland...........................................82 District of Columbia

Washington, D.C. ....................................................................82 Florida

Fort Lauderdale.......................................................................83 Ft. Myers/Naples/Port Charlotte/Bonita Springs .........................83 Jacksonville ............................................................................84 Marin & St. Lucie Counties ......................................................84 Miami.....................................................................................85 Orlando ..................................................................................85 Palm Beach County .................................................................86 Tampa Bay..............................................................................86 Georgia

Atlanta....................................................................................87 Hawaii

Honolulu .................................................................................87 Idaho

Boise......................................................................................88 Southeast (Idaho Falls/Pocatello) ..............................................88 Illinois

Chicago .................................................................................89 Springfield ..............................................................................89 Indiana

Fort Wayne .............................................................................90 Indianapolis ............................................................................90 Iowa

Cedar Rapids, Iowa City...........................................................91 Davenport/Bettendorf, Iowa & Rock Island/Moline, Illinois ..........91 Des Moines.............................................................................92 Sioux City ...............................................................................92 Kansas

Wichita ...................................................................................93 Kentucky

Lexington................................................................................93 Louisville ................................................................................94 Louisiana

Baton Rouge ...........................................................................94 Monroe...................................................................................95 New Orleans ...........................................................................95 Maine

Greater Portland/Southern Maine .............................................96 Maryland

Baltimore ................................................................................96 Suburban Maryland .................................................................97 Massachusetts

Boston....................................................................................97 Western (Greater Springfield) ...................................................98 Michigan

Detroit ....................................................................................98 Grand Rapids ..........................................................................99 Lansing ..................................................................................99 Minnesota

Minneapolis/St. Paul..............................................................100 Missouri

Kansas City...........................................................................100 St. Louis ...............................................................................101

Montana

Bozeman ..............................................................................101 Missoula...............................................................................102 Nebraska

Lincoln .................................................................................102 Omaha .................................................................................103 Nevada

Las Vegas.............................................................................103 Reno ....................................................................................104 New Hampshire

Manchester...........................................................................104 Portsmouth ...........................................................................105 New Jersey

Atlantic County......................................................................105 Middlesex/Somerset Counties ................................................106 Northern New Jersey.............................................................106 Ocean/Monmouth Counties (“Shore Market”)..........................107 Princeton/Mercer County .......................................................107 Southern New Jersey ............................................................108 New Mexico

Albuquerque .........................................................................108 Las Cruces ...........................................................................109 New York

Albany ..................................................................................109 New York City........................................................................110 Long Island ...........................................................................110 North Carolina

Asheville ...............................................................................111 Charlotte...............................................................................111 Greensboro/High Point/Winston-Salem ...................................112 Raleigh/Durham ....................................................................112 North Dakota

Fargo....................................................................................113 Ohio

Akron ...................................................................................113 Canton .................................................................................114 Cincinnati .............................................................................114 Cleveland..............................................................................115 Columbus .............................................................................115 Dayton..................................................................................116 Oklahoma

Oklahoma City.......................................................................116 Tulsa ....................................................................................117 Oregon

Portland................................................................................117 Pennsylvania

Allentown..............................................................................118 Berks County ........................................................................118 Bucks County........................................................................119 Harrisburg/York/Lebanon .......................................................119 Lancaster .............................................................................120 Philadelphia ..........................................................................120 Pittsburgh .............................................................................121 Schuylkill County ...................................................................121 Wilkes-Barre/Scranton/Hazleton .............................................122 South Carolina

Columbia ..............................................................................122 Greenville/Spatanburg/Anderson Counties ..............................123 South Dakota

Sioux Falls ............................................................................123 Tennessee

Chattanooga .........................................................................124 Clarksville .............................................................................124 Knoxville ...............................................................................125 Memphis ..............................................................................125 Nashville...............................................................................126 Texas

Austin...................................................................................126 Beaumont .............................................................................127 Corpus Christi .......................................................................127 Dallas ...................................................................................128 El Paso .................................................................................128 Fort Worth.............................................................................129 Houston................................................................................129 Rio Grande Valley (McAllen/Mission/Brownsville/Harlingen) ......130 San Antonio ..........................................................................130 Texarkana (Bowie County, Texas/Miller County, Arkansas) ........131 Utah

Salt Lake City........................................................................131 Washington County ...............................................................132 Vermont

Burlington .............................................................................132 Virginia

Northern Virginia ...................................................................133 Washington

Seattle/Puget Sound..............................................................133 Spokane ...............................................................................134 Tri-Cities ...............................................................................134 Wisconsin

Madison ...............................................................................135 Milwaukee ............................................................................135 Northeastern Wisconsin (Fox Valley/Green Bay) .......................136 Wyoming

Casper..................................................................................136 Jackson Hole ........................................................................137 Glossary ....................................................................................138

2010 Global Market Report www.naiglobal.com

A Note From Dr. Peter Linneman

Once again, Linneman Associates is pleased to join NAI Global in the production of the 2010 Global Market Report. For years, NAI Global has created this annual report, the industry’s source for in-depth market-by-market data, at a level of detail unavailable from other resources. Since our two organizations forged a strategic alliance in 2003, we have provided NAI professionals and clients with comprehensive market analyses, customized reports and our perspective on macroeconomic indicators as they pertain to real estate markets. By combining NAI Global’s local market data with our real estate economics expertise and proprietary projections, we jointly provide the reader with unmatched insight into the state of local, regional, national and international real estate markets. Linneman Associates and NAI Global continue to jointly offer customized real estate market analyses and reports. Enrich your business and investment efforts by utilizing this combination of real estate expertise, including the Linneman Associates and NAI market analyses and real estate decision making tools. For more information, call your local NAI office. Dr. Linneman holds both Masters and Doctorate degrees in economics from the University of Chicago and is the Principal of Linneman Associates. For over 25 years he has provided strategic and financial advice to leading corporations. Dr. Linneman is the author of the leading real estate finance textbook, Real Estate Finance and Investments: Risks and Opportunities. His teaching and research focuses on real estate and investment strategies, mergers and acquisitions and international markets. He has published over 60 articles during his career. He is widely recognized as one of the leading strategic thinkers in the real estate industry. Dr. Linneman also serves as the Albert Sussman Professor of Real Estate, Finance, Business and Public Policy at the Wharton School of Business, University of Pennsylvania. A member of Wharton’s faculty since 1979, he served as the founding chairman of Wharton’s Real Estate Department and the Director of Wharton’s Zell-Lurie Real Estate Center for 13 years. He is the founding co-editor of The Wharton Real Estate Review.

About Your Global Market Report

The 2010 Global Market Report is a unique tool that reviews and summarizes the real estate activities of the past year on more than 200 property markets worldwide. As a reference tool, it reviews values, economies, social factors and other conditions that impact a market. Each analysis was completed by the NAI Global Member representing the given market. These local professionals are expert at reviewing their markets, identifying trends and reporting market activity. The NAI Global Member making the analysis for each market is identified and may be contacted for further information. Most of the data in the Global Market Report was collected during the fourth quarter of 2009. Rental rates for Class A and Class B office space, retail and new construction are expressed in gross costs per unit area, indicating the landlord pays all expenses except for Europe, where rental rates are reported as net. Industrial space rents are quoted in terms of net rental rates, meaning the tenant pays for most of the operating costs, such as utilities, maintenance, and repairs and cleaning. On all charts, N/A means the information was not applicable or not available at press time. For more information about this report, or to order your own copy for $695, please call 609 945 4000. Additional research reports and whitepapers are available at www.naiglobal.com. Visit the NAI Global blog for real time commentary on industry news and trends at blogs.naiglobal.com

The 2009 Global Market Report is a copyrighted publication of NAI Global, published in December 2009, and should not be reproduced without full permission. Additional copies are available from NAI Global. Demographic data and indices were provided by SRC, LLC.

2010 Global Market Report www.naiglobal.com

Global Outlook Commercial real estate markets across the United States experienced the full impact of the global recession in 2009. The precipitous decline in transaction volume that began in 2008 continued unabated throughout most of 2009 as rising unemployment and general uncertainty about the near-term economic outlook weighed on demand. Rising vacancy rates and declining rental rates were evident in virtually every market and property type, with weak demand and a growing supply of sublease space further eroding market fundamentals. Office space in the central business districts was especially hard hit; the national average vacancy rate for downtown Class A office space reached 13.9% in 2009, an increase of 35% over 2008, and the national average rental rate fell 21.6% to $37.09/SF/YR. Suburban Class A space fared only slightly better as the national average vacancy rate rose to 16.9% in 2009, up from 13% in 2008, and the national average rental rate slipped 4.6% to $25.11/SF/YR. The retail segment was also hit hard as several notable retailers and chain restaurant operators filed for bankruptcy and countless others closed stores to cut costs. The national average vacancy rate in regional malls reached 7.1% in 2009, up from 5.6% in 2008, and the national average rental rate for mall space fell 10.6% to $32.76/SF/YR. The vacancy rate in power centers, a favorite of the struggling big-box retailers, soared to 9.8% in 2009, up from 5.9% in 2008, and the average rental rate fell 6.3% to $19.46/SF/YR.

National Average Rental Rates

National Average Vacancy Rates

The impact of weak consumer demand was also evident in the industrial sector, where new supply compounded market woes. The national average vacancy rate for bulk warehouse space topped 11.1% in 2009, the highest level in five years, but the national average rental rate dipped only 1.3% to $4.57/SF/YR. Fortunately, these negative movements followed a very healthy peak, and tight credit has greatly curtailed new construction starts. While it is clearly a â&#x20AC;&#x153;tenantâ&#x20AC;&#x2122;s marketâ&#x20AC;? in all commercial sectors, many markets already have begun to stabilize, and should begin to improve in mid-2010 as space users act to take advantage of the most favorable market conditions seen in years. We expect a healthy balance between supply and demand at that time.

National Average Vacancy Rates

The investment market, stagnant throughout 2009, is also expected to return in 2010. Billion of dollars have been amassed in private equity funds ready to pounce on the impending wave of distressed assets and REO properties expected to hit the market in the coming year.

2010 Global Market Report www.naiglobal.com

US Overview By Dr. Peter Linneman, Chief Economist, NAI Global The current recession is the worst downturn in economic activity since the Great Depression, a downtown that has been hurt more than helped by government intervention and inconsistent—and often unpredictable—government policy. But barring more government “salvation,” we hit bottom in May 2009. Without disastrous government “salvation,” we probably would have bottomed in January 2009. Contrary to rhetoric, government interventions both lengthened and massively deepened the current super-recession. GDP grew at an annualized rate of 2.8% in the third quarter and employment will lag by about a year. When job declines end, there will be a net loss of about 8.5 million jobs. This is equivalent to more than four years of normal job growth. To put the situation in perspective, real GDP was about $14.8 trillion (2008 $) at the start of September 2008, falling by 3.8% (US$566 billion) year-over-year. The US trade deficit has plunged, reflecting the horrific loss of global confidence in the integrity and productivity of US capital markets. The US trade deficit has fallen to -2.8% of US GDP, and -0.9% of rest-of-world GDP. Always remember that the US trade deficit is not a reflection of the lack of competitiveness of our goods and services, but rather a reflection of our capital market superiority. The fundamental problem remains: It is impossible to predict what will happen next, as every day brings new seemingly ad hoc rules. A perfect example occurred when the list of autos eligible for clunker tax rebates was suddenly revised on the eve of the program without any explanation. And tax, healthcare and regulatory proposals abound, with little clarity as to the ultimate outcomes or costs.

On a 12-month moving average basis through September, just 26% of industries are adding workers, versus the eight-year average of 46%. Not surprisingly, all sectors by major SIC code, except the government (+132,000), experienced significant losses from the beginning of the recession in December 2007 through November 2009. On an absolute basis, the biggest losers were the manufacturing (-2.1 million); trade, transportation, and utilities (-1.7 million); construction (-1.6 million); and professional and business services (-1.3 million) sectors. On a percentage basis, construction (-20%) and manufacturing (-15.5%) were the worst performers. However, job losses continue to slow with a decline of just 11,000 in November 2009. Professional and business services bottomed in August 2009 and gained 148,000 (0.9%) over three months through November. This was driven largely by education and health services, which increased throughout the recession by 858,000 (4.6%) between December 2007 through November 2009.

Real GDP Growth Rate Year-Over-Year Percent Growth 10 8 6 4 2 0 -2 -4 -6 1984

Percent

Early in 2009, monthly job declines were wiping out 500,000-750,000 jobs. In July, that number had diminished to just over 3,000,000, diminishing even further to 111,000 in October and 11,000 in November. Year over year through November 2009, the US lost 3.5% of all payroll jobs.

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In November 2009, the unemployment rate stood at 10%, an increase of 510 basis points since December 2007. Over the same period, the median unemployment duration has risen by 11.7 weeks, to 20.1 weeks (a nearly 140% rise), with the percent unemployed more than 27 weeks rising from a low of 17.5% in December 2007 to 2010 Global Market Report www.naiglobal.com

38.3% in November 2009. At the same time, short-term (five weeks or less) unemployment spells are back to the same level (1.8%) as December 2007, after peaking at 2.4% in January 2009. The truth is that many more people are unemployed, and for longer, as a result of rule-destroying government interventions, though modest improvements are emerging.

Manufacturing as a % of Total Employment (with trendline)

Percent

Teen workers accounted for about 19% of the 7.2 million jobs lost between January 2008 and November 2009. Thank you, Congress, for the minimum wage increase. Job losses continue to be extraordinarily male-centric, with 4.75 million of the 7.2 million total lost jobs concentrated among males older than 19, and only 1.69 million among women older than 19. This reflects the high concentration of males in manufacturing, construction and finance, while women are disproportionately employed in the less adversely impacted healthcare and education sectors. As a result, females now hold half of all US jobs for the first time in US history.

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The biggest uncertainty is not the capital markets; it is the Capitol markets. Despite the serial ineffectiveness of government interventions, investors are slowly coming out of their tortoise shells. The early signs of recovery are fragile because of the surge in oil prices back to $70 per barrel. At $70 per barrel, it will take much longer to rebuild consumer confidence, a precursor for a recovery. GDP bottomed in the third quarter, and employment will lag by about a year. In early December 2009, yields on 10-year Treasuries were around 3.5%. We believe 10year Treasury yields are still some 125 basis points too low. If all were normal, 10-year Treasury yields would be around 4.75-5%, where they hovered before October 2007. Recently, LIBOR and 30-day Treasuries have raced to zero. A low LIBOR has become the life blood for many borrowers with floating rate debt, and a rate spike has the potential to crush many borrowers. Long-term Treasury Inflated-Protected Securities (TIPS) returns have narrowed remarkably, even as inflationary threats loom. They experienced a yield increase to 3.09% in November 2008, and stood at 1.87% in November 2009. Residential mortgage delinquencies have risen among all products since hitting lows in late 2005. However, these delinquencies are highly concentrated in recession torn greater-Ohio (Ohio plus 100 miles beyond the Ohio border) and the boom markets of south/central Florida, Arizona, Nevada and California. Elsewhere in the US, delinquencies remain at cyclical norms.

The best news for the US economy continues to be that the US. housing market bottomed in February 2009. Single family starts hit (a very low) bottom of roughly 355,000 units in January and February, increasing unsteadily to 511,000 in September and 476,000 in October. The inventory of homes held by builders for sale has plummeted to 239,000, as new home production over the past two years has been insufficient to replace the more than 350,000 units destroyed each year. MLS home prices (which

U.S. National Home Price Indices 300 Index Value

Commercial mortgage delinquency rates have risen across the board, most visibly at banks and thrifts, and CMBS. CMBS issuance in the US remains nearly comatose, with no new issues in eight out of the first 10 months of the year. The only positive glimmer was that the CMBS market managed to eke out a handful of deals in June (US$600 million) and July 2009 (US$300 million). And the recent DDR issuance is decidedly a positive sign.

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FHFA

2010 Global Market Report www.naiglobal.com

exclude sheriff sales) have risen nationally, and in almost every MSA, for the past six months. Thus, while many foreclosure sales in the weakest markets continue to drag down the Case-Shiller and NAR indices, the preponderance of homes sold by resident owners has seen price rebounds. This sector’s rebound over the next three to four years will be a powerful growth engine.

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The good news is that broad equity markets have rebounded, reflecting both improved prices and cyclically low earning levels. Since bottoming at 676 in March, the S&P 500 has risen by 62%, and stood at 1,095 in early December, though still 29% below its peak of October 2007. This rebound in broad equity pricing is good news for commercial real estate, as it will slowly work its way through to real estate. While real estate pricing will lag public markets, the rebound should serve to re-equitize many properties crushed by the collapse in late 2008 and early 2009. After steadily declining since the end of 2006, REIT FFO multiples showed the first sign of changing course in the third quarter of 2009. In December, the overall REIT FFO multiple rose to approximately 14.1, compared to the long-term average of 12.1.

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Real Estate (Under) Over Pricing Using: 50

CAPM

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Hotel

Multifamily

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Industrial. NCREIF’s US industrial vacancy rate (primarily for institutional quality properties) continued to increase, from 10% in the second quarter of 2009 to 10.8% in the third quarter. The two data series moved in lock step from 1987 to 2004. Since then, the NCREIF series has trended downward more sharply, but changed course over the last three quarters. This initial divergence indicates that the institutional-grade properties in the NCREIF survey enjoyed greater demand than the overall market, but are now being affected by the wide-reaching economic downturn.

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Multifamily Construction and Vacancy Trends Thousands of Units

Multifamily. The Census Bureau’s quarterly Housing Vacancy Survey indicates that the US multifamily vacancy rate rose in the third quarter to 11.1%, from 10.6% in the second quarter of 2009. This series has generally been hovering around 10% since late 2003. For NCREIF’s institutional properties, the national vacancy rate declined by 20 basis points, from 7.4% in the second quarter to 7.6% in the third quarter of 2009. This discrepancy in vacancy rates is due to the fact that the NCREIF properties are of higher

1998

Liquidity premium assumed to be zero.

Source: NCREIF

Office. In the third quarter of 2009, the national office vacancy rate rose to 14.3%, a 70basis point increase from last quarter, according to NCREIF. This puts US office vacancy above the “natural rate” of roughly 10%. Severe job losses have resulted in increasing shadow or sublease space along with tenant inducements. These availabilities are expected to increase through 2010. The first quarter of 2008 marked the first time the national office vacancy rate surpassed 13% since the third quarter of 2006, and it has been rising since.

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Vacancy Percent

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The Capital Asset Pricing Model (CAPM) indicates that public real estate pricing has improved dramatically relative to its long-term risk during the past six months. In particular, the under-pricing of REITs has gone from 230% in March, to 3% in December. A comparative risk analysis, which assumes that the ownership of the perpetuity lease claim should generate approximately the same expected return as the perpetuity BBB debt claim, suggests that real estate has gone from almost 70% under-priced to 9.5% over-priced. Research indicates that public pricing leads private pricing by roughly 18 months. This suggests a rebound in private pricing remains about a year away.

S&P 500 Index

1,600

1990199219941996199820002002200420062008 Total in Bldgs w/ 5 or More Units (Thousands)

Vacancy

2010 Global Market Report www.naiglobal.com

quality than the Census properties. Thus, better-quality properties are exhibiting better fundamentals. Over the last 10 quarters, the Census vacancy rate has been relatively flat, while the NCREIF series had exhibited a sharp increase, as unsold high-end condos were converted to rental units. The first quarter decline indicated that the condo market overhang may be subsiding. Multifamily starts are about a quarter of their historic norm. They have fallen 75% in about seven months, and will remain low due to the shortage of available construction capital. This is not such a horrible thing in the near term, because there is a fair amount of vacancy due to the fact that as the economy shed jobs, people doubled up. Young graduates stayed with their parents, immigrants stayed with their cousins and brothers, etc. This will continue until labor markets improve and we start to add jobs to the economy. The lack of construction means that excess inventory is being absorbed, but it is tough on the construction business. The multifamily sector will take longer to rebound and we will not see a recovery until late 2010. Retail. NCREIF reported that the national retail vacancy rate jumped to 10.7% from 9.8% in the second quarter of 2009, after breaking 6% in the second quarter of last year, the first time since 1999. The vacancy rate rose 300 basis points from year-end 2008, and just over 315 basis points from a year earlier. The University of Michigan consumer confidence index rose to 70.6 in November 2009, compared to its low of 55.3 in November 2008. The index had not seen the low of 2008 since 1980. Real retail sales peaked in November 2007 at US$337 billion, declined to US$293 billion in April 2009, and stood at US$296 billion in October through September 2009. On a monthly annualized basis, retail construction has been declining steadily, and as of September 2009 was recorded at US$34.7 billion, down from its October 2007 high of US$62.6 billion.

Canada Canadian growth, led by export and commodity sectors (base metals, oil and gas) performed well through early 2008. However, the financial crisis, the declining US market and general softening of the global economy slowed the Canadian economy in late 2008 and forced a sharp downturn in 2009. A rebound in commodity demand enabled the economy to stabilize in late 2009. The Canadian economy is expected to fall 2% year-over-year in 2009, recovering in 2010 with real GDP rising by 3%. The country continues to be subjected to multiple elections and the constraints of a minority-led government. Unemployment remains above 8%, and is expected to ease slightly in 2010 as the country emerges from recession. The Canadian dollar has marginally strengthened against the US dollar in 2009: in March the CAD/USD was $1.26 compared to $1.06 in November. The ownership of commercial real estate in Canada is concentrated in large pension funds, REITs and large domestic corporate investors. The best assets remain in relatively strong financial hands with conservative leverage. Pools of capital are looking to the US, Europe and Asia to satisfy the demand for high quality real estate investment opportunities. Land prices softened and cap rates increased in 2009. Overall, 2010 is expected to be a challenging year, with pockets of strength in western Canada. Transaction volume is slowly beginning to improve despite a slow economy. The fundamentals of commercial 2010 Global Market Report www.naiglobal.com

real estate are stabilizing. Prudent lending practices for home buyers, developers and investors differentiate the Canadian reality from the US experience. As liquidity slowly normalizes, many sectors of the domestic economy will recover sooner than expected. The retail sector will suffer the longest as consumer spending and consumer confidence will remain sluggish through 2010. There are two distinct operating environments in commercial real estate: eastern Canada (e.g., Toronto, Ottawa and Montreal) and the western provinces (e.g., Vancouver, Victoria). Provincial markets such as Saskatchewan have emerged in the past few years.

Toronto and Eastern Canada Because Eastern Canada is the countryâ&#x20AC;&#x2122;s manufacturing base, both the Ontario and Quebec economies are straining under slow business conditions. In Toronto, a recent surge in office and condominium construction will continue to overhang well into 2010 as developers struggle with fewer tenants and a difficult credit environment. Downtown Toronto and suburban Class A vacancies are about 9%. Retail space in Toronto is harder hit with a 10% vacancy rate. The greater Montreal area accounts for more than 21% of the entire Canadian office market, with an office vacancy rate of 8%. The hotel industry in Montreal continues to expand, although industrial development has slowed with the expectation of a recovery in 2010. With its reliance on the government sector, Ottawa remains stable while Halifax retains stability from a solid base of educational, medical and research facilities.

British Columbia (Vancouver and Victoria) The western regions of the country possess abundant natural resources (oil and gas, agriculture, potash, uranium, diamonds, gold, etc.), allowing them to weather the recession. Looking forward, the 2010 Winter Olympics will provide a boost to the regional economy via tourism inflows. Commercial real estate remains strong in British Columbia. The Vancouver office market has a vacancy rate of 7%, but with little new product coming online in 2010-2011. This market will improve as the regional economy strengthens. The Victoria office market, which is dependent on the space demands of the provincial government, has seen increasing vacancies as government spending is cut. Industrial real estate in Vancouver continues to outperform other areas with average vacancy rates at about 4%. In Victoria, the industrial rents are stable due to lack of new supply and vacancy rates less than 1%. Retail space continues to be hit as the credit/financing environment remains tight, muting consumer demand. The retail vacancy rate is 8% in Victoria and is expected to improve very little through 2010. Similarly the Vancouver retail market is under pressure. However, the 2010 Winter Olympics coupled with population growth near the CBD will help this sector recover. Investment in commercial product in this region has been resilient with cap rates around 6-7% for Victoria and 6.5-8% for Vancouver. The Greater Vancouver investment market showed signs of recovery in the third quarter of 2009, after five quarters of flat or declining levels of activity. Investment products in the rest of Canada remain in low supply.

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Saskatchewan Saskatchewan is a smaller, resource-and-farm based economy that has blossomed in the past four years, attracting small- to mid-sized investors. In 2009, Saskatchewan has resisted the general economic downturn and proven to be an â&#x20AC;&#x153;oasisâ&#x20AC;? due to its abundant natural resources. The two largest cities are Regina and Saskatoon; with a combined population over 500,000 and unemployment rate below 5%, Saskatchewan has weathered this recession best of all Canadian markets. Industrial market vacancies are at an all-time low, while rental rates continue to hold up due to low supply and little new construction. Although the Regina office market has experienced declining absorption, vacancy rates remain extremely low at 1.75%. Rental rates will spike up in 2010 as the economy emerges from recession and drives up demand for office product. Expansion continues in the retail sector in Regina with the new neighborhood of Harbor Landing. The Saskatchewan investment market remains strong with interest from local investors. Cap rates are between 8-9% for well-located, well-tenanted projects. Demand for agricultural land has risen steadily in the past three years. As pent-up demand for natural resources and commodities re-emerges, rural land values are expected to improve.

Europe-Middle East-Africa While most of Europe remains firmly in the grip of recession, the worst is over and the recovery is within sight. Within the Euro area, GDP growth is forecast at -3.8% for 2009 (as of mid October 2009), recovering to +1.2% in 2010. Within those figures, France is expected to show -2.1% in 2009, and +1.3% in 2010. Germany growth rates for 2009 and 2010 are expected to be -4.9% and +1.6%; and for the UK, -4.4% and +1.4%, respectively. Both Germany and France returned to positive GDP in the third quarter, but the UK lagged at -0.4%. While the figures in Central and Eastern Europe are bleaker for 2009, they too will see recovery in 2010. Russia for example, will shrink by 7.0% in 2009 and rise 2.5% for 2010. Major Middle Eastern countries are expected to reverse decline in 2010, with GDP growth for UAE and Saudi Arabia predicted to be 3.3% and 4.1%, respectively. Unemployment in the Euro area was 9.6% (as of August 2009) while industrial production had fallen by 15.4%. Inflation is forecast at 0.4% for 2009. The Euro has strengthened further against the US dollar (currently 1.50) in the last 12 months, as the European Repo rate has fallen to 2%, with the UK Base Rate remaining at 0.5%. Consumer demand across Europe remains weak with zero growth in Central and Eastern Europe. However, industrial statistics in the 16-country Euro area increased by 0.9% in August, following 0.2% in July. Space demand in the EMEA region remains weak in all sectors with office vacancy rates climbing to their highest levels since 2004. Fortunately, most of the western cities entered the recession with little office development. But cities like Moscow, Dubai or Kiev, where construction was booming, are being crushed. Development activity has declined dramatically, and in all markets, many tenants have put space up for sub-letting.

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Office rents have fallen across the region, with prime rents down by about 10% on average from mid-2008 to mid-2009. Markets in Austria, Germany (excluding Berlin), Switzerland and Netherlands have proven more resilient than others. Vienna, for example, has seen a 5% decline in rental values, whereas markets such as Dubai, Dublin, Tel-Aviv, London, Madrid, Moscow, Oslo and Warsaw have seen far more significant declines. Rents in Moscow and Kiev are off more than 50% from their peak. In virtually all markets, property owners are offering increased incentives, such as extended rent-free periods (several years in some markets), and contributions to fit-out costs. Retail rents, particularly in Western Europe, have withstood the recession better than those in the office sector. Rents have held steady in Austria, Belgium, France, Germany, Israel, Italy, The Netherlands, Portugal, Sweden, Switzerland and London (West End). However retailers, apart from select discounters and those in the food sector, have placed expansion plans on hold, and there have been some notable failures in the sector. As in previous recessions, the gap between prime and secondary space has widened as retailers upgrade from secondary to prime locations. As in the office sector, development activity has been sharply curtailed, particularly in the Central and Eastern European (CEE) markets. The recession has also hit the warehouse/industrial sector. The most adversely affected are Hungary, Ireland, Israel, Poland, Portugal, Russia, Spain, Ukraine and Dubai, all of which experienced rental declines in excess of 20%. Most notably, industrial production experienced a 15% per annum decline, while retail volume dropped by 2.6% per annum through August 2009. Food and discount retailers are faring relatively well, but many occupiers are downsizing, seeking to rationalize their existing space. Industrial development activity has virtually stopped across the continent. Investment volumes have fallen sharply across the region. In the first half of 2009, approximately â&#x201A;Ź25 billion were invested in European property â&#x20AC;&#x201C; a mere 20% of the corresponding 2007 volume as institutional investors have adopted a wait-and-see attitude. Due to concerns about the security of income streams, buyers are exclusively seeking prime properties with long-term leases with notable transactions completed in France and the UK. The latter has attracted some international investors, as values are expected to rebound as economies bottom. German open-ended funds are slowly returning to the market, but are restricting their search to prime, well-leased properties. Foreign investors are taking advantage of the weakness of the UK Pound, the availability of long term leases with upward-only rent reviews and historically high yield levels. A shortage of prime stock is beginning to nudge yields down. Prime office yields have increased across the region, with the exception of Switzerland, though the rate of increase has slowed in the more mature western markets. In the UK, for example, yields in the City of London are now around 6.5%, an increase of 225 basis points from the peak. Yields in Londonâ&#x20AC;&#x2122;s West End are now 5.25%, an increase of 175 basis points. Current prime yields in Paris are around 5.75%, an increase of 215 basis points. In Frankfurt they are 5.4%, an increase of 40 basis points. These corrections look relatively small compared with shifts of 650 and 450 basis points in Kiev and Moscow, respectively. The focus of investors on prime sector properties has widened the gap between the prime and secondary yields.

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As 2009 draws to a close, there is a mood of cautious optimism for 2010 and 2011. However, a slow recovery will generate further value declines in many locations, particularly in the CEE markets.

Latin America and the Caribbean In the first quarter of 2009, the global economic slowdown clearly affected Latin America and Caribbean countries. However, the â&#x20AC;&#x153;hitâ&#x20AC;? during the year was not as great as feared, with Brazil, Peru, Panama and Colombia registering positive growth. However, real estate development slowed in all countries as many developers decided to either wait out the storm before breaking ground, or deliberately slow the pace of construction. Consumer demand remained comparatively healthy in most of the larger countries, with the notable exceptions of Argentina and Mexico. However decreased flow of investment capital, corporate credit and the greatly diminished overseas demand for goods and raw materials has adversely impacted the region. Projections for the region in 2010 are optimistic, depending upon the country. But growth will depend to a large degree on the depth and breadth of a global economic recovery. The increasing level of construction and manufacturing worldwide will positively impact the region, especially for raw materials and commodities. Many countries in the region have been growing domestic demand, but most remain dependent upon overseas demand. Along with the implementation of measured fiscal policies and the maintenance of adequate reserves, most Latin American and Caribbean countries are positioned to prosper in the upcoming recovery. The Latin America and Caribbean region has been able to weather the economic crisis because most real estate projects and capital investments are done with equity rather than debt. This served to insulate the region from the credit/financing crisis with the exception of Mexico, whose economy is heavily tied to the US and Canada and where much financing is done in dollar denominated debt. Even with the continued diversion of credit to the tier one countries during 2010, most real estate markets in the region will prosper. The likely scenario is that demand for real estate will rise in 2010; and development will increase as developers and investors regain their confidence. Positive real estate supply growth will occur in the larger economies (Brazil, Chile, Peru, Panama and Colombia), but there will also be a modest revival in the smaller economies and Mexico. However, growth in resort and hotel development will lag. Greenfield development in the industrial and office sectors is expected to continue due to the lack of true Class A product throughout the region (with the exception of Mexico). Class A office vacancy rates continue below 2-5% in Santiago, Buenos Aires, Bogota and Sao Paulo. With the notable exceptions of Venezuela, Ecuador and Bolivia, most Latin American and Caribbean countries will experience economic growth in 2010. The challenge remains for governments to provide adequate infrastructure to meet the ever-growing needs of industry.

Argentina The economy and growth were very impacted negatively during 2009 due to lower agricultural commodity prices and weak external demand. Global exports should 2010 Global Market Report www.naiglobal.com

increase, as should the agricultural, textile and service sectors. Inflation is expected to stay high through 2010. There continues to be a shortage of available Class A product in the office, industrial and retail sectors. The office vacancy continues to be below 2%; industrial and downtown retail are below 3%. The construction pipeline is insufficient to meet current and future demand. Although in previous years the tight supply drove up prices, the slower rate of absorption in 2009 resulted in the softening of rental rates.

The Bahamas Both the tourism and banking industry – the two key economic drivers – were negatively impacted in 2009. US and European tourist travel to the islands slowed as did construction of new hotel, resort and residential projects. The projected recovery in the US and Europe in 2010 will provide some relief; but tourism is not projected to increase significantly until 2011. Downtown retail and office market absorption continues to slow, but the rate of decline has decreased. Due to abundant parking and better access, suburban markets continue to attract new growth and expansion. Demand has kept vacancy rates low and spurred build-to-suit opportunities, although demand for suburban retail rents dropped somewhat in 2009. Demand is expected to increase during 2010, especially for industrial space and more modern Class A space. Foreign investment in residential development and hotels is largely on hold, while cap rates range from 7-11%.

Brazil Brazil has proved to be one of the world’s most resilient economies, emerging from the recession in the second quarter of 2009 with 1% quarter-over-quarter growth. The expectations of a continued economic boom are partially due to oil in the country’s large offshore oil deposits; Brazil’s hosting of the World Cup in 2014 and of the Olympics in 2016; alternative energy sources (e.g., ethanol); and continued policy and bureaucratic reforms. In the short term, high business loan rates and bureaucracy will limit the country’s growth. Risk perception among international investors continues to decrease, and the Brazilian Real continues to strengthen against the US dollar, from its low of 2.16 in late 2008 to 1.76 in late 2009. During 2009, the Brazilian real estate market continued to grow, albeit at a slightly slower rate than previous years. The country remains an attractive target for Greenfield Class A office, retail and industrial development and speculative real estate acquisition. Lease rates for all product types remain stable while cap rates hover between 9-11%.

Colombia Colombia continues to be the region’s secret success. Over the last 15 years, the country has steadily grown and improved its democratic credentials. The Peso has remained relatively stable rate at about 2,000 to the US dollar. The imminent finalization of the Free Trade Agreement with the US will further benefit the economy. Real estate development continued to be relatively strong during 2009 with demand exceeding supply. Prices for office, retail and industrial space increased slightly in the first half of the year, but flattened in the second half as the global recession began to hit the country’s economy. International investment funds still have yet to venture strongly into Colombia, but the domestic capital sources are investing actively in Greenfield projects. 2010 Global Market Report www.naiglobal.com

Global investment interest largely disappeared during 2009, but is expected to return in 2011. Given the lack of a transparent investment market for existing product, cap rates are difficult to identify, but are estimated to be 12% or greater.

Chile Chile continues to be the benchmark for most countries in the region as the Chilean economy recorded another respectable year of growth. Inflation dropped while the 7% unemployment rate is among the lowest in Latin America and well below the US rate. The drop in the prices for copper and other commodities paired with the decline in global demand adversely affected the Chilean economy. However, Chile largely avoided any crisis due to capital reserves built up when commodity prices were high in 2007-2008. Its continued attempts to decrease its dependence on imports of natural gas by developing hydroelectric projects in the Andes is hindered by ecological groups. Nevertheless, Chile increased its domestic electricity supply by 7%. Chilean companies, profiting from their strong macroeconomic climate, continued to cautiously expand operations into other countries, including Peru, Colombia, Argentina and Brazil. Demand for quality commercial real estate continues to be strong, albeit slightly diminished, with vacancies remaining below 3%. Of the developments slated for completion in 2009, about 35% were completed on time, 50% were delivered a few months late, with the rest expected in 2010. Rental rates remained stable and cap rates are about 8-10%.

Costa Rica Although the US-Costa Rica Free Trade Agreement went into effect on January 1, 2009, strong benefits have yet to be achieved. The opening up of the telephony sector in 2010 with the combined surge of insurance operators (from the 2009 sector opening) should provide a boost to the economy; however, the pace of reform remains slow. Real estate activity slowed during 2009 with resort, hotel and second home sectors on the Pacific Coast hit hard, with activity dropping about 65%. In the municipal area of San JosĂŠ, activity decreased 15-20% in the office and industrial sectors, but the retail market declined by even more. Rental rates have softened in the office and industrial sectors, dropping 10-15% for retail. For 2010, absorption in the commercial sectors is expected to increase slightly, with a lesser increase in retail. Rental rates are expected to be stable in 2010, but will firm up in the office and industrial sectors as absorption increases. Along the Pacific Coast, recovery and renewed investor interest should start in early 2011. Land prices are weak as owners try to cash out. Cap rates are above 9% and project IRRs are above 18%.

Mexico Mexico was the hardest hit of the larger economies given falling auto demand from the US and the impact of swine flu on tourism. GDP is expected to contract 7.1% in 2009. Mexico began to explore outsourcing of some of its oil-related activities, such as joint-ventures with Petrobras. The positive effects of these efforts will only be felt after 2013, but should increase investment flows to upgrade the Pemex infrastructure for greater exploration.

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The exchange rate has hovered at 13.5 pesos to the US dollar throughout 2009. Interest rates remain stable after having dropped in mid-2008 to their lowest levels (7.3%). The demand for maquiladora product dropped significantly, but by year-end 2009, interest has surged due to increasing labor and transport costs from Asian operations. While real estate activity declined significantly, Mexico City fared better than most markets. The office and the industrial sectors generally experienced positive absorption, though about 20% lower than the previous year. Demand is expected to increase slightly during 2010. Lease rates in Mexico City are relatively stable, but softened by about 15% in the secondary and tertiary submarkets. Sale prices across the country are also stable with cap rates about 9.5% for quality product, and IRRs in the 15-20% range.

Venezuela 2009 was a difficult year for Venezuela as the global recession, plunging oil prices and poor economic micro-management policies plagued the country. The next few years will be particularly difficult with shortages expected in many sectors including power and water. Except for activity from political bedfellows such as Iran, China, Libya and Russia, there is virtually no new foreign investment in Venezuela outside of the petroleum industry. That said, the petroleum industry remains a powerful and profitable economic engine. The countryâ&#x20AC;&#x2122;s administration and policy environment hampers recovery. Vacancy rates are still near zero in office, industrial and retail properties and rental rates are rising due to high inflation rates. Investors and developers remain very cautious due to the lack of transparency and political risks.

Asia Pacific The general feeling across most of Asia is that the worst of the recession is over. Most Asian countries have experienced a major rebound of stock markets, as well as some improvement of real estate values, especially on the residential side. The main indices in Hong Kong, mainland China, South Korea and Singapore have risen more than 50% since January 1, 2009. The Indian Sensex has climbed 72% and stands 20% above where it was just before Lehmanâ&#x20AC;&#x2122;s demise. However, there remains an underlying cautiousness. Countries like Singapore, Hong Kong and South Korea that have seen quick turnarounds in their residential property market values since the beginning of 2009 also see their governments testing new regulations to manage another bubble. Hong Kong has seen more than a 25% rise in its mid-priced residential sector, and a 40% rise in the luxury sector since the beginning of the year. Recently, a Hong Kong apartment was sold for a record price of HK$71,280 per square foot (US$9,197 per square foot), setting a world record price per square foot. In response, the Hong Kong government has cut mortgage limits and freed up more government land for residential development. Nonetheless, wealthy mainland Chinese buyers continue buying luxury residential properties all cash, and often on all-expense-paid property viewing tours by Hong Kong developers.

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Commercial rents have been dropping since late 2008. Class A office rents are down from their peak 2007 levels by as much as 50% in the Singapore CBD and the Central District of Hong Kong, and as much as 25% in Shanghai. Coinciding with the rental compression, yields have risen, as sellers have fewer “real” buyers. Credit markets have lower loan-to-value ratios, more stringent underwriting and higher interest rates. Since the start of the global recession, institutional investors have changed their focus to the developed countries with lower risks. The Asian market players learned from the 1990s Asian Financial Crisis and worked together to avoid a fire sale environment by allowing borrowers to extend on modified terms. Some of the REITS and listed property developers were also able to raise fresh capital in the public markets to reduce their debt levels. Many properties that were listed for sale were later pulled off the market as the bid-ask spreads were too large. In most of the major Asian financial centers (Tokyo, Hong Kong and Singapore), institutional buyers were not on the playing field. The only buyers in town were high net worth private buyers, so market activity through most of 2009 tended to involve transactions under US$100 million. In China, foreign investors who were very active buyers in 2005-2008 became sellers in 2009, with domestic buyers dominating the investment activity. Capital values have been hit hard, resulting in a significant amount of transaction activity. In India, 2009 was a wait-and-see period, as high land prices paid in 2006-2008 could not justify new projects at greatly reduced rents. In the face of the global recession, wealthy Asians have staged a flight to safety, choosing to invest in home markets instead of the US or Europe. As the wealth of the high net worth investor class is expected to grow by 8.8% annually through 2015, China and India should lead the way.

Australia Australia was one of the few economies that never entered a deep recession. GDP growth was 0.7% in 2009 and is projected at 2% for 2010. Estimates for consumer price increases in 2009 and 2010 are 1.6% and 1.5%, respectively. Office markets have been hit the hardest, with values falling by 15-25%. This has meant yields for prime quality assets increasing by approximately 100 basis points in most cities to 7-8%. Sydney had very few large office transactions in 2009 (only four sales over A$50 million); whereas, Melbourne had more sales and some in excess of A$100 million. Perth and Brisbane have had very few transactions in 2009, with a drop in demand for office space and massive new supply under construction. Australia’s capital, Canberra, has had a disproportionate number of large transactions as buyers sought assets with long-term leases to government bodies. Retail investment activity has declined as access to debt was limited. The impact of the government’s A$52 billion stimulus package has enabled households to continue spending supporting sales and employment in many parts of the country. Industrial markets are likely to see yields remain high, while demand remains muted.

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China China continued to post large GDP growth. Projections for GDP growth in 2009 and 2010 are 8.5% and 9%, respectively, while consumer price increases in 2009 and 2010 are just -0.1% and 0.6%, respectively. China’s RMB4,000 billion (US$586 billion) fiscal stimulus package announced in late 2008 continued to work its way into the economy. By the third quarter of 2009, China began to see a sharp rise in foreign direct investment in its manufacturing sector. In Beijing, the overall retail vacancy rate is over 30% due to Olympic construction. In contrast, Shanghai’s prime retail vacancy rate is closer to 3.3%, but this could increase with significant retail development for the 2010 World Expo under way. Investment in the industrial sector is expected to rise as investors see opportunity in the current pricing while owner-occupiers seek cheap buys. US-based Blackstone Group L.P. has set up a fund manager in Shanghai to focus on local opportunities. Disneyland will establish a “Magic Kingdom-style theme park with characteristics tailored to the Shanghai region.” Chinese will replace foreign investors as the main buyers of commercial real estate in the country over the next few years. The domestic share of total property investment grew to 70% in the first half of 2009, up from 36% in 2008.

Hong Kong With Hong Kong’s strong dependence on finance and global trade, it felt the full brunt of the global recession. Projections for GDP growth in 2009 and 2010 are -3.6% and 3.5%, respectively. Estimates for consumer price increases in 2009 and 2010 are -1% and 0.5%, respectively. For much of 2009, absorption of office space was negative. Meanwhile, occupiers upgraded from industrial or Grade B buildings to newer, attractively priced office buildings in Kowloon. China's super-rich are still purchasing homes and sweeping luxury brand items off the shelf. Although total retail sales have dropped 4% this year, luxury brands are doing brisk business thanks to mainland shoppers. Industrial tenants continued to cut costs by downsizing and relocating to more affordable premises, which has fueled a high vacancy.

India India continued to post large GDP growth through the recession. Projections for GDP growth in 2009 and 2010 are 5.4% and 6.4%, respectively. Estimates for consumer price increases in 2009 and 2010 are 8.7% and 8.4%, respectively. The office property market is experiencing an increase in confidence as banks and financial services companies buy, but the IT and Information Technology Enterprise Solutions (ITeS) sectors have yet to enter the growth spree. Delhi and Mumbai have grown the most in new properties available for rent. For example, vacancy levels rose to 30% in the Bandra-Kurla Complex and Kalina districts of Mumbai while vacancy

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levels in Noida (near Delhi) were 40%. The new government and falling interest rates in the second quarter of 2009 have improved local business sentiment in India. But despite improved confidence, office rentals slid in major cities as tenants moved to cheaper locations or upgraded at no cost. Commercial property markets will likely remain soft in the short- to medium-term. Landlords in secondary office locations will struggle with the consequences of overbuilding and will increase tenant incentives. The commercial market will follow the growth spurt of the residential sector, but slowly. On the industrial front, market players are positioning themselves for leadership in logistics and manufacturing platforms. Higher-quality buildings and infrastructure are desperately needed but challenges remain in land acquisition and aggregating land assemblage.

Indonesia With a strong domestic economy and less dependence on foreign investment and capital flows, Indonesia has weathered the storm well. Projections for GDP growth in 2009 and 2010 are 4% and 4.8%, respectively. Estimates for consumer price increases in 2009 and 2010 are 5% and 6.2%, respectively. Many multinational companies have put expansion plans on hold. Investment yields in Indonesia are 7-9%, but there very few transactions closed in the last 12 months. The office rental rate in Jakarta remained stable, even as the office vacancy rate will increase to 15% by year-end 2010. Rental prices fell due to weak economic growth. Supply is predicted to be high for the next two years (around 290,000 SM during 2009-2010). As retailers consolidate stores, absorption will be negative.

Japan Heavy investment in residential and commercial property markets in the last few years has led to extraordinary buying opportunities due to the current lack of liquidity. Projections for GDP growth in 2009 and 2010 are -5.4% and 1.7%, respectively. Estimates for consumer price increases in 2009 and 2010 are -1.1% and -0.8%, respectively. The property sector has been badly bruised, with developers and managers accounting for eight of the 10 biggest bankruptcies of listed Japanese companies this year. Many large investment funds are proposing to start buying Japanese property in the first half of 2010 when prices are expected to bottom. However, to date there has not been as much distress in the market as most expected. One reason is that the leniency of Japanese banks allows borrowers to refinance rather than forcing liquidation. Commercial land prices in Japan fell 4.7% to a three-year low in 2008, with the decline increasing to 5.4% in Tokyo, Osaka and Nagoya. Office vacancies in Tokyo's main business districts increased for the 17th month in a row in June 2009 to 7.25%. Financially strong office tenants have been upgrading their locations to better buildings without increasing rents.

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Malaysia With Malaysiaâ&#x20AC;&#x2122;s dependence on exports and FDI, the impact of the global recession has been severe. Projections for GDP growth in 2009 and 2010 are -3.6% and 2.5%, respectively. Estimates for consumer price increases in 2009 and 2010 are -2.2% and 2.2%, respectively. Tourism is one of the country's biggest revenue sources, accounting for 12-13% of gross domestic product. State investment agency Khazanah Nasional plans to invest over RM1 billion in the leisure industry over the next two to three years in leisure projects. Over the next few years, Malaysia will have some RM2.5 billion worth of new tourism attractions (including Nujasaya, Legoland and Kidzania) which are expected to attract nearly 2 million visitors combined annually.

New Zealand The global recession has greatly impacted New Zealand and its commercial property markets. Projections for GDP growth in 2009 and 2010 are -2.2% and 2.2%, respectively. Estimates for consumer price increases in 2009 and 2010 are 1.5% and 1%, respectively. Commercial landlords continue to struggle with declining values, lower rents and increasing incentive packages. Office and industrial vacancies continue to climb. While the residential market in New Zealand has come back with significant strength, the global markets to need to correct further before similar results in the commercial sector occur.

Singapore The global recession has been felt strongly in Singapore, as it is highly trade-dependent. Projections for GDP growth in 2009 and 2010 are -3.3% and 4.1%, respectively. Estimates for consumer price increases in 2009 and 2010 are -0.2% and 1.6%, respectively. Defying all expectations, Singapore's residential property market has rebounded in the thick of the nationâ&#x20AC;&#x2122;s worst recession. New home sales between January and August of 2009 were already 80% of the total homes sold for the whole of 2007. But going forward, prices of mass market and mid-tier projects will face resistance. The government has announced anti-speculation measures to moderate sales volume and prices: immediate removal of the interest absorption scheme (IAS) and the interest-only housing loans (IOL) scheme for projects yet to be launched. In the office market, Singapore recorded positive take-up in the third quarter of 2009 after three quarters of negative take-up. The island-wide vacancy rate for Class A office space increased from 10.8% in the second quarter of 2009 to 12.2% in the third quarter, a trend that is expected to continue as supply comes online. The emphasis for retailers has shifted from store openings to streamlining operations, prompting a 14.4% fall in rents over the year through June 2009. Rents in the Orchard Road area will remain under pressure due to the large volume of new supply in the next 12-18 months.

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Investment sales have jumped tenfold from S$304 million in the first quarter of 2009 to S$3.1 billion in the third quarter. Nearly half of the transactions are for the residential sector while the commercial real estate sector makes up the remainder.

South Korea With South Koreaâ&#x20AC;&#x2122;s strong dependence on exports and weakened currency, the global recession has been felt strongly. Projections for GDP growth in 2009 and 2010 are -1% and 3.6%, respectively. Estimates for consumer price increases in 2009 and 2010 are 2.6% and 2.5%, respectively. Investor demand in commercial property revived in the second quarter of 2009, with capitalization rates at 5.5-6%. Class A office rents remained stable, while all others experienced pressure on rents and occupancy. However, as new buildings are delivered in the Seoul CBD in the fourth quarter of 2009 and through 2010, landlords expect to face further pressure. The industrial market is also seeing vacancy rates of 15-20%, with rents down 20% from the previous year. Retail sector rents were also decreased from the previous year.

Taiwan With Taiwanâ&#x20AC;&#x2122;s strong dependence on exports, the global recession has been felt. Projections for GDP growth in 2009 and 2010 are -3.3% and 4.1%, respectively. Estimates for consumer price increases in 2009 and 2010 are -0.2% and 1.6%, respectively. Taiwanâ&#x20AC;&#x2122;s economy is extremely dependent on export goods factories, many of which are cutting back in the wake of the global recession. Industrial vacancy rates ranged from 13-20%. The Taipei office market is strengthening because of closer economic ties with China (particularly, the Cross-Straits Summit) enabling investment flows. Taiwan recorded its highest overseas capital inflow ever in the third quarter of 2009 at nearly $13 billion. Office vacancy rates are slowly improving. Retail sector vacancy rates ranged from 1-6%, although rents were slashed 40% or more across the board.

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US Highlights – Northeast Region

Office The downtown Baltimore office market continues to gravitate to the water as Inner Harbor East continues to build out. The new 600,000 SF headquarters for Legg Mason opened in 2009 as the largest office presence to date in that area. What will happen to the former Legg headquarters at 100 Light Street remains a question. With vacancy rates climbing to 9.5% in the Boston CBD and 16.5% in the suburbs, there is no shortage of supply, allowing tenants with solid financials to take advantage of tenant-favorable conditions. The Q3 vacancy rate of 11.9 is the highest New York City has seen in four years, but was up only slightly from the previous quarter. Average asking rates are now $52.05/SF, down from almost $70/SF in late 2008. However, the rate of decline, as well as the supply of sublease space weighing on the market, has stabilized. On the investment side, Manhattan sales have been few; however distressed assets are starting to appear in greater number and it is expected that foreign investors and well capitalized investment groups will seek to take advantage of a new pricing structure, spurring the expected turnaround. The amount of vacant office space in the Washington market has trended up over the past four quarters. With over 2 million SF still scheduled to deliver in 2009, and an additional 3.8 million scheduled for 2010, an easy prediction is an increase in the Washington, DC, office vacancy rate through 2010. However, a potential tightening of supply may occur within the CBD during the first half of 2010.

Downtown Office Class A

Leading Price Class A Markets

SuburbanOffice Office Suburban ClassAA Class

New Jersey New York Pennsylvania Vermont Washington, DC

Market

Effective Avg.

High Rent

Vacancy

New York City-Midtown Washington, DC New York City-Downtown Boston, Massachusetts Wilmington, Delaware

$60.00 $51.00 $48.00 $42.50 $26.00

$110.00 $70.00 $75.00 $52.00 $28.00

14.7% 14.0% 10.5% 9.5% 20.0%

Market

Effective Avg.

High Rent

Vacancy

Long Island, New York Boston, Massachusetts Suburban, Maryland Northern New Jersey Ocean/Monmouth Counties, New Jersey

$31.00 $30.00 $28.45 $28.00 $27.50

$34.00 $35.00 $45.75 $50.50 $32.00

11.0% 16.5% 15.0% 20.0% 11.0%

Market

Effective Avg.

High Rent

Vacancy

New York City-Midtown Boston, Massachusetts Washington, DC Pittsburgh, Pennsylvania Philadelphia, Pennsylvania

$200.00 $70.00 $55.00 $26.37 $26.00

$1,200.00 $120.00 $80.00 $36.00 $100.00

7.6% 15.0% 2.5% 7.6% 11.0%

Market

Effective Avg.

High Rent

Vacancy

Washington, DC Suburban Maryland (DC Metro) Pittsburgh, Pennsylvania Long Island, New York Baltimore, Maryland

$30.00 $25.22 $25.00 $24.00 $23.00

$45.00 $55.00 $30.00 $30.00 $50.00

3.0% 7.9% 7.7% 10.8% 10.8%

Market

Effective Avg.

High Rent

Vacancy

Long Island, New York Southern New Jersey Philadelphia, Pennsylvania Western Massachusetts(Greater Springfield) Suburban Maryland (DC Metro)

$30.00 $28.00 $27.00 $25.00 $24.12

$40.00 $38.00 $38.00 $30.00 $44.00

20.0% 5.0% 18.0% 10.0% 2.4%

Market

Effective Avg.

High Rent

Vacancy

Long Island, New York Washington, DC Wilmington, Delaware Middlesex/Somerset Counties, NJ Northern New Jersey

$90.00 $62.00 $60.00 $50.00 $50.00

$120.00 $90.00 $75.00 $60.00 $60.00

12.0% 12.0% 5.0% 7.0% 3.8%

Market

Effective Avg.

High Rent

Vacancy

Washington, DC Northern New Jersey Suburban Maryland (DC Metro) Boston, Massachusetts Long Island, New York

$9.50 $6.10 $5.95 $5.75 $5.75

$16.00 $9.50 $14.00 $7.00 $7.00

16.0% 12.0% 12.5% 11.0% 9.0%

Market

Effective Avg.

High Rent

Vacancy

Pittsburgh, Pennsylvania Suburban Maryland (DC Metro) Boston, Massachusetts Northern New Jersey Albany, New York

$7.50 $6.42 $6.00 $5.75 $5.55

$13.00 $11.25 $8.00 $6.50 $7.50

10.0% 8.7% 13.5% 11.0% 12.0%

Market

Effective Avg.

High Rent

Vacancy

Long Island, New York Washington, DC Wilmington, Delaware Pittsburgh, Pennsylvania Suburban Maryland (DC Metro)

$16.00 $16.00 $14.00 $13.00 $11.42

$18.00 $18.00 $20.00 $16.00 $16.00

8.5% 23.0% 18.0% 10.0% 7.8%

Leading Price Retail Markets Retail Retail Downtown Office Downtown Downtown Class A

Connecticut Delaware Maine Maryland Massachusetts New Hampshire

Retail Retail Suburban Office Service Centers Service ClassCenters A

With asking rates hovering just shy of $5 NNN, Baltimore developers have sharpened their pencils after sitting on recently delivered product in a market that was flooded with new construction for most of 2008.

The vacancy rate in Philadelphia increased almost 4% to total 13% in 2009. Large land parcels are scarce throughout the Delaware Valley, but Philadelphia features large tracts in the Philadelphia Navy Yard and smaller parcels located in controlled industrial parks.

Leading Price Industrial Markets

The Northern New Jersey retail sector has experienced the most difficult market in the past 20 years. Vacancies in major corridors that would normally be leased right away are remaining vacant for extended periods of time. The sector is suffering from a lack of activity as opposed to the other sectors where there are deals to be made at a price. The Philadelphia County retail vacancy rate increased slightly to 11.9% in 2009. Strong convention and tourism business continues to stimulate the economy. New restaurants continue to open and the $550 million dollar Sugar House Casino is under construction along the Delaware River. There is still strong redevelopment activity of existing retail shops and retail centers within the county.

Industrial Industrial Manufacturing Manufacturing

Boston’s retail market has also felt the impact of the economic turmoil with lower rental rates and significantly higher vacancy in the downtown.

Industrial Industrial High Tech/R&D Flex

Retail

Industrial Industrial BulkBulk Warehouse Warehouse

The vacancy factor in Northern New Jersey’s industrial sector is approaching a 10-year high. However, there have been transactions, especially in the second half of the year. Asking rates have decreased approximately 20% and deals are being made off of those numbers. Landlords are making shorter term deals more frequently than in the past, and tenants have also been reluctant to make long term commitments.

RetailRetail Regional MallsMalls Regional

Asking rates for Boston industrial space have dropped to an average of $6/SF NNN and vacancy rates hit their highest level since Q1 2005. The lack of liquidity continued to plague the investment market in 2009. A majority of investment sales have been limited to smaller deals that can be locally financed.

Retail Retail Power Centers Power Centers

Industrial

2010 Global Market Report www.naiglobal.com

US Highlights – Southeast Region

Many companies have been inclined to shed jobs or consolidate their office requirements in order to cut expenses, leading to a decrease in Northern Virginia’s overall demand for office space. At the close of 2009, 13 buildings were under construction in Northern Virginia for a total of 3.67 million SF, of which 67% was pre-leased. Concerns about the national economy were reflected in the Raleigh Durham office market, which pointed to a rise in vacancy as tenants downsized and new sublease space brought additional pressures. Vacancy hovered close to 19% with negative net demand.

Industrial Absorption slowed in Atlanta’s 560 million SF industrial market. The amount of new construction has dropped considerably and although vacancy rates have climbed over the past several quarters and rental rates decreased slightly, leasing activity remains active. With over 1.6 million SF coming off the market in two large deals, the amount of large warehouse space available in Memphis has decreased. Several national companies looking for large blocks of space could edge lease rates upward next year. Miami’s industrial sector suffered from the recession as transshipping slowed, smaller tenants failed and bankruptcies in the automotive and construction industries intensified problems. Vacancies increased on a weekly basis throughout the year. Orlando’s overall industrial vacancy rate stands at 13.2%, up from 8.3% a year ago. Average lease rates have dropped by more than 10.5% over the past year in response to four consecutive quarters of negative absorption. Vacancy rates are highest for flex product at 17.6%. New construction is non-existent.

Retail Atlanta’s retail market, with over 298 million SF of inventory, reported a slight deterioration in market conditions. Vacancy rates are hovering in the 10-14% range with negative net absorption and rental rates are down from the last several quarters. Boca Raton and Delray have weathered the storm best because of the density of population and strong demographics. Discount tenants of all types have benefited from the decreased rental rates and increased vacancy and have used that as an opportunity to expand. Palm Beach County has seen retail rents retreat 20-30% from the 2006-2007 peak. Increasing unemployment and a decline in tourism have impacted Orlando’s retail sector. Asking and effective rents have dropped, while concessions now amount to more than 10% of asking rents. The retail vacancy rate is 8.3% market-wide, up from 5.7% one year ago. New deliveries have been dominated by single-tenant super centers. Over 2 million SF of retail space was completed in the Raleigh Durham market with an additional 900,000 SF under construction. Despite a rise in vacancy to 7%, overall net absorption was positive, and rental rates declined. As construction continues on the Outer Loop (I-540) around Raleigh, new retail opportunities will be opened at major interchanges.

Downtown Office Class A Suburban Office Class A

Market

Effective Avg.

High Rent

Vacancy

Miami, Florida Fort Lauderdale, Florida Palm Beach County, Florida Tampa Bay, Florida Charlotte, North Carolina

$38.23 $30.00 $30.00 $28.00 $27.25

$43.73 $32.00 $37.50 $32.00 $32.00

14.5% 17.0% 22.7% 15.0% 7.5%

Market

Effective Avg.

High Rent

Vacancy

Miami, Florida Northern Virginia Palm Beach County, Florida Tampa Bay, Florida Atlanta, Georgia

$33.25 $31.00 $30.90 $28.00 $23.00

$38.03 $50.00 $40.00 $32.00 $25.34

22.3% 20.0% 19.0% 15.0% 12.2%

Market

Effective Avg.

High Rent

Vacancy

Miami, Florida Charlotte, North Carolina Orlando, Florida Palm Beach County, Florida Atlanta, Georgia

$31.86 $28.93 $28.00 $25.63 $25.00

$43.92 $34.00 $35.00 $50.00 $40.00

4.7% 10.5% 10.4% 20.0% 8.0%

Market

Effective Avg.

High Rent

Vacancy

Northern Virginia Palm Beach County, Florida Miami, Florida Nashville, Tennessee Mobile/Baldwin Counties, Alabama

$35.00 $26.50 $24.48 $20.88 $18.75

$50.00 $40.00 $45.17 $33.00 $27.50

10.8% 18.5% 7.0% 7.2% 10.0%

Market

Effective Avg.

High Rent

Vacancy

Fort Lauderdale, Florida Palm Beach County, Florida Chattanooga, Tennessee Columbia, South Carolina Miami, Florida

$30.00 $24.63 $24.00 $23.00 $21.37

$40.00 $35.00 $30.00 $30.00 $45.00

8.0% 17.5% 10.0% 9.1% 6.8%

Market

Effective Avg.

High Rent

Vacancy

Fort Lauderdale, Florida Palm Beach County, Florida Chattanooga, Tennessee Columbia, South Carolina Miami, Florida

$30.00 $24.63 $24.00 $23.00 $21.37

$40.00 $35.00 $30.00 $30.00 $45.00

8.0% 17.5% 10.0% 9.1% 6.8%

Market

Effective Avg.

High Rent

Vacancy

Northern Virginia Miami, Florida Fort Lauderdale, Florida Palm Beach County, Florida Orlando, Florida

$9.00 $7.41 $7.00 $6.70 $5.65

$18.00 $10.83 $8.00 $9.50 $7.001

12.0% 10.1% 8.0% 11.7% 2.3%

Market

Effective Avg.

High Rent

Vacancy

Palm Beach County, Florida Fort Lauderdale, Florida Tampa Bay, Florida Orlando, Florida Jacksonville, Florida

$6.70 $6.00 $5.50 $4.70 $4.28

$9.50 $7.00 $7.50 $8.00 $6.22

10.5% 9.0% 20.0% 12.5% 12.8%

Market

Effective Avg.

High Rent

Vacancy

Orlando, Florida Mobile/Baldwin Counties, Alabama Miami, Florida Northern Virginia Lexington, Kentucky

$26.50 $17.50 $13.11 $12.00 $11.50

$30.00 $20.00 $19.33 $23.00 $15.00

6.2% 15.0% 9.3% 18.0% 9.4%

Leading Price Retail Markets Retail Downtown

Net absorption in Orlando was negative in four of the last five quarters from Q2 2008-Q3 2009. Vacancies are highest in Class A properties where average rents have declined by 6% over the past year. Vacant sublease space has increased in all submarkets.

Retail Service Centers

Miami office vacancy rose while rents dropped by more than 10%. Certain submarkets, most notably the CBD & Brickell, are hardest hit as approximately 2 million SF are scheduled to be delivered in 2010 and 2011.

Retail Power Centers

The Atlanta office market’s supply has outweighed the demand, pushing the vacancy rate up in the 19-22% range, creating negative net absorption and declining rental rates. With over 196 million SF of inventory, it is anticipated that the office market will experience more negative net absorption and remain flat for 2010.

Retail Regional Malls

Office

Leading Price Class A Markets

Leading Price Industrial Markets Industrial Bulk Warehouse

North Carolina South Carolina Tennessee Virginia

Industrial Manufacturing

Alabama Florida Georgia Kentucky Mississippi

Industrial High Tech/R&D

2010 Global Market Report www.naiglobal.com

US Highlights – Midwest Region

Rental rates in the Milwaukee office market are down 20-25% and absorption is heavily negative with vacancy climbing to 18.5%. Tenants with lease expirations two to three years out can realize dramatic savings by renegotiating their leases through blend and extend transactions. Office vacancy market-wide is 12% in Minneapolis with the highest vacancy in Class B space. Tenants are renewing existing leases rather than absorb relocation costs. Landlords are offering discounted rates to tenants renewing 12-18 months in advance to ensure spaces remain filled.

Industrial The second largest industrial market and the most important transportation hub in the country, Chicago’s industrial market also was challenged during 2009 due to lack of consumer spending, difficulty obtaining credit and economic uncertainty. Lack of new deliveries, combined with an increase in transactional activity, will help the market eventually rebound. Detroit’s industrial vacancy continues to rise above 20%, primarily due to the hard hit automotive industry. While there is minimal traditional industrial demand, renewable energy firms are beginning to look at flex space as an attractive option for solar and wind technologies. Investors remain interested in the Indianapolis industrial market as modern bulk facilities are still being delivered throughout the market. New construction is trending toward smaller warehouse/distribution facilities. Rental rates and vacancy rates in Milwaukee have remained relatively stable with landlords requiring at or near asking rates while giving concessions on tenant improvements or rent abatement. Larger transactions are stewing, but may not occur until Q1 2010. Wisconsin lost large employers like General Motors and other large employers, like Harley Davidson, have drastically reduced their workforce. The St. Louis industrial market continues to suffer from an excess of speculative space resulting in elevated vacancy rates and decreased rental rates. Vacancy rates increased to 9% in 2009, up almost a full point from the end of 2008. Average rental rates dipped slightly to $4.21/SF.

Retail Power centers in Detroit have begun to feel the effects of falling consumer spending and increasing unemployment with many anchor and smaller tenants vacating. Significant investments by Meijer and LA Fitness helped mitigate the impact of the closing of Circuit City locations throughout the Metro Area. New retailers in Milwaukee included Erewhon, Dave & Buster’s and Gold’s Gym. Local and regional grocers such as Pick ‘n Save, Sendiks and Woodman’s will continue to expand in 2010. Expect vacancies to increase and effective market rents to drop until the market levels out. Nordstrom Rack and Von Maur have announced plans to enter the St. Louis retail market, but the timing remains uncertain. They’ll be joined by CVS Pharmacy, Dunkin Donuts, Five Guys Burgers & Fries and Chick-fil-A, which are expected to open multiple locations in the next year.

Downtown Office Class A Suburban Office Class A

Market

Effective Avg.

High Rent

Vacancy

Chicago, Illinois Detroit, Michigan Grand Rapids, Michigan St. Louis, Missouri Kansas City, Missouri

$42.00 $23.09 $19.00 $18.80 $18.64

$55.00 $30.00 $24.00 $22.00 $23.50

16.1% 9.8% 20.0% 13.0% 24.0%

Market

Effective Avg.

High Rent

Vacancy

St. Louis, Missouri Chicago, Illinois Detroit, Michigan Kansas City, Missouri Minneapolis/St. Paul, Minnesota

$25.00 $23.15 $22.50 $20.81 $20.70

$30.00 $30.00 $45.00 $28.50 $31.00

11.6% 23.4% 17.1% 19.1% 9.8%

Market

Effective Avg.

High Rent

Vacancy

Chicago, Illinois Madison, Wisconsin Milwaukee, Wisconsin Kansas City, Missouri Minneapolis/St. Paul, Minnesota

$30.00 $20.00 $20.00 $17.88 $16.83

$220.00 $40.00 $30.00 $26.00 $25.00

8.2% 7.6% 11.0% 7.8% 5.0%

Market

Effective Avg.

High Rent

Vacancy

St. Louis, Missouri Indianapolis, Indiana Davenport/Bettendorf, Iowa Milwaukee, Wisconsin Lincoln, Nebraska

$16.24 $16.00 $15.00 $15.00 $14.75

$25.00 $17.50 $28.00 $22.00 $22.00

13.0% 14.0% 7.0% 15.0% 9.3%

Market

Effective Avg.

High Rent

Vacancy

Indianapolis, Indiana St. Louis, Missouri Kansas City, Missouri Milwaukee, Wisconsin Grand Rapids, Michigan

$22.00 $20.12 $17.01 $17.00 $16.00

$26.00 $28.00 $28.25 $25.00 $23.00

10.2% 4.9% 7.6% 10.0% 4.0%

Market

Effective Avg.

High Rent

Vacancy

Chicago, Illinois St. Louis, Missouri Northeastern, Wisconsin (Fox Valley/Green Bay) Sioux City, Iowa Lincoln, Nebraska

$50.00 $48.79 $35.00 $35.00 $32.00

$80.00 $60.00 $55.00 $45.00 $85.00

7.8% 7.2% 10.0% 7.5% 17.5%

Market

Effective Avg.

High Rent

Vacancy

Minneapolis/St. Paul, Minnesota Fargo, North Dakota Omaha, Nebraska Milwaukee, Wisconsin Cedar Rapids, Iowa

$5.91 $5.50 $5.02 $4.60 $4.50

$14.75 $6.00 $6.67 $5.00 $6.50

10.2% 9.9% 5.7% 13.0% 7.8%

Market

Effective Avg.

High Rent

Vacancy

Cedar Rapids, Iowa Detroit, Michigan Fargo, North Dakota Minneapolis/St. Paul, Minnesota Des Moines, Iowa

$6.50 $6.50 $6.50 $5.76 $4.60

$10.00 $8.00 $6.90 $11.00 $6.25

5.0% 24.0% 9.9% 7.9% 6.9%

Market

Effective Avg.

High Rent

Vacancy

Indianapolis, Indiana Canton, Ohio St. Louis, Missouri Dayton, Ohio Cedar Rapids, Iowa

$16.50 $12.00 $10.29 $10.07 $9.00

$17.50 $14.00 $12.00 $13.33 $15.00

13.4% 6.0% 14.8% 25.1% 10.0%

Leading Price Retail Markets Retail Downtown

The Detroit office market has developed a churning trend with many users taking advantage of small spreads in rates between classes. Though rate gaps have narrowed, landlords are hesitant to offer tenant improvement incentives as financing and cash remain scarce. New demand is evident in the form of renewable energy and film production, yet these industries do not have the critical mass to benefit the entire market.

Retail Service Centers

Downtown Cleveland is positioned to capture momentum from several large public-sector projects either planned or under way. The suburban office market was a more difficult environment, hampered by widespread financial hardship among tenants.

Retail Power Centers

Chicago’s downtown office market experienced four consecutive quarters of negative net absorption and rising vacancies during 2009. Class A and Class B buildings are suffering from the highest vacancies, each above 16%. Suburban vacancy rates have been rising steadily since 2008, eclipsing 22% in 2009. Leasing activity is expected to pick up during 2010 as asking rents continue to slide and landlords offer aggressive concession packages. This should result in stabilizing vacancy rates.

Retail Regional Malls

Office

Leading Price Class A Markets

Leading Price Industrial Markets Industrial Bulk Warehouse

Nebraska North Dakota Ohio South Dakota Wisconsin

Industrial Manufacturing

Illinois Indiana Iowa Michigan Minnesota Missouri

Industrial High Tech/R&D

2010 Global Market Report www.naiglobal.com

US Highlights – Southwest Region Arkansas Kansas Louisiana

Oklahoma Texas

Office

Market

Effective Avg.

High Rent

Vacancy

Austin, Texas Houston, Texas Fort Worth, Texas San Antonio, Texas Baton Rouge, Louisiana

$35.96 $34.66 $26.00 $21.05 $20.75

$26.30 $45.00 $29.00 $24.00 $21.50

15.1% 7.0% 6.0% 12.8% 9.7%

Market

Effective Avg.

High Rent

Vacancy

Houston, Texas Austin, Texas San Antonio, Texas Dallas, Texas New Orleans, Louisiana

$27.47 $26.29 $24.49 $24.30 $21.50

$40.55 $19.50 $28.00 $45.00 $23.00

16.0% 21.4% 14.1% 16.0% 9.4%

Market

Effective Avg.

High Rent

Vacancy

Houston, Texas Austin, Texas New Orleans, Louisiana San Antonio, Texas Fort Worth, Texas

$37.71 $27.50 $27.50 $24.33 $19.47

$50.00 $41.00 $40.00 $34.00 $38.00

8.0% 4.0% 14.0% 17.3% 2.0%

Market

Effective Avg.

High Rent

Vacancy

Little Rock, Arkansas McAllen/Mission, Texas Austin, Texas Corpus Christi, Texas San Antonio, Texas

$27.75 $23.00 $21.00 $19.00 $16.14

$35.00 $22.00 $32.00 $28.00 $31.00

40.0% 12.0% 16.0% 14.0% 17.1%

Market

Effective Avg.

High Rent

Vacancy

McAllen/Mission, Texas Baton Rouge, Louisiana Beaumont, TX Dallas, Texas Wichita, Kansas

$31.00 $28.00 $18.50 $17.47 $15.00

$32.00 $40.00 $22.00 $30.00 $22.00

15.0% 6.6% 12.0% 13.2% 6.0%

Market

Effective Avg.

High Rent

Vacancy

McAllen/Mission, Texas San Antonio, Texas New Orleans, Louisiana Baton Rouge, Louisiana Austin, Texas

$80.00 $42.50 $41.25 $35.00 $33.50

$100.00 $60.00 $62.50 $80.00 $45.00

4.0% 10.4% 5.0% 5.3% 5.0%

Market

Effective Avg.

High Rent

Vacancy

McAllen/Mission, Texas Houston, Texas Corpus Christi, Texas San Antonio, Texas Austin, Texas

$7.20 $5.31 $4.80 $4.40 $4.20

$7.801 $7.14 $6.00 $6.00 $5.40

5.0% 7.0% 4.0% 12.8% 20.0%

Market

Effective Avg.

High Rent

Vacancy

McAllen/Mission, Texas Beaumont, TX Oklahoma City, Oklahoma Austin, Texas Houston, Texas

$9.75 $6.30 $5.75 $5.70 $5.17

$11.00 $7.00 $9.25 $7.20 $7.80

6.0% 6.0% 14.0% 20.0% 3.0%

Market

Effective Avg.

High Rent

Vacancy

Texarkana New Orleans, Louisiana Wichita, Kansas San Antonio, Texas Beaumont, TX

$14.50 $12.00 $10.00 $9.52 $9.00

$16.00 $15.00 $11.00 $16.75 $10.00

0.0% 10.0% 5.6% 17.2% 5.0%

Houston’s office vacancy rate across all classes was 14.2% in mid-2009 but a low 8.1% in the CBD. A total of 15 buildings totaling 1.1 million SF delivered in 2009 with 3.8 million SF still under construction. The CBD saw its share of large lease transactions, with three deals alone accounting for over 1.4 million SF.

Leading Price Retail Markets

Houston’s industrial market has remained stable with an overall vacancy rate of 6.9% and average asking rental rates of $5.70/SF per year. The industrial sector is booming in Jonesboro, Arkansas, with the announcement of Nordex USA’s plan to construct a $100 million wind-energy plant in the Jonesboro Industrial Park and Alberto Culver expanding to allow for even more jobs and production outside of Jonesboro. More than 1.5 million SF of industrial space absorbed by contractors, utility crews and relief workers in New Orleans in the months following Hurricane Katrina has been returned to the market. That, combined with new inventory, produced a vacancy rate of more than 13%. The first softening in rental rates and pricing is evident.

Retail About 618,940 SF of retail was delivered in Austin in 2009 while only 278,130 SF was absorbed. This resulted in average rental rates decreasing by $2.81/SF from December of 2008 to June of 2009. The Dallas/Ft. Worth retail market has a 9.4% vacancy rate and a retail rental rate of $13.37/SF. Net absorption has been in excess of 1 million SF and the average rental rate has increased 0.8%. Some 21 buildings were delivered totaling just over 300,000 SF. Cap rates have averaged 7.90%. Houston’s retail market has experienced a decrease in vacancy to 9.2% overall, but the average quoted asking rental rate still dropped to $15.15/SF, a 1.9% decrease over the past year. Average sales prices rose year over year to $171/SF, compared with $147 in the previous period.

Retail Service Centers Retail Power Centers

The vacancy rate in the Dallas industrial market stands at about 12%. There is heavy competition for every tenant, pushing rental rates down while also increasing move-in incentives. Absorption rates are in the negative territory for the first time in a while.

Retail Regional Malls

Austin added 3.4 million SF of industrial space from year-end 2007 through mid-2009, an increase of 10% of gross inventory over an 18-month period. There is no institutional grade product currently under construction and rents continue to erode.

Leading Price Industrial Markets Industrial Bulk Warehouse

Industrial

Industrial Manufacturing

The Oklahoma City office market remains strong with overall vacancy at 10%, up from 8.9% a year ago. Rents are very stable with Class A at $22/SF. No new construction is planned except for Devon Energy’s 750,000 SF corporate headquarters in the CBD, to be completed in 2012.

Industrial High Tech/R&D

The New Orleans office market has remained relatively stable in terms of occupancy and rental rates in the CBD and suburbs. No speculative inventory has been added in either market, and the adaptive re-use of older Class B and C buildings has actually reduced available supply.

Retail Downtown

The Dallas/Ft. Worth market leads the nation in employment gains for 2009 and the positive numbers are reflected in what appears to be a healthy office market. Overall vacancy in Dallas remains flat from a year ago at 17.2%. Market rents have dramatically increased to an averaging of $20.05 for all classes of office space. Many companies are choosing to do short-term renewals versus making long term decisions.

Suburban Office Class A

The Austin market failed to absorb 600,000 SF in the first half of 2009. Luckily almost 300,000 SF of mostly Class A space was absorbed in Q3. Landlords are working hard to keep existing tenants and make attractive deals through rent concessions.

Leading Price Class A Markets Downtown Office Class A

2010 Global Market Report www.naiglobal.com

US Highlights – West Region Arizona California Colorado Hawaii Idaho Montana

Nevada New Mexico Oregon Utah Washington Wyoming

Leading Price Class A Markets Downtown Office Class A

Portland office vacancy increased considerably during 2009, but Class A space in the CBD remained tight at around 6%. No new CBD projects will deliver until summer 2010. Positive net absorption of almost 300,000 SF of office space in San Diego in Q3 provided some welcome positive news in an otherwise very difficult year. Investment activity is well off the 2007 peak in velocity and volume. Excluding buildings under 15,000 SF, sale prices in 2009 averaged $140/SF, down from $230/SF in 2008. The San Francisco commercial market remained plagued by rising vacancy, declining rents and occupancy loss with the September 2009 preliminary unemployment rate reaching 10.4%. The market-wide vacancy rate rose to 15.3% at the end of Q3 with nearly 1.7 million SF of negative absorption year to date. Rental rates dropped $3.75 to $33.01/SF full service. San Mateo office vacancy peaked above 18% in 2009, climbing 680 basis points from 2008. The average asking rate decreased a dramatic $10.32 in the past year to $31.92/SF full service per year. Since 2007, nearly 5.7 million SF of office space has been absorbed from San Mateo County's available marketplace.

Effective Avg.

High Rent

Vacancy

Santa Clara County (Silicon Valley), California San Francisco County, California Los Angeles County, California Sacramento, California Jackson Hole, Wyoming San Diego, California

$43.44 $36.42 $34.19 $34.08 $32.50 $31.50

$85.20 $70.00 $52.54 $39.60 $35.00 $36.00

24.1% 14.4% 13.7% 9.6% 10.0% 18.0%

Market

Effective Avg.

High Rent

Vacancy

Santa Clara County (Silicon Valley), California San Mateo County, California Los Angeles County, California Marin County, California Ventura County, California

$35.60 $35.04 $32.67 $30.96 $30.00

$78.96 $162.00 $77.40 $60.00 $35.00

23.9% 18.7% 14.8% 27.9% 19.6%

Market

Effective Avg.

High Rent

Vacancy

San Francisco County, California Santa Clara County (Silicon Valley), California Seattle, Washington San Diego, California Los Angeles County, California

$76.33 $48.00 $42.00 $33.33 $32.61

$750.00 $72.00 $65.00 $60.00 $45.24

Market

Effective Avg.

High Rent

Vacancy

San Francisco County, California Santa Clara County (Silicon Valley), California San Mateo County, California Ventura County, California Los Angeles County, California

$45.06 $36.00 $33.66 $25.70 $25.31

$65.00 $48.00 $54.00 $39.00 $41.68

3.6% 10.8% 3.8% 9.1% 6.8%

Market

Effective Avg.

High Rent

Vacancy

Santa Clara County (Silicon Valley), California Marin County, California San Diego, California San Mateo County, California Seattle, Washington

$43.50 $39.09 $28.07 $27.49 $27.00

$60.00 $45.00 $28.00 $45.00 $38.00

Market

Effective Avg.

High Rent

Vacancy

Santa Clara County (Silicon Valley), California San Francisco County, California Phoenix, Arizona Albuquerque, New Mexico Seattle, Washington

$85.00 $71.37 $50.00 $42.00 $39.00

$125.00 $150.00 $80.00 $50.00 $90.00

12.0% 1.5% 10.0% 22.8% 4.8%

Market

Effective Avg.

High Rent

Vacancy

Ventura County, California Marin County, California San Mateo County, California San Francisco County, California San Diego, California

$15.00 $13.80 $9.48 $9.12 $8.34

$10.80 $15.60 $18.00 $16.20 $12.00

5.9% 10.0% 13.5% 5.1% 9.4%

Market

Effective Avg.

High Rent

Vacancy

Marin County, California Ventura County, California Santa Cruz County, California San Diego, California San Mateo County, California

$13.80 $12.60 $10.08 $9.24 $9.24

$15.60 $7.80 $16.20 $18.00 $18.00

10.0% 6.3% 5.4% 10.9% 11.0%

Market

Effective Avg.

High Rent

Vacancy

San Mateo County, California Marin County, California Santa Clara County (Silicon Valley), California Santa Cruz County, California Las Vegas, Nevada

$27.96 $20.10 $12.96 $12.24 $12.00

$45.00 $20.10 $46.80 $18.60 $18.00

16.1% 10.0% 19.1% 14.7% 18.0%

Leading Price Retail Markets Retail Downtown

The office vacancy rate in Phoenix is 25% overall, but vacancy at Class A+ product downtown and in suburban submarkets has reached a staggering 60%. Relief won’t come anytime soon with over 2 million SF currently under construction.

Retail Service Centers

The entertainment industry, a primary component of the Los Angeles market, has weathered the economic crisis well, but demand is off in most other sectors. Tenants are giving back excess space and renegotiating leases to reduce their operating costs. Higher vacancy rates, lower lease rates and tight credit have almost eliminated new construction.

Suburban Office Class A

Office

Market

6.7% 7.6% 8.1% 6.6% 4.6%

Las Vegas industrial inventory grew to 103 million SF, pushing the vacancy rate beyond 12%. Current vacancies are significantly higher than the 10-year historical average of 8%. Speculative development in the sector remains limited while net absorption remained negative throughout the year. Offsetting Los Angeles’ gains in entertainment are losses in international trade. Total shipments through September at the Port of Long Beach decreased 24.6 % from the previous year, and contributed to rising vacancy and weakening rents in the L.A. County industrial sector. Demand for industrial space in Reno was down for the third consecutive year and the vacancy rate reached an all-time high above 15%. Even with virtually no speculative development during 2009, occupancy receded by more than 3% (almost 2 million SF) and effective rents dropped 15% to 25%, with a concomitant decrease in property values.

Retail Regional Malls

Denver’s vacancy rate is nearing 9%. The good news is there are several large transactions in the market, which should fill some voids that have been created due to the downturn in the economy.

Retail Power Centers

Industrial 8.0% 2.7% 5.8% 5.1% 5.0%

Leading Price Industrial Markets

Retail landlords in Phoenix have been aggressive with rental rates and concessions for both new and existing tenants. In spite of those efforts, overall vacancy has risen from 10.3% at the beginning of 2009 to the current level of 11%. New construction has exacerbated the problem with 2.8 million SF added over the past year and another 1 million SF is due to delivered by mid-2010.

Industrial Manufacturing

While economic conditions in Los Angeles County remain weak, one bright spot is discount retailers such as Big Lots, Dollar Tree, 99 Cents Only and Wal-Mart, continue to expand.

Industrial High Tech/R&D

In December 2009, MGM Mirage’s $8.5 billion CityCenter mixed-use development debuts with 18.5 million SF of resort and residential development along the famous Las Vegas Strip. The property is expected to act as a catalyst for increased visitation, which should have rippling effects throughout the local economy.

Industrial Bulk Warehouse

Retail

2010 Global Market Report www.naiglobal.com

Asia Pacific SECTION CONTENTS Melbourne, Australia

Hyderabad, Pradesh, India

Beijing, China

Kolkata, India

Chengdu, China

Pune, India

Hong Kong, China

Punjab, India

Shanghai, China

Tokyo, Japan

Xiamen, China

Kuala Lumpur, Malaysia

Guam

Seoul, South Korea

Chennai, India

Taipei, Taiwan

Delhi, Gurgaon, India

Singapore

Melbourne, Australia

Beijing, China

In mid-2009, investors are again showing interest in Australia’s retail property sector. The market has been educated by recent transactions in respect to possible returns, and investors are now actively seeking retail assets around the country with the realization that conditions are becoming increasingly favorable. As signs of improving global and local economic conditions emerge, private investors and owner occupiers are leading activity levels within Melbourne’s industrial market.

Contact NAI Melbourne +61 3 9670 1255

Country Data

Following a subdued first quarter, sales volumes increased during the last three months where more than 70% of investment sales transactions occurred. Investor demand for quality assets in prime locations with long term leases in place is expected to continue during the second half of 2009. Overall, rents for prime facilities softened by 13% across Melbourne as a result of decreased demand. In an effort to secure tenants, landlords increased incentive levels by an average of 3%, now averaging 16% for prime buildings and 18% for secondary properties. Rents and incentive levels are now expected to stabilize across Melbourne, with the exception of the South East region, where it is likely landlords will further increase incentives and soften rents to secure tenants. The Australian economy has slowed significantly and 2009 will be remembered as the year when the global economic crisis had its full impact on the local economy. Currently, access to finance is still a barrier for many investors. However, market conditions have shifted and the risk premiums for investments in commercial property have increased notably. Investors in the current market are assessing their property requirements and necessary investment returns. Transactions above US $100 million will be limited in the near future. However, the level of activity is expected to increase considerably in late 2009.

Beijing’s economic growth declined slowly in 2009 due to the global financial crisis. In Q2 2009, Beijing’s GDP increased by 7.8% year-over-year. Until August 2009, total fixed asset investment in Beijing increased by 44.3% yearover-year. Investment in real estate development increased by 44.2% year-over-year. The consumer price index declined by 1.5%. As the support industry of china’s economy, the real estate industry is also confronted with severe challenges and threats. Despite the government’s series of preferential policies, such as lowering interest rates and cutting taxes, most consumers still adopted a wait-and-see attitude, which caused a drop in demand for properties and a decline in prices. Contact NAI Imperial Real Estate +86 10 5870 0399

In addition, because of the economic decline, the retail and industrial markets are still in a negative state. In the investment sector, declining property prices and a generally favorable outlook for the Chinese market led to a significant volume of transactions registered in 2009. But the main investors have changed from the original foreign buyers to domestic buyers.

Country Data* Area (KM2)

9,596,960

GDP Growth (%)

7.7%

GDP 2009 (US$ B)

$3189.12

GDP/Capita (US$)

$2,390.11

Inflation Rate (%)

-1.1%

6.0%

Unemployment Rate (%)

4.3%

3.5%

Interest Rate(%)

5.4%

Area (KM2)

1334.3

GDP Growth (%)

0.73%

GDP 2009 (US$ B)

$920.01

GDP/Capita (US$)

$41,981.70

Inflation Rate (%)

1.63%

Unemployment Rate (%) Interest Rate(%)

It is expected that the retail investment sector will see the majority of transactions occur for neighborhood and sub-regional center types in the price bracket of US $10 million - $60 million in the next 12 months.

The office market was affected by the global financial crisis and greatly increased new supplies. The overall vacancy rate in the Beijing office market maintained an upward tendency in 2009 and rental rates showed a sharp decline, especially in the CBD. Even though rental rates dropped by 15%, the overall vacancy rate is still trending upward.

In the residential market, although sale prices decreased, sales volume did not increase substantially. However, since the government’s relaxation of policies in the resale housing market, the residential market has now become very active. Because of the relatively large new supply, rental rates and overall vacancy rates are not expected to return to the previous strong level. However, with high expectations and confidence in Beijing from both home and abroad, the demand for different types of properties should continue to increase.

Population (Millions) 1334.3

Population (Millions) 21.915

*National Bureau of Statistics of China in 3Q2009

Melbourne At A Glance Conversion: 1.30 AUD = 1 US$

Beijing At A Glance RENT/M2/MO

Low

Conversion: 6.83 RMB = 1 US$

US$ RENT/SF/YEAR

High

Low

High

Vacancy

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores

RENT/M2/MO

Low

US$ RENT/SF/YR

High

Low

High

Vacancy

RMB 2,160.00 RMB 2,520.00 RMB 1,740.00 RMB 4,320.00 RMB 794.00 RMB 1,440.00

$ 29.38 $ 23.67 $ 10.80

$ 34.28 $ 58.76 $ 19.59

60.0% 10.0% 15.0%

RMB 2,400.00 RMB 3,300.00 RMB 1,680.00 RMB 3,600.00 RMB 840.00 RMB 1,560.00

$ 32.65 $ 22.85 $ 11.43

$ 44.89 $ 48.97 $ 21.22

40.0% 10.0% 13.0%

RMB 216.00 RMB 540.00 RMB 216.00 RMB 468.00 RMB 648.00 RMB 1,008.00

$ $ $

2.94 2.94 8.81

$ 7.35 $ 6.37 $ 13.71

N/A N/A N/A

RMB 3,000.00 RMB 14,880.00 RMB 420.00 RMB 1,620.00 RMB 300.00 RMB 1,920.00 N/A N/A

$ 40.81 $ 5.71 $ 4.08 N/A

$ 202.40 $ 22.04 $ 26.12 N/A

$ 14.69

$ 102.83

13.0% 25.0% 17.0% N/A 9.0%

DOWNTOWN OFFICE AUD 450.00 AUD 400.00 AUD 300.00

AUD 500.00 AUD 450.00 AUD 350.00

$ 39.07 $ 34.73 $ 26.05

$ 43.41 $ 39.07 $ 30.39

4.0% 5.0% 6.0%

AUD 250.00 AUD 220.00 AUD 180.00

AUD 270.00 AUD 230.00 AUD 190.00

$ 21.71 $ 19.10 $ 15.63

$ 23.44 $ 19.97 $ 16.50

5.0% 5.0% 7.0%

AUD 130.00 AUD 130.00 AUD 150.00

AUD 40.00 AUD 140.00 AUD 160.00

$ 11.29 $ 11.29 $ 13.02

$ 12.16 $ 12.16 $ 13.89

6.0% 9.0% 5.0%

AUD 800.00 AUD 450.00 N/A AUD 1,700.00 N/A

AUD 900.00 AUD 500.00 N/A AUD 2,000.00 N/A

$ 69.46 $ 39.07 N/A $147.60 N/A

$ 78.14 $ 43.41 N/A $173.65 N/A

3.0% 6.0% N/A 2.0% N/A

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE

DEVELOPMENT LAND

Low/M2

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

N/A AUD 150.00 AUD 110.00 AUD 120.00 AUD 850.00 AUD 1,400.00

High/M2

Low/SF

N/A AUD 160.00 AUD 120.00 AUD 130.00 AUD 900.00 AUD 1,500.00

N/A $ 140.19 $ 102.80 $ 112.15 $ 794.39 $1,308.41

High/SF

N/A $ 149.53 $ 112.15 $ 121.50 $ 841.12 $1,401.87

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

RETAIL Downtown Neighborhood Service Centers Community Power Center

Regional Malls Solus Food Stores

RMB 1,080.00 RMB 7,560.00

DEVELOPMENT LAND

Low/M2

High/M2

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

RMB 5,990.00 RMB 3,745.00 RMB 395.00 RMB 8,840.00 RMB 4,407.00 RMB 1,079.00

RMB 12,905.00 RMB 9,975.00 RMB 4,594.00 RMB 14,840.00 RMB 15,270.00 RMB 14,920.00

$ $ $ $ $ $

81.48 50.94 5.37 120.24 59.94 14.68

175.53 135.68 62.49 201.85 207.70 202.94

2010 Global Market Report I www.naiglobal.com

Chengdu, China

Hong Kong, China The capital city of the Sichuan province and a key commercial center in western China, Chengdu maintained the trend of rapid growth in 2009 despite the current economic situation. According to statistics published by the Chengdu Statistical Bureau, by the end of Q3 2009, the city’s GDP amounted to RMB 316.46 billion, up 14.2% compared with the same period in 2008.Invetsment in fixed assets totaled RMB 290.58 billion, up 40% compared with the same period in 2008. Meanwhile, the consumer price index increased 0.1% in Q3, up 0.3% over the previous quarter.

Contact NAI New Space Real Estate Co., Ltd. +86 28 6653 6999

Country Data Area (KM2)

1334.3

GDP Growth (%)

8.5%

GDP 2009 (US$ B)

$4,757.74

GDP/Capita (US$)

$3,565.73

Inflation Rate (%)

-0.06%

Unemployment Rate (%)

4.3%

Interest Rate(%)

5.31%

During the last three quarters, total investment in fixed assets in Chengdu reached RMB 29.058 billion, up 40%. Investment in commercial and residential development and real estate sales is strong and continuing to increase. According to statistics, during the first nine months of 2009, overall investment in Chengdu totaled RMB 15.705 billion, an increase of 73.6%, outpacing the increase of investment in fixed assets by 33.6%. Sales of commercial real estate in the city reached 1.8 million SM, up 73.6%; and sales of residential real estate reach 1.7 million SM, up 40% compared with the same period in 2008. The Chengdu market has a total inventory of approximately 460,000 SM of Class A space and 891,000 SM of Class B space. Office vacancy rates continue to decline and currently stand at 23.1%. However, leasing activity has slowed and net rental rates for top quality space has come down to attract and retain tenants. In the short term, we expect the leasing market will be stable in Grade A office space and vacant space will be absorbed. However, a large number of new office developments will add to the existing supply in Chengdu from 2010 to 2011. Over 740,000 SM are expected to be delivered over the next three years.

GDP Growth (%)

8.5%

The industrial sector is driven by Chengdu’s location and rising prominence as a hub city for logistics/distribution, and the retail market is dominated by department stores and big box retailers.

GDP 2009 (US$ B)

$4,757.74

GDP/Capita (US$)

$3,565.73

All property sectors in Chengdu should continue to benefit from a growing headquarters presence of multinational companies, along with economic development efforts and preferential policies designed to boost investment in the city and the region.

Inflation Rate (%)

-0.06%

Unemployment Rate (%)

4.3%

Interest Rate(%)

5.31%

Population (Millions) 1334.3

Conversion 7.75 HKD = 1 US$

US$ RENT/SF/YR

High

Low

High

$ 18.77 $ 18.77 $ 8.81

$ 19.59 $ 19.59 $ 9.79

N/A N/A N/A

RMB 1,080.00 RMB 1,200.00 RMB 1,080.00 RMB 1,200.00 RMB 540.00 RMB 600.00

$ 14.69 $ 14.69 $ 7.35

$ 16.32 $ 16.32 $ 8.16

N/A N/A N/A

At the end of 2009 the outlook for 2010 was mixed, with market pundits promoting a 5-15% recovery in 2010, despite economists worldwide predicting a weak global economy and bubble-like symptoms in Hong kong and China. Our view is that long term investment into China will support HK’s economy and real estate market and any retraction will be limited in 2010.

RENT/SF/MO

US$ RENT/SF/YR

High

Low

High

Vacancy

RMB 108.00 RMB 108.00 RMB 432.00

RMB 120.00 RMB 120.00 RMB 480.00

$ $ $

1.47 1.47 5.88

$ $ $

1.63 1.63 6.53

N/A N/A N/A

Regional Malls Solus Food Stores

RMB 432.00 RMB 648.00 RMB 648.00 RMB 432.00 RMB 648.00

RMB 480.00 RMB 720.00 RMB 720.00 RMB 480.00 RMB 720.00

$ $ $ $ $

5.88 8.81 8.81 5.88 8.81

$ $ $ $ $

6.53 9.79 9.79 6.53 9.79

N/A N/A N/A N/A N/A

DEVELOPMENT LAND

Low/M2

High/M2

New Construction (AAA) Class A (Prime) Class B (Secondary)

HKD 80.00 HKD 45.00 HKD 20.00

HKD 120.00 HKD 105.00 HKD 50.00

$ $ $

0.96 0.54 0.24

$ $ $

1.44 1.26 0.60

5.0% 8.0% 10.0%

HKD 25.00 HKD 20.00 HKD 12.00

HKD 40.00 HKD 25.00 HKD 15.00

$ $ $

0.30 0.24 0.14

$ $ $

0.48 0.30 0.18

25.0% 10.0% 15.0%

HKD 8.00 HKD 10.00 HKD 15.00

HKD 15.00 HKD 15.00 HKD 20.00

$ $ $

0.10 0.12 0.18

$ $ $

0.18 0.18 0.24

15.0% 10.0% 15.0%

HKD 250.00 HKD 50.00 HKD 25.00 HKD 100.00 N/A

HKD 800.00 HKD 100.00 HKD 40.00 HKD 300.00 N/A

$ $ $ $

3.00 0.60 0.30 1.20 N/A

$ $ $ $

9.59 1.20 0.48 3.60 N/A

3.0% 15.0% 10.0% 5.0% N/A

SUBURBAN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

From an investment perspective, high yields of 6-7% in Q4 2008 triggered speculative purchases of over HK $4 billion of assets in Q2 and Q3 2009, with yields dropping to 3.5%. Capital values rebounded 30% despite continued declines in rents and yields. Conversely, in early Q4 2009 rents began stabilizing while capital values showed signs of weakening. This paradox highlights the volatile nature of Hong Kong’s real estate market, which does not always follow current fundamentals, but rather a mix of long term sentiment and near term speculation, while heavily influenced by capital inflows from China.

DOWNTOWN OFFICE RMB 1,380.00 RMB 1,440.00 RMB 1,380.00 RMB 1,440.00 RMB 648.00 RMB 720.00

Downtown Neighborhood Service Centers Community Power Center

Industrial demand fell sharply in the first half of 2009 as the trade and logistics sectors suffered, though rents fell by only 20% from already low levels. Exits from the industrial investment sector by several prominent institutions and continued high vacancies have dampened the rebound in capital values. The crisis also triggered several retail chain consolidations and rents fell by 20% in the first half of the year. Supported by the return of Mainland Chinese tourists, rents and value in core districts have rebounded to pre-crisis levels during the second half of 2009.

Low

Vacancy

DOWNTOWN OFFICE

Bulk Warehouse Manufacturing High Tech/R&D

Commercial real estate followed a similar pattern. Rents across all sectors declined 20-30% from their peaks in Q3 2008, and began to stabilize in the second half of 2009. In the office market, Lehman Brothers’ collapse triggered a rapid contraction and relocation of the financial sector, creating a surge in CBD vacancies to 8% and a 30% decline in rents. However, the historically limited supply of prime offices led some replacement tenants to move into the CBD once liquidity returned in mid-2009 and vacancies fell to 5%.

Hong Kong At A Glance RENT/M2/MO

Low

New Construction (AAA) Class A (Prime) Class B (Secondary)

Country Data 1334.3

Chengdu At A Glance

New Construction (AAA) Class A (Prime) Class B (Secondary)

Contact NAI Asia Pacific Properties, Ltd. + 852 2281 7800

Area (KM2)

Population (Millions) 1334.3

Conversion: 6.83 RMB = 1 US$

Buffered by low levels of real estate debt and by capital inflows from China, Hong Kong did not see a contraction in its real estate markets until October 2008. However, the steep decline in Q4 2008 continued into 2009, as Hong Kong’s GDP growth contracted by 7.8% in Q1. With the government’s announced stimulus package of HK $87.6 billion (approximately 5.2% of GDP), the contraction decreased to -3.8% in Q2 2009 and helped stabilize the markets, coupled with a change in global sentiment.

N/A N/A N/A N/A N/A N/A

Low/Acre

N/A N/A N/A N/A N/A N/A

High/Acre

N/A N/A N/A N/A N/A N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores

DEVELOPMENT LAND Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Low/M2

N/A N/A N/A N/A N/A N/A

High/M2

N/A N/A N/A N/A N/A N/A

Low/Acre

High/Acre

N/A N/A N/A N/A N/A N/A

2010 Global Market Report I www.naiglobal.com

Shanghai, China

Xiamen, China During the first half of 2009, the overall Chinese economy in general was dominated by a state of deflation characterized by a slide in consumer and producer prices. Beijing’s US $586 billion stimulus package, coupled with Shanghai’s own US $14.5 billion 2010 Expo expenditure, combined to mitigate the consequences of the downturn.

Contact NAI Asia Pacific Properties +86 21 6288 7333

Country Data Area (KM2)

6.345

GDP Growth (%)

8.5%

GDP 2009 (US$ B)

$4,757.74

GDP/Capita (US$)

$3,565.73

Inflation Rate (%)

-0.06%

Unemployment Rate (%)

4.3%

Interest Rate(%)

5.31%

A wave of new supply to the office market during the first half of 2009 and declining demand fueled a rise in citywide vacancy rates as rental rates dropped by as much as 25% year-over-year. Although demand has improved, approximately 800,000 SM of office space arrived on the market in 2009, and is likely to have a negative impact on occupancy and rental rates in 2010. During a “wait-andsee” stance in the first half of 2009 by most international organizations, the government adjusted its policies on allocating land. Vacancy rates increased with several companies, including Intel, closing offices or relocating outside of the CBD, and rental rates/prices declined, particularly in the suburban areas of the city. The market registered increased activity in the second half of the year, but did not affect the depressed market rates, which we expect to persist into most of 2010. Demand throughout 2009 was steady in the retail market compared to other sectors with minor reductions in price/rentals and occupancy rates. Limited new supply of prime space in the run-up to Expo 2010 is likely to cause increases in prices/rentals for most of 2010. Local investors dominated the market, especially at the start of 2009 when valuations were attractive. The Exchange in Puxi and the Pufa Tower in Pudong were sold to local investors. It was only during the second half of 2009 that more conservative foreign financial institutions began to show interest again in the real estate market. The stimulus package, 2010 Expo expenditure and tax rebates combined to reduce Shanghai’s economic fallout from a sharp decline in exports during 2009. However, these packages cannot fully support the export-oriented economy indefinitely and what the post-stimulus future holds for Shanghai's economy and real estate remains to be seen.

Shanghai At A Glance High

Low

High

RMB 1,640.00 RMB 2,920.00 $ RMB 1,460.00 RMB 3,066.00 $ RMB 1,095.00 RMB 2,190.00 $

22.34 19.89 14.92

$ $ $

39.78 41.77 29.83

60.0% 18.0% 10.0%

RMB 1,022.00 RMB 1,643.00 $ RMB 912.00 RMB 1,570.00 $ RMB 657.00 RMB 800.00 $

13.92 12.42 8.95

$ 22.38 N/A $ 21.39 N/A $10.90 N/A

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

GDP Growth (%)

8.5%

GDP 2009 (US$ B)

$4,757.74

GDP/Capita (US$)

$3,565.73

Inflation Rate (%)

-0.06%

Unemployment Rate (%)

4.3%

Interest Rate(%)

5.31%

Industrial parks saw an increase in activity, keeping many tenants from moving from downtown (Xiamen Island) to the suburban areas like Haicang, Jimei, Xiang’an and Tong’an districts. The municipal industrial development bureau continued to focus on attracting technology, automotive, logistics, manufacturing and high-end agriculture to the suburban area. Office rental rates are staggeringly high, which reflects the increased demand for Class A and B office buildings. After the increase in the housing market after August 2009, prices are expected to adjust to a stable level in 2010.

RENT/M2/MO

Low

US$ RENT/SF/YR

High

Low

High

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary)

RMB 14.00 RMB 15.00 RMB 8.00

RMB 23.00 RMB 28.50 RMB 15.00

$ 15.61 $ 16.72 $ 8.92

$ $ $

25.64 31.77 16.72

5.0% N/A 3.0%

RMB RMB

N/A 7.00 5.00

N/A RMB 13.00 RMB 10.00

$ $

N/A 7.80 5.57

$ $

N/A 14.49 11.15

N/A 8.0% 10.0%

RMB RMB RMB

1.00 1.00 5.20

RMB 3.50 RMB 3.00 RMB 13.80

$ $ $

1.11 1.11 5.80

$ $ $

3.90 3.34 15.38

15.0% 28.0% 10.0%

RMB 70.00 RMB 10.00 RMB 5.00 RMB 48.00 RMB 6.00 Low/M2

RMB 180.00 RMB 55.00 RMB 25.00 RMB 65.00 RMB 35.00 High/M2

$ 78.04 $ $ 11.15 $ $ .57 $ $ 53.51 $ $ 6.69 $ Low/Acre

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL RMB RMB RMB

255.00 RMB 438.00 $ 183.00 RMB 365.00 $ 365.00 RMB 1,460.00 $

3.47 2.49 4.97

$ $ $

5.97 4.97 19.89

RMB10,950.00 RMB 16,425.00 $ 149.16 N/A N/A N/A N/A N/A N/A $ 109.00 $ 437.00 $ 14.85 N/A N/A N/A

223.74 N/A N/A 59.53 N/A

30.0% N/A N/A

RETAIL

DEVELOPMENT LAND

1334.3

In 2009, the Xiamen retail market encompassed a total of 3.5 million SM of space with 43,000 retail units/stores, or about 1.44 SM per capita. The strongest demand is in the high-end luxury niche segment, where space fills up very quickly even though there are many new projects opening to accommodate the demand. Among the new high-end luxury centers are the 12,000 SM Paragon shopping mall, which opened in December 2008 as part of a 100,000 SM mixed-use development, and the 110,000 SM SMII Life Style shopping mall, which opened in October 2009. Several luxury brands entered the Xiamen retail market for the first time in 2009, including Gucci, Versace, Prada, Armani, Hermes and Montblanc.

DOWNTOWN OFFICE

INDUSTRIAL

Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores

Area (KM2)

Vacancy

SUBURBAN OFFICE

Bulk Warehouse Manufacturing High Tech/R&D

Country Data

Conversion: 6.82 RMB = 1 US$

US$ RENT/SF/YR

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

Contact NAI Derun +86 592 5168098

Xiamen has witnessed an increase in development of new Class A office buildings as well as high-end hotels during the past few years. Although there continues to be sufficient supply, the leasing transactions of Class A office buildings remain at a brisk pace in the CBD, especially in areas like North Hubin Street and Lianyue Street. Room rates at both high-end and mid-level hotels continue to rise.

Xiamen At A Glance RENT/M2YR

Low New Construction (AAA) Class A (Prime) Class B (Secondary)

Land prices in Xiamen’s construction areas increased sharply in 2009, influenced by the financial crisis; however, housing sales and values saw a decrease early in the year with a rebound for both realized after August. The residential market is currently operating with prices at higher levels than in years past, resulting in fewer transactions. An adjustment in price is predicted, which is expected to bring costs down in both the housing and land sectors.

Population (Millions) 1334.3

Conversion: RMB 6.82 = 1 US$

Xiamen is not only ranked as the center of high-end consumption in the Golden Delta of South Fujian Province, but is also the bridgehead for dealing across the Taiwan Strait and Southeast Asia.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

Low/M2

N/A RMB 1,500.00 RMB 450.00 N/A N/A N/A

High/M2

N/A RMB 2,000.00 RMB 2,000.00 N/A N/A N/A

Low/SF

$ $

N/A 219.94 65.98 N/A N/A N/A

N/A N/A N/A N/A N/A

High/SF

$ $

N/A 293.26 293.26 N/A N/A N/A

Downtown Neighborhood Service Centers Community Power Center (Big Box) Regional Malls Solus Food Stores

DEVELOPMENT LAND Office in CBD Land in Office Parks) Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

200.67 2.0% 61.32 8.0% 27.87 12.0% 72.46 9.0% 39.02 23.0% High/Acre

N/A N/A N/A

N/A N/A

N/A

2010 Global Market Report I www.naiglobal.com

Guam

Chennai, India Massive construction is expected to take place to accommodate the transfer of approximately 8,000 US Marines and 9,000 military dependents plus support personnel from Okinawa to Guam by 2015. Island population is projected to grow as much as 25% over the five-year period. In anticipation of the build-up, more than 15,000 foreign laborers, primarily from the Philippines and South East Asia, are in Guam, representing the first wave of population growth.

Contact NAI ChaneyBrooks +1 671 649 8742

Country Data

Meanwhile, Guam continues to remain one of the most popular tourist destinations for the Asian markets, primarily for the Japanese and Koreans. Industry experts continue to debate the impact of the construction and military build-up on the island’s allure as a resort destination. The growth is expected to result in pent up demand for industrial, residential and office products, in this order. Hotels and shopping centers should also see an immediate benefit from the influx of new residents and transient workers. Guam’s office market is expected to gradually show steady gains as contractors and government-related offices begin setting up operations in the island. Due to the lack of quality office product, the market will be ripe for new office building development, especially in the Hagatna and Tamuning regions. Until new inventory is introduced, the demand for office property should begin to drive up office rents. Guam’s future looks bright and continues to benefit from a general sense of optimism from both opportunistic US and foreign investors. Over the course of the next three years Guam’s real estate market should prove to be one of the most stable markets in the United States.

Commercial real estate transactions, considered a key indicator of economic activity in Chennai, began showing the first signs of stability with over 1.7 million SF of space having been absorbed in Chennai during the first three quarters of 2009. Suburban markets of Manapakkam, Perungudi and Ambattur continue to be most favored by companies because of proximity and quality space available. The commercial real estate market in 2009 saw a decline in rentals, lower absorption and increasing vacancy rates. Following the financial turmoil, a paradigm shift in the perception of risk was witnessed, resulting in a weakening of demand, the slow-down of expansion plans and migration to more cost-effective locations, all of which put pressure on lease rentals. A pick-up in inquiries for space from the hospitality, healthcare and educational sectors was witnessed in Q2 and Q3. Residential land transactions saw more activity in Q2 and Q3 in central areas of the city for fairly priced properties by end-users.

Contact NAI Hemdev's International Realty Services +91 44 2822 9595

Most retail micro markets saw a correction in rental values in line with the downward rental trends witnessed in India. There has been a slight upward trend in the number of inquiries for retail space since Q2 with retailers taking into account the corrections seen in rentals, and landlords being more open to reasonable prices. One of the highlights in the retail market in Chennai was the opening of The Ampa Skywalk Mall. Mall space supply is set to increase in 2010 with the opening of Express Avenue and Coromandel Plaza. The market for return on investment properties saw a pick up with buyers scouting for tenanted office spaces as the prices reached realistic levels.

Country Data Area (KM2)

1334.3

N/A

GDP Growth (%)

5.36%

GDP 2009 (US$ B)

$2.70

GDP 2009 (US$ B)

$1,242.65

GDP/Capita (US$)

$15,000.00

GDP/Capita (US$)

$1,032.71

Inflation Rate (%)

2.50%

Inflation Rate (%)

8.66%

Unemployment Rate (%)

11.40%

Unemployment Rate (%)

7.32%

Interest Rate(%)

N/A

Interest Rate(%)

4.75%

Area (KM2)

1334.3

GDP Growth (%)

Population (Millions) 1203.28

Population (Millions) 0.178

Guam At A Glance (Rent/SF/YR)

Chennai At A Glance Low

High

Effective Avg.

Vacancy

DOWNTOWN OFFICE N/A N/A $ 26.00

N/A N/A $ 42.00

N/A N/A $ 14.00

N/A N/A $ 36.00

$ $

7.80 7.80 N/A

$ 18.00 $ 18.00 N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 33.00 $ 13.00 $ 9.60 $ 36.00

$ 108.00 $ 60.00 $ 15.00 $ 72.00

DEVELOPMENT LAND

Low(Price/Acre)

High(Price/Acre)

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

N/A N/A N/A $ 753,000.00 $2,018,000.00 $ 108,000.00

N/A N/A N/A $1,077,000.00 $2,023,000.00 $ 680,000.00

New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A N/A 28.20

N/A N/A 18.0%

N/A N/A 19.75

N/A N/A 23.0%

$ $

12.35 12.35 N/A

12.0% 12.0% N/A

$ $ $ $

72.00 31.00 11.25 54.00

16.0% N/A N/A N/A

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

With good quality supply readily available, it will take some time for the supply-demand gap to be bridged. Therefore, rates in the commercial real estate market are expected to remain stagnant or under downward pressure for the medium term.

RETAIL

Conversion: 46 INR = 1 US$

RENT/SF/MO

US$ RENT/SF/YR

Low

High

Low

High

Vacancy

INR 60.00

INR 70.00

$ 15.65

$ 18.26

N/A

INR 60.00 INR 35.00

INR 75.00 INR 50.00

$ 15.65 $ 9.13

$ 19.57 $ 13.04

N/A N/A

INR 25.00

INR 45.00

6.52

$ 11.74

N/A

INR 25.00 INR 20.00

INR 45.00 INR 35.00

$ $

6.52 5.22

$ 11.74 $ 9.13

N/A N/A

INR 12.00 INR 17.00 INR 18.00

INR 20.00 INR 22.00 INR 25.00

$ $ $

3.13 4.43 4.70

$ $ $

5.22 5.74 6.52

N/A N/A N/A

INR 100.00 INR 50.00 N/A INR 35.00 INR 39.00

INR 150.00 INR 80.00 N/A INR 60.00 INR 45.00

$ 26.09 $ 13.04 N/A $ 9.13 $ 10.17

$ 39.13 $ 20.87 N/A $ 15.65 $ 11.74

N/A N/A N/A N/A N/A

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls

Solus Food Stores

DEVELOPMENT LAND Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Low/Acre

INR

High/Acre

4,000 INR N/A

6,000

Low/Acre

N/A

High/Acre

86.96 $ N/A

130.43 N/A

INR

3,200,000 INR 10,000,000 N/A N/A INR 540,000,000 INR 720,000,000

69,565.22 $ 217,391.30 N/A N/A $ 11,739,130.43 $ 15,652,173.91

INR 270,000,000 INR 600,000,000

$ 5,869,565.22

$13,043,478.26

2010 Global Market Report I www.naiglobal.com

Delhi, Gurgaon, India

Hyderabad, Pradesh, India

The current real estate inventory in India is estimated to be worth US $15 billion and anticipated to develop at the rate of 25% annually in the coming decade due to the booming economy, favorable demographics and liberalized Foreign Direct Investment (FDI) regime. Economic recovery during 2010-2011 is likely to revive the interest of foreign investors in India’s real estate market. Despite the global economic downturn, India has been able to retain its position as a preferred investment destination. The economy is regaining momentum, with India adding up to 40 million SF of office space by the end of 2009. The huge addition of new supply is expected to result in a correction. The CBD witnessed a rise in vacancy levels due to high rental rates, limited and poor quality of buildings, relocation of companies to more cost effective options or lease renegotiations. As a result, the CBD witnessed a correction in rental rates back to more realistic levels. Outlying areas are becoming more viable and demand is increasing due to better Metro connectivity.

Contact NAI Collaborators India +91 11 4668 7000

With a projected growth ratio of around 7%, India is making progress towards becoming one of the leading economies in the world over the next several years. Hyderabad, the fifth largest city in the country, is on the radar for top IT, Pharmaceutical and Aviation conglomerates in the world. NAI Hyderabad expects robust growth in 2010. With a stable Government in place, the Hyderabad market is expected to stabilize and grow quickly over the next few years due to a strong commitment from the Government to improve basic infrastructure and connectivity. Major infrastructure projects such as the 262 KM Outer Ring Road (ORR), 13.5 KM elevated expressway, 22 KM eight lane expressway connecting Gachibowli to Shamshabad, Metro Rail and Shamshabad International Airport have been instrumental in making Hyderabad one of the leading cities in India. Contact NAI Hyderabad +91 40 233105712

Upcoming areas like Saket & Jasola, witnessed the delivery of a large amount of new office space, thereby escalating the vacancy level. Even Gurgaon and Noida witnessed an upsurge in the vacancy level due to an increase in the supply and the completion of various projects, along with availability of sublease options, thus keeping downward pressure on the rental rates. The residential sector witnessed a fall due to the global economic outlook in 2009, but is expected to pick up in 2010 due to a shortfall of over 25 million new homes, mostly in the low and middle-income groups, leading to prices moving higher. Delhi’s retail market was slow in 2009 with just 10% of the transactions happening in the last few months. India’s retail market is expected to see the addition of over 1 million SF with 100 new malls.

Country Data Area (KM2)

1334.3

GDP Growth (%)

5.36%

GDP 2009 (US$ B)

$1,242.65

GDP/Capita (US$)

$1,032.71

Inflation Rate (%)

8.66%

Unemployment Rate (%)

7.32%

Interest Rate(%)

4.75%

Revival is on its way in the real estate market, spurred by price corrections, new launches and lowering of interest rates. The commercial market has also started showing signs of revival, driven by a spurt in office space resulting in more conversions taking place in CBD and PBD areas with initial rise in demand for less costly premises. Though most of the deals that happened were of relocation. The office market is showing visible signs of renewal in demand.

Population (Millions) 1203.28

Country Data Area (KM2)

1334.3

GDP Growth (%)

5.36%

GDP 2009 (US$ B)

$1,242.65

GDP/Capita (US$)

$1,032.71

Inflation Rate (%)

8.66%

Unemployment Rate (%)

7.32%

Interest Rate(%)

4.75%

Commercial real estate transactions have seen a substantial increase post elections and are expected to stabilize with better occupancy rates in the coming months. The post election months have seen a rush in the end user market in the segment of 2 BHK and 3 BHK with sales happening in the mid-market segment of prices between US $1.5 million to US $5 million. The retail market in Hyderabad has not seen a material increase or decrease in the past few quarters due to limited availability of new retail space and the current market slump. Despite the announcement of more than 50 malls and retail buildings during the boom period, only a few malls in Prasads, City Center, and GVK have been successfully operational. Inorbit (the largest mall in South India) and Night Bazar at Shilparamam are scheduled for launch in the near future. The overall market scenario in Hyderabad is expected to be positive in the Corporate, IT, Pharmaceutical, medium cost residential and Warehousing sectors. Negative trends are expected in Land, Investment and Retail segments.

Population (Millions) 1203.28

Hyderabad At A Glance

Delhi At A Glance RENT/SF/YR

Low

RENT/SF/YR

High

Low

High

Conversion 50 Rs = 1 US$

RENT/M2/MONTH

US$ NET RENT/SF/YEAR

DOWNTOWN OFFICE

Low High Rs 7,750.00 Rs 12,917.00

Low/SF $ 15.56

High/SF Vacancy $ 25.94 N/A

Vacancy

DOWNTOWN OFFICE $ $ $

67.00 60.00 25.00

$ 73.00 $ 80.00 $ 53.00

$ 67.00 $ 60.00 $ 25.00

$ 73.00 $ 80.00 $ 53.00

25.0% 10.0% 15.0%

New Construction (AAA) Class A (Prime) Class B (Secondary)

Rs 6,458.00

Rs 11,625.00

$ 12.97

$ 23.34

N/A

Rs 5,167.00

Rs 9,688.00

$ 10.37

$ 19.45

N/A

SUBURBAN OFFICE

$ $ $

29.00 40.00 21.00

$ 53.00 $ 53.00 $ 33.00

$ 29.00 $ 40.00 $ 21.00

$ 53.00 $ 53.00 $ 33.00

50.0% 20.0% 50.0%

New Construction (AAA) Class A (Prime) Class B (Secondary)

Rs 6,458.00 Rs 9,042.00 Rs 5,813.00 Rs 7,750.00 Rs 3,875.00 Rs 5,813.00

$ 12.97 $ 11.67 $ 7.78

$ 18.15 $ 15.56 $ 11.67

N/A N/A N/A

$ $ $

3.00 4.00 4.00

$ 5.00 $ 12.00 $ 12.00

$ $ $

3.00 4.00 4.00

$ 5.00 $ 12.00 $ 12.00

50.0% 40.0% 40.0%

Rs 1,162.00 Rs 2,325.00 Rs 1,292.00 Rs 2,583.00 Rs 1,550.00 Rs 3,229.00

$ $ $

4.67 5.19 6.48

N/A N/A N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores

40.00 N/A N/A 13.00

$ 160.00 N/A N/A $ 67.00

$ 40.00 N/A N/A $13.00

$ 160.00 N/A N/A $ 67.00

20.0% N/A N/A 20.0%

Rs 12,917.00 Rs 32,292.00 Rs 9,688.00 Rs 16,146.00 Rs 7,750.00 Rs 9,688.00

$ 25.94 $ 19.45 $ 15.56

$ 64.84 $ 32.42 $ 19.45

N/A N/A N/A

Rs 7,750.00 Rs 11,625.00 N/A N/A

$ 15.56 N/A

$ 23.34 N/A

N/A N/A

DEVELOPMENT LAND

Low/Acre

Low

Low/SF

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ 120.00 $ 7,000,000 $ 2,800,000 $ 1,100,000 $ 18,000,000 $ 250,000

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

N/A

N/A High/Acre

$ 180.00 $ 14,000,000 $ 8,400,000 $ 1,900,000 $ 19,000,000 $ 800,000

N/A

Low/Acre

$ $ $ $ $ $

Downtown Neighborhood Service Centers Community Power Center Regional Malls

2.33 2.59 3.11

N/A High/Acre

120.00 $180.00 7,000,000 $ 14,000,000 2,800,000 $ 8,400,000 1,100,000 $ 1,900,000 18,000,000 $ 19,000,000 250,000 $ 800,000

DEVELOPMENT LAND Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

High

High/SF

Rs 435,600,000

Rs 580,800,000 $ 9,414,307.33 $12,552,409.77

Rs 290,400,000

Rs 363,000,000 $ 6,276,204.88 $ 7,845,256.11

Rs 96,800,000

Rs 145,200,000 $ 2,092,068.29 $ 3,138,102.44

Rs 72,600,000 Rs 338,800,000 Rs 193,600,000

Rs 121,000,000 $ 1,569,051.22 $ 2,615,085.37 Rs 435,600,000 $ 7,322,239.03 $ 9,414,307.33 Rs 290,400,000 $ 4,184,136.59 $ 6,276,204.88

2010 Global Market Report I www.naiglobal.com

Kolkata, India

Pune, Maharashtra, India With a population of more than 15 million people, Kolkata is the world’s 8th largest and India’s third largest metropolitan city. It is the capital of the Indian state of West Bengal and a main center for commerce and financial services in eastern India and northeastern states. The city is home to many regional and corporate headquarters.

Contact NAI NK Realtors Pvt. Ltd. +91 33 24868016/ 7017/7519

Country Data Area (KM2)

1334.3

GDP Growth (%)

5.36%

GDP 2009 (US$ B)

$1,242.65

GDP/Capita (US$)

$1,032.71

Inflation Rate (%)

The total office inventory in Kolkata is in excess of 26 million SF. About 85% of the inventory is in the suburban areas such as Topsia, Kasba, Sector-V and Rajarhat, including IT parks and IT SEZ’s. Downtown Class A office property rental rates have fallen from INR 150-160/SF per month in September 2008 to INR 90-100/SF per month in September 2009. Vacancy in Class A space in the CBD was at 4%, while Sector-V experienced 50% vacancy overall with rental rates of INR 40-45/SF per month. A significant portion of the current office demand came from the telecom sector due to the telecom boom and recorded over 365,000 SF in transactions since January 2009. The retail sector in Kolkata suffered the most over the last 12 months due to plunging sales and high occupancy costs. Rental values started falling in October 2008. Rental rates in downtown mall space declined around 40% and average rentals in suburban malls fell around 17%. Kolkata’s residential market has experienced a moderate recovery since March 2009 due to the growing demand for affordable housing. A number of such housing projects like Parvati Garden in Birati, Sugam Sabuj in Narendrapur and Green Field City near Behala Chowrasta are coming up in the Kolkata market.

Pune is strategically located 150 kilometers from Mumbai, the financial capital of India. The key drivers of this city stem from the turbine industries like Alfa-Laval, Thermax, etc. Bharat Forge is the world's second largest forging company. Pune also is home to large IT companies like HSBC and Infosys. The auto industry and telecommunications sectors are on an upward trend, while IT remains reticent. Pune has not escaped the effects of the global slowdown, with rentals decreasing in the range of 10-40% .Vacancy rates reached a new high, the retail market crashed and the gloom of uncertainty spread fast even through the residential sector.

Contact NAI Property Terminus +91 20 25511900

Some of the larger deals recorded in Pune were Synechron Technologies Pvt. Ltd in. Embassy for 75,000 SF, SEZ at Hinjewadi TietoEnator at EON SEZ in Kharadi at 60,000 SF, Aegis BPO at Commerzone in Yerwada with 50,000 SF, BNY Mellon at Magarpatta Cybercity in Hadapsar at 125,000 SF, and Sungard at EON SEZ in Kharadi with 60,000 SF. Country Data Area (KM2)

1334.3

GDP Growth (%)

7.90%

GDP 2009 (US$ B)

$1,242.65

GDP/Capita (US$)

$1,032.71

8.66%

Inflation Rate (%)

8.66%

Unemployment Rate (%)

7.32%

Unemployment Rate (%)

7.32%

Interest Rate(%)

4.75%

Interest Rate(%)

4.75%

Kolkata had been successful in pulling significant industrial investments over the last couple of years. But the exit of TATA Motors small car project impacted the overall investment climate. In May 2009, the government’s proactive measures towards industrialization have brought Bengal back into focus of global investors.

Population (Millions) 1203.28

Conversion: 45 INR = 1 US$

US$ RENT/SF/YR

High

Low

High

Vacancy

DOWNTOWN OFFICE INR 128.00 INR 100.00 INR 67.00

INR 156.00 INR 111.00 INR 100.00

$ 33.39 $ 26.09 $ 17.48

$ 40.70 $ 28.96 $ 26.09

25.0% 4.0% 5.0%

INR 50.00 INR 45.00 INR 39.00

INR 61.00 INR 50.00 INR 45.00

$ 13.04 $ 11.74 $ 10.17

$ 15.91 $ 13.04 $ 11.74

70.0% 60.0% 40.0%

INR 12.00 N/A N/A

INR 20.00 N/A N/A

5.22 N/A N/A

25.0% N/A N/A

DEVELOPMENT LAND Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Low

High

Vacancy

INR 45.00 INR 50.00 INR 35.00

INR 75.00 INR 60.00 INR 45.00

$ 12.00 $ 13.33 $ 9.33

$ 20.00 $ 16.00 $ 12.00

80.0% 40.0% 50.0%

INR 30.00 INR 50.00 INR 35.00

INR 50.00 INR 60.00 INR 45.00

$ 8.00 $ 13.33 $ 9.33

$ 13.33 $ 16.00 $ 12.00

55.0% 60.0% 72.0%

INR 12.00 INR 18.00 INR 18.00

INR 26.00 INR 45.00 INR 45.00

$ $ $

3.20 4.80 4.80

$ 6.93 $ 12.00 $ 12.00

5.0% 0.5% N/A

INR 91.00 INR 95.00

INR 245.00 INR 145.00

$ 23.74 $ 23.74

$ 63.91 $ 63.91

15.0% 14.0%

Solus Food Stores

INR 70.00 INR 70.00 INR 70.00 INR 60.00 INR 100.00

INR 150.00 INR 120.00 INR 120.00 INR 100.00 INR 125.00

$ $ $ $ $

18.67 18.67 18.67 16.00 26.67

INR 95.00

INR 162.00

$ 24.78

$ 42.26

71.0%

INR 123.00 INR 33.00

INR 251.00 INR 39.00

$ 32.09 $ 8.61

$ 65.48 2.0% $10.17 N/A

DEVELOPMENT LAND

Low/Acre

High/Acre

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

INR INR INR INR INR INR

INR 8,000.00 INR 5,000.00 INR 500.00 INR 10,000.00 INR 10,000.00 INR 8,500.00

$ 133.00 $ 15.00 $ 1.00 $ 67.00 $ 27.00 $ 55.00

New Construction (AAA) Class A (Prime) Class B (Secondary) New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL 3.13 N/A N/A

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores

US$ RENT/SF/YR

High

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

RENT/SF/MO

Low

CITY CENTER OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Pune is known as the Oxford of the east, boasting some of the finest educational institutions, namely the highly regarded Pune University. Pune is the seventh largest metro city in India and has the highest per capita income in the country.

Pune At A Glance NET RENT/SF/MO

Low New Construction (AAA) Class A (Prime) Class B (Secondary)

Construction that had been put on hold is now opening up with new developments like ZerO 1ne at Ghorpadi; Prabhavee Tech Park, Nano Space, Amar Synergy Connaught Road, and Amar Paradigm at Baner; and several more. Pune’s future appears to be bright in all commercial property sectors.

Population (Millions) 1203.28

Kolkata At A Glance Conversion: 46 INR = 1 US$

In Q3, Pune began to bounce back after a positive change in the economy. The markets were definitely abuzz with hectic shopping heralded by massive sales in gold. Lack of confidence in the market was replaced by vibrant buoyancy and a spirit of cheer and celebration prevails. Genuine investors are taking advantage of the market correction and builders are threatening to hike rates. Finally, the much awaited stability is having an impact.

Low/Acre

High/Acre

Low/SF

High/SF

INR 420,000,000 INR 600,000,000 INR 150,000,000 INR 200,000,000

$ 209.61 $ 74.86

$ 299.44 $ 99.81

INR 15,000,000 INR 12,000,000 INR 400,000,000 INR 12,000,000

$ $ $ $

$ 9.98 $ 14.97 $ 299.44 $ 299.44

INR 20,000,000 INR 30,000,000 INR 600,000,000 INR 600,000,000

7.49 5.99 199.62 5.99

Downtown Neighborhood Service Centers Community Power Center Regional Malls

6,000.00 700.00 50.00 3,000.00 1,200.00 2,500.00

$ $ $ $ $

40.00 32.00 32.00 26.67 33.33

$ $ $ $ $ $

177.00 111.00 11.00 222.00 222.00 189.00

15.0% 20.0% 25.0% 35.0% 20.0%

High/Acre

2010 Global Market Report I www.naiglobal.com

Punjab, India

Contact NAI Space Alliance +91 11 55854444

Tokyo, Japan The past year in Punjab brought much anxiety as demand in the real estate market fell sharply. The global economic meltdown and slowing demand, coupled with a liquidity crisis, resulted in mega projects moving at a snailâ&#x20AC;&#x2122;s pace. The first half of 2009 was even tougher than 2008 as demand across all sectors--commercial, retail and residential--continued to remain weak. In 2009, almost every developer had reported a decline in leases and sales in all markets.

With the deepening decline in all sectors in 2009, real estate markets in Japanâ&#x20AC;&#x2122;s key centers of Tokyo and Osaka have remained in a depressed state. The inability for organizations to obtain loans, whether new or extensions on already existing loans, has resulted in many large and small defaults that have continued to only worsen an already stagnant situation. A record number of developers have gone bankrupt as lenders refuse to roll-over loans that had previously been readily available with easy terms.

The office market saw a downward trend with several companies choosing to shut down operations. Even local developers have closed their marketing offices at different locations and many deferred their expansion plans, further impacting rates and leading to a drop in rentals by 15%.

Despite this, many sellers have remained quite defiant and the massive drop in sale prices that many had expected has not yet been realized. A relatively large amount of product has made its way to the market, yet much of it remains at pricing that is not appealing to many potential investors. The investor interest in the Japanese market, particularly in Tokyo assets, has risen continually this year with many funds poised to take advantage of opportunities that offer significant yields.

Major industry in Punjab includes a wide range of products from ready made garments and hosiery to machine tools and auto parts. This sector has seen a 45% dip in Q3 2009 compared to last year.

Contact NAI Japan +81 3 5418 8747

The retail sector also felt the pinch of the economic slowdown. High rentals in up-market locations in Punjab forced retailers to slow expansion and to shut down unproductive stores. Ludhiana, the industrial town of Punjab and the hub of retail expansion, also showed signs of a slowdown with fewer inquiries from retailers in Q3 2009.

Country Data Area (KM2)

1334.3

GDP Growth (%)

5.36%

GDP 2009 (US$ B)

$1,242.65

GDP/Capita (US$)

$1,032.71

Inflation Rate (%)

The price of residential properties also continued to decline in 2009. Reduced real estate rates, lower interest rates and better incentives for customers to purchase homes will go a long way in rebuilding the entire real estate industry. The remainder of 2009 saw customers who had deferred home purchases in 2008 take action and purchase homes given the affordability of product on the market.

Country Data Area (KM2)

1334.3

GDP Growth (%)

-5.37%

GDP 2009 (US$ B)

$5,048.63

GDP/Capita (US$)

$39,573.49

8.66%

Inflation Rate (%)

-1.13%

Unemployment Rate (%)

7.32%

Unemployment Rate (%)

5.4%

Interest Rate(%)

4.75%

Interest Rate(%)

0.1%

Punjab carries good potential for the real estate sector in the long term. The past year was not excellent for this sector as there was no demand at all. The impact of the economic slowdown is going to stay for another six months.

Population (Millions) 1203.28

Tokyo At A Glance RENT/M2/MO

Low

Conversion:90 JPY = 1 US$

US$ RENT/SF/YR

High

Low

High

Vacancy

CITY CENTER OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A INR 370.00 INR 209.00

INR INR

N/A 540.00 301.00

$ $

N/A 9.17 5.18

N/A $ 13.38 $ 7.46

N/A 18.0% 16.0%

N/A N/A N/A

5.75 N/A N/A

14.0% N/A N/A

INDUSTRIAL

DEVELOPMENT LAND Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Low

High

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary)

JPY 6,667.00 JPY 5,455.00 JPY 3,636.00

JPY 12,727.00 JPY 12,120.00 JPY 11,515.00

$ 82.58 $ 67.57 $ 45.04

$ 157.65 $ 150.13 $ 142.64

N/A 5.5% 5.8%

New Construction (AAA) Class A (Prime) Class B (Secondary)

JPY 6,969.00 JPY 4,849.00 JPY 1,818.00

JPY 8,789.00 JPY 7,273.00 JPY 6,060.00

$ 86.32 $ 60.06 $ 22.52

$ 108.87 $ 90.09 $ 75.07

N/A 10.1% 18.3%

INDUSTRIAL INR 126.00 N/A N/A

INR

232.00 N/A N/A

3.12 N/A N/A

RETAIL

Solus Food Stores

US$ RENT/SF/YR

High

SUBURBAN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

Downtown Neighborhood Service Centers Community Power Center Regional Malls

RENT/M2/MO

Low

DOWNTOWN OFFICE

SUBURBAN OFFICE

Bulk Warehouse Manufacturing High Tech/R&D

Many major office buildings have relatively high levels of vacancy at 5.5 % for Class A office buildings and 5.8 % for Class B. As a result, after years of absence, free rent periods, on top of already reduced rental rates, have returned to the market.

Population (Millions) 127.576

Punjab At A Glance Conversion: 45 INR = 1 US$

The remainder of 2009 will likely see an increase in transactions as the gaps between buyer and seller expectations close. With the prevailing economic conditions there has been a continuing low demand for rental of office, retail (particularly for medium to high-end imported brands), residential, industrial and hospitality properties. Rents have been in a steady decline particularly in the retail and office sectors with terms becoming more and more favorable for tenants. Class A office rents show evidence of this downward trend.

Bulk Warehouse Manufacturing High Tech/R&D

JPY 1,045.00 JPY 1,358.00

JPY 3,203.00 JPY 2,732.00

$ 12.94 $ 16.82

$ 39.68 $ 33.84

N/A N/A

N/A

223.25 108.63 89.93 43.35

N/A N/A N/A N/A

N/A

RETAIL N/A N/A

N/A N/A

INR 1,088.00 INR 1,060.00 N/A

INR 1,586.00 INR 1,836.00 N/A

$ 26.95 $ 26.26 N/A

$ 39.29 $ 45.48 N/A

11.0% 15.0% N/A

Low/Acre

High/Acre

Low/Acre

N/A N/A N/A N/A N/A N/A

High/Acre

N/A N/A N/A N/A N/A N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

JPY 5,890.00 JPY 4,385.00 JPY 3,775.00 JPY 1,890.00

DEVELOPMENT LAND

Low/SF

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential (per M2)

JPY 6,330,000 N/A JPY 330,000 JPY 786,000 JPY 1,700,000 JPY 1,300,000

JPY 18,023.00 JPY 8,770.00 JPY 7,260.00 JPY 3,500.00

N/A

$ $ $ $

N/A High/SF

JPY 67,000,000 N/A JPY 1,500,000 JPY 5,790,000 JPY 36,340,000 JPY 6,300,000

72.96 54.32 46.76 23.41

$ $ $ $

N/A Low/SF

$ $ $ $ $

70,333.33 N/A 3,666.67 8,733.33 18,888.89 14,444.44

High/SF

$ 744,444.44 N/A $ 16,666.67 $ 64,333.33 $ 403,777.78 $ 70,000.00

2010 Global Market Report I www.naiglobal.com

Kuala Lumpur, Malaysia

Singapore

The dark clouds of late 2008 and early 2009 gave way to optimism as the Kuala Lumpur market adjusted to the current regional and global economies. An equities rally midway through the year also aided the property market.

In a concerted manner similar to other parts of Asia, Singapore emerged from the recession that ended with the release of Q3 2009 economic data. The manufacturing sector expanded by 35% quarter-over-quarter and the service producing industries expanded by 9%. However, the construction sector declined by 0.6%.

The economy continued to be driven by the service and manufacturing sector. The Malaysian Institute of Economic Research revised its forecast for 2009 GDP upward to a contraction of 3.3% from 4.2%. A rise from the earlier predicted 2.8% to a positive 3.7% is expected for 2010.

The office market in 2009 saw a sharp decline of almost 4050% in prime office rental rates in the first half of the year stemming from the economic downturn. The decline of prime office rentals moderated in Q3 2009. We forecast the decline of prime office rentals in 2010 will moderate given the stronger economic momentum, even with greater office supply coming on stream with MBFC, Asia Square and other new developments in 2010. Class A vacancy rose to 4% in Q2 2009, up from 3.5% in the previous quarter.

Rental rates in the market were strong for newly launched iconic buildings like UOA Bangsar (suburban) at RM 5.30 and G Tower (CBD) at RM 6.50. The average occupancy in Kuala Lumpur in the first half of 2009 was 83%. Roughly 12 million SF of new space is expected to enter the market by the end of 2010. Contact NAI Reapfield +60 3 2713 3399

Darul Takaful, Wisma Chase Perdana, Wisma Dijaya, Wisma Glomac 3, Citibank Tower (50%) and Block B GBC transactions brought confidence to the office market, with the Citibank Tower partial sale in August valued at RM 828/SF and the Darul Takaful sale in March valued at RM 636/SF, indicating positive investor appetite. The manufacturing sector embraced the challenges of reduced demand from major markets in Europe and the US. Industrial properties saw a correction of 20-30% for detached and semi-detached properties in the Klang Valley; however, detached buildings in prime locations continued to attract interest.

Country Data Area (KM2)

1334.3

GDP Growth (%)

-3.3%

Contact NAI Singapore +65 63337738

Country Data

Retail rates experienced a 10-20% decrease. Average occupancy rates stood at 85-90%. An estimated 1 million SF is expected to enter the already crowded Klang Valley market in 2009 with an additional 2.3 million SF in 2010.

Area (KM2)

1334.3

GDP Growth (%)

-3.33%

The conditional sale of a prime 2.62-acre parcel of land along Jalan Ampang in the Cityâ&#x20AC;&#x2122;s Golden Triangle for RM 148.2 million made headlines in early 2009. The market seems set for a selective play by developers who are expected to introduce new and modern designed industrial buildings.

GDP 2009 (US$ B)

$163.13

GDP/Capita (US$)

$34,346.03

Inflation Rate (%)

-0.21%

GDP 2009 (US$ B)

$207.35

GDP/Capita (US$)

$7,468.99

Inflation Rate (%)

-0.10%

Unemployment Rate (%)

3.60%

Unemployment Rate (%)

3.63%

Interest Rate(%)

5.5%

Interest Rate(%)

0.38%

RENT/SF/MO

Low

Conversion: 1.38 SGD = 1 US$

US$ RENT/SF/YR

High

Low

High

Vacancy

RM 5.30 RM 5.50 RM 3.50

RM 6.50 RM 9.00 RM 4.50

$ 18.84 $ 19.56 $ 12.44

$ 23.11 $ 32.00 $ 16.00

N/A 3.0% 15.0%

RM 3.50 RM 4.00 RM 2.50

RM 4.50 RM 4.50 RM 3.50

$ 12.44 $ 14.22 $ 8.89

$ 16.00 $ 16.00 $ 12.44

N/A 15.0% 20.0%

RM 1.20 RM 1.50

RM 1.40 RM 2.00

$ $

4.27 5.33

$ $

4.98 7.11

N/A N/A

RM 2.00

RM 2.50

7.11

8.89

N/A

RM 13.50 RM 7.00 RM 2.50 RM 22.00 N/A

RM 14.40 RM 20.00 RM 12.00 RM 28.00 N/A

$ 48.00 $ 24.89 $ 8.89 $ 78.22 N/A

$ $ $ $

51.20 71.11 42.67 99.56 N/A

10.0% 10.0% 15.0% 5.0% N/A

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

US$ RENT/SF/YR

High

Low

High

Vacancy

SGD SGD SGD

72.00 SGD 120.00 72.00 SGD 120.00 60.00 SGD 90.00

$ $ $

52.17 52.17 43.48

$ 86.96 $ 86.96 $ 65.22

20.0% 5.0% 10.0%

SGD SGD SGD

54.00 SGD 54.00 SGD 36.00 SGD

72.00 72.00 54.00

$ $ $

39.13 39.13 26.09

$ 52.17 $ 52.17 $ 39.13

20.0% 10.0% 15.0%

Bulk Warehouse Manufacturing High Tech/R&D

SGD SGD

N/A 14.00 SGD 30.00 SGD

N/A 17.00 33.00

$ $

N/A 10.14 21.74

N/A $ 12.32 $ 23.91

N/A 25.0% 15.0%

191.30 N/A N/A 104.35 N/A

$ 347.83 N/A N/A $ 217.39 N/A

3.0% N/A N/A 2.0% N/A

RETAIL

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE

Bulk Warehouse Manufacturing High Tech/R&D

RENT/SF/YR

Low

CITY CENTER OFFICE

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

The top five investments in 2009 were: SPA-led consortium puts in a top bid of S$541.9m for a mall being developed in clements by Housing & Development Board. UOLâ&#x20AC;&#x2122;s successful bid in the government residential land tender for the land parcel at Dakota Crescent for S$329 million (S$509/SF plot ratio); Swissotel Merchant Court was sold for S$260 million to TA Enterprise; Katong Mall is sold for S$247.6 million bought bu a consortium of investors led by former capital and retail head. ARA purchased Suntec International Convention & Exhibition Centre for S$235 million.

Singapore At A Glance

Kuala Lumpur At A Glance

New Construction (AAA) Class A (Prime) Class B (Secondary)

In the retail market, Prime Orchard Road continues to transform and three major shopping centers will have opened by Christmas 2009; ION Orchard, Orchard Central and 313 Sommerset. There are major additions and renovations at Park Hotel, Meritus Mandarin Hotel and 111 Sommerset Road. Prime Orchard Road rent averaged S$33/SF/month in Q3 2009, a decrease of 3.0% quarter over quarter. However, prime suburban rents inched up 0.7% quarter over quarter to average $28/SF/month in Q3 2009.

Population (Millions) 4.75

Population (Millions) 27.761

Conversion:3.375 RM = 1 US$

Large transactions in 2009 included the S $172 million purchase of three separate office buildings in a collective sale; Aviva Building, Ceil House and VTB Building with a total strate area of 185,019 SF at a cost of S$929 SF. Strata titled floors in Prudential Towers at level 20 to 25 were sold to KREIT who paid S$106.29 million or S$1,579 SF.

DEVELOPMENT LAND

Low/SF

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential (per M2)

RM 1,000.00 RM 200.00 RM 50.00 RM 25.00 RM 300.00 RM 50.00

High/SF

RM 1,500.00 RM 259.00 RM 70.00 RM 35.00 RM 400.00 RM 70.00

Low/SF

$ $ $ $ $ $

296.30 59.26 14.81 7.41 88.89 14.81

High/SF

$ $ $ $ $ $

444.44 76.74 20.74 10.37 118.52 20.74

Downtown Neighborhood Service Centers Community Power Center Regional Malls

Solus Food Stores

SGD 264.00 SGD 480.00 N/A N/A N/A N/A SGD 144.00 SGD 300.00 N/A N/A

DEVELOPMENT LAND

Low/SF

High/SF

Low/SF

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

SGD 800.00 SGD 500.00 SGD 30.00 SGD 20.00 SGD 1,000.00 SGD 600.00

SGD 1,200.00 SGD 800.00 SGD 100.00 SGD 50.00 SGD 1,500.00 SGD 2,000.00

$ $ $ $ $ $

579.71 362.32 21.74 14.49 724.64 434.78

High/SF

$ 869.57 $ 579.71 $ 72.46 $ 36.23 $1,086.96 $1,449.28

2010 Global Market Report I www.naiglobal.com

Seoul, South Korea

Taipei, Taiwan The Korean economy has improved faster than expected. The global market share of products such as automobile, semiconductor and cell phones increased and conglomerates such as Samsung, Hyundai and LG recorded high profits. Korea's quarterly GDP growth of 2.3% for the April-to-June period was the highest among members of the OECD.

Taipei, the capital of Taiwan, has had the most rapid economic development in the country and has become a global hub for the technology industry. Economic growth has reached an average of 2.11%. Taipei is the world’s number-one provider of notebook PCs, with 72% of the market share. Taipei is also the world’s leading provider of LCD monitors, with 68% of the market share and of chip foundry services, with 70% of the market share.

Overall, Class A office buildings remain stable with low vacancy rates but Class B buildings are experiencing high vacancy rates with rents decreased by landlords’ incentives such as longer free rent periods, not seen before in Class B office buildings. It is expected that the rent of prime buildings will decrease in Q4 due to an increase in vacancy rates and a new supply of office space in the CBD.

Contact NAI Korea +82 2 6205 3500

The investor demand for commercial properties revived from Q2 was due to the government's drive to prevent a residential real estate bubble from growing larger. The notable transactions this year are the ING Tower (KRW 400 billion), DACOM (KRW 182 billion), and Pacific Tower (KRW 153 billion). The capitalization rate has seen a slight decrease to 5.5%-6%.

The office inventory in the Taipei metropolitan area totals 7.12 million SM with an average rental rate of NT $599/SM/month, and NT $709/SM/month for Class A office space. Vacancy rates have risen slightly to 13.92% from 13.80%.

Contact NAI Taiwan + 886 2 8770 6699

The industrial market is also suffering from high vacancy rates of 15%-20% with rent down 20% from the previous year. Sellers outnumbered buyers in 2009, but transactions are not active. Ssangyong factory (KRW 95 billion) and DAEWOO factory (KRW 100 billion) are among the largest transactions of the year. Country Data

In the retail market, the overall rent decreased, except in Myungdong, the most active retail district in Seoul. Myungdong benefited from a new supply of retail space with Noonsquare (23,869 SM) and from tourists visiting the area. The opening of Times Square shopping mall (370,000 SM) in Youndeungpo, is drawing attention to the district.

Country Data Area (KM2)

1334.3

GDP Growth (%)

-4.13%

GDP 2009 (US$ B)

$357.34

GDP/Capita (US$)

$15,373.34

2.6%

Inflation Rate (%)

-0.5%

Unemployment Rate (%)

3.77%

Unemployment Rate (%)

6.08%

Interest Rate(%)

2.0%

Interest Rate(%)

1.25%

Area (KM2)

1334.3

GDP Growth (%)

-0.99%

GDP 2009 (US$ B)

$800.29

GDP/Capita (US$)

$16,449.90

Inflation Rate (%)

A large scale urban redevelopment is under way in the CBD, and a new supply of large office buildings and a high-rise residential complex are expected in two to three years.

Population (Millions) 48.65

Conversion: 32.3 TWD = 1 US$

US$ RENT/SF/YR

High

Low

High

Vacancy

CITY CENTER OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Solus Food Stores

DEVELOPMENT LAND Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

RENT/M2/MO

Low

US$ RENT/SF/YR

High

Low

High

Vacancy

TWD 756.00 TWD 1,059.00 TWD 711.00 TWD 998.00 TWD 499.00 TWD 635.00

$ $ $

26.09 24.54 17.22

$ 36.55 $ 34.45 $ 21.92

45.2% 14.0% 13.9%

TWD 393.00 TWD 484.00 TWD 303.00 TWD 454.00 TWD 257.00 TWD 378.00

$ $ $

13.56 10.46 8.87

$ 16.71 $ 15.67 $ 13.05

61.0% 15.9% 22.5%

TWD 151.00 TWD 212.00 TWD 136.00 TWD 197.00 TWD 330.00 TWD 378.00

$ $ $

5.21 4.69 11.39

$ 7.32 $ 6.80 $ 13.05

16.8% 13.4% 19.0%

Solus Food Stores

TWD 3,781.00 TWD 968.00 TWD 378.00 TWD 1,573.00 N/A

TWD 6,723.00 TWD 1,966.00 TWD 678.00 TWD 3,267.00 N/A

$ 130.50 $ 33.41 $ 13.05 $ 54.29 N/A

$ 232.04 $ 67.86 $ 23.40 $ 112.76 N/A

1.0% 5.9% 1.9% 2.4% N/A

DEVELOPMENT LAND

Low/M2

High/M2

Low/Acre

CITY CENTER OFFICE N/A N/A KRW 290,400 KRW 435,600 KRW 200,400 KRW 290,400

N/A $ 22.88 $ 15.79

N/A $ 34.32 $ 22.88

N/A 3.0% 4.2%

New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A N/A KRW 144,000 KRW 217,800 KRW 108,900 KRW 127,200

N/A $ 11.34 $ 8.58

N/A $ 17.16 $ 10.02

N/A 4.5% N/A

New Construction (AAA) Class A (Prime) Class B (Secondary)

KRW

54,480 KRW N/A N/A

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls

The agreements on Financial MOU and ECFA between Taiwan and China encouraged Taiwanese corporations in China to reinvest back in Taiwan and also allowed for certain forms of Chinese investments in companies on the island.

Taipei At A Glance RENT/M2/YR

Low New Construction (AAA) Class A (Prime) Class B (Secondary)

The Taipei suburban area saw more major transactions compared to Taipei downtown areas such as Nei-Hu Technology Park and Nangang Economy Trading Park. The inflow of overseas capital reached to US $12.99 billion in Q2 2009, the highest ever recorded, according to the central bank. The increased inflow of foreign capital helped both the local financial and real estate markets in Q3 2009.

Population (Millions) 23.244

Seoul At A Glance Conversion: 1179.20 KRW = 1 US$

The dawn is approaching the Taipei office market after the global finance crisis. The success of the Cross-Strait Summit has revitalized the real estate market. Several major transactions occurred after Q1 2009, stimulated by the Summit, leading to increasing closer economic ties with China. The overall absorption was 28,007 SM in Q3 2009. The demand in the suburban office market remains steady and the absorption rate has continued upward. The overall vacancy rate of Nangang Economy Trading Park Phase III went down 16.34% year over year to 34.81%.

72,600 N/A N/A

4.29 N/A N/A

KRW 4,800,000 KRW 500,000 KRW 156,000 KRW 300,000 N/A N/A N/A N/A N/A N/A

$ 37.82 $ 12.29 N/A N/A N/A

Low/M2

N/A N/A N/A N/A N/A N/A

High/M2

N/A N/A N/A N/A N/A N/A

5.72 N/A N/A

15.0% N/A N/A

$ 39.39 $ 23.64 N/A N/A N/A

N/A N/A N/A N/A N/A

High/M2

N/A N/A N/A N/A N/A N/A

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

N/A N/A N/A N/A N/A N/A

High/Acre

N/A N/A N/A N/A N/A N/A

2010 Global Market Report I www.naiglobal.com

Canada

SECTION CONTENTS Calgary, Alberta, Canada Edmonton, Alberta, Canada Vancouver, British Columbia, Canada Victoria, British Columbia, Canada Halifax, Nova Scotia, Canada Ottawa, Ontario, Canada Toronto, Ontario, Canada MontrĂŠal, Quebec, Canada Regina, Saskatchewan, Canada

Calgary, Alberta, Canada

Edmonton, Alberta, Canada

The global economic downturn continued to have a negative impact on the city of Calgary due to the influence the oil and gas industry has on our market. On top of that, the over built downtown office boom in Calgary has led to vacancy that exceeds anything that we have experienced in the past.

Edmonton and Northern Alberta weathered the economic storm longer than most markets throughout Canada. Of a provincial total of $240 billion in major projects proposed, currently under construction or recently completed, $189 billion are slated for Northern Alberta. Oil and gas projects make up 52.19% of this total. Throughout 2009, the investment market has seen a tightening of available credit and the creation of a vast disconnect between seller’s expectations and buyer’s opinions of value.

Downtown office leasing continues to be the major story in real estate in Calgary. There is currently over 1.8 million SF of vacant sublease space and 1.3 million SF of head lease vacancy in the downtown core, with another 3.5 million SF of new space coming to the market in 2010. Companies are continuing to reduce space in order to cut costs. If the current economic conditions continue, there is a potential for these vacancy numbers to double by 2012.

Contact NAI Commercial Calgary +1 403 214 2344

On the positive side, the industrial and retail markets have remained relatively stable because they were not overbuilt. The industrial developers adapted quickly to the recession and as a result, inventory growth was very low in 2009. There was continued strength in the sale of freestanding buildings in 2009 as prices saw a slight decrease and interest rates remained low.

Even while the economy appears to be improving, credit and lending parameters remain tight from the effect of the sub-prime correction. Given these conditions, many owners remain in a holding position and investment volumes are down. Contact NAI Commercial Edmonton +1 780 436 7410

The investment market had reduced activity due to a shortage of top-quality, wel-priced products being offered for sale, which was not related to the weak economic conditions. All segments of the investment market are starting to show signs of new life. It is anticipated that positive recovery of this segment will continue over the next 12 to 18 months. Country Data

Although the downtown office leasing market is looking bleak, investors still view Calgary as a relatively strong investment market. A prime example is the recent purchase of a new $74 million office development, Stampede Station Phase One, by German Investors.

Edmonton’s retail inventory is reported at 25,438,598 SF with a vacancy rate of 2.96% in 2009, down from 3.11% in 2008. Despite challenging economic times, this segment remains strong with the expansion of existing players and the introduction of new entrants to the market.

Country Data Area

9,200,000

GDP Growth (%)

-2.48%

$1,319.14

GDP 2008 (US$ B)

$1,319.14

GDP/Capita (USD)

$39,217.29

GDP/Capita (USD)

$39,217.29

Inflation Rate (%)

0.15%

Inflation Rate (%)

0.15%

Unemployment Rate (%)

8.33%

Unemployment Rate (%)

8.33%

Interest Rate (%)

0.25%

Interest Rate (%)

0.25%

Area

9,200,000

GDP Growth (%)

-2.48%

GDP 2008 (US$ B)

Calgary At A Glance

Conversion .96 CDN = 1 US$

US$ NET RENT/SF/YR

High

Low

High

Vacancy

DOWNTOWN OFFICE CDN 32.00 CDN 24.00 CDN 14.00

CDN 42.00 CDN 28.00 CDN 24.00

$ 33.33 $ 25.00 $ 14.58

$ 43.75 $ 29.17 $ 25.00

7.8% 9.2% 13.7%

CDN 23.00 CDN 20.00 CDN 13.00

CDN 28.00 CDN 25.00 CDN 20.00

$ 23.96 $ 20.83 $ 13.54

$ 29.17 $ 26.04 $ 20.83

6.3% 24.6% 12.6%

CDN 4.75 CDN 5.00 CDN 7.50

CDN 7.00 CDN 8.50 CDN 14.00

$ $ $

4.95 5.21 7.81

$ 7.29 $ 8.85 $ 14.58

5.7% 4.0% 2.4%

Solus Food Stores

Low

High

Vacancy

CDN 25.00 CDN 23.00 CDN 26.00 CDN 60.00

CDN 95.00 CDN 30.00 CDN 35.00 CDN 150.00

$ $ $ $

26.04 23.96 27.08 62.50

$ $ $ $

98.96 31.25 36.46 156.25

3.1% 3.5% 2.1% 3.1%

N/A

New Construction (AAA) Class A (Prime) Class B (Secondary)

CDN 28.00 CDN 25.00 CDN 15.00

CDN 35.00 CDN 32.00 CDN 25.00

$ 29.17 $ 26.04 $ 15.63

$ 36.46 $ 33.33 $ 26.04

N/A 6.5% 6.5%

New Construction (AAA) Class A (Prime) Class B (Secondary)

CDN 23.00 CDN 18.00 CDN 11.00

CDN 28.00 CDN 22.00 CDN 18.00

$ 23.96 $ 18.75 $ 11.46

$ 29.17 $ 22.92 $ 18.75

6.5% 6.5% 6.5%

CDN 5.00 CDN 5.00 CDN 5.00

CDN 11.50 CDN 13.00 CDN 13.00

$ $ $

5.21 5.21 5.21

$ 11.98 $ 13.54 $ 13.54

1.9% 1.9% 1.9%

CDN 18.00 CDN 16.00 CDN 24.00 CDN 30.00

CDN 37.00 CDN 32.00 CDN 35.00 CDN 125.00

$ $ $ $

18.75 16.67 25.00 31.25

$ $ $ $

38.54 33.33 36.46 130.21

4.6% 2.8% 2.6% 3.4%

N/A

Low/Acre

High/Acre

INDUSTRIAL

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls

US$ NET RENT/SF/YR

High

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

NET RENT/SF/YR

Low

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Throughout the latter half of 2009, asking rents in varying areas have moderated by about 10% with landlords offering leasehold inducements in order to compete for lease deals.

Edmonton At A Glance NET RENT/SF/YR

Low New Construction (AAA) Class A (Prime) Class B (Secondary)

The total inventory of industrial space grew by 6.7% to 88,289,785 SF in 2009. The overall vacancy in 2009 was 1.92% compared to 1.30% in 2008. Despite such a low vacancy rate, industrial activity has been down with the largest vacancy increases being seen in the multi-bay market. Given the economic news throughout 2009, tenants’ expectations were that rents should be significantly reduced.

Population (Millions) 33.637

Conversion .96 CDN = 1 US$

With a total office inventory of 24,155,355 SF, vacancies increased to 6.45% in 2009 up from 4.01% in 2008. Office rents from the peak in 2008 have been in decline. The 28-story, 618,000 SF Epcor Tower, still under construction, is now 70% committed. Redevelopment of the former Professional Building (240,000 SF) continues and the province has also announced a $356 million upgrade of the Federal Building which has been vacant since 1989.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

N/A

DEVELOPMENT LAND

Low//Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

CDN 35.00 CDN 400,000 CDN 400,000 CDN 350,000 CDN 600,000 CDN 50,000

CDN 250.00 CDN 1,000,000 CDN 600,000 CDN 800,000 CDN 1,600,000 CDN 600,000

N/A Low/Acre

$ $ $ $ $ $

36.46 416,666.67 416,666.67 364,583.33 625,000.00 52,083.33

Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores

N/A

High/Acre

DEVELOPMENT LAND

Low//Acre

High/Acre

$ 260.42 $1,041,666.67 $ 625,000.00 $ 833,333.33 $1,666,666.67 $ 625,000.00

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

N/A N/A CDN 200,000 CDN 300,000 CDN 350,000 CDN 85,000

N/A N/A CDN 650,000 CDN 750,000 CDN 1,000,000 CDN 1,000,000

$ $ $ $

N/A N/A 208,333.33 312,500.00 364,583.33 88,541.67

N/A N/A $ 677,083.33 $ 781,250.00 $1,041,666.67 $1,041,666.67

2010 Global Market Report I www.naiglobal.com

Vancouver, British Columbia, Canada

Victoria, British Columbia, Canada

Vancouver is the largest city in British Columbia and the third largest in Canada. Metropolitan Vancouver is home to 2.4 million people and is one of the largest ports on North Americaâ&#x20AC;&#x2122;s west coast. Vancouver is set to host the 2010 Winter Olympics and expects 2.5% growth in the regional economy for 2010.

Victoria, British Columbia, is the capital city of the Province of British Columbia, which employs some 10,000 people in the downtown area. It has five primary economic drivers that include the provincial government, the University of Victoria, high technology, tourism and the Department of National Defense, which operates Canadaâ&#x20AC;&#x2122;s largest naval base on the Pacific Coast.

Overall the region has fared better than most during 2009. The office market in the CBD has an overall vacancy rate of 7.0%, and absorption is expected to be negative until mid-2010. In recent years, demand for high-rise residential development sites in the urban core has led to reduced office space inventory with little new office product coming to market in 2010-2011. The office markets in Richmond, Burnaby and Surrey have rebounded as tenants look to the suburbs for space. Contact NAI Commercial Vancouver +1 604 691 6643

Country Data Area

9,200,000

The industrial market continues to outperform most other Canadian industrial markets due to insufficient supply, with average vacancy rates of approximately 4%. Land prices are expected to be stable in 2010, ranging between C $750,000 and C $1.3 million/acre. Overall absorption remains positive. Rental rates average C $8.00/SF net. The retail market is under increasing pressure due to slowing consumer spending. Steady population growth especially in the CBD and near the rapid transit lines will keep this sector active in 2010. Market rents will remain fairly stable as well. The investment market is recovering slowly. After five quarters of either flat or declining levels of investment activity, the Greater Vancouver property market showed signs of recovery in Q3 2009. The multifamily market is particularly active with cap rates of approximately 5.0%. Cap rates for most other product types range between 6.5% and 8.0% in the Vancouver region and between 8.0% and 10% in secondary markets outside the Vancouver area depending on product type and location.

Since the fall of 2008, the provincial government has seen a decline in revenue resulting in spending cuts. Tourism has been damaged by a drop in both US and international visitors. A relatively healthy local economy and low interest rates have resulted in a robust housing market that has seen increases in sales volumes and strengthening of prices. The median single family house price is $500,000. Contact NAI Commercial Victoria +1 250 381 2265

The office market has seen an increase in vacancy rates. A notable impact on the downtown office market has been the downsizing of the provincial government as it struggles with its budget deficit. A new mall under construction anchored by Wal-Mart includes an office component of 200,000 SF of space. It will be interesting to see how readily the market absorbs this new product in the current economic environment. Country Data Area

9,200,000

GDP Growth (%)

-2.48%

GDP 2008 (US$ B)

$1,319.14

GDP/Capita (USD)

$39,217.29

GDP Growth (%)

-2.48%

GDP 2008 (US$ B)

$1,319.14

GDP/Capita (USD)

$39,217.29

Inflation Rate (%)

0.15%

Inflation Rate (%)

0.15%

Unemployment Rate (%)

8.33%

Unemployment Rate (%)

8.33%

Interest Rate (%)

0.25%

Interest Rate (%)

0.25%

Vancouver At A Glance

Conversion .96 CDN = 1 US$

US$ NET RENT/SF/YR

High

Low

High

Vacancy

DOWNTOWN OFFICE CDN 30.00 CDN 28.00 CDN 25.00

CDN 40.00 CDN 38.00 CDN 33.00

$ 31.25 $ 29.17 $ 26.04

$ 41.67 $ 39.58 $ 34.38

5.0% 6.0% 8.0%

CDN 29.00 CDN 25.00 CDN 20.00

CDN 35.00 CDN 32.00 CDN 25.00

$ 30.21 $ 30.21 $ 20.83

$ 36.46 $ 36.46 $ 26.04

8.0% 7.5% 12.0%

CDN 6.00 CDN 6.50 CDN 8.50

CDN 9.00 CDN 10.00 CDN 14.00

$ $ $

6.25 6.77 8.85

$ 9.38 $ 10.42 $ 14.58

4.0% 4.0% 4.5%

Solus Food Stores

Low

High

Vacancy

CDN 105.00 CDN 30.00 CDN 30.00

CDN 180.00 CDN 60.00 CDN 40.00

$109.38 $ 31.25 $ 31.25

$187.50 $ 62.50 $ 41.67

4.0% 4.0% 4.5%

CDN 25.00

CDN 40.00

$ 26.04

$ 41.67

4.5%

N/A

New Construction (AAA) Class A (Prime) Class B (Secondary)

CDN 42.00 CDN 36.00 CDN 30.00

CDN 48.00 CDN 40.00 CDN 34.00

$ 43.75 $ 37.50 $ 31.25

$ 50.00 $ 41.67 $ 35.42

N/A 1.8% 5.0%

New Construction (AAA) Class A (Prime) Class B (Secondary)

CDN 38.00 CDN 32.00 CDN 26.00

CDN 42.00 CDN 36.00 CDN 30.00

$ 39.58 $ 33.33 $ 27.08

$ 43.75 $ 37.50 $ 31.25

N/A 7.0% 10.0%

CDN 10.00 CDN 12.00 CDN 12.00

CDN 12.00 CDN 14.00 CDN 18.00

$ 10.42 $ 12.50 $ 12.50

$ 12.50 $ 14.58 $ 18.75

1.0% 1.0% 1.0%

CDN 38.00 CDN 26.00 CDN 24.00

CDN 90.00 CDN 32.00 CDN 28.00

$ 39.58 $ 27.08 $ 25.00

$ 93.75 $ 33.33 $ 29.17

9.0% 5.0% 2.0%

CDN 50.00

CDN 70.00

$ 52.08

$ 72.92

3.0%

N/A

INDUSTRIAL

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls

US$ NET RENT/SF/YR

High

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

NET RENT/SF/YR

Low

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Investment sales continue to be limited by a lack of product. An abundance of qualified purchasers and the limited number of investment properties have resulted in capitalization rates remaining resilient to the recessionary pressures. Prime commercial property capitalization rates are 6-7%. Residential apartment capitalization rates are around 5%.

Victoria At A Glance NET RENT/SF/YR

Low New Construction (AAA) Class A (Prime) Class B (Secondary)

The retail market in the downtown core continues to show weakness due to a diminished tourism sector. The 8% vacancy rate is expected to hold. Regional and community retail centers in Victoria have a 2-3% vacancy rate with lease rates stable.

Population (Millions) 33.637

Conversion .96 CDN = 1 US$

The industrial market is challenging for buyers and tenants with a very low vacancy rate of less than 1% and limited new supply. Rents for industrial space have remained stable. Lack of capacity in existing industrial areas in the Victoria area continues to be a problem.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

DEVELOPMENT LAND

Low//Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

CDN 75.00 CDN 900,000 CDN 850,000 CDN 750,000 CDN 750,000 CDN 750,000

CDN 135.00 CDN 1,300,000 CDN 1,300,000 CDN 1,200,000 CDN 1,500,000 CDN 1,500,000

Low/Acre

$ $ $ $ $ $

High/Acre

78.13 $ 937,500.00 $ 885,416.67 $ 781,250.00 $ 781,250.00 $ 781,250.00 $

140.63 1,354,166.67 1,354,166.67 1,250,000.00 1,562,500.00 1,562,500.00

Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores

DEVELOPMENT LAND Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Low//Acre

CDN 1,500,000 CDN 600,000 CDN 500,000 CDN 600,000 CDN 1,000,000 CDN 400,000

High/Acre

CDN 2,000,000 CDN 1,000,000 CDN 750,000 CDN 900,000 CDN 1,500,000 CDN 1,000,000

Low/Acre

$1,562,500.00 $ 625,000.00 $ 520,833.33 $ 625,000.00 $1,041,666.67 $ 416,666.67

High/Acre

$ $ $ $ $ $

2,083,333.33 1,041,666.67 781,250.00 937,500.00 1,562,500.00 1,041,666.67

2010 Global Market Report I www.naiglobal.com

Halifax, Nova Scotia, Canada

Ottawa, Ontario, Canada

Halifax Regional Municipality (HRM) is the economic hub of Atlantic Canada and appears to have weathered the current global financial crisis better than other parts of the country. Perhaps this is because HRM has the Canadian Navy’s East Coast base, is the location of many federal government offices and six universities, and as a result is home to a large concentration of educational, medical and research facilities.

Contact NAI Turner Drake & Partners Ltd. +1 902 429 1811

Country Data

The vacancy rate for all classes of office buildings is up this year to 7.44%, an overall increase of 1.2%. The current vacancy rate for Class A space is 4.97%, Class B 8.38% and Class C 7.17%. Although several projects have been approved for the CBD, rental rates need to be at least $25/SF net to make construction worthwhile. Class A rents currently are at $18/SF. However, office development continues in the suburban market where land is cheaper. Construction has recently commenced on a 15-acre site known as The Wright and Burnside Business Campus. It will include six office buildings totaling 400,000 SF. Warehouse vacancy is up in HRM to 8.14% overall and net rental rates have remained virtually unchanged from last year. Burnside/City of The Lakes is the largest of HRM’s industrial parks and has a 4.91% vacancy. There are several new buildings under construction for owner/occupiers in this Park. On the retail front, Dartmouth Crossing continues to expand its retail park. Costco recently opened its second HRM location here and Hampton Inn and Suites welcomed its first guests earlier this year. Bedford Commons, also known as NorthGate Power Centre, a retail project, is under construction. Wal-Mart, Canadian Tire, Future Shop and other national retailers are due to occupy space in this development. There is a shortage of available investment product and the market has been slow.

Contact NAI Commercial Ottawa +1 613 230 2100

Country Data Area

9,200,000

GDP Growth (%)

-2.48%

GDP 2008 (US$ B)

$1,319.14

GDP/Capita (USD)

$39,217.29

Inflation Rate (%)

0.15%

8.33%

Unemployment Rate (%)

8.33%

0.25%

Interest Rate (%)

0.25%

Area

9,200,000

GDP Growth (%)

-2.48%

GDP 2008 (US$ B)

$1,319.14

GDP/Capita (USD)

$39,217.29

Inflation Rate (%)

0.15%

Unemployment Rate (%) Interest Rate (%)

Council passed “HRM By Design” a blueprint for the future of Downtown Halifax. The plan is a balance between heritage preservation and growth. Plans were unveiled recently for a new Trade and Convention Centre in the Halifax downtown. Also in the works is a new commercial/residential subdivision in Bedford West.

Population (Millions) 33.637

Halifax At A Glance Conversion: .96 CDN = 1 US$

Ottawa At A Glance NET RENT/SF/YR

Low

Conversion: 94 CDN = 1 US$

US$ NET RENT/SF/YR

High

Low

High

Vacancy

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A CDN 31.22 CDN 18.00

N/A CDN 34.89 CDN 29.04

N/A $ 32.52 $ 18.75

N/A $ 36.34 $ 30.25

N/A 2.8% 3.4%

CDN 26.50 CDN 20.29 CDN 13.50

CDN 26.50 CDN 30.60 CDN 29.75

$ 27.60 $ 21.14 $ 14.06

$ 27.60 $ 31.88 $ 30.99

32.0% 7.5% 12.4%

Low

High

N/A CDN 30.00 CDN 18.00

CDN CDN

N/A CDN 14.00 CDN

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A 35.00 25.00

N/A $ 31.91 $ 19.15

N/A $ 37.23 $ 26.60

N/A 2.9% 5.8%

New Construction (AAA) Class A (Prime) Class B (Secondary)

CDN

N/A 15.00

N/A $ 14.89

N/A $ 15.96

N/A 7.6%

9.00

CDN

12.00

9.57

$ 12.77

7.6%

CDN CDN CDN

4.00 7.00 8.00

CDN CDN CDN

6.00 11.00 13.00

$ $ $

4.26 7.45 8.51

$ 6.38 $ 11.70 $ 13.83

5.0% 5.0% 18.0%

CDN CDN CDN CDN

50.00 20.00 35.00 30.00 N/A

CDN CDN CDN CDN

195.00 35.00 65.00 68.00 N/A

$ $ $ $

53.19 21.28 37.23 37.23 N/A

INDUSTRIAL CDN 6.55 CDN 5.00 CDN 7.65

CDN 15.00 CDN 16.00 CDN 23.00

$ $ $

6.82 7.97 7.97

$ 15.63 $ 23.96 $ 23.96

10.7% 6.5% 6.7%

Regional Malls Solus Food Stores

CDN 35.00 CDN 22.00 CDN 28.00 CDN 65.00 N/A

CDN 65.00 CDN 28.00 CDN 31.00 CDN 75.00 N/A

$ $ $ $

36.46 22.92 29.17 67.71 N/A

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

N/A N/A CDN 239,580 CDN 326,700

N/A N/A $ 249,562.50 $ 340,312.50

CDN 163,350 CDN 270,115 CDN 270,115 CDN 206,358

$ $ $ $

RETAIL Downtown Neighborhood Service Centers Community Power Center

US$ NET RENT/SF/YR

High

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

NET RENT/SF/YR

Low

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

The Ottawa Federal Government has been hiring steadily, with an expectation that hiring will be reevaluated based on the economic setback of 2009. The high-tech sector continues to strengthen; sector employment numbers are now exceeding the exaggerated pre-high tech bust of 2000. Although the public sector and high-tech sectors are still growing soundly, this growth is being offset by downturns in other sectors affected by the global recession. Employment is expected to remain stable. Growth in the local economy is expected to decline 0.5% this year before rebounding 3.1% in 2010. The industrial market performed well with inventory exceeding 22 million SF. The overall vacancy rate, excluding Kanata, dropped to below 3.9%. With limited new construction, 2010 vacancy should decline further and rental rates are expected to increase. Larger industrial building space blocks are limited, rental rates have increased and demand is strong for highquality high-ceiling modern industrial space. Office market inventory exceeds 47 million SF, with over 2.5 million SF of vacant space; over half of this vacancy is in Kanata (western suburban market). Vacancy rates elsewhere are in decline. Expectations in Kanata indicate a softening of the market with multiple companies, including Nortel’s demise, offering space in the sublet market. In Ottawa core, a new 370,000 SF building was constructed by Ottawa developer Minto Group. The building is over 70% occupied with the remainder expected to be occupied by the Federal government. Export Development Corporation will relocate with a new high-rise tower of 535,000 SF under construction by Broccolini in the core. The local retail market sustained a vacancy rate of 2.7% with an increase of 0.03% in the previous six months. Effects of the unanticipated Canadian dollar strengthening, and concerns over economic downturn, will not be reflected in this sector. Vacancy rental rates continued to escalate with rates averaging $19.75 SF. New retail construction has adopted a “wait and see” approach. There continues to be development of small neighborhood infill projects serving the rapidly growing suburbs. Long-term investors are keeping a large percentage of capital on the sidelines. Substantial assets offered for sale are beginning to receive attention. Capitalization rates increased slightly. Offshore and international investors have expressed continued interest in low-risk products. It has yet to be seen if the extraordinary difficulty experienced in the capital markets will alter commercial real estate markets in dramatic, unforeseen ways.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

CDN CDN CDN CDN

239,580 521,413 544,500 317,117

$ $ $ $

Low/Acre

170,156.25 281,369.79 281,369.79 214,956.25

67.71 29.17 32.29 78.13 N/A

N/A N/A N/A N/A N/A

High/Acre

$ $ $ $

249,562.50 543,138.54 567,187.50 330,330.21

Downtown Neighborhood Service Centers Community Power Center Regional Malls

Solus Food Stores

DEVELOPMENT LAND Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Low/Acre

CDN 17,000,000 CDN 350,000 CDN 275,000 N/A CDN 350,000 CDN 375,000

High/Acre

CDN 17,000,000 CDN 400,000 CDN 375,000 N/A CDN 2,000,000 CDN 3,000,000

Low/Acre

$ $ $ $

207.45 37.23 69.15 69.15 N/A

4.9% 4.3% 1.2% 1.0% N/A

High/Acre

$ 18,085,106.38 $ 18,085,106.38 $ 372,340.43 $ 425,531.91 $ 292,553.19 $ 398,936.17 N/A N/A $ 372,340.43 $ 2,127,659.57 $ 372,340.43 $ 2,127,659.57

2010 Global Market Report I www.naiglobal.com

Toronto, Ontario, Canada

Contact NAI Ashlar Urban +1 416 205 9222

Country Data

Montreal, Quebec, Canada

Toronto is North America’s fifth largest city and Canada’s largest economic center. With a population of approximately 5.5 million people, Toronto is home to one-sixth of Canada’s workforce. As Canada’s center for commerce, Toronto is the hub of the banking and investment community and also acts as the gateway for other major industries in Canada including, medical, film, tourism, fashion, food and information technology.

Enjoying a strategic position within North America, Montreal is a genuine international business center, one that forms a bridge between the economy of the European Union and that of the US. Montreal has not suffered excessively from the worldwide recession that dominated the market in 2009. Classed among the 20 largest cities in North America, it appears that Montreal is a city that has been able to weather the crisis without incurring too much damage.

Toronto’s downtown office market fundamentals continue to reflect the current economic condition with the availability rate remaining at approximately 10%, up from 6.9% in 2008. Of note, the downtown financial core will see a dramatic increase in inventory with the addition of just over 3 million SF expected to come online by the end of 2009. These new completions, which include the Bay Adelaide Centre, Maple Leaf Square, RBC Centre and the Telus Tower, will consist primarily of tenants who have relocated from within the downtown core.

The city of Montreal is ranked second in North America with respect to jobs related to the design and production of video games. The city is also a major center for corporations operating in the aerospace, pharmaceutical and biotechnology fields, and a leader in electronic commerce, multimedia production and information technology. The film industry also continues to experience interesting growth in Montreal.

With the availability of new back-fill space, we expect an increase in the vacancy rate in the downtown financial core. Not withstanding the softening of net rents in the financial core, the downtown east and west markets have fared comparatively well as lower occupancy costs and strong demand have helped keep vacancy rates stable. Toronto has remained very forward thinking in terms of its environmental standards. All major new developments scheduled for the next 24 months have been registered for LEED certification, and smaller developments are starting to bring a new generation of “green buildings” to the market. New energy alternatives such as deep lake water cooling, have been embraced by some of the major new developments (Telus Tower and RBC Centre) in Toronto. A chief objective of the city of Toronto is to have 80% of the downtown area serviced by Enwave by 2050.

Contact NAI Commercial Montreal +1 514 866 3333

Country Data Area

9,200,000

GDP Growth (%)

-2.48%

GDP 2009 (US$ B)

$1,319.14

$39,217.29

GDP/Capita (USD)

$39,217.29

Inflation Rate (%)

0.15%

Inflation Rate (%)

0.15%

Unemployment Rate (%)

8.33%

Unemployment Rate (%)

8.33%

Interest Rate (%)

0.25%

Interest Rate (%)

0.25%

Area

9,200,000

GDP Growth (%)

-2.48%

GDP 2009 (US$ B)

$1,319.14

GDP/Capita (USD)

Toronto At A Glance

Conversion: .96 CDN = 1 US$

US$ NET RENT/SF/YR

High

Low

High

Vacancy

DOWNTOWN OFFICE CDN CDN CDN

40.00 32.00 25.00

$ 29.17 $ 26.04 $ 15.63

$ 41.67 $ 33.33 $ 26.04

9.7% 9.8% 7.5%

CDN 12.00 N/A N/A

CDN

16.00 N/A N/A

$ 12.50 N/A N/A

$ 16.67 N/A N/A

9.0% N/A N/A

CDN

4.00 N/A N/A

CDN

6.50 N/A N/A

6.77 N/A N/A

9.0% N/A N/A

CDN

Regional Malls Solus Food Stores

CDN 30.00 N/A N/A N/A N/A

130.00 N/A N/A N/A N/A

$ 135.42 N/A N/A N/A N/A

10.0% N/A N/A N/A N/A

DEVELOPMENT LAND

Low/Acre

High/Acre

SUBURBAN OFFICE

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Low

High

CDN 28.50 CDN 35.00 CDN 12.00

CDN CDN CDN

N/A CDN 25.00 CDN 15.00

CDN CDN

CDN CDN CDN

4.75 4.25 5.75

CDN CDN CDN CDN

45.00 13.00 22.00 30.00 N/A

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary)

55.00 42.00 20.00

$ 29.69 $ 36.46 $ 12.50

$ 57.29 $ 43.75 $ 20.83

6.8% 7.2% 7.6%

New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A 31.00 20.00

N/A $ 26.04 $ 15.63

N/A $ 32.29 $ 20.83

11.0% 11.5% N/A

CDN 6.50 CDN 6.00 CDN 7.25

$ $ $

4.95 4.43 5.99

$ $ $

6.77 6.25 7.55

6.0% 6.5% 7.0%

CDN CDN CDN CDN

$ $ $ $

46.88 13.54 22.92 31.25 N/A

$ $ $ $

208.33 26.04 33.33 57.29 N/A

5.0% 6.5% 3.5% 6.0% N/A

INDUSTRIAL 4.17 N/A N/A

RETAIL Downtown Neighborhood Service Centers Community Power Center

US$ NET RENT/SF/YR

High

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

NET RENT/SF/YR

Low

DOWNTOWN OFFICE CDN 28.00 CDN 25.00 CDN 15.00

New Construction (AAA) Class A (Prime) Class B (Secondary)

Montreal has made its mark this year by implementing its BIXI program, a bicycle transportation system offering over 6,000 bicycles at some 400 locations in the downtown core and adjacent suburbs. This innovative project is now being exported to other major cities such as London and Boston.

Montreal At A Glance NET RENT/SF/YR

Low New Construction (AAA) Class A (Prime) Class B (Secondary)

The hotel sector in Montreal continues to develop, with several new projects under way. There is approximately 326.5 million SF of leasable industrial space in the greater Montreal area. The vacancy rate in the industrial sector is 7%. The majority of unoccupied space is found in older buildings with lower headroom, with more recent buildings offering greater headroom. However, industrial development has been on the slow side, keeping demand steady with the expectation of an improvement in the world economy in 2010.

Population (Millions) 33.637

Conversion: .96 CDN = 1 US$

The market for office space in the greater Montreal area represents more than 21% of the entire Canadian market. The total inventory in this market is more than 72 million SF, 60% of which is in the downtown core. The overall office vacancy rate is 8%. No large projects have been started during this period, but in both Laval and the South Shore, situated adjacent to Montreal, several building projects have been developed.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL $ 31.25 N/A N/A N/A N/A Low/Acre

High/Acre

N/A

N/A N/A N/A N/A N/A

Downtown Neighborhood Service Centers Community Power Center

Regional Malls Solus Food Stores

200.00 25.00 32.00 55.00 N/A

DEVELOPMENT LAND

Low/Acre

High/Acre

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

CDN CDN CDN CDN CDN CDN

$ $ $ $ $ $

6.50 5.50 4.50 4.50 8.00 6.00

15.00 15.00 14.00 15.00 15.00 28.00

6.77 5.73 4.69 4.69 8.33 6.25

15.63 15.63 14.58 15.63 15.63 29.17

2010 Global Market Report I www.naiglobal.com

Regina, Saskatchewan, Canada The Saskatchewan market appears to be an "oasis" amid a general economic downturn. After years of being a "have not" province it is apparent that it is Saskatchewan's time in the sun. Saskatchewan has abundant resources and a strong economy. Agriculture, oil, gas, potash, uranium, diamonds, gold, and coal have diversified the economy. Unemployment is below 5% and is predicted to remain steady. The two largest cities, Regina and Saskatoon, with a combined population of 500,000, enjoy a diversified economy.

Contact NAI Commercial (SASK) +1 306 525 3344

Country Data Area

9,200,000

GDP Growth (%)

-2.48%

GDP 2008 (US$ B)

$1,319.14

GDP/Capita (USD)

$39,217.29

Inflation Rate (%)

0.15%

Unemployment Rate (%)

8.33%

Interest Rate (%)

0.25%

After 10 years of expansion on the east side of Regina, and five yearsâ&#x20AC;&#x2122; growth in the northwest, look for the focus in the retail market to shift to Harbour Landing (800,000 SF) in the southwest corner of Regina. Rental rates for all other areas are expected to remain constant in 2010. The Saskatchewan investment market remains strong. While investor appetite globally has waned, the local Saskatchewan market has investor appeal. Capitalization rates range between 8% -9% for well-located, well-tenanted projects. The vacancy factor for industrial space is at an all time low. Lack of construction and low supply will invariably continue to push rental rates up. Industrial rates are in the range of US $8.00-$9.00 for existing projects and US $13.00$15.00 for new construction. Land remains in good supply at US $225,000-$250,000/acre. The Regina office market witnessed a reduction of net absorption to 80,000 SF in early 2009. Vacancy is at an overall rate of 1.73%. Lease rates will continue upward as we emerge from the recession. Pent up demand before the recession will remain and no new projects are expected for 2010. Interest in agricultural land in Saskatchewan has risen steadily for the past three years. Rising commodity prices have led to increased demand for rural land. Values are expected to improve in 2010. To summarize, the Saskatchewan market remains strong and is predicted to experience continued steady growth into 2010. Look for rates in all sectors to continue upward as steady demand, low vacancy rates, and a lack of new product will naturally force rates upward.

Population (Millions) 33.637

Regina At A Glance Conversion .97 CDN = 1 US$

NET RENT/SF/YR

US$ NET RENT/SF/YR

Low

High

Low

High

Vacancy

CDN $ 35.00 CDN $ 18.00 CDN $ 12.00

CDN $ 40.00 CDN $ 22.00 CDN $ 14.00

$ $ $

3.35 1.72 1.15

$ 3.83 $ 2.11 $ 1.34

N/A N/A N/A

0.57

$ 0.77

N/A

N/A N/A

1.92 1.15 N/A 3.35

$ 2.39 $ 1.44 N/A $ 4.79

N/A N/A N/A N/A

N/A

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

CDN$ 6.00

CDN $ 8.00

N/A N/A

CDN $ 20.00 CDN $ 12.00 N/A CDN $ 35.00

CDN $ 25.00 CDN $ 15.00 N/A CDN $ 50.00

N/A

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores

DEVELOPMENT LAND

Low//Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

CDN $ 50.00 N/A CDN $ 4.00 N/A CDN $ 12.00 N/A

CDN $ 75.00 N/A CDN $ 6.00 N/A CDN $ 25.00 N/A

$ $ $

N/A Low/Acre

$ 51.55 N/A $ 4.12 N/A $ 12.37 N/A

High/Acre

$ 77.32 N/A $ 6.19 N/A $ 25.77 N/A

2010 Global Market Report I www.naiglobal.com

EMEA

SECTION CONTENTS Vienna, Austria The Baltics (Latvia/Estonia/Lithuania) Sofia, Bulgaria Prague, Czech Republic Copenhagen, Denmark Finland Paris - Ile de France (Paris Region), France Frankfurt am Main, Germany Athens Greece Iceland Tel Aviv, Israel Almaty, Kazakhstan Kuwait Oslo, Norway Doha City, Qatar Bucharest, Romania Moscow, Russian Federation St. Petersburg, Russian Federation Belgrade, Serbia Johannesburg, South Africa Madrid, Spain Stockholm, Sweden Geneva, Switzerland Zurich, Switzerland Kiev, Ukraine Istanbul, Turkey London, England, United Kingdom

Vienna, Austria

The Baltics (Latvia/Estonia/Lithuania) Vienna is the capital of Austria and has a population of 1.7 million. The city has historically been a focus for commerce between East and the West. Growth in the Austrian economy is estimated at -3.4% for 2009 with inflation at 0.5%. The unemployment rate was 4.4% in July 2009, compared to 9% for the EU 27.

Until recently, the Baltic States have been among the fastest growing economies in Europe. However, the unbalanced growth from 2005 through 2008, influenced by rapidly growing domestic demand and availability of advantageous credit resources, is the primary cause for the current crisis in the three Baltic countries. The economic activities decreased most significantly in trade, manufacturing and construction sectors. With the decline of domestic demand, the consumer price inflation has been gradually decreasing.

The new supply of office space was approximately 240,000 SM in 2008. For 2009 about 220,000 SM are estimated. Demand in the office space rental market has slackened. Nevertheless, with approximately 280,000 SM of activity, the leasing performance will level off at a respectable value due to numerous relocations and location consolidations. Annual leasing activity totaled approximately 340,000 SM during the record years of 2005-2008. Contact NAI Otto Immobilien +43 1 512 77 77

Country Data

In recent months, increased space demand has come from the trade, financial and leisure sectors. Top rents as well as the average rent are stable at €24.00, respectively €12.10/SM/month. The vacancy rate remains at 5.7%. Demand for industrial and warehousing facilities has weakened significantly. Rents have softened to around €5.00/SM/month. Owner-occupation is still a dominant feature of the market. Retail sales in Austria continued to be strong during the first six months of 2009. Prime rents for unit shops achieve approximately €2,400/SM/year. Within the framework of Vienna’s main railway stations a lot of retail space is going to enter the market during the next few years. Investment market demand, as well as the requirements concerning property quality and yields, have risen (as much as 1% beyond the top segment). Pricing continues to be difficult for both sides. The massive purchase price reductions some expected have not materialized due to market participants’ wait and see stance.

Contact NAI Baltics +371 6731 2396

Country Data Area (KM2)

175015

GDP Growth (%)

15.5%

GDP 2009 (US$ B)

$83.70

GDP/Capita (US$)

$11,900

0.47%

Inflation Rate (%)

2.5%

Unemployment Rate (%)

5.27%

Unemployment Rate (%)

14.7%

Interest Rate(%)

1.00%

Interest Rate(%)

7.5%

Area (KM2)

1334.3

GDP Growth (%)

-3.82%

GDP 2009 (US$ B)

$374.42

GDP/Capita (US$)

$45,090.49

Inflation Rate (%)

In recent months, the commercial properties changing ownership have been mostly special-use properties like garages and supermarkets, rather than typical offices. Nowadays a trend to less risky real estate investments is clearly noticeable on the demand side.

Vienna At A Glance

Conversion: 0.6664 Euro = 1 US$

US$ RENT/SF/YR

High

Low

High

Vacancy

CITY CENTER OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Experiencing a current downturn, the Baltic real estate market provides excellent possibilities to attain high returns and future prospects of capital appreciation when the market stabilizes. The Baltic States will remain an interesting arena for investors and professional developers due to its excellent strategic location between Eastern and Western Europe.

RENT/M2/YR

Low New Construction (AAA) Class A (Prime) Class B (Secondary)

US$ RENT/SF/YR

High

Low

High

Vacancy

€ € €

108.00 120.00 84.00

€ € €

144.00 180.00 108.00

$ 15.06 $ 16.73 $ 11.71

$ 20.07 $ 25.09 $ 15.06

15.0% 10.5% 18.0%

€

84.00 N/A 60.00

€

120.00 N/A 84.00

$ 11.71 N/A $ 8.36

$ 16.73 N/A $ 11.71

25.0% N/A 27.0%

€

42.00 N/A N/A

€

72.00 N/A N/A

5.86 N/A N/A

$ 10.04 N/A N/A

20.0% N/A N/A

City Center Retail Units in Parks Community Power Center (Big Box) Regional Shopping Centers/Malls Solus Food Stores

€ € €

216.00 96.00 60.00 N/A N/A

€ € €

540.00 144.00 240.00 N/A N/A

$ 30.11 $ 13.38 $ 8.36 N/A N/A

$ 75.28 $ 20.07 $ 33.46 N/A N/A

3.0% 8.0% 1.0% N/A N/A

€ €

156.00 156.00

€ €

288.00 288.00

$ 20.70 $ 20.70

$ 38.22 $ 38.22

5.7% 5.7%

€

131.00

€

156.00

$ 17.39

$ 20.70

5.7%

€ €

140.00 131.00

€ €

156.00 156.00

$ 18.58 $ 17.39

$ 20.70 $ 20.70

5.7% 5.7%

€

90.00

€

140.00

$ 11.94

$ 18.58

5.7%

New Construction (AAA) Class A (Prime) Class B (Secondary)

€ € €

30.00 50.00 60.00

€ € €

60.00 70.00 78.00

$ 3.98 $ 6.64 $ 7.96

$ 7.96 $ 9.29 $ 10.35

9.0% 9.0% 8.0%

Bulk Warehouse Manufacturing High Tech/R&D

€ € €

872.00 260.00 70.00 N/A 62.00

€ 2,400.00 € 430.00 € 87.00 N/A € 70.00

$115.73 $ 34.51 $ 9.29 N/A $ 8.23

$ 318.52 $ 57.07 $ 11.55 N/A $ 9.29

7.5% 7.5% 7.5% N/A 9.0%

Low/SF

SUBURBAN OFFICE

RETAIL City Center Neighborhood Service Centers Community Power Center (Big Box) Regional Malls

Investment volumes were diminished in 2009, mostly due to limitations on real estate financing imposed by the Scandinavian banks, which play a leading role in the Baltics, as well as the influence of the sub-prime mortgage crisis on the European markets.

CITY CENTER OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

One major advantage of the three Baltic countries is strategic location at the crossroads between Eastern and Western Europe, hence new entrant international companies are seeing the benefits of setting up manufacturing or logistics activities in the Baltic States. Due to current economic conditions, rental rates for industrial/warehouse facilities have shown instability and a major decrease.

The Baltics At A Glance RENT/M2/YR

Low New Construction (AAA) Class A (Prime) Class B (Secondary)

Over the last few years more than 15 shopping centers opened or were significantly expanded in the Baltic States. However, the large scale retail developments have been temporarily postponed. The retail space market has changed from a landlords’ market to a tenants’ market, and many international companies have chosen to enter the Baltic States retail market under the new preferential conditions.

Population (Millions) 7.0

Population (Millions) 8.304

Conversion: 0.70 € = 1 US$

The office market faces a severe slowdown due to lack of financing and a decrease in demand. Vacancy rates continue to rise. Vacancy in Class A offices is about 10% on average and 10.5% to 27% in Class B offices. Landlords are offering attractive incentives and discounted rentals. Compared to 2008, the average rental decrease was 25% for Class B and 15% for Class A offices.

€

INDUSTRIAL

RETAIL

Solus Food Stores

€

DEVELOPMENT LAND

Low/M2

High/M2

High/SF

DEVELOPMENT LAND

Low/M2

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

€ € € €

4,360.00 2,100.00 2,000.00 2,180.00

€ 13,081.00 $ 578.65 € 3,200.00 $ 278.71 € 3,052.00 $ 265.44 € 3,488.00 $ 289.32

$ 1,736.08 $ 424.70 $ 405.05 $ 462.92

€

€ €

2,000.00 2,620.00

€ €

$ 405.05 $ 1,061.74

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

3,052.00 $ 265.44 8,000.00 $ 347.72

€ € € €

High/M2

250.00 N/A 20.00 10.00 20.00 10.00

€ 1,000.00 N/A € 50.00 € 50.00 € 200.00 € 170.00

Low/SF

$34.85 N/A $ 2.79 $ 1.39 $ 2.79 $ 1.39

High/SF

$139.41 N/A $ 6.97 $ 6.97 $ 27.88 $ 23.70

2010 Global Market Report I www.naiglobal.com

Sofia, Bulgaria

Prague, Czech Republic The downturn was first felt in October 2008. Deteriorating domestic demand has led to a contraction of Bulgaria’s economy by 5.8-7.1% in Q2 2009. The country's economy deteriorated significantly throughout 2009. Investment volume is off 60% compared to 2008. Most commercial development plans have either been stopped or are on hold.

Contact NAI ProCon +359 2 943 43 75

The market was characterized by weakened domestic demand in comparison to the previous year. Rising exports will help offset that weakened demand, but expectations are for continued negative GDP. Mostly because the adjustment process is still going on and because the currency is fixed, most of this adjustment takes place at a slower pace. Recent data indicates that inflation is heading to a negative territory which, in turn, is also hurting the GDP growth. Bulgaria reported a monthly deflation of non-EU harmonized consumer prices for July, for a third month in a row. We are seeing a further deterioration in domestic demand, which is the key factor for the deepening erosion of GDP. At the same time, net exports should be contributing positively but that will not be enough to offset the slump of the domestic demand component. Plans to start development of nine industrial parks are on hold. Most of the transactions are done by local players. The only property transactions that are continuing are the seasonal and holiday properties along the Black Sea coast, but even those are moving along at a much slower pace. Banks have gradually started to open up for credit but at much higher interest rates than a year ago.

Country Data

The office market has remained the most developed commercial property sector in Bulgaria, primarily concentrated in Sofia. Vacancy rates are in the range of 13.5% with vacancy rates of 19.6% in the suburban areas. Four new shopping malls opened and reached 220,000 SM. The first Carrefour hypermarket opened n Burgas.

With a global economic downturn and GDP in negative territory, the Czech Republic has witnessed a slowdown in development and investment throughout all of 2009. New office, retail and industrial development has significantly diminished due to a lack of financing and reduced tenant demand. This also applies to shopping centre development, which has almost come to a halt.

Contact NAI MIPA +420 224 818 677

Country Data* Area (KM2)

1334.3

GDP Growth (%)

-4.32%

GDP 2009 (US$ B)

$189.67

$5,916.22

GDP/Capita (US$)

$18,193.65

Inflation Rate (%)

0.61%

Inflation Rate (%)

1.04%

Unemployment Rate (%)

8.23%

Unemployment Rate (%)

7.93%

Interest Rate(%)

1.00%

Interest Rate(%)

1.25%

Area (KM2)

1334.3

GDP Growth (%)

-6.50%

GDP 2009 (US$ B)

$44.78

GDP/Capita (US$)

Sofia At A Glance

Conversion: .793 EUR = 1 US$

US$ RENT/SF/YR

High

Low

High

Vacancy

CITY CENTER OFFICE 25.00 10.00 5.00

€ € €

35.00 16.00 10.00

$ $ $

41.72 16.69 8.34

$ $ $

58.40 26.70 16.69

N/A N/A N/A

€ € €

15.00 8.00 5.00

€ € €

25.00 12.00 7.00

$ $ $

25.03 13.35 8.34

$ $ $

41.72 20.02 11.68

N/A N/A N/A

€ € €

3.00 2.00 4.00

€ € €

5.00 4.00 6.00

$ $ $

5.01 3.34 6.67

$ $ $

8.34 6.67 10.01

N/A N/A N/A

City Center (High Street Shop) Neighborhood Service Centers Community Power Center(Big Box) Regional Shopping Centers/Mall Solus Food Stores

€ € € € €

50.00 20.00 6.00 15.00 6.00

€ 100.00 € 40.00 € 8.00 € 25.00 € 8.00

$ $ $ $ $

83.43 33.37 10.01 25.03 10.01

$ $ $ $ $

166.87 66.75 13.35 41.72 13.35

N/A N/A N/A N/A N/A

DEVELOPMENT LAND

Low/M2

SUBURBAN OFFICE

US$ RENT/SF/YR

High

Low

High

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ 29.62 $ 18.85 $ 17.50

$ 32.31 $ 24.24 $ 21.54

13.0% 13.5% 14.0%

$ 21.54 $ 18.85 $ 13.46

$ 24.24 $ 21.54 $ 17.50

13.0% 11.0% 10.0%

$ $ $

8.89 7.41 5.39

$ $ $

9.69 8.08 6.73

3.0% 3.0% 3.0%

$ 177.73 $ 56.55 $ 13.46 $ 64.63 $ 16.16

$ $ $ $ $

242.35 64.63 18.85 88.86 18.85

2.0% 5.0% 3.0% 5.0% N/A

€ € €

220.00 140.00 130.00

€ € €

240.00 180.00 160.00

€ € €

160.00 140.00 100.00

€ € €

180.00 160.00 130.00

€ € €

66.00 55.00 40.00

€ € €

72.00 60.00 50.00

City Center Neighborhood Service Centers Community Power Center (Big Box) Regional Shopping Centers/Malls Solus Food Stores

€ 1,320.00 € 420.00 € 100.00 € 480.00 € 120.00

€ € € € €

1,800.00 480.00 140.00 660.00 140.00

DEVELOPMENT LAND

Low/M2

High/M2

Low/SF

High/SF

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

€ 300.00 € 116.00 € 30.00 € 16.00 € 40.00 € 30.00

€ 1,000.00 € 166.00 € 60.00 € 33.00 € 70.00 € 90.00

$ 40.39 $ 15.62 $ 4.04 $ 2.15 $ 5.39 $ 4.04

$ $ $ $ $ $

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

RENT/M2/MO

Low

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Financing of new developments remains key. Rates are down but pre-leasing requirements are up. Since demand for space is dramatically reduced, this has led to many development sites being put on hold.

CITY CENTER OFFICE € € €

New Construction (AAA) Class A (Prime) Class B (Secondary)

The commercial real estate investment market is experiencing a surprisingly low level of activity and of the four significant office investments transacted in 2009, two were agreements made from previous years. The most significant transactions have been the purchase of Jungmannova Plaza Gemini and Prague 4 by Deka. Yields were 7% and 7.5%, respectively.

Prague At A Glance RENT/M2/MO

Low New Construction (AAA) Class A (Prime) Class B (Secondary)

The Czech Republic has 240 SM of shopping centre space per 1,000 inhabitants. Of this, 1.9 million is in shopping centres and 600,000 SM in retail parks. Openings include Forum Liberec (20,000 SM), Liberec Plaza (19,500 SM), Skodovka Klatovy (16,000 SM), Forum Usti nad labem (26,400 SM), Olympia Brno (25,000 SM), Area Bory Phase II (15,000 SM), Atrium Hradec Kralove (7,300 SM) and retail Park Kladno (6,000 SM). There are currently two outlet centers. There is a total inventory of 3,277,000 SM of industrial space in the region; 1,600,000 SM in Prague and 1,680,000 SM in the rest of the Czech Republic. Vacancy is at 20%. Rent remains low at €3-€4.5/SM/month.

Population (Millions) 10.425

Population (Millions) 7.569

Conversion: 0.6681 € = 1 US$

Prague has 2.6 million SM of modern office space composed of 50% inner city, 30% outer city and 20% city centre with 70% new buildings and 30% refurbished. Vacancy is around 13%. Prague will see about 130,000 SM of new space in 2009, a year over year drop of 60%. Pankrac Budejovicka’s office hub continued to be the preferred location. Significant projects include Prague Marina, Factory Futurama and Prague 8. Only 85,000 SM of modern office space will come on the Prague market in 2010. This will ease the demand/supply situation and help to maintain rents.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

N/A N/A N/A N/A N/A N/A

High/M2

Low/SF

N/A N/A N/A N/A N/A N/A

High/SF

N/A N/A N/A N/A N/A N/A

134.64 22.35 8.08 4.44 9.42 12.12

2010 Global Market Report I www.naiglobal.com

Finland

Copenhagen, Denmark

The Finnish economy seems to have reached the bottom but Finland’s recovery from the recession will take time. Finland became a victim of the global crisis mainly due to its export-driven economy while its domestic business remained relatively healthy. Since approximately 45% of Finnish GDP accounts from foreign trade, Finland’s recovery is very much based on the recovery of its trade partners. An upward turn in the Finnish economy is expected to start late 2010 into early 2011.

Forced sales of properties and asset management have been a dominant part of the 2009 market in Copenhagen. The interest rate had fallen steadily during 2009 to the current 1.25% but is expected to increase during 2010. The unemployment rate has increased to approximately 4% and is expected to increase in 2010. GDP in 2009 is expected to end negative at -4.1% but turn around to 1.5% in 2010. Office vacancy increased in 2009 to the current level of 4.7 % in the CBD. We expect the vacancy rate to increase further in 2010. One of the largest new office developments is the 25,000 SM SEB Bank property. Jeudan has just acquired office properties totaling approximately €400 million.

Contact NAI Denmark +45 70 23 00 26

Country Data Area (KM2)

1334.3

GDP Growth (%)

-2.43%

GDP 2009 (US$ B)

$308.32

GDP/Capita (US$)

Prime industrial locations along the highways and attractive facilities are still hard to find in Copenhagen, which has kept the rent level stable. We believe that the rent will stay level in 2010. The vacancy rate rose from 1.9% in the capital area to approximately 2.8%. The retail market has been severely affected by the financial crisis and rent levels have fallen by approximately 20% in the Copenhagen area. In the primary retail streets, there is still no real vacancy. The vacancy has primarily hit the secondary locations. The vacancy rate for the greater Copenhagen area is 3%, which is expected to increase slightly in 2010. The demand for properties in general, is still very low due to financial uncertainty. Even a very low interest rate has not helped much. Yields in general have increased. Distressed properties have, on many occasions, been bought by the banks that have the largest securities. We are expecting the prices will find a stable level in the beginning of 2010.

Contact NAI Premises +358 46 712 2197

Country Data Area (KM2)

338,424

GDP Growth (%)

-7.00%

GDP 2009 (US$ B)

$242.33

$55,942.17

GDP/Capita (US$)

$45,876.38

Inflation Rate (%)

1.68%

Inflation Rate (%)

3.00%

Unemployment Rate (%)

3.50%

Unemployment Rate (%)

8.74%

Interest Rate(%)

1.00%

Interest Rate(%)

1.00%

The investment market is slowly starting to loosen up and during 2009 there have been a few large transactions. The pension funds are willing to buy at competitive levels, but the core properties they are targeting are very scarce.

Population (Millions) 5.511

Conversion: .793 EUR = 1 US$

US$ RENT/SF/YR

High

Low

High

US$ RENT/SF/YR

High

Low

High

Vacancy

CITY CENTER OFFICE DKK 1,300.00 DKK 1,900.00 DKK 1,200.00 DKK 1,700.00 DKK 700.00 DKK 1,000.00

$ 22.03 $ 20.33 $ 11.86

$ 32.20 $ 28.81 $ 16.95

5.0% 4.7% 7.0%

DKK 900.00 DKK 850.00 DKK 500.00

DKK 1,300.00 DKK 1,100.00 DKK 850.00

$ 15.25 $ 14.40 $ 8.47

$ 22.03 $ 18.64 $ 14.40

5.0% 5.0% 6.5%

DKK 350.00 DKK 350.00 DKK 400.00

DKK DKK DKK

600.00 600.00 650.00

$ $ $

5.93 5.93 6.78

$ 10.17 $ 10.17 $ 11.01

2.5% 3.0% 2.5%

Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores

DKK 3,500.00 DKK 900.00 DKK 1,000.00 DKK 100.00 DKK 900.00

DKK 15,000.00 DKK 2,500.00 DKK 2,200.00 DKK 2,200.00 DKK 1 ,500.00

$ $ $ $ $

59.31 15.25 16.95 16.95 15.25

$ $ $ $ $

1.3% 4.5% 3.0% 3.0% 1.5%

DEVELOPMENT LAND

Low/M2

High/M2

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

DKK 1,800.00 DKK 1,500.00 DKK 1,200.00 DKK 1,500.00 DKK 1,800.00 DKK 1,000.00

DKK 4,000.00 DKK 3,500.00 DKK 3,000.00 DKK 2,750.00 DKK 4,000.00 DKK 3,000.00

New Construction (AAA) Class A (Prime) Class B (Secondary)

€ € €

22.00 22.00 17.00

€ € €

27.00 27.00 21.00

$ $ $

30.93 30.93 23.90

$ 37.96 $ 37.96 $ 29.52

N/A 4.7% 6.2%

€ € €

17.00 15.00 9.00

€ € €

19.00 18.00 14.00

$ $ $

23.90 21.09 12.65

$ 26.71 $ 25.31 $ 19.68

10.5% 11.1% 14.0%

€ € €

6.00 5.00 6.00

€ € €

7.50 7.00 8.00

$ $ $

8.44 7.03 8.44

$ 10.54 $ 9.84 $ 11.25

5.3% 5.3% 5.3%

Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores

€ € € € €

25.00 11.00 11.00 11.00 9.00

€ 140.00 € 40.00 € 40.00 € 40.00 € 16.00

$ $ $ $ $

35.15 15.46 15.46 15.46 15.46

$ 196.82 $ 56.23 $ 56.23 $ 56.23 $ 56.23

2.3% 2.8% 2.9% 2.9% 3.0%

DEVELOPMENT LAND

Low/M2

SUBURBAN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

RENT/M2/MO

Low

Vacancy

CENTER CITY OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

Unemployment has been relatively low during the past several years due to the strong growth of the Finnish economy. While the employment rate was near 6.4% in 2008, it is expected to increase to almost 10% in 2010 based on the GDP’s 1% growth in 2008 versus the prediction of -7% growth in 2009.

Finland At A Glance RENT/M2/YR

Low New Construction (AAA) Class A (Prime) Class B (Secondary)

The past year was not without significant transactions. In Q1 Google bought an old paper industry property from Stora Enso for €40,000,000. In Q2, Etera Mutual Pension Insurance Company sold its office properties, Swing Life Science Center, for €120,000,000 to Fund of Commerz Real AG. In Q3, Finnair Facilities Management made a sale-leaseback transaction and sold its properties for €77,000.000 to NV Property Fund I.

Population (Millions) 5.34

Copenhagen At A Glance Conversion: 5.4824 DKK = 1 US$

During 2009 the transaction volume in the Finnish property market has been very low. Reasons for this stem from poor availability, high financing margins and the fact that sellers and buyers have a wide gap in their yield expectations. From its highest volume in 2007, transaction volume has decreased approximately 80%. At the moment, 65% of investors are domestic compared to 54% in 2008 and 35% in 2007. In the Helsinki Metropolitan Area (HMA), over the span of the past year the prime office yield level has risen from 5% to 6%. During the past year, more than 400,000 SM of new office space has been completed in the HMA area. This has increased the vacancy rates almost 40% compared to last year’s figures. At the same time, rents have decreased, which has affected Net Operating Income at the property level and decreased transaction volumes. The current vacancy rate for 2009 in HMA is approximately 6.8% compared to 4.6% in 2008.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

Low/SF

$ $ $ $ $ $

254.18 42.36 37.28 37.28 25.42

High/SF

30.50 25.42 20.33 25.42 30.50 16.95

$ $ $ $ $ $

67.78 59.31 50.84 46.60 67.78 50.84

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

€ € € € €

High/M2

N/A 275.00 175.00 225.00 250.00 250.00

€ € € € €

N/A 500.00 300.00 275.00 400.00 600.00

Low/SF

$ $ $ $ $

N/A 346.78 220.68 283.73 315.26 315.26

High/SF

$ $ $ $ $

N/A 630.52 378.31 346.78 504.41 756.62

2010 Global Market Report I www.naiglobal.com

Paris lle de France (Paris Region), France

Contact NAI Evolis +33 1 81 72 00 00

Country Data Area (KM2)

1334.3

GDP Growth (%)

-2.36%

GDP 2009 (US$ B)

$2,634.82

GDP/Capita (US$)

Frankfurt am Main, Germany

Despite technical factors such as the impact of companies restocking their inventories or the ramp-up of government stimulus packages, the French government has maintained its prediction that the economy in France will not emerge from recession until sometime in 2010. The employment market suffers of this context, in particular in Greater Paris.

The German market seems to be overcoming the crisis faster than anticipated. GDP for 2010 will increase by 0.75%. Unemployment is at 8.0%, up from 7.4% in 2008 with an increase expected in 2010. The real estate market shows falling prices and modest levels of activity in most sectors.

The real estate market has been hit hard by this challenging economic environment. Adding to the difficulties is investment activity hit by the freeze in the volume of capital committed following the onset of the financial crisis, ongoing tight credit conditions, hesitancy among market players and the persistent gap between appraisal values and market values.

For many companies, the weak economy, combined with the ongoing restrictive loan environment, represents a threat to their very existence. These factors continue to impact demand in all real estate sectors. A clear recovery in the market is unlikely in the next six to nine months. If improvement in the global economic situation is sustained, the real estate market should show a slight improvement in Q3 2010, and then move laterally for a year or two.

Office property accounted for 53% of total investments compared to 80% during the peak in the investment cycle. A total of 1.8 million SM is expected to enter Greater Paris in 2009, which is 36% less than 2008. This level of take-up should remain stable in 2010. Demand for office space was stifled by worsening employment conditions and deteriorating corporate balance sheets. Furthermore, many tenants opted to renegotiate their leases rather than move to cheaper premises. An exception has been the public sector, which was very active, led by 22,000 SM of office space leased by SNCF (national train company) in the CNIT in La Défense. This was the largest transaction of the year. On the supply side, the arrival on the market of a significant volume of new office space launched in 2007 contributed to an increase in the office stock that is expected to reach 5 million SM at the end of the year. This would represent a vacancy rate of 8% by the end of 2009.

Contact NAI apollo +49 69 970 50 50

Country Data Area (KM2)

356,854

GDP Growth (%)

1.9

GDP 2008 (US$ B)

3,818.47

$42,091.33

GDP/Capita (US$)

46,498.65

Inflation Rate (%)

0.34%

Inflation Rate (%)

2.9

Unemployment Rate (%)

9.54%

Unemployment Rate (%)

8.0

Interest Rate(%)

1.00%

The 2010 French real estate market should look nearly the same as in 2009, even with expectations that the investment market will recover thanks to an adjustment between seller prices and buyer expectations.

Population (Millions) 82.1

Population (Millions) 62.598

RENT/M2/YR

Low

Conversion: .793 EUR = 1 US$

US$ RENT/SF/YR

High

Low

High

Vacancy

CITY CENTER OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

€ € €

550.00 420.00 250.00

€ € €

700.00 600.00 450.00

$ $ $

75.96 58.00 34.53

$ $ $

96.67 82.86 62.15

6.5% 6.0% 6.5%

€ € €

180.00 150.00 120.00

€ € €

320.00 250.00 200.00

$ $ $

24.86 20.72 16.57

$ $ $

44.19 8.0% 34.53 10.0% 27.62 11.0%

€ € €

45.00 55.00 50.00

€ € €

50.00 75.00 130.00

$ $ $

6.21 6.21 6.91

$ $ $

6.91 N/A 6.91 N/A 17.95 N/A

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

New development and refurbishments in the first six months of 2009 were at 100,450 SM up from 92,000 SM in 2008. A decline is expected for 2010 and 2011 due to finance problems for projects without pre-leasing. Prime rent is at €34.00/SM/month, down from €42.00/SM/month in 2008. Average rent is at €16.00/SM/month, down from €21.50/SM/month in 2008. The vacancy rate is 14.4% with 1,699,000 SM, slightly up from 1,650,000 SM in 2008. The industrial market in Frankfurt and surrounding areas leased approximately 225,000 SM in the first nine months. Prime rents were at €6.00/SM/month and the average rent was €4.50/SM/month, both unchanged from 2008. The 2009 forecast for absorption is approximately 250,000300,000 SM.

City Center Retail Units in Parks Community Power Center (Big Box) Regional Shopping Centers/Malls Solus Food Stores

€ 7,500.00 € 170.00 N/A € 150.00 N/A

€ 10,500.00 € 190.00 N/A € 180.00 N/A

$1,035.78 $ 23.48 N/A $ 20.72 N/A

$1,450.09 $ 26.24 N/A $ 24.86 N/A

DEVELOPMENT LAND

Low/M2

High/M2

Low/SF

High/SF

N/A N/A N/A N/A N/A N/A

US$ RENT/SF/MO

High

Low

High

Vacancy

CITY CENTER OFFICE Class A (Prime) Class B (Secondary) Average City Center

SUBURBAN OFFICE Westend Class A (Prime) Westend Class B (Secondary)

Suburban Class A (Prime) Suburban Class B (Secondary) Bulk Warehouse Manufacturing High Tech/R&D

N/A N/A N/A N/A N/A

RENT/M2/YR

Low

INDUSTRIAL

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Leased office space in Frankfurt in the first nine months was approximately 273,000 SM, a 30% decrease from 395,000 SM in 2008. Locations with the highest demand included the financial district/trade fair district with 125,132 SM, the city center/railway station at 20,330 SM and the City West/Bockenheim area at 18,526 SM. Roughly 340,000 SM is forecast to be absorbed in the market in 2009.

Frankfurt am Main At A Glance

Paris At A Glance Conversion: 0.6727 € = 1 US$

The investment market saw weakened demand from investors during the first half of 2009, which impacted investment volume in the most important German business centers: Berlin, Düsseldorf, Frankfurt, Hamburg, Munich and Stuttgart. Transaction volume dropped almost 65% to €715 million, down from €2 billion in 2008. Prime yields were 5.5%, up from 4.6% in 2008. Prime property prices have fallen by 17% reflecting the weakening demand for office space and the resultant increase in vacancy with rates predicted to increase.

RETAIL Zeil (Prime Shop Units) Goethe Strasse (Prime Shop Units) Community Power Center (Big Box) Regional Centers/Malls Solus Food Stores

€ € €

270.00 147.00 225.00

€ € €

471.00 234.00 360.00

$ 35.83 $ 19.51 $ 29.86

$ 62.51 $ 31.06 $ 47.78

14.09% 14.09% 14.09%

€ € € €

252.00 162.00 150.00 138.00

€ € € €

456.00 288.00 192.00 150.00

$ $ $ $

33.44 21.50 19.91 18.32

$ $ $ $

60.52 38.22 25.48 19.91

14.09% 14.09% 14.09% N/A

€ € €

42.00 48.00 54.00

€ € €

81.00 81.00 180.00

$ $ $

5.57 6.37 7.17

$ 10.75 $ 10.75 $ 23.89

N/A N/A N/A

$ $ $ $ $

N/A N/A N/A N/A N/A

DEVELOPMENT LAND

€ 2,400.00 € 1,470.00 € 96.00 € 96.00 € 144.00

€ 3,120.00 € 2,640.00 € 180.00 € 180.00 € 92.00

$ 318.52 $195.09 $ 12.74 $ 12.74 $ 19.11

Low/M2

High/M2

Low/SF

High/SF

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

€ 3,000.00 € 400.00 € 160.00 € 170.00 € 180.00 € 500.00

€ 19,600.00 € 1,000.00 € 250.00 € 250.00 € 250.00 € 1,000.00

$ $ $ $ $ $

$ 2,601.26 $ 132.72 $ 33.18 $ 33.18 $ 33.18 $ 132.72

398.15 53.09 21.23 22.56 23.89 66.36

414.08 350.37 23.89 23.89 25.48

2010 Global Market Report I www.naiglobal.com

Athens, Greece

Reykjavik Iceland Greece weathered the economic crisis fairly well despite a 15.8% drop in building permits. The market is looking to the new government for a way out from Ministry decisions concerning matters of semi-sheltered spaces. Property taxation is another major issue for 2010. The market awaiting government provided incentives to boost construction through cheaper loans, radical changes in urban planning laws and efforts towards tying up loose ends that deter foreign investors from investing. Further, the market is eagerly awaiting resolution of major projects Votanikos, Galatsi and Mesogeia malls.

Contact NAI Ktimatiki +30 210 3628559

The office market in Athens is estimated at over 2 million SM with the vast majority being under 500 SM floor plates. Recent Class A buildings tend to be from 800 SM to 1,000 SM. Older buildings have limited or no parking. Current existing inventory is estimated between 50,000 SM to 75,000 SM with less than 25,000 SM under construction. Vacancy rates are estimated at 7-8% for all classes, mainly due to corporate consolidations. Demand for over 2,000 SM to 8,000 SM is high, however, supply is limited. Yields increased from their low of 6% to reach 7-7.5%. Property prices on prime locations in Thessaloniki highstreets have dropped by an estimated 5-10%, while in other locations prices have dropped by over 15% in some cases. On Tsimiski Street, ground retail spaces are leased for €100€150/SM and sale prices reach €30,000 to €35,000/SM, while the same numbers for Mitropoleos Street are €50/SM and €8,000 to €10,000/SM, respectively.

Country Data Area (KM2)

1334.3

GDP Growth (%)

-0.75%

GDP 2009 (US$ B)

$338.25

GDP/Capita (US$)

$30,304.75

Inflation Rate (%)

1.13%

Unemployment Rate (%)

9.50%

Interest Rate(%)

1.00%

Population (Millions) 11.162

Retail investments in Thessaloniki seem undeterred by the crisis. Louis Vuitton leased a further 100 SM for its store, while Inditex signed deals for four city center stores, including an €8.2 million leasing deal for its Pull & Bear brand. Eurobank Properties REIC purchased three retail stores totaling 33,000 SM leased to Praktiker Hellas, a subsidiary of German Praktiker AG. The deal closed at a reported price of €46 million, which is an estimated 9.5% reduction from a 2006 reported value. The yield is at 8.3%. Tourism income fell 10.7% and shipping income dropped 38.7% in August 2009 compared to the same period in 2008, while current account balance remained unchanged at €425 million. Travel expenditure from non-locals dropped 10.7% over August 2008, while locals increased spending 9.7%. Transportation gross receipts (mostly shipping) dropped 38.7%, while income account deficit dropped by €56 million.

Athens At A Glance Conversion .793 EUR = 1 US$

Country Data Area (KM2)

1334.3

GDP Growth (%)

-8.51%

GDP 2009 (US$ B)

$11.78

GDP/Capita (US$)

$36,873.43

Inflation Rate (%)

11.67%

Unemployment Rate (%)

8.62%

Interest Rate(%)

12.00%

The fundamentals in the Icelandic economy are the export of fish and aluminum, which have been enjoying the very weak Icelandic krona. Also the tourism in Iceland has been booming, which again has resulted in increasing demand for hotel rooms. Banks have been more willing to lend into hotel development projects than any other type of projects. Many office, retail and residential development projects have been delayed or cancelled, and in the immediate future such new projects are not likely to be started. The Icelandic government has applied for Iceland to become a member of the EU. Some investors may see that as an opportunity to invest in Iceland. The value of the Icelandic krona is very low now. Prices of properties have come down. Iceland may join the EU within the next two years and adopting the Euro within five years.

Population (Millions) 0.319

Conversion: 122 ISK = 1 US$

US$ RENT/SF/YEAR

High

Low

High

Vacancy

CENTER CITY OFFICE

RENT/M2/MO

US$ RENT/SF/YR

Low

High

Low

High

€ € €

16.00 15.00 9.00

€ € €

22.00 21.00 12.00

$ 26.62 $ 24.96 $ 14.98

$ 36.61 $ 34.94 $ 19.97

10.0% 10.0% 15.0%

ISK 1,322.00 ISK 1,322.00 ISK 1,133.00

ISK 1,983.00 ISK 1,983.00 ISK 1,416.00

$ 12.08 $ 12.08 $ 10.35

$ 18.12 $ 18.12 $ 12.94

N/A N/A N/A

ISK 850.00 ISK 850.00 ISK 708.00

ISK 1,133.00 ISK 1,133.00 ISK 945.00

$ $ $

7.77 7.77 6.47

$ 10.35 $ 10.35 $ 8.64

N/A N/A N/A

ISK 708.00 ISK 708.00 ISK 850.00

ISK 1,039.00 ISK 1,039.00 ISK 1,322.00

$ $ $

6.47 6.47 7.77

$ 9.49 $ 9.49 $ 12.08

N/A N/A N/A

City Center Neighborhood Service Centers Community Power Center (Big Box) Regional Shopping Centers/Malls Solus Food Stores

ISK 1,417.00 ISK 1,133.00 ISK 1,133.00 ISK 1,606.00 ISK 1,417.00

ISK 2,834.00 ISK 1,700.00 ISK 1,606.00 ISK 2,361.00 ISK 1,983.00

$ $ $ $ $

12.95 10.35 10.35 14.68 12.95

$ $ $ $ $

N/A N/A N/A N/A N/A

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

€ € €

16.00 14.00 10.00

€ € €

21.00 20.00 13.00

$ 26.62 $ 23.29 $ 16.64

$ 34.94 $ 33.28 $ 21.63

10.0% 10.0% 15.0%

€ € €

4.50 6.00 7.00

€ € €

7.50 8.00 8.50

$ 7.49 $ 9.98 $ 11.65

$ 12.48 $ 13.31 $ 14.14

5.0% N/A N/A

Downtown Neighborhood Service Centers Community Power Center (Big Box) Regional Malls Solus Food Stores

€ € € € €

35.00 20.00 11.00 20.00 9.00

€ € € € €

290.00 40.00 18.00 150.00 14.00

$ $ $ $ $

DEVELOPMENT LAND

Low/M2

High/M2

Low/SF

High/SF

DEVELOPMENT LAND

Low/M2

High/M2

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

€ 5,000.00 N/A € 120.00 € 150.00 € 1,600.00 € 1,000.00

€ 12,000.00 N/A € 245.00 € 300.00 € 2,700.00 € 3,000.00

$ 7,462.69 N/A $ 179.10 $ 223.88 $ 2,388.06 $ 1,492.54

$ 17,910.45 N/A $ 365.67 $ 447.76 $ 4,029.85 $ 4,477.61

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

ISK 6,100,000 ISK 1,220,000 ISK 1,220,000 ISK 1,220,000 ISK 1,220,000 ISK 2,440,000

ISK 9,760,000 ISK 3,660,000 ISK 3,660,000 ISK 3,660,000 ISK 3,660,000 ISK 9,760,000

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Vacancy

CITY CENTER OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Contact NAI Reykjavik + 354 5331122

The property market in Iceland has been slow or almost frozen throughout 2009. Most deals that occur involve smaller units where buyers are using the opportunity to buy into a good location now at a lower price than in the last few years. Many of the Icelandic real estate holding companies have gone or are going bankrupt, so the ownership of a large part of the leased out real estate base is changing hands, mostly to the new government-owned banks. It is not yet known if or when these properties will be sold in the market.

Reykjavik At A Glance RENT/M2/MONTH

Low New Construction (AAA) Class A (Prime) Class B (Secondary)

The economic situation in Iceland has been uncertain throughout 2009 because of the collapse of 80% of the banking system in October 2008. The property market has been extremely slow. The number of commercial real estate sales is only about 10-20% of the volume recorded in 2007. The economy is export driven with fish and aluminum the primary exports, and the domestic tourist business is booming because of the low value of the Icelandic krona.

INDUSTRIAL

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL 58.24 33.28 18.30 33.28 14.98

482.54 66.56 29.95 249.59 23.29

15.0% 15.0% N/A N/A N/A

25.90 15.53 14.68 21.57 18.12

Low/SF

$ 4,645.11 $ 929.02 $ 929.02 $ 929.02 $ 929.02 $ 1,858.05

High/SF

$ $ $ $ $ $

7,432.18 2,787.07 2,787.07 2,787.07 2,787.07 7,432.18

2010 Global Market Report I www.naiglobal.com

Tel Aviv, Israel

Almaty, Kazakhstan The condition of the Israeli economy in the last year is relatively stable compared to the current global crisis. Israeli banks did not collapse and most of their losses are a result of real estate investments abroad that the banks funded for their Israeli clients, mainly in Eastern Europe.

Almaty is the largest city in Kazakhstan with a population of more than 1.5 million. It plays an important role as the business hub for all of Central Asia. According to official statistics, GDP growth in 2008 was 3.3% and is forecasted to drop to 2% in 2009. The inflation rate was fixed at 9.5% by the end of 2008. The economy of Kazakhstan is based on oil and gas, mining, metals, grain and the production of other natural resources.

In 2009, the Israeli real estate market acted contrary to the trends. The residential market had a significant increase of 15% compared with 2008. The activity in the commercial real estate market divided as follows: In the office market, no new projects started construction and some of the projects under construction were halted. New sublease properties entered the market and caused a price drop of about 17%, causing the demand to decline significantly.

Contact NAI Yair Levy Strategy + 972 3 613 66 99

Country Data Area (KM2)

1334.3

GDP Growth (%)

-0.09%

GDP 2009 (US$ B)

$215.73

GDP/Capita (US$)

Most of the activity in the market focused in yield deals. The beginning of the year reflected a yield of about 9.5%, while end of the year yields declined to 8% reflecting the growing demand for yield properties. In the industrial market, the building of new structures or sites has not begun and the rent prices are in decline since the demand for traditional industries has decreased. In the last year, several new commercial centers opened in central Israel, which stimulated great interest among clients. In Israel, four main groups have formed specializing in retail. In our opinion, most of their future development lies in the expansion of neighborhood commercial centers. We anticipate the start of 2010 will be characterized by serious damage to the commercial real estate market and we estimate that the residential sector will moderate in the near future. In the coming year, public companies in the field of the real estate in Israel will find it difficult to return their bonds, which will force them to sell many properties in the country and abroad. In our opinion, this may result in further declining prices in the commercial field.

Office rental rates fell significantly by an average of more than 40-50% during 2008 and Q1 2009. The market seems to have stabilized in Q3 2009 when the rental rates hit bottom. By October 2009, the average net rent office space fell to US $35/SM/month US $20/SM/month for Class A space and US $20/SM/month for Class B. Contact NAI Aristan 7 727 278 94 08

Country Data* Area (KM2)

1334.3

GDP Growth (%)

-2%

GDP 2009 (US$ B)

$107.04

$29,671.59

GDP/Capita (US$)

$6,875.50

Inflation Rate (%)

3.60%

Inflation Rate (%)

7.53%

Unemployment Rate (%)

8.20%

Unemployment Rate (%)

7.40%

Interest Rate(%)

0.75%

Interest Rate(%)

9.00%

Population (Millions) 7.27

Conversion 151 KZT = 1 US$

US$ RENT/SF/YR

High

Low

High

Vacancy

CENTER CITY OFFICE NIS 120.00 NIS 110.00 NIS 70.00

$ 26.76 $ 25.27 $ 17.84

$ $ $

35.67 32.70 20.81

12.0% 8.0% 15.0%

NIS 70.00 NIS 60.00 NIS 45.00

NIS 75.00 NIS 65.00 NIS 50.00

$ 20.81 $ 17.84 $ 13.38

$ $ $

22.30 19.32 14.86

25.0% 14.0% 15.0%

NIS 34.00 NIS 26.00 N/A

NIS 38.00 NIS 28.00 N/A

$ 10.11 $ 7.73 N/A

$ $

11.30 8.32 N/A

10.0% 5.0% N/A

Downtown Neighborhood Service Centers Community Power Center (Big Box) Regional Malls Solus Food Stores

NIS 110.00 NIS 130.00 NIS 70.00 NIS 80.00 N/A

NIS 140.00 NIS 150.00 NIS 80.00 NIS 100.00 N/A

$ $ $ $

41.62 44.59 23.78 29.73 N/A

5.0% N/A N/A N/A N/A

DEVELOPMENT LAND

Low/M2

High/M2

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

NIS 2,000.00 NIS 1,600.00 NIS 1,000.00 N/A N/A N/A

NIS 2,500.00 NIS 1,800.00 NIS 1,400.00 N/A N/A N/A

SUBURBAN OFFICE

US$ RENT/SF/YR

High

Low

High

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary)

KZT 4,228.00 KZT 4,077.00 KZT 2,114.00

KZT 5,285.00 KZT 5,285.00 KZT 3,926.00

$ 31.22 $ 30.10 $ 15.61

$ 39.02 $ 39.02 $ 28.99

30.0% 15.0% 20.0%

KZT 2,718.00 KZT 3,020.00 KZT 1,812.00

KZT 3,775.00 KZT 4,228.00 KZT 2,567.00

$ 20.07 $ 22.30 $ 13.38

$ 27.87 $ 31.22 $ 18.95

20.0% 14.0% 10.0%

KZT 755.00 KZT 1,057.00 KZT 1,057.00

KZT 1,510.00 KZT 1,963.00 KZT 1,963.00

$ $ $

5.57 7.80 7.80

$ 11.15 $ 14.49 $ 14.49

N/A N/A N/A

KZT 7,550.00 KZT 4,530.00 N/A KZT 3,775.00 N/A

KZT 18,120.00 $ 55.74 KZT 10,570.00 $ 33.44 N/A N/A KZT 9,815.00 $ 27.87 N/A N/A

$ 133.78 $ 78.04 N/A $ 72.46 N/A

N/A N/A N/A N/A N/A

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

RENT/M2/MO

Low

CITY CENTER OFFICE NIS 90.00 NIS 85.00 NIS 60.00

New Construction (AAA) Class A (Prime) Class B (Secondary)

Metro C&C opened its first store in 4Q 2009 in Astana with plans to open up to 14 centers over the next several years. Inditex Group and Al Hokair Group signed lease agreements to open the first Zara store in Almaty by the end of 2009 and the second store in February 2010.

Almaty At A Glance RENT/M2/MO

Low New Construction (AAA) Class A (Prime) Class B (Secondary)

During 2008 and the first half of 2009, the investment market was not active. There were almost no inquiries and institutional foreign investors have stopped financing real estate projects seemingly everywhere in the world. Most of the investment transactions were between local investors and such deals were not as visible. Local commercial banks have disposed of a large number of real estate assets that were pledged over the past few years.

Population (Millions) 15.568

Tel Aviv At A Glance Conversion 3.75 NIS = 1 US$

International mass market retailers such as Mango, Promod, Celio and Sinequanone all reported a robust increase in their sales volumes in Kazakhstan and noted they are positioned among the top compared with similar stores worldwide. This has resulted in many global retailers looking for regional and local partners for franchise cooperation in Kazakhstan. However, one of the main obstacles for global retailers to expand in Kazakhstan is a limited number of modern professional properties both in shopping centers and the street retail sector.

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL 32.70 38.65 20.81 23.78 N/A

$ $ $ $

Low/SF

High/SF

$ 49.55 $ 39.64 $ 24.77 N/A N/A N/A

$ 61.93 $ 44.59 $ 34.68 N/A N/A N/A

Downtown Neighborhood Service Centers Community Power Center Regional Shopping Centres/Malls Solus Food Stores

DEVELOPMENT LAND

Low/M2

High/M2

Low/SF

High/SF

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

KZT KZT KZT KZT KZT KZT

$ $ $ $ $ $

226,500.00 120,800.00 90,600.00 105,700.00 151,000.00 135,900.00

679,500.00 377,500.00 226,500.00 256,700.00 453,000.00 302,000.00

0.01 0.01 0.01 0.01 0.01 0.01

0.04 0.02 0.01 0.02 0.03 0.02

2010 Global Market Report I www.naiglobal.com

Kuwait

Oslo, Norway Kuwait, like most world economies, slowed down in 200809 with negative GDP growth, a decline in exports and struggling credit conditions. However, with oil prices pushing $70 a barrel, Kuwait could run a budget surplus of KD 6 billion (US $20 billion) in 2009-10 riding on higher than expected oil prices. The real estate sector is expected to reenergize with the slowly but steadily improving economic backdrop and the impact of a recent legal ruling permitting financial institutions to trade residential property.

Contact NAI Kuwait +1 965 2437717

Country Data

2009 saw the opening of the 360Â° Mall by Tamdeen featuring a great mix of high-end luxury icons like Yves Saint Laurent, Burberry, Dolce & Gabbana and the GĂŠant Hypermarket. The average asking rent for retail space in the ground Floor in Kuwait stood at KD 27.5/SM. There is demand for retail space. This sector was least affected during the economic crisis and did not witness any drop in rentals. In the office sector, 2009 saw the completion of a number of high rise office towers, including the Arraya Tower, Al Tijaria tower and many office towers of smaller scale. This has resulted in an oversupply of office space in Kuwait City but there is demand for office space towards internal areas. The average asking rent for office space in Kuwait stood at KD 7.5/SM. The Al Hamra Tower, currently under construction in downtown Kuwait City, will become the tallest building in Kuwait at 412 meters on completion in 2010 and will include 98,000 SM of commercial and office space. The expatriate workforce in Kuwait registered a decline of 0.85% due to the economic crisis, which resulted in low demand and increased vacancy in the apartment sector. The average asking rate for single-bedroom units stands at KD 170, two-bedroom at KD 220 and three bedroom at KD 380.

Given the international economic environment Norwegian industries in general performed quite well during and subsequent to the crisis in 2008 and 2009. This can be credited to rising oil prices and confidence returning to the bank systems in the mid-2009. The Norwegian Economy is moving forward positively.

Contact NAI FirstPartners +47 2301 1400

Country Data Area (KM2)

1334.3

GDP Growth (%)

0.11%

GDP 2009 (US$ B)

$368.96

GDP/Capita (US$)

$76,692.09

Inflation Rate (%)

2.33%

7.10%

Unemployment Rate (%)

3.30%

6.20%

Interest Rate(%)

1.50%

Area (KM2)

1334.3

GDP Growth (%)

-1.51%

GDP 2009 (US$ B)

$114.88

GDP/Capita (US$)

$32,491.46

Inflation Rate (%)

4.65%

Unemployment Rate (%) Interest Rate(%)

The Kuwait government has allocated its largest ever budget of KD 1 billion for housing projects for its citizens. Kuwait has about 124 projects under construction worth about US $114 billion, including major infrastructure projects like the $7 billion Kuwait Metro, island development projects, enlargement of road networks, developments of ports and other infrastructure.

Kuwait At A Glance

Conversion: 5.63 NOK = 1 US$

US$ RENT/SF/YR

High

Low

High

Vacancy

CITY CENTER OFFICE KD KD KD

7.00 9.00 5.00

KD KD KD

12.00 13.00 8.00

$ 28.06 $ 36.08 $ 20.04

$ 48.10 $ 52.11 $ 32.07

6.0% 4.0% 2.0%

KD KD KD

7.00 7.00 5.00

KD KD KD

8.00 10.00 7.00

$ 28.06 $ 28.06 $ 20.04

$ 32.07 $ 32.07 $ 28.06

3.0% 2.0% 1.0%

RETAIL

US$ RENT/SF/YR

High

Low

High

Vacancy

2.00

5.00

8.02

$ 20.04

3.0%

3.00

10.00

$ 12.03

$ 40.09

3.0%

N/A

112.24 80.17 120.26 140.31 80.17

2.0% 1.0% 2.0% 2.0% 1.0%

New Construction Class A (Prime) Class B (Secondary)

NOK 2,600.00 NOK 3,100.00 $ 42.90 NOK 2,400.00 NOK 3,000.00 $ 39.60 NOK 1,600.00 NOK 2,300.00 $ 26.40

$ 51.15 $ 49.50 $ 37.95

2.0% 6.0% 9.0%

NOK 1,700.00 NOK 2,100.00 $ 28.05 NOK 1 ,700.00 NOK 2,000.00 $ 28.05 NOK 1,200.00 NOK 1,400.00 $ 19.80

$ 34.65 $ 33.00 $ 23.10

5.0% 5.0% 10.0%

NOK NOK NOK

$ 15.68 $ 11.55 $ 17.33

5.0% 6.0% 6.0%

$ $ $ $

181.51 181.51 41.25 82.51

4.0% 6.0% 7.0% 7.0%

$ 24.75

7.0%

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

RENT/M2/YR

Low

CITY CENTER OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Norway had a soft landing compared to our neighboring countries and the rapid adjustment in 2009 has revealed opportunities. The economic fundamentals are stable in Norway and the commercial property market is picking up at its new levels.

Oslo At A Glance RENT/M2/MO

Low New Construction (AAA) Class A (Prime) Class B (Secondary)

In 2009 rentals decreased dramatically from the record high levels before the crisis, but rentals have now started to flatten out, and it is expected that this will continue in 2010 in most sectors. The industrial market is the least volatile sector but we did experience a slight correction of rents during 2009 and this will level out in 2010. As bankruptcies and unemployment did not increase to the anticipated level we have not seen the number of sublettings in the leasing market, which at last crisis brought down the rental prices to even lower levels. Vacancies are increasing but absorption is picking up and is expected to limit the impact on rental prices.

Population (Millions) 4.811

Population (Millions) 3.536

Conversion .2781 KD = 1 US$

The Norwegian commercial property market was very quiet at the beginning of 2009, but towards the summer activity started to pick up. During the second half of 2009 more and larger transactions occurred and capital was again available. Total transaction volume for 2009 will be less than in 2008, but the prospects for 2010 are better. The estimated transaction volume in 2009 is about US $2.3 billion to $2.7 billion. There has been a significant increase in prime office yields, from 5.75% in July 2008 to 6.75% in July 2009. As we approach 2010 the prime yield is decreasing slightly to 6.5%. Yields in other sectors show similar trends but less marked.

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

N/A

Downtown Neighborhood Service Centers Community Power Center (Big Box) Regional Shopping Centres/Malls Solus Food Stores

KD 15.00 KD 8.00 KD 20.00 KD 20.00 KD 9.00

KD KD KD KD KD

DEVELOPMENT LAND

Low/M2

High/M2

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

KD 5,000.00 N/A

KD 8,500.00 N/A

$ 17,979.14 $ 30,564.55 N/A N/A

KD 400.00 N/A KD 3,000.00 KD 250.00

KD 1,250.00 N/A KD 4,500.00 KD 1,000.00

$1,438.33 N/A $10,787.49 $ 898.96

28.00 20.00 30.00 35.00 20.00

$ $ $ $ $

60.13 32.07 80.17 80.17 36.08

Low/SF

$ $ $ $ $

High/SF

$ 4,494.79 N/A $ 16,181.23 $ 3,595.83

Bulk Warehouse Manufacturing High Tech/R&D

550.00 NOK 950.00 $ 9.08 450.00 NOK 700.00 $ 7.43 750.00 NOK 1 ,050.00 $ 12.38

RETAIL City Center Neighborhood Service Centers Community Power Center(Big Box) Regional Shopping Centers/Malls Solus Food Stores

NOK NOK NOK NOK

2,500.00 1,200.00 1,300.00 1,800.00

DEVELOPMENT LAND

Low/M2

High/M2

Low/M2

High/M2

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

NOK 10,000.00 NOK 3,000.00 NOK 1,500.00 NOK 1,000.00 NOK 1,500.00 NOK 1,000.00

NOK 20,000.00 NOK 6,000.00 NOK 3,000.00 NOK 2,500.00 NOK 4,000.00 NOK 5,000.00

$ 1,776.20 $ 532.86 $ 266.43 $ 177.62 $ 177.62 $ 177.62

$ 3,552.40 $ 1,065.72 $ 532.86 $ 444.05 $ 444.05 $ 888.10

NOK

NOK11,000.00 NOK 1,500.00 NOK 2,500.00 NOK 5,000.00

$ $ $ $

41.25 41.25 21.45 29.70

900.00 NOK 1,500.00 $ 14.85

2010 Global Market Report I www.naiglobal.com

Bucharest, Romania

Doha, Qatar

Contact NAI Qatar +974 4316717

The State of Qatar is a peninsula located on the Western side of the Arabian Gulf. Doha is the capital of the country. Qatar is one of the fastest growing economies in the world and is one of the richest countries in the world with the second largest GDP per capita income. Qatar has the third-largest natural gas reserves in the world and it has shaped the country into one of the most competitive Arab economies.

Romania is currently experiencing a severe economic recession with GDP expected to contract by 8.5% in 2009. However, the country is expected to return to economic growth in 2010, and the government has set a target date of 2014 for joining the EU. Due to the political crisis, Romania is in jeopardy of losing the second loan installment from the World Bank.

Qatar’s construction sector is propelled by the country’s powerful economy and thriving real estate sector. The most positive aspects in the real estate sector stem from developers bringing together timely transfers of high quality, value-added projects, banks’ improvement in managing the risks associated with over exposure to the real estate sector and government efforts to overcome the difficulties. All of these factors are responsible for creating good fundamentals in the real estate market in Qatar.

The past year marked a major shift in the supply and demand equilibrium. Tenants have retained a position of power as the result of a record amount of new office space being delivered to the market, falling demand for space and increased vacancy rates. The total GLA of modern office stock has now surpassed the 1 million SM mark following 245,000 SM of new space delivered in the first half of the year.

There is an excellent demand for office spaces in Doha. The vacancy rate in the CBD is around 7% and 5% in suburban areas where the average rate per SM is low compared to the CBD, but with similar facilities. The average asking rate for office space in the CBD is US $65/SM and in suburban areas, the average rate is US $51/SM. The retail sector has a very promising future. The average rate of growth in the retail sector is 21.3%. The growth is mainly attributed to the decrease in inflation and increase in consumer spending. There is a good demand for warehouse space in Qatar with the average rate of growth at 24.5%.

Country Data Area (KM2)

11,437

GDP Growth (%)

40.90%

GDP 2009 (US$ B)

$100.40

GDP/Capita (US$)

There is a promising growth in the demand for residential apartment units/flats. The average rate (leasehold) for a three-bedroom apartment is US $2,910, US $2,300 for a two-bedroom apartment, and US $1,790 for a singlebedroom apartment. The average asking rate for a villa is US $4,485 with rates ranging from US $3,560 to US $5,770/SM for freehold properties.

Contact NAI Property Partners +1 40 21 667 7105

Country Data Area (KM2)

238,391

GDP Growth (%)

-8.5%

GDP 2009 (US$ B)

RON 497.4

$75,956.31

GDP/Capita (US$)

$ 12,200

Inflation Rate (%)

15.10%

Inflation Rate (%)

4.94%

Unemployment Rate (%)

0.50%

Unemployment Rate (%)

9.6%

Interest Rate(%)

5.55%

Interest Rate(%)

8.00%

Population (Millions) 16.23

Conversion: 0.793 EUR = 1 US$

US$ RENT/SF/YR

High

Low

High

Vacancy

CITY CENTER OFFICE

RENT/M2/MO

Low

US$ RENT/SF/YR

High

QAR 180.00 QAR 160.00 N/A

QAR QAR

300.00 250.00 N/A

$ 55.13 $ 49.00 N/A

$ 91.88 $ 76.57 N/A

7.0% 2.0% N/A

QAR 170.00 QAR 135.00 QAR 90.00

QAR QAR QAR

230.00 195.00 120.00

$ 52.07 $ 41.35 $ 27.56

$ 70.44 $ 59.72 $ 36.75

5.0% 3.0% 4.0%

High

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary)

€ € €

15.00 18.00 10.00

€ € €

20.00 22.00 15.00

$ 21.09 $ 25.31 $ 14.06

$ 28.12 $ 30.93 $ 21.09

5.0% 5.0% 5.0%

€

10.00 N/A 7.00

€

14.00 N/A 9.00

$ 14.06 N/A $ 9.84

$ 19.68 N/A $ 12.65

N/A 10.0% 10.0%

€ €

3.00 1.50 N/A

€ €

4.00 4.00 N/A

$ $

5.62 5.62 N/A

10.0% 10.0% N/A

City Center Neighborhood Service Centers Community Power Center (Big Box) Regional Shopping Centers/Malls Solus Food Stores

€ €

25.00 5.00 N/A 6.00 N/A

€ €

70.00 20.00 N/A 25.00 N/A

$ 98.41 $ 28.12 N/A $ 35.15 N/A

5.0% N/A N/A 15.0% N/A

SUBURBAN OFFICE

INDUSTRIAL

New Construction (AAA) Class A (Prime) Class B (Secondary)

€

INDUSTRIAL QAR 65.00 N/A N/A

QAR

90.00 N/A N/A

$ 19.91 N/A N/A

$ 27.56 N/A N/A

20.0% N/A N/A

City Center Neighborhood Service Centers Community Power Center(Big Box) Regional Shopping Centers/Malls Solus Food Stores

QAR 740.00 QAR 250.00 N/A QAR 575.00 QAR 225.00

QAR QAR

825.00 475.00 N/A 770.00 275.00

$ 226.64 $ 76.57 N/A $ 176.11 $ 68.91

$ 252.67 $ 145.48 N/A $235.83 $84.22

N/A N/A N/A N/A 5.0%

DEVELOPMENT LAND

Low/M2

High/M2

DEVELOPMENT LAND

Low/M2

High/M2

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

QAR 17,500.00 QAR 24,000.00 $ 4,807.69 N/A N/A N/A N/A N/A N/A N/A N/A N/A QAR 7,500.00 QAR 17,250.00 $ 2,060.44 QAR 1,200.00 QAR 5,900.00 $ 329.67

$ 6,593.41 N/A N/A N/A $ 4,739.01 $ 1,620.88

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

€ 2,000.00 € 450.00 € 20.00 € 15.00 € 150.00 € 80.00

€ 4,000.00 € 800.00 € 60.00 € 100.00 € 800.00 € 2,000.00

Bulk Warehouse Manufacturing High Tech/R&D

Low

CITY CENTER OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

The most important acquisition of the year was a takeover on the London Stock Exchange of Fabian Romania Property Fund by Black Sea Global Properties (BSGS). This deal, worth €50 million, included six office buildings in Bucharest and five development sites in other Romanian cities. Following record years of 2007 and 2008, the lack of available finance has pushed yields out to 9-10% for institutional investment stock.

Bucharest At A Glance RENT/M2/Mo

Low New Construction Class A (Prime) Class B (Secondary)

During the first half of 2009, both the supply and demand of industrial properties declined. Bucharest saw only 40,000 SM of new product delivered despite earlier predictions of 175,000 SM. Negligible new supply came to the market in the second half of 2009. The total stock of modern industrial properties is currently 920,000 SM in the greater Bucharest-Ilfov area. Following record years in 2007 and 2008, the lack of available financing has pushed yields to between 9-10% for institutional investment stock.

Population (Millions) 22,215,000

Doha At A Glance Conversion: 3.64 QAR = 1 US$

Reduced consumption has resulted in falling rents, higher vacancy rates and suspended construction of new projects. The total modern retail space in Romania currently stands at approximately 1.16 million SM, with Bucharest claiming 450,000 SM of that amount. Despite the economic slowdown, some retailers are once again showing an appetite for expansion encouraged by the flexibility and incentives offered by the landlords.

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

4.22 2.11 N/A

RETAIL

QAR QAR

High/M2

€

$ 35.15 $ 7.03 N/A $ 8.44 N/A Low/SF

$ 2,522.07 $ 567.47 $ 25.22 $ 18.92 $ 189.16 $ 100.88

High/SF

$ $ $ $ $ $

5,044.14 1,008.83 75.66 126.10 1,008.83 2,522.07

2010 Global Market Report I www.naiglobal.com

St. Petersburg, Russian Federation

Moscow, Russian Federation

Contact NAI Becar +7 495 787 42 97

Country Data Area (KM2)

1334.3

GDP Growth (%)

-7.55%

GDP 2009 (US$ B)

$1,254.64

GDP/Capita (US$)

$8,873.61

Inflation Rate (%)

Among other BRIC emerging markets Russia has been the most impacted by the global economic crisis. Nevertheless, the economy, still very dependent on raw materials and oil prices, started showing some signs of recovery in fall 2009. Moscow, as the capital and largest city of Russia, has been hit the hardest over the past 12 months, but is also expected to see the fastest recovery.

The second largest city in Russia, St. Petersburg is located at the crossroads of Finland and Baltic countries, and historically has benefited from the positive influence of the dynamic economy in this region. Large international and Russian companies generally decide to be headquartered in Moscow, so St. Petersburg has been less impacted by the global economic crisis than the rival capital city.

The overall vacancy rate is now higher than 15% for every type of office and retail property, compared with less than 3% a year ago. In particular, the vacancy rate for Class A and Class B office space reached more than 20%, its highest level in a decade. Prime rents are at a historically low level, down 40% to 60% compared with 2008, and the share of subleases has significantly increased. It is now possible to lease excellent Class A office space for less than $500/SM per year in Moscow. Prime retail properties in main retail corridors can be leased for $2,000/SM per year, compared with $5,000 a year ago.

Over 2009, rents decreased relatively slower than in Moscow. Prime office and retail rents, which used to be much lower than in Moscow, are now almost equivalent. Rental rates reach $800/SM per year for the best office buildings in the city, and $2,500/SM for prime retail properties. The industrial market is still largely under supplied, and rents resisted the impact of the crisis better than other sectors. Prime warehouse rental rates are now around $170/SM per year and for the first time are at a higher level than in Moscow. The hospitality market has been strongly hit in 2009 with occupancy rates dropping below 50%. But hospitality remains attractive to many investors due to the strong tourism potential of the region and lack of European standard two- and three-stars hotels.

The Russian hospitality market is doing comparatively better: Average occupancy is around 50%, versus 70% in 2008. There were several transactions in this sector in 2009 with opportunistic investors buying old assets in Moscow at extremely low prices to reconvert them into western hotels. Other major Russian cities are still largely under-supplied in hotel rooms, and we expect local and foreign investors to remain active in this market throughout 2010. A significant number of distressed office and retail assets are now available for sale. Yields for Class A office centers in Moscow and St. Petersburg are now around 12% to 13%, or 60% to 100% higher than in 2008.

Contact NAI Becar +7 812 490 70 01

Country Data Area (KM2)

1334.3

GDP Growth (%)

-7.55%

GDP 2009 (US$ B)

$1,254.64

GDP/Capita (US$)

$8,873.61

12.27%

Inflation Rate (%)

12.27%

Unemployment Rate (%)

7.60%

Unemployment Rate (%)

7.60%

Interest Rate(%)

9.50%

Interest Rate(%)

9.50%

A majority of investors believe that the market reached its bottom in Q3 2009. Office yields should remain relatively stable over 2010 as prices are expected to go up while very low current rental rates and occupancy levels should mechanically increase in Moscowâ&#x20AC;&#x2122;s still structurally undersupplied office market.

Population (Millions) 141.391

St. Petersberg At A Glance RENT/M2/YR

Low

Conversion: 0.793 EUR = 1 US$

US$ RENT/SF/YR

High

Low

High

60.39 51.10 18.58

$ $ $

650.00 550.00 200.00

$ $ $

800.00 800.00 500.00

$ $ $

74.32 74.32 46.45

N/A N/A N/A

$ $

N/A 250.00 150.00

$ $

N/A 500.00 300.00

$ $

N/A 23.23 13.94

$ $

N/A 46.45 27.87

N/A N/A N/A

$ $ $

100.00 100.00 120.00

$ $ $

130.00 140.00 140.00

$ $ $

9.29 9.29 11.15

$ $ $

12.08 13.01 13.01

N/A N/A N/A

High

Vacancy

Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores

$ 1,200.00 $ 500.00 $ 1,000.00 $ 1,200.00 $ 400.00

$ $ $ $ $

3,000.00 1,500.00 2,500.00 2,500.00 1,300.00

$ 111.48 $ 46.45 $ 92.90 $ 111.48 $ 37.16

$ $ $ $ $

278.71 139.35 232.26 232.26 120.77

N/A N/A N/A N/A N/A

DEVELOPMENT LAND

Low/ Hectare

High/Hectare

Low/Acre

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ $ $

500.00 400.00 300.00

$ $ $

800.00 800.00 400.00

$ $ $

46.45 37.16 27.87

$ 74.32 $ 74.32 $ 37.16

N/A N/A N/A

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ $ $

300.00 300.00 150.00

$ $ $

450.00 450.00 300.00

$ $ $

27.87 27.87 13.94

$ 41.81 $ 41.81 $ 27.87

N/A N/A N/A

$ $ $

90.00 100.00 120.00

$ $ $

100.00 140.00 170.00

$ $ $

8.36 9.29 11.15

$ 9.29 $ 13.01 $ 15.79

N/A N/A N/A

$ $ $ $ $

N/A N/A N/A N/A N/A

INDUSTRIAL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Low

SUBURBAN OFFICE

Bulk Warehouse Manufacturing High Tech/R&D

US$ RENT/SF/YR

High

CITY CENTER OFFICE $ $ $

New Construction (AAA) Class A (Prime) Class B (Secondary)

RENT/M2/YR

Low

Vacancy

CITY CENTER OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

The St. Petersburg market seems to be about to reach its bottom, a few month after Moscow. Paradoxically, many owners are still trying to lease or sell properties at pre-crisis prices, which results in a large gap between the offer and the demand. This imbalance is expected to progressively disappear over 2010.

Population (Millions) 141.391

Moscow At A Glance Conversion: 1 USD = 1 US$

Investment yields are lower than in Moscow but are expected to increase as office and retail prices go down over the coming months. At the current 12% office and retail capitalization rates, only local Russian investors are now ready to purchase real estate assets. International investors considering larger volumes of investment, $40 million and up, believe the risk reward for investing in St. Petersburg should be higher than in Moscow, and therefore yields of 14% to 15% should be achieved.

High/Acre

1,000.00 300.00 150.00 150.00

1,500.00 1,000.00 750.00 500.00

N/A N/A N/A N/A

150.00 200.00

2,000.00 2,000.00

N/A

City Center Neighborhood Service Centers Community Power Center (Big Box) Regional Shopping Centers/Malls Solus Food Stores

$ 1,600.00 $ 550.00 $ 150.00 $ 120.00 $ 100.00

$ 2,500.00 $ 1,100.00 $ 300.00 $ 260.00 $ 200.00

$ 148.64 $ 51.10 $ 13.94 $ 11.15 $ 9.29

DEVELOPMENT LAND

Low/ Hectare

High/Hectare

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

700.00 25.00 50.00 200.00 300.00 200.00

1500.00 1000.00 150.00 1000.00 1500.00 2000.00

N/A N/A N/A N/A N/A N/A

232.26 102.19 27.87 24.15 18.58

High/Acre

N/A N/A N/A N/A N/A N/A

2010 Global Market Report I www.naiglobal.com

Belgrade, Serbia

Johannesburg, South Africa In the first half of 2009, Serbia’s GDP decreased by 4.1%. The main contributors were manufacturing (-20%), trade (-8%) and construction (-16.1%). Positive to mention are the latest arrangements with China and Russia, providing loans for infrastructural investments worth more than 1.2 billion Euros. 2010 will bring a slight recovery, but the return to the strong growth rates will not be seen before 2011.

Contact NAI Atrium + 381 11 2205880

Country Data Area (KM2)

1334.3

GDP Growth (%)

-4%

The total stock of Class A office space increased by 22,000 SM. to 292,000 SM. An additional 30,000 SM will be delivered by year-end 2009 and an estimated 55,000 SM is expected to deliver in 2010. The trend looks positive, since the reduced rent levels are generating more clients. As a result of increased supply, the short-term vacancy reached 28%. But the latest occupier requests are stronger than expected, leading to absorption of vacant space until 2011. Prime rents are currently set at €18/SM/month. Besides USCE shopping mall, which opened in March 2009 with 50,000 SM of net leasable area, only single-box retail concepts such as KIKA furniture, MERKUR DIY, and Mr. Bricolage are under development. All major shopping center developments have been put on hold, explained by the lack of finance and increased uncertainty of the rental market. The Austrian EYEMAXX announced two large-scale logistic projects, in Nis and Belgrade. Both projects are planned to be completed with its first phases in early 2011 offering 30,000 SM of leasable area. The entire project comprises more than 200,000 SM. It is expected that more international developers will enter the Serbian market in 2011. The investment market is relatively immature with few available “products.” Though there has been no known transaction in 2009, the expected yield for office buildings is estimated between 8-12%. 2010 is the year of opportunities. The boom premiums are out of the markets and not many players are able to acquire. Certainly, some property owners will look to cash out and sell parts of their properties, not necessarily for distressed conditions but for decent price/value ratios.

Our real estate markets have succumbed to negative capital growth (source: IPD SA), returning a nominal -0.8% for January-June 2009. The retail and industrial sectors both recorded a 4.1% total return and offices recorded a total return of 1.6%. CPI has surprised everyone by falling to 6.1%, close to the Reserve Bank’s targeted 3-6% range. While World Cup Soccer 2010 is set to positively affect retail & hospitality sectors alike, there is concern for employment once all related infrastructure initiatives have been completed. B-grade office vacancies increased to 17% in the City Centre and 21.8% in suburban markets, while other office vacancies remained relatively consistent. New development continues on a demand basis only.

Contact NAI FINLAY + 27 11 807 4724

Consumer spending is still down and retail turnover is under immense pressure, but with minimal casualties at this stage. We are likely to see smaller businesses struggle to stay afloat in 2010. Larger retail chains have performed well in 2009 under the circumstances, but 2010 will prove much tougher. However, most retailers anticipate a turnaround by mid-2010. Steady increases in retrenchments alongside the looming drastic electricity tariff hikes will dictate retail performance in 2010.

Country Data Area (KM2)

1334.3

GDP Growth (%)

-2.17%

GDP 2009 (US$ B)

$277.38

GDP/Capita (US$)

$5,635.19

GDP 2009 (US$ B)

$42.39

GDP/Capita (US$)

$5,742.04

Inflation Rate (%)

9.85%

Inflation Rate (%)

7.20%

Unemployment Rate (%)

14.00%

Unemployment Rate (%)

23.20%

Interest Rate(%)

10.00%

Interest Rate(%)

7.00%

Population (Millions) 7.382

Population (Millions) 49.223

Belgrade At A Glance Conversion: 0.793 EUR = 1 US$

Conversion: 9.8104 SAR = 1 US$

US$ RENT/SF/YR

High

Low

High

Vacancy

CITY CENTER OFFICE € € €

14.50 14.50 12.50

€ € €

18.00 18.00 16.00

$ 23.09 $ 23.09 $ 19.91

$ 28.67 $ 28.67 $ 25.48

N/A 29.0% 17.0%

€ € €

8.00 14.50 8.00

€ € €

16.00 16.00 16.00

$ 12.74 $ 23.09 $ 12.74

$ 25.48 $ 25.48 $ 25.48

N/A 11.0% 52.0%

NET RENT/M2/YR

Low

€ €

2.00 4.50 N/A

€ €

7.00 7.00 N/A

$ $

$ 11.15 $ 11.15 N/A

N/A N/A N/A

New Construction (AAA) Class A (Prime) Class B (Secondary)

US$ RENT/SF/YR

High

Low

High

Vacancy

SAR 2,100.00

SAR 2,100.00 $ 25.71

$ 25.71

N/A

SAR SAR

4.41 2.94

$ 11.31 $ 8.08

3.9% 21.8%

SAR 2,100.00

SAR 2,100.00 $ 25.71

$ 25.71

N/A

SAR SAR

780.00 588.00

SAR 1,440.00 $ SAR 1,140.00 $

9.55 7.20

$ 17.63 $ 13.96

3.9% 17.0%

SAR

216.00

SAR

456.00 $

2.64

5.58

3.0%

SAR SAR

216.00 336.00

SAR SAR

420.00 $ 600.00 $

2.64 4.11

$ $

5.14 7.35

3.3% 3.7%

City Center Neighborhood Service Centers Community Power Center (Big Box) Regional Malls Solus Food Stores

SAR

264.00

SAR 3,900.00 $

DEVELOPMENT LAND

Low/Hectare

High/Hectare

Low/Hectare

High/Hectare

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

SAR 15,000,000 SAR 17,500,000 SAR 6,500,000 SAR 9,000,000 SAR 15,000,000 SAR 2,500,000

SAR 20,000,000 SAR 22,500,000 SAR 9,000,000 SAR 12,000,000 SAR 20,000,000 SAR 6,500,000

$ $ $ $ $ $

$ 1,066,519.90 $ 1,199,834.88 $ 479,933.95 $ 639,911.94 $ 1,066,519.90 $ 346,618.97

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Anticipated 45% annual increases in electricity tariffs for 2010-12, could lead to thousands of retrenchments, liquidations, and consumer debt rising dramatically. Gautrain (Johannesburg’s rapid-rail link) will be activated in July 2010. Hosting 2010 World Cup Soccer should attract over 450 000 soccer fans to South Africa in May/June 2010.

CITY CENTER OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Investment yields have stayed relatively constant year over year, and minimal large sales/mergers/acquisitions have occurred this year. Financial institutions have halted funding, in turn slowing the development market to a near standstill. There are still a few funds and developers who are being very aggressive in an advantageous market, and on the whole, transactions have occurred in-house. Hospitality is struggling at present, although construction is currently under way to cater to the World Cup Soccer 2010 tourist influx.

Johannesburg At A Glance RENT/M2/MO

Low New Construction (AAA) Class A (Prime) Class B (Secondary)

The industrial sector forms the backbone of the South African economy, which has been substantially affected by the global financial crisis. While rental decrease has been minimal and vacancy rates stagnant in 2009, both will be adversely affected in 2010.

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL 3.19 7.17 N/A

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

City Center Neighborhood Service Centers Community Power Center (Big Box) Regional Malls Solus Food Stores

€ € € € €

DEVELOPMENT LAND

Low/M2

High/M2

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

€ 400.00 € 200.00 € 30.00

€ 1,200.00 € 450.00 € 100.00

N/A N/A N/A

N/A

100.00 500.00

N/A N/A

80.00 15.00 7.00 15.00 10.00

€ € € € €

N/A € 50.00 € 200.00

€ €

150.00 60.00 15.00 60.00 18.00

$ $ $ $ $

127.41 23.89 11.15 23.89 15.93

Low/SF

$ $ $ $ $

238.89 95.56 23.89 95.56 28.67

High/SF

N/A N/A N/A N/A N/A

360.00 240.00

924.00 $ 660.00 $

3.23

$ 47.74

N/A

SAR 1,020.00 SAR 840.00

SAR 4,200.00 $ 12.49 SAR 3,360.00 $ 10.28

$ 51.42 $ 41.13

N/A N/A

SAR 2,040.00 N/A

SAR 8,400.00 $ 24.97 N/A N/A

$ 102.83 N/A

N/A N/A

799,889.92 933,204.91 346,618.97 479,933.95 799,889.92 133,314.99

2010 Global Market Report I www.naiglobal.com

Madrid, Spain

Stockholm, Sweden The International Monetary Fund expects Spanish GDP to contract 3.8% in 2009 and 0.7% in 2010. New construction permits declined 40.1%. Unemployment could reach 20% in 2010. Public deficit rose 5.9% of GDP. Rents have fallen, especially in secondary locations with high vacancy.

Despite the past year’s international economic turmoil, Sweden has been doing relatively well. GDP has been decreasing but the exceptionally low rate has supported the consumption and kept the prices on a stable level for the residential market. The Repo rate is now on a historically and extremely low level of 0.25%. The prime rent in the Stockholm CBD has declined approximately 10% during the past year.

New development is currently on hold. Prime yields are increasing with stable demand in prime locations. Tenants continue to remain very selective. Banks and savings banks are divesting after going from €2 billion in December 2007 to €15.3 billion worth of assets due to foreclosures and debt in March 2009.

Contact NAI Sol + 34 91 181 1567

Only 15 of the predicted 20 to 25 shopping centers opened in the retail sector (600,000 SM) as rents continued to fall. Rental rates are down 15% on prime space and 25% on secondary properties. Demand for well operated and opportunistic assets is rising. The office market saw a decline of 25% in the number of deals completed compared to 2008. The average deal size fell to roughly 620 SM. Companies are relocating and/or taking advantage of lower rents as a cost savings measure and many are reducing space. The prime rents in Madrid fell to €32 SM/month, about a 28% decrease from the previous year. Landlords are offering rent free periods and more flexible lease conditions. Although some industrial space is being converted to mixed use, manufacturing companies are vacating older industrial parks in favor of more modern facilities. Logistic demand remained steady.

Country Data

Contact NAI Svefa +46 8 441 15 50

Country Data Area (KM2)

1334.3

GDP Growth (%)

-4.83%

GDP 2009 (US$ B)

$397.70

GDP/Capita (US$)

$43,146.74

-0.29%

Inflation Rate (%)

2.25%

Unemployment Rate (%)

18.20%

Unemployment Rate (%)

8.50%

Interest Rate(%)

1.00%

Interest Rate(%)

0.25%

Area (KM2)

1334.3

GDP Growth (%)

-3.77%

GDP 2009 (US$ B)

$1,438.36

GDP/Capita (US$)

$31,141.50

Inflation Rate (%)

Almost 40% of transactions were sale-leasebacks with tenant covenants being a key factor. Banco Pastor, Caixa Catalunya and BBVA’s €1.5 billion transaction, by Deutsche Bank are prime examples. The current economic climate has brought a return of foreign funds and investors to the market. Colonial sold its Principe Pío mall in Madrid for €125 million to Dutch investor Corio.

Madrid At A Glance

Conversion: 6.8275 SEK = 1 US$

US$ RENT/SF/YR

High

Low

High

Vacancy

CITY CENTER OFFICE 22.00 16.00 14.00

€ € €

32.00 $ 30.93 24.00 $ 22.49 18.00 $ 19.68

$ 44.99 $ 33.74 $ 25.31

5.5% 8.0% 15.0%

€ € €

20.00 8.00 5.00

€ € €

30.00 $ 28.12 19.00 $ 11.25 10.00 $ 7.03

$ 42.18 $ 26.71 $ 14.06

30.0% 15.0% N/A

€ € €

4.00 3.50 5.00

€ € €

Solus Food Stores

€ € € € €

55.00 10.00 4.00 6.00 8.00

€ € € € €

DEVELOPMENT LAND

Low/M2

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

€

700.00

€

1,050.00 $ 82.01

€ €

210.00 525.00

€ €

630.00 $ 24.60 210.00 $ 61.51

$ 73.81 $ 24.60

€

N/A 175.00

€

N/A N/A 630.00 $ 20.50

N/A $ 73.81

€

525.00

€

2,275.00 $ 61.51

$ 266.52

SUBURBAN OFFICE

New Construction Class A (Prime) Class B (Secondary)

INDUSTRIAL 6.00 $ 6.00 $ 6.00 $

5.62 5.62 7.03

$ $ $

US$ RENT/SF/YR

High

Low

High

Vacancy

SEK SEK SEK

3,500.00 SEK 4,000.00 $ 3,700.00 SEK 4,200.00 $ 2,000.00 SEK 3,200.00 $

47.62 50.35 27.21

$ $ $

54.43 57.15 43.54

10.0% 7.0% 12.0%

SEK SEK SEK

1,700.00 SEK 2,400.00 $ 1,700.00 SEK 2,300.00 $ 1,100.00 SEK 1,500.00 $

23.13 23.13 14.97

$ $ $

32.66 31.30 20.41

6.0% 10.0% 15.0%

SEK SEK SEK

800.00 SEK 1,100.00 $ 600.00 SEK 900.00 $ 800.00 SEK 1,150.00 $

10.89 8.16 10.89

$ $ $

14.97 12.25 15.65

6.0% 9.0% 6.0%

$ 204.11 $ 34.02 $ 34.02 $ 54.43 $ 24.49

N/A N/A N/A N/A N/A

8.44 8.44 8.44

N/A N/A N/A

$ 77.32 $ 14.06 $ 5.62 $ 8.44 $ 14.06

$ 177.14 $ 15.46 $ 7.87 $ 9.84 $ 19.68

N/A N/A N/A N/A N/A

Low/SF

High/SF

DEVELOPMENT LAND

Low/ M2

High/M2

Low/SF

High/SF

$ 123.01

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

SEK SEK SEK SEK SEK SEK

SEK 13,000.00 SEK 2,900.00 SEK 1,300.00 SEK 950.00 SEK 2,300.00 SEK 4,000.00

$ 1,171.73 $ 219.70 $ 95.20 $ 73.23 $ 190.41 $ 366.17

$ $ $ $ $ $

RETAIL City Center Neighborhood Service Centers Community Power Center (Big Box) Regional Malls

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

RENT/M2/MO

Low

CITY CENTER OFFICE € € €

New Construction (AAA) Class A (Prime) Class B (Secondary)

The transaction market has experienced higher yield levels. The Swedish banks had some problems about a year ago and the government gave credit guaranties to some of them. Mostly it was investments in Baltic countries that caused problems. Since funds are relatively accessible again, the number of transactions has increased.

Stockholm At A Glance NET RENT/M2/MO

Low New Construction (AAA) Class A (Prime) Class B (Secondary)

Some investors fear that the retail market doesn’t need too much additional expansion during the upcoming years. The industrial market is relatively stable and has, as the other markets, experienced a very low transaction volume. Increasingly companies are doing sale-leasebacks in order to improve their balance sheets. Yields for industrial realestate have been relatively stable throughout the year. Rental regulation for the residential market has kept rents on a relatively low level, especially in the city of Stockholm. New agreements between different negotiating parties have made it clear that bigger consideration of location should be taken into account in the Stockholm area in the future regarding rent levels. Even government level changes of the law in this area have been taken into consideration and might be changed to allow more differentiated and higher top rents.

Population (Millions) 9.217

Population (Millions) 46.188

Conversion: 0.793 EUR = 1 US$

The vacancies for offices have not increased substantially yet but higher vacancy levels are expected. An increase in sublets or second-hand lease agreements with lower rents has been observed. No bigger office construction projects have been started during the year and the decline of rent levels is noticeable. Almost no construction of new bigger retail areas has started during the last year. Slightly higher vacancy rates than before have been noticed. However, turnover-based rents may prevent rising vacancies.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL 126.00 11.00 5.60 7.00 10.00

High/M2

City Center Neighborhood Service Centers Community Power Center (Big Box) Regional Shopping Centers/Malls Solus Food Stores

SEK 10,000.00 SEK 15,000.00 $ 136.07 SEK 1,700.00 SEK 2,500.00 $ 23.13 SEK 1,500.00 SEK 2,500.00 $ 20.41 SEK 1,000.00 SEK 4,000.00 $ 13.61 SEK 1,000.00 SEK 1,800.00 $ 13.61 8,000.00 1,500.00 650.00 500.00 1,300.00 2,500.00

1,904.06 424.75 190.41 139.14 336.87 585.87

2010 Global Market Report I www.naiglobal.com

Geneva, Switzerland

Zürich, Switzerland

The Geneva area has weathered the economic storm relatively well within the traditional sectors of finance and bio-pharma, although a greater impact has been apparent within the watch making industry. Inflation has revolved around zero since March 2009 and at the time of publication the average inflation rate for 2009 is -0.5%. Unemployment rose during 2009 to 3.9%, which remains low in European terms, though Geneva has suffered more than other zones in this respect.

The Greater Zürich Area (GZA) is known for the financial, insurance and industrial sectors together with growing IT, pharma and life-science industries. A gradual slowdown was noted in the economy in the first two quarters of 2009, however since June a positive change has been noted. Projected GDP figures for 2009 are estimated at -1.7% year over year. Compared with the GDP fall to -4.6% in the Eurozone, Switzerland appears fairly stable.

The office market has seen strong take-up in the CBD and airport areas. Waterfront premises remain in short supply with tenants prepared to drive up rental values.

Contact NAI Commercial CRE + 41 22 707 44 44

Country Data Area (KM2)

1334.3

GDP Growth (%)

-1.95%

GDP 2009 (US$ B)

$484.13

GDP/Capita (US$)

$66,126.80

Inflation Rate (%)

-0.40%

Unemployment Rate (%)

3.48%

Interest Rate(%)

0.25%

The interest of hedge funds has been sustained throughout 2009. Combined with the effect of the “winners and losers” among the private banks and financial sector in general, the Geneva area will see a rise in occupation by April 2010, as the financial players seek to position themselves. Prime rents remained buoyant in 2009, with waterfront properties renting for around CHF 1,000/SM per year and well above for exceptional properties. The industrial market has been more subdued throughout 2009 with many projects put on hold or postponed. Despite this, developments have seen take-up from certain sectors such as bio-pharma, micro-technology and life science sectors. Rents remain at CHF 120-150/SM per year for production areas and CHF 200-360/SM per year for high tech office space. The investment market for landmark buildings has remained strong with prime properties still commanding net yields between 3.25-3.85% as demand outstrips supply. The secondary areas have seen a softening of yields and a reduction in the volume of sales. The retail market has been under pressure since September, suffering from an over-heated market during 2008 coupled with the world economic downturn. Although still relatively scarce, marketed units are reverting in line with sustainable market values. In general, prospects appear good for Geneva, which has suffered less than many European neighbors, benefiting from its traditional “safe-haven” effect. While prime downtown areas will remain stable, a number of developments on the outskirts of Geneva and around the airport may find take-up slow in 2010.

Geneva At A Glance High

Low

High

1334.3

GDP Growth (%)

-1.95%

GDP 2009 (US$ B)

$484.13

GDP/Capita (US$)

$66,126.80

Inflation Rate (%)

-0.40%

Unemployment Rate (%)

3.48%

Interest Rate(%)

0.25%

Bahnhofstrasse added the new Apple store to its world brand, however with the exception of a few newcomers the retail sector has suffered from the sluggish economy. Rents are in the order of CHF 3,500-3,800/SM per year, though some deals have resulted in achieved rents in excess of CHF 7,500/SM per year. Numerous commercial projects on the outskirts of the CBD may prevent stagnation at a later date. However, quality office accommodations with large floor plans have already secured occupants, notably in the WestPark Areal and Ernst & Young set to occupy the Platform area of the Prime Tower development.

RENT/M2/YR

US$ RENT/SF/YR

Low

High

Low

High

Vacancy

CHF 800.00 CHF 750.00 CHF 450.00

CHF 1,000.00 CHF 900.00 CHF 650.00

$ 73.77 $ 69.16 $ 41.50

$ 92.21 $ 82.99 $ 59.94

1.0% 1.5% 4.5%

CHF 450.00 CHF 300.00 CHF 300.00

CHF CHF CHF

550.00 450.00 450.00

$ 41.50 $ 27.66 $ 27.66

$ 50.72 $ 41.50 $ 41.50

4.0% 4.5% 6.0%

CHF 70.00 CHF 80.00 CHF 200.00

CHF CHF CHF

90.00 150.00 380.00

$ 6.46 $ 7.38 $ 18.44

$ 8.30 $ 13.83 $ 35.04

1.0% 1.0% 2.5%

$ 322.75 $ 41.50 N/A $ 41.50 N/A

$ 461.07 $ 46.11 N/A $ 73.77 N/A

1.0% 4.0% N/A 2.0% N/A

Low/SF

High/SF

CITY CENTER OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

CHF 900.00 CHF 1,200.00 CHF 850.00 CHF 1,000.00 CHF 550.00 CHF 800.00

$ 82.99 $ 78.38 $ 50.72

$ 110.66 $ 92.21 $ 73.77

1.0% 1.0% 5.0%

CHF 450.00 CHF CHF 450.00 CHF CHF 300.00 CHF

600.00 550.00 450.00

$ 41.50 $ 41.50 $ 27.66

$ 55.33 $ 50.72 $ 41.50

2.5% 3.5% 5.0%

CHF 70.00 CHF CHF 90.00 CHF CHF 250.00 CHF

90.00 150.00 360.00

$ 6.46 $ 8.30 $ 23.05

$ 8.30 $ 13.83 $ 33.20

1.0% 1.0% 2.0%

CHF 3,250.00 CHF 4,500.00 CHF 450.00 CHF 500.00 N/A N/A CHF 350.00 CHF 600.00 N/A N/A

$ 299.70 $ 41.50 N/A $ 32.28 N/A

$ 414.96 1.0% $ 46.11 4.0% N/A N/A $ 55.33 1.5% N/A N/A

City Center Neighborhood Service Centers Community Power Center (Big Box) Regional Shopping Centers/Malls Solus Food Stores

CHF 3,500.00 CHF 5,000.00 CHF 450.00 CHF 500.00 N/A N/A CHF 450.00 CHF 800.00 N/A N/A

Low/SF

High/SF

DEVELOPMENT LAND

Low/M2

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

CHF 30,000 CHF 40,000 CHF 700 CHF 900 CHF 250 CHF 350 CHF 250 CHF 650 CHF 1,000 CHF 1,600 N/A N/A

SUBURBAN OFFICE

INDUSTRIAL

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL City Center Neighborhood Service Centers Community Power Center (Big Box) Regional Shopping Centers/Malls Solus Food Stores

Area (KM2)

Vacancy

SUBURBAN OFFICE

Bulk Warehouse Manufacturing High Tech/R&D

Country Data

Conversion: 1.00746 CHF = 1 US$

US$ RENT/SF/YR

CITY CENTER OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

Foreign investment interest remains strong, although major Swiss funds rapidly acquire suitable prime properties, which are in short supply. Owner-occupation remains stable, with the majority of the activity in the pharmaceutical, biotech, life science or financial sectors. The volume of sales remains low; however, prime yields have barely softened with net yields continuing to perform at sub -4% for prime locations.

Zürich At A Glance RENT/M2/MO

Low New Construction (AAA) Class A (Prime) Class B (Secondary)

Zürich prime rents peaked in Q1, having reached a level between CHF 850-900/SM per year. The industrial sector has been stagnant, with many decisions being postponed or cancelled. Rents remain stable, though take-up is slow.

Population (Millions) 7.321

Conversion: 1.2237 CHF = 1 US$

Contact NAI Commercial CRE + 41 44 221 04 04

Despite weak demand, office projects have proceeded in the financial, insurance and IT sectors as they benefit from realignment within the Zürich marketplace. Google, Microsoft and Red Herring have all announced new expansion plans. Other players include Draper Investment, Meltwater News and Diamond Systems. Allianz has announced the re-grouping of its organization to Wallisellen (ZH) and New Reinsurance has relocated from Geneva to Zürich. ACM has also opened a new branch along Bahnhofstrasse.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

DEVELOPMENT LAND

Low/M2

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

CHF 30,000 CHF 40,000 CHF 700 CHF 900 CHF 200 CHF 300 CHF 250 CHF 400 CHF 1,000 CHF 1,500 N/A N/A

High/M2

$ 2,766.43 $ 3,688.57 $ 64.55 $ 82.99 $ 18.44 $ 27.66 $ 23.05 $ 36.89 $ 92.21 $ 138.32 N/A N/A

High/M2

$ 2,766.43 $ 64.55 $ 23.05 $ 23.05 $ 92.21 N/A

$ $ $ $ $

3,688.57 82.99 32.28 59.94 147.54 N/A

2010 Global Market Report I www.naiglobal.com

Istanbul, Turkey

Kiev, Ukraine Turkey’s economy shows the impact of the global recession in 2009. The inflation rate reached 5.39% in May, which is slightly higher than the lowest level of 5.24% in the past 39 years. Turkey’s currency has depreciated 20% compared to the first half of 2008. Construction activity declined 7.6%in 2009, and the steel industry declined about 15%. Turkey’s major export manufacturing sectors such as textile and automotive have also been impacted negatively.

Contact NAI Treas +90 216 481 47 00

Country Data

Occupancy rates in CBD routes like Levent and Zincirlikuyu are still high, while Umraniye and Kozyatagi in the Asian Part of Istanbul kept their popularity to become new districts for offices. One of the biggest office projects is the 90,000 SM Akkom office project, which will be built by Eroglu Holding in Umraniye. In addition, Emaar Properties has purchased a 74,000 SM land parcel in the Asian Side of Istanbul for approximately $400 million from Toprak Holding. There will be residence blocks as well as a 120,000 SM shopping center, a five-star hotel and office buildings. The retail market, which registered fast growth in recent years, showed signs of slowing in the first nine months of 2009. By September 2009, retail supply had reached 6.06 million SM in 276 retail centers. Istanbul accounts for 2.2 million SM of this total in 88 shopping centers. There are 135 shopping centers under construction and in the planning stage in Turkey, of which 67 are in Istanbul. There has been an increase in the number of warehouses due to increased demand for industrial real estate in Turkey. Logiturk B2B Real Estate Solutions Company is planning to complete a 126,000 SM warehouse park in Istanbul.

In Q2 of 2009 Ukraine’s real GDP dropped 17.8 %. However the speed of decline has decreased. The construction sector has decreased more than others (-47%). Its part of GDP structure makes up 2.8%. Agriculture is the only sector that demonstrated growth (+2.3%). The processing industry, which is the basis of country’s GDP, had fallen 33% through Q2 2009. Demand for professional office space has decreased considerably. In Kiev, the vacancy rate is about 15%. The fall in rental rates from their 2008 peak is roughly 60%. Prime rents are now about US $30-35/SM/month. Despite the decline, new office buildings continue to be commissioned in Kiev. During the first half of 2009 three new centers were commissioned, accounting for 20,500 SM growth. Contact NAI Pickard +380 44 278 00 02

Country Data Area (KM2)

1334.3

GDP Growth (%)

-14.00%

GDP 2009 (US$ B)

$115.71

$8,427.11

GDP/Capita (US$)

$2,537.80

Inflation Rate (%)

6.20%

Inflation Rate (%)

16.28%

Unemployment Rate (%)

12.80%

Unemployment Rate (%)

9.00%

Interest Rate(%)

6.75%

Interest Rate(%)

10.25%

Area (KM2)

1334.3

GDP Growth (%)

-6.50%

GDP 2009 (US$ B)

$593.53

GDP/Capita (US$)

Total international direct investment in 2008 reached $17.96 billion in Turkey, where $2.94 billion of this amount was invested in real estate. The amount of international direct investment in July 2009 totaled $4.938 billion, down significantly from $9.735 billion in July 2008.

Istanbul At A Glance

Conversion: 7,64 UAH = 1 US$

US$ RENT/SF/YR

High

Low

High

Vacancy

CITY CENTER OFFICE 204.00 126.00 108.00

$ $ $

360.00 306.00 138.00

$ 18.95 $ 11.71 $ 10.03

$ $ $

33.44 28.43 12.82

N/A 15.0% N/A

114.00

138.00

$ 10.59

12.82

N/A

$ $

78.00 54.00

$ $

120.00 120.00

$ $

7.25 5.02

$ $

11.15 11.15

20.0% N/A

$ $ $

48.00 48.00 72.00

$ $ $

84.00 72.00 96.00

$ $ $

4.46 4.46 6.69

$ $ $

7.80 6.69 8.92

N/A N/A N/A

City Center Neighborhood Service Centers Community Power Center (Big Box) Regional Shopping Centers/Malls Solus Food Stores

$ $ $ $ $

432.00 264.00 216.00 216.00 162.00

$ 1,560.00 $ 768.00 $ 576.00 $ 768.00 $ 240.00

$ $ $ $ $

40.13 24.53 20.07 20.07 15.05

DEVELOPMENT LAND

Low/M2

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

FDI is virtually non-existent this year and will probably remain flat until after the presidential elections slated for January 2010. However sales on yields of 20% on current low rental levels are possible. The opportunity for rental growth and consequent capital growth is still strong.

RENT/M2/MO

US$ RENT/SF/YR

Low

High

Low

High

Vacancy

N/A UAH 360.00 UAH 216.00

N/A UAH 420.00 UAH 264.00

N/A $ 52.53 $ 31.52

N/A $ 61.29 $ 38.52

N/A N/A N/A

UAH 70.00 N/A N/A

UAH 85.00 N/A N/A

$ 10.21 N/A N/A

$ 12.40 N/A N/A

UAH 720.00 UAH 600.00 UAH 660.00 UAH 720.00 N/A

$ $ $ $

High/M2

CITY CENTER OFFICE $ $ $

New Construction (AAA) Class A (Prime) Class B (Secondary)

Ukraine is still desperately short of hotels especially in the genuine three-star category. The authorities are offering to fast track approvals but money remains tight.

Kiev At A Glance RENT/M2/YR

Low New Construction (AAA) Class A (Prime) Class B (Secondary)

The occupancy rate for shopping centers in Kiev has decreased but it is still rather high; only about 3.5% of total retail spaces are vacant. Yet a decrease of consumer demand and devaluation of the Hrivna led to a substantial decline in rental rates, dropping 60% since 2008. The average rental rates today are about US $45-50/SM/month. Growth of retail space in shopping centers in the first half of 2009 is at 14.3% (66,900 SM).

Population (Millions) 45.593

Population (Millions) 70.431

Conversion: 1.49 = 1 US$

From the beginning of 2009, prime rents for modern warehouse facilities within a 30km zone from Kiev dropped by 30% to US $6.00-$7.00/SM/month excluding operating expenses. Vacancy rates are currently 35%-40%. Most warehousing developments are now on hold and their delivery is rescheduled to 2010-2011. Only 70,000-80,000 SM is likely to be delivered onto the market by the end of 2009.

New Construction Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE

RETAIL

New Construction Class A (Prime) Class B (Secondary)

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

N/A 17.0% 14.0%

N/A N/A N/A

N/A N/A N/A 35.0% N/A N/A

RETAIL

$ $ $ $

850.00 N/A 265.00 210.00 425.00 45.00

High/M2

$ 4,015.00 N/A $ 825.00 $ 1,950.00 $ 3,010.00 $ 3,010.00

Low/SF

$ $ $ $ $

78.97 N/A 24.62 19.51 39.48 4.18

$ 144.93 $ 71.35 $ 53.51 $ 71.35 $ 22.30

20.0% N/A N/A 18.0% N/A

City Center Neighborhood Service Centers Community Power Center (Big Box) Regional Shopping Centers/Malls

Solus Food Stores

UAH 490.00 UAH 360.00 UAH 480.00 UAH 480.00 N/A

High/SF

DEVELOPMENT LAND

Low/M2

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $

373.00 N/A 76.64 181.16 279.64 279.64

N/A N/A N/A N/A N/A N/A

71.50 52.53 70.04 70.04 N/A

Low/SF

N/A N/A N/A N/A N/A N/A

105.06 87.55 96.31 96.31 N/A

6.2% N/A 2.0% 2.0% N/A

High/SF

N/A N/A N/A N/A N/A N/A

2010 Global Market Report I www.naiglobal.com

London, United Kingdom The UK economy is currently (Q2) contracting at 5.5%. With GDP expected to return to growth in the fourth quarter, the current forecast for 2009 is -4.40%. Economists are forecasting GDP growth of 1.40% for 2010. The UK Base rate is 0.5%, credit remains tight, monetary stimulus has been extended and Sterling is relatively weak. In line with GDP forecasts, there is the perception that the real estate markets are at or close to bottom.

Contact NAI Global +1 609 945 4000

Country Data Area (KM2)

244,100

GDP Growth (%)

1.0

GDP 2008 (US$ B)

2,787.37

GDP/Capita (US$)

45,681.00

Inflation Rate (%)

3.8

Unemployment Rate (%)

5.4

Office rents have fallen 40% to 50% from the peak. Incentives of two or three years rent free are common on 10-year leases in the West End and City, respectively. Development activity is declining. Leasing activity remains low. Unsurprisingly, warehouse rents have been falling (3.2% in the year to June 2009) and the availability of large buildings in excess of 10,000 SM increased by about 15%. Development activity has slowed dramatically. Retail sales were up 2.4% year over year through September. Non-food retail figures were flat at around 1.1% annual growth while food store volumes grew at 2.8%. Central London rental values have fallen 5.9% in the last 12 months but some key central London streets have bucked the trend, boosted by tourism and the weak Pound. For example, Bond Street still commands rents of £750/SF Zone A. Leasing incentives are increasing. Development activity has virtually stopped. Investment activity is improving with £1.98 billion invested in the City and West End in the first half of the year. Yields are hardening. Overseas investors have been attracted by the weak pound, the length of UK leases (10-15 years), upward-only rent reviews, historically high yields and the perception that the prime property market is close to bottom. Some UK funds have recently started to re-enter the market. While the UK economy remains difficult and the emergence from recession is slower than economists were forecasting, the rate of rental decline in the different sectors is slowing and there are clear signs of a recovery in the investment market.

Population (Millions) 61.1

London At A Glance Conversion: 0.6162 £ = 1 US$

RENT/M2/YR

RENT/SF/YR

Low

High

Low

High

£ 700.00 £ 500.00

£ £

800.00 565.00

$ 105.54 $ 75.38

$ 120.61 $ 85.18

£ 400.00 £ 300.00 £ 400.00

£ £ £

450.00 350.00 450.00

$ $ $

60.31 45.23 60.31

$ $ $

67.84 52.77 67.84

Vacancy 6.7% N/A N/A 8.5% N/A N/A N/A

£ 85.00 £ 130.00

£ £

120.00 140.00

$ $

12.82 19.60

$ $

18.09 21.11

N/A N/A

N/A N/A N/A N/A N/A N/A N/A

£ £ £ £ £ £ £

5,167.00 3,606.00 2,153.00 5,920.00 5,813.00 8,234.00 2,153.00

$ 779.01 $ 543.66 $ 324.60 $ 892.54 $ 876.41 $ 1,241.41 $ 324.60

N/A N/A N/A N/A N/A N/A N/A

OFFICE WEST END Mayfair Victoria

OFFICE CITY Core Fringe Mid-town

INDUSTRIAL SPACE South East (excluding Heathrow) Heathrow

RETAIL SPACE (ZONE A) Brompton Road Canary Wharf City Convent Garden Oxford Street New Bond Street Marylebone High Street

DEVELOPMENT LAND Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Low/M2

N/A N/A N/A N/A N/A N/A

High/M2

N/A N/A N/A N/A N/A N/A

N/A N/A N/A N/A N/A N/A N/A Low/SF

N/A N/A N/A N/A N/A N/A

High/SF

N/A N/A N/A N/A N/A N/A

2010 Global Market Report I www.naiglobal.com

Latin America SECTION CONTENTS Buenos Aires, Argentina Nassau, Bahamas Campinas, Brazil Curitiba, Brazil Porto Alegre, Brazil Rio de Janeiro, Brazil Sao Paulo, Brazil Santiago, Chile San Jose, Costa Rica Kingston, Jamaica Ciudad Juarez, Mexico Guadalajara, Mexico Guanajuato, Mexico Matamoros, Tamaulipas, Mexico Mexicali, Baja California, Mexico Mexico City, Mexico Monterrey, Nuevo Leon, Mexico Querétaro, Mexico Reynosa, Mexico Saltillo, Mexico San Luis Potosí (SLP), Mexico Tijuana, Baja California, Mexico Torreon, Mexico Caracas, Venezuela

Buenos Aires, Argentina

Contact NAI Castro Cranwell & Weiss S.A. +54 11 5031 1600

2,766,890

GDP Growth (%)

-2.5%

GDP 2008 (US$ B)

$301.33

GDP/Capita (USD)

$7,508.05

Inflation Rate (%)

5.58%

Unemployment Rate (%)

8.8%

Interest Rate (%)

10.5%

The Argentine economy is expected to shrink 2% in 2009 as the agricultural and commodities sectors suffer from lower global prices and local draught, as well as lower investments due to internal political conflicts. In 2010 the economy is expected to bounce back and grow 2% to 3% based on the countryâ&#x20AC;&#x2122;s relative competitive advantage in sectors like agribusiness, back office services and specialized manufacturing.

The Bahamas is known worldwide as a great destination for travelers and, with over 5 million tourists per year, the hospitality sector is growing. The Bahamas Government along with the Bahamas Financial Services Board is looking at creating a commercial court system to resolve commercial matters quickly and efficiently. It is hoped that a well functioning judiciary would create confidence and attract more international investors.

Lower demand in the office market sector has caused lease prices to fall 10%-15% in Class A office space in the Buenos Aires CBD, to an average of US $28$32/SM/month. Vacancy rates jumped from 3% to 9%. The drop in value in Class B space and suburban offices has been approximately 20% in 2009 with transactions ranging in the US $15-$20/SM range as corporations emphasize cost savings. Accenture, for example, took 8,000 SM in a refurbished Class B building paying approximately US $16/SM. Symantex and PepsiCo moved to suburban office buildings at US $18/SM. Premium industrial parks and logistics facilities maintained their values and the vacancy level is still in the low single digits as this segment in Argentina continues to be under serviced and as demand continues to increase with the overall economy.

The CBD Class A and B office market is slow as more companies are willing to move out of the core. In suburban areas the demand for office space is quite high but the availability of space is restricted due to land availability and cost. Offshore banking is still a mainstay of the economy and there have been some large mergers in 2009. The demand is still high for land in suburban areas as land and development costs in these areas are still reasonable.

In the other market segments, warehouse space vacancy has increased slightly and values have become marginally softer. Top retail lease values have softened in this market during 2009, both in high street space and in shopping centers. Nevertheless, the retail market continues to be under serviced as is evidenced by the inauguration of IRSAâ&#x20AC;&#x2122;s DOT Shopping Center with full occupancy of its 140 stores. Capitalization rates have increased in 2009 and are generally in the 12%-14% range although there continues to be a lack of sellers, particularly of premium properties.

Country Data Area

Nassau, The Bahamas

Overall, the real estate market has entered into a down cycle in 2009 with lower demand causing vacancies to increase 5%-10% and prices to soften 10%-25%.

Contact NAI Lowes Realty +1 242 322 1741

The Airport Industrial Park is growing as businesses move there from the more congested and costly areas. This activity is mostly warehouse and back offices. The retail market is still growing; with more residential developments in the western district of New Providence there is a need for more retail centers. The downtown core has seen a downturn recently due to a lack of cleanliness and safety. One of the major problems in this area is the lack of parking and this impacts greatly the amount of local traffic. Investment sales have slowed in the second home market but there has been more interest by investors looking at either hospitality or office complexes as an investment. The Bahamar project on Cable Beach has drawn the interest of the Chinese and they have started investing quite heavily in the Bahamas.

Country Data Area

13,940

GDP Growth (%)

-3.9%

GDP 2008 (US$ B)

$7.40

GDP/Capita (USD)

$21,727.86

Inflation Rate (%)

1.84%

Unemployment Rate (%)

14.2%

Interest Rate (%)

5.5%

The outlook for 2010 is a slow start in Q1 but increased activity in the latter part of the year as the Bahamar development on Cable Beach should be progressing and other planned projects will be getting off the ground.

Population (Millions) 40.134 Population (Millions) 0.341

Buenos Aires At A Glance

Nassau At A Glance RENT/M2/Mo

Low

US$ RENT/SF/YR

High

Low

RENT/SF/YR

High

Vacancy

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

$ $ $

30.00 24.00 12.00

$ $ $

35.00 32.00 20.00

$ 0.73 $ 0.59 $ 0.29

$ $ $

0.86 0.78 0.49

0.5% 8.0% 12.0%

18.00

22.00

$ 0.44

0.54

2.0%

$ $

15.00 10.00

$ $

20.00 12.00

$ 0.37 $ 0.24

$ $

0.49 0.29

2.0% 2.0%

$ $

3.50 3.50

$ $

6.00 5.50

$ 0.09 $ 0.09

$ $

0.15 0.13

N/A N/A

5.00

8.00

$ 0.12

0.20

N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Storesl

$ $

35.00 15.00

$ $

70.00 20.00

$ 0.86 $ 0.37

$ $

1.71 0.49

5.0% 15.0%

N/A 18.00

N/A $ 50.00

N/A $ 0.44

N/A 1.22

N/A 10.0%

N/A

DEVELOPMENT LAND

Low/M2

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

High

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ $

N/A 25.00 18.00

$ $

N/A 33.00 25.00

N/A 10.2% 15.7%

$ $

N/A 25.00 12.00

$ $

N/A 35.00 18.00

N/A N/A N/A

20.00 N/A N/A

N/A N/A N/A

95.00 N/A $ 100.00 $ 25.00 N/A

8.0% N/A N/A N/A N/A

High/Acres

Low/SF

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Low

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

10.00 N/A N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores

45.00 N/A 35.00 15.00 N/A

Low/Acres

RETAIL

N/A

$ $ $ $

400.00 N/A 30.00 5.00 200.00 400.00

N/A High/M2

$ $ $ $

$ 1.00 N/A 60.00 70.00 1.00 1,000.00

N/A Low/SF

High/SF

DEVELOPMENT LAND

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $

0.01 N/A 0.00 0.00 0.01 0.01

$ $ $ $

0.00 N/A 0.00 0.00 0.00 0.03

$ $

$ $ $

N/A N/A N/A 10.00 18.00 10.00

$ $ $

N/A N/A N/A 18.00 25.00 50.00

N/A N/A N/A 0.02 0.0 0.0

2010 Global Market Report I www.naiglobal.com

Campinas, Brazil

Curitiba, Brazil Campinas is located in the state of São Paulo, about 90km from the capital of the same name – São Paulo. Campinas occupies an area of 796 km² and has a population of 1.064.664 inhabitants. Eleventh richest city of Brazil and third most populous city of the country, Campinas is part of the Metropolitan Complex Extended of São Paulo. As such, it is an important logistics hub for the area.

Contact NAI Commercial Properties Brazil +1 55 11 5506 5655

Country Data Area

8,511,965

GDP Growth (%)

-0.66%

The Campinas market comprises approximately one-third of the industrial output of the state of São Paulo, including high technology and metallurgy. The region is home to more than 10,000 companies, including prominent global names such as: Honda, Toyota, Unilever, 3M of Brazil, SherwinWilliams, Bosch, Pirelli, Dell, IBM, BASF, Dow Chemical, Ericsson, Singer, Goodyear, Valero, International Paper, Nortel, Lucent, Samsung, Motorola, AmBev, Caterpillar, Bombardier and many others. The petrochemical complex is centered in Paulínia, about 13 kilometers from Campinas, next to the Petrobrás Refinery of the Plateau (REPLAN). This complex is the largest in Brazil and one of the largest in all of Latin America, and hosts companies such DuPont, Chevron, Shell, Exxon, Rhodia and others. The Campinas airport claims the largest volume of import/export shipments for the country. Campinas is also an important and diversified commercial center, and home to two of the largest shopping malls in the country—The Shopping Iguatemi of Campinas and the mall Park D. Pedro—and the International Airport Viracopos, which is involved in the international transport of shipments. The city of Campinas should attract more investors in 2010 due to fiscal incentives put in place. The town has healthy vacancy and growth potential to more than the double its present market size. The economy showed signs of recovery. Presidential elections in 2010, the World Cup of soccer in 2014 and the selection of Brazil to host the 2016 Olympic Games should attract additional investment that will support overall economic stability in the country.

Curitiba is the capital of Paraná, located in the southern part of Brazil. The city occupies 435 square kilometers and has a population of almost 1.8 million inhabitants. For many, this city has the best quality of life in the country. It is the seventh most populous city of Brazil and the largest of the southern region. The city’s initial and famous diverse town planning and legislation that aimed to contain its growth has started to lose control.

Contact NAI Commercial Properties Brazil +55 11 5506 5655

Country Data Area

8,511,965

GDP Growth (%)

-0.66%

GDP 2008 (US$ B)

$1,481.55

GDP/Capita (USD)

4.85%

GDP 2008 (US$ B)

$1,481.55

GDP/Capita (USD)

$7,737.32

Inflation Rate (%)

4.85%

Inflation Rate (%)

5.7%

Unemployment Rate (%)

7.7%

Unemployment Rate (%)

7.7%

Interest Rate (%)

8.75%

Interest Rate (%)

8.75%

Population (Millions) 191.481

Curitiba At A Glance RENT/M2/MO

Low

Conversion: 1.72 BRL = 1 US$

US$ NET RENT/SF/YR

High

Low

High

Vacancy

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

BRL 50.00 BRL 30.00 BRL 20.00

$ 22.69 $ 16.20 $ 9.72

$ 32.41 $ 19.44 $ 12.96

5.5% 6.0% 6.5%

BRL 9.00 BRL 9.00 BRL 9.00

BRL 15.00 BRL 14.00 BRL 16.00

$ $ $

5.83 5.83 5.83

$ 9.72 $ 9.07 $ 10.37

5.5% 6.5% 6.5%

BRL 10.00 BRL 3.00

BRL 16.00 BRL 10.00

$ $

6.48 1.94

$ 10.37 $ 6.48

4.0% 5.0%

BRL 6.00

BRL 12.00

3.89

7.78

6.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores

BRL 16.00 BRL 18.00 BRL 22.00 BRL 35.00 BRL 22.00

BRL 40.00 BRL 30.00 BRL 32.00 BRL 50.00 BRL 30.00

$ $ $ $ $

10.37 11.67 14.26 22.69 14.26

$ $ $ $ $

25.93 19.44 20.74 32.41 19.44

6.0% 5.1% 5.0% 5.0% 4.2%

DEVELOPMENT LAND

Low/Acre

High/Acre

N/A N/A N/A N/A N/A N/A

SUBURBAN OFFICE

Low

High

Vacancy

BRL 15.00 BRL 9.00 BRL 7.00

BRL 23.00 BRL 15.00 BRL 10.00

$ $ $

9.72 5.83 4.54

$ 14.91 $ 9.72 $ 6.48

5.0% 5.5% 6.0%

BRL 11.00 BRL 10.00 BRL 9.00

BRL 18.00 BRL 13.00 BRL 10.00

$ $ $

7.13 6.48 5.83

$ 11.67 $ 8.43 $ 6.48

5.0% 4.5% 5.0%

BRL 10.00 BRL 3.00 BRL 6.00

BRL 16.00 BRL 10.00 BRL 12.00

$ $ $

6.48 1.94 3.89

$ 10.37 $ 6.48 $ 7.78

4.5% 4.5% 5.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

BRL 10.00 BRL 6.00 BRL 7.00 BRL 10.00 BRL 9.00

BRL 18.00 BRL 11.00 BRL 11.00 BRL 14.00 BRL 11.00

$ $ $ $ $

6.48 3.89 4.54 6.48 5.83

$ 11.67 $ 7.13 $ 7.13 $ 9.07 $ 7.13

4.5% 5.0% 4.5% 3.0% 3.0%

DEVELOPMENT LAND

Low/Acre

New Construction (AAA) Class A (Prime) Class B (Secondary) New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

US$ RENT/SF/YR

High

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

RENT/M2/MO

Low

DOWNTOWN OFFICE BRL 35.00 BRL 25.00 BRL 15.00

New Construction (AAA) Class A (Prime) Class B (Secondary)

Single-purpose industrial condominiums, built primarily for certain sectors’ needs, characterize the industrial property market in Curitiba. During 2009, the industrial sector stabilized and is now considered one of the city’s best property investments. In the retail sector, the most important submarket is Ahú, now that the Ahú Prison has been shuttered and its tenants relocated to other areas. The Anita Garibaldi submarket has undergone one of Brazil’s biggest urban changes in recent years; many older structures are now being redeveloped for commercial uses.

Population (Millions) 191.481

Campinas At A Glance Conversion 1.72 BRL = 1 US$

Curitiba is the fifth largest city in Brazil and one of the best cities for investments in Latin America. It has important companies in the sectors of commerce, service and financial. It has a 43 million SM industrial park, the second-largest automotive center for the country and the Alfonso Pena International Airport. The rate of companies moving into the market has increased so land and property values are increasing and the supply rate is falling. The vacancy rate for Class A office space remained low at less than 6%. The average rental rates for office space in the city of Curitiba also are low compared to other cities, about 15% to 20% lower.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

Low/Acre

N/A N/A N/A N/A N/A N/A

High/Acre

N/A N/A N/A N/A N/A N/A

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

High/Acre

Low/Acre

High/Acre

N/A

N/A N/A N/A N/A N/A

2010 Global Market Report I www.naiglobal.com

Porto Alegre, Brazil

Rio de Janeiro, Brazil

Porto Alegre occupies 497 square kilometers and is located in the extreme south of Brazil. Porto Alegre is the capital of RIo Grande do Sul state and it is in the Southern Region of the country. With a population of 1.4 million inhabitants, it has the highest per capita density and is the fourth most populous city in Brazil.

Contact NAI Commercial Properties Brazil +1 55 11 5506 5655

Country Data

The economy of the city is primarily based on the service sector, followed by industrial and farming. The high output of fruits and vegetables makes Porto Alegre the largest rural zone between the Brazilian capitals. It will be one of the 12 headquarters cities for the soccer World Cup in 2014. It will also be a host city for the 2016 Olympic Games; these two factors should bring significant infrastructure investment, including improvements in the infrastructure such as new streets and an expansion of the subway. This should provide an impulse to the local economy and increase the activity in the property market. Several major commercial developments are also under way. The developer, Rossi, is going to invest R $500 million in the construction of a condominium and commercial complex that will form a neighborhood planned in the eastern portion of the city. Another major construction project, Center Home Mall, will have more than 60,000 SM of buildings. Located in the Av. Sertório and Assis Brazil, this development solidifies the region as a business and commercial hub. Upon completion it will have 120 shops, a food plaza, service operations and parking for 1,200 cars. Beyond the jobs it generates, it also brings significant improvement to the infrastructure in the region.

The second largest economy of Brazil, Rio de Janeiro occupies an area of 1,182 km², has a population of 6,093,472 inhabitants and is located in the Southeast part of the country. Its industrial areas are utilized primarily by chemical, pharmaceuticals, steel, metallurgy, petroleum, processed foods, printing and publishing industries. Rio’s main economic source is tourism—40% of the foreigners that visit Brazil choose Rio de Janeiro as their destination—followed by the services sector and the oil industry.

Contact NAI Commercial Properties Brazil +1 55 11 5506 5655

The cautious approach that most companies, builders and developers had has now been replaced with optimism. Many companies are now looking to expand, and investors have returned to inject capital into the economy. In the office market, the high-end product did not suffer from the global economic malaise, primarily due to the low vacancies that already existed. The class-A building towers completed during the last few months are, by all accounts, leasing well. In Barra da Tijuca, the newest and most desirable area, the activity is even higher due to the completion of numerous buildings and the expected completion of several more.

Country Data

Rental rates have remained stable, also as a consequence of the low vacancy. The rental of retail space in Rio de Janeiro is very active due to the strong presence of corporate users and the city’s diverse tourist areas that attract foreigners and Brazilians. The Southeast area of Brazil is the most important region for industrial operations. The Rio de Janeiro industrial inventory and average pricing remained relatively stable during 2009.

Area

8,511,965

Area

8,511,965

GDP Growth (%)

-0.66%

GDP Growth (%)

-0.66%

GDP 2008 (US$ B)

$1,481.55

GDP 2008 (US$ B)

$1,481.55

GDP/Capita (USD)

$7,737.32

GDP/Capita (USD)

$7,737.32

Inflation Rate (%)

4.85%

Inflation Rate (%)

4.85%

Unemployment Rate (%)

7.7%

Unemployment Rate (%)

7.7%

Interest Rate (%)

8.75%

Interest Rate (%)

8.75%

Population (Millions) 191.481

Porto Alegre At A Glance Conversion 1.72 BRL = 1 US$

Rio de Janeiro At A Glance RENT/M2/MO

Low

Conversion1.72 BRL = 1 US$

US$ NET RENT/SF/YR

High

Low

High

Vacancy

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

BRL 20.00 BRL 18.00 BRL 14.00

$ 8.43 $ 10.37 $ 4.54

$ 12.96 $ 11.67 $ 9.07

4.5% 5.0% 5.0%

BRL 12.00 BRL 10.00 BRL 7.00

BRL 18.00 BRL 16.00 BRL 12.00

$ $ $

7.78 6.48 4.54

$ 11.67 $ 10.37 $ 7.78

5.5% 4.0% 5.0%

BRL 9.00 BRL 9.00 BRL 9.00

BRL 15.00 BRL 10.00 BRL 12.00

$ $ $

5.83 5.83 5.83

$ $ $

9.72 6.48 7.78

3.5% 3.0% 3.5%

BRL 10.00 BRL 11.00

BRL 16.00 BRL 14.00

$ $

6.48 7.13

$ 10.37 $ 9.07

4.0% 3.5%

Solus Food Stores

BRL 11.00 BRL 14.00 BRL 11.00

BRL 16.00 BRL 16.00 BRL 14.00

$ $ $

7.13 9.07 7.13

$ 10.37 $ 10.37 $ 9.07

3.0% 3.0% 2.5%

DEVELOPMENT LAND

Low/Acre

SUBURBAN OFFICE

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Low

High

Vacancy

BRL $ 80.00 BRL $ 150.00 BRL $ 70.00 BRL $ 140.00 BRL $ 60.00 BRL $ 100.00

$ 51.85 $ 45.37 $ 38.89

$ 97.22 $ 90.74 $ 64.82

1.0% 1.4% 1.9%

BRL $ 80.00 BRL $ 140.00 BRL $ 70.00 BRL $ 140.00 BRL $ 60.00 BRL $ 100.00

$ 51.85 $ 45.37 $ 38.89

$ 90.74 $ 90.74 $ 64.82

1.0% 5.5% 9.7%

BRL $ 11.00 BRL $ 18.00 BRL $ 11.00 BRL $ 15.00 BRL $ 12.00 BRL $ 18.00

$ $ $

7.13 7.13 7.78

$11.67 $9.72 $11.67

6.5% 7.0% 6.5%

Solus Food Stores

BRL $ 80.00 BRL $ 40.00 BRL $ 80.00 BRL $ 1 50.00 BRL $ 150.00

$ $ $ $ $

51.85 25.93 51.85 97.22 97.22

162.04 64.82 162.04 259.26 226.85

9.0% 7.5% 8.5% 7.0% 7.5%

DEVELOPMENT LAND

Low/Acre

High/Acre

N/A

N/A N/A

N/A N/A N/A

New Construction (AAA) Class A (Prime) Class B (Secondary) New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls

US$ NET RENT/SF/YR

High

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

RENT/M2/MO

Low

DOWNTOWN OFFICE BRL 13.00 BRL 16.00 BRL 7.00

New Construction (AAA) Class A (Prime) Class B (Secondary)

Rio de Janeiro is expected to get a major economic boost from infrastructure improvements and investments resulting from its selection as the host city for the 2016 Summer Olympics.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

High/Acre

Low/Acre

High/Acre

N/A N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

BRL $ 250.00 BRL $ 100.00 BRL $ 250.00 BRL $ 400.00 BRL $ 350.00

Low/Acre

$ $ $ $ $

High/Acre

2010 Global Market Report I www.naiglobal.com

Sao Paulo, Brazil

Contact NAI Commercial Properties Brazil +1 55 11 5506 5655

Country Data Area

756,950

GDP Growth (%)

-1.74%

GDP 2008 (US$ B)

$150.36

GDP/Capita (USD)

$8,852.96

Inflation Rate (%)

2.04%

Unemployment Rate (%) Interest Rate (%)

Santiago, Chile São Paulo is located in the southeast region of Brazil and occupies an area of approximately 1,523 square kilometers. It is one of the most important mercantile, corporate and financial centers of Latin America. São Paulo is the largest city in the country and the most globally influential Brazilian city. The city of São Paulo has 11 million inhabitants, and if the entire metropolitan region is considered, the population grows to 22 million inhabitants.

Chile has a dynamic market-oriented economy characterized by a high level of foreign trade. Chile’s economy is based on the export of minerals, mainly cooper, which accounts for about half of the total value of exports. Other fast growing sectors are agriculture (fruits and cereals), cellulose, salmon and wine exports. Major developments are expected in the extraction of gold, since more than three high-grade gold deposits were discovered recently.

The high growth rate that occurred during 2008 was not repeated in 2009. However, the market continues to grow at a solid pace. Due to the presidential elections that will occur in 2010, the pace of the construction has been accelerated on the southern stretch of the "Rodoanel Mario Covas," ring road for political reasons. Given this unexpected push, the anticipated delivery date of this logistically important road is now early 2010.

The office market has experienced major growth. In the last 12 months a total of 14 Class A office buildings entered the market, increasing Santiago office stock by 7% and reaching a total inventory of 1.6 million SM. Vacancy rates have shown an upward trend, due to the large amount of projects that entered the market during Q3 2009. Vacancy levels reached 5.75% for Class A office buildings. In the next 24 months we expect explosive growth of 456,000 SM of Class A office space.

The office inventory continues to grow and developers in the region are beginning to offer Class A office property in modular condominiums and Build to Suits. However, availability of high quality industrial property still is insufficient to meet the strong demand, keeping the vacancy rates low and prices stable and high. The retail market suffered less than other sectors, mainly due to the low availability and the continued high demand throughout the year. Its outlook is expected to be strong for the near term; especially in the shopping centers and supermarkets. The office market did feel some effects of the crisis with decreasing demand starting in early 2009. At present, as a result of the government’s ad hoc national economic measures, a return to increased activity in the real estate market is already on the horizon. Companies are back looking to expand. And both Brazilian and international investors have returned to inject their capital into the economy.

Contact NAI Sarra +56 2 347 7000

Country Data Area

756,950

GDP Growth (%)

-1.74%

GDP 2008 (US$ B)

$150.36

GDP/Capita (USD)

$8,852.96

Inflation Rate (%)

2.04%

10.20%

Unemployment Rate (%)

10.20%

0.50%

Interest Rate (%)

0.50%

The economic setting present today in Brazil is unprecedented. The general feeling is that as availability of credit improves Brazil will be able to foment an expansion never seen before. The changes will be visible mainly in four principal areas: capital, infrastructure, retail and real estate.

Population (Millions) 16.984

RENT/M2/YR

US$ NET RENT/SF/YR

High

Low

High

New Construction (AAA) Class A (Prime) Class B (Secondary)

BRL 75.00

BRL 110.00

$ 48.61

$ 71.30

4.3%

BRL 70.00

BRL 100.00

$ 45.37

$ 64.82

5.5%

BRL 50.00

BRL 90.00

$ 32.41

$ 58.33

6.1%

BRL 55.00 BRL 52.00

BRL 65.00 BRL 62.00

$ 35.65 $ 33.70

$ 42.13 $ 40.19

5.0% 5.5%

BRL 50.00

BRL 60.00

$ 32.41

$ 38.89

10.2%

BRL 18.00 BRL 16.00 BRL 16.00

BRL 25.00 BRL 18.00 BRL 22.00

$ 11.67 $ 10.37 $ 10.37

$ 16.20 $ 11.67 $ 14.26

2.0% 5.0% 3.0%

BRL 20.00 BRL 50.00 BRL 60.00 BRL 150.00 BRL 100.00

BRL 180.00 BRL 100.00 BRL 150.00 BRL 400.00 BRL 200.00

$ $ $ $ $

5.0% 8.0% 6.0% 8.0% 6.0%

DEVELOPMENT LAND Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Low

High

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary)

CLP$ 147,851 CLP$ 197,970 $ 25.16 CLP$ 122,792 CLP$ 145,345 $ 20.89 CLP$ 105,250 CLP$ 125,298 $ 17.91

$ 33.68 $ 24.73 $ 21.32

4.0% 5.8% 2.0%

N/A N/A CLP$ 85,202 CLP$

N/A N/A N/A N/A 98,985 $ 14.50

N/A N/A $ 16.84

N/A N/A 13.5%

CLP$ 15,035 CLP$ CLP$ 17,541 CLP$ CLP$ 30,071 CLP$

25,059 $ 22,553 $ 39,343 $

$ $ $

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

2.56 2.98 5.12

4.26 3.84 6.69

6.5% 3.5% 5.0%

RETAIL

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores

US$ RENT/SF/YR

High

DOWNTOWN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Low

Vacancy

DOWNTOWN OFFICE

SUBURBAN OFFICE

Chile is regarded as the first economy in the region likely to bounce back in 2010 from the current economic downturn, and its economy is already showing signs of recovery after the economic slump. A favorable scenario for the real estate market is forecasted in 2010.

Santiago At A Glance RENT/M2/YR

Low New Construction (AAA) Class A (Prime) Class B (Secondary)

Industrial supply has grown, especially the number of industrial parks. Prices have not significantly changed during 2009. The average sale value for land in industrial parks is US $120/SM. Investment returns have stabilized between 7-9% for office, 9-11% for retail and 11-12% for industrial.

Population (Millions) 16.984

Sao Paulo At A Glance Conversion 1.72 BRL = 1 US$

Lease and sale rates have maintained stable levels. The average leasing rate in the Santiago CBD is US $24/SM. Strip centers have become very popular in the last five years with a projected investment of US $500 million in the near future by the main player in this area. Lease rates in the most popular retail zones in downtown Santiago have reached US $190/SM/month. In these areas there is virtually no space available.

Low/Acre

N/A N/A N/A N/A N/A N/A

High/Acre

N/A N/A N/A N/A N/A N/A

12.96 32.41 38.89 97.22 64.82

116.67 64.82 97.22 259.26 129.63

Low/Acre

High/Acre

N/A N/A N/A N/A N/A N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

CLP$ 250,596 CLP$ 1,252,980 CLP$ 200,476 CLP$ 300,712 CLP$ 30,071 CLP$ 37,589 N/A N/A CLP$ 37,589 CLP$ 62,649

$ 42.64 $ 34.11 $ 5.12 N/A $ 6.40

$ 213.20 $ 51.17 $ 6.40 N/A $ 10.66

DEVELOPMENT LAND

Low/M2

High/M2

Low/M2

High/M2

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

CLP$ 392,600 CLP$ 208,830 CLP$ 52,207 CLP$ 20,883 CLP$ 208,830 CLP$ 104,415

CLP$ 584,724 CLP$ 261,037 CLP$ 83,532 CLP$ 125,298 CLP$ 417,660 CLP$ 229,713

$ $ $ $ $ $

Solus Food Stores

66.80 35.53 8.88 3.55 35.53 17.77

N/A 4.00% 4.00% N/A N/A

99.49 44.42 14.21 21.32 71.07 39.09

2010 Global Market Report I www.naiglobal.com

San Jose, Costa Rica

Kingston, Jamaica

Like most markets, Costa Rica felt the impact of the financial world crisis. Almost immediately affected was the tourism sector which generated our own internal crisis in the pacific coast due to the considerable reduction in the flow of tourists which had a negative impact on all industries supported by tourism. The investment in on going projects as well as projects ready to break ground, stagnated due to a near total credit restriction.

Contact NAI Costa Rica + 506 2228 7760

The office market is beginning to experience a higher absorption rate with almost 50,000 SM, also approximately 20,000 SM of new projects came into the market increasing the inventory and several international companies arrived leasing new spaces. A good sign of recover is the reduction in the vacancy rate from 12% in Q3 to the current 8%. There was a 3% increase in inventory from 724,955 SM to 745,469 SM. According to our projections, the office market could expect a considerable recovery by mid 2010, returning to its normal behavior, where supply and demand works hand in hand with the growth of the economy.

The Jamaican property market has suffered less than many of the developed overseas markets. The banking system remains strong with no significant fallout or failures. Growth in the property sector has been restricted mainly by the Government decision to initially raise interest rates in response to the global crisis. Currently, interest rates are falling, but benchmark rates are still in the high teens. Higher mortgage rates, particularly in the residential sector, have stifled the market.

Contact NAI Jamaica +1 876 925 7861

The retail market is still realizing positive demand. Inside the malls, occupancy and pricing has remained stable. At the strip and neighborhood centers, occupancy is lower, with some retailers having closed or changed locations to less expensive sites. However, this market continues to grow quickly. Country Data Area

1,972,550

GDP Growth (%)

-1.30%

GDP 2008 (US$ B)

$29.29

GDP/Capita (USD)

$6,361.30

Inflation Rate (%)

On the industrial side, exportation decreased in the last quarter. Absorption is lower, but the development of new space is more controlled than in other markets. The FTZâ&#x20AC;&#x2122;s have been receiving interest from and negotiating with, more companies and are expected to welcome around 20 international companies in the next 18 months, creating a good opportunity in the marketplace. In 2009 the most significant transactions were: Forum II with 8000 SM, Plaza Roble with 6000 SM, Zona Franca de Este with 11100 SM and Zona Franca America with 4000 SM.

The only activity in the industrial market has been a small number of large owner-occupier developments, mainly in the warehousing and distribution sectors. Rental demand for units in the more desirable areas (for staff and customers) often dictates rental levels. Such space over10,000 SF is limited.

Country Data Area

13,940

GDP Growth (%)

-3.61%

GDP 2008 (US$ B)

$11.92

GDP/Capita (USD)

$4,397.48

Inflation Rate (%)

9.43%

Unemployment Rate (%)

11.00%

Interest Rate (%)

19.00%

8.37%

Unemployment Rate (%)

4.90%

Interest Rate (%)

9.00%

There remains a shortage of quality office units with adequate parking facilities. Little new space has been built in recent years as development costs for new buildings have exceeded the developed value. The situation is changing and, currently a number of developers are seeking sites to develop. Local planning regulations are insisting on adequate parking for staff and clients, which adds a new element to development costs. Actual rental rates obtained by landlords are somewhat capped due to the high monthly maintenance charges, which can be higher than rentals. Electricity and security costs are the main factor in this cost. Office yields have risen from around 9% over a year ago towards 12%, currently. Rental levels remain firm.

There has been little new expansion in the retail market. Fallout, with the reduction in retail activity, has been minimal. Yields in this market tend to follow the office market. New development in the resort market has been virtually nonexistent this year The main factors governing desirability of property in Jamaica is the location in relation to the areas perceived as unsafe for staff and customers. Areas of the main cities are well defined with distinct value levels.

Population (Millions) 4.605 Population (Millions) 2.711

Kingston At A Glance

San Jose At A Glance Conversion: 550 COL = 1 US$

RENT/M2/MO

Conversion: 89 J$ = 1 US$

US$ RENT/SF/YR

Low

High

Low

High

N/A COL 111,360 COL 69,600

N/A COL 125,280 COL 111,360

N/A $ 17.84 $ 11.15

N/A $ 20.07 $ 17.84

N/A 24.0% 7.0%

New Construction (AAA) Class A (Prime)

COL 139,200 COL 111,360 COL 69,600

COL 180,960 COL 174,000 COL 139,200

$ 22.30 $ 17.84 $ 11.15

$ 28.99 $ 27.87 $ 22.30

3.0% 8.0% 8.0%

New Construction (AAA) Class A (Prime)

COL 27,840 COL 31,320 COL 24,360

COL 69,600 COL 45,240 COL 34,800

$ $ $

$ 11.15 $ 7.25 $ 5.57

12.0% 4.0% 1.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores

COL 55,680 COL 69,600 COL 76,560 COL 160,080 COL 41,760

COL 153,120 COL 180,960 COL 208,800 COL 236,640 COL 76,560.

$ 8.92 $ 11.15 $ 12.26 $ 25.64 $ 6.69

DEVELOPMENT LAND

Low/M2

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

4.46 5.02 3.90

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

US$ RENT/SF/YR

High

Low

High

Vacancy

N/A 484.00 242.00

N/A J $ 807.00 J $ 484.00

N/A $ 6.06 $ 3.03

N/A $ 10.11 $ 6.06

N/A N/A N/A

J $ 1,130.00 J $ 1,130.00 J $ 969.00

J $ 1,453.00 J $ 1,453.00 J $ 1,130.00

$ 14.15 $ 14.15 $ 12.14

$ 18.20 $ 18.20 $ 14.15

N/A N/A N/A

J$ J$

404.00 404.00 N/A

J$ 969.00 J$ 969.00 J $ 1,130.00

$ 5.06 $ 5.06 N/A

$ 12.14 $ 12.14 $ 14.15

N/A N/A N/A

$ 18.20 N/A N/A $ 22.25 N/A

N/A N/A N/A N/A N/A

DOWNTOWN OFFICE

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

RENT/M2/MO

Low

Vacancy

High/M2

N/A N/A N/A N/A N/A N/A

Low/SF

N/A N/A N/A N/A N/A N/A

$ $ $ $ $

24.53 9.7% 28.99 3.6% 33.44 0.8% 37.90 N/A 12.26 1.1%

High/SF

N/A N/A N/A N/A N/A N/A

Class B (Secondary) SUBURBAN OFFICE

Class B (Secondary) INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

J$ J$

RETAIL Downtown (High Street Shops) Neighborhood Service Centers Community Power Center (Big Box) Regional Malls Solus Food Stores

DEVELOPMENT LAND

807.00 N/A N/A J$ 1,211.00 N/A

J $ 1,453.00 N/A N/A J$ 1,776.00 N/A

$ 10.11 N/A N/A $ 15.17 N/A

Low/ M2

High/M2

Low/SF

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

J$ J$ J$ J$ J$ J$

12.00 12.00 5.00 10.00 10.00 6.00

30.00 20.00 8.00 13.00 13.00 15.00

$ $ $ $ $ $

0.13 0.13 0.06 0.11 0.11 0.07

High/SF

$ $ $ $ $ $

0.34 0.22 0.09 0.15 0.15 0.17

2010 Global Market Report I www.naiglobal.com

Ciudad Juarez, Chihuahua, Mexico

Guadalajara, Mexico

Juarez is the largest city in Chihuahua, with a population of 2 million inhabitants. It is located across from El Paso, Texas, and has been a destination for foreign manufacturing since the 1960s. Manufacturing facilities known as “maquiladoras” drive the economy. Of Mexico’s foreign manufacturing plants, 90% are situated along the US-Mexico border and 33% are found in Juarez.

As Mexico’s second-largest city, Guadalajara has managed to modernize without seriously altering its centuries old city plan or endangering the quality of life of its inhabitants. Guadalajara is known as the "Silicon Valley of Mexico” with the establishment of multinational technology firms such as IBM, HP, Foxxcon, Flextronics, SCI-Sanmina and Freescale.

Approximately 330 registered maquiladora operations are located in Juarez, employing more than 200,000 people. Juarez is home to companies such as Philips, Thomson, GM, Electrolux, Yazaki, Foxconn, Lear, Johnson & Johnson, GE Medical, Johnson Controls, Delphi and Ford.

Contact NAI Mexico +1 619 690 3029

Country Data Area

1,972,550

GDP Growth (%)

-7.34%

GDP 2008 (US$ B)

$866.34

At the outset of 2010, the market is expected to change from a landlords’ market to at tenants’ market with this trend continuing into 2011. Early signs of expansion were noted by the end of 2009 with another wave of projects on the horizon. At the outset of 2010, only one new industrial facility is under construction. The global economic crisis during 2009 slowed investment by manufacturers and as demand fell so did lease rates. Juarez vacancy rates rose for the first time to over 10%. As a result, lease rates fell by about 20-30% and developer incentives, such as free rent, were noted. The office market remains flat. The limited amount of Class A space is occupied by local firms, government agencies and global service providers with regional operations. Activity was slower with lease rates falling and vacancies rising in the range of 10-20% during 2009. Overall rates are predicted to remain stable during 2010. US retailers such as Costco, Wal-Mart, Sam's, Auto Zone and Home Depot are following Mexican retailers into the market and prospects for 2010 are improving. Juarez’s critical mass of industrial firms, proximity to all US markets and a 50-year history with foreign manufacturers ensure the future will be bright. Most believe 2010 will be a rebound year with increased activity by the second half and continuing in force through 2012 and beyond.

Contact NAI Mexico +1 619 690 3029

Country Data Area

1,972,550

GDP Growth (%)

-7.34%

GDP 2008 (US$ B)

$866.34

GDP/Capita (USD)

$8,040.24

Inflation Rate (%)

5.43%

GDP/Capita (USD)

$8,040.24

Inflation Rate (%)

5.43%

Unemployment Rate (%)

6.06%

Unemployment Rate (%)

6.06%

Interest Rate (%)

4.50%

Interest Rate (%)

4.5%

Population (Millions) 107.75

Most of the new office projects initiated during 2008 and 2009 are expected to reach the market in late 2010 due to slowed construction by most developers. New projects in 2010 will include Class A+ (AAA) buildings in Puerta de Hierro and Americas-Country corridor. The majority of demand is from Mexican national firms; however, multinational companies are also securing space from 1,500 to 10,000 SF. Office market vacancy in Class B buildings is projected to average 20-25%. Nevertheless, finding buildings with 10,000 SF continuous is challenging. Guadalajara has become a destination market for major industrial developers. Aggressive promotion has nearly doubled the city’s industrial base during the past four years. Industrial land and facility rental rates are expensive in Guadalajara. Sale prices range from $80-$150/SM, ranking Guadalajara among the most expensive areas in Mexico. Lease rates for assembly and manufacturing space are above Mexico’s national average. During 2009, demand has been flat and lease rates did not increase, resulting in landlords continuing to experience excess inventories during 2010. Guadalajara will remain a “tenants’ market” during 2010. The retail sector in Guadalajara experienced decreased vacancy in 2009 and it is projected to continue throughout 2010. Convenience stores such as Oxxo, 7 Eleven and Waldo’s are seeking both in-line and pad sites. Retail space rates and land values remained flat in most commercial submarkets during 2009. Guadalajara remains a core market in central Mexico with a strong mix of foreign and national firms active in the market. Projections are positive with sharp increases in demand forecast for Q3 and Q4 2010.

Population (Millions) 107.75

Guadalajara At A Glance

Juarez At A Glance

RENT/SF/YR

Low

High

Effective Avg.

$ $ $

12.00 9.00 8.00

$ $ $

17.00 13.00 10.00

$ 14.50 $ 11.00 $ 8.75

N/A 8.0% 20.0%

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ $ $

12.00 9.00 8.00

$ $ $

17.00 13.00 10.00

$ 14.50 $ 11.00 $ 8.75

15.0% 10.0% 20.0%

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ $

3.30 4.00 N/A

$ $

4.00 6.00 N/A

$ $

3.60 4.80 N/A

11.5% 11.5% N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $

15.00 10.00 N/A N/A

$ $

20.00 12.00 N/A N/A

$ 13.00 $ 9.50 N/A N/A

N/A 27.5% N/A N/A

DEVELOPMENT LAND

Low/SF

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Vacancy

$ $

N/A 10.37 8.29

$ $

N/A 15.55 10.37

N/A N/A N/A

N/A 20.0% 25.0%

SUBURBAN OFFICE 23.41 19.50 N/A

$ $

27.87 21.18 N/A

N/A N/A N/A

N/A 20.0% N/A

$ $ $

4.15 5.18 11.15

$ $ $

5.18 6.82 16.72

N/A N/A N/A

9.0% 8.0% 2.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

15.00 15.00 15.00 20.00

$ $ $ $

20.00 20.00 20.00 50.00

N/A N/A N/A N/A

7.0% 8.0% 2.0% 15.0%

High/SF

DEVELOPMENT LAND

Low/M2

N/A $ 180.00 $ 50.00

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park) Retail/Commercial Land Residential

Effective Avg.

$ $

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

High

DOWNTOWN OFFICE

Low

Vacancy

$ $

N/A 5.57 3.25

N/A $7.45 9.00

$ $

N/A 24.00 19.00

High/M2

700.00 250.00 80.00 100.00 350.00 250.00

$ $ $ $ $ $

1,500.00 500.00 150.00 300.00 800.00 750.00

2010 Global Market Report I www.naiglobal.com

Guanajuato, Guanajuato, Mexico

Mexico City, Mexico Mexico City, the capital of Mexico, is located in South-Central Mexico and has over 23 million inhabitants. Mexico City is often seen as the first stop for foreign investors interested in development, industrial, retail and office investments. In 2008, Mexico joined the group of top 12 economies in the world ($1 trillion GDP), maintains an investment grade rating and is the eighth largest world exporter.

The city of Guanajuato has approximately 5 million inhabitants and is located in the area of Mexico known as “El Bajio.” Guanajuato is centrally located in Mexico with five neighboring states: Jalisco to the west, San Luis Potosi and Zacatecas to the south, Queretaro to the east and Michoacan to the north. Guanajuato is at the crossroads of two major industrial corridors: Highway 45 (The Pan American Highway) and Highway 57 (the NAFTA Highway), which links South America, Mexico and North America. Multimodal capabilities are available in several locations. Guanajuato also hosts the only intersection of the Kansas City and Ferromex railroads in Mexico. Major corporations based in Guanajuato include GM, American Axle, Colgate Palmolive, Flex-n Gate, Fiberweb, Avon, Faurecia, Hino Motors, Getrag Ford, Flexi and Hella. Contact NAI Mexico +1 619 690 3029

Completed transactions during 2009 included Hino Motors (Automotive), Samot (Metal Mecanic) and Teco Westinghouse (Power Solutions), all of them build-to-suit projects. Vacancy rates during 2009 decreased from 10.14% to 9.8% as a result of the lease of “Pisa Company” and “TLG” in Castro Del Rio Industrial Park and the delivery of 247,572 SF of build-to-suit projects in Santa Fe Industrial Park. Guanajuato’s office market is small and most space is composed of low rise, garden office type projects that host Mexican local firms and global service providers. Lease rates and land values are steady and not projected to rise during 2010.

Country Data

The retail sector consists of large multi-tenant shopping centers located in middle and low income areas such as Plaza El Suez. Lease rates and land value are expected to remain stable through 2010.

Mexico City is host to major corporate headquarters from a variety of global sectors. National firms with headquarters in Mexico City include Grupo Modelo, Grupo Carso, Telmex, DESC, GICSA and BIMBO. Automotive firms include GM, Ford, Volkswagen, Nissan, Honda and Chrysler. Most multinationals like Coca Cola, Pepsi, Honeywell, Siemens, Motorola, USG, IBM, HP, Samsung, Sony, INTEL, LG, P&G and Wal-Mart maintain headquarters in Mexico City. Contact NAI Mexico +1 619 690 3029

Country Data Area

1,972,550

GDP Growth (%)

-7.34%

GDP 2008 (US$ B)

$866.34

GDP/Capita (USD)

$8,040.24

5.43%

Inflation Rate (%)

5.43%

Unemployment Rate (%)

6.06%

Unemployment Rate (%)

6.06%

Interest Rate (%)

4.5%

Interest Rate (%)

4.5%

Area

1,972,550

GDP Growth (%)

-7.34%

GDP 2008 (US$ B)

$866.34

GDP/Capita (USD)

$8,040.24

Inflation Rate (%)

Guanajuato’s unique central location in Mexico and its position at the crossroads of the nation’s two largest rail lines and highways position it to become a major trade corridor into North America for many years to come.

Population (Millions) 107.75

Low

High

Effective Avg.

Vacancy

DOWNTOWN OFFICE $ $

N/A 12.86 8.76

$ $

N/A 11.23 6.58

N/A 12.0% 12.0%

New Construction (AAA) Class A (Prime)

$ $

N/A 7.48 4.33

$ $

N/A 14.57 8.68

$ $

N/A 11.02 6.50

N/A 4.0% 4.0%

New Construction (AAA) Class A (Prime)

Bulk Warehouse Manufacturing High Tech/R&D

$ $

3.48 4.35 N/A

$ $

4.40 4.70 N/A

$ $

3.94 4.52 N/A

9.8% 9.8% N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $

13.50 15.90 N/A 15.50

$ $

24.25 27.50 N/A 33.37

$ $

18.87 21.70 N/A 24.43

N/A N/A N/A N/A

DEVELOPMENT LAND

Low/M2

RETAIL

$ $ $ $

N/A N/A 25.00 22.00 100.00 150.00

High/M2

$ $ $ $

N/A N/A 37.00 33.00 300.00 500.00

US$ RENT/SF/YR

High

Low

High

Vacancy

DOWNTOWN OFFICE

N/A 9.60 4.40

INDUSTRIAL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Mexico City will continue to be a first stop for foreign investors. Its critical mass, domestic market demand and position as a place for Latin American regional headquarters ensure continued growth and a positive forecast for 2010 and beyond. Mexico City will remain a global destination for both corporate users and investors for many years to come.

Low

$ $

SUBURBAN OFFICE

Bulk Warehouse Manufacturing High Tech/R&D

Office market vacancies were under 10% in 2009 due to high demand from the number of companies seeking office space and limited inventory due to the lack of new buildings on the market. New construction projected for late 2009 has been delayed and only those buildings with over 80% completion are being finalized. Lease rates are running from $24-$40/SM per month. In general, the Mexico City office market remains strong and a constant demand for product promises a robust market for 2010.

RENT/M2/MO

RENT/SF/YR

New Construction (AAA) Class A (Prime) Class B (Secondary)

The retail sector cooled rapidly during 2009 although Amway, Wal-Mart, Costco, Home Depot, Best Buy and other big box retailers experienced some growth, even under the negative economic conditions. However, the rate of expansion for these retailers decreased across the board. Investors are now looking for stand-alone sites, strip centers and anchored retail centers for 2010.

Mexico City At A Glance

Guanajuato At A Glance

New Construction (AAA) Class A (Prime) Class B (Secondary)

Mexico City and Toluca encompass more than 17 million SM of industrial land. At the end of 2009, the largest vacancy among the main industrial submarkets in the Mexico City metro area was registered in Cuautitlan with 20% of the total industrial inventory. Recent developments include Tlalnepantla, Toluca-Lerma and now Huehuetoca. Lease rates and land values have not fallen and are expected to remain unchanged during 2010.

$ $ $

24.00 18.00 8.00

$ 40.00 $ 24.00 $ 15.00

$ 26.76 $ 20.07 $ 8.92

$ 44.59 $ 26.76 $ 16.72

10.0% 20.0% 35.0%

$ $ $

20.00 15.00 10.00

$ 25.00 $ 20.00 $ 16.00

$ 22.30 $ 16.72 $ 11.15

$ 27.87 $ 22.30 $ 17.84

30.0% 35.0% 25.0%

$ $ $

4.00 4.00 5.00

$ $ $

6.00 7.00 7.00

$ $ $

4.46 4.46 5.57

$ $ $

6.69 7.80 7.80

16.0% 15.0% 20.0%

Downtown (High Street Shops) Neighborhood Service Centers Community Power Center (Big Box) Regional Malls Solus Food Stores

$ $ $ $

50.00 26.00 40.00 40.00 N/A

$ $ $ $

13.38 20.07 27.87 39.02 N/A

$ $ $ $

DEVELOPMENT LAND

12.00 18.00 25.00 35.00 N/A

55.74 28.99 44.59 44.59 N/A

15.0% 20.0% 12.0% 20.0% N/A

Low/ M2

High/M2

Low/SF

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

Class B (Secondary) SUBURBAN OFFICE

Class B (Secondary) INDUSTRIAL

RETAIL

1,280.00 408.00 60.00 100.00 215.00 265.00

3,000.00 878.00 243.00 325.00 690.00 560.00

118.91 37.90 5.57 9.29 19.97 24.62

High/SF

$ $ $ $ $ $

278.71 81.57 22.58 30.19 64.10 52.03

2010 Global Market Report I www.naiglobal.com

Matamoros, Tamaulipas, Mexico

Contact NAI Mexico +1 619 690 3029

Mexicali, Baja California, Mexico

Matamoros is an important maquiladora center with over 65,000 workers in approximately 140 plants. Major sectors for industrial export range from heavy steel products to metal mechanics, automotive and electronic products. Besides proximity to Brownsville, Texas, it is located on the major trade corridor serving the Midwest and Eastern US.

Mexicali, a thriving metropolitan area with 900,000 residents, is the capital of Baja California and home to approximately 200 maquiladora operations. Mexicali is an industrial center with a high work ethic, which has been a contributing factor in the relocation of more than 100 new manufacturing companies to Mexicali from 1996 to 2009.

During 2009, industrial lease rates fell 10-20% for Class B and C facilities. Shell rates averaged $0.36/SF/month. During 2010, tenants should experience a “tenants’ market” and receive additional incentives for free rent and time to retrofit space.

Industrial activity was slow during 2009. Crystal automotive assumed Fleetwood’s 100,000 SF facility, Newell Rubbermaid expanded its operation, Global Logistics relocated to a larger building with 62,000 SF and Judco Manufacturing purchased the 40,000 SF. LG Innotek facility. La Moderna from Central Mexico acquired land in Ejido Pueblo for pasta production and Fabrica de Papel San Francisco purchased land for its distribution center.

2009 reflected the same fall in demand and consolidation in Matamoros as the rest of the Mexican industrial markets. Delphi placed three facilities of 700,000 SF on the market at the end of 2009. New projects included Hilti, Inteva, Tyco and Core. More demand will occur in 2010 due to projected expansions from existing operations. Industrial land values remained consistent during 2009 with asking prices ranging from $30-$40/SM. No change is expected for 2010.

Contact NAI Mexico +1 619 690 3029

Matamoros’ office market is primarily composed of small projects hosting local service industries. Only one small office building was constructed during 2009 in the downtown area. The outlook for the office market in 2010 projects rates will remain the same and demand will be generated from local and regional operations. Country Data Area

1,972,550

GDP Growth (%)

-7.34%

GDP 2008 (US$ B)

$866.34

GDP/Capita (USD)

$8,040.24

Inflation Rate (%)

5.43%

Unemployment Rate (%)

6.06%

Interest Rate (%)

4.5%

Retail centers in Matamoros host a blend of domestic brands with a mix of US franchisees and big box operations. The growth in 2008 and 2009 has been limited to the expansion of Mexican retailers (Soriana, Coppel, Home Mart, SMart) with the exception of HEB and Sam’s Club. 2010 lease rates and land prices are expected to remain the same. Matamoros’ unique location on the NAFTA Highway, its border location, strong industrial tradition and ability to ship overnight to much of the US make it a destination for foreign firms to locate new projects in Mexico. The long term outlook is very favorable through 2010 and beyond.

During 2009, several firms consolidated to other markets, including Sony, LG Electronics, Mag Technology, Kwang Sung, Starion, and Kyomex. During 2009, Silicon Border Science Park was selected by Q-Cells, the world’s largest solar cell manufacturer for its $3.5 billion project. Prices for industrial land have remained flat since the purchase of large development tracts by Thompson Electronics and Alen Industries. Industrial lease rates will remain flat and competitive for 2010.

Country Data Area

1,972,550

GDP Growth (%)

-7.34%

GDP 2008 (US$ B)

$866.34

GDP/Capita (USD)

$8,040.24

Inflation Rate (%)

5.43%

Unemployment Rate (%)

6.06%

Interest Rate (%)

4.5%

The office market is small with most office projects no larger than three stories and located in one of three commercial corridors in the city. During 2009, construction began for the three-story “Solarium Building.” Most retail centers are small strip or food and drug anchored neighborhood centers. Lease rates are expected to remain flat during 2010 and Mexicali is expected to remain a destination for national retailers and new US firms entering the market. Mexicali holds a unique position on the Mexican border with overnight drive times to most Western US markets. Its industrial culture, abundant water and natural gas supply will help to maintain it as a destination for foreign operations through 2010 and many years to come.

Population (Millions) 107.75 Population (Millions) 107.75

Mexicali At A Glance

Matamoros At A Glance

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

$ $

8.40 6.00

$ $

18.00 8.40

2.40

6.00

$ $ $

8.40 6.00 2.40

$ $ $

18.00 8.40 6.00

$ $

3.84 4.56

$ $

6.00

Downtown Neighborhood Service Centers Community Power Center Regional Malls

DEVELOPMENT LAND

Low/Acre

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ 12.00 $ 8.40

20.0% 30.0%

4.80

30.0%

$ 12.00 $ 8.40 $ 4.80

10.0% 10.0% 10.0%

4.56 6.00

$ $

4.56 5.76

10.0% N/A

6.60

6.36

N/A

$ 11.40

14.40

$ 12.96

15.0%

$ $

Vacancy

$ 8.40 $ 11.16 $ 9.60

$ $ $

9.60 12.00 10.80

$ 9.00 $ 11.64 $ 10.20

30.0% 20.0% 10.0%

New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A 21.60 10.00

N/A $ 10.80 $ 6.00

N/A 14.0% 10.0%

N/A N/A N/A

New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A N/A N/A

Bulk Warehouse Manufacturing High Tech/R&D

$ $

3.36 4.08 N/A

$ $

4.32 5.52 N/A

$ $

3.84 5.28 N/A

6.0% 8.0% N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $

3.60 6.00 N/A 8.40

$ $

6.00 7.20 N/A 16.00

$ $

4.80 6.60 N/A N/A

3.0% 10.0% N/A 4.0%

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

N/A $ 12.00 $ 3.60

Effective Avg.

INDUSTRIAL

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

High

SUBURBAN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Low

DOWNTOWN OFFICE

$ $ $ $

N/A N/A 100,000.00 75,000.00 95,000.00 140,000

High/Acre

$ $ $ $

N/A N/A 160,000.00 90,000.00 140,000.00 200,000

$ $ $ $

283,400.00 N/A 101,215.00 80,972.00 202,429.00 485,830.00

$ $ $ $

607,287.00 N/A 202,409.00 182,186.00 607,287.00 931,174.00

2010 Global Market Report I www.naiglobal.com

Monterrey, Nuevo Leon, Mexico

Querétaro, Querétaro, Mexico

Monterrey, Nuevo Leon is located in North Central México, 140 miles southwest of Laredo, Texas. It is the third largest metropolitan area in Mexico, with a population of approximately 4.5 million. An industrial city with a 100-year operating history, it is sometimes referred to as the Chicago of Mexico.

Contact NAI Mexico +1 619 690 3029

Monterrey is well positioned as the major industrial market in Northeast Mexico. It is host to many multinational corporations such as BASF, Carplastics, Brachs, Caterpillar, Daewoo, Denso, GE, JCI, Navistar, Mattel, Panasonic, Parker, LG, Whirlpool, Sara Lee, Saturn, Elcoteq LG, Rockwell and many more. Monterrey offers more than 30 industrial parks. Compared with other markets in Mexico, industrial lease rates have only dropped to a small degree, although more concessions are being offered. Vacancy rates are hovering near 11%. Activity in the industrial market was very slow during the first half of 2009; only five new foreign companies commenced operations in that period. However, there are more than 15 companies negotiating new spaces at the end of 2009 as they take advantage of landlord concessions and recently discounted labor rates. The office market experienced slow but positive growth during 2009 with vacancy rates ranging from 5-12% in various submarkets. Although vacancy rates are slowly falling, rental rates have not begun to rise and range from $15-$25/SM. At the end of 2009 there are four projects under construction ranging from 20,000-70,000 SF.

Country Data Area

1,972,550

GDP Growth (%)

-7.34%

GDP 2008 (US$ B)

$866.34

GDP/Capita (USD)

$8,040.24

Inflation Rate (%)

5.43%

Unemployment Rate (%)

6.06%

Interest Rate (%)

4.5%

Retail is positive even with the global slowdown during 2009 as Wal-Mart, Sams, Costco, Sears and other franchisees searched for sites in Monterrey. The future for 2010 through 2012 is bright. Home Depot and Lowes will continue to expand their presence. Monterrey’s growth prospects are excellent. Its long industrial history, proximity to the US and unique technical infrastructure ensure that it will be one of the strongest industrial locations in Mexico during 2010.

Queretaro, with an estimated population of 1.34 million, is one of the smallest but most active and productive states for business in Mexico. Located in Central Mexico in the famous “El Bajio” region, Queretaro occupies a strategic location adjacent to nine neighboring states. Additionally, Queretaro is positioned on a critical trade corridor, the NAFTA Highway (57), linking South America, Mexico and North America. The unique advantage of being located in Central Mexico and within four hours driving distance of 70% of Mexico’s population makes Queretaro a major logistics hub. More than 45 million inhabitants live within a 135-mile radius.

Contact NAI Mexico +1 619 690 3029

Queretaro hosts 19 industrial parks and zones. The automotive sector has four assembly plants, 57 Tier-one suppliers, 100 Tier-two suppliers and more than 30,000 workers. The Aerospace sector is the next emerging market. At the end of 2009, 2.1 million SF was under construction for Grupo Safran and Calamanda Distribution. Construction for 2010 will be primarily for build-to-suits. During 2009, Queretaro promoted large capital investments with Bombardier, Meggitt, Metrocolor and Exco. Industrial lease rates fell 10-15% in existing industrial space. Strong competition among developers to offer creative incentives and flexible lease contracts ensures that 2010 will be a “tenants’ market” through 2011.

Country Data Area

1,972,550

GDP Growth (%)

-7.34%

GDP 2008 (US$ B)

$866.34

GDP/Capita (USD)

$8,040.24

Inflation Rate (%)

5.43%

Unemployment Rate (%)

6.06%

Interest Rate (%)

4.5%

Queretaro’s office sector is composed mainly of low rise, garden, office type projects. Lease rates and land values in 2010 for office facilities are projected to remain stable. Retail growth was steady during 2009. Retail construction in 2010 will continue with the launch of mixed use projects and strip centers. Queretaro’s unique location on the NAFTA Highway, its Central Mexico proximity to distribute to major population centers and free trade zones, make it a destination for foreign firms to locate new projects in Mexico. The long term outlook is extremely favorable through 2010 and beyond.

Population (Millions) 107.75 Population (Millions) 107.75

Querétaro At A Glance

Monterrey At A Glance

(Rent/SF/YR)

RENT/SF/YEAR

Low

High

Effective Avg.

$ $ $

14.91 13.66 9.94

$ $ $

19.89 18.63 14.91

$ 17.83 $ 16.72 $ 14.49

5.0% 7.0% 6.0%

$ $ $

18.63 22.37 14.91

$ $ $

29.83 26.09 21.12

$ 27.87 $ 23.41 $ 16.72

10.0% 11.0% 12.0%

$ $

3.00 4.32 N/A

$ $

3.96 5.04 N/A

$ $

3.20 4.35 N/A

10.0% 9.0% N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $

27.34 19.88 N/A 25.47

$ $

45.98 24.86 N/A 62.45

$ 27.87 $ 21.18 N/A $ 44.59

6.0% 12.0% N/A 4.00%

DEVELOPMENT LAND

Low/SF

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Vacancy

$ 14.93 $ 10.40 $ 4.45

$ $ $

20.81 12.10 9.48

$ 17.87 $ 11.25 $ 6.97

15.0% 20.0% 10.0%

$ 17.18 $ 10.28 $ 6.66

$ $ $

20.39 16.53 10.00

$ 18.78 $ 13.41 $ 8.33

25.0% 10.0% 20.0%

$ $ $

2.98 3.82 7.80

$ $ $

4.10 4.82 12.24

$ 3.54 $ 4.32 $ 10.02

30.0% 10.0% 5.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

13.32 14.76 25.68 24.12

$ $ $ $

22.32 24.48 34.56 44.64

$ $ $ $

DEVELOPMENT LAND

Low/M2

New Construction (AAA) Class A (Prime) Class B (Secondary) New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Effective Avg.

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

High

DOWNTOWN OFFICE

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Low

Vacancy

$ $ $ $ $

N/A 4.18 3.72 1.39 5.57 13.94

High/SF

$ $ $ $ $

N/A 18.58 10.00 9.29 46.45 90.00

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $

17.82 19.62 30.12 34.38

N/A N/A N/A N/A

High/M2

N/A N/A 32.00 25.00 100.00 150.00

$ $ $ $

N/A N/A 48.00 35.00 300.00 570.00

2010 Global Market Report I www.naiglobal.com

Reynosa, Mexico

Saltillo, Coahuila, Mexico Reynosa is a dynamic city on the northeast border of Mexico, nine miles south of McAllen, Texas, and located along the well established NAFTA Highway. Its third international crossing, Anzalduas Bridge, will generate even more growth in 2010 based on construction of a multi-modal service center in McAllen, which will provide even lower distribution costs.

Saltillo, located in Northeast Mexico, is the capital city of Coahuila. Saltillo ranks second in the country in international exports. It is located 180 miles south of the US border from Laredo, Texas, and has a population of approximately 700,000 inhabitants. Saltillo is recognized as a key center for servicing the global automotive industry. There are five main sectors that make up the Saltillo economy; automotive, metal-mechanic, electrical-electronic, plastic and aerospace. Corporations such as General Motors, Daimler Chrysler and Freightliner support Saltillo’s automobile industry while global suppliers such as ITT, Magna, Quimmco, Johnson Controls, and John Deere are also located here.

Reynosa is one of the top five maquiladora markets in Mexico with 13 industrial parks accommodating more than 350 manufacturing operations. During the global consolidation of 2008-2009, Reynosa proved to be a preferred relocation destination for many operations, including Motorola, LG Electronics, Panasonic and Invensys.

Contact NAI Mexico +1 619 690 3029

In 2009, industrial lease rates fell 20-30%. During 2010, tenants can look forward to a “tenants’ market” and will receive additional incentives for free rent and time to retrofit space. 2009 resulted in the same fall in demand and consolidation of product as the rest of the Mexican industrial markets. Escalade and others offered facilities for lease or sale. More demand will occur in 2010 due to projected expansions from existing operations.

Country Data

Reynosa’s office market is composed of small projects hosting local service industries. Most are located near major arteries or close to the border and industrial housing communities. No changes in lease rates are expected for 2010. Retail availability in Reynosa is limited and lease rates remained stable during 2009. Vacancies remained low due to strong demand from Mexican retail tenants. US retailers will continue to evolve in Reynosa in 2010. New franchises such as Holiday Inn, Fiesta Inn, City Express, Best Western, Little Cesar’s, Sirloin Stockade, Chili’s, Subway, Applebee’s, Baskin Robbins, Popeye’s and 7-11 have recently opened locations.

Area

1,972,550

GDP Growth (%)

-7.34%

GDP 2008 (US$ B)

$866.34

GDP/Capita (USD)

$8,040.24

Inflation Rate (%)

5.43%

Unemployment Rate (%) Interest Rate (%)

Contact NAI Mexico +1 619 690 3029

Country Data Area

11,972,550

GDP Growth (%)

-7.34%

GDP 2008 (US$ B)

$866.34

GDP/Capita (USD)

$8,040.24

Inflation Rate (%)

5.43%

6.06%

Unemployment Rate (%)

6.06%

4.5%

Interest Rate (%)

4.5%

Reynosa’s unique location on the NAFTA Highway, its border location, strong industrial tradition and its ability to ship overnight to much of the US make it a desirable destination for foreign firms to locate new projects in Mexico. The long term outlook is very favorable through 2010 and beyond.

Population (Millions) 107.75

2009 reflected the same fall in demand and consolidation in Saltillo as the rest of the Mexican industrial markets. Recent projects include Whirlpool, Aventec, GSC and Trinity. More demand will occur in 2010 due to projected expansions from existing operations. During 2009, industrial lease rates fell 10-20% for Class B and C facilities. During 2010, tenants will experience a “tenants’ market” and receive additional incentives for free rent and time to retrofit space. Industrial land values remained consistent during 2009 with no change expected for 2010. Two new industrial parks are under development: Amistad Airport and Santa Monica. During 2009, there were no changes in rates or prices in the office sector. Saltillo only offers two high-rise buildings and smaller two- or three-story office buildings. In the retail sector during 2009, two new shopping malls were launched: Sendero Saltillo and Liverpoll. The trend for small strip centers continued during 2009 with more projected for 2010. Saltillo’s unique location on the trade corridor to Texas, its strong industrial tradition and its ability to ship overnight to much of the US, make it a destination for foreign firms to locate new projects in Mexico. The long term outlook is positive for 2010 and beyond.

Population (Millions) 107.75

Reynosa At A Glance

Saltillo At A Glance (Rent/SF/YR)

Low

High

Effective Avg.

RENT/SF/YR

Vacancy

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

8.40 6.00 2.40

$ $ $

18.00 8.40 6.00

$ 12.00 $ 8.00 $ 4.00

7.0% 1.0% 3.0%

$ $ $

8.40 6.00 2.40

$ $ $

18.00 8.40 6.00

$ 17.50 $ 8.00 $ 4.50

7.0% 1.0% 3.0%

$ 3.48 $3.96 N/A

$ $

3.96 4.56 N/A

$ $

3.72 4.32 N/A

19.0% 13.0% N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

5.50 5.00 5.50 5.50

$ $ $ $

5.33 4.85 5.33 5.33

N/A 2.0% N/A 6.0%

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ 100,000.00 $ 100,000.00 $ 75,000.00 $ 75,000.00 $ 95,000.00 $ 140,000.00

New Construction (AAA) Class A (Prime) Class B (Secondary)

Effective Avg.

Vacancy

$ $ $

11.14 7.80 6.68

$ $ $

16.72 10.03 7.80

$ 13.37 $ 8.91 $ 6.68

3.0% 4.0% 3.0%

$ $ $

13.37 7.80 6.74

$ $ $

16.72 8.91 7.80

$ 13.37 $ 8.91 $ 6.74

2.0% 3.0% 3.0%

$ $ $

3.60 4.50 5.40

$ $ $

4.44 5.04 6.24

$ $ $

3.84 4.68 6.00

6.0% 6.0% N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $

10.03 7.80 N/A 11.14

$ $

15.60 10.03 N/A 28.42

$ 11.14 $ 8.91 N/A $ 15.00

10.0% 12.0% N/A 11.0%

DEVELOPMENT LAND

Low/SF

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

High

DOWNTOWN OFFICE $ $ $

New Construction (AAA) Class A (Prime) Class B (Secondary)

Low

RETAIL 4.00 3.00 3.00 4.00

High/Acre

$ $ $ $ $ $

145,000.00 130,000.00 110,000.00 85,000.00 140,000.00 200,000.00

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

High/SF

N/A N/A 2.78

$ $ $

1.67 13.93 11.14

N/A N/A 3.71

$ 3.71 $ 27.87 $ 18.58

2010 Global Market Report I www.naiglobal.com

San Luis Potosi (SLP), Mexico

Contact NAI Mexico +1 619 690 3029

Country Data

Tijuana, Baja California, Mexico

San Luis Potosi with a population of 1 million is located in Central Mexico in the famous “El Bajio” region. San Luis Potosi occupies a strategic location adjacent to 10 neighboring states. Additionally, SLP is positioned on a critical trade corridor along the NAFTA Highway (57), linking South America, Mexico and North America.

Tijuana is located on the northwest tip of Mexico in the state of Baja California. Tijuana is primarily an industrial city with a limited availability of high-end office space but boasts an emerging retail sector. Tijuana has played host to the largest concentration of foreign manufacturing firms in Mexico for over 40 years.

The San Luis Potosi market is centrally located within a fivehour drive of 70% of Mexico’s population, making it a major logistics hub. San Luis Potosi now hosts Mexico’s two most important inland ports and free trade zones: Borderless and Interpuerto.

At the outset of 2009, four new industrial developments were under construction, lease rates were at an all-time high and investors had flocked to the Tijuana market. However, the global economic crisis slowed investment by manufacturers and as demand fell so did lease rates. Tijuana’s vacancy rates rose to over 10%, a number unmatched in any year prior. As a result, lease rates fell by 20-30% and developer incentives such as free rent were noted for the first time. At the outset of 2010, the market has changed from a landlords’ market to a tenants’ market and this trend will continue into 2011.

No new construction for speculative industrial projects was initiated during 2009. Construction for new projects for 2010 will be for build-to-suits only. San Luis Potosi now hosts large capital investments with General Motors. During 2009, SLP also welcomed Becton Dickinson (medical), Cosma International (automotive), Perennials Fabrics Outdoors (textile) and Aztek Technologies (steel) to the market. During 2009, industrial lease rates fell approximately 10-15% for all classes of industrial space. Strong competition among developers to offer creative incentives and flexible lease contracts ensures that San Luis Potosi will be a “tenants’ market” through 2011. San Luis Potosi’s office sector is composed mainly of low rise, garden, office type projects. Minor speculative office construction is projected for 2010; therefore lease rates and land values for office facilities are projected to remain stable. During 2009, Soriana & MAZDA anchored the new “Lomas de Chapultepec.” Office Depot, Office Max, BANREGIO, Chili’s and Starbucks were the most active firms. Retail construction in 2010 will continue with the launch of three new mixed-use developments.

Contact NAI Mexico +1 619 690 3029

Country Data Area

1,972,550

GDP Growth (%)

-7.34%

GDP 2008 (US$ B)

$866.34

GDP/Capita (USD)

$8,040.24

Inflation Rate (%)

5.43%

6.06%

Unemployment Rate (%)

6.06%

4.5%

Interest Rate (%)

4.5%

Area

11,972,550

GDP Growth (%)

-7.34%

GDP 2008 (US$ B)

$866.34

GDP/Capita (USD)

$8,040.24

Inflation Rate (%)

5.43%

Unemployment Rate (%) Interest Rate (%)

San Luis Potosi’s unique location on the NAFTA Highway, its proximity in Central Mexico to distribute to major population centers and several free trade zones make it a destination for foreign firms to locate new projects in Mexico. The longterm outlook is extremely favorable through 2010 and beyond.

Early signs of expansion were noted by the end of 2009, and it is anticipated that another wave of projects will be scheduled for Tijuana throughout 2010. During 2009, Fisher & Pakel from New Zealand was the first major operator to take advantage of the profitable situation in the market by securing a 10-year, 200,000 SF lease. During 2009, one new retail project was completed on Blvd. 2000 and one additional development is projected in the El Florido area for 2010. US retailers such as Auto Zone, Carl’s Jr. and Wal-Mart continue to expand their business in Tijuana. The Zona Rio and Agua Caliente corridors offer a limited number of Class A office projects. Only one new Class A office project completed construction in October 2009. Tijuana’s critical mass of industrial firms, proximity to western US markets and 40-year history with foreign manufacturers project a bright future for the real estate market. Although 2010 is expected to be a rebound year, increased activity is projected by the second half and anticipated through 2012 and beyond.

Population (Millions) 107.75

Tijuana At A Glance

San Luis Potosi At A Glance

RENT/SF/YR

RENT/SF/YEAR

Low

High

Effective Average

$ $

N/A 4.56 4.20

$ $

N/A 7.44 5.16

$ $

N/A 7.80 4.32

$ $

N/A 10.20 8.76

$ $

N/A 6.20 4.32

N/A 20.0% 18.0%

$ $

N/A 8.76 6.96

N/A 5.0% 5.0%

$ $

3.45 4.32

$ $

N/A

3.84 5.28

$ $

3.54 4.68

18.0% 13.0%

N/A

23.88 25.80 N/A 33.60

$ 18.33 $ 20.16 N/A $ 24.72

10.0% 3.0% 7.0% 5.0%

$ 12.84 $ 14.40 N/A $ 15.72

DEVELOPMENT LAND Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ $ $

25.00 16.50 10.00

40.0% 15.0% 20.0%

N/A N/A 8.00

N/A N/A 25.0%

3.96 3.96 N/A

33.0% 15.0% N/A

N/A 14.39 N/A 33.10

N/A 4.0% N/A 6.0%

$ $ $

20.00 13.00 8.00

$ 30.00 $ 20.00 $ 13.00

New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A N/A 5.50

N/A N/A $ 11.00

Bulk Warehouse Manufacturing High Tech/R&D

3.00 3.00 N/A

$ $

N/A 12.19 N/A 16.00

N/A $ 16.60 N/A $ 50.16

$ $

4.80 4.80 N/A

RETAIL

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls

Vacancy

INDUSTRIAL

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Effective Avg.

SUBURBAN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

High

DOWNTOWN OFFICE

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Low

Vacancy

Low/M2

$ $ $

High/M2

$ 300.00

$ 1,000.00

N/A 20.00

N/A 32.00

$ 216.60 $ 315.88 $ 361.01

$ 658.84 $ 1,263.53 $ 496.38

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $

DEVELOPMENT LAND

Low/SF

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $

$ $

High/SF

43.00 N/A 60.00 50.00 30.00 80.00

$ $ $ $ $

1,500.00 N/A 100.00 130.00 1,500.00 450.00

2010 Global Market Report I www.naiglobal.com

Torreon, Coahulia, Mexico

Caracas, Venezuela

Torreon is situated in a unique region of Mexico known as La Laguna. This region is located in north central Mexico, between the limits of Coahuila and Durango States. This area called “La Laguna” has a population of approximately 1.3 million people and is host to 20 of the Fortune 500 companies from various sectors. This region is sustained in part by the apparel, automotive and educational sectors.

Venezuela offers excellent opportunities for investment due to extraordinary oil revenues. Although oil prices went from US $147 to US $78 (Oct. 20, 2009), oil revenues are still an important commodity. The level of Venezuela cash reserves at the beginning of the economic crisis allowed that macroeconomic imbalances did not translate into a severe contraction in the market. The oil sector and oil related industries are the key drivers of the Venezuela economy.

Automotive firms include John Deere, Takata, Delphi, JCI, Linar, Alcoa, Sumitomo, Cooper and Metzler. Metal fabricators include Lincoln Electric, Caterpillar and Superior Essex, while the major textile firms are Parras, RKI, Wrangler, Libra, and Lajat Denim. The seven regional industrial parks in the area are Amistad, Ferropuerto Laguna, Jumbo Plaza, Las Americas, Lagunero, Matamoros Industrial Park, San Pedro and Oriente Industrial Park. Contact NAI Mexico (Baja) +619 690 3029

Country Data Area

1,972,550

GDP Growth (%)

-7.34%

GDP 2008 (US$ B)

$866.34

GDP/Capita (USD)

$8,040.24

Inflation Rate (%)

5.43%

Unemployment Rate (%) Interest Rate (%)

2009 reflected the same fall in demand and consolidation in Torreon as the rest of the Mexican industrial markets. More demand is anticipated to occur in 2010 due to projected expansions from existing operations. During 2009, industrial lease rates fell 10-15% for Class B and C facilities. During 2010, tenants will experience a “tenants’ market” and should receive additional incentives for free rent and time to retrofit space. Industrial land values remained consistent during 2009 with no change expected for 2010. No new Industrial parks are under development. During 2009, there were no changes in rates or prices in the office sector. Torreon offers few high-rise buildings with most offices in the market housed in smaller, two or three-story projects. In the retail sector, only five small strip centers were launched during 2009. This trend will continue in 2010 with only a few additional projects expected to be delivered to the market. SORIANA, one of the biggest supermarket retailers in Mexico, is based out of Torreon.

The office market in Caracas, mostly dependent on foreign companies, has become thin. Sale and rental prices increased due to very low inventory, while construction of new projects started but only a few have entered the market in 2009; more projects will be finished in 2010, which will not be enough to catch up with demand for Class AAA offices. Contact NAI Ferca +58 212 286 8124

Country Data Area

912,050

GDP Growth (%)

-2.0%

GDP 2008 (US$ B)

$353.47

GDP/Capita (USD)

$12,354.30

Inflation Rate (%)

29.45%

6.06%

Unemployment Rate (%)

8.4%

4.5%

Interest Rate (%)

18.66%

Torreon’s unique location on the trade corridor to Texas, its strong industrial tradition and its ability to ship overnight to much of the US make it a destination for foreign firms to locate new projects in Mexico. The Torreon market looks to be very encouraging in 2010 and beyond.

Population (Millions) 107.75

Low

High

Effective Avg.

Vacancy

DOWNTOWN OFFICE 10.25 10.25 5.40

$ $ $

21.57 18.84 12.96

$ 16.20 $ 13.37 $ 8.64

10.0% 9.0% 9.0%

16.72 N/A N/A

22.29 N/A N/A

$ 16.72 N/A N/A

11.0% N/A N/A

$ $

1.60 2.80 N/A

$ $

2.81 4.00 N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $

5.40 9.72 N/A 29.28

$ $

DEVELOPMENT LAND

Low/SF

SUBURBAN OFFICE

US$ RENT/SF/YR

Low

High

Low

High

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary)

Bs. Bs. Bs.

240.00 163.00 137.00

Bs. Bs. Bs.

350.00 220.00 190.00

$ 10.37 $ 7.04 $ 7.04

$ 15.12 $ 9.51 $ 9.51

1.8% 0.6% 2.3%

N/A N/A N/A

SUBURBAN OFFICE

INDUSTRIAL

New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A N/A N/A

INDUSTRIAL $ $

1.93 3.50 N/A

8.0% 4.0% N/A

$ 8.63 $ 12.96 N/A $ 32.44

5.0% 8.0% N/A 10.0%

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

RENT/M2/MO

DOWNTOWN OFFICE $ $ $

Bulk Warehouse Manufacturing High Tech/R&D

Venezuela has the biggest oil reserves in the world, a commodity that will continue to be key to the world economy. Due to its foreign exchange reserves, it is estimated that Venezuela will be able to cope with any temporary variation of oil prices.

San Jose At A Glance Conversion: 2.15 Bs. = 1 US$

RENT/SF/YR

New Construction (AAA) Class A (Prime) Class B (Secondary)

Investment in real estate among transnational companies has improved as many companies use this type of investment to hedge their Bolívar cash balances against inflation. Due to the exchange control system in force since 2006, repatriation of dividends at an official exchange rate of US $1 = Bs. 2.15 is very difficult leaving many companies to invest their Bolívar cash surplus in offices/warehouses.

Population (Millions) 28.611

Torreon At A Glance

New Construction (AAA) Class A (Prime) Class B (Secondary)

The industrial real estate market has also seen low inventory levels in 2009 with rental and sale prices above 2008 levels. It is expected that this trend will continue in 2010 due to an increase in oil revenue and plans from the Chavez administration to reduce unemployment through development of the manufacturing, construction and agricultural sectors. Retail has also seen low inventory and increased prices. Vacancy rates at Class AAA shopping centers are extremely low. The retail sector has benefited from the government policy of increasing consumption of the lower income population, which increased the demand of retail outlets.

Bulk Warehouse Manufacturing High Tech/R&D

Bs. Bs.

21.00 Bs. 9.80 Bs. N/A

44.10 23.09 N/A

$ $

0.91 0.42 N/A

$ $

1.91 1.00 N/A

N/A N/A N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores

Bs.

70.00 Bs. N/A N/A 55.00 Bs. N/A

250.00 N/A N/A 82.00 N/A

3.02 N/A 2.38 2.38 N/A

$ 10.80 N/A $ 3.54 $ 3.54 N/A

N/A N/A N/A N/A N/A

DEVELOPMENT LAND

Low/M2

RETAIL

$ $ $ $

N/A N/A 1.75 3.20 16.00 7.00

12.97 16.16 N/A $37.84

High/SF

$ $ $ $

N/A N/A 4.36 4.84 28.00 30.00

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Bs.

High/M2

N/A Bs. N/A N/A N/A N/A 210.00 Bs.

$ $

Low/SF

6,000.00 N/A N/A N/A N/A N/A N/A N/A N/A N/A 2,800.00 $ 97.67

High/SF

2,790.70 N/A N/A N/A N/A 1,302.33

2010 Global Market Report I www.naiglobal.com

United States

SECTION CONTENTS Birmingham, AL Huntsville, AL Mobile, AL Phoenix, AZ Jonesboro, AR Little Rock, AR Inland Empire, CA Los Angeles, CA Marin County, CA Monterey County, CA Oakland, CA Orange Couny, CA Sacramento, CA San Diego, CA San Francisco County, CA San Mateo County, CA Santa Clara County, CA Santa Cruz County, CA Sonoma County, CA Ventura County, CA Colorado Springs, CO Denver, CO Delaware & Cecil County, Maryland Washington D.C. Fort Lauderdale, FL Ft. Myers, FL Jacksonville, FL Martin & St. Lucie Counties, FL Miami, FL Orlando, FL Palm Beach, FL Tampa Bay, FL Atlanta, GA Honolulu, HI

Boise, ID Southeast Idaho (Idaho Falls/Pocatello) Chicago, IL Springfield, IL Fort Wayne, IN Indianapolis, IN Cedar Rapids, Iowa City, IA Davenport, Bettendorf IA and Rock Island, Moline, IL Des Moines, IA Sioux City IA Wichita, KS Lexington, KY Louisville, KY Batten Rouge, LA Monroe, LA New Orleans, LA Greater Portland, ME Baltimore, MD Suburban Maryland, MD Boston, MA Western (Greater Springfield), MA Detroit, MI Grand Rapids, MI Lansing, MI Minneapolis/St. Pau, MN Kansas City, MO St. Louis, MO Bozeman, MT Missoula, MT Lincoln, NE Omaha, NE Las Vegas, NV Reno, NV

Manchester, NH Portsmouth, NH Atlantic County, NJ Middlesex/Somerset Counties, NJ Northern, NJ Ocean County, NJ Princeton, NJ Southern, NJ Albuquerque, NM Las Cruces, NM Albany, NY Long Island, NY New York, NY Asheville, NC Charlotte, NC Greensboro, NC Raleigh, NC Fargo, ND Akron, OH Canton, OH Cincinnati, OH Cleveland, OH Columbus, OH Dayton, OH Oklahoma City, OK Tulsa, OK Portland, OR Allentown, PA Berks County, PA Bucks County, PA Harrisburg/York/Lebanaon, PA Lancaster, PA Philadelphia, PA Pittsburgh, PA

Schuylkill County, PA Wilkes-Barre, PA Columbia, SC Greenville/Spartanburg/ Anderson Counties, SC Sioux Falls, SD Chattanooga, TN Clarksville, TN Knoxville, TN Memphis, TN Nashville, TN Austin, TX Beaumont, TX Corpus Christi, TX Dallas, TX Houston, TX El Paso, TX Fort Worth, TX Rio Grande Valley, TX San Antonio, TX Texarkana, TX Salt Lake City, UT Washington County, UT Burlington, VT Northern Virginia, VA Seattle/Puget Sound, WA Spokane, WA Tri-Cities WA Madison, WI Milwaukee, WI Northeastern (Fox Valley/Green Bay), WI Casper, WY Jackson Hole, WY

Birmingham, Alabama

Huntsville, Decatur County, Alabama

Birmingham is Alabama’s largest metropolitan area and one of the largest urban regions in the South. This area has a diverse workforce of over 900,000 and a thriving economic base, including a mixture of corporate headquarters, biotechrelated industries, operations centers, distribution facilities and automotive manufacturing and related suppliers.

The Huntsville/Madison County commercial real estate market continues to remain stable throughout the first three quarters of 2009. Although the local economy remains in recession, the jobs Huntsville will gain from Base Realignment and Closure (BRAC) consolidation will lift the city out of the nationwide recession before the rest of the country. The Huntsville/Madison County community once again led Alabama in both population growth and the new and expanding job markets.

Most sectors of Birmingham’s commercial market showed continued signs of contraction in 2009 with rental rates and occupancies declining. Negative absorption for the multi-tenant markets also continued, though there was some absorption in freestanding industrial buildings and the service-center sector. There has been little new product brought to the market due to the credit freeze, although a few office developments were under construction based on previous commitments. Contact NAI Chase Commercial Realty, Inc. +1 888 539 1686

Metropolitan Area Economic Overview 2009 Population

1,105,506

2014 Estimated Population

1,191,674

Employment Population

569,945

Household Average Income

$65,470

The Birmingham office market overall, saw a direct negative absorption of 62,897 SF during Q2 and an occupancy rate of 91.6%, a slight decrease from 92% at the end of Q1. The Birmingham office market continues to see negative absorption each quarter, however the gap is narrowing. The CBD showed positive activity in Class A space adding 10,000 SF to overall occupancy in Q3. The midtown market continues to demonstrate strength with an overall occupancy of 95%. Retail has also experienced a slide in occupancy due to the economy. Economic conditions have had the most effect on the retail sector. Retail development has also slowed dramatically. Homewood, Mountain Brook and Vestavia maintain the highest occupancy for retail with a year-to-date level of 91%. However, it too has experienced negative absorption of 7,000 SF for the year. The Birmingham industrial market experienced a negative absorption of 126,262 SF in Q2. The overall occupancy rate was 81.4%, a decrease from 83.2% in Q1. Despite a negative absorption of 18,906 SF for the quarter, the midtown submarket continues to demonstrate strength with the highest occupancy rate in the market of 95.8% and an occupancy rate of 97.1% in Class A space.

Contact NAI Chase Commercial RE Services, Inc. +1 888 539 1686

Huntsville’s industrial market is currently seeing vacancy in excess of 9%. The market is reacting by providing additional concessions and reduced rent, but vacancy is expected to inch higher during the first half of 2010. Metropolitan Area Economic Overview 200 Population

402,764

2014 Estimated Population

441,760

Employment Population

193,101

Household Average Income

$64,222

Median Household Income $48,949

Median Household Income $55,903

Total Population Median Age

37.95

Birmingham At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

N/A 17.50 13.00

N/A $ 23.50 $ 17.50

N/A $ 21.07 $1 6.48

N/A 9.1% 13.0%

$ $ $

23.00 18.00 13.50

$ 28.00 $ 23.00 $1 8.00

$ 27.00 $ 21.26 $ 15.75

N/A 8.0% 12.5%

$ $ $

2.80 2.00 9.00

$4.54 $4.00 $12.00

$ $ $

3.58 3.20 9.25

19.0% 16.0% 12.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

9.00 8.00 9.00 18.00

$ 13.79 $ 11.50 $ 11.00 $1 9.00

9.3% 12.0% 12.0% 13.0%

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $

SUBURBAN OFFICE

Low

High

N/A $ 18.00 $ 14.00

$ $

N/A 25.00 17.00

N/A $ 20.00 $ 15.00

N/A 8.0% 12.0%

$ 19.00 $ 18.00 $ 13.00

$ $ $

25.00 22.00 17.00

N/A N/A $ 15.00

25.0% 4.0% 12.0%

$ $ $

2.00 3.00 8.00

$ $ $

3.50 5.00 10.00

$ $ $

3.00 3.75 9.25

9.0% 15.0% 12.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

N/A $ 8.00 $ 8.00 $ 20.00

$ $ $

N/A 18.00 10.00 60.00

N/A $ 15.00 $ 7.00 $ 30.00

N/A 8.0% 10.0% 8.0%

DEVELOPMENT LAND

Low

Office in CBD (per buildable SF) Land in Office Parks (per acre) Land in Industrial Parks (per acre) Office/Industrial Land - Non-park (per acre) Retail/Commercial Land (per acre) Residential (per acre)

$ $ $ $ $ $

(Rent/SF/YR)

Effective Avg.

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Huntsville remains the shining star of the state of Alabama with national recognition and rankings. The Huntsville/Madison County community has received unprecedented rankings and recognition for job growth, technology and quality of life. In 2009, it received its most lofty ranking yet when it was named by Kiplinger as the number one city in the US.

DOWNTOWN OFFICE $ $

New Construction (AAA) Class A (Prime) Class B (Secondary)

The retail market has experienced anemic performance due to the economic downturn. More vacancies are increasing in big block space and niche shopping centers. The Huntsville retail market ended 2008 with a 12% vacancy rate. Vacancy rates have continued to rise in 2009. Construction starts came to a near halt during 2009. To combat low absorption and the decline in retail activity, landlords have begun lowering rental rates and offering more concessions.

Huntsville, Decatur County At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

The Huntsville/Decatur office market has remained stable in 2009. Absorption of office space has slowed, but continued defense spending has allowed several companies to build new buildings in 2009. The office market should remain stable with slower growth for the next two years sustained by the planned growth due the BRAC realignment. Rental rates in the office market have remained consistent at $17.75-$25/SF for Class A space and $13 -$17/SF for Class B. New construction completed in 2009 has kept vacancy rates higher at an 11% average. Office vacancy rates should begin to decrease by year’s end. Much of the vacant space should be absorbed by the end of 2010. Overall, the 2010 forecast for office remains stable.

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

$ $

305,000.00 195,000.00 $50,000.00 40,000.00 320,000.00 N/A

$ $ $ $

15.00 19.00 17.00 35.00

High/Acre

$ $ $ $ $

850,000.00 310,000.00 125,000.00 240,000.00 850,000.00 N/A

High

40,000.00 50,000.00 25,000.00 50,000.00 225,000.00 15,000.00

$ $ $ $ $ $

75,000.00 120,000.00 50,000.00 150,000.00 750,000.00 125,000.00

2010 Global Market Report I www.naiglobal.com

Mobile, Alabama

Contact NAI Heggeman Realty Company, Inc +1 251 479 8606

Metropolitan Area Economic Overview 2009 Population

401,171

2014 Estimated Population

393,638

Employment Population

199,986

Household Average Income

$48,705

Median Household Income $43,051 Total Population Median Age

Phoenix, Arizona While somewhat resistant to the recessionary pressures in 2008, the Mobile area definitely experienced a major slowdown in 2009. Despite the current downward economic trends in the area, Mobile is noted as a leader for ship building,aerospace and medical research within the state of Alabama. Mobile remains a global player with its deepwater port currently ranked in the top 10 with regard to bulk and container handling.

The Phoenix commercial real estate market is experiencing its most difficult challenges since the early 1990s. Impacted by the continuing increase in unemployment, the demand for space has been stymied by uncertainty and corporate contraction. After ranking second in population growth in the US for 25 years, Arizona has fallen to 49th and is experiencing negative job growth due to the loss of thousands of construction related jobs.

The office sector shows a slight decrease in absorption from 2008, with very little Class A space available. Rents remained stable with an overall 10% vacancy. Class B space is experiencing a 20% vacancy with ample sublease opportunities. There is no new construction at the present time.

The office vacancy rate is at 25% overall. Due to the overbuilding of new office space that is delivered but not yet occupied, vacancy of office space in the downtown and some suburban submarkets has reached a staggering 60% vacancy rate. Asking rates are just over $26/SF for Class A office space. Effective rates on completed new leases are at $23/SF. The market is experiencing negative net absorption that will be compounded with the delivery of over 2 million SF currently under construction.

The industrial market has realized a substantial increase in vacancy during 2009. Vacancy levels are approaching approximately 25%. Mobile is fortunate to have the nearly completed Thyssen-Krupp Steel Mill in its northern sector scheduled to open in mid 2010 with a capital investment of roughly $4.5 billion. Mobile Container Terminal located on the deepwater port, continues to expand despite the economic climate. General cargo and bulk activity remain below average at the port due to the trends in the global market. The retail sector continues to soften and is very reflective of the trend nationwide. There is virtually no new construction under way in either Mobile or Baldwin County. Retail rents are flat with many national tenants renegotiating early renewals at lower rates. The lending environment continues to challenge developers for permanent financing to close deals. Virtually no “big box” projects are under way at the present time. Surprisingly, the multifamily market in Mobile/Baldwin remains steady with approximately 3,000 units under construction. The multifamily market is one of the few real estate products that remain favorable in the capital markets with permanent financing available. Overall expectations for 2010 remain unclear. In the event that Northrop Grumman/Airbus is awarded a major contract to manufacture aircraft for the US Air Force in Mobile, every sector of the market would feel a direct surge in activity with major growth returning.

Mobile At A Glance High

Effective Avg.

Vacancy

$ $ $

25.00 20.00 15.00

$ 22.15 $ 18.50 $ 12.50

N/A 10.0% 20.0%

2014 Estimated Population

5,149,033

Employment Population

1,852,413

Household Average Income

$71,428

Median Household Income $58,328

Today’s market offers opportunities with upside potential for tenants and investors. More opportunities are expected as foreclosure looms for properties not measuring up to their purchase pro formas. Prosperity will return to the Phoenix market once positive growth is realized through increased consumer confidence, job growth and access to credit markets.

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

$ $ $

28.00 20.00 14.00

$ 37.00 $ 32.00 $ 28.00

$ 34.00 $ 26.00 $ 21.00

60.0% 16.0% 17.0%

$ 20.00 $ 15.00 $ 9.00

$ $ $

22.00 18.00 13.00

$ 21.00 $ 16.50 $ 11.00

N/A 10.0% 20.0%

$ $ $

20.00 18.00 15.00

$ 37.00 $ 36.00 $ 34.00

$ 28.00 $ 26.00 $ 22.00

60.0% 28.0% 23.0%

$ 3.00 $ 2.75 $ 15.00

$ $ $

4.25 4.00 20.00

$ 3.65 $ 3.37 $ 17.50

25.0% 15.0% 10.0%

$ $ $

2.50 3.00 4.50

$ 15.00 $ 16.00 $ 17.00

$ $ $

6.00 7.00 8.50

18.0% 13.0% 19.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 8.00 $ 10.00 $ 16.00 $ 18.00

$ $ $ $

10.00 27.50 20.00 25.00

$ 9.00 $ 18.75 $ 18.00 $ 21.50

10.0% 10.0% 10.0% 10.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

10.00 11.00 16.00 25.00

$ $ $ $

19.00 17.00 22.00 50.00

15.0% 13.0% 12.0% 10.0%

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

High/Acre

DEVELOPMENT LAND

Low/Acre

High/Acre

$ $ $ $ $ $

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

SUBURBAN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

4,456,884

Retail landlords have been the most aggressive with rental rates and concessions for both new and existing tenants. In spite of those efforts, overall vacancy has risen from 10.3% at the beginning of 2009 to the current level of 11%. New construction has exacerbated the problem with 2.8 million SF added to the base over the past four quarters. Another 1 million SF is currently under construction and due to be delivered over the next three quarters. As the economy continues to struggle and new product is completed and delivered, vacancy rates can be expected to climb another 3-5%.

DOWNTOWN OFFICE $ 20.00 $ 17.00 $ 10.00

New Construction (AAA) Class A (Prime) Class B (Secondary)

2009 Population

Industrial vacancy stands at nearly 17% with negative net absorption of just over 6 million SF in 2009. Achieved rental rates have declined 15-18% year over year. With the delivery of another 2.2 million SF over the next three quarters, vacancy will undoubtedly increase and rental rates will continue to erode.

Phoenix At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Metropolitan Area Economic Overview

Total Population Median Age

(Rent/SF/YR)

Contact NAI Horizon +1 602 955 4000

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

200,000.00 120,000.00 35,000.00 40,000.00 261,360.00 20,000.00

1,200,000.00 217,800.00 87,120.00 261,360.00 871,200.00 50,000.00

800,000.00 108,000.00 100,000.00 15,000.00 10,000.00 2,000.00

32.00 28.00 38.00 80.00

7,500,000.00 500,000.00 450,000.00 2,000,000.00 8,000,000.00 1,500,000.00

2010 Global Market Report I www.naiglobal.com

Jonesboro, Arkansas

Little Rock, Arkansas

Jonesboro experienced growth in many sectors during 2009, including education, medical and industrial. Arkansas State University enjoyed record enrollment for the second year in a row. Key industries in Jonesboro continue to be retail, industrial, office and education.

Little Rock's growth sectors are medical, government and institutional. Suburban Little Rock is experiencing a much slower absorption in retail growth and multifamily development. The SMA has been positively impacted with natural gas exploration (Fayetteville Shale) and wind energy related manufacturing. The bedroom communities are also developing their identities as potential corporate office locations.

The industrial sector boomed in 2009 between the announcement of Nordex USAâ&#x20AC;&#x2122;s plan to construct a $100 million wind-energy plant in the Jonesboro Industrial Park and Alberto Culver, also located in the Jonesboro Industrial Park, expanding to allow for even more jobs and production outside of Jonesboro. Startek, an in-bound call center that fields calls for AT&T customers, had a huge hiring upswing at the beginning of 2009, expanding to well over 600 employees. Contact NAI Halsey +1 870 972 9191

Metropolitan Area Economic Overview 2009 Population

121,875

2014 Estimated Population

135,082

Employment Population Household Average Income

The retail sector contracted in 2009 as shown by the closure of Steinmart, Steve & Barryâ&#x20AC;&#x2122;s and Circuit City, but made progress to regain ground with the arrivals of Olive Garden, Murphy Oil Convenience Store, Sport Clips for Men, Office Depot, a third Burger King location, and a Best Buy. The multifamily market showed a slight upturn with the construction of The Grove student housing, fully furnished apartments located just off campus from Arkansas State University. The largest announcement of 2009 was that NEA Baptist Memorial Hospital was approved for construction of a $200 million, 250 bed hospital on the Northeastern side of Jonesboro. This has called for area growth and many residential zones being quickly re-zoned to commercial, which is expected to continue well into 2010. Jonesboro saw several significant transactions in 2009 including the sale of a new office building valued at $1.5 million to Merrill Lynch, the new location of E.C. Barton's Surplus Warehouse and the purchase of property for Ritter's corporate campus, an internet, TV, and phone provider headquartered here.

Contact NAI Dan Robinson & Associates +1 501 224 7500

Metropolitan Area Economic Overview 2009 Population

690,000

2014 Estimated Population

746,933

53,430

Employment Population

423,829

$52,949

Household Average Income

$60,500

Median Household Income $39,936

Median Household Income $49,636

Total Population Median Age

Jonesboro At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

N/A $ 14.00 $ 10.00

$ $

N/A 22.00 16.00

N/A $ 12.00 $ 15.00

N/A N/A N/A

$ 18.00 $ 14.00 $ 8.00

$ $ $

22.00 20.00 15.00

$ 18.00 $ 18.00 $ 12.00

10.0% 10.0% 10.0%

6.00 N/A N/A

3.50 N/A N/A

10.0% N/A N/A

The community of Conway recently announced that it will house corporate offices for two major companies, Hewlett Packard and Southwestern Energy Company. Searcy announced the facility expansion of Schulze & Burch Biscuit Co., a specialty baking company out of Chicago, IL.

Effective Avg.

Vacancy

24.00 19.50 14.00

N/A N/A N/A

N/A 10.0% 13.0%

$ $ $

24.00 20.00 16.50

N/A N/A N/A

5.0% 12.0% 7.0%

2.50 1.50 6.00

$ $ $

5.00 6.90 9.50

N/A N/A N/A

5.0% 8.0% 5.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

N/A $ 20.00 $ 14.00 $ 25.00

$ $ $

N/A 35.00 30.00 40.00

N/A N/A N/A N/A

N/A 40.0% 60.0% N/A

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $

(Rent/SF/YR)

Low

High

N/A $ 14.00 N/A $ 25.00

N/A N/A N/A 10.0%

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ 20.00 $ 17.00 $ 10.00

$ $ $

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ 22.00 $ 16.00 $ 14.00 $ $ $

INDUSTRIAL 3.00 N/A N/A

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

Downtown Neighborhood Service Centers Community Power Center Regional Malls

N/A $ 10.00 N/A $ 18.00

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Time, distance and available infrastructure in close proximity to major employment centers have caused developers to redirect their site searchs along the I-430 corridor. Arkansas's favorable tourism industry entices the entrepreneurial spirit and restaurants and hotel facilities continue to emerge but at a slower pace in the CBD and suburban markets. There is serious competition for market share.

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

The Little Rock investment market is primarily an owner/user market. Fast food facilities tend to be the segment most prone to investment activity. However, this activity is moving into the bedroom communities. Multifamily activity has slowed. Projects are on the drawing board seeking sources of funding.

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

There is an abundance of first generation retail space in place or approved in high income areas or along high traffic corridors. City-wide limited infill activity will continue. The most prominent infill location is just north of I-630 on University Ave.

Little Rock At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Office market activity is occurring in the bedroom communities of Benton, Maumelle and particularly Conway. Internal growth is absorbing the second generation office space in the CBD and West Little Rock. With Verizon's purchase of Alltel's corporate campus (Midtown) the anticipation is this campus will become available. Production facilities for natural gas and wind energy are being completed. Food grade production facilities are also coming online.

$ $ $ $

N/A 120,000.00 5,000.00 5,000.00 N/A 8,000.00

$ $

N/A 20.00 N/A 32.00

High/Acre

$ $ $ $

N/A 330,000.00 20,000.00 15,000.00 N/A 20,000.00

435,600.00 174,240.00 32,670.00 1.50 108,900.00 N/A

1,306,800.00 522,760.00 108,900.00 261,360.00 1,306,800.00 N/A

2010 Global Market Report I www.naiglobal.com

Inland Empire (Riverside/ San Bernardino), California

Los Angeles, California

The Inland Empire has suffered during the recession mainly due to a strong development surge over the last 10 years. Residential foreclosures have subsided as median home prices fell. Lease rates for all types of commercial property declined, which increased absorption in a double-digit vacancy factor environment throughout the commercial spectrum.

The entertainment industry, a primary component of the market in Los Angeles, has weathered the current crisis quite well. The October 25th year-to-date box office receipts increased 7.3% from 2008. Offsetting the gains in entertainment are losses in international trade. Total shipments through September at the Port of Long Beach decreased 24.6 % from the previous year. In general, economic conditions in Los Angeles County remain weak. However, there is a bright spot as discount retailers, such as Big Lots, Dollar Tree, 99 Cents Only, and Wal-Mart, continue to expand.

The good news is that the Inland Empire has returned to its historical position as the lower cost alternative to the Los Angeles basin. Affordable housing, low cost commercial space, and a strong employee base are likely to encourage economic growth in the Inland Empire.

Contact NAI Capital (Riverside)

+1 951 346 0800 NAI Capital (Ontario/San Bernardino)

+1 909 945 2339 NAI Capital (Temecula Valley)

+1 951 491 7590 Metropolitan Area Economic Overview 2009 Population

4,189,781

2014 Estimated Population

4,458,827

Employment Population

1,321,430

Household Average Income

$74,095

The office market experienced a significant contraction during the recession. Vacancy rates rose to unprecedented levels over the last two years causing highly aggressive base rental rates and concession packages to attract the Inland Empire office user. With the exception of malls, retail vacancy rates in the Inland Empire exceed 10%. Although high, these rates are likely to remain constant or decrease slightly over the next 12 months. Enticed by low lease rates, discount retailers, who have experienced an increase in sales during the recession, are inquiring about additional space. The industrial market remains weak due to negative absorption and approximately three years of available inventory proliferating throughout the Inland market in all size spectrums. The optimistic aspect is that the gap between buyers and sellers and landlords and tenants has finally narrowed, which is stimulating transactions. Distressed property owners are moving product lateral with the late 1980s market. With prices at a 15-year low, opportunity has been created for the investor looking to purchase at or below replacement cost. Private Equity Funds are taking to this market due to the tremendous upside potential of where they can buy now as opposed to where the product topped out during the height of the market.

Median Household Income $55,131 Total Population Median Age

Low

High

2014 Estimated Population

12,341,926

Employment Population

5,950,383

Household Average Income

$82,944

We have experienced a significant decline in lease rates and sales prices with some categories at lower levels than we have seen for almost 10 years. However, with the current increase in activity, some improvement in credit lending and the existing low prices in the market, we expect to see a significant increase in lease and sale transactions in the next 12 months.

Vacancy

Low

High

N/A $ 18.00 $ 9.81

$ $

N/A 52.54 44.35

N/A $ 34.19 $ 21.74

N/A 13.7% 12.2%

$ 24.75 $ 14.71 $ 6.00

$ $ $

64.37 77.40 54.32

$ 41.01 $ 32.67 $ 25.20

69.8% 14.80% 12.7%

$ $ $

0.59 2.40 4.68

$ $ $

29.88 17.36 12.60

$ $ $

6.72 6.81 7.00

9.2% 6.8% 11.6%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 7.08 $ 10.80 $ 3.24 $ 18.00

$ $ $ $

45.24 41.68 37.00 25.00

$ $ $ $

32.61 25.31 23.85 24.46

4.6% 6.8% 7.6% 3.3%

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $

$ 10,937,500.00 $ 3,849,206.00 $ 3,120,000.00 N/A $ 3,975,000.00 N/A

(Rent/SF/YR)

Effective Avg.

Vacancy

DOWNTOWN OFFICE N/A N/A N/A

New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A N/A N/A

SUBURBAN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

DOWNTOWN OFFICE $ 29.40 $ 13.97 $ 5.64

$ $ $

41.40 49.76 39.51

$ 37.41 $ 26.80 $ 20.50

80.2% 32.8% 19.5%

$ $ $

15.47 25.80 13.44

$ $ $

4.57 4.02 6.86

15.0% 16.7% 7.4%

$ $ $

N/A 45.00 47.24 42.00

N/A $ 19.60 $ 26.25 $ 30.77

N/A 10.5% 11.4% 2.8%

INDUSTRIAL

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL 2.04 1.80 4.20

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

Downtown Neighborhood Service Centers Sub Regional Centers Regional Malls

N/A $ 3.48 $ 4.80 $ 15.00

DEVELOPMENT LAND

Low

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential (per acre)

12,721,592

Higher vacancy rates, lower lease rates and tight credit have almost eliminated new construction. Very little construction took place in Los Angeles County during 2009 and is not likely to pick up in the near future. However, several new construction sites are slated for 2011.

Los Angeles At A Glance Effective Avg.

DOWNTOWN OFFICE

Bulk Warehouse Manufacturing High Tech/R&D

2009 Population

Total Population Median Age

Inland Empire (Riverside/ San Bernardino) At A Glance

New Construction (AAA) Class A (Prime) Class B (Secondary)

Metropolitan Area Economic Overview

Tight credit markets and an unwillingness to lend have negatively impacted the number of sales transactions. The number and dollar value of sales transactions declined significantly compared with 2008 figures. The velocity of sales transactions is expected to increase as owners shift to SBA financing.

Median Household Income $57,887

(Rent/SF/YR)

Contact NAI Capital (Encino) +1 818 905 2400 NAI Capital (West Los Angeles) +1 310 440 8500 NAI Capital (South Bay) +1 310 532 9080 NAI Capital (Commerce) +1 323 201 3600 NAI Capital (Pasadena) +1 626 564 4800 NAI Capital (Santa Clarita) +1 661 705 3550

Concerns regarding future economic growth have kept demand for commercial real estate in Los Angeles County subdued. Companies throughout Los Angeles are looking for ways to reduce lease expenses. For some, this means vacating their existing space. This has led to higher vacancy rates for office, retail, and industrial space. Other companies are asking for rent reductions. This, combined with higher vacancy rates, led to lower lease rates in all three markets.

$ $ $

N/A 881,928.00 153,932.00 N/A 403,846.00 N/A

High

$ $ $

N/A 1,033,057.00 653,400.00 N/A 1,520,270.00 N/A

4,375,000.00 1,066,666.00 1,034,031.00 N/A 1,306,801.00 N/A

2010 Global Market Report I www.naiglobal.com

Marin County, California

Contact NAI Global +1 609 945 4000

Monterey, California

Marin County, bordered by the San Francisco Bay, the Pacific Ocean and the vineyards of Sonoma Valley, is considered one of the most affluent counties in the nation. Located just north of San Francisco’s Golden Gate Bridge, Marin, home to Mt. Tamalpais, has an excellent climate, lavish open space and spectacular views.

Monterey County’s major economic generators are agriculture and tourism. The Monterey Peninsula, home to Pebble Beach, Cannery Row and the Monterey Bay Aquarium, is heavily dependent on tourism. The Salinas Valley is one of the state’s most significant agricultural regions producing a variety of lettuces, strawberries, grapes and other products.

Marin County office vacancy peaked above 16.8% in 2003, but has since increased to 21.1% by Q3 2009. Vacancy increased 570 basis points since Q3 2008. The average asking rate decreased a substantial $2.52/SF in the past year to $30.72/SF full service per year. Since 2004, nearly 5 million SF of available office space has been absorbed from the county’s marketplace.

Vacancy numbers rose across the board from Q3 2008 to Q3 2009; Class A office vacancy countywide increased from 9.3% in Q3 2008 to approximately 13.1% in Q3 2009, while Class B office vacancy rose from 5.1% to 7.8% during the same period. Average rents for Class A office remained steady, rising from $27.96/SF to $28.20/SF while Class B office saw a decrease from $23.40/SF to $22.80/SF. Industrial vacancy rose from 4.4% in Q3 2008 to 8.2% in Q3 2009 and posted an average rent of $5.64/SF.

A rare occurrence, the City of San Rafael vacancy, at 27.3% in Q3 2009 compared to 17.7% a year ago, is higher compared to its northern counterpart, Novato. This vacancy increase is due to the completion of the second phase of the San Rafael Corporate Center bringing 160,000 SF of new construction to the market.

Contact NAI Global +1 609 945 4000

In Southern Marin, the overall average asking rate in Q3 2009 decreased $0.52/SF to $3.19/SF full service compared to a year ago. This part of the county holds the highest average asking rates that shelters many of the county’s successful financial firms.

Metropolitan Area Economic Overview 2009 Population

246,713

2014 Estimated Population

243,128

Employment Population

132,909

Household Average Income

$121,815

Commercial sale activity experienced a stalemate during 2009. The largest transaction in the county closed at the beginning of the year as Inland Western Larkspur LLC sold its 172,443 SF shopping center to JS Rosenfield & Co. Other sale activity includes MEPT, a pension fund selling 55, 75 & 88 Rowland Way in Novato, totaling 168,072 SF, to Barker Pacific Group and Rockwood Capital. Investment activity remained quiet for 2009. We anticipate continued softening in values as capitalization rates rise to accommodate perceived risks. The Marin market is relatively stable due to the high barriers of entry for new development, the active small tenant population and relatively lower use of debt.

Metropolitan Area Economic Overview 2009 Population

402,398

2014 Estimated Population

4389,312

Employment Population

184,867

Household Average Income

$76,236

Median Household Income $90,312

Median Household Income $60,077

Total Population Median Age

Marin County At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

N/A N/A N/A

$ $ $

42.00 23.40 23.40

$ 42.00 $ 60.00 $ 42.00

$ 42.00 $ 30.96 $ 30.24

100.0% 27.9% 16.6%

$ $ $

12.00 12.00 15.00

$ 15.60 $ 15.60 $ 20.10

$ 13.80 $ 13.80 $ 20.10

N/A N/A N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $

N/A 15.00 36.00 N/A

N/A $ 45.00 $ 45.00 N/A

N/A $ 21.29 $ 39.09 N/A

N/A 8.1% 2.7% N/A

DEVELOPMENT LAND

Low

SUBURBAN OFFICE

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

N/A N/A N/A

New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A N/A N/A

N/A 28.20 22.80

N/A 13.1% 7.8%

N/A 5.64 N/A

N/A 8.2% N/A

N/A N/A N/A N/A

SUBURBAN OFFICE

INDUSTRIAL

New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A $ 12.00 $ 6.72

$ $

N/A 46.32 27.00

$ $

INDUSTRIAL

RETAIL

Office in CBD (per buildable acre) Land in Office Parks (per acre) Land in Industrial Parks (per acre) Office/Industrial Land - Non-park (per acre) Retail/Commercial Land (per acre) Residential (per acre)

32.9

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

Bulk Warehouse Manufacturing High Tech/R&D

Most new development will continue to be focused on the former Fort Ord and Salinas Valley. Additional development on the Monterey Peninsula will be limited by water availability and local politics.

Monterey At A Glance Low

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

Water use remains a driving force behind the current state of future growth as the Monterey Peninsula looks for an alternative water source other than the Carmel River. Currently the PUC is considering three solutions for a desalination plant in the area: the proposed Cal-Am desalinization plant in Moss Landing, another proposed Cal-Am desalinization plant in Marina, and the Regional Water Project, also located in Marina. In the Salinas Valley, efforts to combat saltwater intrusion have proceeded well. The Monterey County Water Resources Agency is in the process of completing a project that includes modifications to the Nacimiento Dam spillway and the installation of a rubber dam and diversion facility on the Salinas River near Marina.

Bulk Warehouse Manufacturing High Tech/R&D

N/A 3.00 N/A

N/A 17.76 N/A

RETAIL

$ $ $ $ $

N/A 1,306,800.00 871,200.00 871,200.00 1,524,600.00 2,395,800.00

High

$ $ $ $ $

N/A 1,742,400.00 1,306,800.00 1,306,800.00 1,960,200.00 2,831,400.00

N/A N/A N/A N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

DEVELOPMENT LAND

Low

$ $ $ $ $

N/A N/A N/A N/A High

15.00 261,360.00 174,240.00 261,360.00 435,600.00 N/A

$ 40.00 $ 609,840.00 $ 609,840.00 $ 1,524,600.00 $ 1,742,400.00 N/A

2010 Global Market Report I www.naiglobal.com

Oakland, California

Orange County, California

The East Bay office market has risen to a 17.7% vacancy, a 3.2% increase since Q3 2008. Vacancy had steadily remained around 14% since Q3 2005 until this year when vacancy climbed each successive quarter to its current level. The average asking rate decreased $2.28 in the past year to $25.92/SF per year for full-service properties.

The Orange County office, retail and industrial markets have begun to recover from the last two years of economic slow down. The Orange County market was particularly hard hit during the recession due to the downfall of the national sub-prime lenders headquartered in Orange County, the construction of 4 million SF of Class A office projects and unemployment rising from 3.5% to 9.5%.

The “core” East Bay office market accounts for a total building base of 21 million SF. Vacancy is at 14.3% and the average asking rate is $27.12/SF per year for full-service properties. R&D vacancy continues to hover above 20%, climbing from 20.6% in Q3 2008 to 23.1% in Q3 2009. The average asking rate has dropped from $13.28/SF in Q3 2008 to $11.22/SF NNN. Year-to-date 2009, the R&D market has recorded over 3 million SF of gross absorption, an improvement over 2008, which totaled less than 3.5 million SF. Contact NAI Global +1 609 945 4000

Metropolitan Area Economic Overview 2009 Population 2014 Estimated Population Employment Population Household Average Income

4,249,644

4,362,644

2,274,988

Manufacturing vacancy closed Q3 2009 at 7.6%, up from 5.2% in Q3 2008. The average asking rate fell from $6.83 to $6.00/SF per year NNN during the same time span. Year-to-date 2009, the manufacturing market has amassed over 4.7 million SF in gross absorption, which is already greater than 2008’s total gross absorption of 4.6 million SF. The retail shopping centers market ended mid-year 2009 with vacancy climbing and asking rates steadily dropping. Vacancy was 7.2% on gross leasable area of 25 million SF with the average asking rate $24.83/SF NNN. Investment activity has been steady through Q3 2009. HRPT properties secured the largest sale of 2009 with the purchase of TMG/JER’s Bayside Business Park in Fremont with the four-building portfolio measuring 392,488 SF of R&D space. Many large construction projects have been put on hold due to the poor economic forecast. Earlier this year, Ellis Partners completed their 110,000 SF office/retail building in Jack London Square; however, the building is currently 100% vacant.

Metropolitan Area Economic Overview 2009 Population

2,985,498

2014 Estimated Population

2,956,048

Employment Population

1,413,475

Household Average Income

$98,346

$100,489

Median Household Income $77,440 Total Population Median Age

Contact NAI Capital +1 949 854 6600

The good news is that the worst is likely over in Orange County. Many existing companies are beginning to lock in long term leases at rates that are the lowest in 10 years. Conditions may deteriorate further but not to the extent witnessed over the last 24 months. Although leasing activity has been driven primarily by existing companies renewing their leases early, the Orange County market has been one of the most active in the US, according to real estate information provided by CoStar. We are beginning to see a migration from low rise to Class A high rise space as tenants take advantage of lower lease rates. Orange County retail markets have fared well. Vacancy rates have crept above 5% while lease rates declined only 1% from last year. These trends may continue as consumers continue to cut spending in favor of savings. However, a weak dollar combined with economic growth in Asia, is likely to boost tourism in Orange County. Increased tourism will help to offset weak domestic retail spending. The Orange County industrial market experienced a contraction during the recession. Vacancy rates rose above 10% in two of the markets tracked. On average, lease rates declined 4.1% from Q3 2008 levels. Due to these conditions, construction activity came to a halt. While this is certainly a negative, it is the first step for recovery in the market. At the moment, overall capacity is capped at current levels. As economic conditions improve, low lease rates are likely to entice new entrants into the market. With capacity capped, vacancy rates will decline. Lease rates will increase as the market eventually tightens.

Median Household Income $75,638 40 Total Population Median Age

Oakland At A Glance (Rent/SF/YR)

Orange County At A Glance Low

High

Effective Avg.

Vacancy

DOWNTOWN OFFICE N/A 12.00 10.08

N/A $ 37.20 $ 34.32

N/A $ 29.90 $ 25.01

N/A 14.9% 22.1%

$ $

N/A 13.20 9.00

N/A $ 30.00 $ 31.20

N/A $ 28.76 $ 19.37

N/A 14.1% 24.4%

$ $ $

1.80 2.40 3.60

$ 7.20 $ 12.00 $ 42.00

$ 3.88 $ 4.50 $ 11.42

6.1% 6.1% 23.1%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $

N/A 6.00 6.00 N/A

N/A $ 48.00 $ 48.00 N/A

N/A $ 24.83 $ 24.83 N/A

N/A 4.4% 4.4% N/A

DEVELOPMENT LAND

Low/Acre

High/Acre

N/A N/A N/A N/A N/A N/A

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

High

Effective Avg.

Vacancy

N/A N/A N/A

New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A N/A N/A

$ 23.15 $ 9.00 $ 8.52

$ $ $

45.40 60.00 48.40

$ $ $

37.48 28.94 24.39

11.7% 21.2% 17.5%

$ $ $

3.00 2.40 3.00

$ $ $

22.80 21.00 22.80

$ $ $

7.92 7.33 7.63

8.6% 11.0% 10.1%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

N/A $ 10.20 $ 12.00 $ 18.61

$ $ $

N/A 60.00 72.00 51.00

$ $ $

N/A 24.93 25.15 26.11

N/A 6.0% 5.0% 3.6%

DEVELOPMENT LAND

Low/Acre

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Low

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

(Rent/SF/YR)

DOWNTOWN OFFICE $ $

New Construction (AAA) Class A (Prime) Class B (Secondary)

36.5

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

Office in CBD Land in Office Parks) Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $

N/A 1,392,857.00 1,286,434.00 N/A 1,200,000.00 N/A

High/Acre

$ $ $

N/A 2,333,333.00 2,000,000.00 N/A 3,076,923.00 N/A

2010 Global Market Report I www.naiglobal.com

Sacramento, California

San Diego, California

Located in the north-central region of California, the Sacramento Valley has benefited from the migration of Bay Area companies seeking high quality facilities, affordable rental rates and lower employment costs. Additionally, the Sacramento Valley market is accessible to major thoroughfares (I-80, US-50, I5 and Highway 99). The Port of Sacramento is an inland port that handles mainly agricultural commodities.

Contact NAI Global +1 609 945 4000

Metropolitan Area Economic Overview 2009 Population

2,138,182

2014 Estimated Population

Sacramento Valley office vacancy closed Q3 2009 at 17.2%, more than a 300 basis point increase from a year ago. Total availability grew 2.8 million SF during this time to 13.7 million SF. A substantial amount of new construction has played a key role in the vacancy/availability increase. The average asking rate was $23.76/SF full service, a sizable decrease of $3.36/SF, or 12%, from a year ago. The market continues to remain favorable for tenants as landlords offer rental rate discounts plus other concessions such as free rent and higher TI allowance dollars. Lease terms also remain shorter, typically ranging between one and two years. The R&D/manufacturing/warehouse market ended Q3 2009 with a vacancy of 10.4%. Total availability in the industrial market was 14.5 million SF, composed predominantly of direct space accounting for 92% of the total. Sublease space increased nearly 700,000 SF in Q3 2009 alone, to more than 1.15 million SF. This surge was mainly attributed to Optisolarâ&#x20AC;&#x2122;s massive industrial facility hitting the market. The average industrial asking rate was $4.56/SF NNN, down $0.84, or 15% from a year ago. Office construction continued to trickle on to the market during Q3 as projects that were funded over a year or two ago are just now being completed. The development pipeline, however, is quickly tightening as todayâ&#x20AC;&#x2122;s developers wait on the sidelines until market conditions become favorable again.

The San Diego County commercial real estate market has softened significantly during the past year, but with a glimmer of positive indications towards Q4 2010. Overall, rental rates, occupancy rates and new construction have trended downward, as has net absorption in retail and industrial properties. But positive net absorption of almost 300,000 SF of office space in Q3 provided some welcome positive news in an otherwise very difficult year. At the end of Q3 2009, office vacancy rates were 15.3%, retail vacancy rates 5.1% and industrial vacancy was 10.9%. Both retail and industrial properties experienced substantial net negative absorption, approximately 1.5 million SF and 3.75 million SF, respectively, resulting in reduced asking rental rates across all product types. Contact NAI San Diego +1 619 497 2255

Metropolitan Area Economic Overview 2009 Population

3,040,388

2,255,358

2014 Estimated Population

3,202,143

Employment Population

944,031

Employment Population

1,460,337

Household Average Income

$75,478

Household Average Income

$81,825

Median Household Income $61,395

Median Household Income $60,331

Total Population Median Age

Sacramento At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

$ 33.00 $ 28.20 $ 15.00

$ $ $

37.80 39.60 42.36

$ 37.56 $ 34.08 $ 24.72

61.4% 9.6% 10.7%

$ 23.40 $ 16.68 $ 9.60

$ $ $

32.40 37.80 36.72

$ 27.36 $ 25.20 $ 22.20

49.1% 25.3% 19.0%

Low

High

N/A $ 27.00 $ 21.00

$ $

$ 30.00 $ 24.00 $ 18.00 $ $ $

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ 4,356,000.00 N/A $ 436,500.00 $ 436,500.00 $ 871,200.00 $ 100,000.00

$13,000,000.00 N/A $ 1,000,000.00 $ 1,300,000.00 $ 2,000,000.00 $ 4,000,000.00

(Rent/SF/YR)

Effective Avg.

Vacancy

N/A

4.56

10.4%

34.20 37.44 37.56 36.00

$ $ $ $

20.40 18.36 24.48 27.00

2.8% 12.9% 7.1% 26.8%

New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A 36.00 30.00

N/A $ 31.50 $ 25.50

N/A 18.00% 13.20%

$ $ $

33.00 30.00 30.00

$ 31.50 $ 27.00 $ 24.00

N/A 21.00% 11.00%

4.68 4.80 9.00

$ $ $

12.00 18.00 14.40

$ $ $

8.34 9.24 9.00

9.40% 10.90% 16.20%

21.18 12.00 20.00 30.00

$ $ $ $

60.00 36.00 28.00 44.47

$ $ $ $

33.33 23.00 28.07 38.50

6.60% 7.10% 5.80% 1.80%

SUBURBAN OFFICE

INDUSTRIAL

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL N/A

Industrial & Warehouse

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 7.20 $ 6.60 $ 15.48 $ 21.00

DEVELOPMENT LAND

Low

Sales activity for 2009 has been especially slow due to the combined forces of the aforementioned credit tightening and buyer reluctance. Continued downward pressure from prices is forecast for 2010 as concessions and capitalization rates rise, rents decline, CMBS loans mature and refinancing becomes problematic.

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Among the largest office lease signings this year is the law firm Procopio, Cory, Hargreaves & Savitch downtown for 102,000 SF, eBioscience for 49,000 SF in North City and the Department of Homeland Security for 45,000 SF. Industrial leases include 200,000 SF by MOR Furniture and 129,000 SF by FedEx Ground, both in Otay Mesa near the Mexico Border. The largest sale was the 175,000 SF office building purchased by Kaiser Permanente for approximately $52 million, just under $300/SF. Excluding small buildings (under 15,000 SF), six office buildings totaling $61 million sold in the first half of 2009 for an average of $140/SF, down from an average price of $230/SF in 2008.

San Diego At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Investment sales and owner user sales have continued to be slow compared with sales from two to four years ago, as the credit environment has remained challenging. Loan to value ratios have decreased to 50-60% of appraised values, increasing equity requirements substantially, with the exception of SBA financing. Owner users are waiting on the sidelines for prices to drop further, leading to fewer SBA financed transactions.

$ $ $ $

N/A 217,800.00 130,680.00 87,120.00 174,240.00 N/A

$ $ $ $

High

$ $ $ $

N/A 435,600.00 348,480.00 217,800.00 522,720.00 N/A

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

2010 Global Market Report I www.naiglobal.com

San Francisco County, California

Contact NAI Global +1 609 945 4000

Metropolitan Area Economic Overview 2009 Population

4,249,644

2014 Estimated Population

4,362,644

Employment Population

2,274,988

Household Average Income

$100,489

Median Household Income $77,440 Total Population Median Age

San Mateo County, California

The San Francisco commercial market remained plagued by rising vacancy, declining rents and occupancy loss with the September 2009 preliminary unemployment rate reaching 10.4%. The market-wide vacancy rate rose to 15.3% at the end of 3rd quarter 2009. The San Francisco office market continued to experience deterioration, though at a continuing lesser pace, despite signs of increased leasing activity as major companies looked to lock in long-term deals and take advantage of attractive rents with generous concessions currently offered by Landlords. The market-wide vacancy rate rose to 15.3% at the end of 3rd quarter 2009. The overall market continued to show occupancy loss ending Q3 at 247,870 SF of negative net absorption. The year-to-date total amounted to nearly 1.7 million square feet of negative absorption, already exceeding 2008’s annual total of negative 1.3 million square feet. The overall annual market rental rates dropped $3.75 to $33.01 per square foot full service. The amount of sublease space remained flat during the 3rd quarter at about 2.7 million square feet, or 3.2% of the total building inventory, showing early signs of some companies now shedding less excess space onto the sublease market and other companies leasing up the bargain sublease opportunities. San Francisco’s industrial/warehouse market contains 19.3 million sf of base and includes users in both distribution and manufacturing industries. The overall market-wide vacancy rate rose to 5.1% as it lost occupancy at negative 110,500 square feet of net activity. Year-to-date net absorption has already tallied a negative 413,180 square feet, nearly equivalent to its highest amount of annual occupancy loss seen in 2001. Market-wide industrial asking rates dropped lower to $0.76 per square foot industrial gross. The market recovery still remains to be seen. The availability rate is expected to continue to go up as demand remains slow. San Francisco’s first quarter 2009 retail vacancy rate was the lowest in the country at 2 percent, remaining unchanged from year end 2008, and far below the national average of 7.2 percent. Average asking rates dropped 4.6 percent to $38.14 per square foot. Of the top metropolitan areas throughout the country, San Francisco’s low vacancy rate is reflective of our individual market demand in our supplyconstrained urban environment.

San Francisco At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

Metropolitan Area Economic Overview 2009 Population

709,558

2014 Estimated Population

715,897

Employment Population

374,088

Household Average Income

$116,511

R&D vacancy continues to increase, closing Q3 2009 at 16.11%, an increase of 239 basis points from 2008. The average asking rate closed Q3 2009 at $27.96/SF NNN per year, down $2.88 from 2008. The County has recorded over 36,000 SF of negative net activity year-to-date in 2009. Manufacturing vacancy closed Q3 2009 at 4.57% with an average asking rate of $10.68/SF NNN. San Mateo County’s warehouse vacancy pushed into double-digit territory from 5.3% in Q3 2008 to 11.0% in Q3 2009. The average asking rate closed Q3 2009 at $9.24/SF NNN. In the past year, the warehouse market has absorbed 2 million SF of inventory. Future retail developments include a redevelopment and new construction at 1450 Howard Avenue in Burlingame with a new 44,000 SF Safeway store with an additional 13,000 SF of retail space.

Median Household Income $89,763 Total Population Median Age

40.8

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

DOWNTOWN OFFICE N/A $ 19.00 $ 18.00

$ $

N/A 70.00 40.00

N/A $ 36.42 $2 8.72

N/A 14.4% 13.8%

N/A N/A N/A

9.12 N/A N/A

5.1% N/A N/A

$ 76.33 $ 45.06 N/A $ 71.37

6.7% 3.6% N/A 1.5%

SUBURBAN OFFICE

N/A N/A N/A

$ $

N/A 11.40 6.00

N/A $ 162.00 $ 66.00

N/A $ 35.04 $ 25.20

N/A 18.7% 24.8%

$ $ $

4.56 4.56 9.00

$ 18.00 $ 18.00 $ 45.00

$ 9.48 $ 9.24 $ 27.96

13.5% 11.0% 16.1%

$ $

N/A 18.00 15.00 N/A

N/A $ 54.00 $ 45.00 N/A

N/A $ 33.66 $ 27.49 N/A

N/A 3.8% 5.1% N/A

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE N/A N/A N/A

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Contact NAI Global +1 609 945 4000

San Mateo office vacancy peaked above 18% in 2009, climbing 680 basis points from 2008. The average asking rate decreased a dramatic $10.32 in the past year to $31.92/SF per year for full service properties. Since 2007, nearly 5.7 million SF of office space has been absorbed from San Mateo County's available marketplace. The city of South San Francisco’s vacancy rate remained high at 25.7% in Q3 2009 compared to 26.4% a year ago and 13.9% in 2007. Belmont/San Carlos also remains among the highest in San Mateo County at 24.9%.

San Mateo County At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

San Mateo County is home to the San Francisco International Airport and some of the world’s leading technology companies. World-class universities, world-class cultural venues, a diverse labor pool and abundant intellectual resources of working capital make this region one of the best locations to conduct business in the United States.

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL $

5.40 N/A N/A

16.20 N/A N/A

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 28.50 $ 28.20 N/A $ 24.00

$ 750.00 $ 65.00 N/A $ 150.00

DEVELOPMENT LAND

Low

High

DEVELOPMENT LAND

Low

Office in CBD (per buildableSF) Land in Office Parks (per acre) Land in Industrial Parks (per acre) Office/Industrial Land - Non-park (per acre) Retail/Commercial Land (per acre) Residential (per acre)

N/A N/A N/A $ 1,700,000.00 $ 1,800,000.00 $ 2,000,000.00

N/A N/A N/A $ 6,000,000.00 $ 10,000,000.00 $ 13,000,000.00

$ $ $ $ $ $

Downtown Neighborhood Service Centers Community Power Center Regional Malls

High

111.00 1,500,000.00 1,100,000.00 1,110,000.00 4,200,000.00 775,000.00

$ $ $ $ $ $

870.00 2,300,000.00 2,645,000.00 2,900,000.00 5,500,000.00 9,032,000.00

2010 Global Market Report I www.naiglobal.com

Santa Clara County (Silicon Valley), California

Santa Cruz County, California

Santa Clara County has one of the highest median family incomes and boasts some of the highest rated educational systems nationwide. Many consider this county one of the best places in the country to live and work. This area had been a main target for new office/R&D development in recent years, but due to weak demand stemming from economic decline and rising unemployment, developers have halted most new projects altogether or until the economy recovers.

Contact NAI Global +1 609 945 4000

Silicon Valley office vacancy hit 19.1% in Q3 2009 compared to 13.6% a year ago, while availability was 14.2 million SF, compared to 9.8 million SF in 2008. Both are record high levels. The average asking rate slid $2.04 the past year to $32.76/SF per year for full service properties. R&D vacancy also grew to 19.1% in Q3 2009, a hefty increase of 5.7 million SF from 15.6% a year ago. The average asking rate was $12.96/SF NNN, down $2.52 from Q3 2008. The velocity in these sectors softened and decelerated as Q2 and Q3 consecutively fared much better than the horrendous Q1 2009.

Santa Cruz County, an area rich in natural beauty, covers 439 square miles, making it the second smallest county by area in California. With its six state parks, attractive beaches and famous Santa Cruz beach boardwalk, the county remains one of the West Coastâ&#x20AC;&#x2122;s most famous seaside playgrounds. The economy is still largely dependent on seasonal tourism and agriculture, but is becoming more diversified with businesses in the high-tech, software and educational industries.

Contact NAI Global +1 609 945 4000

Manufacturing vacancy was 8.35% with an average asking rate of $8.16/SF NNN in the Q3 2009, while warehouse vacancy was 8.85% with an average asking rate of $5.16/SF NNN. Both vacancies are up and both asking rates are down from a year ago. Notably, warehousing did note a reduction in vacancy and positive net absorption in the Q3 2009. Metropolitan Area Economic Overview 2009 Population

1,837,779

2014 Estimated Population

1,922,925

Employment Population

956,264

Household Average Income

$111,629

Silicon Valley sales activity has been very anemic, though it has accounted for a good portion of the total activity in the Bay area and minor quarterly up-ticks have recently been realized. Reports indicate Silicon Valley has the least amount of distressed real estate nationwide. We are still a few quarters from the market's bottom, but the Silicon Valley has several economic and employment advantages compared to other areas in the country and should be positioned well ahead of the curve for commercial recovery once we experience sustainable economic recovery and job growth.

Metropolitan Area Economic Overview 2009 Population

255,778

2014 Estimated Population

265,553

Employment Population

117,912

Household Average Income

$85,822

Median Household Income $93,182

Median Household Income $67,389

Total Population Median Age

Santa Clara County At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

$ $ $

54.00 25.20 15.00

$ 99.60 $ 85.20 $ 66.00

$ 50.92 $ 43.44 $ 27.00

98.5% 24.1% 18.2%

$ $ $

30.00 18.00 15.48

$ 84.00 $ 78.96 $ 61.20

$ 57.00 $ 35.60 $ 26.88

100.0% 23.9% 13.7%

$ $ $

2.40 2.64 3.48

$ 8.40 $ 23.40 $ 46.80

$ 5.16 $ 8.16 $ 12.96

8.9% 8.4% 19.1%

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

$ $ $ $

24.00 24.00 27.00 45.00

$ $ $ $

New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A 24.00 13.68

N/A $ 28.80 $ 25.20

N/A $ 25.68 $ 22.20

N/A 40.1% 7.1%

N/A $18.60 $12.00

N/A $ 28.20 $ 27.00

N/A $ 23.28 $ 21.84

N/A 15.8% 10.5%

$ $ $

3.60 4.68 11.40

$ 12.00 $ 16.20 $ 18.60

$ 7.08 $ 10.08 $ 12.24

4.7% 5.4% 14.7%

$ $

18.00 12.00 N/A N/A

$ 42.00 $ 27.00 N/A N/A

N/A N/A N/A N/A

$ $

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

One positive trend for Santa Cruz County was the fall of unemployment rates in Q2 and Q3, after reaching a high of 13.5% in Q1 2009. However, unemployment did still remain in the upper 10% range at the close of Q3 2009.

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Manufacturing/warehouse vacancy grew to 5.1% in Q3 2009, up from 3.9% a year ago. The industrial market had 560,000 SF available in Q3, with roughly 10% composed of sublease space. Sublease space nearly tripled from 2008. The average asking rate for industrial product was $8.88/SF NNN in Q3 2009, a sharp decline of $1.56/SF from 2008. Net absorption was negative 170,000 SF through the first three quarters of 2009, its most critical level since 2002.

Santa Cruz County At A Glance

Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

In accordance with the slumping economy, Santa Cruz County office/R&D vacancy increased for eight consecutive quarters, rising from 9.8% in Q3 2007 to 12.9% in Q3 2009. Meanwhile, the average asking rate fell by $1.20/SF over the past year to $22.32/SF for full service properties. Total availability grew to 954,000 SF countywide in Q3 2009. This market has not hit the 1 million SF mark since 2004. Sublease space totaled 134,000 SF, or 14% of the countyâ&#x20AC;&#x2122;s total office availability, compared to 185,000 SF, or 23%, a year ago. Through the first three quarters of 2009, reported net absorption totaled a negative 153,200 SF, more than the total negative net activity of 2008 and 2007 combined.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ 1,306,800.00 $ 871,200.00 $ 653,400.00 $ 1,306,800.00 $ 1,089,000.00 $ 653,400.00

72.00 48.00 60.00 125.00

48.00 36.00 43.50 85.00

High/Acre

$ $ $ $ $ $

3,310,560.00 2,178,000.00 1,306,800.00 1,742,400.00 1,742,400.00 1,960,200.00

N/A N/A N/A N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ 1,300,000.00 N/A N/A $ 522,000.00 N/A N/A

High/Acre

$ 3,200,000.00 N/A N/A $ 1,500,000.00 N/A N/A

2010 Global Market Report I www.naiglobal.com

Sonoma County, California

Ventura County, California

Sonoma County, “the gateway to the wine country,” is bordered on the south by Marin County, on the east by Napa County, on the north by Mendocino County and on the west by the Pacific Ocean. Sonoma is a highly regarded tourist destination with nearly 7.5 million visitors in 2008.

Ventura County has certainly felt the impact of the recession with the demise of Countrywide, resulting in a negative impact on the office market. Vacancy rates are approaching 20% and net absorption was negative through 2009 Q3. While this amounts to a substantial inventory, there is some good news. Very little space is expected to return to the market as it appears that Countrywide/Bank of America has returned the majority of its unused space. This will help reduce vacancy rates for Class A space, the preferred space of Countywide.

Sonoma office vacancy was at a high of 11.2% in 2004, but has since climbed to 29.2% in Q3 2009. Vacancy increased 300 basis points since Q3 2008. The average asking rate decreased $1.32 in the past year to $20.80/SF full service per year. Since 2004, nearly 4.8 million SF of office space has been absorbed from the county’s available marketplace.

Contact NAI Global +1 609 945 4000

Metropolitan Area Economic Overview 2009 Population

459,348

2014 Estimated Population

446,684

Employment Population

240,062

Household Average Income

$80,118

The City of Santa Rosa remains relatively healthy with vacancy at 20.2% in Q3 2009, compared to 15.8% a year ago. Even with the vacancy spike, this submarket is still the lowest in Sonoma County. Petaluma’s vacancy remains among the highest in the county at 32.4%. Industrial vacancy remains on a healthy path, with Q3 2009 ending at 13.9%, up 270 basis points since Q3 2008. The average asking rate closed Q3 2009 at $8.25/SF gross per year, down $0.24 SF from a year ago. Year-to-date 2009, Sonoma County has recorded about 610,000 SF of leased space. The industrial market has seen a slowdown in its absorption, although the food industry is taking advantage of this downturn by picking up large blocks of this space. Commercial sale activity has come to a stalemate during 2009. Tenants and buyers are aggressively looking to take advantage of today’s soft market conditions, although at a level that is sometimes more aggressive than landlords and sellers are able or willing to consider. We anticipate continued softening in values as capitalization rates rise to accommodate perceived risk. Many are still waiting on the sidelines hesitant to commit due to current economic conditions. There remains a large gap in perceived values between owners and tenants/buyers.

Contact NAI Capital (Ventura County) +1 805 278 1400 NAI Capital (Westlake Village) +1 805 446 2400 NAI Capital (Simi Valley) +1 805 522 7132

Metropolitan Area Economic Overview 2009 Population

795,243857

2014 Estimated Population

,787,305

Employment Population

371,999

Household Average Income

$90,424

Median Household Income $67,472

Median $75,440 Household Income

Total Population Median Age

40.3

Sonoma County At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

N/A N/A N/A

N/A 16.20 16.20

N/A $ 30.00 $ 30.00

N/A $ 21.96 $ 18.84

N/A 34.6% 20.2%

4.56 4.56 N/A

$ 12.00 $ 12.00 N/A

$ $

8.28 8.28 N/A

13.9% 13.9% N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

N/A $ 22.20 $ 15.00 N/A

N/A $ 36.00 $ 42.00 $ 35.40

N/A $ 24.76 $ 26.13 $ 21.83

N/A 4.1% 3.0% 14.4%

DEVELOPMENT LAND

Low/Acre

SUBURBAN OFFICE

36.1

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

N/A N/A N/A

New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A N/A N/A

SUBURBAN OFFICE $ $

INDUSTRIAL

$ 27.00 $ 27.00 $ 21.00

$ $ $

35.00 35.00 26.40

$ $ $

30.00 30.00 24.00

78.8% 19.6% 16.7%

$ $ $

4.20 4.80 6.00

$ $ $

10.80 7.80 15.00

$ $ $

15.00 12.60 10.50

5.9% 6.3% 7.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

N/A $ 6.60 $ 13.45 $ 17.00

$ $ $

N/A 39.00 34.00 48.00

$ $ $

N/A 25.70 23.63 21.17

N/A 9.1% 5.4% 2.3%

DEVELOPMENT LAND

Low/Acre

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL $ $

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Tight credit conditions, increasing commercial default rates, and declining lease rates are negatively impacting the ability of buyers to secure financing. As a result, the number and dollar value of sales transactions is down considerably. However, low prices mean it is a good time to buy for those with adequate financing.

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

Bulk Warehouse Manufacturing High Tech/R&D

The retail market also experienced contraction during the recession but seems to be improving. Rents have leveled off and do not appear to be declining. In the Westlake Village/Thousand Oaks market, many centers have a vacancy factor of less than 4%. The number of delinquent tenants has also dropped significantly and most retailers are reporting that sales activity is improving. One potential problem is a proposal by the City of Ventura to raise the sales taxes. If this ballot initiative passes, retail sales are likely to fall across the board. This could have a negative impact on the demand for retail space.

Ventura County At A Glance Low

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

Demand for industrial space has slowed. A good deal of the decline is tied to the regional and national manufacturing sector and the Port of Hueneme. The port imports a significant number of the BMW automobiles that enter the West Coast for US distribution. As demand for cars dwindled, so did the demand for industrial space related to warehousing and transporting. As it appears that world trade has begun to increase, it is likely that demand for industrial space in Ventura County will also increase during the next 12 months.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

$ $ $ $ $

N/A 871,200.00 435,600.00 653,400.00 871,200.00 2,718,000.00

High/Acre

$ $ $ $ $

N/A 1,306,800.00 871,200.00 1,089,000.00 1,306,800.00 2,613,600.00

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $

N/A 430,500.00 350,000.00 N/A 525,000.00 N/A

High/Acre

$ $ $

N/A 1,300,000.00 875,000.00 N/A 1,300,000.00 N/A

2010 Global Market Report I www.naiglobal.com

Colorado Springs, Colorado

Denver, Colorado

The economy for the Colorado Springs market has deteriorated somewhat since year-end 2008. Troop increases at Fort Carson, coupled with Department of Defense spending at five military installations, plus defense contractors, have been a significant stabilizing force on the economy and prevented it from slipping further. The 12,000 troop increase at Fort Carson through 2011 will add 30,000 people to the Colorado Springs population.

Contact NAI Highland Commercial Group, LLC +1 719 577 0044

Metropolitan Area Economic Overview 2009 Population

632,079

2014 Estimated Population

688,728

Employment Population Household Average Income

Citywide, Class A office vacancies are 18.5%, up from 2008's 13.1% and the vacancy rate in the CBD is 9.5%, up from 8.6%. Asking rates are down $0.18-$0.28/SF and the strike rates on completed deals are well below asking rates. Year-to-date absorption citywide is 242,234 SF. Sales projected through 2009 are off 75% in sales price and 77% in square footage. There were no significant office building starts in 2009. The industrial vacancy rate is 11.6%, up from 9.3% at the end of 2008. Average asking rates are down $0.57/SF. Sales projected to year end are off 67% on price and 63% on square footage. There were no significant industrial starts in 2009. Retail vacancy is up 1.2% to 9.7%. Asking rates are up $0.03/SF to $14.33/SF. Sales of retail properties are off roughly 50% in both square footage and price. A new Costco opened in October 2009, with Lowe's and Kohl's close behind in the University Village Shopping Center, which is an urban renewal project with additional pads and shop space. The investment market has been very slow with both institutional and 1031 buyers primarily on the sidelines and the TICs trying to hold their assets. Sales have been primarily owner-users utilizing SBA financing. The base economy is solid. However, without a significant increase in primary jobs, we are looking at a slow recovery that is subject to the vagaries of the national economy.

While Denver is healthier than most markets around the United States, it continues to have its share of concerns. The good news is, Denver has been attracting companies from the renewable energy sector, including wind and solar, and there is hope that Denver will be viewed as a good place to conduct “green” business. Office vacancy rates have inched up over the last year with landlords being challenged by mounting tenant occupancy costs. Operating expenses continue to increase as well, making it challenging for owners due to their lower net rents. All agree that this should lead to pent-up demand that should see a spike in new leasing activity towards the middle of 2010.

Contact NAI Fuller +1 303 292 3700

Denver’s retail sector suffered in 2009. Well located retail is still holding its own, with outlying centers suffering the most. The lack of consumer confidence has decreased retail sales making it difficult for some tenants to pay their relatively high rents. It could be several years before the retail market stabilizes. Metropolitan Area Economic Overview 2009 Population

2,570,177

2014 Estimated Population

2,829,742

298,947

Employment Population

1,321,562

$70,092

Household Average Income

$78,583

Median Household Income $61,930

Median Household Income $68,140

Total Population Median Age

Colorado Springs At A Glance (Rent/SF/YR)

Historically, the industrial market has enjoyed a vacancy rate between 6% and 7% and now it is nearing 10%. Industrial owners have resisted making tenant concessions, but as we closed out 2009 this began to change slightly. The good news is there are several large (100,000 – 200,000 SF) transactions in the market, which should fill some voids that have been created due to the downturn in the economy.

The investment market in Denver is virtually non-existent. The lack of financing coupled with personal recourse and larger equity requirements by lenders have made investing in commercial real estate challenging. Job growth drives the commercial real estate market and until we see an increase in jobs and the stabilization of unemployment, 2010 could be more of the same for owners. The key will be to pay attention to costs, like maintenance and tenant improvements, in order to minimize risk to the owner.

Denver At A Glance Low

High

Effective Avg.

Vacancy

DOWNTOWN OFFICE

(Rent/SF/YR)

Low

High

Effective Avg.

N/A $ 13.50 $ 10.00

$ $

N/A 20.00 14.50

$ $

N/A 15.99 12.70

N/A 9.1% 9.5%

$ 15.50 $ 12.50 $ 8.50

$ $ $

18.80 16.00 12.50

$ $ $

17.00 14.00 9.75

68.0% 18.5% 14.4%

$ $ $

3.00 6.00 9.00

$ $ $

5.50 8.50 13.50

$ $ $

4.75 7.75 9.96

10.3% 7.9% 10.9%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

11.50 11.00 18.00 18.00

$ $ $ $

25.00 30.00 33.00 29.00

$ $ $ $

16.50 16.50 24.00 23.00

7.7% 9.2% 9.3% 8.2%

DEVELOPMENT LAND

Low/Acre

High/Acre

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

$ 140.00 $ 500,000.00 $ 200,000.00 $ 240,000.00 $ 1,200,000.00 $ 180,000.00

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Premium (AAA) Class A (Prime) Class B (Secondary)

$ $ $

30.00 22.00 10.00

$ 35.00 $ 30.00 $ 20.00

$ 31.00 $ 24.00 $ 15.00

7.3% 13.1% 19.7%

$ $ $

22.00 16.00 10.00

$ 28.00 $ 23.00 $ 16.00

$ 26.00 $ 20.00 $ 14.00

7.3% 17.9% 19.1%

$ $ $

2.00 4.00 4.50

$ 4.50 $ 7.00 $ 10.00

$ $ $

3.50 4.50 7.00

7.9% 11.3% 10.1%

$ $ $ $

12.00 13.00 11.00 13.00

$ $ $ $

25.00 17.00 20.00 26.00

9.1% 10.3% 11.5% 7.1%

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Vacancy

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

871,200.00 172,240.00 150,000.00 130,000.00 261,360.00 20,000.00

3,800,000.00 348,480.00 200,000.00 261,000.00 871,000.00 50,000.00

Downtown Neighborhood Service Centers Community Power Center Regional Malls

20.00 250,000.00 80,000.00 80,000.00 200,000.00 30,000.00

40.00 30.00 28.00 50.00

2010 Global Market Report I www.naiglobal.com

Delaware & Cecil County, Maryland

Washington D.C.

Wilmington’s vacancy rate increased in 2009 while absorption rates decreased. Local developers have acquired existing assets and have completed new construction, much of which has remained vacant. Suburban office vacancies rose sharply in 2009 while suburban development will continue with moderate pre-leasing activity. Industrial activity in New Castle County has been slow.

Contact NAI Emory Hill +1 302 322 9500

Metropolitan Area Economic Overview 2009 Population

365,831

2014 Estimated Population

431,861

Employment Population

175,945

Household Average Income

$62,172

Median Household Income $48,297 Total Population Median Age

Bank of America continues to consolidate into Wilmington’s CBD, bringing 500,000 SF of suburban office online. Class B is forecasted to lease quickly as it has shown moderate activity and net absorption throughout 2009. Suburban office availability remains below the national average and has stabilized for Class A and Class B properties. Class A rates dropped while vacancy rose, with a reduction in Class B rates driven by increased sublease space. Development sites in Middletown and Newark represent an additional 200,000 SF. Absorption and lease rates are expected to remain constant during early 2010. Medical office commands the highest rental rates and land prices remain unchanged from 2007. Since 2002, nearly 2.5million SF of industrial had been absorbed by automakers. In 2008, both Chrysler’s Newark plant and Saturn’s New Castle plant closed. The University of Delaware purchased the Newark plant. Fisker Automotive purchased the New Castle plant, where they will assemble a hybrid sedan. Industrial land absorption is expected to remain stagnant through 2010. Most of Delaware's new retail construction is mixed-use with some strip centers in Northern Delaware opting for additions and renovations. New construction is strongest around the Christiana area. Southern Delaware continues to see growth. Future development around Route 273 and Christiana Mall will bring nearly 2 million SF online in the next few years. Cecil County, Maryland, has experienced increased industrial activity due to aggressive county initiatives. Base Realignment And Closure, which will transfer operations from Fort Monmouth to Aberdeen Proving Ground in 2011, is affecting Cecil County as new residents are relocating to the area. Accordingly, industrial interest remains strong throughout the county.

Delaware & Cecil County, Maryland At A Glance Low

High

Vacancy

$ 26.00 $ 26.00 $ 13.00

$ $ $

30.00 28.00 19.00

$ 27.50 $ 26.00 $ 18.50

25.0% 20.0% 35.0%

$ 24.00 $ 22.00 $ 15.50

$ $ $

28.00 28.50 19.00

$ 26.00 $ 22.50 $ 18.50

15.0% 20.0% 30.0%

5,331,775

2014 Estimated Population

5,398,312

Employment Population

2,934,389

Household Average Income

$109,029

If employers slow the pace of job loss and the effects of the stimulus package continue, the District could see several of its submarkets begin to tighten in 2010.

Median Household Income $81,001 37

High

Effective Avg.

46.00 35.00 28.00

$ 70.00 $ 70.00 $ 50.00

$ 58.00 $ 51.00 $ 41.00

N/A 14.0% 11.0%

N/A N/A N/A

$ 16.00 N/A $ 18.00

5.00 N/A 9.00

9.50 N/A $ 16.00

16.0% N/A 23.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

25.00 20.00 15.00 35.00

$ $ $ $

(Rent/SF/YR)

Low

Vacancy

7.00 N/A 20.00

20.0% N/A 18.0%

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ $ $

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

2009 Population

In the area locally referred to as NoMa (north of Massachusetts Avenue), the multi-faceted Constitution Square, which consists of approximately 1.6 million SF of space, is under construction with the retail section anchored by a new urban Harris Teeter grocery store. The first delivery of space is expected to occur at the end of 2010. In addition, Forest City is building The Yards adjacent to Nationals Park. More than 400,000 SF of retail space and 2,800 residential units are planned.

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Metropolitan Area Economic Overview

The amount of vacant office space in the Washington market has trended up over the past four quarters. At the end of 2008, there was 395,912 SF of vacant sublease space. Currently, there is 447,301 SF vacant in the market. More of the same is expected for the balance of 2009 and the beginning of 2010, but things could change quickly if demand shows any signs of recovery. With over 2 million SF still scheduled to deliver in 2009, and an additional 3.8 million scheduled for 2010, an easy prediction is an increase in the vacancy rate through 2010. However, a potential tightening of supply may occur within the CBD during the first half of 2010. Less than 850,000 SF expected to be delivered, is located inside the CBD and development in the retail sector is still doing well.

Washington DC At A Glance Effective Avg.

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Contact NAI KLNB, LLC +1 202 375 7500

Total Population Median Age

(Rent/SF/YR)

The Washington, DC, retail market experienced a decline in market conditions over 2009. However, the stimulus package has had a positive impact on the overall real estate market in Metropolitan Washington, DC, with several GSA leases signed during the year. The Recovery Act group itself completed a lease for 12,000 SF at 1717 Pennsylvania Avenue and Troubled Asset Relief Program (TARP) signed another lease for 70,000 SF at 1801 L Street.

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL 3.50 N/A $ 10.00

4.25 N/A $ 14.00

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

12.00 18.00 19.50 55.00

DEVELOPMENT LAND

Low/Acre

High/Acre

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

40.00 300,000.00 175,000.00 150,000.00 300,000.00 35,000.00

$ $ $ $

18.00 23.00 27.00 75.00

$ $ $ $

13.25 20.00 21.00 60.00

75.00 550,000.00 220,000.00 450,000.00 550,000.00 225,000.00

10.0% 15.0% 10.0% 5.0%

2,600,000.00 N/A N/A N/A 2,600,000.00 N/A

80.00 45.00 40.00 90.00

55.00 30.00 20.00 62.00

2.5% 3.0% N/A N/A

96,000,000.00 N/A N/A N/A 96,000,000.00 N/A

2010 Global Market Report I www.naiglobal.com

Fort Lauderdale, Florida

Ft. Myers/Naples/Port Charlotte/Bonita Springs, Florida

Fort Lauderdale is a service market for southeast Florida. The major industries are tourism, finance and service related business with a strong segment of international trade. The area is serviced by three seaports, Port of Miami, Port Everglades and the Port of Palm Beach as well as three international airports. Few sectors of the economy are growing. Most major industries are experiencing depressed economic conditions.

Southwest Florida has many positive attributes with a coastal location and excellent quality of life for its residents. The region stretches from the 10,000 islands north to Port Charlotte, and from the Gulf of Mexico east to Lehigh Acres. The area has a significant amount of prominent, former and current business executives and entrepreneurs who live in Southwest Florida for a good part of the year. This wealth of expertise and experience serve as valuable resources to the business community.

The office market is experiencing declines in occupancy and rental rates and is expected to continue to weaken through 2010. Values have dropped roughly 30% since 2007. There is no new construction in the market.

Contact NAI Rauch, Weaver, Norfleet, Kurtz & Co. +1 954 771 4400

Metropolitan Area Economic Overview 2009 Population

5,305,182

2014 Estimated Population

5,051,513

Employment Population

2,792,167

Household Average Income

$71,345

Industrial vacancies are in the 12% to 15% range. Rents are dropping, with many tenants asking for as much as 30% in rent reductions from landlords and landlords are accommodating those requests in order to keep tenants in their buildings. There is no new construction planned for 2010 except for build to suit space. The retail market has experienced more vacancies each month. Rents are being reduced in order to keep tenants in their space. Many major retailers have closed stores and this trend is expected to continue through 2010. New construction has become increasingly difficult. Investors are holding off on major purchases unless they can buy at 40% to 50% of previous values. Capitalization rates are up to at least 8.5% to 9.5%. Financing requires 30% to 50% down and coverage ratios of 1.25% to 1.35%. Multi family has some transactions but most sellers do not want to discount prices. Sellers may not be able to sell their properties without taking huge losses or getting banks to write down loans. Land sales are all but non existent except for small build to suit deals. The supply of land has been increased due to the failure of so many car dealerships and several proposed buildings. The policy of most landlords is to do anything to keep the current tenants in place as new tenants are few and far between. Lenders are extending loans in a delay and pray process. New construction is not on the horizon for 2010.

Contact NAI Southwest Florida, INC +1 239 437 3330

Metropolitan Area Economic Overview 2009 Population

1,094,938

2014 Estimated Population

1,184,949

Employment Population

355,978

Household Average Income

$75,551

Median Household Income $51,044

Median Household Income $53,607

Total Population Median Age

Fort Lauderdale At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

Charlotte, Collier, Hendry and Lee counties reported an increase in unemployment in 2009. Lee County's unemployment rate rose to 13.9%, Collier County’s increased to 13.1 % and Charlotte County’s figure grew to 12.7%. The unemployment rate is not seasonally adjusted. The overall opinion is that 2010 will see a regional comeback as welcomed confidence returns to Southwest Florida.

Low

High

$ 22.00 $ 19.00 $ 17.00

$ $ $

26.00 22.00 19.00

$ 23.00 $ 20.00 $ 17.00

20.0% 20.0% 15.0%

$ 20.00 $ 17.00 $ 16.00

$ $ $

26.00 22.00 19.00

$ 22.00 $ 19.00 $ 17.00

50.0% 50.0% 22.0%

$ $ $

3.50 3.75 7.00

$ $ $

5.00 4.50 10.00

$ $ $

4.00 4.00 9.00

20.0% 27.0% 20.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 7.00 $ 10.00 $ 12.00 $ 20.00

$ $ $ $

13.00 15.00 18.00 40.00

$ 9.00 $ 12.00 $ 14.00 $ 29.00

22.0% 19.0% 20.0% 20.0%

Low

(Rent/SF/YR)

Effective Avg.

Vacancy

DOWNTOWN OFFICE 32.00 28.00 22.00

$ 34.00 $ 32.00 $ 26.00

$ 33.00 $ 30.00 $ 24.00

N/A 17.0% 10.0%

$ $ $

24.00 20.00 15.00

$ 26.00 $ 26.00 $ 20.00

$ 25.00 $ 23.00 $ 18.50

N/A 18.0% 16.0%

$ $ $

6.00 5.00 7.00

$ 8.00 $ 7.00 $ 12.00

$ $ $

7.00 6.00 9.50

8.0% 9.0% 10.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

15.00 10.00 20.00 25.00

$ $ $ $

22.50 17.50 30.00 35.00

10.0% 15.0% 8.0% 7.0%

DEVELOPMENT LAND

Low/Acre

High/Acre

DEVELOPMENT LAND

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

$ 1,000,000.00 $ 650,000.00 $ 500,000.00 $ 500,000.00 $ 1,200,000.00 $ 600,000.00

SUBURBAN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

2009 brought with it a continued increase in vacancy and rental rates and an overall slowdown in development in all sectors of the marketplace. While many companies like McGarvey, JED of Southwest Florida and the East Group gear up for “green” and sustainable responsible development, the economy dictates they proceed with caution while remaining attentive to the needs and demands of the marketplace.

44.2

$ $ $

New Construction (AAA) Class A (Prime) Class B (Secondary)

The John Madden Company is planning to break ground on the Research Loop at the Southwest Florida International Airport. This project will introduce new, high paying career opportunities that will further propel the region, making it more than a retirement destination.

Ft Myers/Naples/Port Charlotte/Bonita Springs, Florida At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

The area is home to many institutions of higher learning; Edison State College, Hodges University, Ave Maria University and Florida Gulf Coast University, which is a member of the State University System of Florida. The number of well -educated students creates a valuable resource for local companies to draw from. Southwest Florida continues to be home to a growing population of young professionals with opportunities expanding to grow other industries, including biotechnology and healthcare.

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

500,000.00 400,000.00 250,000.00 250,000.00 650,000.00 200,000.00

30.00 25.00 40.00 60.00

$ $ $ $

High

N/A 217,800.00 130,000.00 90,000.00 450,000.00 N/A

N/A $ 305,000.00 $ 215,000.00 $ 125,000.00 $ 1,000,000.00 N/A

2010 Global Market Report I www.naiglobal.com

Jacksonville, Florida

Martin & St. Lucie Counties, Florida

Jacksonville's diverse economy makes it an ideal choice for relocating and expanding businesses and its healthcare sector is emerging as a major medical player in the southeast. However, in 2009 demand in all markets was, at best, sluggish. Unemployment rates soared to 11.3% and consolidations in the financial services sector produced a glut of sublease availabilities. With more than 40,000 people employed in distribution/warehousing-related occupations, even Jacksonville's robust logistics sector contracted slightly in 2009.

Contact NAI Commercial Jacksonville. +1 904 358 2717

Metropolitan Area Economic Overview 2009 Population

1,344,504

2014 Estimated Population

1,454,531

Employment Population

663,969

Household Average Income

$68,792

Median Household Income $54,951 Total Population Median Age

Negative net absorption of 1,192,680 SF pushed Jacksonville's 2009 office vacancy rate to 15.8%. Average rental rates declined from 2008 levels to $18.53/SF, but as Jacksonvilleâ&#x20AC;&#x2122;s hospitals grow in national and regional stature, the need for additional medical office space should help reduce vacancies and spur an increase in rental rates in late 2010 and beyond. Over $14.8 million in federal stimulus funds is earmarked for infrastructure improvements at The Port of Jacksonville and additional funds are awaiting approval. Even so, product delivered to the Port waned in 2009, as did distribution companies' expansion plans. As a result, industrial construction that commenced and completed in 2008 and 2009 was left temporarily vacant at a rate of 10.3%. Jacksonville's retail market behaved in accordance with depressed national market standards in 2009. Eleven retail sales transactions with a total volume of $22.8 million and an average price of $78.17/SF closed in 2009. In 2008, the market posted 15 transactions with a total volume of $59.2 million and a price per SF averaging $161.83. After 2008's record expansion of the multifamily market and the demise of the condominium conversion market, demand for apartments plummeted in 2009. The fallout from non-existent home sales and decline in Florida in-migration forced Jacksonville's 2009 apartment vacancy rate to 13.7%, more than double 2008â&#x20AC;&#x2122;s rate of 6.3%. One of Jacksonville's largest 2009 office transactions was the lease of 43,008 SF for the new corporate headquarters of Xorail, Inc. brokered by NAI Commercial Jacksonville. The company also represented D&H Distributors in the lease of 79,652 SF of industrial space to Invacare Corporation.

Jacksonville At A Glance High

Effective Avg.

Vacancy

$ 17.50 $ 17.00 $ 9.92

$ $ $

19.72 21.23 18.91

$ 17.83 $ 20.41 $ 17.82

16.2% 16.1% 12.4%

$ 17.50 $ 17.00 $ 14.50

$ $ $

21.50 21.50 19.50

$ 19.10 $ 20.62 $ 18.02

12.2% 13.8% 17.2%

$ $ $

3.74 3.00 7.70

$ $ $

8.52 6.22 14.91

$ $ $

4.36 4.28 9.89

10.1% 12.8% 13.3%

415,435

2014 Estimated Population

453,891

Employment Population

135,521

Household Average Income

$69,787

Median Household Income $49,891

Land prices are at 20-50% of their value from the 20042006 period. Foreclosed, aggressively priced, bank-owned land is predominant in the market. In the multifamily market, finished residential lots have shown stronger appeal in 2009. Several transactions have closed in the $25,000$50,000/lot range for lot packages ranging from 15-30 or more lots. The overall outlook is better than at the beginning of 2009. Most investors and businesses feel there is genuine opportunity but remain cautious in their outlook. It is expected that in 2010 foreclosures will continue to spread into the commercial markets but there will be opportunities for those in a position to take advantage of them.

42.4

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

$ 10.31 $ 8.89 $ 12.64 $ 14.69

$ $ $ $

19.04 21.60 13.39 36.21

$ $ $ $

14.31 14.29 13.01 24.51

8.2% 10.3% 12.9% 7.4%

$ $ $

12.00 12.00 7.00

$ 20.00 $ 16.00 $ 12.00

$ 16.00 $ 14.00 $ 10.00

15.0% 15.0% 25.0%

$ $ $

10.00 8.00 6.00

$ 15.00 $ 13.00 $ 10.00

$ 12.50 $ 10.00 $ 7.50

20.0% 20.0% 25.0%

$ $

5.00 4.00 N/A

$ $

6.00 5.00 N/A

50.0% 50.0% N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $

15.00 12.00 15.00 N/A

$ 17.50 $ 15.00 $ 17.50 N/A

15.0% 20.0% 18.0% N/A

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

New Construction (AAA) Class A (Prime) Class B (Secondary) New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls

2009 Population

The retail market remains the most attractive. Small neighborhood tenant spaces range from $12/SF net to $18/SF net with the better positioned end caps and prime spaces experiencing a higher rate. Several big box facilities remain vacant. Occupancy in the retail sector is approximately 85%. The bid/ask in Martin and St. Lucie counties for investment properties remains wide spread and financing investment properties remains a challenge.

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Metropolitan Area Economic Overview

The industrial market has been the hardest hit. There remains approximately 750,000 SF of vacant flex space and rents have been reduced to the range of $5-$7/SF gross from $10-$12/SF in the boom years. Vacancy in the industrial sector is at nearly 50% for all property types.

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Contact NAI South Coast +1 772 286 6292

Martin & St. Lucie Counties At A Glance Low

DOWNTOWN OFFICE Premium (AAA) Class A (Prime) Class B (Secondary)

In the office market, the majority of leasing activity has been in the form of tenants making a move from more expensive space to less expensive space. Rents are in the range of $10/SF to $15/SF net for Class A and good Class B buildings and occupancy has dipped to approximately 85%.

Total Population Median Age

(Rent/SF/YR)

The overall economy for Martin and St. Lucie counties has continued to contract as unemployment has reached 11.2% in Martin County and 14.7% in St. Lucie County. This has had a negative impact on all sectors of commercial real estate. The area unemployment has also had a significant impact on multi-family properties. The market for office space remains slow as many companies with headquarters in larger metropolitan areas seek to close satellite offices in smaller markets.

Bulk Warehouse Manufacturing High Tech/R&D

7.00 6.00 N/A

RETAIL

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

250,000.00 125,000.00 130,000.00 85,000.00 125,000.00 8,500.00

High/Acre

$ 600,000.00 $ 425,000.00 $ 350,000.00 $ 550,000.00 $ 1,000,000.00 $ 450,000.00

450,000.00 200,000.00 75,000.00 100,000.00 500,000.00 20,000.00

$ 20.00 $ 18.00 $ 20.00 N/A

650,000.00 400,000.00 150,000.00 200,000.00 875,000.00 50,000.00

2010 Global Market Report I www.naiglobal.com

Miami, Florida

Orlando, Florida Experts in the market report that events leading into 2009 caused an unprecedented decline in all facets of commercial and residential real estate. Activity quickly skidded to a halt and stayed at a virtual standstill during the first half of 2009. Foreclosures, short sales and loan restructurings were most common. Predictions are that a bottom in the market was reached and growth will resume in 2010, albeit at an anemic pace. It may be difficult to differentiate the growth from the stagnation.

The overall Orlando office vacancy rate stands at 15.1%, up from 12.3% one year ago. Average lease rates are down by 3.3%. Net absorption has been negative in four of the last five quarters. Vacancies are highest in Class A properties where average rents have declined by 6% over the past year. Vacant sublease space has increased in all submarkets. Built-to-suit headquarters have dominated new office construction.

Investment activity is at a standstill due to a lack of financing, rising vacancy rates, lower rent rates and investors demanding increasing yields. Development activity is nonexistent as declining rents combine with rising vacancy and capitalization rates to make development nonviable for up to three years. Land prices are down by 50%. Contact NAI Miami +1 305 938 4000

Office vacancy rates rose while rents dropped by more than 10%. Certain submarkets, most notably the CBD & Brickell, are hardest hit as approximately 2 million SF are scheduled to be delivered in 2010 and 2011.

Contact NAI Realvest +1 407 875 9989

Miamiâ&#x20AC;&#x2122;s industrial sector suffered from the recession as transshipping slowed and smaller tenants failed. Vacancies increased weekly. Bankruptcies in the automotive and construction industries intensified problems. Rents and resale prices have dropped. Prospects for 2010 are grim as stagnation does not foster tenant growth. Metropolitan Area Economic Overview 2009 Population

5,305,182

2014 Estimated Population

5,051,513

Employment Population

2,792,167

Household Average Income

$71,345

Median Household Income $51,044 Total Population Median Age

Retail demand has been hard hit. Consumer demand has stopped, resetting to 2004 levels. Retailers are reevaluating store spacing and product offerings. Rents dropped and vacancies increased. Exceptions are local, well-capitalized retailers. After waiting out the exuberance, they are selectively expanding, negotiating favorable leases.

2009 Population

2,124,270

Residential prices dropped 20-50% because of a lack of end-user financing. Most multifamily projects are in a loan restructuring, foreclosure, bankruptcy, short sale or some other workout. Some lenders sold their notes at a 50-80% discount. Others financed end-users, permitting lower prices. It appears the bottom was reached in 2008; stayed flat in 2009 and will slowly increase in 2010.

2014 Estimated Population

2,354,381

Employment Population

1,121,730

Household Average Income

$68,690

2010 will be a major transition year in most market segments as the final problems will be addressed and the markets stabilize. If population and job growth resume, the Miami markets will accelerate at a pace faster than most experts predict.

Median Household Income $53,357

Miami At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

Orlando is one of only two communities worldwide where a new medical city is being developed. The cluster of life science companies emerging here include a new University of Central Florida College of Medicine, East Coast headquarters of Burnham Institute for Medical Research, Nemours Childrenâ&#x20AC;&#x2122;s Hospital, University of Florida Research Center, M.D. Anderson Cancer Research Institute, and Orlando VA Medical Center. The $600 million VA facility, due to open in 2013, will be the first VA hospital built in the United States since 1995. Within 10 years, the cluster is expected to create 30,000 jobs and generate $7.6 billion in economic impact.

(Rent/SF/YR)

Low

$ 43.00 $ 33.31 $ 26.51

$ $ $

49.50 43.73 31.57

$ 44.27 $ 38.23 $ 28.73

92.0% 14.5% 23.4%

$ 31.59 $ 26.94 $ 19.21

$ $ $

34.09 38.03 36.12

$ 32.27 $ 33.25 $ 27.22

85.0% 22.3% 15.6%

Effective Avg.

Vacancy

10.1% N/A 9.3%

$ $ $ $

$ $ $

24.00 16.00 15.00

$ $ $

29.00 32.00 28.50

$ $ $

27.00 24.50 21.70

36.0% 20.0% 17.0%

$ $ $ $ $ $ $

18.00 11.00 12.00 3.95 3.50 8.50 18.00

$ $ $ $ $ $ $

40.00 40.00 28.00 7.00 8.00 30.00 35.00

$ $ $ $ $ $ $

24.00 23.00 21.00 5.65 4.70 26.50 28.00

49.0% 17.3% 14.6% 12.3% 12.5% 6.2% 10.4%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $

12.00 18.00 14.00

$ $ $

30.00 30.00 40.00

$ $ $

16.60 15.70 23.80

11.6% 10.6% 4.6%

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE

INDUSTRIAL

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

5.53 N/A 9.74

10.83 N/A 19.33

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

25.83 14.75 13.00 14.00

$ $ $ $

43.92 45.17 45.00 53.72

DEVELOPMENT LAND

Low/Acre

High/Acre

DEVELOPMENT LAND

$ 45.00 Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ 3,250,000.00 $ 653,400.00 $ 348,480.00 $ 435,600.00 $ 653,400.00 $ 87,120.00

$ $ $ $ $ $

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $

Bulk Warehouse Manufacturing High Tech/R&D

High

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Total Population Median Age

Increasing unemployment and a decline in tourism have impacted the retail sector over the past year. Asking and effective rents have dropped, while concessions increased to more than 10% of asking rents. The market-wide retail vacancy rate is 8.3%, up from 5.7% one year ago. New deliveries have been dominated by single-tenant super centers. Investors are waiting on the sidelines for distressed opportunities, though few have surfaced.

Orlando At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Metropolitan Area Economic Overview

The overall Orlando industrial vacancy rate stands at 13.2%, up from 8.3% one year ago. Average industrial lease rates have dropped by more than 10.5% over the past year in response to four consecutive quarters of negative absorption. Vacancy rates are highest for flex product at 17.6%. Tenants in every industry that supports industrial real estate are reluctant to commit to new leases and take advantage of aggressive concessions, resulting in stagnant deal volume. Construction of new industrial space has halted throughout the market.

7.41 N/A $ 13.11

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL 31.86 24.48 21.37 31.19

5,445,000.00 1,089,000.00 653,400.00 1,089,000.00 3,267,000.00 5,445,000.00

4.7% 7.0% 6.8% 2.3%

218,000.00 130,000.00 65,500.00 218,000.00 50,000.00

$High/Acre 90.00 $ 350,000.00 $ 260,000.00 $ 217,800.00 $ 653,000.00 $ 109,000.00

2010 Global Market Report I www.naiglobal.com

Palm Beach County, Florida

Tampa Bay, Florida

The local economy continues to be impacted by negative employment trends. The single-family residential market has bottomed while the condominium market has further to fall. The investment sale market in 2009 has been non-existent and too few transactions have occurred to predict where prices will settle. A significant gap remains between bid and ask as banks continue to be reluctant to foreclose on delinquent loans.

Contact NAI Merin Hunter Codman, Inc. +1 561 471 8000

Metropolitan Area Economic Overview 2009 Population

1,249,392

2014 Estimated Population

1,208,909

Employment Population

509,853

Household Average Income

$81,995

The office market throughout the county is weak. Rental rates are 15-25% below peak rates, with free rent and other concessions prevalent. The industrial vacancy rate for Palm Beach County has increased consistently from 8.9% in Q3 2008 to 12.5% in Q3 2009. Year to date net absorption is a negative 1,843,615 SF. The overall average rental rate decreased to $7.44/SF with flex rates at $8.91/SF and warehouse rates at $6.70/SF. Retail provides much of the same picture as the other markets. Boca Raton and Delray Beach have weathered the storm best because of the density of population and strong demographics. Discount tenants of all types have benefited from the decreased rental rates and increased vacancy and have used that as an opportunity to expand. The county in general has seen retail rental rents retreat approximately 20-30% from the 2006-2007 peak pricing. Along with prices losing ground, vacancy has increased to over 10%. New construction of speculative product in all property types is at a virtual standstill and will remain there for at least the next 12-15 months. The Northern Palm Beach office market, consistently a strong performer, suffers from the downturn in both residential real estate and financial services. The South County office market has an overall vacancy of 26.2%. The vacancy rates have been climbing steadily from 11.2% in Q4 2006. Overall absorption in South County, year to date, is negative 527,000 SF. West Palm Beach and its surrounding markets, mirror what is happening in the rest of the county.

Service, retail finance, insurance and real estate are key drivers of the Tampa Bay economy. Bio-science and other high tech industries are expanding, and the manufacturing base is growing as the regional economy continues to diversify. Having hit bottom in late 2008, the entire Tampa Bay commercial real estate market is rebounding at an accelerated pace. Transaction volume has resumed to a more normalized pace and activity levels increased during 2009. The Tampa Bay area investment apartment market bottomed in Q1 2008, however the volume of transactions is on the rise. REO bank foreclosures and troubled assets are dominating the multi-family market with nearly 80% of the last 25 transactions closed having some sort of REO component. Contact NAI Tampa Bay +1 727 585 2070

The local industrial market suffers from an abundance of functionally obsolescent product types with low ceilings and fixed interior components. New flex space in the I-4 corridor is the hot new market with several large facilities currently under construction Metropolitan Area Economic Overview 2009 Population

2,771,843

2014 Estimated Population

2,895,484

Employment Population

1,277,414

Household Average Income

$64,708

Median Household Income $58,403

Median Household Income $47,986

Total Population Median Age

43.2

Palm Beach County At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

N/A $37.50 $ 29.85

N/A $ 30.00 $ 20.05

N/A 22.7% 19.3%

$ 34.50 $ 22.00 $ 15.00

$ $ $

39.22 40.00 42.00

$ 36.73 $ 30.90 $ 25.03

59.4% 19.0% 24.4%

$ $ $

4.00 4.00 6.00

$ $ $

9.50 9.50 11.75

$ $ $

6.70 6.70 8.91

11.7% 10.5% 15.4%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 17.50 $ 14.00 $ 20.00 N/A

$ $ $

50.00 40.00 35.00 N/A

$ 25.63 $ 26.50 $ 24.63 N/A

20.0% 18.5% 17.5% N/A

DEVELOPMENT LAND

Low

SUBURBAN OFFICE

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

Premium (AAA) Class A (Prime) Class B (Secondary)

$ $ $

25.00 21.00 10.00

$ 35.00 $ 32.00 $ 18.00

$ 30.00 $ 28.00 $ 14.00

30.0% 15.0% 15.0%

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ $ $

25.00 21.00 10.00

$ 35.00 $ 32.00 $ 18.00

$ 30.00 $ 28.00 $ 14.00

30.0% 15.0% 15.0%

$ $ $

4.50 4.50 4.50

$ $ $

6.50 7.50 9.50

$ $ $

5.25 5.50 6.50

20.0% 20.0% 20.0%

$ $ $ $

9.00 12.00 16.00 24.00

$ $ $ $

14.00 20.00 20.00 45.00

$ $ $ $

12.00 15.00 18.00 35.00

20.0% 20.0% 10.0% 5.0%

INDUSTRIAL

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

The Tampa Bay investment market is a hotbed of opportunity with values bottoming at nearly 50% of 2006 peak levels. Both institutional and local investor confidence and activity have increased in 2009

DOWNTOWN OFFICE N/A $ 19.00 $ 9.00

New Construction (AAA) Class A (Prime) Class B (Secondary)

The retail market continues to be a challenging environment based on current economic trends. The market conditions have stalled several new developments slated for 2009 due to the credit crisis and lack of national retailer response. The new Cypress Creek Mall is currently slated for a 2011 opening.

Tampa Bay At A Glance

Low

DOWNTOWN OFFICE Premium (AAA) Class A (Prime) Class B (Secondary)

Vacancy levels in the office market increased to 15% regionally. Sublease space continues to shadow the market. Concessions persist as the standard course of business and tenants are looking at every space in the market before committing. The sublease market is estimated at a three-year supply with the greatest amount of sublease availability concentrated in the suburban markets.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

$ $ $ $

N/A N/A 305,000.00 150,000.00 400,000.00 100,000.00

High

$ $ $ $

N/A N/A 525,000.00 400,000.00 900,000.00 150,000.00

Downtown Neighborhood Service Centers Community Power Center Regional Malls

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

50,000.00 50,000.00 40,000.00 35,000.00 125,000.00 25,000.00

High/Acre

$ $ $ $ $ $

150,000.00 150,000.00 125,000.00 75,000.00 500,000.00 175,000.00

2010 Global Market Report I www.naiglobal.com

Atlanta, Georgia

Contact NAI Brannen Goddard +1 404 812 4000

Metropolitan Area Economic Overview 2009 Population

5,537,929

2014 Estimated Population

6,190,636

Employment Population

2,591,351

Household Average Income

$76,542

Honolulu, Hawaii Metropolitan Atlanta is home to over 5 million residents and 137,000 businesses. Atlanta’s diverse population, deep talent pool, strong local communities, global transportation and quality of life contribute to its economic strength and ongoing growth. Atlanta ranks fifth in the United States for the number of Fortune 500 headquarters. The Atlanta area remains a haven for both national/international relocations and expansions and is ranked second-least-expensive city in the country in which to operate a corporate headquarters.

Honolulu is the 51st largest economy in the United States and is a vibrant and resilient metropolitan city. The commercial real estate market is expected to maintain limited growth throughout 2010. The dire projections for 2009 were less than expected and visitor arrivals, a major economic indicator for Hawaii, were greater than projected for 2009. The Honolulu market will benefit from the increase in the Yen value as Japanese investors seek more value for their investments.

Atlanta is also home to the world’s busiest airport with 30 airlines and an average of 1,500 daily flights to over 250 worldwide destinations. Additionally, Atlanta is the rail center of the South and one of the five most important distribution centers in the US, with two major rail carriers each operating over 100 freight trains daily to and from Atlanta.

The Honolulu CBD saw 2009 end with vacancy rates above 10.73% and negative absorption. Average asking rents are $2.91/SF gross per month. Landlords are very focused on retention and we are seeing a softening in asking rates and more concessions such as free rent and liberal TI allowances. Market rates on average are 11% below the asking rates at year-end 2008.

The Atlanta Office market supply has outweighed the demand, pushing the vacancy rate up in the 19-22% range, creating negative net absorption and declining rental rates. With over 196 million SF of inventory, it is anticipated that the Office market will experience more negative net absorption and remain flat for 2010. At the close of the third quarter, the Industrial market, with over 560 million SF of inventory, reported a slowdown in absorption. The amount of new construction has dropped considerably and although vacancy rates have climbed over the past several quarters and rental rates decreased slightly, leasing activity remains active. Atlanta’s Retail market, with over 298 million SF of inventory, is reporting a slight decline in market conditions. Vacancy rates are hovering in the 10-14% range, negative net absorption is reported and rental rates are down from the last several quarters. One of the larger office projects under construction at the end of Q3 is Phipps Tower, a 486,000 SF building to be completed in Q1 2010. The largest industrial lease-signing year to date is the 556,800 SF lease signed by Smuckers in South Atlanta.

Contact NAI ChaneyBrooks +1 808 544 1600

Metropolitan Area Economic Overview 2009 Population

895,361

2014 Estimated Population

870,854

Employment Population

431,431

Household Average Income

$80,939

Median Household Income $65,880

Median Household Income $66,053

Total Population Median Age

Atlanta At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

$ $ $

23.00 22.91 16.23

$ 32.62 $ 26.25 $ 19.83

N/A N/A N/A

92.0% 22.1% 19.9%

$ $ $

20.00 19.79 15.82

$ 25.88 $ 25.34 $ 19.40

N/A N/A N/A

75.0% 12.2% 17.8%

$ $ $

2.40 2.50 3.75

$ $ $

N/A N/A N/A

12.1% 13.1% 15.6%

Low

High

Effective Avg.

Vacancy

$ $ $ $

10.00 11.00 10.00 13.64

N/A N/A N/A N/A

8.0% 14.5% 9.5% 4.1%

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ 33.00 $ 27.00 $ 23.40

$ $ $

48.24 39.00 33.00

$ 43.92 $ 34.68 $ 26.76

6.6% 10.3% 13.9%

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ 28.20 $ 25.20 $ 15.00

$ $ $

45.00 43.20 27.00

$ 46.98 $ 31.80 $ 22.20

N/A N/A N/A

$ 14.28 $ 11.40 $ 19.56

$ $ $

20.28 19.56 40.20

$ 17.28 $ 15.48 $ 29.88

7.3% 5.0% 3.2%

$ $ $ $

$ 210.00 $ 64.92 $ 42.36 $ 79.80

$ $ $ $

2.6% 2.5% 7.1% 2.6%

INDUSTRIAL 3.25 3.50 7.00

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls

(Rent/SF/YR)

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Hawaii’s real estate market is firmly in a period of adjustment. This type of market always creates opportunity for the entrepreneurial investor and user. We are seeing an onslaught of extend and blend as well as lease assignments. We anticipate a stabilization of the market in the second half of 2010.

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Honolulu’s retail sector, which benefited from tremendous growth and an influx of capital for redevelopment projects from 2006 through mid-2008, has changed considerably. Many retailers who are locked into long term leases at previously negotiated rental rates are finding the economic challenges too difficult to navigate. Major shifts are projected in hotel and resort property ownership as opportunities to buy distressed assets that are irreplaceable become more prevalent.

Honolulu At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Oahu’s industrial market continues to outperform its mainland counterparts. The demand for bulk warehouse space has softened with the weakening of tourist arrivals, resulting in an island-wide vacancy rate of 5.22%. Average asking rental rates for bulk warehouse space ranges from $0.95/SF to $1.20/SF net for the most desirable locations. Going forward, we expect to see a leveling off in Oahu’s industrial market due primarily to a softening housing market and tourist arrivals; however, we anticipate renewed sales activity as opportunistic investors acquire available industrial parcels.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Urban Retail/Commercial Land Retail/Commercial Land Residential

$ 10.00 $ 75,000.00 $ 25,000.00 $ 35,000.00 $ 1,200,000.00 $ 150,000.00 $ 20,000.00

$40.00 $23.00 $22.00 $50.00

High/Acre

$ 25.00 $ 200,000.00 $ 75,000.00 $ 150,000.00 $ 4,000,000.00 $ 400,000.00 $ 150,000.00

Downtown Neighborhood Service Centers Community Power Center Regional Malls

28.40 32.76 20.04 48.96

DEVELOPMENT LAND

Low

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ 950,000.00 $ 655,000.00 $ 420,000.00 $ 375,000.00 $ 1,420,000.00 N/A

124.20 48.84 31.20 64.32

High

$ $ $ $ $

6,700,000.00 3,700,000.00 2,700,000.00 875,000.00 12,000,000.00 N/A

2010 Global Market Report I www.naiglobal.com

Boise, Idaho

Southeast (Idaho Falls/Pocatello), Idaho Commercial Real Estate in the Boise Metropolitan area experienced high vacancy rates and decreasing lease rates. Unemployment has risen but is still below the national average. The high-tech sector has stabilized and may increase in 2010. Boise’s health care sector is growing along with alternative energy. Retail, office and industrial are down. Residential development has stopped. Much needed highway work is providing economic stimulus to the area.

Contact NAI Pinnacle +1 208 947 0019

Metropolitan Area Economic Overview 2009 Population

631,645

2014 Estimated Population

740,193

Employment Population

306,935

Household Average Income

$66,650

Boise is still rated one of the best areas in the country to live, work and start a business (Forbes), as reflected by the dramatic increase of company inquiries. With an educated, employable workforce, Boise State University and a great quality of life, we see an upswing occurring in all markets in 2010 except residential development. The industrial sector has been hit hard and vacancy rates have reached 11%. Lease rates are similar to the mid 1990s at around $0.32 to $0.48/SF. Vacancy in the office sector is continuing to rise with an overall 19.5% vacancy rate. Vacancy rates throughout the submarkets are ranging from 7.5% vacancy Downtown to over 25% in the Southwest Boise market. New construction and owner occupied sales are down more than 50% from last year. Multifamily vacancies are under 8%, reflecting an increasing market sector. Fully leased investment properties are still hard to find and when found carry capitalization rates equivalent to national norms of mid 7% to high 8%. Retail is still location specific. An overall vacancy rate of 14% represents an increase over 2008. The big box retailers that closed are replaced by retailers new to the area, which speaks well for the vibrancy of the Boise Metropolitan Area. Owners in all sectors will continue to offer aggressive concessions such as free rent, lower rates, and increased TI allowances. The Boise Metropolitan Area is once again poised to grow in 2010 driven by new jobs from relocated companies. Retail and industrial sectors will increase first, followed by office and residential. Quality of life will still be our driving force for 2010.

Eastern Idaho is uniquely positioned to continue its steady growth and weather the economic storms facing the nation, with an economy fueled by a well-educated workforce, energy, medical technologies, agribusiness and tourism. In Idaho Falls, the strategically located 400-acre Snake River Landing development opened its Central Valley, an integral part of the master-planned community that includes over 30 acres of green space, walking paths, cascading waterfalls and a 3.65-acre lake.

Contact NAI Commerce One Real Estate, LLC +1 208 525 8088

Metropolitan Area Economic Overview 2008 Population

122,265

2013 Estimated Population

134,838

Employment Population

55,247

Household Average Income

$56,740

Median Household Income $53,925

Median Household Income $52,207

Total Population Median Age

Boise At A Glance (Rent/SF/YR)

Plentiful recreation opportunities abound in the area, along with easy access to world famous destinations like Jackson Hole, Grand Targhee and Yellowstone. Pocatello is a strategically located logistics hub that is also home to the state's premier health research university and a variety of new retail developments, including Costco. Rexburg has benefited from the continued expansion of BYU-Idaho, led by the former Dean of the Harvard Business School. Eastern Idaho provides an abundance of opportunities for energy related companies, including commercialization programs between the Idaho National Lab and private industry, and an increasing number of research parks and incubators. The INL employs over 7,500 scientists, researchers and support staff, providing economic stability in the region. Idaho is one of the top four states in the nation in green job growth, with eastern Idaho being very attractive due to its vibrant business environment, low cost of living, industrious workforce and favorable local government support. Pocatello was selected as the location for Nordic Windpower’s North American manufacturing facility because of its advantageous cost of operations, excellent workforce and central location to potential customers and transportation. Also in Pocatello, the Hawaiian company Hoku Scientific, is continuing work on its $390 million polysilicon plant scheduled to be finished in 2010. Areva’s $2 billion Eagle Rock uranium enrichment facility, located west of Idaho Falls, is slated for completion in 2014. According to a study by the Regional Development Alliance, the project could bring up to $5 billion in economic activity and create 5,000 direct and indirect jobs during construction.

Idaho Falls/Pocatello At A Glance Low

High

Effective Avg.

Vacancy

DOWNTOWN OFFICE

High

Effective Avg.

N/A 16.00 11.00

N/A $ 18.00 $ 13.00

N/A $ 17.00 $ 12.00

N/A 10.0% 12.0%

N/A N/A $ 10.50

N/A N/A $ 14.00

N/A N/A $ 13.00

N/A N/A 10.0%

$ $ $

3.00 4.80 6.00

$ $ $

6.50 6.50 7.00

$ $ $

4.50 6.00 7.00

5.0% 5.0% 5.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

9.00 11.00 9.00 28.00

$ $ $ $

12.00 28.00 17.00 40.00

$ $ $ $

10.00 16.00 15.00 32.00

18.0% 14.0% 18.0% 2.0%

(Rent/SF/YR)

Low

$ 20.00 $ 16.00 $ 8.00

$ $ $

25.00 21.00 14.50

$ 23.50 $ 17.50 $ 12.00

10.0% 5.5% 7.5%

$ 17.50 $ 12.00 $ 6.00

$ $ $

23.00 19.50 15.00

$ 21.00 $ 14.50 $ 10.50

15.0% 18.5% 21.0%

$ $ $

2.64 3.72 5.52

$ $ $

5.16 6.24 12.23

$ $ $

3.90 4.98 8.88

11.0% 5.7% 15.4%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 9.00 $ 7.00 $ 12.00 $ 19.00

$ $ $ $

21.00 19.00 24.00 28.00

$ $ $ $

16.00 14.00 18.00 22.00

8.5% 25.0% 10.4% 8.0%

DEVELOPMENT LAND

Low

High

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ 1,004,400.00 $ 206,910.00 $ 152,460.00 $ 128,066.00 $ 128,066.00 $ 15,900.00

$ 1,306,578.00 $ 917,650.00 $ 315,810.00 $ 384,199.00 $ 866,844.00 $ 49,800.00

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ $

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Vacancy

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

217,000.00 217,000.00 75,000.00 40,000.00 150,000.00 15,000.00

435,000.00 435,000.00 150,000.00 150,000.00 650,000.00 100,000.00

2010 Global Market Report I www.naiglobal.com

Chicago, Illinois

Springfield, Illinois Chicago, the third largest metropolitan area in the US after New York and Los Angeles, is the most influential economic region between the East and West Coasts. Situated at the geographical heart of the nation, Chicago’s location advantages have fostered its development into an international center for banking, securities, high technology, air transportation, business services, manufacturing, wholesale and retail trade.

Contact NAI Hiffman +630 932 1234

Metropolitan Area Economic Overview 2009 Population

9,540,736

2014 Estimated Population

9,581,556

Employment Population

4,981,030

Household Average Income

$79,857

Median Household Income $66,132 Total Population Median Age

The downtown office market experienced four consecutive quarters of negative net absorption and rising vacancies during 2009. Throughout the market, Class A and Class B buildings are suffering from the highest vacancies, each above 16%. While three projects representing over 3.6 million SF were delivered during 2009, there is no ongoing construction, as any proposed projects have been put on hold until the financial markets and the economy begin to recover. Vacancy should level off in 2010 as transaction velocity continues to accelerate. Chicago’s suburban office market is composed of several scattered pockets of corporate parks and high-rise office towers and experiences historically higher vacancy rates, larger swings in net absorption, and lower asking rents than downtown. Suburban vacancy rates have been rising steadily since 2008, eclipsing 22% in 2009. Leasing activity is expected to pick up during 2010 as asking rents continue to slide and landlords offer aggressive concession packages. This should result in stabilizing vacancy rates for the suburban office market. The second largest industrial market and the most important transportation hub in the country, Chicago’s industrial market was challenged during 2009 due to lack of consumer spending, difficulty obtaining credit and economic uncertainty. New construction projects are few as developers have responded to market conditions. Lack of new deliveries, combined with an increase in transactional activity, will help the market eventually rebound. Chicago’s expansive intermodal developments show continued success due to their ability to offer tremendous transportation savings to importing operations. The nation’s largest inland port, the CenterPoint Intermodal Center, has fueled the regions growth, securing its importance both nationally and internationally.

Chicago At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

2009 Population

207,549

2014 Estimated Population

209,973

Employment Population

150,563

Household Average Income

$60,441

Despite the breadth of history, culture and recreational opportunities found in Springfield, the cost of living remains low. Springfield has consistently been one of the most affordable communities in Illinois with robust residential sales in 2009.

Median Household Income $55,950 Total Population Median Age

Low

High

N/A $ 14.00 $ 10.00

$ $

N/A 18.00 13.50

N/A $ 16.00 $ 11.00

N/A 20.0% 15.0%

$ 26.00 $ 16.00 $ 9.00

$ $ $

35.00 20.00 16.00

$ 30.00 $ 16.00 $ 14.00

10.0% 10.0% 15.0%

2.50 N/A N/A

5.00 N/A N/A

4.00 N/A N/A

10.0% N/A N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 8.00 $ 10.00 N/A N/A

$ $

15.00 23.00 N/A N/A

$ 11.00 $ 17.00 N/A N/A

12.0% 12.0% N/A N/A

High

DEVELOPMENT LAND

Low/Acre

High/Acre

$ 500.00 $ 700,000.00 $ 435,000.00 $ 575,000.00 $ 1,300,000.00 $ 1,000,000.00

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

$ $ $

60.00 55.00 36.00

$ 50.00 $ 42.00 $ 28.00

35.2% 16.1% 17.0%

$ 23.00 $ 22.00 $ 17.50

$ $ $

30.00 30.00 23.00

$ 25.74 $ 23.15 $ 19.08

18.6% 23.4% 23.5%

$ $ $

2.15 3.00 5.75

$ $ $

6.00 6.25 10.00

$ $ $

4.10 4.40 7.50

11.7% 11.7% 11.7%

Downtown Neighborhood Service Centers Sub Regional Centers Regional Malls

$ $ $ $

22.00 12.00 10.00 20.00

N/A N/A N/A N/A

8.2% 9.6% 9.8% 7.8%

DEVELOPMENT LAND

Low

Office in CBD Land in Office Parks Land in Industrial Parks) Office/Industrial Land - Non-park Retail/Commercial Land ) Residential

$ $ $ $ $ $

SUBURBAN OFFICE

(Rent/SF/YR)

Effective Avg.

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Metropolitan Area Economic Overview

Retail growth in Springfield is recovering with the opening of national chain stores and big-box users like Super Wal-Mart, Menards and Gander Mountain over the past 18 months. Scheels is planned to open soon in the area with a belief that other national chain stores will continue to locate in Springfield. The Abraham Lincoln Museum and Library are two prestigious visitor/tourist attractions in Springfield. Recreation opportunities in Springfield are plentiful with over 30 public parks offering tennis courts, ice rinks and swimming pools. There are nine public golf courses, two country club golf courses, indoor/outdoor theatre venues and a 4,235-acre lake.

DOWNTOWN OFFICE $ 45.00 $ 30.00 $ 21.00

New Construction (AAA) Class A (Prime) Class B (Secondary)

Contact NAI True +1 217 787 2800

Government is the largest employer in the Springfield area. The two largest private employers in the region are St. Johns Hospital and Memorial Hospital, including the SIU School of Medicine. Over the last year, there have been some major medical developments including a cancer research center, a new hospital and a $40 million expansion of the Springfield Clinic. Current medical developments include another 50-bed acute care hospital and an orthopedic medical facility with rehabilitation services. Higher education opportunities include the University of Illinois at Springfield, Southern Illinois University School of Medicine and Lincoln Land Community College. Robert Morris University and Benedictine University at Springfield make up the private colleges in the area.

Springfield At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Springfield, the capital of Illinois, accounts for approximately half of the population in the metropolitan areas of Sangamon and Menard counties. Springfield’s major employment sectors are government, medical, public service and small business. Money for commercial real estate loans is readily available. Springfield's current economy has been impacted to a lesser extent than that of the national economy.

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

80.00 300,000.00 120,000.00 265,000.00 700,000.00 50,000.00

$ 220.00 $ 26.00 $ 14.00 $ 80.00

450,000.00 130,000.00 35,000.00 30,000.00 130,000.00 5,000.00

945,000.00 250,000.00 100,000.00 200,000.00 480,000.00 25,000.00

2010 Global Market Report I www.naiglobal.com

Fort Wayne, Indiana

Indianapolis, Indiana

The economic climate in the greater Fort Wayne market declined slightly through 2009 with an unemployment rate in the six-county SMSA rising to 9.5%. Fort Wayne continues to revitalize its downtown. A $30 million baseball stadium and a 900-space parking garage have been completed, a $35 million Courtyard by Marriott Hotel is currently under construction and the $14.5 million residential condominium/retail complex is expected to break ground in the near future.

Contact NAI Harding Dahm +1 260 423 4311

Metropolitan Area Economic Overview 2000 Population

412,468

2014 Estimated Population

418,327

Employment Population

246,965

Household Average Income

$59,889

The retail market slowed again in 2009. The strongest major retail submarkets are on the Dupont and Lima Road corridors in the Northern section of the city and along Illinois Road in the Southwest section. Orchard Crossing, which opened in 2008, continues to be a draw, with Target and Goodmanâ&#x20AC;&#x2122;s as anchor tenants along with 26 other possible occupants. The Maplecrest Road extension, connecting the Northeast residential markets with New Haven, will be completed by 2012 and should lead to future retail development. The industrial market has seen an abundance of larger facilities become vacant while the demand for smaller industrial buildings continues to remain stable. The office warehouse market continued to be soft throughout 2009. Vacancy rates in this sector are at 15%. There has been very little construction in this sector over the past year and very little is planned for 2010. This will remain the case until there are improvements in economic conditions and the financial markets. The office market is stable; however, vacancy rates are still high. There is very little construction in the office industry, but the market is experiencing strong growth in medical office space as Parkview Hospital constructs a new regional medical center in the I-69/Dupont interchange. Both Parkview and Lutheran continue to expand with new medical office buildings on their respective campuses. We project this market will continue to remain status quo over the next few years with unemployment remaining at current levels within the six-county SMSA.

The Indianapolis metropolitan area achieved high positive net absorption in the office and industrial markets in 2009. Investment, retail and land sales continued despite a decrease in overall purchases. The Indianapolis population is growing and employment levels in the area fared better than the rest of the state and other metropolitan areas.

Contact NAI Olympia Partners +1 317 264 9400

Metropolitan Area Economic Overview 92008 Population

1,746,373

2014 Estimated Population

1,870,651

Employment Population

1,039,590

Household Average Income

$69,848

Median Household Income $55,798

Median Household Income $61,107

Total Population Median Age

Fort Wayne At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

$ $

N/A 15.50 10.00

N/A $ 13.25 $ 7.50

N/A 26.0% 27.0%

$ 12.95 $ 14.50 $ 7.00

$ $ $

17.50 19.00 12.00

$ 15.25 $ 16.75 $ 9.50

75.0% 25.0% 23.0%

$ $ $

1.00 2.75 4.00

$ $ $

3.00 5.00 8.00

$ $ $

2.00 3.88 6.00

15.0% 15.0% 50.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 7.00 $ 5.00 $ 6.00 $ 10.00

$ $ $ $

12.00 18.00 22.00 35.00

$ 9.50 $ 11.50 $ 14.00 $ 22.50

14.0% 22.0% 15.0% 14.0%

DEVELOPMENT LAND

Low/Acre

SUBURBAN OFFICE

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ $

N/A 15.00 14.00

N/A $ 19.83 $ 17.00

N/A $ 16.50 $ 15.00

N/A 10.6% 4.9%

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ $ $

15.00 11.00 10.00

$ 24.00 $ 23.50 $ 20.00

$ 18.00 $ 20.00 $ 17.00

13.7% 14.3% 9.9%

$ $ $

3.40 3.70 15.00

$ 5.50 $ 3.90 $ 17.50

$ 3.40 $ 3.50 $ 16.50

10.0% 3.5% 13.4%

$ $ $ $

8.00 5.00 10.00 7.00

$ 9.50 $ 17.50 $ 26.00 $ 33.00

$ 8.50 $ 16.00 $ 22.00 $ 22.00

9.2% 14.0% 10.2% 9.1%

INDUSTRIAL

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

The economy continues to improve as the employment and population levels both increase. The multi-tenant office market continues to expand as inventory grows and the total net absorption of space is positive. Investors remain interested in the industrial market as modern bulk facilities are still being delivered throughout the market.

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

The retail sector welcomed new vendors to the market, newly constructed strip centers and shopping centers and a variety of specialty restaurants. Several retailers entered the new midfield terminal at the Indianapolis International Airport in Q4. The retail market experienced an increase in activity by discount retailers in 2008.

DOWNTOWN OFFICE N/A $ 11.00 $ 5.00

New Construction (AAA) Class A (Prime) Class B (Secondary)

The office market ended Q3 2009 with a vacancy rate of 11.1%. The vacancy rate was unchanged over the previous quarter, with net absorption totaling positive 50,797 SF in Q3. Rental rates ended Q3 at $17.32/SF, an increase over the previous quarter. Only one building totaling 109,219 SF delivered to the market in Q3 with 709,591 SF is still under construction.

Indianapolis At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

The industrial market had more medium distribution product constructed than any other product type. In the past, construction of modern bulk buildings added the most to overall inventory. This shift to smaller construction is expected to continue into 2010. A total of five buildings totaling 828,000 SF were delivered to the market in Q3, with 420,000 SF still under construction at the end of the quarter. Speculative construction will continue, albeit at a slower rate than in 2007 and 2008. Rental rates ended Q3 at $4.46/SF, a decrease over Q2.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

$ $ $ $ $

N/A 120,000.00 44,000.00 65,000.00 175,000.00 10,000.00

High/Acre

$ $ $ $ $

N/A 234,740.00 125,000.00 130,000.00 1,000,000.00 40,000.00

Downtown Neighborhood Service Centers Community Power Center Regional Malls

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

784,000.00 175,000.00 65,340.00 42,000.00 300,000.00 24,829.00

High/Acre

$ 196,200.00 $ 475,000.00 $ 152,460.00 $ 81,250.00 $ 1,200,000.00 $ 108,900.00

2010 Global Market Report I www.naiglobal.com

Davenport, Bettendorf, Iowa and Rock Island, Moline, Illinois

Cedar Rapids, Iowa City, Iowa

Contact NAI Iowa Realty Commercial +1 319 363 2337

Metropolitan Area Economic Overview

Cedar Rapids, Iowa City and Waterloo, the Eastern Iowa Corridor, are still recovering and rebuilding from the historic floods of 2008. With a loss in excess of $6 billion, the Corridor’s major new industry is recovery and reconstruction. The floods and recovery will be the major area of economic activity for years to come.

The Quad Cities (Davenport and Bettendorf, Iowa, and Rock Island and Moline, Illinois), the four cities bordering the Mississippi River, continue to be a vibrant community in which to do business. The area’s largest employer, the Rock Island Arsenal, continues to add jobs while other larger employers are reducing their labor force by modest amounts.

Post flood, demand for Class A and B suburban office space reached unprecedented highs with 94% occupancy and rates on a NNN basis from $13 to $16 for Class A space and $10 to $12 for Class B space. Class C space remained soft with rates from $6.50 to $9 and an 82% occupancy rate. Cedar Rapids CBD space was 100% lost on the first floors and slowly recovering at this writing with rents below $10. Warehouse and industrial space is tight with an overall vacancy of 7.8% and average rents of about $5.50/SF. Because of strategic location midway between Chicago and Omaha and St. Louis and St. Paul, warehousing remains quite active and any large vacancies are typically backfilled readily.

While there is a slight oversupply of office space, landlords are holding steady in their asking rates. This has caused landlords and tenants to become savvier in lease negotiations, resulting in leases that include rent abatement, rental rates to be stair-stepped over the term of the lease, more tenant improvements being paid for by property owners and shorter lease terms.

As elsewhere, retail has been slow with little movement and prices are steady in the $10 NNN range for second and third generation space. The major centers have been able to maintain high (88%+) occupancy with little rent erosion. Our major retail center, 2,300,000 SF in Coralville, maintains a near 100% occupancy. Rebuilding is expected to return over 100,000 SF of Class A and B office/service/retail space to the CBD of Cedar Rapids in the next few years. In addition, new City, County and Federal Government buildings are planned in the CBD to replace those destroyed. A recent sale of a neighborhood mall at $9.5 million and a mobile home park at $12 million show that players are still interested in the Corridor area. As money loosens, there are a number of investment properties that are and will be coming available.

Contact NAI Ruhl & Ruhl Commercial Company +1 563 355 4000

Metropolitan Area Economic Overview 2009 Population

373,332

2014 Estimated Population

366,440

Employment Population

221,583

$58,670

2009 Population

257,417

2014 Estimated Population

268,328

Employment Population

172,433

Household Average Income

$65,707

Median Household Income $51,007

Median Household Income $57,180 Total Population Median Age

Total Population Median Age

Whereas retail has been challenged nationally in 20082009, the Quad Cities has not seen the large run of closings that other areas have experienced, mostly because the troubled companies nationally either do not have stores in this market or the stores in the market have maintained sales sufficient to escape closure. The Quad City area, with 375,000 people in the MSA and over 900,000 people in a 60-mile radius, remains attractive to retailers. Industrial real estate activity began slowing down in the second half of 2008. The slowdown continued into Q1 2009 as local area manufacturers began laying off employees and putting expansion plans on hold in response to the nation’s recession. There was brisk activity through 2008 and into 2009 from wind power manufacturers and logistics providers who were focusing on Iowa locations. Numerous prospects from many countries visited the Quad Cities area to view existing manufacturing facilities, greenfield sites for new factories and storage sites. The Quad Cities has had slower but steady growth over the years. Employment, housing and commercial development is not as oversupplied as many of the markets that experienced more growth before the recession. This has been a very positive influence to the area’s more stable housing and commercial real estate values.

Cedar Rapids At A Glance (Rent/SF/YR)

Davenport,Bettendorf, Iowa and Rock Island,Moline, Illinois At A Glance Low

High

Effective Avg.

Vacancy

DOWNTOWN OFFICE Premium (AAA) Class A (Prime) Class B (Secondary)

N/A $ 10.00 $ 7.00

$ $

N/A 13.00 10.00

N/A $ 11.50 $ 8.00

N/A N/A N/A

$ 13.00 $ 13.00 $ 10.00

$ $ $

13.50 16.00 12.00

$ 13.50 $ 13.50 $ 11.00

N/A 6.0% 18.0%

$ $ $

6.50 10.00 15.00

4.50 N/A 9.00

7.80% 5.0% N/A

Vacancy

N/A $ 13.00 $ 7.00

$ $

N/A 18.00 11.00

N/A $ 15.25 $ 9.50

N/A 15.0% 20.0%

$ 14.50 $ 13.00 $ 10.50

$ $ $

21.00 16.50 13.00

$ 16.50 $ 14.75 $ 11.25

10.0% 12.0% 15.0%

$ $ $

1.75 2.00 6.50

$ $ $

3.50 5.00 8.50

$ $ $

2.63 3.50 7.50

15.0% 5.0% 10.0%

$ $ $

N/A 12.00 22.00 45.00

N/A $ 10.00 $ 14.00 $ 30.00

N/A 15.0% 10.0% 2.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 8.00 $ 10.00 $ 4.00 N/A

$ $ $

12.00 28.00 12.00 N/A

$ 10.00 $ 15.00 $ 6.00 N/A

10.0% 7.0% 10.0% N/A

DEVELOPMENT LAND

Low

High

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ 6.00 $ 217,800 $ 43,560 $ 43,560 $ 348,480 $ 43,560

$ $ $ $ $ $

New Construction (AAA) Class A (Prime) Class B (Secondary) New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL 7.50 3.00 7.00

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

Downtown Neighborhood Service Centers Sub Regional Centers Regional Malls

N/A $ 9.00 $ 10.00 $ 12.00

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Effective Avg.

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

High

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Low

(Rent/SF/YR)

$ $ $ $ $

N/A 160,000.00 40,000.00 40,000.00 165,000.00 16,000.00

High/Acre

$ $ $ $ $

N/A 280,000.00 130,000.00 160,000.00 522,000.00 45,000.00

8.00 392,040 108,900 108,900 609,840 87,120

2010 Global Market Report I www.naiglobal.com

Des Moines, Iowa

Sioux City, Iowa The Des Moines Metroâ&#x20AC;&#x2122;s position as the financial and insurance hub of the Midwest and the subsequent weakness within that industry has led to the instability of the market. Downsizing and widespread layoffs have created an inability to backfill space that has been created due to the building of owner occupied facilities.

Contact NAI Ruhl & Ruhl Commercial Company +1 515 309 4002

Metropolitan Area Economic Overview 2009 Population

564,915

2014 Estimated Population

608,748

Employment Population

366,008

Household Average Income

$70,130

Allied/Nationwide Insurance recently completed the third phase of their downtown office development for a total of over 1,000,000 SF. Aviva Insurance is currently constructing the first building of a suburban campus for mid 2010 occupancy totaling 360,000 SF. Wellmark Blue Cross Blue Shield is also in the midst of building a 550,000 SF CBD facility that is being assisted by Des Moinesâ&#x20AC;&#x2122; commitment to new development surrounding a large redevelopment area known as Gateway West. Although this contributes to an amount of new construction that many larger markets would envy, the vacancy that is being created when these companies move out of competitive space is currently placing downward pressure on lease rates as owners compete to fill properties that have historically enjoyed very low vacancy rates. The West Suburban Market continues to see the bulk of new development activity in the metro area. Over 400,000 SF of new, high cube warehouse was brought online in the past 12 months along the Interstate 80/35 corridor. Developers have been able to lease much of this space prior to the completion of the buildings. In addition, several technology companies, such as Microsoft, have selected the market for high tech server farm facilities, which represent a substantial investment in the area. Although these projects have been placed on hold temporarily, sites have been acquired and site plans approved. A new Super Wal-Mart recently broke ground in the northwest suburb of Grimes and is scheduled to open in the summer of 2010. This appears to be kicking off the creation of a new retail node and is attracting interest from retailers that have declared themselves in a slow growth mode.

The metropolitan area includes Sioux City, Iowa, South Sioux City, Nebraska, and North Sioux City, South Dakota. Site Selection magazine ranked the Sioux City area number one nationally in economic activity among metros under 200,000 people in 2007 and again in 2008. Strong development activity in the agricultural business and food processing sectors were responsible for the ranking.

Contact NAI LeGrand & Company +1 712 277 1070

Sioux City is the dominant retail center in the region with 6,098,000 SF of space. Retail sales have steadily increased due to a large amount of new space coming on line, but it was only a matter of time until overbuilding outpaced demand. Many properties are experiencing rising vacancy rates and falling rental rates, creating a favorable market for tenants. Metropolitan Area Economic Overview 2009 Population

141,240

2014 Estimated Population

137,187

Employment Population

80,169

Household Average Income

$59,654

Median Household Income $59,831

Median Household Income $48,657

Total Population Median Age

Des Moines At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

$ 23.00 $ 13.00 $ 8.00

$ $ $

26.00 20.00 14.00

N/A N/A N/A

24.0% 10.7% 3.7%

$ 14.00 $ 13.50 $ 12.25

$ $ $

25.25 22.00 15.50

N/A N/A N/A

N/A 11.2% 7.5%

$ $ $

2.50 2.90 2.20

$ $ $

5.00 6.25 5.75

N/A N/A N/A

7.2% 6.9% 7.8%

Low

High

N/A $ 10.00 $ 8.00

$ $

N/A 15.56 13.00

N/A $ 13.00 $ 9.50

N/A 5.0% 20.0%

$ 16.25 $ 14.00 7.50

$ $ $

20.88 20.00 12.00

$ 18.00 $ 16.00 $ 11.00

N/A 4.0% 13.0%

$ $

1.50 1.50 N/A

$ $

5.25 3.50 N/A

$ $

4.00 3.00 N/A

10.0% 4.0% N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 5.00 $ 10.00 $ 11.00 $ 30.00

$ $ $ $

15.00 18.50 24.00 45.00

$ $ $ $

10.00 14.00 16.00 35.00

33.0% 10.0% 11.0% 7.5%

DEVELOPMENT LAND

Low/Acre

(Rent/SF/YR)

Effective Avg.

Vacancy

$ 10.80 $ 8.00 $ 9.00 $ 6.50

$ $ $ $

16.00 13.00 20.00 28.50

N/A N/A N/A N/A

5.5% 7.6% 5.7% 17.7%

New Construction (AAA) Class A (Prime) Class B (Secondary) New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

The Sioux City area will experience an unprecedented economic boom if the proposed Hyperion Energy Center goes forward. A research study estimates the project would result in 14,000 new jobs and add $14 billion in annual economic activity to the market.

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

The office market consists of 5,572,000 SF, and has maintained a split personality. The professional sector remains weak due to the lack of white collar job growth, while the medical market is robust. Medical space has accounted for nearly half of all office construction since 2000. The Dakota Dunes submarket thrives with just a 2.8% vacancy rate, the highest average rents in the region, and more space under construction.

Sioux City At A Glance Low

DOWNTOWN OFFICE Premium (AAA) Class A (Prime) Class B (Secondary)

The industrial market has a total of 15,250,000 SF, with a favorable 7.5% vacancy rate and steady new construction. Work is under way on a $400 million expansion by Beef Products, Inc. in South Sioux City, which is the largest single investment ever made in Nebraska. The most significant industrial news is a $10 billion, 400,000 barrel oil refinery planned by Hyperion Resources of Dallas that would be the second largest construction project in the history of the United States. The company has obtained options on over 10,000 acres and a countywide referendum approved a rezoning petition for the project. Construction is likely to begin in 2011.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

348,480.00 35,835.00 43,000.00 40,000.00 45,000.00 13,000.00

High/Acre

$ $ $ $ $ $

450,000.00 450,000.00 305,252.00 554,919.00 900,000.00 35,000.00

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $

N/A 130,000.00 25,000.00 15,000.00 260,000.00 10,000.00

High/Acre

$ $ $ $ $

N/A 260,000.00 55,000.00 218,000.00 870,000.00 40,000.00

2010 Global Market Report I www.naiglobal.com

Wichita, Kansas

Contact NAI John T. Arnold Associates, Inc. +1 316 263 7242

Metropolitan Area Economic Overview 2009 Population

604,427

2014 Estimated Population

626,523

Employment Population

342,244

Household Average Income

Lexington, Kentucky As the Wichita Metro area entered the economic downturn, all its major sectors--aircraft manufacturing, energy, agricultural and healthcare--were in excellent health. The local unemployment rate at the beginning of 2009 was 6.0%. As the local economy softened, the unemployment rate rose to 8.9%, largely due to layoffs in the aerospace manufacturing industry.

Lexingtonâ&#x20AC;&#x2122;s commercial real estate market continues to experience reduced activity. There has been an increase in vacancy in all segments of the market. Since Lexington is not overbuilt, occupancy is expected to rebound in 2010. 2010 should also yield opportunistic property purchases as a vast amount of equity anticipates asset re-pricing and REO sales.

The commercial real estate rental rates and market values have not decreased appreciably from last year; however, the transaction volume as a whole is down approximately 30-40%. Vacancy rates in the industrial sector have increased approximately 3%, while the office and retail rates have only increased approximately 1%. Sales of commercial property due to bank foreclosures are not yet significant. This is largely due to long term stability in lease rates and property values. However, sales of development land for new projects are down significantly.

The office market has experienced a decline in occupancy in the suburban market and the CBD. Office construction has slowed significantly, which will assist the market in recovery and increase occupancy as the economy improves. Rental rates have declined but should stabilize in 2010. Retail remains slow with little growth planned for 2010. Value-oriented retailers continue to expand on a selected basis while rates remain stagnant.

Local and national restaurant chains are opening new stores in the Wichita market. The Burger King franchise will be opening four new stores in 2010, and Spangles, a local chain, will be adding a new location as well. By the end of 2009, construction will be complete on the 15,000 seat, $185 million downtown Intrust Bank Arena. This facility is debt-free and was financed through sales tax revenue. Also under construction is the National Center for Aviation Training. This 222,000 SF world-class training facility will provide students the opportunity to receive hands-on, real-world training in the areas of general aviation manufacturing and aircraft and power plant mechanics. The $54 million, 1,300-student facility will open in the fall of 2010. The employment rate has stabilized and is expected to begin to rise again in 2010, but the economy is predicted to improve slowly as the aircraft industry rebounds. Financing for new construction remains challenging. Energy, healthcare and agricultural sectors are expected to experience stability and modest growth in 2010.

$64,274

Contact NAI Isaac +1 859 224 2000

Investment has been quiet in 2009 with an apparent disconnect between buyers and sellers. Buyers are seeking adjusted capitalization rates based on the re-valuation of assets. Sellers have not been willing to reduce prices. 2010 should see increased sales with an improving economy. Metropolitan Area Economic Overview 2009 Population

553,080

2014 Estimated Population

600,196

Employment Population

268,464

Household Average Income

$63,094

Median Household Income $54,875

Median Household Income $50,307

Total Population Median Age

Wichita At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

N/A $ 11.00 $ 9.00

$ $

N/A 16.50 11.00

N/A $ 14.00 $ 10.00

N/A 9.0% 17.0%

$ 23.50 $ 18.00 $ 11.00

$ $ $

27.00 21.00 13.50

$ 25.00 $ 19.00 $ 12.00

4.5% 8.5% 15.0%

$ $ $

2.50 3.50 7.00

$ $ $

3.75 6.00 11.00

$ 3.50 $ 4.00 $ 10.00

8.0% 10.0% 5.6%

Low

High

N/A $ 17.00 $ 13.50

$ $

N/A 20.00 16.00

N/A $ 18.50 $ 15.00

N/A 10.5% 8.6%

$ 18.00 $ 17.00 $ 16.00

$ $ $

22.00 20.00 17.00

$ 19.00 $ 18.00 $ 16.00

40.0% 16.3% 11.8%

$ $ $

3.00 3.75 8.00

$ $ $

4.50 4.75 15.00

$ 4.00 $ 4.25 $ 11.50

14.8% 7.5% 9.4%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

10.00 11.00 15.00 30.00

$ $ $ $

20.00 21.00 28.00 75.00

$ $ $ $

25.4% 11.7% 9.4% 0%

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

$ 60.00 $ 850,000.00 $ 140,000.00 $ 500,000.00 $ 1,200,000.00 $ 135,000.00

(Rent/SF/YR)

Effective Avg.

Vacancy

$6.00 $12.00 $10.00 N/A

$ $ $

12.00 16.00 22.00 N/A

$ 10.00 $ 14.00 $ 15.00 N/A

12.6% 9.0% 6.0% N/A

New Construction (AAA) Class A (Prime) Class B (Secondary) New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls

Lexington should weather the recession better than most areas due to its broad-based economy, central geographic location and controlled zoning and development, which prevents significant overbuilding in the commercial sector.

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Vacant land is near a historical low. There is a community effort to utilize techniques to encourage growth through urban redevelopment. Farm real estate values for the year are $750 higher than the national average.

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Several student housing projects and new market rate complexes were completed in 2009. This has caused an increase in vacancies, particularly student housing. Due to the lack of existing zoned multifamily land, very few projects will be started in 2010.

Lexington At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Property owners have been more flexible to lease vacancies. Recent activity has occurred in small office/warehouses and some adaptive reuse of older bulk warehousing. Industrial will remain stable for 2010 with gradual absorption of vacancy and limited new construction.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

200,000.00 190,000.00 70,000.00 170,000.00 240,000.00 5,000.00

High/Acre

$ $ $ $ $ $

900,000.00 450,000.00 165,000.00 250,000.00 960,000.00 20,000.00

40.00 425,000.00 125,000.00 125,000.00 575,000.00 40,000.00

15.00 17.00 21.00 50.00

2010 Global Market Report I www.naiglobal.com

Louisville, Kentucky

Contact NAI Walter Wagner, Jr. Company Realtors, LLC +1 502 562 9200

Metropolitan Area Economic Overview 2009 Population

1,252,795

2014 Estimated Population

1,299,624

Baton Rouge, Louisiana

Over the past year, metropolitan Louisville’s commercial real estate market has weathered the recession relatively well in spite of an unemployment rate that rose four points to 10.3% and a limited influx of new businesses to the area. In other good news, home sales are up approximately 15% over 2008.

Baton Rouge, the Capital of Louisiana, has withstood the economic slowdown of 2008-2009 relatively well. Weekly wages increased from 2008, the Brooking Institution ranked Baton Rouge the sixth-best performing metro area in Q2 2009, and Forbes ranked Baton Rouge as the seventh-best mid-sized city for job growth in the country.

The Louisville office market ended Q3 2009 with a vacancy rate of 11.2%, up from 10.7 % in 2008. Class A vacancy stood at 13.3% compared to 13.7% for Class B and 6.9% for Class C space, The CBD reported a vacancy rate of 5.9% for Class A buildings. Net absorption was negative 68,943 SF. The average rental rate in all classes was $15.49/SF, a 0.3% decrease from the end of Q2 2009. Class A sector rents averaged $19.91/SF, Class B stood at $14.68/SF and Class C at $12.16/SF.

Baton Rouge has remained well insulated due to several economic catalysts. Louisiana State University, with an enrollment of 35,000 calls Baton Rouge home along with several other universities and colleges. The inmost port on the Mississippi River is located in Baton Rouge, generating a strong barge and shipping base for industrial growth. Numerous plants take advantage of the Mississippi River access like DOW, Exxon, Shintech, Kaiser and Nucor.

The retail market did not experience a significant change over the first three quarters of 2009. The vacancy rate increased to 8.6%, up slightly from 8.4% in 2008. Net absorption wavered between positive and negative territory throughout the year, with indicators pointing to a relatively flat or slightly negative result for the year. Vacant sublease space decreased by 3,715 SF. Rental rates also decreased slightly, ending at $11.97/SF for the year. The industrial market ended Q3 with a vacancy rate of 13.2%, a slight increase over the previous quarter and up from 12% a year ago. Net absorption totaled positive 1,299,350 SF. Vacant sublease space decreased, ending the quarter at 1,251,872 SF. Rental rates were $3.57/SF, an increase over the previous quarter. Louisville’s downtown arena continues to be a bright spot as the major construction project in the area. Scheduled to open in 2010, the $250 million, multi-purpose arena is expected to generate more than $100 million in downtown investment and construction.

Contact NAI Latter & Blum +1 225 295 0800

Metropolitan Area Economic Overview 2009 Population

773,208

2014 Estimated Population

787,300

387,346

$60,749

Employment Population

684,103

Employment Population

Household Average Income

$61,277

Household Average Income

Median Household Income $52,415

Median Household Income $47,801

Total Population Median Age

Louisville At A Glance (Rent/SF/YR)

Other economic generators include Baton Rouge as the state capital as well as having the I-10 and I-12 corridor running through the city. This provides a big boost to Baton Rouge's hospitality sector. Medical is another large employer with five major hospitals in the city. Although rental rates and occupancies have been holding strong across the board, Baton Rouge is finally seeing some inventory coming on line. Office vacancies for Class A space slipped to 9% citywide excluding the additional sublease space that could top 100,000 SF or an additional 2% vacancy by year’s end. Retail occupancies slipped as well in 2009. Overall city vacancies were 12.4%, up 1% from a year earlier. The strongest sector this year has been multifamily with a near 95% occupancy rate citywide. In addition, the highest price per door was paid for an apartment complex in the sale of the 300-unit Millennium, which topped $140,000 per door. All things considered, Baton Rouge continues to show signs of a resilient economy with companies like Albemarle establishing its corporate headquarters in the capital city and outside investors looking at Baton Rouge and the Gulf Coast region as a healthy place to invest.

Baton Rouge At A Glance Low

High

Effective Avg.

Vacancy

DOWNTOWN OFFICE

Low

High

Effective Avg.

$ 24.00 $ 20.00 $ 12.50

$ $ $

28.00 21.50 16.00

$ 27.00 $ 20.75 $ 14.50

41.0% 9.7% 25.0%

$ 28.00 $ 17.95 $ 12.00

$ $ $

28.00 23.00 16.00

$ 28.00 $ 19.80 $ 14.75

25.0% 6.0% 23.0%

3.00 N/A N/A

5.15 N/A N/A

4.00 N/A N/A

13.8% N/A N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 12.00 $ 8.00 $ 23.00 $ 12.00

$ $ $ $

24.00 24.00 40.00 80.00

$ $ $ $

16.00 15.00 28.00 35.00

6.0% 12.5% 6.6% N/A

(Rent/SF/YR)

$ 18.25 $ 18.00 $ 8.00

$ $ $

25.00 24.00 16.00

N/A N/A N/A

N/A 7.5% 8.3%

$ 18.50 $ 17.50 $ 7.00

$ $ $

25.00 23.00 14.00

N/A N/A N/A

N/A 18.0% 19.5%

$ $ $

1.50 1.50 5.45

$ $ $

4.50 4.50 8.25

N/A N/A N/A

13.4% 12.4% 9.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

11.00 10.00 15.00 20.00

$ $ $ $

30.00 20.00 20.00 40.00

N/A N/A N/A N/A

8.6% 10.0% 12.0% 4.0%

DEVELOPMENT LAND

Low/Acre

High/Acre

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land) Residential

$ $ $ $ $ $

$ 1,900,000.00 $ 1,450,000.00 $ 110,000.00 $ 100,000.00 $ 850,000.00 $ 140,000.00

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

$ 1,750,000.00 $ 350,000.00 $ 260,000.00 $ 350,000.00 $ 1,250,000.00 $ 50,000.00

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Vacancy

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

550,000.00 940,000.00 25,000.00 55,000.00 150,000.00 30,000.00

900,000.00 215,000.00 130,000.00 80,000.00 350,000.00 15,000.00

2010 Global Market Report I www.naiglobal.com

Monroe, Louisiana

New Orleans, Louisiana The commercial real estate market for the Northeast Louisiana region has felt the effects of the tough economic times but not as deeply as larger metropolitan markets. Although the market has seen a slowdown in activity, the area has not experienced a distinct drop in property values or lease rates.

Contact NAI Faulk & Foster +1 318 807 4666

Metropolitan Area Economic Overview 2009 Population

171,344

2014 Estimated Population

Over the last year, Northeast Louisiana has seen several significant business investments awarded to our region. One of these is V-Vehicle Co., a new American car company. V-Vehicle selected Monroe as the site for its assembly plant resulting in the addition of 1,400 jobs. V-Vehicle's capital investment is estimated at $248 million. Two other major announcements were from Gardner Denver Thomas consolidating its operations to Monroe with 230 new jobs and Foster Farms investing $20 million to renovate and reopen a processing plant, thereby saving 1,100 jobs. An analysis by university economists issued a jobs forecast for 2010 and 2011 for the state of Louisiana and named Monroe as the city that will add jobs at the fastest pace. This is very welcome news after seven years of lost jobs in Monroe. The university economists estimate Monroe will lead in the percentage of new jobs, 2.5% or 1,900 jobs in 2010 and 1,500 jobs or 1.9% in 2011. The growth of the region through capital investment and job creation will spur an acceleration of economic activity both now as well as into the future. Louisiana and our region will continue to compete for new business investment for the state and the region. We anticipate an increase in new real estate development and expansion opportunities as a result of these new additions to our region.

More than four years since Hurricane Katrina and the ensuing levee failures devastated New Orleans, federal dollars and rebuilding have helped cushion the local economy against the national recession. The metro area has lost 0.9% of its jobs since June, compared to 4.1% lost nationally. The New Orleans area unemployment rose to 7.3% compared to 9.5% nationally.

Contact NAI Latter & Blum +1 504 569 9300

Metropolitan Area Economic Overview 2009 Population

1,052,131

170,501

2014 Estimated Population

1,078,373

Employment Population

91,368

Employment Population

628,467

Household Average Income

$52,956

Household Average Income

$67,632

Median Household Income $39,978

Median Household Income $47,873

Total Population Median Age

Monroe At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

N/A N/A $ 12.00

N/A N/A 15.00

N/A N/A $ 13.50

N/A N/A N/A

N/A $ 17.00 $ 10.00

$ $

N/A 22.00 12.00

N/A $ 19.50 $ 11.00

N/A N/A N/A

3.50 N/A N/A

N/A N/A N/A

Low

High

N/A $ 16.00 $ 12.00

$ $

N/A 21.00 18.00

N/A $ 18.50 $ 15.00

N/A 9.4% 13.4%

N/A $ 20.00 $ 18.00

$ $

N/A 23.00 20.00

N/A $ 21.50 $ 19.00

N/A 9.4% 12.2%

$ $ $

2.00 2.50 9.00

$ $ $

3.75 6.50 15.00

$ 2.90 $ 4.50 $ 12.00

13.2% 15.0% 10.0%

Downtown Neighborhood Service Centers Sub Regional Centers Regional Malls

$ $ $1 $

15.00 12.00 5.00 20.00

$ $ $ $

14.0% 15.0% 10.0% 5.0%

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ 1,500,000.00 $ 150,000.00 $ 350,000.00 $ 90,000.00 $ 261,360.00 $ 30,000.00

$ 6,500,000.00 $ 812,500.00 $ 650,000.00 $ 175,000.00 $ 2,178,000.00 $ 650,000.00

(Rent/SF/YR)

Effective Avg.

Vacancy

N/A $ 11.50 $ 15.00 N/A

N/A N/A N/A N/A

New Construction (AAA) Class A (Prime) Class B (Secondary) New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL 2.50 N/A N/A

4.50 N/A N/A

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

Downtown Neighborhood Service Centers Sub Regional Centers Regional Malls

N/A $ 8.00 $ 12.00 N/A

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

The lodging sector has produced unprecedented transaction volume. Since 2006, hospitality investment in the CBD involved 2,894 CBD-French Quarter hotel rooms, with an aggregate value of $405 million. An additional $74 million has been invested in the acquisition of 1,994 storm-damaged rooms resulting in a total post-storm investment of $479.2 million in the sector.

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

The New Orleans economy is heavily dependent on the tourist and hospitality industries. Not surprisingly, the cutback in corporate travel, fewer and smaller meetings and the drop in consumer spending has reduced visitation to the City. The loss of service sector population postKatrina and higher local labor costs have reduced the profitability of area hotels and restaurants in the face of decreasing revenues. Most industry observers do not expect recovery in this sector until 2012.

New Orleans At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

New Orleans is not immune from the current economic crisis. The housing market has stalled with home sales down 39% and new construction off by 48%. Infrastructure projects have helped offset the drop in new construction. The office market has remained relatively stable in terms of occupancy and rental rates in the CBD and suburbs. No speculative inventory has been added in either market. The adaptive re-use of older, Class B and C buildings has actually reduced available supply. The more than 1.5 million SF of industrial space that was absorbed in the months following Katrina by contractorâ&#x20AC;&#x2122;s utility crews and relief workers has been returned. By the third quarter of 2009, the inventory of industrial space in the metropolitan area had climbed to more than 6.9 million SF, producing a vacancy rate of more than 13%. The first softening in rental rates and pricing is evident.

$ $ $

N/A N/A 10,000.00 130,000.00 425,000.00 N/A

$ $

N/A 15.00 18.00 N/A

High/Acre

$ $ $

N/A N/A 40,000.00 450,000.00 650,000.00 N/A

$ 40.00 $1 8.00 $ 29.00 $ 62.50

27.50 15.00 22.00 41.25

2010 Global Market Report I www.naiglobal.com

Greater Portland, Southern Maine

Baltimore, Maryland

Office leasing has seen a noticeable slowdown in transactions. A lack of activity and demand for space, with an approximate 10% vacancy rate, has resulted in a very "pro-tenant" atmosphere. Landlords in all sectors of the market are making concessions to either induce new tenants to come to their buildings or to entice existing tenants to stay at reduced rates. Sale of medical/office buildings has slowed and capitalization rates have risen, particularly in suburban sectors.

Contact NAI The Dunham Group +1 207 733 7100

Metropolitan Area Economic Overview 2009 Population

509,558

2014 Estimated Population

500,330

Employment Population

301,558

Household Average Income

$70,528

Median Household Income $54,555 Total Population Median Age

The inventory of viable office investment properties is limited and the number of capable buyers remains sparse given the tightened commercial lending situation. Speculative construction of office buildings has stalled as ample existing space is available at rates below what would be needed to justify new construction. Lenders continue to shy away from these types of projects. Big box expansion, which led the previous growth cycle, has come to a standstill. Target, Home Depot, Kohl's and Wal-Mart supersizing have halted expansion in Maine. Spaces vacated by Circuit City, Linen's & Things, Tweeter and other bankrupt retailers, have been very slow to re-lease. This also tends to be the case with vacated national restaurant sites. Vacancy rates for power centers and retail strips remain manageable, provided there is not another large wave of store closings. Walgreens continues to construct new stores in Maine, albeit at a slower pace. Rents have declined. Sam's Club has been evaluating opportunities in Maine and Tractor Supply is building several new stores. McDonald's continues its program of upgrading stores as well as adding new stores in selected markets. Tim Horton's has initiated limited expansion in northern and central Maine and there has been additional supermarket expansion in secondary markets. Lower-end discount stores have also been active, including Ocean State, Marden's, Chapter 11 and Save-A-Lot. These stores were presented with opportunities to occupy prime vacancies at low rates. Maine has not escaped the effects of the national and global recession. The inventory of industrial space has ballooned since the beginning of the year. However, the increasing vacancy rate has resulted in lower lease rates which are providing tenants with attractive opportunities in the market.

Greater Portland, Southern Maine At A Glance Low

Effective Avg.

Vacancy

$ 16.00 $ 15.00 $ 8.00

$ $ $

21.00 18.00 15.00

$ 20.25 $ 17.00 $ 12.50

5.0% 6.0% 11.5%

$ 14.00 $ 10.00 $ 8.00

$ $ $

18.00 14.00 10.00

$ 16.00 $ 13.00 $ 9.00

5.0% 8.0% 9.0%

$ $ $

4.50 5.25 8.00

$ $ $

5.0% 5.0% 3.0%

2014 Estimated Population

2,732,754

Employment Population

1,323,649

Household Average Income

$83,898

Things might get worse before they get better. New construction continues in the downtown market and nearly 1 million SF of space is expected to enter the inventory over the next year. Owners can fight by keeping an eye on operating expenses and taking advantage of saving wherever possible.

Median Household Income $64,415 38

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ $ $

28.00 20.00 12.00

$ 38.00 $ 31.75 $ 22.50

$ 32.00 $ 25.00 $ 18.00

N/A 13.8% 12.4%

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ $

N/A 15.00 10.00

N/A $ 32.00 $ 30.00

N/A $ 26.00 $ 20.00

N/A 15.3% 11.5%

4.00 N/A 4.00

$ 12.00 N/A $ 25.00

5.00 N/A $ 10.70

14.4% N/A 15.7%

15.00 15.00 10.00 N/A

$ 50.00 $ 50.00 $ 16.00 N/A

$ 22.00 $ 23.00 $ 15.00 N/A

N/A N/A N/A N/A

INDUSTRIAL 2.50 3.50 4.75

3.50 4.25 6.00

RETAIL

2,686,982

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

2009 Population

However, Baltimore is not immune to the credit crunch. The market has witnessed some recovery at the end of Q2. With asking rates hovering just shy of the $5 NNN mark for industrial space, developers have sharpened their pencils after sitting on recently delivered product in a market that was flooded with new construction for most of 2008. Asking rates were previously based on construction costs and projections that were developed during the boom times of 2006 and 2007. The tenant has become king in the industrial, office and retail markets, with multiple opportunities to upgrade space at competitive rates and aggressive terms. Well-financed users seeking to purchase buildings remain on the sidelines, patiently waiting for the market to hit what they perceive to be the bottom.

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Metropolitan Area Economic Overview

Buoyed by its proximity to Washington, DC, and the presence of multiple government installations, Baltimore, the East Coastâ&#x20AC;&#x2122;s farthest inland seaport, enjoys a marginal insulation from the global economic slowdown. The Social Security Administration, the Health Care Financing Administration, the National Security Agency, Ft. Meade and Aberdeen Proving Ground are all federal government operations in the area that employ Marylanders at well above average salaries. These agencies require significant private contractor support which, in turn, supplies even better paying jobs.

Baltimore At A Glance

High

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Contact NAI KLNB, LLC +1 410 321 0100

Total Population Median Age

(Rent/SF/YR)

Baltimore's fundamentals have helped to insulate the city from the current financial climate. The downtown office market continues to gravitate to the water as Inner Harbor East continues to build out. The new 600,000 SF headquarters for Legg Mason opened in 2009 as the largest office presence to date in that area. What will happen to the former Legg headquarters at 100 Light Street remains a question.

Bulk Warehouse Manufacturing High Tech/R&D

$ $

RETAIL

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

16.00 10.00 10.00 18.00

DEVELOPMENT LAND

Low

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential (per acre)

$ $ $ $ $ $

18.00 150,000.00 125,000.00 70,000.00 250,000.00 65,000.00

$ $ $ $

30.00 18.00 22.00 50.00

$ $ $ $

25.00 14.00 16.00 30.00

5.0% 5.0% 5.0% 4.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $

High

DEVELOPMENT LAND

Low/Acre

$ 25.00 $200,000.00 $150,000.00 $150,000.00 $750,000.00 $300,000.00

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $

650,000.00 125,000.00 100,000.00 50,000.00 300,000.00 N/A

High/Acre

$ $ $ $ $

3,000,000.00 1,500,000.00 1,350,000.00 700,000.00 2,000,000.00 N/A

2010 Global Market Report I www.naiglobal.com

Suburban Maryland

Boston, Massachusetts

Suburban Maryland includes two primary counties and three secondary counties. Both Prince George’s and Montgomery counties border Washington, DC, and have the largest populations. Calvert, Charles and Frederick Counties further outside of Washington, DC, and have smaller populations; however, these areas are continuing to grow due to jobs markets in both Washington, DC, and Baltimore, Maryland.

Contact NAI Michael +1 301 459 4400

Metropolitan Area Economic Overview 2009 Population

5,331,775

2014 Estimated Population

5,398,312

Employment Population

2,934,389

Household Average Income

In southwestern Prince George’s County, the name of Andrews Air Force Base has been changed to Joint Base Andrews–Naval Air Facility Washington. This change comes as currently the base is having over $1 billion in renovations and construction, and is expected to grow even more in the near future. Andrews is still the second largest employer in the State of Maryland, next to the University System, which has recently opened its UMUC Campus in Largo. In northern Prince George’s, a limited industrial land supply is expected to remain robust and keep this market strong. The office sector is expected to grow in the near future as the Federal Government takes aim at the county’s undeveloped land, which is unmatched in the Washington, DC, metropolitan area for built-to-suit projects. Montgomery County has extensive infrastructure in place due to the large amount of science and technology firms located in the area along the I-270 corridor. This area hosts over 200 biotech companies, employs over 100,000 advanced technology workers and has attracted the highest concentration of PhDs in the nation. The new Inter County Connector (ICC) will connect I-270 with I-95, allowing a 12-minute travel time between these two counties, thereby alleviating traffic on I-495 the Capital Beltway and allowing the growth of both the Industrial and Office markets. This market has several moving parts. It hosts an area developed and steadily thriving in Montgomery, an up-andcoming area with major developments in Prince George’s, as well as areas unaffected now but poised for future development in Charles, Calvert and Frederick.

While the Massachusetts economy is still in a downturn, the rate of deterioration has slowed considerably. According to MassBenchmarks, economic activity in Massachusetts declined at a 1.1% annualized rate in Q3 2009, compared to 4.2% in February 2009. The state’s education, health services, professional services and information sectors have remained relatively stable despite strong recessionary pressures from the financial services sector.

Contact NAI Hunneman +1 617 457 3400

Metropolitan Area Economic Overview 2009 Population

4,536,261

2014 Estimated Population

4,669,975

Employment Population

2,741,072

Household Average Income

$109,029

$91,065

Median Household Income $81,001

Median Household Income $68,969

Total Population Median Age

Suburban Maryland At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

N/A N/A N/A

$ $ $

25.50 17.00 11.00

$ 49.00 $ 45.75 $ 39.00

$ 40.36 $ 28.45 $ 24.20

73.0% 15.0% 12.0%

$ $ $

4.95 5.00 6.95

$ 14.00 $ 11.25 $ 16.00

$ 5.95 $ 6.42 $ 11.42

12.5% 8.7% 7.8%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $

N/A 12.00 13.00 22.10

N/A $ 55.00 $ 44.00 $ 40.00

N/A $ 25.22 $ 24.12 $ 23.12

N/A 7.9% 2.4% 3.4%

DEVELOPMENT LAND

Low/Acre

SUBURBAN OFFICE

The retail market has also felt the impact of the economic turmoil with lower rental rates and significantly higher vacancy in the downtown. Super H-Mart’s 51,000 SF lease at 3 Old Concord Road in Burlington is one of the few deals that was completed in 2009. Although the Boston market continues to slide, the rate of decline is showing significant signs of deceleration. If this trend of decelerating decline continues, we can anticipate the beginnings of a stabilizing market in 2010, with more sustainable growth trends returning in 2011.

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

Premium (AAA) Class A (Prime) Class B (Secondary)

$ 45.00 $ 35.00 $ 25.00

$ $ $

55.00 52.00 35.00

$ 50.00 $ 42.50 $ 30.00

17.0% 9.5% 11.3%

$ 32.00 $ 25.00 $ 16.00

$ $ $

42.00 35.00 25.00

$ 37.00 $ 30.00 $ 22.50

40.0% 16.5% 15.0%

$ $ $

4.50 4.75 7.00

$ $ $

7.00 8.00 18.00

$ 5.75 $ 6.00 $ 10.00

11.0% 13.5% 15.0%

$ $ $ $

20.00 10.00 10.00 15.00

$ $ $ $

15.0% 7.5% 7.5% 7.5%

SUBURBAN OFFICE

INDUSTRIAL

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Lack of liquidity continued to plague the investment market in 2009. A majority of investment sales have been limited to smaller deals that can be locally funded. The multifamily market remains relatively active; one of the largest deals in 2009 was the sale of a 90 unit multifamily portfolio in Arlington for $12 million. Capitalization rates have increased to 7.5% for multifamily sales, 9% for office property sales and 9.5% for retail property sales.

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

Bulk Warehouse Manufacturing High Tech/R&D

The industrial market continues to trudge along as asking rates have dropped to an average of $6/SF NNN. Vacancy rates have hit their highest level since Q1 2005. One significant transaction is Best Buy’s build-to-suit lease of a new distribution facility at 140 Depot Street in Bellingham, totaling 238,370 SF.

Boston At A Glance

Low

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

Asking rates for office space continued to fall in 2009, but are leveling off. With vacancy rates climbing to 9.5% in the CBD and 16.5% in the suburbs, there is no shortage of supply, allowing tenants with solid financials to take advantage of tenant-favorable conditions. Significant transactions include Verizon’s 200,000 SF lease at 185 Franklin Street in Downtown Boston and 3Com Corporation’s 130,000 SF lease at 350 Campus Drive in Marlborough.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

$ $ $ $ $

N/A 118,000.00 140,000.00 40,000.00 160,000.00 25,000.00

High/Acre

$ $ $ $ $

N/A 550,000.00 625,000.00 240,000.00 700,000.00 50,000.00

Downtown Neighborhood Service Centers Community Power Center Regional Malls

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

100.00 225,000.00 80,000.00 75,000.00 280,000.00 100,000.00

$ 120.00 $ 17.50 $ 17.50 $ 80.00

70.00 13.25 13.25 47.00

High/Acre

$ 150.00 $ 750,000.00 $ 225,000.00 $ 150,000.00 $ 1,400,000.00 $ 500,000.00

2010 Global Market Report I www.naiglobal.com

Western (Greater Springfield), Massachusetts

Detroit, Michigan

Greater Springfield is definitely in a recessionary climate with negative absorption in the office, retail and industrial sectors and vacancy rates that have continually increased in the Western Massachusetts region. Overall, demand for commercial space has slowed in the past year as national companies have scaled back, or stopped expanding altogether, due to a drop in consumer spending.

Contact NAI Samuel D. Plotkin Associates +1 413 781 8000

Metropolitan Area Economic Overview 2009 Population

675,599

2014 Estimated Population

658,190

Employment Population

344,760

Household Average Income

$62,737

Few retailers are expanding in the area with the exception of Lowes, which is constructing a new retail facility in Hadley and is looking to develop a new retail facility in Holyoke in the next two years. The Western Massachusetts industrial market remains flat, and as a result, there continues to be an oversupply of industrial space as manufacturers continue to restructure and downsize. The industrial market vacancy in the area has increased from approximately 9-12% and has resulted in the average lease rates decreasing from approximately $4/SF to $3.75/SF. We continue to receive a number of inquires for warehousing and distribution companies searching for modern, high bay facilities with 24’ to 26’ height, which are limited and seem to result in new construction. The weak economy has resulted in declining demand for office space in both the suburban and downtown markets. Landlords are trying to combat rising vacancies by lowering rental rates and increasing concessions to retain existing tenants and attract new ones. The Massachusetts Development Finance Agency recently completed the purchase of the former Federal Building located at 1550 Main Street in downtown Springfield. The building will become the home of the Springfield School Department and offices for Baystate Health. Constant changes in commercial real estate are hard to adjust to, but where others might see challenges, we see opportunities. We remain hopeful that we will see a drastic turnaround in 2010. The current environment is a great opportunity for companies in Western Massachusetts to begin new businesses and expand locations.

The continual decline of the auto industry weighed heavily on real estate markets throughout the Metro Detroit area in 2009. Sweeping layoffs have not only hampered Detroit’s industrial market, but the commercial and retail markets continue to suffer as well. Medical development drove most real estate growth but is beginning to show weakness. The office market has developed a churning trend with many users taking advantage of small spreads in rates between classes. Though rate gaps have narrowed, landlords are hesitant to offer tenant improvement incentives as financing and cash remain scarce. New demand has entered the marketplace in the form of renewable energy and film production, yet these industries do not have the critical mass to benefit the entire market. Contact NAI Farbman +1 248 353 0500

Metropolitan Area Economic Overview 2009 Population

4,451,621

2014 Estimated Population

4,408,696

Employment Population

2,226,596

Household Average Income

$69,120

Median Household Income $51,521

Median Household Income $64,464

Total Population Median Age

Greater Springfield At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

$ $

N/A 23.00 14.00

$ $

N/A 18.00 12.00

N/A 15.0% 20.0%

$ 18.50 $ 13.00 $ 11.00

$ $ $

22.50 20.00 16.00

$ $ $

20.50 16.00 14.00

10.0% 10.0% 15.0%

$ $ $

2.00 3.00 6.00

$ $ $

5.25 5.25 8.00

$ $ $

3.00 3.75 7.00

12.0% 12.0% 6.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 8.00 $ 8.50 $ 20.00 $ 25.00

$ $ $ $

15.00 16.00 30.00 40.00

$ $ $ $

12.00 10.50 25.00 30.00

15.0% 11.0% 10.0% 10.0%

DEVELOPMENT LAND

Low/Acre

SUBURBAN OFFICE

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

$ 22.00 $ 20.00 $ 3.50

$ 33.00 $ 30.00 $ 23.00

$ 25.85 $ 23.09 $ 16.50

13.0% 9.8% 21.0%

$ 14.76 $ 9.00 $ 9.75

$ 39.36 $ 45.00 $ 25.00

$ 28.27 $ 22.50 $ 18.97

14.9% 17.1% 20.5%

$ $ $

4.00 1.00 2.95

$ 35.00 $ 8.00 $ 22.00

$ $ $

4.24 6.50 5.63

13.0% 24.0% 19.8%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $

6.32 5.00 N/A N/A

$ 20.00 $ 30.00 N/A N/A

$ 12.30 $ 12.74 N/A N/A

11.2% 11.2% N/A N/A

DEVELOPMENT LAND

Low

New Construction (AAA) Class A (Prime) Class B (Secondary) New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

The overall real estate market in Metro Detroit should continue a decline through 2010 until new industries gain traction and automotive profits return. With aggressive tax incentive programs in place, Detroit should slowly see demand return in late 2010, most likely in the form of energy research and development.

DOWNTOWN OFFICE N/A $ 15.00 $ 10.00

New Construction (AAA) Class A (Prime) Class B (Secondary)

Retail power centers have begun to feel the effects of falling consumer spending and increasing unemployment with many anchor and smaller tenants vacating. The largest hit to the retail market came from sweeping closures of Circuit City locations throughout the Metro Area. Many of these spaces were replaced with significant investments from Meijer and LA Fitness, helping to stabilize the sliding demand for retail space. As vacancy continues to lead national averages, retail will show weakness throughout 2010, specifically for in-line applications.

Detroit At A Glance

Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Industrial vacancy continues to rise above 20%, primarily due to the hard hit automotive industry. With minimal traditional industrial demand, renewable energy firms are beginning to look at flex space as an attractive option for solar and wind technologies as these industries are currently more R&D focused. Ford Motor is in the process of selling 4.7 million SF of plant space to an energy coalition aimed at creating new solar technologies.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

$ $ $ $ $

N/A 60,000.00 55,000.00 50,000.00 100,000.00 10,000.00

High/Acre

$ $ $ $ $

N/A 100,000.00 75,000.00 200,000.00 1,000,000.00 300,000.00

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $

High

N/A 40,000.00 191,666.00 N/A 45,831.00 N/A

N/A $ 1,041,666.00 $ 230,270.00 N/A $ 1,024,590.00 N/A

2010 Global Market Report I www.naiglobal.com

Grand Rapids, Michigan

Contact NAI West Michigan +1 616 776 0100

Metropolitan Area Economic Overview 2009 Population 2014 Estimated Population

784,632

803,240

Employment Population

478,570

Household Average Income

$64,503

Lansing, Michigan

The region is in an era of transition as it evolves away from its traditional reliance on the furniture and auto related industries. While most segments in West Michigan experienced below-average growth, if any, the emerging life science industry continued to propel transactions through 2009. In general, vacancy was up and rent was down.

The Lansing area and tri-area is composed of Ingham, Eaton and Clinton Counties. Lansing's population remains steady at approximately 450,000. In 2009 the market nearly grinded to a halt but turned around with signs of life in the fourth quarter. As the debt market corrects itself in 2009, we anticipate the number of transactions to increase into 2010.

The office sector reflected the ups and downs of an overall tough year. Activity levels improved late in the year as tenants were in the market checking available deals and incentives being offered. Tenants are renegotiating rates and terms rather than dealing with disruption and cost of moving. The medical sector continues to grow as the Michigan State medical school and the Van Andel Institute, Phase II, will be completed in 2010, and Grand Rapids becomes a regional medical care provider.

The economic trend continued with below average growth in all segments of the market. Lansing's office market has approximately 10 million SF with the largest concentrations in the CBD and East Lansing. The market had steadily increasing vacancy rates nearing 25% while the US vacancy rate averaged 15%. As vacancy rates increased in the market, rental rates continued to drop and landlords were forced to offer significant incentives to attract tenants. The forecast is that pricing should remain relatively flat or declining mainly due to the uncertainty of the market.

Demand for industrial property in 2009 has been soft. Many companies, unsure of their futures, had difficulty making long term real estate decisions. In 2010 we expect to see little new development. Rather, existing buildings will be redeveloped and used for growing industries in West Michigan such as medical, wind and solar energy, component manufacturing, food processing and related businesses. The retail sector has also seen increased vacancy and lower average rents over the past year. With weak leasing activity, landlords are being forced to be more flexible in negotiations. With tightened financial markets, landlords also had difficulty obtaining financing for tenant improvements. Neighborhood retail centers experienced declines in rental rates and tenants are finding a challenging business environment. Although many restaurants have been cautious about expansion, the West Michigan market has seen some activity in 2009 by national restaurants such as Sonic, Culvers and Golden Corral. Despite the downturn there is some great news in West Michigan, which includes the Farmerâ&#x20AC;&#x2122;s Insurance announcement of 1,600 added jobs and 275,000 SF of new office construction. Many tenants are renegotiating reduced rents in exchange for extended leases.

Contact NAI Mid-Michigan Vlahakis Commercial +1 517 487 9222

Metropolitan Area Economic Overview 2009 Population

460,491

2014 Estimated Population

469,554

Employment Population

265,711

Household Average Income

$60,427

Median Household Income $56,923

Median Household Income $56,523

Total Population Median Age

West Michigan At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

$ 15.00 $ 14.00 $ 5.00

$ $ $

25.00 24.00 12.00

$ 20.00 $ 19.00 $ 8.50

20.0% 20.0% 25.0%

$ 12.00 $ 10.00 $ 5.00

$ $ $

18.50 17.00 11.00

$ 15.25 $ 13.50 $ 8.00

25.0% 20.0% 20.0%

$ $ $

2.00 2.00 3.00

$ $ $

3.50 3.50 6.00

$ $ $

2.75 2.75 4.50

12.0% 12.0% 12.0%

Low

High

Effective Avg.

Vacancy

$ 7.50 $ 7.00 $ 9.00 $ 14.00

$ $ $ $

20.00 20.00 23.00 35.00

$ $ $ $

13.75 13.50 16.00 25.00

N/A 15.0% 4.0% 2.0%

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ 17.00 $ 12.00 $ 8.00

$ $ $

22.00 16.00 12.00

$ 19.50 $ 14.00 $ 10.00

10.0% 21.0% 30.0%

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ 16.00 $ 12.00 $ 6.00

$ $ $

22.00 16.00 10.00

$ 18.00 $ 14.00 $ 8.00

16.0% 18.0% 28.0%

$ $ $

2.50 3.00 4.25

$ $ $

3.50 4.50 6.50

$ $ $

3.00 3.50 5.50

20.0% 16.0% 15.0%

$ 8.00 $ 6.50 $ 12.00 $ 25.00

$ $ $ $

12.00 12.50 14.00 34.00

$ 10.00 $ 8.75 $ 12.50 $ 28.00

12.0% 14.0% 12.0% 10.0%

INDUSTRIAL

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls

(Rent/SF/YR)

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

The retail market consists of nearly 14 million SF, primarily located in regional malls and strip centers. Factors that contributed to growth in previous years were related to activity from drugstores and bank branch expansion. We can expect steady economic trends for 2010.

Lansing At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

The industrial market has shown significant declines in users and user interest. The marketâ&#x20AC;&#x2122;s largest owner users are General Motors and Meijer. Both companies have a direct impact on the industrial market, occupying more than 20% of the total available space. The largest concentration of industrial space can be found in West Lansing (Eaton County), which comprises nearly 50% of the gross leasable product in the market. General Motors and suppliers collectively have brought approximately 2 million SF of Class A Industrial space to the market. This has shuffled the deck in the industrial market, which consisted of older obsolete buildings. Vacancies have increased over the past two years increasing from 18% in 2008 to near 25% in 2009. The outlook is fair but we expect absorption to be slow.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ 1,100,000.00 $ 100,000.00 $ 50,000.00 $ 30,000.00 $ 100,000.00 $ 5,000.00

High/Acre

$ 5,000,000.00 $ 180,000.00 $ 125,000.00 $ 130,000.00 $ 400,000.00 $ 30,000.00

Downtown Neighborhood Service Centers Community Power Center Regional Malls

DEVELOPMENT LAND

Low/Acre

Office in CBD) Land in Office Parks Land in Industrial Parks) Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

100,000.00 80,000.00 20,000.00 25,000.00 200,000.00 2,500.00

High/Acre

$ $ $ $ $ $

400,000.00 120,000.00 80,000.00 50,000.00 400,000.00 150,000.00

2010 Global Market Report I www.naiglobal.com

Minneapolis/St. Paul, Minnesota

Kansas City, Missouri

Minneapolis/St. Paul, the “Twin Cities,” are home to 19 Fortune 500 companies in industries driven by commerce, finance, healthcare and high-tech companies. The diverse 11-county metro area has an annual population growth of 2-3%, a highly educated workforce and low rates of unemployment, producing a stable environment even during unpredictable times.

Contact NAI Welsh +1 800 897 7701

Metropolitan Area Economic Overview 2009 Population

3,263,689

2014 Estimated Population

3,398,253

Employment Population

2,035,357

Household Average Income

$82,364

Vacancy rose steadily throughout 2009 as rental rates decreased slightly in all property types. Office vacancy market-wide is 14% with the highest vacancy in Class B space. Industrial vacancy sits at 10% and retail vacancy is about 5%. Tenants exercise caution when it comes to leasing or acquiring new space, renewing existing leases rather than absorbing relocation costs. Landlords are offering discounted rates to tenants renewing 12 to 18 months in advance to ensure spaces remain filled. Leases of 10,000 SF or less are driving the industrial market as retail spaces vacated in late 2008 and early 2009 are filled by a host of new eateries. Major leases this year included a 929,800 SF Target Corporation office renewal, the 300,000 SF Silgan Containers industrial lease and the 30,000 SF Home Valu Interiors retail lease. Market activity has grown throughout 2009 and will continue in 2010. Movement is due to consolidation and downsizing, as opposed to actual growth. There is a large amount of “shadow” space in industrial and office segments as companies downsized but did not release unused space. That space needs to be filled before new construction demand will return. Top construction projects under way in 2009 were the Excelsior Crossings Office Park – Bldg. C, 2201 W 94th Ave. in Bloomington and BMW of Minnetonka. Transaction volumes are down as are pricing and value. Looking ahead, we'll see more foreclosures, forced sales and increased transactional activity as lenders liquidate assets. The largest sales in 2009 included the 116,000 SF Syngenta Headquarters office building in Hopkins, the 335,400 SF industrial building located at 13201 N Wilfred Lane in Rogers, and the 97,535 SF Hastings Marketplace.

Kansas City, a bi-state community of over 2,000,000 people, ranks in the top half nationwide for growth during the recession. Bioscience, healthcare and bulk distribution have been key performers. The industrial sector remains healthy with 7.25% vacancy and a fairly narrow margin between quoted and negotiated lease rates. Coleman’s 1,100,000 SF distribution center opened at year-end 2009. BNSF/Allen Group’s intermodal project in Johnson County, Kansas is proceeding in Edgerton with support from the city, county and state.

Contact NAI Capital Realty Kansas City +1 913 469 4600

Metropolitan Area Economic Overview 2009 Population

2,016,662

2014 Estimated Population

2,095,104

Employment Population

1,127,170

Household Average Income

$68,837

Median Household Income $69,755

Median Household Income $59,541

Total Population Median Age

Minneapolis/St. Paul At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

N/A 24.00 55.00

N/A $ 18.45 $ 17.97

N/A 11.0% 13.4%

N/A $ 15.00 $ 14.00 N/A $ 13.00 $ 2.38

$ $

N/A 31.00 60.00

N/A $ 20.70 $ 17.79

N/A 9.8% 10.0%

$ $ $

2.50 2.50 3.00

$ $ $

14.75 11.00 25.71

$ $ $

5.91 5.76 7.24

10.2% 7.9% 15.5%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 10.00 $ 5.00 $ 3.50 $ 7.00

$ $ $ $

25.00 37.00 32.00 70.00

$ $ $ $

16.83 13.86 11.32 14.73

5.0% 7.8% 6.3% 1.5%

DEVELOPMENT LAND

Low/Acre

SUBURBAN OFFICE

The retail sector slowed dramatically in 2009 and improvement is unlikely until at least 2011. Corbin Park in Overland Park opened with Von Maur, but has since encountered numerous contractors’ liens and minimal leasing. Lee’s Summit’s Summit Fair, a 395,000 SF lifestyle center opened, anchored by Macy’s and JC Penney.

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

Premium (AAA) Class A (Prime) Class B (Secondary)

N/A $ 18.00 $ 14.50

$ $

N/A 23.50 20.00

N/A $ 18.64 $ 17.13

N/A 24.0% 18.2%

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ 28.50 $ 20.50 $ 15.00

$ $ $

28.50 28.50 21.00

$ 28.50 $ 20.81 $ 17.70

100.0% 19.1% 16.4%

$ $ $

3.55 2.65 4.50

$ $ $

5.60 6.40 17.85

$ $ $

3.92 3.45 8.00

5.9% 7.3% 15.5%

$ 9.00 $ 6.20 $ 6.45 $ 12.00

$ $ $ $

26.00 23.50 28.25 33.50

$ $ $ $

17.88 12.80 17.01 18.24

7.8% 13.2% 7.6% 8.9%

INDUSTRIAL

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

The Wizards soccer team is flipping its stadium development along with a significant Cerner Corporation office project from Missouri to Kansas. Developers are moving forward at Village West/Kansas Speedway in Kansas City, Kansas due to greater economic incentives available in Kansas. Cerner will create up to 4,000 jobs in this development, the largest jobs influx in Kansas City Kansas in years.

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Healthcare, bioscience research and telecommunications impact demand. Two of the largest transactions occurred at Sprint’s headquarters with healthcare companies Apria Healthcare and Care Centrix opening new operations. Telecommunication companies Sprint and CenturyLink (formerly Embarq) offered large blocks of space new to the market at Sprint’s Headquarters and CenturyTel’s premises at Glenwood Place.

DOWNTOWN OFFICE $ $

New Construction (AAA) Class A (Prime) Class B (Secondary)

Kansas City’s office market vacancy increased throughout most submarkets in 2009. However, this sector is projected to begin improving in late 2010. The south Johnson County, Kansas submarket, the metro’s most active, should rebound first. Large sublease offerings were a factor in increased incentives and depressed rates.

Kansas City At A Glance

Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

The CenterPoint/KC Southern Railway intermodal center at the former Richards-Gebaur Airport is advancing. Phase I opened in spring 2008 with $30 million site grading, streets, sewers and utilities. This intermodal serves as an alternative to the congested Los Angeles port system by shipping from Mexico’s Port of Lazaro Cardena, an increasingly significant gateway for imports from Asia.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

High/Acre

N/A N/A N/A N/A N/A N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

DEVELOPMENT LAND

Low

Office in CBD (per square foot) Land in Office Parks (per acre) Land in Industrial Parks (per acre) Office/Industrial Land - Non-park (per acre) Retail/Commercial Land (per acre) Residential (per acre)

$ 40.00 $ 150,000.00 $ 40,000.00 $ 35,000.00 $ 26,000.00 N/A

High

$ $ $ $ $

75.00 480,000.00 200,000.00 175,000.00 1,050,000.00 N/A

2010 Global Market Report I www.naiglobal.com

100

St. Louis, Missouri

Bozeman, Montana The Greater St. Louis Metropolitan area consists of 16 counties in Missouri and Illinois and has a population of 2.8 million, making it the 18th largest metropolitan area in the nation.

Bozeman is the primary urban center in Southwestern Montana and is the seat of Gallatin County with a population of 90,000. Located just 90 miles north of Yellowstone National Park and only 45 miles north of the Big Sky resort community, Bozeman represents an attractive primary and secondary home market.

The office market has been slowly declining over the last year with slight price erosion and flat demand. Vacancy rates increased to 11.8% in 2009 compared to 10.8% at the end of 2008.The office sector is expected to weaken further in 2010 when banks increase foreclosures. With one exception, development projects such as the Brown Shoe Company headquarters and Ballpark Village remain on hold. The Centene Corporation building, a 485,250 SF high-rise in Clayton, is the only significant development expected to deliver in 2010.

Contact NAI DESCO +1 314 994 4444

Metropolitan Area Economic Overview 2009 Population

2,812,578

2014 Estimated Population

2,833,749

Employment Population Household Average Income

The industrial market continues to suffer from an excess of speculative space resulting in elevated vacancy rates and decreased rental rates. Vacancy rates increased to 9.0% in 2009 compared with 8.1% at the end of 2008. Average rental rates dropped in 2009 to $4.21/SF compared with $4.35/SF at the end of 2008. No significant projects are currently under construction. However, agents are reporting an increase in tenant and buyer inquiries, which could signal an end to the inactivity. The retail sector has been the hardest hit, seeing little activity in the last two years. Tenants continue to vacate or seek rent reductions, causing lease rates to decrease and vacancies to increase. There were no new developments delivered in 2009. As an exception to this inactivity, several newcomers are actively seeking locations. CVS/Pharmacy, Dunkin Donuts, Five Guys Burgers & Fries and ChickfilA are expected to open multiple locations in the next year.Nordstrom Rack and Von Maur have also announced plans to enter the market, but the timing remains uncertain. Retail prospecting is expected to increase in 2010 with little urgency to close until 2011.

Contact NAI Landmark +1 406 556 5005

Metropolitan Area Economic Overview 2009 Population

103,096

2014 Estimated Population

136,019

1,497,458

Employment Population

40,064

$68,844

Household Average Income

$69,488

Median Household Income $55,768

Median Household Income $47,771

Total Population Median Age

St. Louis At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

N/A 17.00 10.00

N/A $ 22.00 $ 17.00

N/A $ 18.80 $ 16.07

N/A 13.0% 14.8%

$ $ $

28.00 21.00 15.75

$ 32.00 $ 30.00 $ 20.00

$ 30.00 $ 25.00 $ 17.00

N/A 11.6% 11.3%

$ $ $

2.80 2.00 7.00

$ 4.75 $ 4.75 $ 12.00

$ 3.96 $ 4.21 $ 10.29

8.7% 9.0% 14.8%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

8.00 8.00 12.00 15.00

$ $ $ $

6.1% 13.0% 4.9% 7.2%

DEVELOPMENT LAND

Low/Acre

SUBURBAN OFFICE

Low

High

Effective Avg.

$ 12.00 $ 11.00 $ 7.00

$ $ $

14.00 13.00 10.00

$ 13.00 $ 12.00 $ 8.50

2.0% 5.0% 5.0%

$ 12.00 $ 10.00 $ 9.00

$ $ $

14.00 12.00 11.00

$ 13.00 $ 11.00 $ 10.00

10.0% 15.0% 18.0%

$ 4.00 $ 5.00 $ 10.00

$ $ $

6.00 6.25 12.00

$ 5.00 $ 5.50 $ 11.00

12.0% 12.0% 3.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

16.00 14.00 25.00 25.00

$ $ $ $

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

$ 1200,000.00 $ 350,000.00 $ 175,000.00 $ 220,000.00 $ 650,000.00 $ 30,000.00

(Rent/SF/YR)

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary) New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

33.7

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

The historic Downtown Bozeman retail and office markets remain one of the state's finest. New private investment downtown has been stimulated by a $12 million, 435-car parking garage. A natural gas explosion in March of 2009 destroyed a quarter of a city block that is now in redevelopment.

DOWNTOWN OFFICE $ $

New Construction (AAA) Class A (Prime) Class B (Secondary)

A substantial growth in residential development over the past 10 years stimulated county-wide development across the Valley. While the Southwest Montana economy is somewhat cushioned from the volatility experienced nationally in recent months, there has been a decline in demand for office and retail product that will likely slow the absorption of a small oversupply. Vacancy is capped at 5% in the office segment and 8% in the retail markets. Market rent rates remain stable, in the range of $12 to $14/SF/per year for suburban Class A office space. New retail product offers opportunity, principally in the form of a new 60,000 SF development at South 19th Avenue and Oak Street, and an outdoor lifestyle development at College Street and West Main. In the industrial sector, warehouse demand has weakened slightly with the decline in new housing starts. Demand is limited for high-tech flex and R&D space.

Bozeman At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Anchored by an economy rich in agriculture, the greater Bozeman market has emerged as a trade region built on the business spin-offs of research successes of Montana State University, making Bozeman one of the leading smaller urban centers in the nation. Bozeman's economy continues to be a primary performer in the state with 3.2% annual growth. The city enjoys a mature construction industry, significant airline connections, recreational industries, emerging regional medical community and high-tech small business.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

$ $ $ $ $

N/A 315,000.00 155,000.00 85,000.00 130,000.00 55,000.00

22.00 25.00 28.00 60.00

12.42 16.24 20.12 48.79

High/Acre

$ $ $ $ $

N/A 520,000.00 260,000.00 180,000.00 1,200,000.00 200,000.00

13.00 12.00 16.00 18.00

850,000.00 229,000.00 98,000.00 120,000.00 440,000.00 15,000.00

14.50 13.00 20.50 21.50

5.0% 5.0% 8.0% 3.0%

2010 Global Market Report I www.naiglobal.com

101

Missoula, Montana

Contact NAI Crowley Moore +1 406 721 1111

Metropolitan Area Economic Overview 2009 Population

112,108

2014 Estimated Population

128,278

Employment Population

63,510

Household Average Income

Lincoln, Nebraska Missoula, also known as the “Garden City,” is Montana’s second largest city composed of approximately 67,165 residents. Missoula is western Montana's center of education, medicine, business, retail shopping, entertainment, culture and recreation. Traditionally timber and mining were the primary industries throughout the state. However, Missoula’s economy has diversified with growth in tourism, retail, manufacturing, trucking and customer services.

Lincoln is the capital of Nebraska and represents its second largest city. The local economy remains healthier than most US markets due to the presence of state government and the University of Nebraska. However, the office, retail and industrial sectors have not been entirely impervious to the current economic events as new activity has diminished. The city delayed its public financing vote to spring 2010 on a new arena project west of the CBD.

Residential home sales have slowed significantly, with most sales occurring in the starter home sector. In Missoula County, 994 homes sold in 2008 with the median home price averaging $215,000. First Interstate Bank constructed a new six-story, 86,844 SF office building that will house its downtown branch and administrative offices along with other businesses. Another six-story office building with 48,000 SF owned by the Garling, Lon and Robinson law firm, is under construction and will be completed in 2010. The Old Mill Site (former Brownfield) located across the Clark Fork River near Missoula's Downtown, is expected to receive subdivision approval in 2010. The site will be developed with single-family residential, multifamily residential, retail and office space. Office vacancy estimates are 6% and retail estimates are 8% for 2009.

Lincoln’s office vacancy rates edged higher across the market. Asking lease rates softened and landlords offered more concessions to serious tenants. New space was predominantly build-to-suit with minimal speculative space, bringing the total office inventory to over 12 million SF.

Missoula’s Trade Area population has steadied with Tertiary Trade Areas in 2009 estimated at over 360,000. Retail expansion on North Reserve Street has stalled, with one big box location now vacant. Restaurant expansion continues with only the addition of Five Guys Burgers on East Broadway. A sewer main extension has been constructed along Highway 10 to the Wye (airport area), allowing for the relocation of the Missoula National Guard Armory. The Amory is scheduled to be completed in 2010. Development in multifamily units has slowed since the peak in 2007, with average apartment rental rates at $663 per month. Occupancy levels are good, averaging better than 95%.

Contact NAI FMA Realty +1 402 441 5800

Metropolitan Area Economic Overview 2009 Population

306,162

2014 Estimated Population

338,823

Employment Population

201,481

Household Average Income

$62,415

$62,576

Median Household Income $43,433

Median Household Income $54,697

Total Population Median Age

Missoula At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

25.00 15.00 10.00

$ 32.00 $ 19.00 $ 14.00

$ 29.00 $ 17.00 $ 11.00

30.0% 15.0% 10.0%

$ $ $

17.00 14.00 11.00

$ 22.00 $ 18.00 $ 13.00

$ 18.00 $ 15.00 $ 12.00

5.0% 7.0% 7.0%

$ $

3.00 2.00 N/A

$ $

7.00 8.00 N/A

$ $

5.00 4.00 N/A

4.0% 25.0% N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

10.00 12.00 10.00 15.00

$ $ $ $

18.00 19.00 18.00 20.00

$ $ $ $

14.00 16.00 16.00 16.00

3.0% 4.0% 5.0% 2.0%

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

SUBURBAN OFFICE

The 2010 forecast suggests a continuation of a slower market, but Lincoln’s economy should fare better than the national economy. Higher quality of life and a lower cost of living index make Lincoln an attractive place to invest and do business.

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A $ 14.75 $ 10.00

$ $

N/A 20.00 23.00

N/A $ 16.75 $ 16.50

N/A 11.5% 10.4%

$ 12.50 $ 17.50 $ 9.00

$ $ $

25.00 24.00 24.00

$ 19.25 $ 20.00 $ 15.50

33.1% 5.8% 9.7%

$ $ $

2.00 2.00 3.50

$ $ $

8.00 6.00 10.50

$ $ $

4.25 3.50 6.75

6.2% 8.6% 11.0%

$ 4.00 $ 5.00 $ 6.00 $ 20.00

$ $ $ $

18.00 22.00 25.00 85.00

$ $ $ $

11.75 14.75 14.75 32.00

12.6% 9.3% 9.9% 17.5%

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Lincoln’s industrial market saw an increase in sales and leasing activity in 2009 as companies took advantage of lower rental rates and vacancies, but it was not enough to stop the upward trend of overall vacancy, which increased to 13.5%. The most notable industrial project was a 72,000 SF addition to a cold storage facility.

DOWNTOWN OFFICE $ $ $

New Construction (AAA) Class A (Prime) Class B (Secondary)

The retail market remained challenging, as vacancies rose across most submarkets and types. Retailers who predicted growth have since put expansion on hold and several new developments have stalled due to lack of national retailer response. However, tenants expanding in the current economy are finding greater choices and lower rents. Success stories in 2009 include Staples, which broke ground on its first store in Lincoln. Several new restaurants are looking to enter the market, and CVS, Jimmy John’s, Verizon and Snap Fitness continue to expand their presence. The hospitality sector is encouraging with several new hotel projects under construction or planned.

Lincoln At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

The CBD continues to attract investment in adaptive reuse of older buildings primarily into residential condominiums and apartments. Lincoln Flats, a $6 million mixed-use project, created retail, office and 24 residential units downtown.

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

High/Acre

50.00 8.00 5.00 4.00 10.00 2.00

$ $ $ $ $ $

70.00 12.00 8.00 10.00 30.00 4.00

Downtown Neighborhood Service Centers Community Power Center Regional Malls

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

25.00 130,000.00 75,000.00 45,000.00 196,000.00 25,000.00

High/Acre

$ 45.00 $ 1,000,000.00 $ 200,000.00 $ 350,000.00 $ 1,200,000.00 $ 65,000.00

2010 Global Market Report www.naiglobal.com

102

Omaha, Nebraska

Las Vegas, Nevada Although Omaha has remained somewhat insulated from the economic crisis, the impact is still being felt. Nowhere is this more evident than commercial real estate. In the past year, Omaha has seen increased vacancy rates across the board, historic rental rate reductions, longer rental abatement periods and increased leasehold improvement allowances. But it isn't all doom and gloom, and some sectors still hold the promise of stability.

Contact NAI NP Dodge +1 402 255 6060

Although overall rental rates are up, vacancy rates are down, and there’s a lot to get excited about in Omaha. Several redevelopment construction projects are taking place, including Aksarban Village, a mixed-use urban lifestyle setting near the University of Nebraska at Omaha. The development includes approximately 750,000 SF of office space, 250,000 SF of retail, a 139-room Courtyard by Marriott and 500 housing units including multifamily and condos. Another exciting development is Midtown Crossing, a $250 million mixed-use urban development. Midtown Crossing will feature a pedestrian-oriented retail and entertainment environment composed of seven buildings and approximately 200,000 SF of space.

Southern Nevada has been one of the most robust economies of its size in the country. Broader market conditions have shifted the growth-driven environment in and around Las Vegas, including its core tourism industry, but the fundamental structure remains the same. Declines in end-user and investor demand over the past two years have created challenges within the commercial real estate sector while providing opportunity for strategic acquisitions and those with a vision for the future. During 2009, the commercial office market posted a vacancy rate in excess of 22%, representing an all-time high as annual negative absorption was reported for the first time in history. With inventory reaching 50 million SF and over 11 million SF of vacant space, the market experienced downward pressure on pricing with average asking rents. Contact NAI Las Vegas +1 702 796 8888

In the industrial market, rental rates have risen but overall vacancy rates are down. In 2007, the average vacancy rate was 8.3% compared to the current 6.3%. In 2007, the average rental rate for industrial property was $4.69; this year it is $4.80. Metropolitan Area Economic Overview 2009 Population

838,875

2014 Estimated Population

858,579

Employment Population

415,400

Household Average Income

$67,576

The Omaha office market can best be described as stagnant. Rental rates have risen steadily over the past three years, from $13.55/SF in 2007 to $16/SF at the end of the Q3 2009. However, overall vacancies rates are down. The suburban market has experienced increased pressure to lower rates, which has put pressure on every other sector. With additional space anticipated to be on the market in 2010, an increase in vacancy rates is expected. Omaha has a cost of living that’s 10-13 % below the national average, a consistently low crime rate and the entertainment and cultural amenities of a city twice its size. In summary, it’s an excellent place to live, work and play.

Metropolitan Area Economic Overview 2009 Population

1,949,304

2014 Estimated Population

2,228,122

Employment Population

1,087,815

Household Average Income

$73,925

Median Household Income $59,130

Median Household Income $60,412

Total Population Median Age

Omaha At A Glance (Rent/SF/YR)

The number of projects actively moving forward continued to shrink dramatically, while several stalled construction projects signal corrections are under way. The retail market experienced a similar market shift as a number of anchor tenants vacated spaces. The move-outs were a direct result of corporate financial issues for regional and national chains such as Circuit City and Linens N Things. Local fundamentals also impacted retailers. Total inventory reached 52 million SF, while vacancies surged to 10%, a figure that hovered around 4% during the past decade. Expansions going forward will be limited to pre-leased, anchor spaces by known brands. Niche opportunities have prevailed for Hispanic grocers and discount retailers, a trend required to fill existing product. Industrial product also experienced escalating vacancies that reached beyond 12% as total inventory exceeded 103 million SF. Vacancies are significantly higher than the 10-year historical average of 8%. Speculative development in the sector remains limited while net absorption remained negative throughout the year. In December 2009, MGM Mirage’s $8.5 billion City Center debuts with 18.5 million SF of resort and residential development along the famous Las Vegas Strip. The property is expected to act as a catalyst for increased visitation, which should have rippling effects throughout the economy.

Las Vegas At A Glance Low

High

Effective Avg.

Vacancy

DOWNTOWN OFFICE

Low

High

N/A $ 24.00 $ 21.00

$ $

N/A 39.00 30.00

N/A $ 27.60 $ 25.20

N/A 5.0% 17.1%

N/A $ 30.00 $ 21.00

$ $

N/A 45.00 30.00

N/A $ 27.00 $ 24.00

N/A 29.5% 23.2%

$ $ $

4.56 6.00 6.00

$ $ $

10.20 11.40 18.00

$ 7.32 $ 8.45 $ 12.00

11.7% 12.2% 18.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

N/A $ 18.00 $ 18.00 N/A

$ $

N/A 30.00 27.00 N/A

N/A $ 23.52 $ 22.96 N/A

N/A 11.9% 11.4% N/A

(Rent/SF/YR)

Effective Avg.

$ $

N/A 9.00 11.17

N/A $ 26.54 $ 18.81

N/A $ 19.07 $ 12.07

N/A 8.2% 6.9%

$ $

N/A 9.00 8.37

N/A $ 28.50 $ 25.46

N/A $ 19.85 $ 15.55

N/A 11.1% 12.1%

$ $

6.67 N/A 8.75

3.36 N/A 5.23

4.52 N/A 6.40

5.7% N/A 10.7%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

3.10 6.00 12.14 6.00

$ $ $ $

21.41 15.65 18.50 27.09

$ $ $ $

11.96 12.00 15.91 15.46

8.5% 12.9% 4.4% 7.4%

DEVELOPMENT LAND

Low/Acre

High/Acre

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

$ 1,300,000.00 $ 750,000.00 $ 1,000,000.00 $ 430,000.00 $ 785,000.00 $ 50,000.00

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Vacancy

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL $

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

300,000.00 200,000.00 130,000.00 80,000.00 350,000.00 15,000.00

450,000.00 300,000.00 100,000.00 85,000.00 350,000.00 100,000.00

825,000.00 700,000.00 500,000.00 350,000.00 850,000.00 450,000.00

2010 Global Market Report www.naiglobal.com

103

Reno, Nevada

Contact NAI Alliance +1 775 336 4600

Manchester, New Hampshire Traditional economic drivers in Reno are tourism and gaming with warehousing/distribution the leading non-gaming related industry. Gaming revenues declined more than 23%, the visitor count dropped by a similar amount and industrial activity was less than 60% of the average for the previous eight years. Construction employment dropped precipitously, contributing significantly to an unemployment rate of more than 13.2%.

The Manchester, New Hampshire, market is often classified as a suburb of the Boston real estate market, but a distinction should be drawn. As one draws concentric highway circles around Boston, the “128 Belt,” then the “495 Belt,” the occupancy levels and rental rates for most asset classes have been sinking. However, just outside the last of the beltways is the New Hampshire border and indicators seem to improve.

The office market experienced a record high vacancy rate resulting in landlords making deals well below already reduced asking rates, with free rent the concession of choice. Less than 10,000 SF of new construction occurred in 2009, with virtually no speculative office buildings planned for 2010 as weak demand is expected to continue.

The first main indicator is that New Hampshire’s unemployment, hovering a shade under 7%, is nearly two points better than the national average. New Hampshire’s lack of income and sales taxes keep it a fairly stable force in the region, being one of the few states in the New England area to boast positive net migration five out of the last six years. However, as the New Hampshire legislature prepares its biennium budgets, job losses in the public sector and increased taxes are sure to be on the docket, which could hurt the 2010 outlook. The public sector will contribute to real estate growth in the Manchester area, as Federal Stimulus money has been used for the completion of the “Airport Access Road.” This links the Everett Turnpike, Route 3 and the Manchester Boston Regional Airport. The road will improve commuting, shipping and open access to land on the airport side of the Merrimack River to future industrial development.

Demand for industrial space was down for the third consecutive year and the vacancy rate reached an all-time high of more than 15%. There was virtually no speculative development during 2009. Market occupancy receded by more than 3% (almost 2 million SF) and effective rents dropped 15-25%, with a concomitant decrease in property values.

Contact NAI Norwood Group +1 603 668 7000

The retail market saw an overall vacancy rate of 15.6%, with a number of local and national tenants vacating their spaces. Some projects in the pipeline are continuing, most notably the 130,000 SF phase two of the Legends at Sparks Marina. Despite market conditions, Wal-Mart is under construction with one store and is in the process of acquiring another site. Metropolitan Area Economic Overview 2009 Population

428,342

2014 Estimated Population

473,903

Employment Population

247,075

Household Average Income

$76,319

Investment sales have been impacted by lower occupancies and lower rents in all sectors. Most investors have increased yield requirements between 9-11% to compensate for these risks. At the same time, the complete collapse of traditional sources of debt resulted in a “perfect storm,” decreasing values almost 45% since their peak in 2006. The decline in demand for commercial space in the local market caused by the global recession appears to have moderated. Location, climate and lifestyle, attractive inducements to the area that led to inflated values before the recession, will be the engines that power the market back into normalcy as the economy recovers.

Metropolitan Area Economic Overview 2009 Population

400,362

2014 Estimated Population

395,281

Employment Population

214,311

Household Average Income

$81,148

Median Household Income $61,047

Median Household Income $67,787

Total Population Median Age

Reno At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

Low

High

NA $ 16.00 $ 10.00

$ $

NA 20.00 14.00

NA $ 17.00 $ 11.00

NA 20.0% 15.0%

NA $ 16.50 $ 8.00

$ $

NA 19.00 13.00

NA $ 17.00 $ 10.00

NA 15.0% 10.0%

$ $ $

3.75 4.00 7.00

$ $ $

5.50 6.00 10.00

$ $ $

4.75 5.00 8.00

5.0% 5.0% 5.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 10.00 $ 10.00 N/A N/A

$ $

20.00 25.00 N/A N/A

$ 13.00 $ 17.00 N/A N/A

N/A N/A N/A N/A

Low/Acre

(Rent/SF/YR)

$ 27.00 $ 27.00 $ 22.20

$ 27.00 $ 22.20 $ 17.40

100.0% 17.5% 25.9%

$ $ $

N/A $ 16.80 $ 12.00

N/A $ 23.40 $ 19.20

N/A $ 1.80 $ 18.00

N/A 22.4% 15.5%

$ $ $

3.00 3.10 7.80

$ 3.96 $ 4.00 $ 10.80

$ $ $

3.36 3.75 9.00

14.9% 6.2% 2.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

12.00 12.00 18.00 24.00

$ $ $ $

22.00 20.00 22.00 36.00

N/A 15.6% 11.0% 18.2%

DEVELOPMENT LAND

Low/Acre

High/Acre

DEVELOPMENT LAND

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

SUBURBAN OFFICE

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Effective Avg.

DOWNTOWN OFFICE 27.00 20.40 16.20

New Construction (AAA) Class A (Prime) Class B (Secondary)

Manchester and her surrounding communities are well poised for 2010. Though the word of 2009 may have been “apprehension,” the forecast for next year seems to be much more positive, based on the improvements to infrastructure and stability in population.

Manchester At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

On the Bedford and Merrimack side, projects are in place to develop additional retail due to the increased traffic. Further up the river in the downtown area, the Elliot at River’s Edge will make its debut in 2010. A 200,000 SF medical facility will be unveiled on a site of an old, environmentally dirty industrial building.

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

$ $

20.00 348,000.00 109,000.00 N/A 174,000.00 25,000.00

30.00 30.00 30.00 50.00

$ $

25.00 435,000.00 174,000.00 N/A 261,000.00 40,000.00

$ $ $

N/A N/A N/A 75,000.00 125,000.00 75,000.00

High/Acre

$ $ $

N/A N/A N/A 100,000.00 200,000.00 200,000.00

2010 Global Market Report www.naiglobal.com

104

Portsmouth, New Hampshire

Atlantic County, New Jersey

The New Hampshire seacoast is the axis of the Golden Triangle that runs from Portsmouth along the Massachusetts boarder up to Manchester and back to Portsmouth. Seacoast was the ranked the #1 place to start a business in New Hampshire by Business Week. The area has a population of 433,244. The city of Portsmouth was named one of the top 10 places to live in the US by Money Magazine five out of the last 10 years.

Atlantic County’s economy is dominated by both the tourism and casino gambling industries. Efforts are under way to diversify the county’s economy with the development of an aviation research and technology park; however, the bulk of real estate investment remains targeted at hotels, entertainment, housing (to the casino industry) and recreation. In 2009, casino gambling volume declined an average of 14% for the county’s 11 casinos. The bright spot of the region continues to be the Borgata Casino, which opened in 2003. Borgata was the area’s first $1 billion-plus casino. This past year, gambling at Borgata was down a modest 5%. Entering 2008, there were several planned mega-casinos on the drawing board, however, due to the recession only Revel Entertainment broke ground and is currently under construction.

The seacoast office market has experienced a change in vacancy. The Pease International Tradeport vacancy rate has dropped from 18% to 12%. This is attributed to tenants relocating from the demolished Parade Mall and the expansion of existing tenancies in the Tradeport.

Contact NAI Norwood Group +1 603 431 3001

Metropolitan Area Economic Overview 2009 Population

20,880

2014 Estimated Population

20,587

Employment Population

12,298

Household Average Income

$76,211

Statistically, New Hampshire entered Q4 2009 in a better position than the rest of New England. The recently reported New Hampshire unemployment rate at 6.9% was three points under the national rate of 9.7%. The loss rate in one of the largest sectors of the seacoast area is the hospitality industry with 1,300 jobs lost and rising. The $610 million Stimulus Package for 2009 awarded to New Hampshire will provide stability and an increase in jobs. Areas to be affected include but are not limited to highway/bridge infrastructure, weatherization/energy programs, learning institutions and drinking/waste water infrastructures. Across the harbor from Portsmouth is the Portsmouth Naval Shipyard. This facility has a payroll of $361.1 million, accounts for $73 million in purchases in the New England area and contracts for $67 million in facility services. The planned second phase of the PortWalk project in downtown Portsmouth has broken ground for 12,000 SF of retail and a 120-room extended-stay hotel. Two phases will follow, bringing roughly 160,000 SF of office, 40,000 SF of retail and 20,000 SF of restaurant space, as well as an underground parking garage. The New Hampshire seacoast, with its diverse economy and unique resources, will not only endure the current economic setback, but will continue to grow as a community and remain in the forefront of economic stabilization.

Contact NAI Mertz +1 856 234 9600

Metropolitan Area Economic Overview 2009 Population

268,530

2014 Estimated Population

263,127

Employment Population

191,412

Household Average Income

$71,988

Median Household Income $56,451

Median Household Income $55,623

Total Population Median Age

44.1

Portsmouth At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

N/A $ 17.00 $ 8.00

N/A 23.00 15.00

N/A $ 19.00 $ 10.00

N/A 10.0% 15.0%

N/A 16.00 N/A

N/A $ 12.00 N/A

N/A N/A N/A

N/A 8.00 N/A

N/A 5.00 N/A

N/A 15.0% N/A

$ 28.00 $ 12.00 N/A N/A

5.0% 15.0% N/A N/A

$ $

N/A 4.50 N/A

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

$ $

N/A 18.00 12.00

N/A $ 20.00 $ 17.00

N/A $ 19.00 $ 14.50

N/A 12.0% 18.0%

$ $

N/A 14.00 9.00

N/A $ 18.00 $ 15.00

N/A $ 16.00 $ 12.00

N/A 15.0% 18.0%

$ $ $

2.25 1.50 6.00

$ 5.00 $ 4.00 $ 12.00

$ $ $

20.0% 20.0% 20.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

25.00 8.00 15.00 20.00

$ $ $ $

$ 32.00 $ 9.00 $ 18.50 $ 27.50

DEVELOPMENT LAND

Low/Acre

New Construction (AAA) Class A (Prime) Class B (Secondary) New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL $

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

3.50 2.95 8.00

RETAIL

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 22.00 $ 8.00 N/A N/A

DEVELOPMENT LAND

Low/Acre

High/Acre

N/A N/A N/A N/A N/A N/A

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

SUBURBAN OFFICE N/A 8.00 N/A

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Despite the recession and declining casino revenue, developers have not given up on the region. Casino Walks retail center began its third phase of development with completion scheduled for summer 2010. The Atlantic City community is hoping the future mega-casinos will transform their region to an over-night destination location similar to Las Vegas.

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

The retail sector is the most vibrant commercial real estate sector, owing to the casinos and tourism/summer shore activity. Retail vacancy is approximately 7%, representing an increase from 5.5% in 2008. The total retail market is estimated to be in excess of 9 million SF.

Atlantic County At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Industrial real estate in the region continues to suffer from a lack of deal velocity. Vacancy rates increased to approximately 20% from 18% in 2008. Negative absorption was in excess of 100,000 SF with a product base of approximately 5 million SF. The office market is relatively small for the region, with just under 3 million SF. The office vacancy rate is approximately 13%, which represents an increase of about 2% from 2008. Leasing activity remains modest, mostly renewal activity and again, locally driven and casino related.

$ $

30.00 16.00 N/A N/A

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $

N/A 65,000.00 20,000.00 50,000.00 65,000.00 10,000.00

45.00 12.00 25.00 40.00

8.0% 11.0% 5.00% 7.0%

High/Acre

$ $ $ $ $

N/A 200,000.00 100,000.00 150,000.00 400,000.00 55,000.00

2010 Global Market Report www.naiglobal.com

105

Middlesex/Somerset Counties, New Jersey

Northern New Jersey

Middlesex and Somerset Counties are located in the heart of the central New Jersey commercial real estate market, located 40 minutes from downtown New York City and 60 minutes from Philadelphia. Direct access to Newark Liberty International Airport, the Ports of Elizabeth and Newark, access to a public mass transit system and an excellent road system attract companies wanting to take advantage of its geographical location and the abundant supply of a skilled and educated labor force.

Contact NAI DiLeo-Bram & Co. +1 732 985 3000

Metropolitan Area Economic Overview 2009 Population

1,114,010

2014 Estimated Population

1,117,820

Employment Population

550,366

Household Average Income

$103,225

Median Household Income $83,279 Total Population Median Age

Office sales and leasing activity is at a near standstill as buyers/tenants and sellers/landlords remain cautious. Renewal activity is more prevalent as companies are opting to stay in place rather than incur the costs of moving and landlords are willing to make concessions to stabilize their assets. The office vacancy rate has increased to 20.7% as more sublease space continues to come onto the market. The industrial market in central New Jersey remains highly challenged. Central New Jerseyâ&#x20AC;&#x2122;s strength is as a regional distribution hub for larger big box industrial companies servicing the retail sector. The downturn in the economy has negatively affected the supply provided by the optimistic speculative construction that took place in the past 10 years. The submarket located at exit 8A on the NJ Turnpike has been especially hit hard as the vacancy rate has hit almost 20% and rents have dropped 30-35% to rates not seen in 20 years. The retail market in central New Jersey remains relatively stable. A handful of national retailers have gone bankrupt and many retailers continue to struggle. The vacancy rate has risen from 3% to 9% in the region. Rents have stabilized or dropped and new construction is non-existent. The biggest hurdle will be who will replace the big box retailers that have exited. Tenants will continue to take advantage of the current market conditions as investors wait on the sidelines for opportunities to emerge on mortgages coming due for properties that were overleveraged at reduced capitalization rates. Once the market stabilizes and space is absorbed the region will again be primed for growth.

Middlesex/Somerset Counties At A Glance Low

Effective Avg.

Vacancy

N/A N/A N/A

$ $ $

24.00 18.00 14.00

$ 29.00 $ 24.00 $ 18.00

$ 25.00 $ 20.00 $ 15.00

30.0% 21.00% 20.0%

$ $ $

2.50 2.50 6.00

$ 4.75 $ 5.00 $ 12.00

$ $ $

3.50 3.50 8.00

14.0% 6.0% 7.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

14.00 12.00 16.00 30.00

$ $ $ $

20.00 17.00 22.00 50.00

8.0% 10.0% 10.0% 7.0%

DEVELOPMENT LAND

Low/Acre

SUBURBAN OFFICE

2009 Population

3,956,4481

2014 Estimated Population

3,760,849

Employment Population

1,996,289

Household Average Income

$103,225

Median Household Income $83,279

The retail sector has experienced the most difficult market in the past 20 years. Vacancies in major corridors that would normally be leased right away are remaining vacant for extended periods of time. The sector is suffering from a lack of activity as opposed to the other sectors where there are deals to be made at a price. Investment sales have been nearly nonexistent. There is a growing gap in value between what owners feel their properties are worth and what buyers are willing to pay. Additionally, there are fewer buyers in a position to purchase properties, and many of them are pursuing debt purchases versus physical real estate. The first half of 2010 should be a continuation of the second half of 2009. Leasing activity should steadily improve as companies begin to feel more confident in the economy, with any area of concern remaining in the debt and capital arenas.

38.6

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

$ $

N/A 22.00 13.00

N/A $ 40.50 $ 27.00

N/A $ 28.00 $ 25.00

N/A 12.0% 20.0%

$ $

N/A 17.00 13.00

N/A $ 50.50 $ 25.00

N/A $ 28.00 $ 22.00

N/A 20.0% 16.0%

$ $ $

2.70 2.25 6.50

$ 9.50 $ 6.50 $ 16.00

$ $ $

6.10 5.75 9.30

12.0% 11.0% 11.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

11.00 13.00 12.50 30.00

$ $ $ $

26.00 19.50 20.00 50.00

9.7% 7.7% 5.1% 3.8%

DEVELOPMENT LAND

Low/Acre

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE

INDUSTRIAL

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Metropolitan Area Economic Overview

The vacancy factor in the industrial sector is approaching a 10-year high. However, there have been transactions, especially in the second half of the year. Asking rates have decreased approximately 20% year to date and deals are being made off of those numbers. Landlords are making shorter term deals more frequently than in the past, and tenants have also been reluctant to make long term commitments.

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

Bulk Warehouse Manufacturing High Tech/R&D

Contact NAI James E. Hanson +1 201 488 5800

Northern New Jersey At A Glance High

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

In the office market, vacancy factors are only slightly up over a year ago. However, asking rents have decreased and landlords are very aggressive in offering free rent and extensive work letters. Subletting is also having a major impact on the market. The suburban markets have suffered more than the submarkets close to New York City.

Total Population Median Age

38.6

(Rent/SF/YR)

The market was stagnant in Q4 of 2008 into the first half of 2009. Whether people focused on internal issues or waiting for the next problem to arise, the end result was that they delayed making decisions. This began to change midway through the year. There is now more real activity and deal making taking place. Most of the transactions being completed are relatively short term and ones where the landlords and sellers are very aggressive.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

$ $ $ $ $

N/A 200,000.00 150,000.00 150,000.00 150,000.00 25,000.00

25.00 22.00 25.00 60.00

High/Acre

$ $ $ $ $

N/A 350,000.00 250,000.00 250,000.00 800,000.00 150,000.00

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $

N/A 250,000.00 125,000.00 100,000.00 550,000.00 200,000.00

45.00 27.00 26.00 60.00

High/Acre

N/A $ 600,000.00 $ 500,000.00 $ 500,000.00 $ 2,000,000.00 $ 1,000,000.00

2010 Global Market Report www.naiglobal.com

106

Ocean/Monmouth Counties (“Shore Market”), New Jersey

Princeton/Mercer County, New Jersey

The "Shore" region’s key employment sector growth was driven by healthcare and senior services. New construction continues to falter, and tourism was better than expected, but still weak by historical standards. The recent consolidation of the Superbase (Lakehurst Naval, Maguire AFB and Fort Dix Army) has not offset the economic losses anticipated at Fort Monmouth. The Fort Monmouth exodus began slowly, but is gaining momentum, driving up vacancies and landlord anxiety.

The Greater Princeton area joined the recession in 2009 with a pull back in financial companies such as Blackrock and Merrill Lynch. The pharmaceutical companies experienced growth after several years of languishing and readjusting their models to become more streamlined. Overall, the retail and industrial sectors have been negatively affected as consumer demand retracted, causing a lack of demand and a lowering of rents.

The fundamental problems in greater NJ (government spending, high taxes, high cost of living and weak employment growth) have a particular impact on the shore market because of its heavy reliance on tourism. Core real estate demand drivers (job and housing growth) were weak in 2009 and are projected to remain soft well into 2010. Contact NAI Atlantic Coast Realty +1 732 736 1300

Anemic job growth continues to plague the office sector, although leasing activity picked up in the latter part of 2009 as tenants scrambled to secure better lease terms. Buy-side opportunities remain well below replacement cost so major new construction is not anticipated in 2010.

Contact NAI Fennelly Associates, Inc. +1 609 520 0061

Re-trading historical rents was the 2009 story for industrial assets as producers and warehousing struggled to contain costs. Industrial rents are flat to declining, but overall vacancy is increasing, pushing values downward.

Metropolitan Area Economic Overview 2009 Population

1,227,405

2014 Estimated Population

1,276,214

Employment Population

537,330

Household Average Income

$90,007

Median Household Income $69,545 Total Population Median Age

40.9

Retail landlords won't know the outcome of 2009 until after the Christmas season, but if the "age of frugality" holds, conventional wisdom is for increasing vacancies into Q1 2010. All asset classes saw 100 to 150 basis point increases in capitalization rates as underwriting (LTV, etc.) on commercial assets has become overly conservative. The land market is stagnant but 2010 should provide strong buy-side opportunities on land inventory for long-term development as the economy struggles back. Owner-user buyers should be examining build-to-suit options now as land prices are historically cheap and construction activity is at an all-time low. The long-term prognosis for the Shore Region remains strong. The Ocean-Monmouth region has the fastest growing population and income in NJ. Population growth will likely slow in the coming decade as land inventory becomes terminal. However, this bodes well for future value spikes for those invested at the 2010 bottom.

Ocean/Monmouth Counties (“Shore Market”) At A Glance (Rent/SF/YR)

Low

High

Vacancy

$ $ $

31.00 31.00 20.00

$ 35.00 $ 35.00 $ 28.00

$ 34.00 $ 34.00 $ 26.00

11.0% 11.0% 14.0%

$ $ $

30.00 21.00 19.00

$ 35.00 $ 32.00 $ 24.00

$ 33.50 $ 27.50 $ 22.50

11.0% 11.0% 14.0%

$ $ $

3.00 3.50 5.00

$ $ $

6.00 7.00 9.00

$ $ $

5.25 4.75 6.25

11.0% 11.0% 12.0%

350,099

Employment Population

180,232

Household Average Income

$99,847

As the commercial real estate market begins to rebound, this will create opportunities for companies to position themselves in markets that were previously too expensive, such as the opening of the new 25,000 SF Home Furnishings store in Nassau Park. Companies, as well as investors, will use this time to understand the strategic benefits and reap the rewards that will be available in the market.

Median Household Income $73,339 Total Population Median Age

37.7

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

$ $ $ $

22.00 20.00 20.00 45.00

$ $ $ $

30.00 27.00 26.00 100.00

$ $ $ $

24.50 22.50 21.50 65.00

12.0% 7.0% 8.0% 7.0%

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ $ $

35.00 22.00 17.00

$ 38.00 $ 38.00 $ 23.00

$ 26.00 $ 26.00 $ 21.00

3.0% 6.0% 5.0%

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ $ $

31.00 23.00 18.00

$ 33.00 $ 29.00 $ 24.00

$ 32.00 $ 26.00 $ 22.00

17.0% 20.0% 24.0%

$ $ $

2.00 1.00 4.00

$ $ $

4.50 3.00 6.00

$ $ $

3.00 2.00 5.00

15.0% 14.0% 16.0%

$ $ $ $

20.00 12.00 10.00 18.00

$ $ $ $

40.00 18.00 16.00 39.00

$ $ $ $

30.00 15.00 13.00 28.00

10.0% 14.0% 14.0% 12.0%

INDUSTRIAL

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls

2014 Estimated Population

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

361,073

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

2009 Population

Industrial rents have plummeted in the areas surrounding exits 8A and 7A of the New Jersey Turnpike, representing a 30% reduction in rental values. Comparables in the area include: Schwartz Paper at Exit 7A with 150,000 SF at $3.25/SF starting rents and total rent averaging $4/SF over 15 years; One Crossroads, a 20,000 SF single-story office warehouse in Hamilton, at $1.3 million or $68/SF. On the other side of Hamilton in an older industrial area, recent foreclosure activity has taken place with a 60,000 SF, 14’ clear building at 2425 East State Street recently selling for $21.66/SF.

Princeton/Mercer County At A Glance

Effective Avg.

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Metropolitan Area Economic Overview

A drop-off in demand from service/legal business lowered overall demand by 10% in the first half of the year. Notable transactions were the Niksun $20/SF rental at Nassau Park for 30,000 SF and Stealth Microwave for 20,000 SF in Ewing Technology. Johnson & Johnson leased a total of 125,000 SF at 23 Orchard Road. Otsuka Pharmaceuticals recently leased 67,000 SF at One University Square in Princeton. Technology expansion in Princeton was up in the first half of the year to 37% compared to 2008 figures. Medical sector growth came back from a slow 2008 with 11% growth so far this year compared to 4% last year. GDP went into negative territory in Q3 2008, dropping further to negative 6% in Q1 2009 and now remains at negative 1%.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls

DEVELOPMENT LAND

Low/Acre

High/Acre

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $

20.00 150,000.00 75,000.00 125,000.00 200,000.00 75,000.00

40.00 350,000.00 300,000.00 450,000.00 500,000.00 250,000.00

400,000.00 600,000.00 200,000.00 80,000.00 200,000.00 N/A

High/Acre

$ $ $ $ $

600,000.00 800,000.00 275,000.00 150,000.00 800,000.00 N/A

2010 Global Market Report www.naiglobal.com

107

Southern New Jersey

Albuquerque, New Mexico

Southern New Jersey continues to be an advantageous location for many businesses because it is contiguous to the Philadelphia area. It is also at the center of the Northeast Corridor with excellent road networks, rail capabilities and port facilities, making it ideal for almost any logistics and supply chain requirement.

While the Albuquerque market has not been immune to the national economic downturn, it appears to have held up fairly well compared to others around the country. The current unemployment rate for the Albuquerque MSA is 7.4%, the highest since 1996 but well below the national average. Albuquerque Economic Development reports a record number of site location visits during 2009. Precise METRO indicates that Albuquerque will emerge as a growth leader during the recovery period and will outperform the national economy during the next expansion.

The Southern New Jersey industrial market is faring better than the office or retail sectors. Industrial vacancy rates trended up 1.5% from 2008. Rental rates have dropped approximately 10%. Sales prices have taken the brunt of the downturn running at 15-25% below their peak values. Deals of note completed in 2009 included Kimberly Clark’s 600,000 SF distribution center in the LogistiCenter and Goya Foods 250,000 SF build-to-suit in Gateway Business Park. Contact NAI Mertz +1 856 234 9600

Metropolitan Area Economic Overview 2009 Population

1,304,559

2014 Estimated Population

1,285,132

Employment Population

634,709

Household Average Income

$81,769

Office leasing in 2009 was anchored by only a handful of medium-size deals including Coner Strong’s lease of 47,121 SF and the Parente Randolph lease of 29,609 SF. However, more characteristic of the market was leasing activity dominated by short term renewals and sublet activity. Office vacancy rates climbed to 12% range and are anticipated to peak in late 2010 in the 13.5% range. In 2009, the average sales price was down approximately 19%. Construction starts were virtually non-existent in 2009. Activity in the region was internally generated. Growth was seen by service and sales companies in the collection, courier/distribution, healthcare and consumer product industries. The vacancy rate in the retail sector increased to approximately 8% with rental rates dropping approximately 10% to attract retailers to small strip centers. The requirements of New Jersey’s Council of Affordable Housing (COAH) have been temporarily suspended. COAH was intended to subsidize affordable housing development and cannot be passed on to tenants, complicating the return on investment calculus for developers at a time with significant challenges.

Contact NAI The Vaughan Company +1 505 797 1100

Metropolitan Area Economic Overview 2009 Population

864,696

2014 Estimated Population

939,220

Employment Population

404,526

Household Average Income

$61,073

Median Household Income $67,109

Median Household Income $49,637

Total Population Median Age

38.5

Southern New Jersey At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

N/A N/A N/A

$ 21.00 $ 21.00 $ 10.00

$ 24.00 $ 24.00 $ 20.00

$ 22.50 $ 22.00 $ 14.50

N/A 13.0% 13.0%

$ $ $

3.00 3.00 4.50

$ 5.00 $ 5.50 $ 12.50

$ $ $

4.00 4.25 8.50

10.0% 10.0% 12.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $

10.00 12.00 18.00 N/A

$ 40.00 $ 20.00 $ 38.00 N/A

$ 25.00 $ 16.00 $ 28.00 N/A

7.0% 16.0% 5.0% N/A

DEVELOPMENT LAND

Low/Acre

SUBURBAN OFFICE

Leasing has increased in the second half of 2009 while sales continue to lag due to economic uncertainty by ownerusers and difficulty in obtaining financing by investors. Albuquerque should continue to grow due to many factors including its mild climate, quality of life and its productive work force.

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A $ 14.75 $ 12.00

$ $

N/A 21.88 15.00

N/A $ 18.31 $ 13.50

N/A 18.5% N/A

$ 21.00 $ 18.00 $ 15.00

$ $ $

24.00 23.00 19.00

$ 22.50 $ 20.50 $ 17.00

13.9% 12.6% 16.1%

$ $ $

3.45 4.25 6.00

$ $ $

6.95 8.00 13.50

$ $ $

5.75 6.50 8.75

8.8% 8.8% 8.8%

$ 9.00 $ 9.00 $ 15.00 $ 28.00

$ $ $ $

23.00 28.00 32.00 50.00

$ $ $ $

13.50 15.00 21.00 42.00

27.8% 14.7% 16.7% 22.8%

SUBURBAN OFFICE

INDUSTRIAL

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

The Albuquerque industrial market is the healthiest of the specialty markets with a current vacancy rate of 8.8%. Asking industrial lease rates are down 15% from last year as tenants take advantage of the opportunity to shop for a lower lease rate in the market or renegotiate their current locations. Employment in construction related industries needs to improve before demand for industrial space increases.

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

Bulk Warehouse Manufacturing High Tech/R&D

The vacancy rate for Albuquerque office space continued its upward trend to 16% with negative net absorption for the year. With no new construction, asking lease rates for office space have remained stable. Two significant projects, the 200,000 SF Hewlett Packard call center in Rio Rancho and the 93,000 SF Carpenter’s Union along the I-25 Corridor in Albuquerque, are scheduled to be completed in late 2009 or early 2010.

Albuquerque At A Glance

Low

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

The Albuquerque retail market remains soft with a current vacancy rate of 14%. There was positive net absorption of 448,000 SF in Q3 2009 as the Wal-Mart Supercenter opened its 196,000 SF facility. Asking lease rates for neighborhood centers and strip centers are down as landlords struggle to keep their centers full.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

$ $ $ $

N/A 125,000.00 80,000.00 60,000.00 75,000.00 N/A

High/Acre

$ $ $ $

N/A 250,000.00 165,000.00 125,000.00 300,000.00 N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

650,000.00 250,000.00 150,000.00 100,000.00 275,000.00 25,000.00

High/Acre

$ 2,000,000.00 $ 525,000.00 $ 350,000.00 $ 300,000.00 $ 800,000.00 $ 275,000.00

2010 Global Market Report www.naiglobal.com

108

Las Cruces, New Mexico

Albany, New York

New Mexico economists like to say, the Las Cruces economy is insulated from, but not immune to, national economic downturns. Events of 2009 have served to strikingly illustrate this truth. While the US entered a recession in December 2007, it wasn’t until March 2009, a full 14 months later, before Las Cruces saw negative year-overyear employment numbers.

Albany, the capital of New York, continues to outperform the rest of the state. Recently named the newest international home for AMD and a $2 billion chip fabrication plant, the capital region is quickly earning its tech valley moniker. Nanotechnology research and numerous opportunities in higher education are helping to attract and retain workers. The insular nature of the state’s government seat has continued to contribute to the stability of the area.

The office market has experienced rising vacancy rates approaching 10% - a rate far below the national average, but in excess of the 8% five year historical annual average. Absorbing the 100,000 SF of new office space permitted in 2008, will provide building owners little latitude in rental rate negotiations.

Contact NAI 1st Valley +1 575 521 1535

Metropolitan Area Economic Overview 2009 Population

208,136

2014 Estimated Population

229,497

Employment Population

63,528

Household Average Income

In the retail market, there is nothing like the loss of a job to dampen consumer sentiment, spending and demand for space. Following 16 consecutive years of consistent growth, Total Gross Receipts, including the widely watched Retail Trade component, registered a small, uncharacteristic decline in 2009 Q2 data. It is likely that unfavorable trend will impact year end totals. Scant new retail sector construction should help maintain the supply and demand equilibrium and hold vacancy rates through the coming year within the 10-12% range. The Las Cruces multi-family market has exhibited sustained stability and strength. With a 2000-2009 period market average occupancy of 93.9% and average annual rental increases of 2.4%, this has proven to be among the best performing commercial real estate sectors in Las Cruces. Developers have apparently taken note as more permits were drawn for multi-family units in the first two months of this year than in the previous two years combined. Las Cruces will see substantial "downtown" renewal with the addition of Pro's Ranch Market and the renovation of the Brazito Plaza. Also, national retailers are looking to get ahead of the boomer wave moving to New Mexico when they are able to sell their homes elsewhere in the country.

$49,165

The CBD office market continues to struggle with a glut of Class B or lower inventory. Vacancy in that sector is 20% or higher. Functionally obsolete buildings that require substantial capital to renovate are abundant in the downtown marketplace. The suburban office parks are performing very well with vacancy rates of 10-12% overall. Contact NAI Platform +1 518 465 1400

The industrial marketplace has been an active arena. The few tenants that are moving have taken advantage of the current situation, forcing landlords to reluctantly make lower priced deals rather than be burdened with a year-long vacancy. Rates are in the 8-12% range overall with spaces of 25,000 to 50,000 SF. Metropolitan Area Economic Overview 2009 Population

857,461

2014 Estimated Population

867,195

Employment Population

542,766

Household Average Income

$70,935

Median Household Income $38,116

Median Household Income $55,853

Total Population Median Age

Las Cruces At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

N/A N/A 14.00

$ $

N/A 21.00 16.00

N/A N/A 16.50

N/A N/A $ 15.50

N/A N/A 5.8%

$ $

N/A 27.00 19.50

N/A $ 24.25 $ 18.00

N/A 9.3% 21.1%

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ 22.00 $ 18.00 $ 12.00

$ $ $

26.00 24.00 16.00

$ 24.00 $ 21.00 $ 14.00

N/A 5.0% 29.0%

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ 16.50 $ 16.00 $ 11.00

$ $ $

22.50 20.00 16.00

$ 20.00 $ 18.00 $ 14.00

N/A 5.0% 14.0%

$ $ $

3.00 5.50 9.50

$ $ $

3.00 7.50 11.50

$ 2.75 $ 5.55 $ 10.50

15.0% 12.0% 10.0%

$ 9.00 $ 12.00 $ 12.00 $ 18.00

$ $ $ $

18.00 16.00 18.00 35.00

$ $ $ $

INDUSTRIAL $

3.00 N/A N/A

6.00 N/A N/A

$ 4.50 N/A N/A

5.0% N/A N/A

14.00 N/A N/A N/A

18.00 N/A N/A N/A

$ 16.50 N/A N/A N/A

9.5% N/A N/A N/A

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls

Look for brighter skies and more activity as the year unfolds. As a strong tertiary marketplace, the capital region has remained a stable and safe environment to live, work and invest.

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Investment and multifamily offerings were down slightly as lenders continue to tighten their requirements. This practice has driven capitalization rates up slightly to an average of 8-9% overall.

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Retail activity has slowed considerably with only the smaller franchisors and very large, established retailers making waves in the pool. Dick’s Sporting Goods expanded to more than 60,000 SF on two levels. Forever 21 will back fill the former 30,000 SF space.

Albany At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

A large state-owned tract of land commonly known as the State Campus is being viewed as the next home for a mixed-use park. Slated to be unveiled in Q2 2010, the park will offer high-end office space, research space, retail and a mix of residential units.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

250,000.00 250,000.00 25,000.00 25,000.00 250,000.00 20,000.00

High/Acre

$ $ $ $ $ $

400,000.00 400,000.00 45,000.00 45,000.00 625,000.00 105,000.00

Downtown Neighborhood Service Centers Community Power Center Regional Malls

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

150,000.00 150,000.00 75,000.00 60,000.00 150,000.00 25,000.00

13.50 14.50 15.00 26.50

N/A N/A N/A N/A

High/Acre

$ $ $ $ $ $

750,000.00 250,000.00 175,000.00 150,000.00 850,000.00 125,000.00

2010 Global Market Report www.naiglobal.com

109

New York City, New York

Long Island, New York As with most of the country, Long Island is feeling the effects of the recession. History has shown the local economy to be stable compared to the rest of the nation, in good times and bad, as evidenced by the current unemployment rate of 7.4%, well below the national average. However, all segments of the real estate market are soft and it is expected to worsen before it improves.

The Manhattan office market was relatively stable at the end of 2009. The 11.9% vacancy reached in Q3 2009 was the highest Manhattan has seen in four years, but is still among the lowest in the country. Rents continued to decline in 2009 with average asking rents falling to $52.05/SF, down from almost $70.00/SF in late 2008. However, the rate of decline has stabilized. Sublease space, which had increased each quarter for over a year, has also stabilized. Most of the recent leasing activity has been led by those companies waiting for rents to hit bottom and finally deciding to make a move to upgrade their existing space at rock bottom prices.

Contact NAI Global New York City +1 212 405 2500

Midtown Manhattan enjoys a great diversity of tenants, and there are several large tenants seeking space in the 200,000+ SF range. Tenants with good credit will continue to have the upper hand with landlords offering increased concessions. The Midtown South submarket provides secondary office buildings for tenants seeking less expensive alternatives. Downtown Manhattan is bracing for an increase in available space; however, city government is expanding incentives for services companies locating to the area. Manhattan market fundamentals remain weak with current unemployment at 10.3%, the highest in New York City in 16 years. The financial industry continues to reduce its labor force, job growth and corporate revenues remain stagnant and the credit market remains tight. With the fundamentals showing continued weakness, a turnaround in the commercial market is not expected until mid to late 2010.

Metropolitan Area Economic Overview 2008 Population

18,962,019

2013 Estimated Population

19,340,176

Employment Population

9,120,649

Household Average Income

$89,679

Median Household Income $62,065 Total Population Median Age

Investment sales in Manhattan have been few; however distressed assets are starting to appear in greater number and it is expected that foreign investors and well capitalized investment groups will seek to take advantage of a new pricing structure, spurring the expected turnaround. The stabilization of sublet space is another indication that the market may soon turn around as it indicates firms are holding onto space for anticipated staffing needs, rather than putting it on the market at a loss and then having to lease additional space at a premium once the market has recovered. There are many positive signs, including a strong workforce, New York Cityâ&#x20AC;&#x2122;s global leadership and its diverse industries such as: Professional Services, Bioscience, Emerging Technology, Green Industry, Media & Entertainment, Not For Profit, Fashion and Tourism.

New York City At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

The industrial sector is also very soft. Vacancy rates have risen to 9% but numerous owner occupants have been struggling to sell properties too large for their businesses as sales prices have fallen 20-30% in most submarkets.

Metropolitan Area Economic Overview 2009 Population

1,267,4441

2014 Estimated Population

1,173,752

Employment Population

630,791

Household Average Income

$119,517

The retail market has been impacted substantially by the recession. Many auto dealerships have lost their licenses, putting quality properties on the market. That increased inventory has led to a significant reduction of prices for potential development sites. Home Depot Expo and Circuit City have left the market, leaving several big box vacancies. Most of these spaces have not been filled but they are being considered by retailers looking to take advantage of the opportunities. Unlike the recession of the early 1990s, Long Island is not overbuilt. Because of this, prevailing sentiment is that the recovery from this downturn may be faster than the recovery in the mid 90s.

Median $91,445 Household Income Total Population Median Age

42.1

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

DOWNTOWN OFFICE $ 110.00 $ 80.00 $ 38.00

$ 185.00 $ 225.00 $ 65.00

$ 150.00 $ 100.00 $ 52.00

N/A 7.2% 6.5%

$ 65.00 $ 40.00 $ 25.00

$ $ $

75.00 65.00 45.00

$ 70.00 $ 52.50 $ 35.00

N/A 6.4% 8.2%

N/A N/A N/A

Central Business District Neighborhood Service Centers Community Power Center Regional Malls

$ 60.00 N/A N/A N/A

$1,400.00 N/A N/A N/A

$ 300.00 N/A N/A N/A

3.5% N/A N/A N/A

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

N/A N/A N/A N/A N/A N/A

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Contact NAI Long Island +1 631 270 3000

The investment market has changed rapidly in 2009. The lack of credit has caused investment sales to come to a virtual standstill with few deals being completed. Many properties purchased at top prices in recent years are struggling to meet debt service. Attention has turned to lenders who are holding numerous loans in early stages of default.

Long Island At A Glance Low

MIDTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

The office market has weakened considerably throughout 2009. Overall vacancy rates for Class A and B space have increased to 11.1%. However, the total availability rate, which accounts for occupied sublet space, has increased to 17.5%. Landlords are offering substantial rent reductions and concessions to attract and retain tenants.

New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A N/A N/A

30.00 28.00 22.00

$ 36.00 $ 34.00 $ 28.00

N/A N/A N/A

11.0% 11.0% 11.0%

7.00 N/A $ 18.00

N/A N/A N/A

9.0% 9.0% 8.5%

N/A $ 30.00 $ 40.00 $ 120.00

N/A N/A N/A N/A

SUBURBAN OFFICE

INDUSTRIAL

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ $ $

INDUSTRIAL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL (Midtown)

Bulk Warehouse Manufacturing High Tech/R&D

4.50 N/A $ 14.00

RETAIL N/A 18.00 20.00 60.00

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $

High/Acre

DEVELOPMENT LAND

Low/Acre

N/A N/A N/A N/A N/A N/A

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $

N/A 500,000.00 300,000.00 500,000.00 800,000.00 N/A

High/Acre

N/A $ 1,000,000.00 $ 600,000.00 $ 1,000,000.00 $ 2,500,000.00 N/A

2010 Global Market Report www.naiglobal.com

110

Asheville, North Carolina

Charlotte, North Carolina

Asheville is in a great position to do business, sitting at the crossroads of two major interstates; I-40 which links the east and west coast of the US, and I-26 which helps connect Charleston, South Carolina, to the Ohio River Valley. A growing mix of healthcare, professional/technical services, knowledge-based enterprises and tourism fuels the local economy.

Over the last two years, various sources have ranked the Queen City area as the number one place in America in the following categories: Best Place to Live, Most Educated Workforce, Top Large Counties for Recruitment & Attraction, America’s Most Livable Communities and Economic Strength Ranking. Eight Fortune 500 companies are headquartered here and 326 Fortune 500 companies have facilities here. A vast majority of the region’s employment is directly linked to financial, manufacturing, energy and racing related firms. The strategic location, coupled with the low cost of living, keep people moving to the market.

Industrial vacancy rates were virtually unchanged from 2008. New construction in the industrial sector will likely be limited to build-to-suit projects in the new year.

Contact NAI BH Commercial +1 828 210 3940 1 866 810 5893

Metropolitan Area Economic Overview 2009 Population

416,498

2014 Estimated Population

446,922

Employment Population

219,126

Household Average Income

$59,194

Median Household Income $45,198 Total Population Median Age

Supply-side pressures in the office market are expected to continue into 2010 with over 90,000 SF of new space under construction and over 195,000 SF of office space proposed. Completions during 2009 surpassed the totals reported in each of the past three years, and supply side pressure on vacancy will continue to increase as the remaining new space is delivered. Approximately 10.5% of the market’s retail inventory was reported vacant. Several mix-used projects were underway, including Reynolds Mountain and Biltmore Park among others. Barnes and Noble, with their second location in the Asheville market, occupied 28,000 SF of new space at Biltmore Park Town Square, one of the largest tenant moves during the year. The area unemployment rate was the highest rate reported since 1991; however, it continues to be lower than the state and national average. In addition, the annual job growth rate consistently tops the state and nation. One of the key advantages to building your business in Asheville is its suitability both as a place to live and a vital place to grow your business. Asheville has been ranked by several prominent publications. Asheville was ranked number six as “Best Metro Places for Business and Careers” by Forbes Magazine (March 2009), ranked number two as “One of the Nations Top Arts Destinations” by American Style Magazine, ranked number eight of Top 10 Metro Areas for Quality of Life by Business Facilities Magazine in July 2009 and included as a Favorite City of Business Trips in USA Today Road Warriors in August 2009.

Asheville At A Glance High

Effective Avg.

Vacancy

$ $ $

24.00 18.00 14.00

$ 26.00 $ 21.00 $ 18.00

$ 25.00 $ 19.50 $ 16.00

15.0% 14.0% 18.0%

$ $ $

24.00 22.00 18.00

$ 30.00 $ 28.00 $ 20.00

$ 27.00 $ 25.00 $ 19.00

25.0% 22.0% 16.0%

$ $ $

2.00 3.00 4.00

$ $ $

3.00 5.00 6.00

$ $ $

2.50 4.00 5.00

24.0% 22.0% 20.0%

2,108,238

Employment Population

856,303

Household Average Income

$72,765

Median Household Income $62,093

Other than a few apartment properties changing hands, the Investment Market has been extremely slow. This may be beginning to change as a 1.1 million square foot Industrial portfolio at Crosspoint Park sold for $34.2 million. There were multiple bidders for the property that sold at roughly a 9.5% CAP rate. Yes, the recession is hitting Charlotte, but we feel the area is in a great position to come out of the downturn stronger than ever.

Low

High

N/A $ 17.00 $ 12.00

$ $

N/A 22.00 16.00

N/A $ 19.00 $ 14.00

N/A 7.0% 12.0%

$ 18.00 $ 18.00 $ 12.00

$ $ $

22.00 20.00 16.00

$ 20.00 $ 19.00 $ 14.00

10.0% 10.0% 15.0%

$ $ $

2.25 2.40 6.00

$ $ $

3.25 3.50 10.00

$ $ $

2.50 2.80 7.00

14.0% 5.0% 5.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

10.00 12.00 20.00 21.00

$ $ $ $

23.00 20.00 30.00 50.00

$ $ $ $

18.00 18.00 24.00 37.00

5.0% 10.0% 10.0% 10.0%

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

$ 1,200,000.00 $ 250,000.00 $ 125,000.00 $ 300,000.00 $ 1,500,000.00 $ 125,000.00

(Rent/SF/YR)

Effective Avg.

Vacancy

$ $ $ $

13.00 10.00 8.00 16.00

$ $ $ $

20.00 22.00 17.00 25.00

$ $ $ $

16.50 16.00 12.50 20.50

14.0% 9.8% 10.0% 15.0%

New Construction (AAA) Class A (Prime) Class B (Secondary) New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls

2014 Estimated Population

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

1,782,827

Retail vacancies are rising, and landlords are offering generous concessions to attract tenants to their centers. Currently, Retail vacancy is at 8.9%, up substantially from 5.7% over the past year. However, it is expected that the vacancy rate will continue to rise into mid-2010. Very little development is expected until rates level off.

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

2009 Population

The Industrial market has been fortunate not to suffer from over supply. Only two speculative buildings are in the construction phase in the entire market. The current vacancy rate is 13.5% which holds its own compared to 12.6% a year ago. Although demand today is weaker than the pre-recession period, brokers report an increased demand in the 20,000 to 50,000 square foot range.

Charlotte At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Metropolitan Area Economic Overview

Total Population Median Age

(Rent/SF/YR)

Contact NAI Southern Real Estate +1 704 375 1000

The overall vacancy in the Office market is 15.9%, an increase of 23% over the past year. The vacancy rate in the Central Business District is 7.6%, up from 2.1% in 2008. With 2.5 million square feet of new space coming on line, the CBD vacancy rate is expected to climb to 12-13%. The good news is Charlotte now has sufficient space available to compete for major corporate relocations.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

300,000.00 350,000.00 150,000.00 60,000.00 400,000.00 40,000.00

High/Acre

$ 800,000.00 $ 700,000.00 $ 250,000.00 $ 200,000.00 $ 1,500,000.00 $ 125,000.00

650,000.00 125,000.00 65,000.00 100,000.00 200,000.00 60,000.00

2010 Global Market Report www.naiglobal.com 111

Greensboro/High Point/Winston Salem, North Carolina

Raleigh/Durham, North Carolina

Infrastructure improvements bode well for the future of the region. Expansion of a third runway and major road improvements have resulted in a $300 million FedEx Mid-Atlantic hub opening at the airport and the location of a 400,000 SF FedEx Ground sorting facility in Kernersville. HondaJet has opened a headquarters facility at the airport and will deliver the first of its six-passenger light jets in 2011.

Contact NAI Piedmont Triad +1 336 373 0995

Metropolitan Area Economic Overview 2008 Population

722,220

2013 Estimated Population

781,425

Employment Population

407,900

Household Average Income

$59,036

The industrial market suffered its share of setbacks in 2009, with an unemployment rate over 11% and the closing of the flagship 790,000 SF Dell manufacturing plant in Union Cross. Industrial vacancies for modern distribution centers over 200,000 SF exceed 6 million SF, an estimated 10-year supply at historic absorption levels. The only bright spot is increased demand for warehouse space between 20,000 and 40,000 SF with rents leveling out in the $3.00$3.50/SF range for good quality space at the airport. The retail sector has continued to deteriorate with small shop vacancies reaching 25% and tenants going out of business faster than the landlords can lease the space. Restaurants and boutique shopping have been particularly hard hit as consumers continue to cut back on spending. Food anchored neighborhood centers are faring better than other product types, with rents for small shops declining by only 20%. The forecast for 2010 is more of the same, with little hope of substantial improvement until 2012. The office market has followed other market segments, with cutbacks caused by Wachoviaâ&#x20AC;&#x2122;s demise freeing up large blocks of space in downtown Winston-Salem. Vacancy is over 20% in all markets. There are sporadic signs of activity with a financial services arm of LabCorp bringing 383 jobs to Greensboro by Q2 2010. Public sector investment has been strong, with UNC-G and NC A&T universities breaking ground on a $60 million center for Nanotechnology in east Greensboro. Guilford Technical Community College is also under way with a $150 million Airport Campus that will specialize in the aviation and logistics industries.

In May 2009, MSNBC named Raleigh-Durham number two in the nation for the top five markets likely to recover quickly. This analysis was based on good job growth, growing population, good weather, lots of first-time home buyers, little overbuilding, vital downtowns where people can live without a car, a well educated population, and a large number of foreclosures that happened early. Fortunately, the region is also home to the Research Triangle Park, one of the most successful R&D centers in the world, featuring microelectronics, environmental sciences, pharmaceuticals, and biotechnology companies.

Contact NAI Carolantic Realty, Inc. +1 919 832 0594

Metropolitan Area Economic Overview 2009 Population

1,150,305

2014 Estimated Population

1,404,352

Employment Population

540,316

Household Average Income

$75,927

Median Household Income $51,439

Median Household Income $66,967

Total Population Median Age

Greensboro, High Point, Winston Salem At A Glance (Rent/SF/YR)

Low

High

The Triangle area continued to attract new businesses as well as domestic and international expansions despite the downturn in the economy. The Triangle Combined MSA added an average of 10,254 jobs per year (July to June) over the 7-year period ending in June 2009 resulting in an average 1.5% annual growth rate. Companies like EMC Corporation announced plans for a $280 million expansion that will add almost 400 jobs over the next five years. Deutsche Bank will open a technology development center creating over 300 jobs and investing $6.7 million. However, even with the growth, concerns about the national economy were reflected in the local office market which pointed to a rise in vacancy as tenants downsized and new sublease space brought additional pressures. Vacancy rose two percentage points higher from 2008 to 15% with minimal net demand. Approximately 1.4 million square feet were added to the market during 2009 and rental rates dropped slightly with concessions offered on extended leases. Less than 500,000 square feet were under construction for 2010. Somewhat surprising, the multipurpose sector experienced a slight drop in vacancy from 16% in 2008 to 15% in 2009 with 3% absorption. Uncertainties in the overall economy and financial markets will test this sector into 2010. Rental rates declined and approximately 300,000 square feet were under construction for 2010. Over 1.4 million square feet of retail space was completed in the Raleigh-Durham market in 2009 with an additional 900,000 square feet now under construction. Vacancy rose from 4% in 2008 to 6% in 2009 and absorption remained at 3%. Rental rates declined slightly. As construction continues on the Outer Loop (I-540) around Raleigh, new retail opportunities will be opened at major interchanges.

Raleigh/Durham At A Glance Effective Avg.

Vacancy

DOWNTOWN OFFICE

(Rent/SF/YR)

Low

High

$ $ $

25.00 18.00 14.00

$ 28.95 $ 25.00 $ 17.00

$ 26.98 $ 21.50 $ 15.50

12.0% 12.0% 12.0%

$ $ $

24.00 19.00 14.00

$ 30.00 $ 24.00 $ 16.50

$ 27.00 $ 21.50 $ 15.50

15.0% 15.0% 15.0%

$ $ $

3.25 3.50 7.50

$ 4.50 $ 4.50 $ 11.00

$ $ $

3.75 4.00 9.00

15.0% 15.0% 15.0%

$ $ $ $

8.00 10.00 14.00 21.00

$ $ $ $

15.50 13.00 19.00 33.00

6.0% 6.0% 6.0% 6.0%

$ 22.00 $ 18.50 $ 11.00

$ $ $

28.00 21.00 15.00

$ 25.00 $ 19.50 $ 13.50

N/A 8.0% 25.0%

$ 21.00 $ 18.50 $ 11.00

$ $ $

26.00 22.00 16.00

$ 23.00 $ 19.00 $ 13.00

N/A 15.0% 20.0%

$ $

2.00 3.50 N/A

$ $

3.50 4.75 N/A

$ $

3.25 4.00 N/A

15.0% 10.0% N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 8.00 $ 12.00 $ 16.00 $ 22.00

$ $ $ $

23.00 20.00 24.00 40.00

$ $ $ $

16.00 18.00 20.00 28.00

15.0% 20.0% 12.0% 12.0%

DEVELOPMENT LAND

Low/Acre

High/Acre

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

$ 2,000,000.00 $ 300,000.00 $ 150,000.00 $ 100,000.00 $ 250,000.00 $ 75,000.00

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Effective Avg.

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

700,000.00 100,000.00 75,000.00 50,000.00 125,000.00 20,000.00

Downtown Neighborhood Service Centers Community Power Center Regional Malls

50.00 175,000.00 100,000.00 80,000.00 152,460.00 25,000.00

23.00 16.00 24.00 45.00

High/Acre

$ $ $ $ $ $

90.00 225,000.00 175,000.00 200,000.00 750,000.00 150,000.00

2010 Global Market Report www.naiglobal.com 112

Fargo, North Dakota

Contact NAI North Central +1 701 364 0244

Metropolitan Area Economic Overview 2009 Population

202,025

2014 Estimated Population

225,041

Employment Population

142,133

Household Average Income

$57,820

Median Household Income $50,127 Total Population Median Age

Akron, Ohio

The 2009 Fargo market can best be described as sporadic and uneven. Demand for office and retail space is contracting while demand for industrial space is fairly stable. The multifamily sector remains active but with off-market properties. Current inventory of multi-family properties is very low. Excessive surplus office and retail inventories exist. Industrial inventory has a slight surplus. Key Fargo industry drivers include health care, education, banking, insurance, agribusiness, shipping - transportation, and manufacturing.

Situated near Lake Erie and several major interstates in the heart of the Midwest, Akron continues to attract entrepreneurs, investors and new businesses through its reputation for innovation, low cost of living and strong institutional investment in the community. Akronâ&#x20AC;&#x2122;s greatest growth in 2009 was in health care, education, technology and service industries. Manufacturing and distribution continue to contract from last year and retail has slowed with consumer spending.

The office rental market is soft. An overabundance of lease space with landlord concessions and competitive rental rates prevails. Currently, there are approximately 219 lease listings on the market. Rental rates vary from $7.00/SF to $8.00/SF for Class B space and up to $9.50/SF to $11.25/SF for Class A space located in start-up business parks or along key corridor sites. The surplus of office space is expected to carry through 2010. Closed office sales are off from last year's pace and are expected to finish behind 2008.

Greater Akron saw an increase in institutional development projects throughout 2009. The construction of the $61.6 million Infocision stadium at the University of Akron was completed this year and welcomed a capacity crowd on opening day. The requirement for educational office space has increased as the unemployed seek job and career training from ITT Technical Institute, Brown Mackie College, Strayer University and the like. These companies seek Class A and B office space in markets across the country and have opened multiple locations throughout Northeast Ohio to accommodate growth in enrollment.

The industrial rental market is near equilibrium with a nominal inventory surplus. Rental rates for Class B heated space range from $4.50/SF to $6.00/SF. Year to date closed industrial sales are slightly behind 2008. The retail rental market is saturated with 142 lease listings on the market. New retail projects including Amber Valley, Cityscapes Plaza, Eagle Run, Osgood, and Shoppes at Urban Plains, have added to the surplus. The surplus will carry through 2010. Rental rates for Class A space are $14.00/SF to $16.00/SF. Class B space runs $9.00/SF to $10.75/SF. However, closed retail sales should finish comparable to 2008. Major I-94 interchange projects are in progress in south Moorhead and south West Fargo creating renewed interest in and development at those sites. North Dakota State University opened a satellite business college & architecture department in the CBD. Special mention is made of the historic 2009 Red River Flood. Local and regional businesses lost at least one full month of sales and production as a direct result of the flood. Economic impact was felt across all sectors as employers contributed valuable labor and inventory to this effort.

Fargo At A Glance High

Effective Avg.

Vacancy

12.50 9.50 7.00

$ 16.50 $ 11.25 $ 8.00

$ 15.50 $ 10.50 $ 7.50

12.5% 10.5% 11.3%

$ $ $

12.00 10.75 8.00

$ 15.00 $ 12.50 $ 11.00

$ 14.00 $ 12.00 $ 10.00

9.8% 10.50% 11.0%

$ $

4.50 5.75 N/A

$ $

Downtown Neighborhood Service Centers Sub Regional Centers Regional Malls

$ $ $ $

14.00 10.00 8.00 18.00

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

SUBURBAN OFFICE

2014 Estimated Population

680,988

Employment Population

393,378

Household Average Income

$64,509

Median Household Income $54,658 39

Retail development expanded to suburban communities. These growing areas have lured regional and national tenants, speaking to the demand for mid to upscale services. Declining malls, strip centers and plazas are being reinvented to include mixed use, light industrial, records storage, trade schools and call center space.

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ 19.00 $ 14.00 $ 9.50

$ $ $

23.00 19.00 19.00

$ 16.50 $ 16.00 $ 14.07

N/A 13.0% 10.0%

$ 17.50 $ 14.50 $ 8.50

$ $ $

21.00 20.00 14.00

$ 18.50 $ 18.50 $ 12.00

N/A 13.0% 12.0%

$ $ $

4.00 3.75 8.00

$ $ $

3.25 3.25 7.50

14.0% 12.0% 7.0%

$ $ $ $

17.00 30.00 17.00 30.00

$ $ $ $

12.00 13.50 14.00 25.00

8.0% 14.0% 14.0% 4.0%

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

694,360

Investors have seen rising capitalization rates for cash-ready buyers and sale/leaseback opportunities abound. Seller financing is now a viable option for many buyers and sellers who are highly motivated to close transactions. Manufacturing has taken a hit with the drastic reduction in automotive assembly. With an ample supply of light industrial space available, tenant lease terms are shorter. Sale prices and attractive lease rates offer great opportunities for buyers and tenants.

DOWNTOWN OFFICE $ $ $

New Construction (AAA) Class A (Prime) Class B (Secondary)

2009 Population

The requirement for medical office space continues to expand as groundbreaking takes place on hospital and medical center projects throughout Summit County. Summa Hospitals began construction on the Crystal Clinic and acquiring Robinson Memorial Hospital in Ravenna. Akron General expanded the reach of its emergency medical services and wellness centers with new facilities and a 30+ bed hospital planned for a suburban community.

Akron At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Metropolitan Area Economic Overview

Total Population Median Age

(Rent/SF/YR)

Contact NAI Cummins Real Estate +1 330 535 2661

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL 6.00 6.90 N/A

5.50 6.50 N/A

9.9% 9.9% N/A

$ 15.00 $ 11.50 $ 9.00 $ 19.50

14.3% 8.5% 8.5% 3.0%

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

2.25 2.75 7.00

RETAIL

9.20 87,120.00 76,230.00 84,942.00 174,240.00 21,780.00

$ 16.00 $ 12.50 $ 9.50 $ 20.00

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$7.00 $6.00 $10.00 $20.00

High/Acre

DEVELOPMENT LAND

Low/Acre

High/Acre

$ $ $ $ $ $

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

15.30 174,240.00 108,900.00 130,680.00 261,360.00 54,450.00

350,000.00 140,000.00 60,000.00 55,000.00 100,000.00 15,000.00

525,000.00 250,000.00 100,000.00 90,000.00 300,000.00 20,000.00

2010 Global Market Report www.naiglobal.com 113

Canton, Ohio

Cincinnati, Ohio Stark County, including the greater Canton area, is strategically located in Northeastern Ohio at the crossroads of the Eastern and Midwestern markets. Its network of interstate highways and one of the fastest growing airports in the country, allows companies easy access to several major cities. This, coupled with a low cost of living, primarily the result of very reasonable housing prices, makes Stark County a great place for companies and families to locate.

The Cincinnati, Ohio regional market has recently been recognized for its inclusion on the top 25 list of total personal income (TPI), (U.S. Bureau of Economic Analysis), for two of the top 10 hospitals in the nation (Modern Healthcare), and three of the nation’s top 500 fastest growing businesses (Inc.).

A bright spot in the Stark County market has been the growth around the airport. The Akron-Canton Airport (CAK) offers the lowest average fare of any airport in Ohio. Industrial, office, retail, and hospitality have all developed along with the airport. Located in close proximity to the airport, Rolls Royce just announced a multimillion dollar expansion of their Fuel Cell Prototyping Center at Stark State College. Contact NAI Spring +1 330 966 8800

Metropolitan Area Economic Overview 2009 Population

401,820

2014 Estimated Population

388,122

Employment Population

212,030

Household Average Income

$57,514

Other areas throughout the county also remain upbeat. On the industrial front, Shear's Potato Chip broke ground on Ohio's fist Gold LEED-Certified Food Manufacturing Plant in NEOCOM Industrial Park in Massillon. Another major project is the new Federal Building in Downtown Canton. This $14 million dollar facility is expected to be completed in July 2010. The office market remained relatively flat with several tenants consolidating space. The Schroyer Group, for example, is consolidating their operations and planning to move into its new state of the art 57,000 SF office in the former Hoover Building. The industrial market continues to struggle with quite a few large, older manufacturing buildings on the market for sale or lease. However, distribution space of 10,000 to 50,000 SF is somewhat limited around the I-77 corridor. Downtown Canton remains a hot spot for retail with several new restaurants, a bustling arts district and other shops opening during 2009. Traditionally, the Canton area doesn't experience the extreme highs or lows found in other markets. This held true as the overall region remained relatively stable compared to other markets around the country.

Contact NAI Bergman +1 513 769 1710

Metropolitan Area Economic Overview 2009 Population

2,187,233

2014 Estimated Population

2,317,532

Employment Population

1,114,241

Household Average Income

$68,738

Median Household Income $49,569

Median Household Income $57,738

Total Population Median Age

Canton At A Glance (Rent/SF/YR)

Cincinnati has two major areas of growth in an otherwise challenging year. The Banks project in the CBD is a 2.8 million SF mixed-use development on the Cincinnati riverfront located between Paul Brown Stadium and the Great American Ballpark. The second major growth area is the Cincinnati/Dayton Metroplex, specifically the West Chester-Middletown submarket. Located between Dayton and Cincinnati, this market is activity-driven. The area is home to three new hospitals: Westchester Medical Center, Children’s Medical Center Liberty Campus, and Atrium Medical Center; GE Aviation, a 403,000 SF campus in West Chester; and the Cincinnati Premium Outlets in Monroe, an upscale, 100-store retail mall. While transactions are conservative and the process extended, the commercial real estate market continues to be stable. The office market has produced positive absorption. Vacancy and rental rates remain consistent within historic margins, and certainly better than has been witnessed in other U.S. office markets in general. At rates approaching 8% for warehouse and flex at 10%, Cincinnati industrial warehouse vacancy is also faring better than the U.S. norm. Though fewer transactions overall, sales prices have remained steady and rental rates have dropped less than 20%. Retail rental rates have increased as the retail inventory is being absorbed. Scheduled projects for Q4 2010 completion include The Banks Phase I (70,000 SF) and Corryville Crossings (100,000 SF). Cincinnati’s business-friendly environment, affordable housing, well-educated workforce, stability, diverse economy, and easy access to national and regional markets create a solid environment for new business and continued growth.

Cincinnati At A Glance Low

High

Effective Avg.

Vacancy

DOWNTOWN OFFICE

Low

High

Effective Avg.

$ 20.00 $ 11.20 $ 8.00

$ $ $

25.00 22.84 22.11

$ 22.50 $ 16.10 $ 13.26

23.0% 12.0% 11.0%

N/A $ 10.50 $ 3.91

$ $

N/A 27.81 26.41

N/A $ 16.58 $ 14.30

N/A 15.1% 18.0%

$ $

1.50 1.45 N/A

$ $

7.95 7.50 N/A

$ $

3.30 2.75 N/A

11.0% 3.0% N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 3.17 $ 3.00 $ 11.02 $ 15.00

$ $ $ $

18.00 21.00 15.25 30.00

$ $ $ $

14.18 11.21 14.65 21.31

2.0% 13.0% 7.0% 10.0%

(Rent/SF/YR)

$ 14.00 $ 10.00 $ 8.00

$ $ $

16.00 16.00 12.00

$ 15.00 $ 13.00 $ 10.00

N/A 10.0% 16.0%

$ 14.50 $ 12.00 $ 8.00

$ $ $

22.00 18.00 12.00

$ 18.25 $ 15.00 $ 10.00

N/A 14.0% 16.0%

$ 2.00 $ 2.50 $ 10.00

$ $ $

4.00 3.50 14.00

$ 3.00 $ 3.00 $ 12.00

14.0% 12.0% 6.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 8.00 $ 8.00 $ 8.00 $ 20.00

$ $ $ $

16.00 16.00 16.00 30.00

$ $ $ $

10.0% 14.0% 14.0% 10.0%

DEVELOPMENT LAND

Low/Acre

High/Acre

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

$ 3,000,000.00 $ 350,000.00 $ 150,000.00 $ 350,000.00 $ 3,809,524.00 $ 250,000.00

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Vacancy

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

75,000.00 100,000.00 20,000.00 75,000.00 200,000.00 20,000.00

12.00 12.00 12.00 25.00

150,000.00 250,000.00 100,000.00 150,000.00 850,000.00 200,000.00

300,000.00 125,000.00 29,443.00 26,000.00 150,000.00 20,000.00

2010 Global Market Report www.naiglobal.com 114

Cleveland, Ohio

Columbus, Ohio Battered by continued economic woes, particularly in the banking and automotive sectors, the Cleveland market was characterized in 2009 by sluggish leasing velocity, slowly rising vacancy rates and a dramatic absence of property sales. The CBD office sector was the most stable market segment. Seeking to take advantage of a tenantsâ&#x20AC;&#x2122; market, several major companies made new lease commitments, solidifying the downtown market for the next several years.

Contact NAI Daus +1 216 831 3310

Metropolitan Area Economic Overview 2009 Population

2,056,588

2014 Estimated Population

1,958,428

Employment Population

1,260,439

Household Average Income

$63,694

Additionally, downtown Cleveland is positioned to capture momentum from several large public-sector projects either planned or under way, including a new convention center and medical mart, a mixed-use redevelopment of the East Bank of the Flats and possibly a new hotel/casino. The suburban office market was a more difficult environment, hampered by widespread financial hardship among tenants. A couple of bright spots include the announcement by Eaton Corporation to develop a new world headquarter campus at Chagrin Highlands in the Eastern suburbs and the continued development of substantial medical facilities by the Cleveland Clinic in Twinsburg and University Hospitals at Chagrin Highlands. It was also a challenging environment in both the industrial and retail markets. The overall industrial vacancy rate increased 100 basis points during the year and absorption was negative each quarter. Although there was moderate leasing activity, it was dominated by tenants seeking lower rents, less space and shorter terms. The retail market shared many of the same characteristics, particularly among tenant activities. However, unlike the industrial market, which had virtually no new construction, the retail market did have a few projects in the pipeline. These included the Plaza at Southpark in Strongsville (300,000 SF) and City Center of Avon (100,000 SF). The improvement of broader economic indicators should bode well for the region in 2010. However, direct impact in the real estate segment likely won't be noticeable until the second half of the year and a dramatic improvement will not happen until the capital markets return to a more normal environment.

Columbus continues to lead the state in job growth, population growth and new development, due in large part to being the state seat of government, and home to the Ohio State University, Battelle Memorial Research Institute, health industry leader Cardinal Health, Nationwide Insurance and the Limited Brand family of stores. Major hospital systems Ohio Health, University Hospitals and Mount Carmel Health Systems continue to compete for market share with new office development and the addition of hospital beds.

Contact NAI Ohio Equities, LLC +1 614 224 2400

Metropolitan Area Economic Overview 2009 Population

1,811,662

2014 Estimated Population

1,948,423

Employment Population

1,064,756

Household Average Income

$67,218

Median Household Income $54,416

Median Household Income $58,492

Total Population Median Age

Cleveland At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

NA $ 18.00 $ 14.00

$ $

NA 24.00 19.00

NA $ 17.09 $ 15.00

NA 11.7% 17.3%

$ 21.50 $ 16.00 $ 13.00

$ $ $

28.50 24.00 17.00

$ 27.50 $ 19.62 $ 16.63

42.0% 11.3% 13.1%

The central Ohio economy continues to chug along with the bulk of activity being generated by local operators not pulled down by economies outside our region.

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

$ $

5.50 6.00 NA

New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A $ 16.25 $ 11.25

$ $

N/A 25.00 16.00

N/A $ 17.00 $ 13.50

N/A 12.7% 13.7%

N/A $ 15.00 $ 13.00

$ $

N/A 19.00 16.00

N/A $ 17.00 $ 13.50

N/A 10.0% 18.4%

$ $

2.25 2.75 N/A

11.6% 8.5% N/A

N/A $ 14.00 $ 15.00 N/A

N/A 19.0% 15.0% N/A

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Residential development of all kinds is virtually non-existent, with the exception of a few market apartment buildings being developed. Single family developers continue to pick up undeveloped blanks from lenders and competitors who hope to resume building once the existing inventory starts to be absorbed. Capitalization rates for all investment product seems to have stabilized. Properties that had been trading at 7% capitalization now hover around 9%.

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

All segments of the warehouse market continue to stagnate, with vacancy increasing about 1% in bulk and manufacturing space. Interest from national retailers for new development has slowed substantially. Fast food is the only segment of the retail market with new store growth. Retail rates have fallen across the board, and by as much as 25% or more for the most expensive space.

Columbus At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Demand for all office product stagnated in 2009 with a loss of occupied square footage of about 1% of the total. Vacancy increased in all office markets except for suburban Class A, which decreased by 0.5%. Rental rates fell in all office markets as a result of landlords aggressively chasing tenant renewals. Many office leases had rates reduced and terms extended, as tenants took advantage of landlords hoping to stabilize assets that would need refinancing in the next few years.

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL 2.25 2.00 NA

$ $

3.50 3.75 NA

7.9% 8.3% NA

NA $ 12.00 $ 14.00 $ 25.00

NA 11.9% 13.7% 3.5%

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

1.00 0.75 N/A

3.25 3.00 N/A

RETAIL

Downtown Neighborhood Service Centers Community Power Center Regional Malls

NA $ 5.00 $ 4.00 $ 10.00

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

10.00 200,000.00 70,000.00 90,000.00 60,000.00 10,000.00

$ $ $

NA 32.00 30.00 40.00

Downtown Neighborhood Service Centers Community Power Center Regional Malls

N/A $ 10.00 $ 12.00 N/A

High/Acre

DEVELOPMENT LAND

Low/Acre

High/Acre

$ 125.00 $ 400,000.00 $ 150,000.00 $ 175,000.00 $ 2,000,000.00 $ 120,000.00

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $

$ $ $ $ $ $

34.00 140,000.00 31,000.00 35,000.00 15,000.00 $6,000.00

$ $

N/A 24.00 16.00 N/A

40.00 175,000.00 80,000.00 75,000.00 750,000.00 10,000.00

2010 Global Market Report www.naiglobal.com 115

Dayton, Ohio

Oklahoma City, Oklahoma With commercial real estate conditions expected to weaken into 2010, many commercial banks that provided loans during the commercial real estate buying spree now face capital shortfalls and will be forced to stop extending loan due dates and begin cleansing their balance sheets of troubled assets. The opportunities to buy at steep discounts during this time period will be ample for investors with cash-plentiful balance sheets.

Oklahoma City will end 2009 at just above 6% unemployment, one of the lowest in the country. The strong oil and gas industry, low vacancy and low cost of living have helped the city weather the storm. Oklahoma City is home to Devon Energy, which just broke ground on a 750,000 SF, 53-story office building to be completed in 2012 in the CBD. The retail market is the weakest with overall vacancy of 12%. Class A rates are $21/SF, Class B rates $12/SF and Class C rates are $8/SF NNN. No new construction was delivered in 2009. The industrial market is one of the strongest markets, with vacancy at 9.6% up from 8.2% a year ago. Bulk warehouse rates average $3.75/SF NNN. There is very little available over 24' clear.

The Dayton office sector ended Q3 2009 with a vacancy rate of 11.7% and negative absorption of 4,295 SF. Rental rates ended Q3 at $14.64 SF, continuing a downward trend. A total of 51,780 SF were delivered in Q3 with 78,866 SF under construction. The strongest submarket remains the south market with access to I-75 & I-675. There is almost no speculative development under way in the market; almost everything currently under construction is build to suit or fully pre-leased. Contact NAI Dayton +1 937 294 7777

Notable office deals in 2009 included DRS Technologies’ lease of 47,000 SF in Mission Point in the Northeast submarket and Ohio Institute of Photography & Technology’s lease of 54,072 SF in the Dayton Walther Building in the South submarket.

Contact NAI Sullivan Group +1 405 840 0600

The Dayton industrial sector ended Q3 2009 with a vacancy rate of 9.6% and negative absorption of 679,202 SF. Rental rates ended Q3 at $3.68 SF, up slightly despite the rising vacancy factor. The strongest submarkets remain the I-75 corridor to the south and the I-70 corridor to the east. Metropolitan Area Economic Overview 2009 Population

827,370

2014 Estimated Population

807,016

Employment Population

459,851

Household Average Income

$59,972

Notable industrial deals in 2009 included Soin International’s lease of 115,000 SF in the Central submarket, and Phygen’s lease of 34,000 SF in the Northeast. The Dayton retail sector ended Q3 2009 with a vacancy rate of 9.4%, and absorption was negative 20,950 SF. Rental rates ended Q3 at $9.25 SF, declining in step with the rising vacancy rate. The stronger submarkets remain the south and northeast markets. Wright Patterson Air Force Base continues to be the region’s economic engine, with a dozen new construction projects in the pipeline valued over $300 million. The 1,000,000 SF of facility space under construction over the next three years will bring an additional 1,200 new jobs to the market.

Metropolitan Area Economic Overview 2009 Population

1,230,369

2014 Estimated Population

1,321,614

Employment Population

658,188

Household Average Income

$63,547

Median Household Income $53,222

Median Household Income $47,782

Total Population Median Age

Dayton At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

Oklahoma City is the third best city in the country according a Forbes Magazine October 2009 report, based on low unemployment, increasing home values and strong government leadership.

Low

High

Effective Avg.

$ 21.00 $ 15.00 $ 9.00

$ $ $

23.00 17.00 10.00

N/A $ 16.00 $ 14.00

N/A 11.9% 10.0%

$ 19.00 $ 17.00 $ 15.00

$ $ $

21.00 19.00 17.00

$ 20.00 $ 18.00 $ 16.00

N/A 16.0% 10.0%

$ $ $

2.85 2.25 7.00

$ $ $

5.40 9.25 9.00

$ $ $

4.13 5.75 8.00

5.4% 14.0% 15.3%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

N/A $ 11.40 $ 8.80 $ 12.00

$ $ $

N/A 15.00 12.00 16.00

N/A $ 13.20 $ 10.80 $ 14.00

N/A 4.3% 9.4% 10.2%

(Rent/SF/YR)

$ 17.25 $ 16.04 $ 10.24

$ $ $

18.25 22.98 14.56

$ 17.55 $ 17.95 $ 13.55

15.4% 16.9% 18.2%

$ 14.00 $ 16.04 $ 9.61

$ $ $

17.25 22.98 20.93

$ 16.58 $ 20.53 $ 15.15

8.8% 13.3% 14.6%

3.44 N/A $ 10.07

9.2% N/A 25.1%

$ 10.27 $ 9.36 $ 11.16 $ 19.80

14.6% 16.9% 6.3% 5.9%

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE

INDUSTRIAL

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL 1.64 N/A 4.50

4.51 N/A 13.33

Downtown Neighborhood Service Centers Sub Regional Centers Regional Malls

$ 8.25 $ 5.00 $ 10.50 $ 17.21

$ $ $ $

15.23 12.75 14.00 36.00

DEVELOPMENT LAND

Low/Acre

High/Acre

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

Bulk Warehouse Manufacturing High Tech/R&D

Vacancy

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

The multifamily market continues to be very strong with overall vacancy at 9.5%, which is up from 7.0% a year earlier. Rental rates for Class A properties average $.95/SF/month, Class B at $.75/SF/month, and Class C at $.49-$.58/SF/month. There is a great deal of construction in the multifamily market with over 2,000 units currently under construction. We expect the market to be very stable and improve as single family construction is at a standstill.

Oklahoma City At A Glance Low

DOWNTOWN OFFICE Premium (AAA) Class A (Prime) Class B (Secondary)

The Oklahoma City office market remains strong with overall vacancy at 10%, up from 8.9% a year ago. Rents are very stable with Class A at $22/SF, Class B at $14/SF and Class C at $10/SF, all quoted as full service. No new construction is planned except for Devon Energy’s 750,000 SF corporate headquarters in the CBD to be completed 2012.

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

6.00 38,000.00 185,000.00 28,500.00 50,000.00 8,500.00

14.00 142,500.00 74,250.00 68,500.00 950,000.00 92,500.00

150,000.00 400,000.00 65,000.00 250,000.00 85,000.00 12,000.00

250,000.00 500,000.00 85,000.00 400,000.00 300,000.00 20,000.00

2010 Global Market Report www.naiglobal.com 116

Tulsa, Oklahoma

Portland, Oregon The Tulsa market, with extensive oil and energy base employment, remained cautiously stable during the first three quarters of 2009 while now experiencing real impact and slowdown from the national economic downturn that is affecting other markets. However, the increase in commercial vacancies for Tulsa is still among the lowest of the country’s largest metro areas.

Contact NAI Commercial Properties +1 918 745 1133

Metropolitan Area Economic Overview

The office market is holding tight to its 2008 vacancy levels as demand and relocations have tapered off. The vacancy rate for the CBD, at 23.7%, remains the highest in the market. The suburban market continues to remain the strongest sector with majority of higher class buildings averaging $14-$18.35/SF. The office market has maintained a 76.4% occupancy rate overall with approximately 21,183,758 SF in 148 buildings. The overall vacancy for a 15,912,250 SF retail market has slightly increased about 1% to 15.09%, the highest in a decade. Rental rates have actually risen since 2008 with $19.64/SF for Class A and $10.47/SF for Class B properties. However, retail feeling the effects of thinning national tenants and larger big boxes vacated, will see increased vacancies, reduced rent pressures and stiffer competition for the remainder of 2009. In comparison, the industrial market has fared better than other sectors despite a 3.5% vacancy increase from 2008, or approximately 8% total, on an inventory of 60,000,000 SF. Lease rates have softened for new leases and renewals, with current averages of $4.07/SF for bulk warehouse and $6.65/SF for service center spaces. Investment/land sales for multi-family, hospitality and retail have virtually stopped from late 2008 with the notable exception of a $38 million Hilton hotel/retail development in the CBD across from the new BOK Arena.

Portland was named the #1 “Greenest City in America” by Popular Science last year, and sustainable industries like solar and wind power and green buildings are a significant and growing presence in the area’s economy. Software and activewear companies (Columbia Sportswear and Nike are headquartered in Portland) are also important sectors. Portland’s employment climate was challenging in 2009, but the city’s green reputation, cultural offerings and outdoor offerings continue to attract new businesses and residents.

Contact NAI Norris, Beggs & Simpson +1 503 223 7181

Metropolitan Area Economic Overview 2009 Population

2,248,554

2014 Estimated Population

2,428,948

492,642

Employment Population

1,093,050

$64,106

Household Average Income

$72,032

2009 Population

916,457

2014 Estimated Population

944,580

Employment Population Household Average Income

Given Tulsa’s energy dependence, the stabilization of oil and gas prices along with a dose of consumer confidence will ensure that Tulsa can successfully navigate its mild storm.

Median Household Income $48,239

Median Household Income $59,248

Total Population Median Age

Tulsa At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

$ $

NA 19.00 15.00

NA $ 6.89 $ 13.84

NA 9.1% 17.4%

$ 19.00 $ 13.50 $ 11.00

$ $ $

21.00 21.14 16.00

$ 19.50 $ 16.00 $ 13.50

N/A 14.5% 18.0%

3.25 2.50 3.75

$4.75 $4.00 $6.00

$ $ $

4.07 3.00 5.25

29.3% 7.0% 4.6%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

N/A $ 6.00 $ 10.00 $ 18.00

N/A 13.00 18.00 26.00

N/A $ 10.50 $ 14.27 $ 22.00

N/A 15.1% 14.4% 3.5%

DEVELOPMENT LAND

Low/Acre

SUBURBAN OFFICE

Though 2009 was a challenging year, Portland has solid commercial property fundamentals, and the metro area is well-positioned for economic recovery in 2010. The Portland metro area is expected to add more than 76,000 jobs in the next four years, and environmental services and the hightech industry should continue to be key areas of job growth.

Low

High

Effective Avg.

$ 29.00 $ 23.00 $ 15.50

$ $ $

39.00 35.00 30.00

$ 32.75 $ 29.00 $ 22.75

N/A 6.7% 17.8%

$ 25.00 $ 12.00 $ 11.00

$ $ $

32.00 33.50 37.40

$ 28.75 $ 29.25 $ 15.85

N/A 22.6% 18.9%

$ $ $

4.97 5.14 5.84

$ $ $

16.04 16.13 17.29

$ 6.11 $ 6.69 $1 0.49

14.3% 18.9% 15.7%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 12.00 $ 6.00 $ 13.64 $ 14.26

$ $ $ $

95.00 35.00 30.95 34.00

$ $ $ $1

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $

(Rent/SF/YR)

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary) New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL $ $ $

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Multifamily vacancy hovered around 5%; fewer tenants were active, as some doubled up or moved in with family to save money. Others took advantage of the $8,000 first-time home buyer tax credit. Nearly 1,000 high-end units delivered in the downtown area in the first half of the year, and it will take time for those units to be absorbed.

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Retail vacancy rose to around 8%, and the Portland market saw some big-box spaces coming back on the market. The bankruptcy/liquidation of Joe’s Sports, which had 14 Oregon stores, left considerable vacant space, but Dick’s Sporting Goods leased six metro locations of around 50,000 SF each.

DOWNTOWN OFFICE NA $ 14.00 $ 11.00

New Construction (AAA) Class A (Prime) Class B (Secondary)

The industrial market softened, with vacancy rising to 15%. Though construction was down, work continued on FedEx Ground’s facility in Tigard, which should deliver in summer 2010 and employ about 650. One ofthe largest transactions of the year was SEH America’s $55 million purchase of Hewlett-Packard’s Vancouver, Washington, campus.

Portland At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Office vacancy increased considerably during 2009, but Class A space in the CBD remained tight, around 6%. No new CBD projects will deliver until summer 2010. Shorenstein’s First & Main and Park Avenue West were put on hold due to a lack of financing. Vacancy in the suburban markets rose to around 20%, as Kruse Way and other submarkets where many financial firms were located suffered higher vacancy rates.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

$ $ $ $ $

N/A 260,000.00 33,000.00 30,000.00 237,400.00 15,000.00

$ $ $

High/Acre

$ $ $ $ $

N/A 785,000.00 217,800.00 239,580.00 1,220,000.00 52,000.00

$ $

150.00 385,000.00 N/A 200,000.00 310,000.00 N/A

28.50 20.00 17.87 9.25

9.8% 9.3% 9.2% 3.3%

355.00 975,000.00 N/A $ 450,000.00 $ 1,050,000.00 N/A

2010 Global Market Report www.naiglobal.com 117

Allentown, Pennsylvania

Contact NAI Summit +1 610 264 0200

Metropolitan Area Economic Overview 2009 Population

810,773

2014 Estimated Population

827,614

Employment Population

366,200

Household Average Income

$68,490

Berks County, Pennsylvania

The Lehigh Valley, located in eastern Pennsylvania, offers all of the amenities of major urban areas. The Lehigh Valley is the third largest region in Pennsylvania. It is well situated, just 95 miles to New York City and 53 miles north of Philadelphia. The Lehigh Valley is an excellent location for business and industry. The Lehigh Valley has 11 higher learning institutions and healthcare facilities that have been recognized nationally and continue to grow in the region.

Berks County competes for business in the New Jersey, New York and Maryland markets. Food companies, plastics, specialty metals and battery manufacturing are all well established industries in the area. Medical and financial services are key drivers in the office sector with technologybased businesses rapidly emerging. Private/Public partnerships are effectively linking the Penn Corridor from Reading to Wyomissing.

The area consists of an enterprising and diversified economy that has led to higher-income jobs, a growing and thriving population and tremendous commercial and industrial growth in the region. The Lehigh Valley is home to some of the worldâ&#x20AC;&#x2122;s top corporations in a variety of fields, including: Air Products and Chemicals, Inc., B. Braun Medical Inc., Binney & Smith, Olympus and many others. Excellent transportation access also exerts an important influence on the Lehigh Valley. The most important highways in the area are Route 22, Interstate 78, which connects the Lehigh Valley with Harrisburg to the west and New Jersey to the east, and major roadways such as Interstate 81 and 83 to the north. Route 22 provides fast, limited access between Allentown, Bethlehem, and Easton. The Extension of the Pennsylvania Turnpike can also be accessed off Route 22 and Interstate 78, which connects Philadelphia with Wilkes-Barre and Scranton areas. The area is also served by the Lehigh Valley International Airport.

The office market has shown mixed results. Class A vacancy and rental rates have experienced a slight downturn, while Class B vacancy is down 10% and rental rates remain flat. Vacancy in the Class C sector is up with unoccupied properties accounting for over 1.1 million SF. This spells opportunity for both tenants and buyers. Approximately 300,000 SF of office space was absorbed in 2009 with a total of 450,000 SF of new space proposed for 2010.

The Lehigh Valley market remains an attractive market to investors, importers, exporters, manufacturers and high-tech companies. Developers, enticed by abundant land, favorable taxes, the lure of railway access and infrastructure, continue to secure land positions along Route 22 and Interstate 78 corridors. Rental rates in all markets have remained relatively stable despite the economy. The industrial market continues to be one of the regions largest growth areas. Modern shopping malls, big-box and lifestyle centers remain popular. Several developments have recently been completed, including Promenade in Saucon and Airport Center along Route 22.

Contact NAI Keystone Commercial & Industrial +1 610 779 1400

Metropolitan Area Economic Overview 2009 Population

403,204

2014 Estimated Population

405,964

Employment Population

190,940

Household Average Income

$68,129

Median Household Income $57,235

Median Household Income $56,582

Total Population Median Age

Allentown At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

N/A N/A N/A

N/A 17.00 10.00

N/A $ 25.60 $ 22.00

N/A $ 22.81 $ 18.40

N/A 14.5% 16.8%

14.60% N/A N/A

SUBURBAN OFFICE

38.5

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

$ $ $

15.00 12.00 8.00

$ 18.00 $ 15.50 $ 12.50

$ 17.00 $ 14.25 $ 12.00

N/A 4.8% 23.5%

$ $ $

18.00 16.00 13.50

$ 21.00 $ 21.00 $ 18.00

$ 19.00 $ 18.00 $ 15.30

N/A 13.9% 12.1%

$ $ $

3.00 2.90 4.75

$ $ $

4.10 4.00 4.75

$ $ $

3.50 3.29 6.35

20.0% 18.0% 3.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

12.50 16.00 13.00 13.25

$ $ $ $

16.00 21.50 18.00 16.75

$ $ $ $

13.25 18.25 15.25 15.00

12.0% 10.0% 11.0% 13.0%

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

$ 8.00 $ 250,000.00 $ 110,000.00 $ 175,000.00 $ 1,225,000.00 $ 50,000.00

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE $ $

INDUSTRIAL

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL $

2.75 N/A N/A

7.75 N/A N/A

4.18 N/A N/A

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL N/A 8.00 3.00 10.00

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Watch for a Technology Park to be developed at the Reading/Berks Airport and the emergence of Bryne Eyre, a 3,000 Acre PRD at the I-176 and PA Turnpike interchange. The BOSS 2020 program will enhance traffic flow and boost development of Sinking Spring Borough and its vicinity.

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

Bulk Warehouse Manufacturing High Tech/R&D

Residential new construction is down 47% with developers sitting on over 2,000 approved, but unimproved lots. Notable retail projects include the 500,000 SF Exeter Commons and a 253,000 SF shopping center in Temple. The $75 million Wyomissing Square development is complete with 248 apartments and a 135-room Marriot Courtyard. A 215-room Doubletree has been proposed with completion scheduled for 2010.

Berks County At A Glance Low

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

Industrial inventory levels have risen sharply with 6.1 million SF currently available. Approx. 826,000 SF of new product was added during the past year. The market had negative absorption of 1,072,100 SF of product compared with 243,000 SF of positive absorption the prior year. Lease rates are down slightly with landlord concessions a common occurrence. Leasing activity is up as many users are unable to obtain financing. Gross sale of industrial product was up $23 million over the prior year for a total of $179 million. Sale prices were down 12% with a prices ranging from $51/SF for Class A space to $29/SF for Class C.

$ $ $ $ $

N/A 250,000.00 115,000.00 80,000.00 200,000.00 50,000.00

N/A $ 28.50 $ 18.00 $ 40.00

N/A $ 13.86 $ 10.02 $ 16.72 High/Acre

$ $ $ $ $

N/A 300,000.00 165,000.00 125,000.00 500,000.00 110,000.00

N/A 8.9% 3.3% 4.2%

6.00 130,000.00 60,000.00 48,000.00 155,000.00 25,000.00

2010 Global Market Report www.naiglobal.com 118

Bucks County, Pennsylvania

Harrisburg/York/Lebanon, Pennsylvania

The Bucks County industrial market totals 55.5 million SF and is a premier location for both industrial and office businesses. Bucks County is strategically located north of the city of Philadelphia, with immediate access to I- 95 and I-276, and is located in the heart of the Boston to Washington, DC, corridor.

Central Pennsylvania is home to many prominent, high profile Fortune 500 companies, including Hershey Foods, Rite-Aid, HARSCO, Graham Packaging and GIANT Foods. As the Capital City of Pennsylvania, Harrisburg has a large public sector base. The combination of government, manufacturing and medical industry has resulted in a stable local economy year after year. Central Pennsylvania has encountered some market contraction led by the industrial and investment sectors.

Inventory for lease and sale remains readily available. Sale prices declined approximately 10% and product remained on the market for a considerably longer period of time. Lease rates have become more competitive with aggressive landlord concessions. The vacancy rate increased 2% from last year to approximately 13%.

Contact NAI Mertz +1 215 221 1100

Metropolitan Area Economic Overview 2009 Population

616,356

2014 Estimated Population

604,078

Employment Population

320,335

Household Average Income

$87,172

Bucks County features two of the best land tracts available; 1,200 acres within the Keystone Industrial Port Complex (KIPC) and another 250 acres in Langhorne, Pennsylvania. Notable transactions include Abington Metals completing their high-tech 50,000 SF build-to-suit and AE Polysilicon with their $53 million facility still under construction. These two transactions are both located in the KIPC. The Bucks County office market activity also slowed dramatically with considerable sublease space available as companies continue to downsize and show the effects of the recession. Vacancy at year end stands in the 20% range, reflective of the weakened economy. The total net office absorption remains negative and correspondingly, rental rate growth continues to be negative with concessions increasing, as landlords try to compete with the inexpensive rental rates and flexible terms that most sublease space affords. Currently, leasing activity is composed of mostly renewals and absorption of sublease space. Average Class A rent remains steady at $25.50/SF, with Class B space averaging around $20.23/SF and Class C rent averaging $19.18/SF. Keystone Industrial Port Complex was designated a KOIZ, adding 1,259 acres of heavy industrially zoned land with port and rail facilities. KOIZ offers companies special tax exemptions and abatements on their real estate, state and local taxes, as well as priority for state and local financing programs.

Contact NAI CIR +1 717 761 5070

Metropolitan Area Economic Overview 2009 Population

535,917

2014 Estimated Population

553,096

Employment Population

357,066

Household Average Income

$66,334

Median Household Income $75,848

Median Household Income $55,318

Total Population Median Age

41.4

Bucks County At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

N/A N/A N/A

$ $ $

25.00 20.00 14.00

$ 30.00 $ 28.00 $ 22.00

$ 27.50 $ 25.50 $ 20.23

11.0% 11.5% 12.5%

$ $ $

2.25 2.50 4.50

$ $ $

3.25 3.50 6.50

13.0% 15.0% 13.0%

N/A N/A N/A N/A

SUBURBAN OFFICE

Low

High

Effective Avg.

$ 17.50 $ 17.00 $ 14.00

$ $ $

24.00 22.00 17.50

$ 20.75 $ 19.50 $ 15.75

N/A 3.00% 7.00%

$ 19.50 $ 16.75 $ 12.50

$ $ $

21.00 19.50 16.75

$ 20.25 $ 18.13 $ 14.63

N/A 6.0% 11.0%

$ $ $

2.00 1.00 4.00

$ $ $

4.00 3.50 9.00

$ $ $

3.00 2.25 6.50

17.0% 10.0% 12.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 12.00 $ 8.00 $ 15.00 $ 15.00

$ $ $ $

15.00 18.00 25.00 25.00

$ $ $ $

13.50 13.00 20.00 20.00

13.0% 12.0% 12.0% 12.0%

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $

$ 150.00 $ 225,000.00 $ 135,000.00 $ 250,000.00 $ 2,000,000.00 N/A

(Rent/SF/YR)

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary) New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL 4.00 4.50 8.50

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL N/A N/A N/A N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

SUBURBAN OFFICE

INDUSTRIAL

DEVELOPMENT LAND

Cedar Shopping Centers completed two grocery anchored shopping centers, Blue Mountain Commons in Lower Paxton Township and Northside Commons Shopping Center in Campbelltown. Pacific Development has begun construction on Newberry Commons, a Wal-Mart anchored shopping center, located in Newberry Township, York County.

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

Bulk Warehouse Manufacturing High Tech/R&D

With economic uncertainty impacting the demand for warehouse space, and recently executed speculative building projects increasing an already sizeable inventory, the region’s industrial real estate market suffers from unprecedented vacancy rates. Landlords seeking tenants in the 100,000 SF to 350,000 SF range have an overwhelming set of competing buildings, particularly at the Class A level, which has forced them to explore innovative incentives to remain competitive. Landlords are placing significant downward pressure on near-term rents to secure tenants. However, beyond the three- to five-year horizon, there is reluctance by institutional investors to discount that perceived future market rental. Despite rising vacancy rates and lower rental rates, retail development in Central Pennsylvania remained relatively active during 2009

Harrisburg/York/Lebanon At A Glance Low

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

The region’s office market has experienced weakening demand due to job cuts and business closings. Office rental rates are down approximately 10-15%, while absorption rates were generally flat. However, there are some bright spots. The Commonwealth of Pennsylvania’s 411,000 SF master lease at 555 Walnut Street is the largest lease yearto-date and probably in the history of the mid-state office market. Approximately 160,000 SF of new inventory entered the market in 2009, far lower than what was projected in 2008.

Low/Acre

$ $ $

N/A 130,000.00 125,000.00 90,000.00 N/A N/A

N/A N/A N/A N/A

High/Acre

$ $ $

N/A 490,000.00 225,000.00 200,000.00 N/A N/A

75.00 125,000.00 80,000.00 100,000.00 250,000.00 N/A

2010 Global Market Report www.naiglobal.com 119

Lancaster, Pennsylvania

Philadelphia, Pennsylvania

Lancaster continues to benefit from a diverse economic base even in the face of today’s turbulent economy. While property values and lease rates have declined, statistics show much less downturn than other parts of the country. New development exists in many segments of the market and is expected to continue through 2010.

Philadelphia transitioned from an industrial/manufacturing city into a center of finance, insurance, telecommunications, biopharmaceuticals, aerospace, education and tourism. It is home to cable giant Comcast. The largest private employer in the city is the University of Pennsylvania. Philadelphia continues to receive interest on a global basis as heavy manufacturing/high-tech/drug/alternative energy companies seek labor, power, rail, port and economic incentives offered.

The revitalization of downtown Lancaster strengthened with the long anticipated opening of the Lancaster County Convention Center and 300-room Marriott Hotel. Other notable projects include Urban Place, a redevelopment of the Kerr Glass complex into a mixed use development of over 300,000 SF. Also under way is the redevelopment of the 65-acre Armstrong World Industries site by a joint venture of Lancaster General Hospital, Franklin & Marshall College and our local EDC. Contact NAI Commercial Partners Inc. +1 717 283 0600

Metropolitan Area Economic Overview 2009 Population

506,093

2014 Estimated Population

524,597

Employment Population

271,223

Household Average Income

$63,861

Median Household Income $56,837 Total Population Median Age

The economic downturn has impacted Lancaster’s real estate market in varying degrees. The industrial sector has been less impacted overall with stable occupancy levels and moderately lower lease rates. The office sector continues to be soft, especially for Class B and C space, with overall lease rates declining by 15-20%. Most office transactions have been as a result of specialized medical and financial services companies occupying newer Class A facilities. The retail occupancy levels have been impacted by a loss of tenants such as Circuit City and Linens and Things, yet Lancaster continues to be under stored. Recent projects include the development of a new Lowe’s and Best Buy at the former Crowley Foods site, as well as a reported Kohl’sanchored center of approximately 250,000 SF. In addition, there are several other large retail projects that remain in the development pipeline that comprise more than 1.5 million SF. Looking forward, we anticipate further stabilization of market conditions as we enter 2010, including increases in absorption rates and a positive trend in overall property values and rental rates. Lancaster’s wide range of agricultural, manufacturing, retail, medical, service and tourist related businesses provide the foundation for a revitalized local marketplace.

Lancaster At A Glance High

Effective Avg.

Vacancy

$ $

N/A 15.00 10.00

N/A $ 13.50 $ 8.75

N/A 21.0% 3.0%

$ 20.00 $ 16.00 $ 10.00

$ $ $

24.00 20.00 12.00

$ 22.00 $ 18.00 $ 11.00

N/A 19.0% 18.0%

$ $ $

3.75 3.50 5.00

$ $ $

4.25 4.00 8.50

$ $ $

4.00 3.75 6.75

10.0% 10.0% 16.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 8.00 $ 11.00 $ 16.00 $ 22.00

$ $ $ $

10.00 14.00 22.00 28.00

$ 9.00 $ 12.50 $ 19.00 $ 25.00

N/A 15.0% 8.0% 8.0%

DEVELOPMENT LAND

Low/Acre

SUBURBAN OFFICE

5,826,970

2014 Estimated Population

5,821,451

Employment Population

3,030,142

Household Average Income

$78,541

Median Household Income $61,284

Pennsylvania Governor Ed Rendell has staked a large investment in the state’s future on alternative energy with a very ambitious program aimed at attracting developers and manufacturers of wind, solar and other energy technologies. This initiative has already attracted Spanish wind turbine manufacturer Gamesa Corporación Tecnologica to the Philadelphia region.

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A $ 20.00 $ 16.00

$ $

N/A 27.00 19.00

N/A $ 24.00 $ 18.00

N/A 13.4% 13.1%

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ 25.00 $ 21.00 $ 15.00

$ $ $

32.00 28.00 20.00

$ 27.00 $ 24.00 $ 16.00

20.0% 16.0% 15.0%

$ $ $

3.75 3.95 7.50

$ $ $

13.0% 8.0% 13.0%

INDUSTRIAL

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

2009 Population

The Philadelphia County retail vacancy rate increased slightly to approximately 12% in 2009. Strong convention and tourism business continues to stimulate the economy. New restaurants continue to open and the $550 million dollar Sugar House Casino is under construction along the Delaware River. There is still strong redevelopment activity of existing retail shops and retail centers within the county.

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Metropolitan Area Economic Overview

DOWNTOWN OFFICE N/A $ 12.00 $ 7.50

New Construction (AAA) Class A (Prime) Class B (Secondary)

NAI Mertz +1 215 221 1100

The Philadelphia industrial marketplace totals over 100 million SF. The vacancy rate in 2009 increased almost 4% to approximately 13%. Large land parcels are scarce throughout the Delaware Valley, but Philadelphia features large tracts in the Philadelphia Navy Yard and smaller parcels located in controlled industrial parks. Industrial land prices range from $100,000 to $150,000 per acre. The Naval Yard was designated a KOIZ adding 1,200 acres of industrially zoned land with port and rail facilities. The Naval Yard has approximately 200 acres for sale or lease. KOIZs offer companies special tax exemptions and abatements on their real estate, state and local taxes, as well as priority for state and local financing programs to locate within a designated KIOZ through December 31, 2018.

Philadelphia At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Contact NAI Geis Realty Group, Inc. +1 215 568 7222

Total Population Median Age

(Rent/SF/YR)

2009 was a difficult year. Activity was consistently slow throughout the year. Inventory for lease and sale is in strong supply causing sale prices to slide approximately 15% and rental rates to be most competitive and creative.

Bulk Warehouse Manufacturing High Tech/R&D

1.50 2.00 4.50

2.75 2.95 6.00

RETAIL

$ $ $ $ $

N/A 150,000.00 85,000.00 60,000.00 150,000.00 35,000.00

High/Acre

$ $ $ $ $

N/A 300,000.00 120,000.00 80,000.00 500,000.00 65,000.00

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 18.00 $ 15.00 $ 14.00 N/A

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $

N/A 40,000.00 100,000.00 75,000.00 N/A N/A

$ 100.00 $ 20.00 $ 38.00 N/A

$ 26.00 $ 17.00 $ 27.00 N/A

11.0% 11.0% 18.0% N/A

High/Acre

$ $ $

N/A 400,000.00 200,000.00 175,000.00 N/A N/A

2010 Global Market Report www.naiglobal.com 120

Pittsburgh, Pennsylvania

Schuylkill County, Pennsylvania

Pittsburgh, through imaginative reinvention, has emerged from a post-industrial economy to a shining 21st century city. President Obama selected Pittsburgh for the site of the 2009 G-20 Summit. Home to Carnegie Mellon University, The University of Pittsburgh and the University of Pittsburgh Medical Center, Pittsburgh continued to see economic growth in technology, medical science, robotics, financial industries and now, due to the discovery of Marcellus Shale gas deposits, a leading energy center.

Contact NAI Pittsburgh Commercial +1 412 321 4200

Metropolitan Area Economic Overview 2009 Population

2,323,152

2014 Estimated Population

2,242,696

Employment Population

1,202,050

Household Average Income

$62,683

Located in the heart of anthracite coal country, Schuykill County is shaking off its coal roots to emerge as a service, technology and small business-based economy. Schuylkill County, with its rural character and a sparse population within its 779-square-mile area, exemplifies an essential quality of small town America: hard-working people doing their utmost to improve their quality of life. Now and again small packages produce big results. This is definitely true here.

The Office Market has a vacancy rate of 10.5% with positive net absorption of 388,613 SF. In a major expansion of its nuclear power engineering operations, Westinghouse Electric Company finalized a lease for a new, three-building, 772,000 SF build-to-suit project. We forecast significant positive net absorption through 2010 with available office space trending downward. In particular; the Oakland Submarket has pent-up demand for large blocks of Class A space. However, sites in the Oakland Market are difficult to secure and the current lending environment is problematic for developers.

Contact NAI Keystone Commercial & Industrial, LLC +1 610 779 1400

The Industrial Market has a vacancy rate of 9.5%, which represents a positive net absorption of 388,064 SF. The Flex market recorded net absorption of negative 121,993 SF. The largest lease signing in 2009 included 20th Century Fox committing to a 330,000 SF lease. Industrial quoted rates are steady at $4.99/SF and the average quoted rental rate for Flex was $9.91/SF. The total industrial inventory in the Pittsburgh Market amounted to 149,794,391 SF comprising 3,920 buildings.

Metropolitan Area Economic Overview

The Retail Market vacancy rate is 7.2%. The largest lease signing in 2009 included Lowe’s Home Improvement leasing 124,000 SF. Despite the distressed retail in other U.S. markets, Pittsburgh has continued to see growth in the development of new lifestyle centers and retail projects.

2009 Population

146,970

2014 Estimated Population

146,141

Pittsburgh’s investment market continues to see capitalization rates in the single digits. Medical office and multi-family housing are the strongest sectors, while office and industrial continue to struggle.

Employment Population

68,033

Household Average Income

$53,395

Median Household Income $46,957

Median Household Income $41,310

Total Population Median Age

Pittsburgh At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

N/A 28.00 19.00

N/A $ 22.91 $ 16.23

N/A 10.5% 15.9%

N/A $ 19.00 $ 16.00 N/A $ 18.00 $ 14.00

$ $

N/A 24.00 20.00

N/A $ 21.00 $ 18.00

N/A 11.5% 10.70%

$ 2.75 $ 2.50 $ 10.00

$ $ $

9.00 13.00 16.00

4.99 N/A N/A

9.5% N/A N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

$ $ $

36.00 30.00 25.00 $40.00

$ $ $ $

26.37 25.00 19.61 37.50

7.6% 7.7% 7.9% 7.5%

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ 1,000,000.00 $ 100,000.00 $ 60,000.00 $ 75,000.00 $ 100,000.00 $ 40,000.00

SUBURBAN OFFICE

Retail construction and leasing cooled off through 2009 with sites along the Route 61 Corridor in the highest demand. A new, $19 million Intermodal Center that will include a three-story office building is slated to open in Pottsville. The Schuylkill County Economic Development Office spearheads economic development activity and interacts with the Schuylkill Economic Development Corp (SEDCO), Tamaqua Industrial Development Enterprises (TIDE), and Mahanoy Area Joint Industrial Corp (MAJIC). SEDCO manages 12 industrial parks that represent more than $1.1 billion in capital investment in the last nine years.

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ $ $

15.50 9.00 8.00

$ 18.00 $ 15.00 $ 12.00

$ 17.00 $ 12.75 $ 12.00

N/A 6.0% 9.0%

$ $ $

17.50 16.50 13.50

$ 20.00 $ 17.50 $ 16.00

$ 18.50 $ 17.00 $ 14.00

N/A 10.0% 9.5%

$ $ $

2.75 2.75 4.75

$ $ $

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Pottsville anchors the medical system, professional buildings and governmental offices and is also home to Yuengling, America's oldest brewery. The Pottsville/Schuykill Technology Incubator serves the area well and is one of many efforts to retain the younger demographic and promote new business starts in the area.

DOWNTOWN OFFICE $ $

New Construction (AAA) Class A (Prime) Class B (Secondary)

Solar Innovations opened a new $8.1 million, 206,000 SF Leed-Certified facility in the Pine Grove Business Park. Wegman’s is expanding its 570,000 SF distribution center with a $7 million, 350,000 SF temperature-controlled warehouse. The project will install alternative fuel cell distribution technology for fueling 150 material handling vehicles. In other Green news, Locust Ridge Wind Farm has now grown from 13 to 51 wind turbines that will generate 128 megawatts of electricity.

Schuylkill County At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

42.4

Investment continues in the 2,000 acre Highridge Business Park. Notable companies include the 1.2 million SF Lowes, 1.4 million SF Big Lots, Office Max with 600,000 SF and Wal-Mart with 900,000 SF of space. Wal-Mart now employs 1,050 people in the area. Sara Lee recently opened a new 182,000 SF frozen food distribution center. New companies moving into Schuykill include Electrolux with a modern 455,000 SF plant and Gordon Food Service in a 150,000 SF plant.

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

4.25 4.25 7.50

3.25 3.25 5.50

7.0% 6.5% 8.0%

$ 10.00 $ 15.75 N/A $ 18.00

9.0% 7.0% N/A 6.5%

RETAIL 18.00 15.00 17.00 25.00

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $

8.00 14.00 N/A $ 17.00

High/Acre

DEVELOPMENT LAND

Low/Acre

$ 4,000,000.00 $ 500,000.00 $ 110,000.00 $ 500,000.00 $ 3,000,000.00 $ 1,000,000.00

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $

N/A N/A 45,000.00 35,000.00 125,000.00 15,000.00

$ 12.50 $ 18.00 N/A $19.00

High/Acre

$ $ $ $

N/A N/A 75,000.00 60,000.00 800,000.00 30,000.00

2010 Global Market Report www.naiglobal.com 121

Wilkes Barre/Scranton/Hazleton, Pennsylvania

Columbia, South Carolina

This area had been traditionally dominated by coal production and heavy industry. However, the excellent highway system that runs through Northeastern Pennsylvania--Interstates 81, 80, 84, 380, 180, and the Northeast Extension of the Pennsylvania Turnpike--has transformed the region into the epicenter for major companies to locate mega-distribution centers to service the Northeast and Mid-Atlantic population centers, as well as for backroom office operations.

The Columbia economy is anchored by recession-resistant industries. The State of South Carolina is the region’s largest employer with nearly 25,000 employees. Fort Jackson and McIntire Joint National Guard Base employ around 10,000 people. Both gained additional employees as a result of the last round of Base Realignment and Closure process. The region is also home to six universities that collectively employ around 6,000 people. Columbia is also a regional medical center with three major hospital systems.

Throughout 2009, few companies were looking to expand and most were looking to consolidate operations. It is a buyer’s market without question. Rents have traditionally floated between the low- to mid-$4/SF price for new construction. Over the past year, developers have dropped the starting rates of new buildings below $3/SF and under $2/SF on older product. Contact NAI Mertz of Pennsylvania HQ +1 570 820 7700

Metropolitan Area Economic Overview 2009 Population

546,576

2014 Estimated Population

539,170

Employment Population

302,837

Household Average Income

$54,450

Encouragingly, the market in the latter part of 2009 has shown slight signs of improvement. There are companies that once again are looking to expand and or relocate to the area, but with plenty of supply in the market, rents have not yet begun to stabilize. Today, speculative development is non-existent. Companies prefer existing buildings that are offering deals that represent a deep discount compared to ground up development. The availability of tax incentives such as KOZ and LERTA that offer significant savings, are helping to keep the area attractive for relocations. The retail and office sectors are both experiencing extended lease-up periods. Over the past several years, intense development of retail projects and anemic office demand has been the norm, however office leasing and construction continues in the health care sector. Downtown office resurgence, while weak, reflects the green mentality brought on by the economy. Highlights in the market are the opening of a 460,000 SF distribution center by Home Depot in Centerpoint, Pittston. Tootsie Roll opened a 240,000 SF facility in the Humboldt Industrial Park. Benco Dentals will open a 198,000 SF facility in Centerpoint and Common Wealth Medical College opened in Scranton.

Contact NAI Avant, LLC +1 719 577 0044

Metropolitan Area Economic Overview 2009 Population

742,896

2014 Estimated Population

809,744

Employment Population

382,376

Household Average Income

$60,570

Median Household Income $42,917

Median Household Income $52,443

Total Population Median Age

Wilkes Barre/Scranton/Hazleton At A Glance (Rent/SF/YR)

Low

Effective Avg.

Vacancy

N/A 20.00 10.00

N/A $ 30.00 $ 18.00

N/A $ 25.00 $ 12.00

N/A 15.0% 18.0%

N/A $ 15.00 $ 14.00

N/A $ 20.00 $ 20.00

N/A $ 17.00 $ 16.00

N/A 15.0% 12.7%

$ $

1.75 1.75 N/A

$ $

3.50 2.50 N/A

$ $

2.95 2.95 N/A

15.0% 24.0% N/A

$ $ $ $

8.00 5.00 12.00 15.00

$ $ $ $

20.00 24.00 20.00 33.00

$ $ $ $

14.00 13.00 15.00 23.00

15.0% 15.0% 8.0% 8.0%

$ $

Low

High

N/A $ 17.00 $ 14.00

$ $

N/A 20.00 16.00

N/A $ 18.50 $ 15.00

N/A 9.8% 16.9%

N/A $ 17.00 $ 14.00

$ $

N/A 19.50 16.50

N/A $ 18.25 $ 15.25

N/A 16.7% 22.5%

$ $

4.00 2.50 N/A

$ $

4.50 3.50 N/A

$ $

4.25 3.00 N/A

15.0% 10.0% N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

16.00 12.00 16.00 25.00

$ $ $ $

18.00 20.00 30.00 45.00

$ $ $ $

17.00 16.00 23.00 35.00

14.0% 11.5% 9.1% 13.4%

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

$ 3,000,000.00 $ 350,000.00 $ 80,000.00 $ 40,000.00 $ 650,000.00 $ 30,000.00

(Rent/SF/YR)

Effective Avg.

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary) New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls

The number of significant transactions this year has been limited to lease renewals and purchases by end users of office, retail, and industrial space. The largest transaction was the purchase of an 80,000 SF office building for the international headquarters of Pure Fishing in Northeast Richland.

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

The industrial market has 33.8 million SF of space. Occupancy fell at year end to 93%. Rents have remained stable because there are a relatively small number of high quality buildings that meet current market requirements. Recent developments include a 400,000 SF distribution center for Home Depot in the Lexington County Industrial Park. Miller Valentine is building a 176,000 SF multi-tenant warehouse next door and Kirco recently completed an 186,000 SF building in Northeast Richland.

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

The retail market has 21.2 million SF. About 575,000 SF are absorbed annually on average. Rents in Class A retail centers range from $16 to $22/SF. Occupancy fell marketwide by mid-year to 88.7% largely as a result of several “big box” national tenants closing stores.

Columbia At A Glance

High

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Columbia has about 9.7 million SF of office space and has experienced average annual absorption of 85,000 SF. Occupancy at mid-year was 83.4%. Landlords have held rents steady over the last year but are providing additional tenant improvement dollars and free rent as concessions. In 2010, the completion of a 197,000 SF building in the CBD will create three large spaces in Class A and B buildings, which tenants will use as leverage for additional concessions as their leases renew.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

7.00 60,000.00 35,000.00 20,000.00 100,000.00 15,000.00

High/Acre

$ $ $ $ $ $

17.00 275,000.00 120,000.00 180,000.00 800,000.00 125,000.00

850,000.00 120,000.00 30,000.00 25,000.00 435,000.00 10,000.00

2010 Global Market Report www.naiglobal.com 122

Greenville/Spartanburg/Anderson Counties, South Carolina

Sioux Falls, South Dakota

The Upstate area felt the national economic downturn this year but still retained a top-ranked business climate and affordable cost of living, making it an attractive place to live and work. The Upstate is among the fastest growing regions in the nation and is continuously recognized as an appealing and well planned area with a bright future.

One of the fastest growing areas of the United States during the past decade, Sioux Fallsâ&#x20AC;&#x2122; strong metro territory has brought hundreds of businesses to the region. For the sixth consecutive year, Forbes voted Sioux Falls first among US cities with populations of 50,000-177,000 as the best place for business. Sioux Falls was also voted number eight for 2009-2010 as one of the 60 US Hotspots for Young, Talented Workers for cities with a population of 100,000200,000.

The office market continues the upward trend in vacancy as tenants downsize or sublease. Tenants in Class B and C buildings are relocating to Class A space for below standard rates. On a positive note, the local hospitals continue to absorb general office space.

Contact NAI Earle Furman, LLC +1 864 232 9040

Metropolitan Area Economic Overview 2009 Population

284,347

2014 Estimated Population

306,303

Employment Population

148,606

Household Average Income

$51,519

Industrial market rates have decreased resulting from an increase in vacancy. Sales and leasing volume have slowed while capitalization rates have increased. However, activity appears as though it may steadily increase as we approach 2010. Retail vacancies have been up and rental rates are down, but owners are offering attractive incentives. This year, Academy Sports opened, Rooms To Go purchased a site at Magnolia Park and Easley Towne Center is under way with leases from Wal-Mart, Bed Bath & Beyond and eight to ten small retailers. Supply is still overpriced in the investment market due to many owner/developers holding capitalization rates where they were a year ago, but available financing will not generate required returns for sideline investors. However, many of the astute owner/developers have increased capitalization rates from as little as 50 basis points to as much as 150 basis points over similar properties from a year ago, and these properties are trading today. An upscale 346-unit apartment complex on Woodruff Road is set to begin leasing in 2010. The Hilton Garden Inn opened and a Courtyard Marriott is scheduled to open in 2010 in Downtown Greenville. In 2009, redi-Group announced it will locate its new North American headquarters in Greenville. The company offers a wide range of services to automotive companies both domestically and internationally. In addition, Samsung announced plans for its North American Customer Care Center in the Centerpointe Business Park in Mauldin.

The Sioux Falls office market inventory consists of approximately 9,010,407 SF. Of that, 7,942,245 SF is occupied, resulting in a vacancy rate of 11.85%. The office vacancy rate has increased just over 1% compared to 2008 statistics. Contact NAI Sioux Falls +1 605 357 7100

Metropolitan Area Economic Overview 2009 Population

253,027

2014 Estimated Population

316,658

Employment Population

146,380

Household Average Income

$62,615

Median Household Income $48,179

Median Household Income $55,934

Total Population Median Age

Greenville/Spartanburg/Anderson Counties At A Glance (Rent/SF/PY)

Low

High

Vacancy

$ $ $

25.00 21.50 18.50

$ 22.50 $ 19.00 $ 16.50

5.0% 10.0% 17.0%

$ 19.00 $ 16.00 $ 13.50

$ $ $

22.00 18.00 15.50

$ 19.50 $ 16.00 $ 14.50

10.0% 10.0% 15.0%

$ $ $

2.25 3.00 4.50

$ $ $

4.00 5.00 9.50

$ $ $

3.13 4.00 7.00

11.4% 13.0% 15.5%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

12.00 10.00 10.00 30.00

$ $ $ $

26.00 20.00 30.00 40.00

$ $ $ $

17.00 15.00 20.00 35.00

9.0% 8.0% 12.0% 2.0%

DEVELOPMENT LAND

Low/Acre

SUBURBAN OFFICE

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ 17.00 $ 12.00 $ 9.00

$ $ $

22.00 16.00 11.00

$ 19.50 $ 14.00 $ 10.00

N/A 10.5% 12.7%

New Construction (AAA) Class A (Prime) Class B (Secondary)

$ 15.00 $ 14.00 $ 9.00

$ $ $

20.00 18.00 14.00

$ 17.50 $ 16.00 $ 11.50

N/A 8.7% 9.5%

$ $ $

4.50 5.50 8.00

$ $ $

4.00 4.75 7.00

2.8% 2.8% 2.8%

$ 16.00 $ 20.00 $ 20.00 $ 100.00

$ $ $ $

12.50 16.00 15.50 25.00

3.6% 5.3% 5.3% 5.3%

INDUSTRIAL

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Today, the community is experiencing growth and expansion in the technology, healthcare, retail, construction and research sectors. Greater Sioux Falls has not experienced the extreme lows of other markets, which has allowed investors to enjoy consistency and reasonable returns benefiting from its stability.

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Many different styles of apartments are located throughout the area; from historic lofts in the CBD to newer complexes located in the outlying sections. The area's steadily growing population has helped fuel the demand.

DOWNTOWN OFFICE $ 22.00 $ 18.50 $ 16.50

New Construction (AAA) Class A (Prime) Class B (Secondary)

The Sioux Falls industrial market felt the strain of the national economy in 2009 as decision makers delayed any major decisions. Build-to-suit activity was off pace, (yet impressive), with several projects at various stages of development. We are currently experiencing high demand and look for a strong year in 2010. To date, large tract development land sales have come to a virtual halt with the change in the economic conditions and sizable level of inventory. Prices for raw land appear to be trending downward.

Sioux Falls At A Glance Effective Avg.

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Sioux Falls is said to be the largest retail option between Minneapolis and Denver. The Shoppes at Dawley Village is a 70-acre retail development that includes Target. Plans for more national retailers are in progress. The CBD is undergoing renovation and continues to add offices, restaurants and shops.

Bulk Warehouse Manufacturing High Tech/R&D

3.50 4.00 6.00

RETAIL

$ $ $ $ $

N/A 175,000.00 36,000.00 25,000.00 200,000.00 18,000.00

High/Acre

$ $ $ $ $

N/A 350,000.00 76,000.00 45,000.00 914,760.00 45,000.00

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 9.00 $ 12.00 $ 11.00 $ 10.00

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ 1,089,000.00 $ 186,872.40 $ 84,942.00 $ 65,340.00 $ 152,460.00 $ 15,000.00

$ 1,481,040.00 $ 365,000.00 $ 107,500.00 $ 324,800.00 $ 1,306,800.00 $ 40,000.00

2010 Global Market Report www.naiglobal.com 123

Chattanooga, Tennessee

Clarksville, Tennessee

Even though the national economy is suffering, Chattanooga continues to have good news and is looking forward to 2010. Long noted as a great place to live, Chattanooga now is a great place to work because of the 775,000 SF Volkswagen assembly plant. When the cars roll out in 2011, the plant will deliver an immediate demand for 2,000 new employees and up to 12,000 jobs created by tier-one and tier-two suppliers.

Contact NAI Charter Real Estate Corporation +1 423 267 6549

Metropolitan Area Economic Overview 2009 Population

550,922

2014 Estimated Population

642,126

Employment Population

254,381

Household Average Income

$60,904

This is the first time in recent memory that there is an ample supply of quality buildings in the 100,000 to 250,000 SF range. Once the tier-one and tier-two suppliers are announced, these buildings will be absorbed. Then Chattanooga will have a shortage of industrial space that will spur build-to-suit and speculative industrial development. With the current vacancies, property owners and brokers are holding their breath until the suppliers are announced. The office market in the CBD remains stagnant even though Blue Cross Blue Shield of Tennessee relocated to its new 950,000 SF corporate headquarters on the peripheral of downtown in Q1 of 2009. Blue Cross vacated almost 400,000 SF in three different office buildings. Office rates have remained flat and there have not been any major office user relocations. The Suburban market has two Class A office parks competing for tenants, which makes rates very attractive. Of the almost 100,000 SF of vacancy, an estimated 60,000 SF has been absorbed in the last 12 months. Retail development is lethargic with no new projects announced since late 2007. The Hamilton Place Mall area remains the driver and premier retail location with Northgate Mall in the Hixson submarket as a strong second. Downtown activity, especially in the North Shore market, is active. Chattanooga promotes sustainable growth and with VW pumping new life in the industrial sector this combination will create a healthy local economy. Downtown is alive and one example of this is the recent announcement of the Maclellan Building being converted to a boutique hotel by the Indigo Group.

Clarksville is the fifth largest city in the state of Tennessee and the 17th fastest growing city in the United States. The city of Clarksville, adjacent to Fort Campbell Military Base, enjoys an expanding and diverse industrial base, a vibrant residential market and is home to Austin Peay State University.

Contact NAI Clarksville +1 931 648 4700

Metropolitan Area Economic Overview 2009 Population

302,924

2014 Estimated Population

403,655

Employment Population

88,736

Household Average Income

$55,492

Median Household Income $46,974

Median Household Income $46,280

Total Population Median Age

Chattanooga At A Glance (Rent/SF/YR)

Hemlock Semiconductor Corporation, one of the world’s leading suppliers of polycrystalline silicon products, is currently constructing a 1.5 billion dollar facility which will become operational in late 2012. Conwood Corporation, a subsidiary of R. J. Reynolds, recently purchased a one hundred ninety three acre site and will invest 130 million dollars expanding their existing operation in Clarksville. Other corporate citizens with manufacturing facilities in Clarksville include The Trane Company, Quebecor World, Jostens, Bridgestone Metalpha, Florim, US Zinc and the Robert Bosch Corporation. A new 200 million dollar hospital facility was recently constructed and is operated by Community Health System. Austin Peay State University is the fastest growing university in the Tennessee Board of Regents system with enrollment exceeding 10,000 students. APSU offers 57 majors allowing students to earn a bachelor’s, master’s or education specialist’s degree. In addition, the university boasts two accomplished Centers of Excellence and four Chairs of Excellence. There is a good supply of new land available for retail, office, industrial and residential development. Land prices are typically lower than those found in comparable markets. Currently there is a shortage of warehouse space primarily resulting from the entrance of Hemlock Semiconductor and related suppliers into the market. Construction of retail space has slowed due to the national economy. However, Clarksville enjoys a stable retail environment as evidenced by increased sales tax collections. CNN Money recently ranked Clarksville as the fourth best metro area to launch a business. Clarksville has also been ranked as one of the top 100 real estate markets and one of the 20 best performing cities in the country’s 200 largest metro areas.

Clarksville At A Glance Low

High

Effective Avg.

Vacancy

DOWNTOWN OFFICE

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

$ 15.00 $ 14.00 $ 8.00

$ $ $

19.00 15.00 10.00

$ 17.00 $ 14.50 $ 9.00

5.0% 12.0% 5.0%

$ 18.00 $ 15.00 $ 10.00

$ $ $

22.00 18.00 12.00

$ 20.00 $ 16.50 $ 11.00

10.0% 8.0% 12.0%

$ $

2.50 3.00 N/A

$ $

4.00 5.00 N/A

$ $

3.25 4.00 N/A

3.0% 5.0% N/A

$ $ $ $

10.00 14.00 15.00 20.00

$ $ $ $

14.00 17.00 19.00 30.00

$ $ $ $

12.00 15.50 17.00 25.00

8.0% 12.0% 5.0% 10.0%

DOWNTOWN OFFICE N/A $ 17.00 $ 12.00

$ $

N/A 22.00 16.00

N/A $ 19.00 $ 14.00

N/A 7.0% 12.0%

$ 18.00 $ 18.00 $ 12.00

$ $ $

22.00 20.00 16.00

$ 20.00 $ 19.00 $ 14.00

10.0% 10.0% 15.0%

$ $ $

2.25 2.40 6.00

$ $ $

3.25 3.50 10.00

$ $ $

2.50 2.80 7.00

12.0% 5.0% 5.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

10.00 12.00 20.00 21.00

$ $ $ $

23.00 20.00 30.00 50.00

$ $ $ $

18.00 18.00 24.00 37.00

5.0% 10.0% 10.0% 10.0%

DEVELOPMENT LAND

Low/Acre

High/Acre

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

$ 1,200,000.00 $ 250,000.00 $ 125,000.00 $ 300,000.00 $ 1,500,000.00 $ 125,000.00

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

New Construction (AAA) Class A (Prime) Class B (Secondary) New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

650,000.00 125,000.00 65,000.00 100,000.00 200,000.00 60,000.00

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $

8.00 3.00 N/A 1.00 8.00 0.60

High/Acre

$ $ $ $ $

20.00 8.00 N/A 4.00 15.00 1.50

2010 Global Market Report www.naiglobal.com 124

Knoxville, Tennessee

Memphis, Tennessee

Knoxville’s economy, unanchored by any single industry, has seen a downturn in 2009. A number of major employers have been impacted by the economy and this is reflected in commercial real estate. Businesses are reluctant to make real estate commitments despite the fact that prices have been adjusted downward.

Contact NAI Knoxville +1 865 777 3030

Metropolitan Area Economic Overview 2009 Population

706,862

2014 Estimated Population

770,531

Employment Population

387,679

Household Average Income

$58,049

Office transactions have seen shorter term commitments by tenants and lower rates, both for new leases and for renewals. Despite the Brookview Center leasing 30,000 SF to the largest law firm in the state and 58,000 SF to a medical staffing company and The Scripps Network doubling the size of its corporate headquarters, vacancies are up and returns to owners are dropping as rental rates fall. Industrial activity has been very slow. Closings and layoffs have occurred such as the closure of America’s largest magazine distributor, which cost 400 jobs. Some expansions have begun including Green Mountain Coffee’s new packaging plant and a furniture maker opening in Morristown to supply IKEA. Meleleuca and Exedy America Corporation began expansions that will add 540 jobs to the marketplace. Retail has suffered with vacancies in all geographic areas. Chain restaurants in particular have been right-sizing by closing units. One significant transaction that took place was the lease signing by big box retailers, although active in market and site analysis, are waiting to see if more bargains can be had. Two large developments Dumplin Creek in Sevier County and the Sherrill tract in Knox County have fallen victim to more aggressive negotiating and delays as developers nationwide complete for the tenants. The only multifamily or hospitality development has been the continuation of projects under way in 2008. Vacancies in all segments are hovering around 10%. A major auto parts manufacturer closed a new plant in Knoxville as did an international electronics manufacturer, creating almost 700,000 SF of vacancy. A major office employer that manufactured molded plastic signs, largely for the auto industry, closed, as did a lower price point retail clothing chain headquartered here.

Memphis only delivered two large speculative office products this year, preventing a glut of space from being placed on a slow market. Industrial real estate development has slowed as some larger vacancies have hit key submarkets but leasing activity has been strong. Retail development stopped mid-year and rental rates have declined. Memphis office vacancy rates rose slightly to 12.6% due to negative year-to-date absorption of 26,174 SF. The slow down in the market has kept pace with the downturn in the economy, resulting in only two large, speculative properties, Boyle Investment Co.’s recently completed 150,000 SF office building and Highwoods Properties 150,000 SF Triad Centre III, coming on the market. UT Medical Group, Inc. had the largest lease of the year with 85,651 SF at Mid Memphis Tower. Contact NAI Saig Company +1 901 526 3100

Metropolitan Area Economic Overview 2009 Population

1,286,151

2014 Estimated Population

1,301,835

Employment Population

679,256

Household Average Income

$63,599

Median Household Income $47,048

Median Household Income $52,090

Total Population Median Age

Knoxville At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

N/A $ 16.00 $ 12.00

$ $

N/A 17.50 16.00

N/A $ 16.75 $ 13.25

N/A 14.4% 16.0%

$ 19.00 $ 18.00 $ 12.00

$ $ $

22.00 22.00 17.00

$ 20.50 $ 20.00 $ 15.00

24.0% 16.3% 19.4%

$ $ $

4.00 4.25 15.00

$ $ $

12.0% 14.0% 6.0%

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

New Construction (AAA)/ Class A (Prime) Class B (Secondary)

N/A $ 15.00 $ 10.00

$ $

N/A 22.50 17.50

N/A $ 18.75 $ 13.75

N/A 16.5% 32.4%

New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A $ 11.29 $ 5.00

$ $

N/A 29.00 24.00

N/A $ 20.15 $ 14.50

N/A 19.6% 30.9%

1.00 N/A 1.00

4.05 N/A 19.80

2.55 N/A $ 10.40

N/A N/A N/A

1.00 8.00 N/A N/A

$ $

22.00 25.00 N/A N/A

$ 11.50 $ 16.50 $ 8.00 N/A

32.8% 16.4% 24.7% N/A

INDUSTRIAL 2.00 2.25 4.75

3.25 3.40 9.00

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls

Memphis saw a drop in average asking rental rates, down to $10.98/SF. The Memphis office market is not overbuilt, allowing vacancy to drop as the economy improves and companies expand. The market could see speculative industrial development as soon as late 2010, most likely in the DeSoto County submarket.

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Retail vacancy tightened to 8.9% in Q3 2009 compared to 10% in Q3 2008. Several national big box retailers closed Memphis-area stores, but that space was backfilled fairly quickly by more robust companies.

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

With Kuehne+Nagel, Inc. taking its 865,120 SF of sublease space off the market and Conwood Co. LLC purchasing a 787,500 SF building in Southeast Memphis, the amount of large warehouse space has decreased. Direct vacancy overall, remained steady at 13.8%, the same as Q1 2008. Memphis experienced 195,855 SF of positive absorption and lease rates dipped slightly to $2.62/SF. Several national companies looking for large blocks of space could edge lease rates upward next year.

Memphis At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Much of the leasing activity in Memphis has been renewals and expansions, with a few companies taking advantage of the depressed market to change properties. Lease rates for the overall office market remained fairly steady at $16.84/SF with the largest submarket, East Memphis, at 1.5 million SF, seeing a Q3 increase to $19.41/SF.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL $ 12.00 $ 9.00 $ 12.00 $ 28.00

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $

150,000.00 175,000.00 20,000.00 30,000.00 250,000.00 N/A

$ $ $

21.00 20.00 26.00 N/A

$ 15.00 $ 16.50 $ 17.00 N/A High/Acre

$ 300,000.00 $ 350,000.00 $ 85,000.00 $ 300,000.00 $ 1,100,000.00 N/A

11.0% 9.2% 8.0% N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $

N/A 261,300.00 78,000.00 5,000.00 211,111.00 22,000.00

High/Acre

$ $ $ $ $

N/A 700,000.00 152,460.00 174,240.00 217,800.00 76,500.00

2010 Global Market Report www.naiglobal.com 125

Nashville, Tennessee

Austin, Texas

The cost of living in the Nashville region is 10% below the national average due to the lower costs of housing, transportation, utilities and many tax benefits, including no state income tax. As a result of these economic opportunities, Nashville continues to dominate many prominent lists. Business Facilities ranked the Nashville Metro number one for Quality of Life, number six for Best Cost of Living, and number nine for Economic Growth Potential while POLICOM ranked Nashville number five for Economic Strength.

Contact NAI Nashville +1 615 850 2700

Metropolitan Area Economic Overview 2009 Population 2014 Estimated Population

1,649,381

1,967,166

Employment Population

842,148

Household Average Income

$69,054

Median Household Income $55,965 Total Population Median Age

Vacancy rates rose during 2009 for the office, industrial and retail markets and should begin to stabilize by mid 2010. During the course of the year, 2.7 million SF of product was added to the market, which further increased the vacancy for all sectors. Another factor in the increased vacancy is that sublease space has risen over the course of the year with more than 2 million SF of space on the market. The office market has witnessed some moderate gains during the year while industrial is still trying to recover. Retail vacancy has risen but has little sublease space available. Over the past five years, the Nashville MSA was a landlords’ market with minimal concessions given to tenants. To keep occupancies up, landlords have given tenants more concessions such as free rent and additional TI allowance to compensate for the increase in available new space and sublease space they are competing against. This trend will remain in favor of the tenants until new product and sublease space is absorbed and the number of choices for tenants decreases. Notable leases in 2009 include: Nissan’s 717,000 SF lease at Couchville Pike II; Genco’s 319,375 SF lease at 3815 Logistics Way; Synnex Corporation’s 307,200 SF lease at I24 Distribution Center 2 and Simplex Healthcare’s 91,253 SF lease at Cool Springs IV. With continued fears of an unstable economy, Nashville’s commercial real estate sectors will remain shallow through the first half of 2010. However, Nashville is in a good position to withstand the downturn and rebound more quickly than other markets in the US because it supports a wider array of industries.

Nashville At A Glance High

Effective Avg.

Vacancy

$ 28.00 $ 17.50 $ 14.00

$ $ $

31.00 26.50 18.50

$ 29.50 $ 22.00 $ 16.25

52.0% 13.3% 14.3%

$ 23.75 $ 17.00 $ 13.00

$ $ $

28.00 29.00 23.50

$ 25.88 $ 23.00 $ 18.25

51.0% 9.0% 11.0%

Austin’s industrial leasing inventory grew from 34.5 million SF in 2007 to 37.9 million SF by mid-2009. A total of 3.4 million SF was added in an 18-month period. This represents an increase of 10% of gross inventory. As a result, no institutional grade product is under construction in the Austin area and rents continue to erode. Metropolitan Area Economic Overview 2009 Population

1,762,915

2014 Estimated Population

2,180,846

Employment Population

832,927

Household Average Income

$76,318

During 2009, 618,940 SF of retail was delivered, while only 278,130 SF was absorbed. This resulted in average rental rates decreasing by $2.81/SF from December of 2008 to June of 2009. Development for the most part has come to a grinding halt across all product types. There is a wait and see attitude among developers and investors. The lack of adequate financing has been a major obstacle, so buyers are pooling equity to close all-cash deals.

Median Household Income $64,972 33

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

$ $ $

4.75 5.00 9.50

$ $ $

3.75 4.13 7.25

20.2% 16.1% 4.4%

$ 22.00 $ 20.88 $ 26.00 N/A

15.8% 7.2% 6.0% N/A

New Construction (AAA) Class A (Prime) Class B (Secondary)

N/A $ 45.62 $ 34.00

$ $

N/A 26.30 21.14

N/A $ 35.96 $ 27.57

N/A 15.1% 8.8%

N/A $ 33.08 $ 28.00

$ $

N/A 19.50 16.57

N/A $ 26.29 $ 22.29

N/A 21.4% 22.1%

$ $ $

3.00 4.20 6.00

$ $ $

5.40 7.20 10.20

$ $ $

4.20 5.70 8.10

20.0% 20.0% 20.0%

$ 14.00 $ 10.00 $ 15.00 $22.00

$ $ $ $

41.00 32.00 30.00 45.00

$ $ $ $

27.50 21.00 22.00 33.50

4.0% 16.0% 10.0% 5.0%

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

The office market failed to absorb 600,000 SF in the first half of 2009. Luckily almost 300,000 SF of mostly Class A space was absorbed in Q3. Landlords work hard to keep existing tenants and make attractive deals through rent concessions. The average rental rate at the end of Q3 was $25.52/SF per year.

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Contact NAI Austin +1 512 346 5180

Austin At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

While news is good for economic development in Austin with only 7.2% unemployment, it has become a hindrance to commercial property transactions by widening the bid-ask gap. Sellers lock in on good news and try to wait out the recession for a higher price, while buyers hold out for cheaper deals. The lack of adequate financing remains a major obstacle requiring buyers to pool equity to close all cash deals.

Total Population Median Age

(Rent/SF/YR)

Austin, the state capital of Texas, is ranked at the top of several national metro comparison studies, including Best City for Recession Recovery (Forbes, June 2009), Third Strongest Metro Economy in the Nation (Brookings Institution, June 2009), and the Nation’s Best City For A Fresh Start (Relocation.com, June 2009).

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL 2.75 3.25 5.00

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

Downtown Neighborhood Service Centers Sub Regional Centers Regional Malls

$ 12.00 $ 8.75 $24.00 N/A

DEVELOPMENT LAND

Low/Acre

High/Acre

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

35.00 125,000.00 40,000.00 40,000.00 150,000.00 6,000.00

$ 32.00 $ 33.00 $28.00 N/A

70.00 750,000.00 125,000.00 125,000.00 800,000.00 800,000.00

Downtown Neighborhood Service Centers Sub Regional Centers Regional Malls

15.00 175,000.00 75,000.00 87,000.00 218,000.00 10,000.00

25.00 325,000.00 150,000.00 218,000.00 523,000.00 40,000.00

2010 Global Market Report www.naiglobal.com 126

Beaumont, Texas

Corpus Christi, Texas Southeast Texas is in the midst of an industrial expansion totaling an estimated $15 billion in the petro chemical industry. The industrial and multifamily sectors have benefited most from this expansion. Retail space is flat. Office space has not benefited as vacancy continues to climb. Land is not moving well due to financing issues. Investment property continues to do well but has also slowed. The medical office market is doing well as SETX's medical community continues to grow.

Contact NAI Fidelis +1 409 899 3300

Metropolitan Area Economic Overview 2009 Population

370,113

2014 Estimated Population

355,016

Employment Population Household Average Income

174,485

$57,364

Median Household Income $44,664 Total Population Median Age

In 2009, there was an increase in new hotels and apartment complexes built to house workers from the expansion of several industrial plants. However, this has slowed with some projects pulling back toward the close of the year. We expect a drastic increase in the number of construction jobs during Q1 2010 as things ramp back up on the almost $8 billion Motiva project. The retail markets are flat as sales have dropped, but many of the bargain retailers have positioned themselves for expansion in 2010. Port Arthur is still hot for retail growth while Beaumont and Orange are slow, with Beaumont having significant vacant space and others having gone dark altogether. The industrial market benefited from industrial expansion and, unfortunately, from recent hurricanes that destroyed older inventory. This has brought some speculative building to the market. Cardinal Drive in Beaumont and South are the hottest areas for this market. Land deals have dried up as lenders are requiring upwards of 50% down. Once those rates return to more realistic numbers, activity undoubtedly will pick up. Despite this situation, prices have remained stable.

2014 Estimated Population

402,092

Employment Population

189,098

Larger deals in 2009 included the HydroTex industrial build to suit as well as several retail lease transactions. Many large transactions never closed due to lending difficulties. Leasing activity has picked up based on the lending climate and we suspect it will continue until lenders resume loaning money again.

Household Average Income

$57,608

High

Effective Avg.

Vacancy

Freestanding retail and strip centers are doing well. Large buildings have been filled with only two, large, vacant buildings remaining on the market; the former Mervynâ&#x20AC;&#x2122;s and the space next to Academy. Steinmart is filling the former Circuit City location and Hobby Lobby is expanding in Moore Plaza, the cityâ&#x20AC;&#x2122;s power center. The old Parkdale Plaza is finally being torn down and replaced with a Super Wal-Mart, a small shadow center and some pad sites. The redevelopment of LaPalmera Mall (formerly Padre Staples Mall) is under way at a cost of roughly $50 million. Every part of the mall is being upgraded, including the anchor tenants. The only negative in the retail market was the foreclosure of Sunrise Mall. The future of Corpus Christi looks bright thanks to expansion at the port and the anticipation of the $3 billion dollar Las Brisas Power Plant and $1 billion dollar Chinese pipe plant.

Median Household Income $45,527 Total Population Median Age

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

DOWNTOWN OFFICE N/A $ 10.00 $ 8.00

$ $

N/A 12.00 11.00

N/A $ 11.00 $ 9.50

N/A 14.0% 15.0%

N/A $ 12.00 $ 8.00

$ $

N/A 15.00 12.00

N/A $ 13.50 $ 10.00

N/A 10.0% 12.0%

$ $ $

3.00 7.00 10.00

$ $ $

15.0% 6.0% 5.0%

$ $

N/A 17.00 9.00

N/A $22.00 $14.00

N/A $ 19.50 $ 11.50

N/A 17.0% 29.0%

$ $

N/A 13.00 9.00

N/A $ 22.00 $ 13.00

N/A $ 17.50 $ 11.00

N/A 13.0% 14.0%

6.00 N/A $ 12.00

3.60 N/A 6.00

4.80 N/A 9.00

4.0% N/A 6.0%

Downtown Neighborhood Service Centers Sub Regional Centers Regional Malls

$ $ $ $

6.00 10.00 9.00 9.75

$ $ $ $

$ 8.50 $ 19.00 $ 18.50 $ 18.88

60.0% 14.0% 12.0% 52.0%

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL 2.16 4.80 7.80

2.40 6.30 9.00

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

Downtown Neighborhood Service Centers Sub Regional Centers Regional Malls

N/A $ 6.50 $ 14.00 $ 12.00

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

The industrial market is down as a result of the decline in the petrochemical industry. Exploration and refining have slowed significantly over the last year and as a result, many service type buildings with yards came on the market. Large warehouse buildings are remaining vacant, especially the older dock high buildings.

Corpus Christi At A Glance Low

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Metropolitan Area Economic Overview 410,741

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Contact NAI Cravey Real Estate Services, Inc. +1 361 289 5168

2009 Population

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

The office market continues to lag behind the rest of the real estate market. Numerous national and regional companies have closed their offices and/or are downsizing. Office rents in Class A buildings have dropped enough to cause tenants from Class B and C buildings to consider moving up. It is anticipated that occupancies in Class A buildings will remain the same while B and C will suffer from this migration.

The office market remains flat. Some of this can be attributed to larger users downsizing and subleasing space available at lower rates than what landlords are offering. Jobs have not been created in this area of the market and new job growth is not predicted in the near future. Some office users are moving into retail centers, thus having a further negative impact on the market.

Beaumont At A Glance (Rent/SF/YR)

The Corpus Christi economy suffered slightly from the economic downturn. The petrochemical industry is down, resulting in a decline in the local economy. However, the refineries and related industries are expanding and upgrading in anticipation of the pending increase in oil and gas exploration. The Port of Corpus Christi is doubling in size to meet future demand.

$ $ $ $

N/A 196,000.00 32,670.00 34,000.00 130,680.00 N/A

$ $ $

N/A 12.00 22.00 18.00

N/A $ 10.00 $ 18.50 $ 14.00 High/Acre

$ $ $ $

N/A 348,480.00 108,900.00 43,560.00 700,000.00 N/A

N/A 10.0% 12.0% 6.0%

348,480.00 76,230.00 76,230.00 15,000.00 196,020.00 15,000.00

11.00 28.00 28.00 28.00

522,720.00 196,000.00 196,000.00 108,900.00 784,080.00 35,000.00

2010 Global Market Report www.naiglobal.com 127

El Paso, Texas

Dallas, Texas

Contact NAI Robert Lynn +1 214 256 7100

Metropolitan Area Economic Overview 2009 Population

6,409,378

2014 Estimated Population

7,061,395

Employment Population

3,182,487

Household Average Income

$75,624

The Dallas area continues to outpace much of the country due to its central location and proximity to DFW Airport, one of the busiest transportation hubs in the world. The economic conditions of 2009 resulted in companies, both large and small, choosing short term renewals over making long term decisions.

Bright spots in the El Paso market are highlighted by the new Texas Tech School of Medicine, the University of Texas at El Paso, continued downtown revitalization and explosive growth at Ft. Bliss. However, the commercial real estate market remains sluggish. Regional manufacturing is down, warehouse has softened and office and retail are flat.

Dallas has an abundance of land and an extremely competitive commercial development market. This has helped keep real estate lease rates competitive and makes Dallas a favorite spot for corporate headquarter relocations. Even in these trying times, the horizon looks bright as economic indicators point to an optimistic forecast for 2010 with employment gains projected to continue to increase. The Dallas/Ft. Worth area currently leads the nation in employment gains for 2009 and the positive numbers are reflected in what appears to be a healthy office market.

Rents and occupancies in the suburban office markets remained flat through 2009 with little change forecast for 2010. Despite slow leasing, revitalization efforts continue in the CBD, where a local REIT and Mills Plaza Properties are re-developing over 700,000 SF of office properties. The industrial market, now mostly distribution and logistic space, has softened. There has been no new construction as rents continue to lag behind the rising construction cost. FoxConn opened its new facility in Mexico at the Santa Teresa crossing, occupying an initial 1 million SF in Phase I. Vendors are being drawn to the area.

There were 91,000 net new jobs added to the North Texas economy according to the US Bureau of Labor Statistics. Office absorption for the same area totaled a negative 40,621 SF. Overall vacancy remains flat from a year ago at 17.2%. The largest lease signings of 2009 included the 203,239 SF lease signed by AT&T at Lakeside Centre in the Plano/Richardson market and the 201,354 SF deal signed by Oncore at the Oncore Building in the Ft. Worth market. The Dallas industrial market stands at about 12% vacancy. There is heavy competition for every tenant pushing rental rates down while also increasing move-in incentives. Absorption rates are in the negative territory for the first time in quite some time. Currently, the retail market in the Dallas/Ft. Worth area has a 9.4% vacancy rate and a retail rental rate of $13.37/SF. Net absorption has been in excess of 1 million SF and the average rental rate has increased 0.8%. In all, 21 buildings were delivered totaling just over 300,000 SF. Capitalization rates have averaged 7.9%.

Contact NAI El Paso +1 915 859 3017

Metropolitan Area Economic Overview 2009 Population

729,085

2014 Estimated Population

715,271

Employment Population

287,353

Household Average Income

$50,351

Median Household Income $63,251

Median Household Income $39,962

Total Population Median Age

Low

High

Effective Avg.

Vacancy

$ $

N/A 14.95 10.25

N/A $ 32.00 $ 20.00

N/A $ 17.20 $ 14.70

N/A 29.0% 47.0%

$ $ $

21.00 14.00 11.00

$ 35.00 $ 45.00 $ 27.00

$ 25.00 $ 24.30 $ 17.26

90.0% 16.0% 26.1%

$ $ $

1.50 1.75 4.50

$ 3.90 $ 6.00 $ 12.00

$ $ $

2.90 3.50 6.75

12.0% 12.0% 12.0%

Downtown Neighborhood Service Centers Sub Regional Centers Regional Malls

$ $ $ $

8.00 6.00 12.00 30.00

$ $ $ $

17.55 13.37 17.47 23.77

1.9% 9.2% 13.2% 9.2%

Effective Avg.

Vacancy

N/A $ 18.00 $ 14.00

$ $

N/A 25.00 18.00

N/A $ 19.00 $ 16.00

N/A 40.0% 50.0%

$ 21.50 $ 16.00 $ 14.00

$ $ $

25.00 20.00 16.00

$ 23.00 $ 17.00 $ 15.00

10.0% 10.0% 25.0%

$ $ $

2.80 3.20 4.50

$ $ $

3.85 4.50 7.00

$ $ $

3.50 3.70 5.10

13.0% 18.0% 13.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 10.00 $ 10.00 $ 4.50 N/A

$ $ $

20.00 18.00 17.00 N/A

$ 16.50 $ 13.50 $ 11.00 N/A

10.0% 12.0% 6.0% N/A

DEVELOPMENT LAND

Low/Acre

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ 1,306,800.00 $ 217,800.00 $ 87,120.00 $ 108,900.00 $ 261,360.00 $ 20,000.00

$ 1,742,400.00 $ 435,600.00 $ 130,680.00 $ 435,600.00 $ 871,200.00 $ 60,000.00

New Construction (AAA) Class A (Prime) Class B (Secondary) New Construction (AAA) Class A (Prime) Class B (Secondary) Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

High

INDUSTRIAL

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Low

(Rent/SF/YR)

SUBURBAN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

DOWNTOWN OFFICE

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Despite the economic downturn, the El Paso business climate remains favorable. A positive turn in the global economy would energize manufacturing in Mexico and stimulate warehouse occupancy in El Paso. Ft. Bliss, the new Texas Tech school of Medicine, and UTEP, are expected to continue to be local growth generators.

El Paso At A Glance

Dallas At A Glance (Rent/SF/YR)

The retail market was generally flat in 2009 and no change is expected. The El Paso market experienced slow to no growth in existing strip centers with shell space, “big box” retailers remained non-committal and local and chain restaurant operators encountered tighter financing. However, some existing retailers in the marketplace, such as Kohl’s, Furniture Warehouse and Forever 21, have taken advantage of the economic environment to strike deals on vacant space for additional stores. Development and pre-leasing activity continues for the 300,000 SF Phase I of the Fountains, a 55-acre power center on I-10. Multifamily has benefited with the growth of Ft. Bliss. Occupancy exceeds 93% and rents are generally between $.72 and $.82/SF per month.

$ $

N/A N/A 65,000.00 60,000.00 N/A N/A

25.00 60.00 30.00 60.00

High/Acre

$ $

N/A N/A 196,000.00 350,000.00 N/A N/A

2010 Global Market Report www.naiglobal.com 128

Fort Worth, Texas

Houston, Texas Fort Worth is projected to post positive job growth once again despite a three point rise in the unemployment rate from this time last year. The current rate is 8.3%, still well below the national average. The Barnett Shale gas play has slowed by some 60% from last year as prices have dropped and other natural gas deposits have been discovered in different parts of the US.

Houston’s economy is based on energy, but to a lesser extent than in past several years. Its diverse economy is composed of research firms, medical and biomedical technology, telecommunications, agriculture and other distinct businesses. The emphasis on international trade is expanding and is a prominent theme in the city’s continued economic development. Houston’s business appeal is enhanced by it being one of the least expensive major US cities in which to conduct business.

Fort Worth continues to experience effects of a tight office market due to the strong local economy. The Fort Worth CBD currently has a 6% vacancy rate in Class A office and a 15% vacancy rate in Class B office. Although healthy, Fort Worth is not completely immune to what is happening in the market throughout the US. Within the first three quarters of 2009, over 1 million SF of sublease space hit the market in the CBD. Contact NAI Huff Partners +1 817 877 4433

Metropolitan Area Economic Overview 2008 Population

6,409,378

2013 Estimated Population

7,061,395

Employment Population

3,182,487

Household Average Income

$75,624

Median Household Income $63,251 Total Population Median Age

Fort Worth’s retail market proved to be somewhat stable. With approximately 4.5 million SF of new construction delivered in the past 18 months, direct deal velocity definitely came to a staggering halt. Existing tenants and landlords, however, have symbiotically created renewal and rework structures for tenants to remain in those properties. The Fort Worth retail market is seeing about a 91% occupancy level versus the 94% witnessed in Q4 2008. The average rental rate of $13.71 is down from the 2008 annual average of $14.50. The theme for 2009 has been tenants want to stay and landlords need them to stay, resulting in one of the lowest sublet vacancy rates of all time, currently below 1%. Tenants have taken advantage of reworking their leases, obtaining lower rates to help offset a decline in their sales revenue in 2009. The industrial market shows negative absorption for the first time in years. The overall vacancy rate for all product types is up four points to 12.31%. No new development at this time. Rates have dropped and many incentives are available allowing credit tenants to name their price. The bid/ask price ratio for sales still remains skewed. Industrial is still out pacing all other product types. Cautious optimism for growth and stabilization of the market place is projected for 2010. Industrial is still outspacing all other product types. Cautious optimism for growth and stabilization of the market place is projected for 2010.

Fort Worth At A Glance High

Effective Avg.

Vacancy

$ $

N/A 29.00 23.00

N/A $ 26.00 $ 20.00

N/A 6.0% 15.0%

$ 24.50 $ 19.00 $ 14.00

$ $ $

24.50 23.00 21.00

$ 24.50 $ 21.00 $ 18.00

57.0% 12.0% 16.0%

$ $ $

2.75 2.50 5.00

$ $ $

3.30 3.50 12.00

$ $ $

3.03 3.00 8.50

10.8% 17.0% 9.1%

Downtown Neighborhood Service Centers Sub Regional Centers Regional Malls

$ 14.00 $ 4.99 $ 4.00 $ 15.63

$ $ $ $

38.00 30.00 30.00 20.00

$ $ $ $

19.47 12.86 11.95 16.04

2.0% 13.0% 14.0% 11.0%

DEVELOPMENT LAND

Low/Acre

SUBURBAN OFFICE

129

6,183,639

Employment Population

2,746,271

Household Average Income

$76,301

Long recognized as the energy capital of the world, with every major energy company represented locally, Houston is ranked second among US cities with the most Fortune 500 headquarters.

Median Household Income $58,581 34

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

$ $ $

44.50 19.25 14.00

$ 51.00 $ 45.00 $ 32.16

$ 46.98 $ 34.66 $ 23.61

47.0% 7.0% 13.0%

$ $ $

16.50 13.00 15.75

$ 38.25 $ 40.55 $ 38.00

$ 28.10 $ 27.47 $ 28.26

54.5% 16.0% 13.0%

$ $ $

4.08 4.00 3.00

$7.14 $7.80 $33.00

$ $ $

5.31 5.17 5.38

7.0% 3.0% 6.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

12.00 5.48 15.19 6.88

$ $ $ $

37.71 14.82 15.58 14.99

8.0% 12.9% 12.0% 7.0%

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

$ 217,800.00 $ 239,578.00 $ 176,000.00 $ 6,098,400.00 $ 6,098,400.00 $ 1,219,680.00

New Construction (AAA) Class A (Prime) Class B (Secondary) New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

2014 Estimated Population

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

5,788,330

Houston’s retail market has experienced a decrease in vacancy to 9.2% overall. The average quoted asking rental rate is $15.15/SF, which represents a 1.9% decrease over the past year. Average sales prices have risen over the past several years. Retail properties sold for $171/SF over the past 12 months, compared with $147/SF in the previous period.

DOWNTOWN OFFICE N/A $ 24.00 $ 18.00

New Construction (AAA) Class A (Prime) Class B (Secondary)

2009 Population

Houston’s industrial market has remained stable with an overall vacancy rate of 6.9% and average asking rental rates of $5.70/SF per year. The largest lease signings in 2009 included the 300,000 SF lease signed by Ozburn-Hessey Logistics at Bayport North, the 234,000 SF lease signed by Tramontina-USA Inc. at 1641 Gillingham, and the 224,511 SF lease signed by United DC at Eastport Four.

Houston At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Metropolitan Area Economic Overview

Total Population Median Age

(Rent/SF/YR)

Contact NAI Houston +1 713 629 0500

Houston’s office vacancy rate across all classes was 14.2% in mid-2009 and a low 8.1% in the CBD. A total of 15 buildings delivered to the market totaling 1,141,455 SF, with 3,829,489 SF still under construction. The largest lease signings in 2009 included the 844,763 SF lease signed by Hess at Hess Tower, the 160,000 SF deal signed by Locke Lord Bissell & Liddell, LLP at Chase Tower, and a 232,962 SF lease signed by NRG Texas at Houston Pavilions, each in Houston’s CBD.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

50.00 220,000.00 60,000.00 55,000.00 125,000.00 N/A

High/Acre

70.00 675,000.00 115,000.00 110,000.00 320,000.00 N/A

185,130.00 5,499.00 5,000.00 6,875.00 2,501.00 21,780.00

50.00 30.02 54.00 35.50

2010 Global Market Report www.naiglobal.com

129

RIO GRANDE VALLEY, Texas

Contact NAI Rio Grande Valley +1 956 994 8900

Metropolitan Area Economic Overview 2009 Population

1,196,001

2014 Estimated Population

1,237,256

Employment Population

690,000

Household Average Income

$43,395

(Brownsvile, Harlingen,McAllen, Edinburg, and Mission.)

San Antonio, Texas

With a dynamic young labor force, strategic bi-national location, low cost of living and development opportunities, the Rio South Texas region is an ideal location for global companies looking to expand or relocate. The convergence of two nations into one region with many choices is the focal point of a new marketing strategy.

South Texas has been less affected by the recession than many other areas, but national pressures have moved into San Antonio, the seventh largest city in the US. Still, the Alamo City has been identified as one of the top cities (Brookings Institution) and one of the most recession-resistant (Forbes) in the country.

While commercial real estate activity is down overall in the Rio Grande Valley as compared to previous years, the market continues to be one of the strongest in the nation through Q2 2009 according to the MetroMonitor report by Brookings Institution. Despite a slight decline in retail sales, big box retailers are still entering the market. In 2009 McAllen’s third Best Buy opened and Buffalo Wild Wings is under construction with its second location. CVS entered the Rio Grande Valley market in Q1 opening several locations throughout the Valley. Ashley Furniture opened its first McAllen store and Rooms-To-Go and Pappadeaux Seafood Kitchen are both under construction in McAllen and Pharr, respectively with Q2 2010 projected openings. Kohl’s, Bed Bath & Beyond, Forever 21, Shoe Carnival and one additional Walgreens have entered Brownsville.

New construction and investment activity slowed significantly in 2009. The office market added less than 300,000 SF compared to more than 1.4 million constructed in 2008. Only one major warehouse facility with 275,000 SF was completed and retail development was limited to less than 1 million SF compared to 3.5 million SF added in 2008.

The office market is dominated by healthcare and government agencies with few leases or sales below 5,000 SF. Doctors Hospital at Renaissance has recently opened a major addition, which includes a new Medical Tower with an expanded Emergency Department, a new Pediatric Intensive Care Unit and Pediatric Oncology Services. 495 Commerce Center became home to its second GSA building (four-story, 150,000 SF) which opened in Q1 2009. With the opening of the newest international bridge in January 2010, the industrial market will regain momentum. The presence of maquiladoras provides considerable advantages to the economic environment along the border by increasing trade, generating employment and acquiring local resources; all important stimuli to the economy in the South Texas area.

Contact NAI REOC Partners, Ltd. +1 210 524 4000

Metropolitan Area Economic Overview 2009 Population

2,087,385

2014 Estimated Population

2,325,643

Employment Population

904,793

Household Average Income

$61,347

Median Household Income $31,110

Median Household Income $52,086

Total Population Median Age

27.9

Low

High

Effective Avg.

Vacancy

$ 12.00 $ 12.00 $ 8.00

$ $ $

25.00 25.00 15.00

$ 24.50 $ 24.50 $ 15.50

70.0% 70.0% 20.0%

$ 12.00 $ 10.00 $ 8.00

$ $ $

36.00 21.00 16.00

$ 30.00 $ 20.50 $ 16.00

15.0% 25.0% 12.0%

$ $ $

3.30 4.25 5.00

$ $ $

7.80 11.00 8.00

$ $ $

7.20 9.75 9.00

15.0% 6.0% 10.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

10.00 12.00 15.00 30.00

$ 21.00 $ 22.00 $ 32.00 $ 100.00

$ $ $ $

20.50 23.00 31.00 80.00

15.0% 12.0% 15.0% 4.0%

High

Effective Avg.

Vacancy

$ 22.00 $ 18.00 $ 12.00

$ $ $

24.00 24.00 22.00

$ 23.00 $ 21.05 $ 18.16

15.4% 12.8% 18.3%

$ 22.00 $ 18.00 $ 12.00

$ $ $

32.00 28.00 28.00

$ 27.00 $ 24.49 $ 19.90

32.7% 14.1% 19.7%

$ $ $

2.10 2.00 4.20

$ $ $

6.00 5.00 16.75

$ $ $

4.40 3.75 9.52

12.8% 10.0% 17.2%

Downtown Neighborhood Service Centers Sub Regional Centers Regional Malls

$ 16.00 $ 9.00 $ 17.00 $ 25.00

$ $ $ $

34.00 31.00 40.00 60.00

$ 24.33 $ 16.14 $ 23.97 N/A

17.3% 17.1% 10.1% 10.4%

DEVELOPMENT LAND

Low/Acre

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

Premium (AAA) Class A (Prime) Class B (Secondary) New Construction (AAA) Class A (Prime) Class B (Secondary) Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

Low

(Rent/SF/YR)

INDUSTRIAL

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

SUBURBAN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Looking ahead, IHS Global Insight predicted that San Antonio will be one of the first cities to lead the way out of the recession and regain the pre-recession job levels in 2010. Commercial real estate is expected to trail that recovery path with improvement anticipated in 2011.

DOWNTOWN OFFICE

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

In the office market, Medtronic, Inc. selected San Antonio for its new Diabetes Therapy Management and Education Center, which filled the Overlook at the Rim (145,000 SF) property. Citing San Antonio’s affordable office costs, ample workforce and inland location away from the threat of damaging hurricanes, Whataburger Restaurants LP relocated to 300 Concord Plaza (141,000 SF) after petroleum refiner Tesoro Companies expanded into its new 618,000 SF headquarters facility at Ridgewood Park.

San Antonio At A Glance

McAllen Mission At A Glance (Rent/SF/YR)

Still, the market maintained some enviable positive momentum with the addition of several notable relocations. In the industrial arena, Toyota Motor Corporation announced that production of the Tacoma pick-up truck would be relocated from Freemont, California, to the San Antonio plant starting in 2010 creating 850 new jobs. In the satellite community of Seguin, construction is under way on Caterpillar Inc’s 1 million SF, $170 million engine assembly plant, which is expected to create more than 1,400 new jobs.

$ $ $ $ $

N/A 174,000.00 54,000.00 43,500.00 240,000.00 21,000.00

High/Acre

$ $ $ $ $

N/A 566,000.00 130,000.00 65,000.00 914,000.00 82,000.00

45.00 75,000.00 45,000.00 43,560.00 110,000.00 9,000.00

120.00 475,000.00 200,000.00 220,000.00 795,000.00 60,000.00

2010 Global Market Report www.naiglobal.com 130

Texarkana (Bowie County, Texas/Miller County, Arkansas), Texas

Salt Lake City, Utah

Forbes Magazine predicted Texarkana to be ranked number two in the US for the fastest growing SMSA in the under 500,000 category, with a 28.57% increase in gross metropolitan product over the next five years. Transportation, medical, industrial and residential growth continues with an increased vacancy rate in the retail sector.

Salt Lake City is a vibrant, pro-business community with a highly educated populace and an entrepreneurial spirit that is consistently rated among the best cities for business. Healthcare, technology and education remain the primary drivers of the local economy. Unemployment is a relatively low 6.1% compared to the national average. Salt Lake City continues to outperform the nation as a whole and remains one of the soundest economies in the US.

The medical office sector has experienced moderate growth as Texarkana continues to be the regional center for the surrounding 60-mile area. The purchase of Wadley Regional Hospital by Brim Heathcare insures robust competition and growth in the industry.

Contact NAI American Realty Co. +1 903 793 2666

Metropolitan Area Economic Overview 2009 Population

134,117

2014 Estimated Population

133,365

Employment Population

61,861

Household Average Income

$57,074

The industrial base for the market is diverse, with two paper mills, Cooper Tire and Red River Army Depot the leading employers. The Depot is expected to transfer several thousand acres with buildings and infrastructure to Red River Redevelopment Authority in the near future. Construction is under way for a new clean burning coal power plant, resulting in 1,000 construction jobs, and a new cement plant is in progress. Alumax Aluminum mill closed, but Cooper Tire expanded in Texarkana after closing its Anniston, Alabama, plant. Texarkana continued to experience reduced growth in the retail sector in 2009. However, Lafferty’s Appliance, Osaka Japanese Restaurant, and Minton’s Sportsplex all opened, providing a bright spot for this market. Central Mall has added several small shops and maintains a high occupancy rate. Recent hotel openings include Holiday Inn Express, Best Western, Fairfield and Candlewood Suites with a Holiday Inn, Country Host, Crown Plaza and Sleep Inn, scheduled to open soon. A new convention center, hotel and restaurant are planned on the Arkansas side of Texarkana We anticipate additional retail, hospitality and restaurant growth in this area. Texas A&M University has completed construction of a new science and technology building and construction has begun on a new 183,000 SF library building that is a part of the 375-acre 1.4 million SF University.

Contact NAI Utah Commercial Real Estate (Salt Lake) +1 801 578 5555

Metropolitan Area Economic Overview 2009 Population

1,163,845

2014 Estimated Population

1,324,171

Employment Population

650,512

Household Average Income

$72,391

Median Household Income $41,098

Median Household Income $62,526

Total Population Median Age

Texarkana At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

N/A $ 10.50 $ 5.50

$ $

N/A 12.50 9.50

N/A $ 11.50 $ 7.50

N/A 20.0% 85.0%

$ 12.00 $ 13.00 $ 8.00

$ $ $

18.00 17.00 11.00

$ 14.00 $ 15.00 $ 9.50

5.0% 5.0% 7.0%

$ 2.00 $ 2.50 $ 13.00

$ $ $

3.50 4.50 16.00

$ 2.25 $ 2.75 $ 14.50

15.0% 20.0% 0.0%

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

$ $ $ $

$ $ $

11.00 16.00 18.00 N/A

$ 7.50 $ 11.50 $ 12.50 $ 18.50

15.0% 10.0% 10.0% 8.0%

$ $ $

33.00 22.08 12.50

$ 33.00 $ 28.00 $ 22.00

$ 33.00 $ 24.51 $ 17.73

67.0% 5.8% 17.8%

$ $ $

18.75 17.50 17.50

$ 24.00 $ 28.00 $ 22.00

$ 21.38 $ 22.20 $ 18.58

73.6% 14.9% 17.6%

$ $ $

2.88 3.00 2.88

$ 6.00 $ 12.96 $ 16.08

$ $ $

4.20 5.40 6.72

N/A N/A N/A

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

6.75 10.82 15.77 28.50

$ $ $ $

15.23 16.88 23.77 32.85

N/A N/A N/A N/A

Low/Acre

New Construction (AAA) Class A (Prime) Class B (Secondary) New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL Downtown Neighborhood Service Centers Sub Regional Centers Regional Malls

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Salt Lake City’s largest project is the City Creek Center mixed-use redevelopment in the CBD. The 20-acre development includes 1.5 million SF of office space, 800,000 SF of retail space, 700 residential units and large swaths of open spaces. The development is scheduled for completion in 2012.

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Salt Lake City is a key distribution hub with over 109 million SF of industrial space. Total availability in the industrial market reached 9% this year after bottoming at 4% in late 2007. Lease rates have declined 7% since late 2008 and average at $.40/SF NNN per month. While leasing activity has leveled off this year, a 470,000 SF distribution warehouse was sold midyear. The retail market has just under 37 million SF of leasable space. Vacancy in the overall market stands at 6%. Rates have dipped to $15/SF NNN in the CBD.

Salt Lake City At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

The commercial real estate industry in the Salt Lake City metropolitan market trended downward in 2009 in response to the changing economic conditions. The total office market inventory is 31.5 million SF, one-third of which lies in the downtown submarket. Direct vacancy in the overall market increased to 13.6%; vacancy downtown is 5.8% and 17.8% in the suburban submarkets. Class A full service rental rates have dipped to an average of $25/SF for product downtown and an average of $22/SF for office space in the suburban submarkets. While leasing activity is down compared to 2008, it has improved steadily through the year.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL 4.00 7.00 7.00 6.00

DEVELOPMENT LAND

Low/Acre

High/Acre

DEVELOPMENT LAND

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

25,000.00 185,000.00 10,000.00 10,000.00 200,000.00 14,000.00

175,000.00 250,000.00 30,000.00 25,000.00 650,000.00 70,000.00

$ $ $

N/A 239,017.00 85,665.00 N/A 379,310.00 N/A

23.40 29.12 30.53 37.20

High/Acre

N/A 239,017.00 565,789.00 N/A $ 1,176,120.00 N/A $ $

2010 Global Market Report www.naiglobal.com 131

Washington County, Utah

Burlington, Vermont

Southern Utah has seen its housing market begin the recovery process and prices are expected to increase slightly in 2010. Historically, housing has been a very important sector in the local economy. The increasing stability in the housing market, along with the local economic development office's efforts to diversify the economy, is a sign that our aggressive historical growth trends are not far behind.

The Greater Burlington commercial real estate market saw limited growth in 2009. 2010 looks to be a similar year with below average growth anticipated in the retail, office and industrial sectors. Each of these market segments should see lease rates weaken. The number of lease transactions has also declined over the past five years. Retail growth in 2010 is expected to be around 3.6%. Vacancy in the suburban markets has risen slightly, while vacancy in the CBD remains stable. In the CBD, lease rates are $18-$30/SF, with the highest rates seen in the Church Street Marketplace and Burlington Town Center. Average suburban retail lease rates are between $8 and $13/SF. New office development in 2010 is anticipated to be about 1.4%.

The economy has had the greatest impact on the industrial market. While net absorption has been negative for two consecutive years, we have seen an increase in the number of transactions relative to Q1 and Q2 of 2009. The vast majority of new leases are for small space with short-term leases and low rates. Although new business leasing was not sufficient enough to outpace business contraction in 2009, we expect to see positive absorption in 2010. Contact NAI Utah Southern Region +1 435 628 1609

Metropolitan Area Economic Overview 2009 Population

148,274

2014 Estimated Population

184,260

Employment Population

37,729

Household Average Income

$59,135

Leasing activity and demand in the office market is also improving. Although it was just a slight increase, we did see positive absorption in the office market in Q3 2009. This improvement was driven by softening lease rates and business growth. We expect office leasing to remain soft into 2010 with tenants asking for aggressive rates and additional concessions. Most of the leasing activity will continue to come from business relocations, although we do expect an increase in the number of new businesses entering the market. Locally, retail continues to be Southern Utahâ&#x20AC;&#x2122;s most active market, although retailers are still struggling and vacancy rates are still rising. Most of the interest in the retail market is in high exposure locations. While actual retail rents have decreased, it has not been to the degree seen in the office and industrial markets. NAI Utah Southern Region is the largest commercial real estate brokerage in Southern Utah as measured by agents, leasing volume and sales volume. We also offer property management services.

Contact NAI J.L. Davis Realty +1 802 878 9000

Metropolitan Area Economic Overview 2009 Population

208,401

2014 Estimated Population

210,825

Employment Population

121,812

Household Average Income

$71,349

Median Household Income $47,782

Median Household Income $57,648

Total Population Median Age

30.2

Washington County At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

$ $

N/A 0.90 0.70

$ $

N/A 0.90 0.70

$ $

N/A 1.25 1.15

$ $

N/A 1.25 1.15

$ $ $

1.15 1.13 1.00

35.0% 8.6% 14.9%

$ $

N/A 1.13 1.00

35.0% 8.6% 14.9%

Low

High

N/A $ 15.00 $ 10.00

$ $

N/A 22.00 15.00

N/A $ 18.50 $ 12.50

N/A 4.0% 5.0%

$ 15.00 $ 14.00 $ 10.00

$ $ $

22.00 22.00 14.00

$ 18.50 $ 17.00 $ 12.00

14.0% 14.2% 15.5%

$ $ $

3.50 4.00 6.50

$ $ $

6.50 6.00 8.00

$ $ $

5.00 5.00 7.25

7.5% 8.5% 9.6%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

18.00 10.00 18.00 20.00

$ $ $ $

30.00 16.00 22.00 35.00

$ $ $ $

24.00 13.00 20.00 27.50

7.4% 7.8% 7.0% 7.0%

(Rent/SF/YR)

Effective Avg.

Vacancy

0.46 N/A N/A

23.3% N/A N/A

N/A N/A N/A N/A

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Overall, 2010 should produce many opportunities for businesses of all sizes. As the economy tries to stabilize, development moves forward with new leasing opportunities for the office, retail, and industrial markets.

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Industrial growth in 2010 is projected at 2.2%. Vacancy rates have risen to 9% in 2009. Rents are expected to weaken for all classes of industrial space. Above average property is leasing for $6-$8/SF, average industrial property rents for $4.50-$6/SF, and below average property leases at $3-$4.50/SF. In general, large industrial properties are leasing for $3.50-$5.00/SF depending on condition and location.

Burlington At A Glance

Low

DOWNTOWN OFFICE Premium (AAA) Class A (Prime) Class B (Secondary)

There has been a weakening in the suburban office market while the CBD remains stable. Vacancy rates for office space in Chittenden County are 12.4%. Suburban vacancy rates are closer to 14.7%. The CBD has the lowest vacancy coming in at 4%. Lease rates for Class A office space in the CBD range from $13-$17/SF and are stable. Class B space in this district rents for $8-$13/SF and is also stable.

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL $

0.35 N/A N/A

0.55 N/A N/A

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL N/A N/A N/A N/A

Downtown Neighborhood Service Centers Sub Regional Centers Regional Malls

N/A N/A N/A N/A

DEVELOPMENT LAND

Low/Acre

High/Acre

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

$ $

350,000.00 300,000.00 125,000.00 N/A 450,000.00 30,000.00

$ $

600,000.00 500,000.00 175,000.00 N/A 700,000.00 60,000.00

15.00 90,000.00 60,000.00 50,000.00 200,000.00 60,000.00

28.00 125,000.00 120,000.00 80,000.00 500,000.00 120,000.00

2010 Global Market Report www.naiglobal.com 132

Northern Virginia

Seattle/Puget Sound, Washington The Northern Virginia office market experienced an increase in vacancy rates matched by a drop in the average asking rental rate. The amount of available space in Northern Virginia is on the rise as many tenants remain conservative. This trend has resulted in ample opportunities for companies in decent financial position to take advantage of landlords who are offering generous incentives, or to acquire space that has already been built-out to a high standard.

Contact NAI KLNB +1 571 382 2100

Metropolitan Area Economic Overview 2009 Population

2,197,406

2014 Estimated Population

2,288,593

Employment Population

1,078,992

Household Average Income

$123,675

Many companies have been inclined to shed jobs or consolidate their office requirements in order to cut expenses, leading to a decrease in Northern Virginiaâ&#x20AC;&#x2122;s overall demand for office space. In coordination with diminished demand, vacancy rates in Northern Virginia continued to rise. At the close of 2009, 13 buildings were under construction in Northern Virginia for a total of 3.67 million SF, of which 67% was pre-leased. The Army, in conjunction with Duke Realty, broke ground on the Mark Center Office Park, a 1.7 million SF office complex in the I-395 submarket. The project is being developed to house Department of Defense personnel and is scheduled to be completed by the September 2011 Base Realignment and Closure (BRAC) deadline. The JBG Companies broke ground on a 144,000 SF office building, located at 900 N Glebe Road in the Ballston submarket. The building is 100% leased to the Virginia Tech Research Institute, which will receive ownership upon completion of the structure. Declining office demand and the frozen credit markets have caused developers to delay new construction projects unless there is a significant portion of pre-leasing activity.

The Seattle/Puget Sound region has suffered major job losses since the national recession finally hit the local market during the summer of 2009. Vacancies have almost doubled in office, industrial and retail sectors compared to the low averages the region enjoyed in previous years. Vacancy is expected to peak around mid-year 2010. Microsoft and Boeing have had minimal layoffs as compared to other large corporations and both continue to be anchors of stability for the region.

Contact NAI Puget Sound Properties +1 425 586 5600

Metropolitan Area Economic Overview

Northern Virginia can be broken down into two noticeably different scenarios: inside the beltway and outside the Beltway. Recovery momentum is expected to continue in submarkets inside the Beltway close to Washington, DC, where rental rates have held steady.

2009 Population

3,398,053

2014 Estimated Population

3,617,098

Even with limited new office supply over the past year and support from the stimulus package and increased federal budget, the region is struggling, but poised, to recover much more quickly than other parts of the country.

Employment Population

1,711,309

Household Average Income

$83,654

Median Household Income $93,243

Median Household Income $65,472

Total Population Median Age

37.5

Northern Virginia At A Glance (Rent/SF/YR)

High

Effective Avg.

Vacancy

N/A N/A N/A

SUBURBAN OFFICE

The investment market has been painfully slow due to the lack of available financing. We expect conditions to gradually improve during the year. Investors with cash and the ability to act quickly will be able to pick up assets well below replacement costs. Multifamily continues to be the most solid sector of the market. Capitalization rates are 6-8% and rent rates are expected to begin rising by mid year. Signs of recovery are evident across the region and opportunities exist for tenants and smart investors.

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

$ $ $

28.00 24.00 18.00

$ 37.00 $ 31.00 $ 27.00

$ 26.00 $ 23.00 $ 19.00

70.0% 15.0% 13.0%

$ $ $

25.00 17.00 14.00

$ 34.00 $ 26.00 $ 22.00

$ 27.00 $ 22.00 $ 17.00

55.0% 15.0% 15.0%

$ $ $

3.70 4.25 8.75

$ 5.10 $ 8.20 $ 15.00

$ 3.85 $ 4.70 $ 12.00

8.0% 10.0% 15.0%

Downtown Neighborhood Service Centers Sub Regional Centers Regional Malls

$ $ $ $

27.00 14.00 21.00 30.00

$ $ $ $

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ 6,000,000.00 $ 500,000.00 $ 275,000.00 $ 210,000.00 $ 650,000.00 $ 210,000.00

$15,000,000.00 $ 900,000.00 $ 510,000.00 $ 600,000.00 $ 2,700,000.00 $ 1,400,000.00

New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE $ 29.00 $ 20.00 $ 16.00

$ $ $

50.00 50.00 38.00

$ 42.00 $ 31.00 $ 26.00

N/A 20.0% 15.0%

8.00 N/A 23.00

9.00 N/A $ 12.00

12.0% N/A 18.0%

N/A 50.00 20.00 N/A

N/A $ 35.00 $ 19.00 N/A

N/A N/A N/A N/A

INDUSTRIAL

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

6.00 N/A 7.00

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

Downtown Neighborhood Service Centers Community Power Center Regional Malls

N/A $ 20.00 $ 16.00 N/A

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

The retail sector has been hit by the downturn in the economy. However, the overall vacancy hovers at 7%. Vacancy is expected to increase slightly during the first half of 2010 and then stabilize. Most vacancy is attributed to big box stores who have vacated their facilities. Some retailers are taking advantage of the favorable leasing conditions and expanding market share.

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

Bulk Warehouse Manufacturing High Tech/R&D

The Puget Sound industrial market has suffered due to decreased container traffic at the ports of Seattle and Tacoma. Home construction and related industries contribute to the total vacancy which averages over 8% in the region. Bright spots in demand have been growth in aerospace production and warehousing of consumer goods. Occupancy is expected to begin to increase early in 2010 starting in the huge Kent Valley market.

Seattle/Puget Sound At A Glance Low

DOWNTOWN OFFICE

New Construction (AAA) Class A (Prime) Class B (Secondary)

Regional Puget Sound office vacancy rates are at 13% and are expected to rise to over 20% during 2010. Downtown Seattle has 3.5 million SF of new product scheduled to hit the market in 2010. This fact alone will keep the rates depressed in Seattle, while downtown Bellevue will enjoy lower vacancy due to the dominating presence of Microsoft and little new spec product expected on the market.

$ $ $ $

$ $

N/A 300,000.00 200,000.00 100,000.00 300,000.00 N/A

High/Acre

$ $ $ $

N/A 5,000,000.00 500,000.00 400,000.00 5,000,000.00 N/A

65.00 32.00 38.00 90.00

42.00 23.00 27.00 39.00

8.1% 9.2% 5.0% 4.8%

2010 Global Market Report www.naiglobal.com 133

Spokane, Washington

Tri Cities, Washington

The most significant change in the Spokane market is the dramatic decrease in investment sales. Apartment building sales totaled $70 million in 2008 but 2009 sales are anticipated around $10 million. Apartment vacancy rates remain low at 5.58%, but the lack of available financing has greatly reduced activity in that sector. Additionally, there have been few sales of retail, office and industrial properties to investors. Those properties that have been sold have traded at capitalization rates from 9-11%.

Contact NAI Black +1 509 623 1000

Metropolitan Area Economic Overview 2009 Population

474,627

2014 Estimated Population

520,228

Employment Population

233,916

Household Average Income

$61,434

Median Household Income $47,298 Total Population Median Age

Spokane office leasing has remained steady with many major companies taking advantage of attractive rent and tenant improvement packages. The Principal Financial Group leased 35,000 SF in the Riverview Corporate Center at Sullivan Road, relocating from the Rock Pointe Corporate Center. Shell Energy relocated and expanded to the Wells Fargo Bank Building taking 10,000 SF, and Western States Insurance Company upgraded to 9,000 SF in the Riverpoint Office Building. The Spokane office market experienced an increase in vacancy from 10.94% in 2008 to 12.68% in 2009. Spokane's medical office market is one bright spot in the market. 2009 has seen a steady demand for office space by growing medical and dental specialist practices. This demand has generated new owner occupied medical office construction and a reduction in the medical office vacancy rate from 7.49% to 7.23%. National retailers have greatly reduced their plans for new store openings in the region. There has been some activity in the retail leasing market limited mostly to local retailers. The downtown CBD remains a vibrant shopping district with a slight decrease in retail sales. The industrial market has stabilized and become fairly active in the second half of 2009. Spokane's industrial vacancy increased slightly from 8.51% to 8.82% with rental rates remaining unchanged. With the lack of any new construction anticipated in the next year, vacancy rates should decrease with rents increasing in 2010. The overall economic climate in Spokane remains relatively stable. There will continue to be some distressed sellers in the market due to the economy, creating buying opportunities for owner users or investors with cash. Time will continue to stabilize and improve the overall commercial real estate market.

Spokane At A Glance (Rent/SF/YR)

Contact NAI Tri-Cities +1 509 943 5200

Metropolitan Area Economic Overview 2009 Population

234,721

2014 Estimated Population

248,878

Employment Population

89,082

Household Average Income

$64,124

Median Household Income $59,323 Total Population Median Age

High

Effective Avg.

Vacancy

Large commercial construction projects this year have been single facility projects such as the new headquarters for Gesa Credit Union. While interest in further development has been strong growth has been slow as a result of the challenges faced by contractors at loan origination. Therefore, much of the development this year has focused on tenant improvements and the filling of existing commercial properties. 2010 predictions are brighter as Cascade Natural Gas and Kennewick General Hospital anticipate breaking ground on their new facilities. Other growth, tied to local lending, appears to be positive for developers. With unemployment at 6% and home values currently up 8.9% over the past three years, 2010 looks strong.

High

Effective Avg.

N/A N/A 9.00

N/A N/A $ 12.00

N/A N/A $ 10.50

N/A N/A 10.%

$ $ $

18.00 18.00 12.00

$ 23.00 $ 23.00 $ 16.00

$ 20.50 $ 20.50 $ 14.00

5.0% 10.0% 5.0%

$ $ $

2.50 2.50 3.50

$ $ $

Downtown Neighborhood Service Centers Sub Regional Centers Regional Malls

$ $ $

8.00 12.00 15.00 N/A

Low/Acre

(Rent/SF/YR)

$ $

N/A 18.00 14.00

N/A $ 22.00 $ 17.50

N/A $ 18.94 $ 15.60

N/A 9.6% 19.2%

New Construction (AAA) Class A (Prime) Class B (Secondary)

Low

Vacancy

SUBURBAN OFFICE $ $

N/A 19.50 14.50

N/A $ 22.00 $ 17.50

N/A $ 20.00 $ 16.75

N/A 9.5% 8.9%

$ $ $

2.64 4.56 5.76

$ $ $

3.60 5.76 7.56

$ $ $

3.00 5.04 6.00

8.1% 8.9% 8.4%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

9.00 8.00 6.00 18.00

$ $ $ $

30.00 28.00 26.00 36.00

$ $ $ $

22.00 20.00 18.00 22.00

11.9% 9.1% 8.9% 8.2%

DEVELOPMENT LAND

Low/Acre

High/Acre

DEVELOPMENT LAND

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

$ 100.00 $ 500,000.00 $ 300,000.00 $ 900,000.00 $ 1,500,000.00 $ 250,000.00

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

On the down trend was demand for office and retail space as national chains and local businesses felt the crunch of the economic recession. Given this down trend rental rates for office space fell markedly while vacancy rates increased to 10% for Class B office space, the bulk of available office space in the region. Retail space also struggled with higher than normal vacancies, especially in newer neighborhood power centers.

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

In 2009 the medical industry topped the list of sectors in the Tri-Cities that remained strong. Contributing to the trend was Kadlec Regional Medical Center, which opened three 20,000 SF office buildings designed to house hospitalowned physician practices. Pacific Northwest National Lab followed the development trend with continued construction of 300,000 SF of additional lab and professional space at its north Richland campus. Manufacturing and warehouse property remained constant as well, although this was driven more by limited inventory rather than a response to a new insurgence of business.

Tri Cities At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

The Tri-Cities is located in southeastern Washington and is composed of Richland, Kennewick, Pasco and numerous surrounding rural communities. Easily accessible, the area is the service and occupational hub in the region. The economy is fueled by government contracted projects for environmental clean-up, scientific research and development, agriculture and healthcare.

New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Bulk Warehouse Manufacturing High Tech/R&D

3.00 3.00 6.00

2.75 2.75 4.75

5.0% 5.0% 3.0%

$ 9.00 $ 14.00 $ 17.50 N/A

15.0% 25.0% 10.0% N/A

RETAIL

65.00 300,000.00 175,000.00 100,000.00 400,000.00 75,000.00

$ $ $ $ $

N/A 175,000.00 30,000.00 150,000.00 218,000.00 25,000.00

$ 10.00 $ 16.00 $ 20.00 N/A

High/Acre

$ $ $ $ $

N/A 392,000.00 88,000.00 218,000.00 785,000.00 50,000.00

2010 Global Market Report www.naiglobal.com 134

Madison, Wisconsin

Milwaukee, Wisconsin

Historically, the state government and the University of Wisconsin-Madison have been the key drivers to the local economy and 2009 was no exception. These two economic drivers are the insulating factors that allow Madison’s economy to maintain a relatively stable outlook in spite of the national economic downturn. Madison was ranked the seventh best city in the country by Kiplinger’s Personal Finance in July 2009.

Transaction volume and aggregate value are down in all market sectors, further qualifying the fact that 2009 was the year of the smaller deal. As the nation’s economy slowly starts to rebound, there is no better time to be a tenant, assuming your business is relatively stable. Slowly is the key word as we enter 2010. Rental rates in the office market are down 20-25% and absorption is heavily negative with vacancy climbing to 18.5%. Tenants with lease expirations two to three years out can realize dramatic savings by systematically renegotiating their leases through blend and extend transactions.

The 2009 industrial vacancy rate was 6.1%, the same as 2008. The total industrial inventory includes 1,071 buildings that encompass almost 43.5 million SF. The average rental rate for industrial space is $4.51/SF NNN.

Contact NAI MLG Commercial +1 608 663 6000

Though downtown retail space remains in high demand, overall retail vacancy has risen to 8.2%. In an effort to improve leasing activity, owners of neighborhood/community centers are turning to non-traditional tenants and increasing up-front concessions. Development activity remains isolated, however Target continues to pursue a Hilldale Mall location on the site of a stalled Whole Foods project. Commercial investment capitalization rates have shifted from 7%-8% to 9%-11%. The multifamily rental market has increased capitalization rates from 6%-7% to 8%-9%. Developers are holding the line on commercial leasing, while others are decreasing asking rents and negatively impacting NOIs in the marketplace.

Metropolitan Area Economic Overview 2009 Population

579,515

2014 Estimated Population

638,538

Employment Population Household Average Income

450,515

$74,890

Median Household Income $61,780 Total Population Median Age

Hotel development continues and a proposed $109 million Edgewater Hotel is the largest redevelopment in years. The average hotel occupancy rate is 51.9% and the average nightly room rate is $85/night. Madison’s office market has been facing significant challenges. Overall vacancy rate is roughly 13.8%. Net absorption for Q3 2009 was a negative 765 SF. Gross asking lease rates average between $16.60 -$16.80/SF. Office building sales amounted to only seven transactions at the end of Q3 2009. The office, retail and industrial landlord’s ability to achieve a healthy occupancy level in an already over built market and developers’ ability to secure financing for key projects will both be significant factors in 2010.

Madison At A Glance High

Effective Avg.

Vacancy

$ 15.00 $ 12.00 $ 8.00

$ $ $

27.00 21.00 16.00

$ 20.00 $ 18.00 $ 12.00

7.9% 10.4% 20.9%

$ 11.00 $ 6.00 $ 8.00

$ $ $

16.00 17.00 14.95

$ 13.50 $ 12.00 $ 13.00

13.7% 13.0% 12.4%

$ $ $

2.90 3.50 3.50

$ $ $

5.50 7.44 13.00

$ $ $

3.84 4.25 5.46

7.6% 1.4% 11.8%

2,478,976

Employment Population

1,097,412

Household Average Income

$67,676

New retailers in the market included Erewhon, Dave & Buster’s and Gold’s Gym. Many local and regional grocers such as Pick ‘n Save, Sendik’s, and Woodman’s (250,000 SF) will continue to expand in 2010. Expect vacancies to increase and effective market rents to drop until the market levels out.

Median Household Income $58,700 38

(Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

$ 15.00 $ 9.00 $ 12.00 $ 15.00

$ $ $ $

40.00 18.00 32.00 50.00

$ $ $ $

20.00 12.00 15.00 30.00

N/A 9.7% 6.5% 2.5%

$ $

N/A 13.00 5.00

N/A $ 18.00 $ 11.00

N/A $ 15.00 $ 9.00

N/A 10.1% 22.0%

$ $

N/A 9.00 5.00

N/A $ 13.00 $ 11.00

N/A $ 11.50 $ 9.00

N/A 15.0% 18.0%

$ $ $

1.00 1.00 4.25

$ $ $

5.00 5.00 9.75

$ $ $

4.60 3.50 6.00

13.0% 5.7% 6.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ $ $ $

10.00 7.00 10.00 20.00

$ $ $ $

30.00 22.00 25.00 45.00

$ $ $ $

20.00 15.00 17.00 30.00

11.0% 15.0% 10.0% 3.0%

DEVELOPMENT LAND

Low/Acre

New Construction (AAA) Class A (Prime) Class B (Secondary) New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls

2014 Estimated Population

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

2,341,684

The retail market saw minimal growth in 2009. The three largest retail developments were the Shoppes on Sunset in Waukesha, anchored by Target and Pick 'n Save; a new Pick ‘n Save in Wauwatosa; and Prairie Ridge Shops in Pleasant Prairie, anchored by Target, JC Penny and Dick's Sporting Goods. Tertiary markets saw a slight increase in vacancy as retailers pulled back expansion, and slower sales caused some doors to close. Market rents dropped slightly as tenants gained power over landlords eager to fill vacant space.

DOWNTOWN OFFICE

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

2009 Population

Wisconsin lost large employers like General Motors and other large employers, like Harley Davidson, have drastically reduced their workforce. Cyclical effects are being felt by all sectors as a result.

Milwaukee At A Glance Low

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

Metropolitan Area Economic Overview

Total Population Median Age

(Rent/SF/YR)

Contact NAI MLG Commercial +1 262 797 9400 (Brookefield) +1 414 347 9400 (Milwaukee)

The industrial market has seen an increase in lease activity yet square footage requirements have decreased. Rental rates and vacancy rates in Milwaukee have remained relatively stable with landlords requiring at or near asking rates while giving concessions on tenant improvements or rent abatement. Larger transactions are stewing, but may not occur until Q1 2010. Many companies are towing-the-line to attain minimal profit.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $

711,700.00 217,800.00 29,900.00 N/A 323,000.00 N/A

High/Acre

$ 1,627,058.00 $ 820,670.00 $ 525,000.00 N/A $ 1,677,000.00 N/A

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $

N/A 100,000.00 40,000.00 20,000.00 100,000.00 N/A

High/Acre

$ $ $ $

N/A 250,000.00 250,000.00 175,000.00 200,000.00 N/A

2010 Global Market Report www.naiglobal.com 135

Northeastern (Fox Valley/Green Bay), Wisconsin

Casper, Wyoming

Northeastern Wisconsin felt the effect of the economic downturn in mid-2008 and through all of 2009, but the market can best be characterized as stable going into 2010. The office and retail sectors experienced little change in vacancy rates in 2009. Overall vacancy for industrial is 1518%

Contact NAI MLG Commercial +1 920 997 9990

Metropolitan Area Economic Overview 2009 Population

1,099,581

2014 Estimated Population

1,106,993

Employment Population Household Average Income

The office, industrial and retail sectors have all experienced reduced rental rates on leases as landlords have been receptive to downward adjustments in rents in return for locking in credit-worthy tenants for longer terms. It is widely felt that companies appear to be past the large job reductions and plant closings that began in 2008, and recent economic indicators have renewed hope that the performance of companies is improving and plans for expansion that had been placed on hold may soon move forward again. Employers and their lenders are cautiously moving into a period of hopeful stability. With many landlords concerned about their debt maturities and loan-to-value ratios, the traditional thinking of maintaining building valuations has been thrown out the window. Many building valuations are upside down. As a result, landlords will not be able to sell their buildings for a profit for quite some time. As a result, landlords are seeking to firm up their cash flow to service debt and pay returns. Municipalities continue to hold off on expansion of industrial land holdings, as the current supply of existing sites appears to be more than adequate to meet demand over the next several years. Hence, vacancy rates are expected to remain stable with no speculative development under way or planned.

Casper has the amenities of a metro area with the convenience and accessibility of a smaller community. With 75,000 people in Natrona County, the Casper area is the largest MSA in Wyoming and supports a vibrant economy. Casper cradles a broad industry base built around natural resources and expanding to manufacturers who desire low overhead with a central western presence. Industrial space rents range from $5 to $12/SF gross and there is supply of about 4 million SF of rentable area and a vacancy rate of less than 5%. Office rents are $10 to $20/SF gross with a supply of about 2 million SF and a vacancy rate of around 10%. Retail space is priced from $12-$25/SF gross with a supply of about 2.25 million SF and a vacancy rate of 12% due to a couple of recent big box vacancies (Office Depot and Rex's). Contact NAI Luker +1 307 265 8000

Metropolitan Area Economic Overview 2009 Population

73,475

2014 Estimated Population

78,171

310,990

Employment Population

44,612

$60,479

Household Average Income

$71,361

Overall, transactions in 2009 were down throughout all market sectors, both on the number of transactions and transaction value. Vacancy rates are expected to remain stable and may even be reduced as we enter 2010.

Median Household Income $55,755

Median Household Income $46,558

Total Population Median Age

Northeastern (Fox Valley/Green Bay), Wisconsin At A Glance (Rent/SF/YR)

Low

High

Effective Avg.

N/A 18.00 13.50

N/A $ 17.00 $ 13.00

N/A 15.0% 20.0%

N/A $ 16.00 $ 12.50 N/A $ 12.00 $ 10.00

$ $

N/A 16.00 12.00

N/A $ 14.00 $ 11.00

N/A 15.0% 20.0%

$ $ $

2.00 2.80 5.00

$ $ $

2.50 5.00 6.50

$ $ $

2.30 3.90 5.60

20.0% 8.0% 14.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 8.00 $ 12.00 $ 12.00 $ 25.00

$ $ $ $

15.00 15.00 19.00 55.00

$ $ $ $

11.50 13.50 15.00 35.00

15.0% 15.0% 15.0% 10.0%

DEVELOPMENT LAND

Low/Acre

SUBURBAN OFFICE

Low

High

Effective Avg.

$ 18.00 $ 15.00 $ 10.00

$ $ $

20.00 20.00 15.00

$ 19.00 $ 17.50 $ 12.50

5.0% 10.0% 12.0%

$ 16.00 $ 15.00 $ 8.00

$ $ $

19.00 18.00 14.00

$ 18.00 $ 17.00 $ 10.00

7.0% 5.0% 9.0%

$ $ $

3.00 4.00 6.00

$ $ $

8.00 10.00 12.00

$ $ $

5.00 7.00 9.00

4.0% 4.0% 3.0%

Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 12.00 $ 10.00 $ 12.00 $ 6.00

$ $ $ $

16.00 16.00 18.00 20.00

$ $ $ $

14.00 12.00 15.00 13.00

8.0% 6.0% 12.0% 8.0%

DEVELOPMENT LAND

Low/Acre

High/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

$ $ $ $ $ $

(Rent/SF/YR)

Vacancy

New Construction (AAA) Class A (Prime) Class B (Secondary) New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL

RETAIL

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

SUBURBAN OFFICE

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

Casperâ&#x20AC;&#x2122;s location facilitates access to worldwide markets through Wyomingâ&#x20AC;&#x2122;s only international airport, routes along I-25 and rail routes. Casper is a regional medical, finance and retail hub with a trade area encompassing central Wyoming. Companies are opening new facilities, while established industries expand, creating jobs, infusing capital and solidifying investment.

DOWNTOWN OFFICE $ $

New Construction (AAA) Class A (Prime) Class B (Secondary)

A 700-acre development is currently under way with rail spur access through Burlington Northern and in close proximity to Natrona County International Airport, which is ideal for manufacturing and distribution. Drilling and oil service companies have continued showing strong demand in the region.

Northeastern (Fox Valley/Green Bay), Wisconsin At A Glance Vacancy

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

There has been heavy retail and office development on the east side of Casper, including a 600,000 SF regional mall, a Wal-Mart super center (there is also a newer west side Wal-Mart super center), Home Depot, Menards, five national hotels, car dealers, and 500,000 SF of office/medical campuses. Continued industrial demand has driven development to the north and west.

Bulk Warehouse Manufacturing High Tech/R&D

RETAIL

$ $ $ $ $

N/A 85,000.00 25,000.00 50,000.00 140,000.00 35,000.00

High/Acre

$ $ $ $ $

N/A 140,000.00 50,000.00 90,000.00 1,500,000.00 50,000.00

250,000.00 140,000.00 65,000.00 40,000.00 300,000.00 100,000.00

350,000.00 200,000.00 150,000.00 100,000.00 900,000.00 300,000.00

2010 Global Market Report www.naiglobal.com 136

Jackson Hole, Wyoming Jackson, Wyoming, sits at 6,200 feet above sea level in Teton County. The unique natural beauty of this area has made it a world famous tourist destination and resort area with thriving retail shops, art galleries and a vibrant night life to complement the numerous outdoor activities. Jackson is ranked amongst the top resort towns in the nation. Jackson is the county seat of Teton County and the only incorporated municipality in the region. Of the 2.7 million acres in Teton County, 97% are federally or state owned and managed. The remaining 3% consist of already developed land and permanently deeded conservation easements, leaving available land scarce.

Contact NAI Jackson Hole +1 307 734 8700

Metropolitan Area Economic Overview 2009 Population

29,907

2014 Estimated Population

33,945

Employment Population

15,094

Household Average Income

$101,106

The headwaters of the Snake River are located in Teton County. In addition to world class fly fishing, the river offers stretches for adventurous white water rafting as well as a relaxing, scenic float. The three ski resorts in the county, Jackson Hole Mountain Resort, Grand Targhee Resort and Snow King Resort, delight visitors and residents alike. Wyoming public schools are well-funded and residents enjoy excellent amenities. Wyomingâ&#x20AC;&#x2122;s tax structure is one of the most business-friendly in the nation, with no personal income tax, no corporate income tax, no gross receipts tax, no chain store tax, no excise taxes and low property taxes. Wyoming is a freeport state which allows for a relatively uninhibited flow of goods through the state to destinations across the US and from Canada to Mexico. US energy independence depends heavily on western Wyoming. The area is the focus of extensive exploration and oil field development and has one of the largest natural gas reserves in the world. The world's largest known supply of oil shale is the Green River deposit in Southwestern Wyoming. Wyoming also has the nation's largest supply of coal, and is one of the top four states in green job growth, including wind technology.

Median Household Income $61,653 Total Population Median Age

37.8

Jackson Hole At A Glance (Rent/SF/YR)

Low

High

Effective Avg.

Vacancy

$ 25.00 $ 30.00 $ 15.00

$ $ $

25.00 35.00 19.00

$ 25.00 $ 32.50 $ 17.00

N/A N/A N/A

$ 20.00 $ 20.00 $ 17.00

$ $ $

20.00 25.00 22.00

$ 20.00 $ 22.50 $ 19.75

N/A N/A N/A

32.00 N/A N/A N/A

$ 28.50 N/A N/A N/A

N/A N/A N/A N/A

DOWNTOWN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

SUBURBAN OFFICE New Construction (AAA) Class A (Prime) Class B (Secondary)

INDUSTRIAL Bulk Warehouse Manufacturing High Tech/R&D

N/A N/A N/A

RETAIL Downtown Neighborhood Service Centers Community Power Center Regional Malls

$ 25.00 N/A N/A N/A

DEVELOPMENT LAND

Low/Acre

Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential

N/A N/A N/A $ 3,000,000.00 $ 3,500,000.00 $ 3,000,000.00

High/Acre

$ $ $

N/A N/A N/A 6,000,000.00 9,500,000.00 3,000,000.00

2010 Global Market Report www.naiglobal.com 137

Glossary

Acre

Area of land equal to 43,560 SF (4,047 M2).

Bulk Warehouse (Warehouse) All modern distribution facilities 25,000 SF (2,500 M2) or greater. Quoted annual rate, net basis.

CBD (City Centre) The central business district is a market’s primary concentration of business activity, much like a traditional downtown.

Class “A” Office (Prime) Excellent location (5,000 SF or 500 M2), highquality tenants, high-quality finish, excellently maintained; usually new, or old buildings that are competitive with new construction.

Class “B” Office (Secondary) Good location (5,000 SF or 500 M2), fairly highquality construction and tenants. Buildings with only minimal deterioration or obsolescence.

Community Power Centers (Big Box) Retail centers over 250,000 SF – 600,000 SF (25,000 M2 - 56,000 M2), which include one or more “category killers”, life-style centers and outlet centers.

Development Land Prices Based on land sales recorded between October 2006 and October 2007. The guide quotes the rate paid for land with available utilities and zoning in place for the use noted.

Downtown Office (City Centre) Sites in the market’s central business district.

Downtown Retail (City Centre) Any prime ground floor retail space in the market’s central business district, excluding space in enclosed malls. United Kingdom and Ireland presented on Zone A Basis.

Education Index The Education Index was calculated by dividing the number of people with a college degree and some college education by the total population in that Market and by then dividing that quotient by the same figure for the United States. Data provided by SRC, LLC.

Effective Average Rent Net present value rate taking concessions, such as free rent and escalations into account.

Full Service Basis Indicates that the landlord pays all expenses.

Government Index The Government Index was calculated by dividing an estimate of total government services employment by total nonagricultural employment for a Market. This quotient was then divided by the same data for the United States. Data provided by SRC, LLC.

Health Services Index The Health Services Index was calculated by dividing an estimate of total health services employment by total non-agricultural employment for a Market. This quotient was then divided by the same data for the United States. Data provided by SRC, LLC.

High Tech/R&D (Flex) Modern buildings with space dedicated to research/product development, or buildings in industrial settings with high percentage of office/showroom style finish.

GLA Gross leasable area.

GSA General Services Administration, the US Government’s property procurement agency.

Hectare Area of land equal to 2.47 acres.

Highway/Commercial Land Refers to any commercially zoned land that has frontage along, and access to, a major state or interstate highway.

Income Index The Income Index was calculated by dividing per capita income in a Market by the average national per capita income. Data provided by SRC, LLC.

Industrial Rents This report quotes the annual rate on a net basis.

Manufacturing Space All facilities of 25,000 SF (2,500 M2) or greater used in the production or development of goods.

Neighborhood Service Centers (Retail Units on Parks) Retail centers ranging in size from 75,000 to 250,000 SF (7,500 M2 to 25,000 M2), anchored by foot and/or drug stores providing general services to the local market—including pad sites. United Kingdom and Ireland presented on Zone A Basis.

Net Basis Indicates the tenant pays for most of the operating costs such as utilities, maintenance, repairs and cleaning.

Office Index The Office Index was calculated by dividing an estimate of office employment by total non-agricultural employment for a Market. This quotient was then divided by the same data for the United States. Data provided by SRC, LLC.

Population Growth Index The Population Growth Index was calculated by dividing the projected five year population growth rate for the Market by the same projected value for the United States. Data pro vided by SRC, LLC.

Regional Mall (Regional Shopping Centres) Suburban or downtown properties over 600,000 SF (60,000 M2) with at least two major department store anchor tenants.

Retail Rents This report quotes the annual rate on a full-service basis. Europe quoted as annual rates, net basis.

Retail Services Index The Retail Services Index was calculated by dividing an estimate of total retail services employment by total non-agricultural employment for a Market. This quotient was then divided by the same data for the United States. Data provided by SRC, LLC.

S.F.; s.f. Square foot or square feet, depending on the reference. 1 square foot = 0.093 M2.

S.M.; sm; M2 Square meter. 1 S.M. = 10.764 square feet.

Solus Food Stores Stand-alone large supermarkets or hypermarkets from 50,000 SF (5,000 M2) and up. Quoted as annual rates, net basis.

Suburban Office Stand-alone buildings and business parks not within the metro city limits.

Vacancy Rate The percentage of market space being directly offered by the landlord or properties for lease and the amount of sublease space being offered by tenants. In cases where the space is under lease but not occupied, count it as part of the vacancy.

Wholesale Index The Wholesale Index was calculated by dividing an estimate of wholesale employment by total non-agricultural employment for a Market. This quotient was then divided by the same data for the United States. Data provided by SRC, LLC.

Zone A The area at the front of the shop at pedestrian level. It is usually 6.1 meters deep, this measurement equating 20 feet. In a very limited number of locations, Zone A can be 30 feet deep (9.1 meters.)

Office Rents This report quotes the annual rate as full-service basis. Europe quoted as annual rates, net basis.

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