C&W NYCMG Market Overview - Second Quarter 2009 With Addenda

MARKET OVERVIEW
Second Quarter 2009

22
Table of Contents
■ Executive Summary
MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP
– Economic Overview
– NY Capital Markets
– NY Office Leasing
– NY Residential
■ Addenda
– Economic Overview
– NY Capital Markets
– NY Office Leasing
– NY Residential
33
Economic Overview - National
Executive Summary
■ 9.5% unemployment rate highest since 1984; projected to reach 10% by year-end

■ TALF and CMBS Public-Private Investment Program underway to help unfreeze commercial
loan market – market impact TBD
■ A record high 5.5% of outstanding CMBS loans in special servicing
■ Unprecedented loan maturities during next five years
■ 2008 real estate investment activity down 82% versus 2007; 2009 running 86% below 2008
■ REIT prices down 60%+ from 2007 peak
* Additional data can be found in the addenda (Slides 32-46).

44
Civilian Unemployment Rate
10.8%

10% 9.5%
9.0%
7.9% 7.4% 7.8% 7.8%

8%
6.9%
5.9% 5.9% 6.3%

6% `
4%
2%
1949 1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004 2009
Recessions Unemployment Rate
6/09 unemployment rate at 9.5% is highest in 25 years.

Two-thirds of jobs lost have occurred since 3Q08.
Source: Bureau of Labor Statistics

55
US Historical Investment Volume (Billions), 2001-2009 YTD
$600

$512
$500
$128
$400 $352
$303
$ Billions
$29
$137
$300 $9 $66
$62
$204
$3 $144
$200
$43
$123 $0.2
$102
$79 $23 $232 $256 $247 $34
$100 $22
$15 $158
$100 $110 $13
$63 $79
$0
2001 2002 2003 2004 2005 2006 2007 2008 2009YTD*
Individual Asset Sales Portfolio (Non-privatization) Privatizations
2008 US investment volume down 63% versus prior 3 year average;

down 72% versus 2007. 2Q09 annualized $31 billion; lowest this decade.
* As of May 31, 2009, except for Hotel as of March 2009.

Source: Real Capital Analytics, Cushman & Wakefield Capital Markets Group
66
Total Commercial Mortgage Maturities

$350 BN
$300 BN
$250 BN
$200 BN
$150 BN
$100 BN
$50 BN
$0 BN
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
CMBS Non-CMBS
Total commercial mortgage maturities from 2009 – 2013

estimated at $1.4 trillion or almost $300 billion per annum.
Source: Mortgage Bankers Association, Trepp, Foresight Analytics, UBS Investment Research
77
CMBS Loan Maturities
$ Billions
$160

CMBS Other *
$140
CMBS Floating Rate
$120 CMBS Fixed-rate Conduit
$100
$80
$60
$40
$20
$0
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
$265 billion matures from 2009 to 2012; $371 billion matures from 2015 to 2017.
2Q09 CMBS in special servicing up 170% from 4Q08; $14.3 billion to $39.9 billion.
* CMBS Other represents private deals, not publicly tracked, etc.

Source: Mortgage Bankers Association, Realpoint
88
CMBS Loans on Watchlist
Loan Balance
(Millions)

$60,000
24.0%
$50,000 23.6%
$40,000
$30,000
12.2%
$20,000
11.6%
$10,000 8.7%
6.7% 6.9% 7.1%
1.0%
$0
2000 2001 2002 2003 2004 2005 2006 2007 2008
CMBS Origination Year

Note: % is percentage of each year’s total issuance on watchlist.
CMBS Loan Balance on Watchlist
16% all CMBS loans issued since 2000, or $153 billion, on watchlist.
Source: Bloomberg
99
Current Implied Public Market Pricing
Implied Nominal Cap Rates

Nominal Cap Nominal Cap Nominal Cap Nominal Cap Nominal Cap
Rates for NAV Rates for NAV Rates for NAV Rates for NAV Rates for NAV
Peak: 5.2 Peak: 6.2 Peak: 5.4 Peak: 6.1 Peak: 6.2
Current: 9.0 Current: 8.8 Current: 7.6 Current: 8.6 Current: 9.3
’99-’08 Avg: 7.8 ’99-’08 Avg: 7.9 ’99-’08 Avg: 7.4 ’99-’08 Avg: 7.6 ’99-’08 Avg: 8.2
’99-’05 Avg: 8.7 ’99-’05 Avg: 8.6 ’99-’05 Avg: 8.2 ’99-’05 Avg: 8.3 ’99-’05 Avg: 8.8
%
12
10 9.1
8.5 8.5 8.6
8 7.5
5.5 5.8
6 5.2 5.3
4.9
0
Office Industrial Apartment Mall Strip Center
Peak Current
Current cap rates generally in-line with historic levels.
Source: Green Street Advisors

10
10
Economic Overview - New York
NYC Employment,1988-2010
June 2009
18% Vacancy 12% Vacancy 10.5% Vacancy
$30 PSF Rents $44 PSF Rents $60 PSF Rents
150,000 Jobs Lost 140,000 Jobs Lost 117,000 Jobs Lost (thru 6/09)

3,900
3,800
3,700 Projected total

Thousands of Persons
job loss: 250,000

3,600 4Q 2010 Vacancy
Projection: 15%
3,500
3,400
3,300
3,200
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
National Recessions NYC Em ploym ent NYC Employment Projection
U.S. unemployment at 9.5%; New York City at 9.3%.
* As per New York City OMB 2009 projections.

Source: Cushman & Wakefield Research
11
11
Economic Trends & Forecast
U.S. Payroll Employment Compared with NYC
US job loss since

December 2007: NYC

National
-6.5 million (-4.7%)

3,800
135,000
3,700
130,000
3,600
Thousands of Persons
125,000
120,000
3,500
NYC job loss since

115,000
August 2008:
-117,400 (-3.0%) 3,400
110,000
3,300
105,000
100,000 3,200
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
National Recessions NYC Employment National Employment
Source: US Bureau of Labor Statistics

12
12
NYC Potential Job Loss Impact on Vacancy
18.0%
17.0% Office Using Jobs Lost 17.0%

16.0% Historical
+40,000*
15.0%
+65,000* 14.3%
14.0% +125,000*
13.2%
13.0%
Vacancy Rate
12.0%
11.0%
10.0%
9.0%
8.0%
7.0%
6.0%
5.0%
2002 2003 2004 2005 2006 2007 2008 2009 2010
60,000 office using jobs lost since the start of the recession,
approximately 50% of NYC total job loss.
* Additional job loss from July 1, 2009

13
13
Economic Overview – New York
New Office Building Construction, By Decade
Average = 58.6 MSF per decade
70.0 65.3

60.0 270 Park Ave - 1,132,460

1285 Aven of the Ame - 1,473,950 54.6 55.9
643 West 43rd St - 1,128,000
S q u a r e F e e t (m illio n s )
1 Chase Manhattan Plz - 1,898,158
50.0 153 East 53rd St - 1,492,860 237 Park Ave - 1,142,196

399 Park Ave - 1,250,000
1166 Ave of the Ame - 1,430,000 55 East 52nd St - 1,050,000
60 Broad St - 1,014,041
1211 Ave of the Ame - 1,734,105 101 Park Ave - 1,137,000
200 Park Ave - 2,254,274
1 Bankers Trust Plz - 1,363,334 590 Madison Ave - 1,016,413
40.0
1290 Ave of the Ame - 1,987,328
277 Park Ave - 1,529,945
1633 Broadway - 2,240,000 335 Madison Ave - 1,046,984 Average = 15.0 MSF per decade
1 Penn Plz - 2,072,136 85 Broad St - 1,040,000
1301 Ave of the Ame - 1,764,411
1 Liberty Plz - 2,121,437 101 Barclay St - 1,140,000
59 Maiden Ln - 1,043,007
Inventory reduced 25 MSF due to
30.0
55 Water St - 3,600,000 787 Seventh Ave - 1,429,610
245 Park Ave - 1,611,046
26 Federal Plz - 1,109,969
9 West 57th St - 1,500,000 1 WFC - 1,461,365 World Trade Center (15 MSF) and
140 Broadway - 1,200,000
1114 Ave of the Ame - 1,310,000 3 WFC - 2,300,000
residential conversion (10 MSF)
1185 Ave of the Ame - 1,000,000 4 WFC - 1,600,000
17.6
20.0
909 Third Ave - 1,125,000
1221 Ave of the Ame - 2,200,000 2 WFC - 2,200,000
767 Fifth Ave - 1,637,379
1251 Ave of the Ame - 1,893,652 7 WTC - 1,855,000
1345 Ave of the Ame - 1,640,000
1515 Broadway - 1,417,450 Financial Sqr - 1,000,301
12.5 383 Madison Ave - 1,200,000
745 Seventh Ave - 1,036,741
2 Penn Plz - 1,500,000
825 Eighth Ave - 1,550,212 5 Times Square - 1,062,203
10.0
1 WTC - 3,958,091
1 NY Plz -2,103,750 Columbus Center - 1,016,000
2 WTC - 3,958,091 388 Greenwich St - 1,600,000 1585 Broadway - 1,220,732 300 Madison Ave - 1,200,000
345 Park Ave - 1,600,519
60 Wall St - 1,587,849 4 Times Square - 1,477,631 7 Times Square - 1,000,000
2 NY Plz - 1,345,919
450 West 33rd St - 1,500,000 7 WTC - 1,700,000
1101 Ave of the Ame - 2,100,000
0.0
620 Eighth Ave - 1,500,000
1960s 1970s 1980s 1990s 2000s

Net addition to supply over last 20 years = 6.5 MSF.
Long term, NYC faces space supply shortage.
Note: New buildings identified > 1,000,000 SF; total construction SF includes all new office buildings above 100,000 SF.
14
14
NY Capital Markets
Manhattan Overview
■ 2009 YTD sales volume down 95% from 2007 peak; down 90% from 2004-2008 average

■ Sharp sales volume decline due to:

– Real estate debt illiquidity
– Lack of available product
– Declining fundamental and lack of completed transactions
■ Declining fundamentals, lack of financing and increased yield requirements have caused
values to fall as much as 60%+
■ Only two Midtown Class A office transactions closed in 2009, accounting for 38% of sales
volume YTD
– 1540 Broadway – sale price represents a 6% cap on in-place income and an 8% cap on
stabilized income
– World Wide Plaza – $315 PSF price reportedly includes projected leasing costs
■ The sales of the former Macklowe/EOP properties reflect an estimated value decline (from
1/07 prices) of 30% for those properties sold in 2008, and 65% for those properties sold in
2009

15
15
NY Capital Markets
Manhattan Annual Investment Sales Activity
Sales Activity
(Billions) Price PSF
(1)

$941
$55.0 $1,000
$875
$50.0 $900
$45.0 $749 $800
$40.0 $700
$35.0
$549 $600
$30.0 $475
$421
$443 $434 $500
$25.0
$336 $308
$340
(2) $400
$20.0 $392
$253
$15.0 $300
$10.0 $200
$5.0 $100
$1.8B
$0.0 $0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2Q09
# of Deals 128 173 155 111 78 58 83 165 170 259 346 191 28
Total Midtown and Midtown South Downtown Weighted Average Midtown Class A Office Price PSF
2Q09 closed and under contract $2.5B.
(1) 2008 Average price PSF excluding GM Building: $832 PSF

(2) Based on the only Class A sale through 2Q09: 1540 Broadway
Source: Cushman & Wakefield Capital Markets Group
16
16
Investment Sales by Investor Profile
Based on 2006 Total Sales of Based on 2007 Total Sales of
$34.8 Billion $48.5 Billion
Corporate / User Corporate / User
Other Other
1% 1%
2% Pension Fund 3%

Pension Fund
4%
10%
REIT REIT
19% 18%
Foreign
Foreign 13%
13%
Private Capital
Private Capital 56%
55%
Based on 2008 Total Sales of Based on 2Q09 Total Sales of

$19.8 Billion $1.8 Billion (Closed)
Corporate / User Other Foreign
6% 1% REIT Corporate / User 5%
Pension Fund 11%
25%
10%
Private
Capital
Foreign
37%
39%
Private Capital
33% Pension
Fund
33%
Source: Cushman & Wakefield CMG

17
17
NY Capital Markets
Midtown Class A Cap Rates - Weighted Overall Cap Rates,
1999 – 2Q09

Cap Rate
10.00% 10.00%
9.00% 9.00%
7.91%
8.00% 7.58% 8.00%
7.30% 7.34%
7.00% 6.34% 7.00%
6.00%
6.00% 6.00%
4.93%
5.00% 4.64% 4.45% 5.00%
4.04%
4.00% 3.55% 4.00%
3.00% 3.00%
2.00% 2.00%
1.00% 1.00%
0.00% 0.00%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2Q09*
*1540 Broadway transaction at approximately 6% cap on in-place NOI (22% vacancy).

18
18
Manhattan Notable 2009 Sales
Status / Address Type / Size Sale Price Seller / Buyer Comments
Under Contract Office $110,000,000 AIG, Inc. AIG will vacate in December 2010.

Mixed use development planned.
70 Pine Street 1,243,624 $88 PSF Young Woo and Kumho

(AIG) Investment Bank
Closed 7/09 Office $605,000,000 Deutsche Bank Price reportedly includes projected
leasing costs; 40% vacant.
Approximately $470 million seller
825 Eighth Avenue 1,919,000 SF $315 PSF George Comfort & Sons,
financing.
(World Wide Plaza) Longview Capital and
DRA Advisors
Closed 1Q09 Condo Unit $355,000,000 Deutsche Bank Sale of the office condominium
portion of the property. 78% leased
at time of sale; price represents a
1540 Broadway 905,533 SF $392 PSF CBRE Investors
6% cap on in-place income. Part of
the 2007 EOP/Macklowe portfolio
transaction.
Closed 1Q09 Condo Unit $225,000,000 New York Times New York Times entered into a 10-
year sale-leaseback transaction for
21 floors or 58% of the building. Sale
620 Eighth Avenue 750,000 SF $300 PSF W.P. Carey & Co.
price represents an 11% coupon.
(New York Times Building)
New York Times has an option to
purchase the property at end of
lease at set price.
19
19
NY Office Leasing Market
Overview
Manhattan

■ Leasing statistics through 3Q08 lagged downturn; showing impact 4Q08 - 2Q09
■ Vacancy 10.5% vs. the low of 5.3% in 2Q07; may reach 15% over next year
■ Midtown Class A net effective rents down 48% from peak
■ Midtown Class A vacancy 12.7%; availability 14.2%
■ Tenants seeking short-term extensions or blend-and-extend; more tenants focusing on

potential long-term opportunities to lock in low net effective rents
■ Leasing velocity picking up – more upcoming expirations, and tenants taking advantage of
the market

20
20
Overall Vacancy Rates
Direct Total Total
Inventory Vacancy Vacancy(1) Availability(2) Rent
Midtown 240,433,464 sf 8.3% 11.7% 12.8% $66.82

21.0%

Midtown South 64,504,640 sf 6.7% 8.7% 9.3% $49.55
Downtown 87,656,973 sf 6.4% 8.7% 9.6% $43.81

19.0%
Manhattan 392,595,077 sf 7.6% 10.5% 11.5% $60.23
17.0%
15.0%
13.0%
11.0%
9.0%
Equilibrium 7-9%
7.0%
5.0%
3.0%
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2Q09
Recessions Manhattan MT MTS DT
1) Total Vacancy is defined as available space that is currently vacant or will be vacant within 6 months.
2) Total Availability is defined as available space that is currently vacant or will be vacant within 12 months.

21
21
Overall Average Asking Rental Rates
$100.00 2Q09 Overall Asking Rents

$90.00 Manhattan $60.23

MT $66.82
MTS $49.55
$80.00 DT $43.81
$70.00
$60.00
$/sf
$50.00
$40.00
$30.00
$20.00
$10.00
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2Q09
Recessions Manhattan MT MTS DT
Asking rents down 21% in Midtown and 14% in Downtown compared to 3Q08.

22
22
Midtown Office Market | Class A Asking Rental Rates
Direct rent vs. Sublease

$95.00
Average Gap (1995-2008): $5.40
Current Gap: $17.68
$85.00
$75.00 $76.99
$65.00
$/SF
$59.31
$55.00
$45.00
$35.00
$25.00
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Midtown Direct Midtown Sublease
Midtown direct and sublease asking rent spread at $17.68 per square foot,
approximately 23% delta, highest since 1996.

23
23
Midtown Class A Rents | Asking Vs. Net Effective

$90.00
$92.30
$92.59
$86.40
$80.00
$80.42
$78.75
$79.13
$70.00
$71.58
$/SF
$63.89
$63.32
$60.00
$46.15
$50.00
$40.00
2Q08 3Q08 4Q08 1Q09 2Q09
Midtown Asking Midtown Net Effective
2Q09 Net effective rents 35.5% less than asking rents.

2Q09 Asking rents down 22.4% versus 2Q08.

24
24
2003-2005 Recovery | Asking Vs. Net Effective Rents
Manhattan Overall Rents

$45
$43
$43.29
$42.48
$41.97
$41
$41.35
$41.12
$40.80
$40.58
$40.53
$40.54
$40.51
$40.39
$40.28
$40.06
$39.94
$39
$39.53
$38.11
$37
$37.79
$37.00
$/SF
$35
$33
$33.71
$33.68
$33.37
$32.57
$32.26
$31
$29
$29.79
$27
$25
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05
Net Effective Rent Asking Rent
In 2003-2005 recovery asking rents remained stagnant while net effective rents
grew significantly as concessions declined. Rent spikes followed.

25
25
Midtown Class A Forecast
$90 16%

$85
$86.40
14%
$83.40
$80
$75
12%
$70
$71.40
$71.56
$/SF per Year
$67.90
$65
$66.85
$66.25
10%
$60
Vacancy
$55 8%
$50
$45 6%
$40
4%
$35
$30 2%
$25
$20 0%
19
19
19
19
19
20
20
20
20
20
20
20
20
20
20
20
20
20
20
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
Asking Rents Vacancy Rate
Vacancy is expected to peak in 2009 and asking rents

projected to bottom in 2010 as vacancy turns the corner.

26
26
NY Residential Market
Manhattan Overview
■ Manhattan residential fundamentals weakening, but not as dramatically as the office

sector
■ Condominium market hit hard as debt market dries up

– Since its peak in 1Q08, average pricing per unit dropped 22.6%;
Luxury Sector witnessed a 37.9% decrease in average unit pricing
– Annualized sales volume down 44.5% since year ending 2008
■ Projected 2009 permits down 87% from 2008 peak
■ Peak to trough condo pricing estimated to drop 35% to 45%
■ Peak to trough rental rates estimated to drop 20% - 30%

27
27
Manhattan Residential Condo Sale Prices, 1998 – 2Q09
$ Per Unit $ PSF

$2,000,000 $1,600
$1,800,000
$1,400
$1,600,000
$1,200
$1,400,000
$1,000
$1,200,000
$1,000,000 $800
$800,000
$600
$600,000
$400
$400,000
$200
$200,000
$0 $0
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Average Unit Price Average Price Per Square Foot
Average unit pricing has dropped 16.0% since the prior quarter
and a total of 22.6% since 1Q08 peak.
Source: Miller Samuel, Inc.

28
28
Manhattan Residential Co-Op Sale Prices, 1998 – 2Q09

$ Per Unit $ PSF
$1,600,000 $1,400
$1,400,000 $1,200
$1,200,000
$1,000
$1,000,000
$800
$800,000
$600
$600,000
$400
$400,000
$200,000 $200
$0 $0
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Average Co-Op unit pricing has dropped 10.4% since the prior
quarter and a total of 23.3% since 1Q08 peak.

29
29
Manhattan Luxury Residential Condo and Co-op Sale Prices,
1998 – 2Q09

$ Per Unit $ PSF

$8,000,000 $3,000
$7,000,000
$2,500
$6,000,000
$2,000
$5,000,000
$4,000,000 $1,500
$3,000,000
$1,000
$2,000,000
$500
$1,000,000
$0 $0
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Luxury unit pricing down 39.0% and sales volume down 27.5% since 1Q09.
Note: Luxury market accounts for top 10% of all Condo and Co-op Sales
30
30
Manhattan Residential Overview
Yearly Volume of Condominium & Co-Op Sales
16,000

14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Q209
Condos Co-ops
Annualized 2009 sales volume of Manhattan condominium and co-op units down 47% since 2008.

31
31
Residential Unit Permits Issued for New York City
40,000

35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
*Est. 2009
Estimated 2009 issued permits have dropped by 87% from 2008.
421a program influenced peak issuance in 2008.
* Annualized based upon first five months of 2009.
Source: U.S. Department of Housing and Urban Development

ADDENDA:
ECONOMIC OVERVIEW
33
33
US Banks
Rapidly Shrinking Banking Industry
US Banks Non-US Banks
Market caps ($bn) Market caps ($bn)
Bank of America

Mar. 1, 2007 Mar. 1, 2007
Government stake*
$45bn Deutsche Bank
July 10, 2009*** Government stake:
July 10, 2009
None
225.3
JP Morgan Chase
Government stake*
$25bn
75.1 67.8 HSBC
170.9 200.5 Government stake:
None
124.8 38.4 96.0
33.6
Goldman Sachs 72.3 UBS
Government stake* 14.4 Swiss government stake:
82
123.9
$10bn 49.4 $5.3bn
.1
96.3
* US government
investments are in
250.4 preference shares and
BNP Paribas
French government stake: are non-comparable to
$3.9bn ordinary shares
Potential value of
hybrid planned ** Total value of
Citigroup outstanding shares
Government stake*
$52bn
*** Market caps at
6pm GMT July 10, 2009
Sources: Thomson Reuters, Atlantic Equities; companies
34
34
U.S. Commercial Real Estate Debt Markets, $3.5 Trillion
REIT's

1.1%
Commercial/Savings
Finance Companies
Banks
2.1%
50.3%
All Other
4.4%
Govt. Entities
7.5%
Life Insurance Cos

9.1%
Commercial/Savings Banks - $1.7T
CMBS - $891B
Life Insurance Cos - $316B
Govt. Entities - $261B
All Other - $153B
CMBS Finance Companies - $72B
25.6%
REIT’s - $37B
Source: Mortgage Bankers Association

35
35
U.S. Residential Real Estate Debt Markets, $11 Trillion
REIT's
0.3%

Finance Companies Commercial/Savings

3.3% Banks
Credit Unions 26.4%
3.1%
Govt. Entities
0.9%
All Other
5.5%
Life Insurance Cos
0.1%
Commercial/Savings Banks - $2.9T

MBS, ABS and Agency - $6.6T
Life Insurance Cos - $12B
MBS, ABS*and All Other - $604B

Agency/GSE ** Govt. Entities - $102B
Mortgage Pools
60.3% Credit Unions - $346B
Finance Companies - $368B
REIT’s - $31B
* ABS containing home equity loans only.
** Fannie Mae, Freddie Mac, Ginnie Mae
Source: Mortgage Bankers Association
36
36
US Annual CMBS Issuance

250
$230
$203
200
$169
150
$Billions
100 $93
$78
$67
$52
$47
50
$12
$0
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2Q09
No US CMBS Issuance in first-half 2009; 2008 down 95% from 2007.
Source: CMAlert.com, Cushman & Wakefield Capital Markets Group

37
37
US Annual Sales Volumes by Core Property Type,
2004 - May 2009

2004 2005 2006 2007 2008 May-09
$4.9
$53.2
$208.5
Office
$3.0
$37.4
$101.3
Apartment
$2.6
$20.6
$67.1
Retail
$0.6
$11.8
1 $89.0
Hotel
$1.9
$21.5
$51.1
Industrial
$0 $50 $100 $150 $200 $250

Dollar Volume (billions)
All property types nationally reflect major downdraft in sales.
1 As of 1Q09
38
38
US Top CBD Office Investment Markets
Sales Volume 2005 – MAY 2009
2005 2006 2007 2008 May-09

$1.7
1 $13.1
Manhattan $37.5
$0.3
$2.4
Washington DC $6.0
$0.2
$1.4
Chicago $7.9
$0.2
$1.0
San Francisco $10.2
$0.6
$0.9
Boston $7.0
$0 $5 $10 $15 $20 $25 $30 $35 $40

Sales Volume (Billions)
1 As of June 2009
39
39
Average Capitalization Rate, 2005 – 1Q2009*
2005 2006 2007 2008 1Q09

6.0%
4.7%
Manhattan 4.5%
6.6%
5.8%
Washington DC 5.0%
8.1%
8.0%
Chicago 5.8%
6.5%
6.1%
San Francisco 4.3%
6.9%
5.8%
Boston 4.9%
2% 3% 4% 5% 6% 7% 8% 9% 10%
Weighted Average Cap Rate
* Fall off in investment sales activity make quarterly cap rate changes unreliable due to lack of trades.
40
40
Average Sales Price PSF, 2005 – 1Q2009
2005 2006 2007 2008 1Q09

$392 *
$787
Manhattan $703
$570
$564
Washington DC $440
$177
$230
Chicago $244
$396
$390
San Francisco $479
$301
$343
Boston $370
$0 $100 $200 $300 $400 $500 $600 $700 $800 $900
Average Sales Price per Square Foot
* Based on the only Class A sale through 1Q09: 1540 Broadway

41
41
US Top CBD Office Markets
Vacancy Rates, 1997 – 1Q 2009
Boston Chicago Manhattan San Francisco Washington DC

30%
25%
20%
15%
10%
5%
0%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1Q09
Source: Cushman & Wakefield Research, Cushman & Wakefield Capital Markets Group
42
42
US Top CBD Office Markets
Average Asking Rents, 1997 – 1Q 2009
Boston Chicago Manhattan San Francisco Washington DC

$80
$70
$60
$50
$40
$30
$20
$10
$0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1Q09
Source: Cushman & Wakefield Research, Cushman & Wakefield Capital Markets Group
Manhattan Employment And Office Space Demand:
43
43
Conservative
Employment Forecast: 1990 – 2016 and Implied Space Demand
Office Using

1,300
1,250
Thousands
1,200
1,150
1,100
1,050
1,000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Cumulative Space Demand
Thousands of Square Feet
0
-5
-10
-15
-20
-25
2008 2009 2010 2011 2012 2013 2014 2015 2016
Employment and Office Space Demand: Forecasted return to pre-2008 levels after 2016.
Source: Bureau of Labor Statistics, Moody’s Economy.com

Manhattan Employment And Office Space Demand:
44
44
Aggressive
Employment Forecast: 1990 – 2016 and Implied Space Demand
Office Using

1,300
1,250
Thousands
1,200
1,150
1,100
1,050
1,000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
15 Cumulative Space Demand
Thousands of Square Feet
10
5
0
-5
-10
-15
-20
-25
2008 2009 2010 2011 2012 2013 2014 2015 2016
Employment and Office Space Demand: Forecasted return to pre-2008 levels in 2015.
Source: Bureau of Labor Statistics, Moody’s Economy.com

45
45
Impact of the Securities Industry
Percent of Jobs
5.4%

5.2%
5.0%
4.8%
4.6%
4.4%
4.2%
4.0%
1990 1992 1994 1996 1998 2000 2002 2004 2006
18.0% Percent of Income

16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
1990 1992 1994 1996 1998 2000 2002 2004 2006

46
46
Manhattan Office Market
Manhattan Office Construction – Annual Added Inventory
10.0
9.0
Historical Construction Completions
8.0

7.0 New Construction (In Process)

6.0
Potential Future Developments
(msf)
5.0
4.0
3.0 2009 +:
2.0 New Construction (In Process):
1.0 5.5 msf
The Drawing Board:
0.0
30.7 msf
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
NEW CONSTRUCTION (IN PROCESS): POTENTIAL FUTURE DEVELOPMENTS (cont’d):
2009 World Products Center Extell Development 1,500,000 MT
510 Madison Avenue Macklowe Organization 350,000 MT
8th Avenue & 46th Street Boston Properties/ 1,000,000 MT
11 Times Square SJP Properties 1,100,000 MT Related Companies
450 West 14th Street/HighLine Charles Blaichman 88,300 MTS World Trade Center: Tower 4 Silverstein Properties 1,800,000 DT
Building
20 Times Square/641 Eighth Lawrence Ruben 1,300,000 MT
2010 Avenue Company/ Vornado
Goldman Sachs HQ/200 West Goldman Sachs/ 2,000,000 DT Realty Trust
St./6 WFC Madison Equities World Trade Center: Tower 5 Port Authority of NY & NJ 2,000,000 DT
2013
World Trade Center: Tower 1 Port Authority of NY & NJ 2,000,000 DT 4 Hudson Square Trinity Real Estate 1,310,000 MTS
(Freedom Tower) Brookfield Site: South Tower Brookfield Properties 3,400,000 MT
POTENTIAL FUTURE DEVELOPMENTS: Brookfield Site: North Tower Brookfield Properties 2,300,000 MT
855 Avenue of the Americas Cherit Group 355,279 MT Hotel Pennsylvania Vornado Realty Trust 3,000,000 MT
360 Tenth Avenue Extell Development 140,000 MT One Penn East Vornado Realty Trust 2,000,000 MT
51 Astor Place/Cooper Union Minskoff Properties 325,000 MTS World Trade Center: Tower 3 Silverstein Properties 2,100,000 DT
Tech School World Trade Center: Tower 2 Port Authority of NY & NJ 2,300,000 DT
Extell Diamond Tower/West Extell Development 800,000 MT Madison Square Vornado Realty Trust/ 3,000,000 MT
47th Street Garden/Moynihan Station Related Companies
250 West 55th Street/920 Boston Properties/ 1,000,000 MT 708 First Avenue Sheldon Solow 1,100,000 MT
Eighth Avenue Madison Equities

ADDENDA:
NY CAPITAL MARKETS
48
48
Manhattan Investment Sales Summary

Summary of Manhattan Sales Activity

(Rounded to the nearest $1 Million)
As of June 30, 2009
Midtown Midtown South Downtown Uptown TOTAL
Closed $1,529,000,000 $176,000,000 $0 $80,000,000 $1,786,000,000
Under Contract $627,000,000 $0 $110,000,000 $0 $737,000,000
Total $2,156,000,000 $176,000,000 $110,000,000 $80,000,000 $2,523,000,000
Note: Includes transactions of $10 million and higher

Closed and Under Contract

49
49
Manhattan Year-to-Year Comparison
2Q09 Closed Sales, as of June 30 ($ Million)

Midtown Midtown South Downtown TOTAL % Change vs. '07
Class A Office $580 $0 $0 $580 -89.1%

Other Office $167 $82 $0 $249 -74.9%
Multifamily $174 $18 $0 $192 -82.3%
All Other $688 $77 $0 $765 -55.5%
TOTAL $1,610 $176 $0 $1,786 -80.4%
2Q08 Closed Sales, as of June 30 ($ Million)

Midtown Midtown South Downtown TOTAL
Class A Office $4,992 $310 $19 $5,320

Other Office $376 $532 $84 $992
Multifamily $822 $139 $126 $1,087
All Other $864 $597 $259 $1,719
TOTAL $7,054 $1,578 $487 $9,118

50
50
Manhattan Investment Sales by Market
Closed as of June 30, 2009 ($1.8 Billion)

Midtown
$1.6 Billion – 90%
Midtown South
$176 Million – 10%
Note: No 2009 Downtown transactions have closed. AIG/70 Pine is under contract for $110 Million.

51
51
Manhattan Investment Sales by Product Type
Closed as of June 30, 2009 ($1.8 Billion)

All Other
$520 Milion – 29%
Class A Office
$580 Million – 33%
Retail
$23 Million – 1%
Hotel Other Office

$223 Million – 13% $249 Million – 14%
Multifamily
$192 Million – 11%

ADDENDA:
NY OFFICE LEASING
53
53
Manhattan Leasing Fundamentals 2Q09 vs. 1Q09

LEASING FUNDAMENTALS Manhattan MT MTS DT
Vacancy 10.5% 9% 11.7% 11% 8.7% 7% 8.7% 7%
Overall Asking Rents $60.23 -7% $66.82 -9% $49.55 -6% $43.81 -2%
Class A Asking Rents $67.24 -9% $71.58 -10% $53.27 -10% $48.47 -1%
Leasing Activity (SF)* 6,383,685 -45% 4,289,864 -43% 690,908 -56% 1,402,913 -43%
• Leasing activity only reflects new leases (i.e. not renewals).
• Leasing activity compares 2Q09 vs. 2Q08 due to the cyclical nature of leasing over a year.

54
54
Manhattan Office Market (392,595,077 SF)
14.0%

12.0%
10.5%
10.0%
8.0% Equilibrium 7-9%

7.6%
6.0%
4.0%
2.9%
2.0%
0.0%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2Q09
Total Sublease Direct

55
55
Class A Vacancy Rates

14.0%
12.0%
11.5%
10.0%
7.6%
6.0%
4.0% 3.9%
2.0%
0.0%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2Q09
Total Direct Sublease

56
56
Overall Rental Rates vs. Overall Vacancy Rates
$80 20%

$ 69. 44
18%
$70 $ 65. 08
$ 60. 23 16%
$60
14%
$ 50. 92 $ 50. 56
$50 $ 46. 69
12%
$ 42. 96
$ 40. 53 $ 39. 55 $ 40. 58
$ 38. 04
$40 $ 35. 31
10%
$ 31. 26
$ 29. 03 $ 28. 79 8%
$30 $ 27. 37 $ 26. 77 $ 26. 90
$ 26. 22 $ 26. 71
6%
$20
4%
$10
2%
$0 0%
2Q09
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Overall Asking Rent al Rates Vacancy Rate

57
57
Class A Average Asking Rental Rates

$90.00
$80.00
$70.00 $71.58
$60.00
$/sf
$53.27
$50.00
$48.47
$40.00
$30.00
$20.00
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2Q09
MT Class A MTS Class A DT Class A

58
58
World’s ten most expensive cities
Occupancy Costs
Rank

Country City Market $/SF/Yr
2008 2007
1 1 United Kingdom London West End $311
2 3 China Hong Kong CBD $238
3 2 Japan Tokyo CBD $210
4 5 India Mumbai Cetral - Worli $166
5 7 Russia Moscow CBD $158
6 4 France Paris CBD $141
7 n/a Singapore Singapore CBD $130
8 10 United Arab Emirates Dubai CBD $126
9 6 Ireland Dublin 2/4 Districts $112
10 9 United States New York Midtown $100
Source: Cushman & Wakefield Research Office Space Across the World 2008
59
59
New Leasing Activity

40
35
33.4 33.1
30 31.2 31.5
29.5
25 27.1
25.5
Millions SF
23.6
20
20.8 20.1
18.9 19.1
15
2Q08
10
11.5
5 6.4
0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2Q09

60
60
Comparative Direct Net Absorption
Manhattan Total

6,000,000 2Q09: (7,849,420)

2008: (3,910,360)
2Q08: (1,983,351)
4,000,000 2007: (972,073)
2,000,000
Square Feet
-2,000,000
-4,000,000
-6,000,000
-8,000,000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2Q09
Midtown Midtown South Downtown

61
61
Tenant Industry Breakdown – By % of SF Occupied, 2Q09
Financial Services

33.1%
Other
21.3%
Legal Services
12.3%
Apparel
3.8% Business Services
8.2%
Communications
4.1%
Advertising Gov't/Education/Soc
Printing &
4.3% Svcs
Publishing
7.8% 7.2%

62
62
Total Available SF – Direct VS Sublease
Total Available Area

80.0
70.0
60.0
(in million SF)
50.0
58.5 62.9
40.0 53.7
61.0
58.1
51.6 30.1
30.0 35.7
45.4
33.3 29.8
21.6
32.9
20.0 27.3 26.3 23.6
22.2 20.4
18.7
10.0
12.1 16.3
14.3 12.2 12.3 12.9
11.1 9.6 11.4
8.4 6.8 6.8 6.4 8.2
5.4 5.2 5.7 4.1 5.7 3.5
2.7
0.0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2Q09
Sublease Direct

63
63
Size Distribution of Available Space (Contiguous Blocks)

80
Period # of Blocks Available SF
75
2Q09: 154 24,641,230
70
4Q08: 126 22,663,000
65
3Q08: 129 23,425,000
60
55 4Q07: 104 16,808,000
50
Number of Blocks
45
40
35 55 73
30 59 59
25 52
51
20 42
15 30
26 25
10 22
19
5
0
4Q07 3Q08 3Q08 2Q09 4Q07 3Q08 4Q08 2Q09 4Q07 3Q08 4Q08 2Q09
50,000-99,999 SF 100,000-249,999 SF 250,000 + SF

64
64
100,000 SF+ Leases (including renewals)

60
50
50
40 44
42
Number of Leases
30 32
30 30
27
25
20 22 21
14 15
10 12
0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2Q09

65
65
Average Asking Rent By Submarket
% Change over Prior QTR % Change Year-over-Year
Midtown

-2.0%
-4.5%
-8.9% -7.9% -8.2% -8.5%
-11.7% -12.4% -11.6%
-14.9% -14.0%
-16.1% -17.4%
-20.4% -20.1%
-25.2%
-32.0% -32.6%
Total Murray Grand East Park Madison Sixth West Times
MT Hill Central Side Avenue / Fifth Rock Ctr. Side Sq. South
0.7% 1.3%
Midtown South
-2.4%
-5.6% -6.9% -6.9% -5.8%
-9.2% -9.0%-10.1%
-12.4% -12.8%
Total Greenwich Madison / Hudson Sq. / Chelsea

MTS SoHo Village / NoHo Union Square W. Village
Downtown
-0.3% -1.5%
-1.7% -2.2%
-3.6% -3.7%
-5.9%
-12.2% -11.3%
-13.7% -13.0%
-16.7%
Total City Hall World Financial Financial Insurance

DT Financial West East
66
66
Midtown Office Market (240,433,464 SF)
14.0%

12.0%
11.7%
10.0%
8.0% Equilibrium 7-9% 8.3%
6.0%
4.0%
3.4%
2.0%
0.0%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2Q09

67
67
Midtown Office Market
Historical Rental Rates vs. Overall Vacancy Rates

$90 22%
$80 $76.26 $79.81 20%
18%
$70 $66.82
16%
$58.92
$60 $56.56
$52.83 14%
$48.15 $47.41
$50 $45.37$45.98
12%
$43.03
$40.36
$40 10%
$34.19
$30.40 $33.23
$31.56
$28.97 $28.86 $30.56 8%
$30 $28.52
6%
$20
4%
$10
2%
$0 0%
2Q09
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Overall A sking Rental Rates Vacancy Rate

68
68
60
55 1 Period # of Blocks Available SF

50 4 2Q09: 101 14,237,517

2 2Q08: 84 14,204,189
45
40
Number of Blocks
35 3 2
2
30 6
7 10
25 6
46 4
20
7
15
25
10 22 5 2
2
13
5 5
8
3
0
2Q08 2Q09 2Q08 2Q09 2Q08 2Q09
3 Months 6 Months 12 Months 24 Months
50,000-99,999 SF 100,000-249,999 SF 250,000 + SF
Total available space increased 63% year over year.

69
69
Leasing Activity by Block Size, Total SF Leased – 2Q09

6.9%
42.7%
10.8%
15.1%
1-9,999 sf
10,000-24,999 sf
25,000-49,999 sf
50,000-99,999 sf
24.4% 100,000 + sf

70
70
Taking Rents of $80 and Above (Number of Deals)
200

171 167
180
160
42
47
140
120
100
51
100 43
16
80
27
25
60 39
35
23 23 23
40 1
10
4 52 1
7
20 34
43 7
9 3
3 21
7 12
0
2004 2005 2006 2007 2008 2Q09
$80 - $89.99 $90 - $99.99 $100 - $124.99 $125 +

71
71
Taking Rents of $80 and Above
2005 2006 2007 2008 2Q09

# of # of # of # of # of
Total SF Avg. SF Total SF Avg. SF Total SF Avg. SF Total SF Avg. SF Total SF Avg. SF
Deals Deals Deals Deals Deals
1 2,500 2,500 16 633,784 39,612 42 810,939 19,308 47 866,129 18,428 1 8,000 8,000
10 135,132 13,513 27 729,918 27,034 51 1,864,720 36,563 43 1,701,187 39,562 7 56,471 8,067
7 162,104 23,158 23 684,491 29,760 35 1,025,601 29,303 25 442,848 17,714 3 160,419 53,473
21 329,429 15,687 34 1,655,633 48,695 43 2,151,873 50,044 52 1,507,959 28,999 12 272,022 22,669
39 629,165 16,132 100 3,703,826 37,038 171 5,853,133 34,229 167 4,518,123 27,055 23 496,912 21,605
$80 - $89.99 $90 - $99.99 $100 - $124.99 $125 + TOTALS

72
72
MIDTOWN OVERALL Total Wtd. Avg. Rental Rate

2nd QTR 2009 $66.82 $50.42 $60.74 $62.61 $75.88 $96.87 $71.05 $65.25 $46.40
1st QTR 2009 $73.31 $51.47 $65.96 $74.64 $89.18 $105.58 $80.33 $71.30 $48.57
2nd QTR 2008 $83.96 $57.08 $69.30 $83.65 $111.65 $117.34 $105.39 $81.71 $53.98
$ Change
($6.49) ($1.05) ($5.22) ($12.03) ($13.30) ($8.71) ($9.28) ($6.05) ($2.17)
over Prior QTR
$ Change
($17.14) ($6.66) ($8.56) ($21.04) ($35.77) ($20.47) ($34.34) ($16.46) ($7.58)
Year-over-Year
-2.0%
-4.5%
-8.9% -7.9% -8.2% -8.5%
-11.7% -12.4% -11.6%
-14.9% -14.0%
-16.1% -17.4%
-20.4% -20.1%
-25.2%
-32.0% -32.6%

73
73
Leasing Activity, 2Q08 vs. 2Q09

Total Leased
2,000 1,920.5 2Q08: 7,488.6

2Q09: 4.289.9
1,800
1,600
SF in Thousands
1,400
1,200 1,148.0
1,012.2
1,000 948.9
866.0
800 722.0 730.0

675.9
600 512.8
477.0 509.0
425.0 437.2
400 357.0
211.0
178.0
200
0
Murray Hill Grand Central East Side Park Avenue Madison/Fifth Sixth/Rock Ctr. Westside Times Sq.
South
2Q08 2Q09

74
74
Midtown Total

2,500,000
2Q09: (6,029,623)
2Q08: (537,141)
2,000,000 1,912,590
1,500,000
1,000,000
Square Footage
500,000
86,575
0
(38,624)
(209,132) (210,437)
(241,511)
-500,000 (409,409)
(411,570) (476,811)
(540,305) (600,653)
(704,941)(767,399)(696,641)
-1,000,000
(1,274,881)
-1,500,000
(1,627,208)
-2,000,000
Grand Central East Side Park Avenue Madison/ Fifth 6 Ave/ Rock Westside Penn Station Times Sq South
Cntr
2Q08 2Q09

75
75
Leasing Activity by Month – 6 Yr Avg 2002-2007 vs. 2Q09
October - December preceding 6-yr average total: 3.9 msf

October - December 2008 total: 2.1 msf

2.0
1.8
1.7
1.8
1.6
1.5
1.5 1.4 1.4
1.4 1.4
1.3 1.3
1.3 1.3 1.3 1.3
1.2 1.2
1.3 1.2
1.1 1.1
MSF Leased
1.0
1.0 0.9
0.9 0.9
0.8 0.7
0.6 0.6
0.6
0.5 0.5
0.5 0.4
0.3
0.0
July Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
6 Year Average 2008 2009

76
76
Midtown South Office Market (64,504,640 SF)

16.0%
14.0%
12.0%
10.0%
8.7%
6.7%
6.0%
4.0%
2.0% 2.0%
0.0%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2Q09

77
77
Midtown South Office Market
$60 22%

$54.09
20%
$49.55
$50 $46.89 18%
$45.65
$40.55 16%
$38.74
$40
$33.23 14%
$33.63
$31.34
$29.37 $30.37 12%
$30
$25.73
10%
$20.23 $19.54
$19.10 8%
$20 $17.40 $17.08 $16.99
$16.65 $14.73
6%
$10 4%
2%
$0 0%
2Q09
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Overall Asking Rent al Rat es Vacancy Rat e

78
78

10
1 2Q08: 19 2,810,397
2Q09: 20 3,459,353
1
Number of Blocks
2
9
5
1
7
7 1
1 1
4
1
2
1
0
2Q08 2Q09 2Q08 2Q09 2Q08 2Q09
50,000-99,999 SF 100,000-249,999 SF 250,000 + SF

79
79

52.09%
0.00%
7.98%
1-9,999 sf
10,000-24,999 sf
25,000-49,999 sf
50,000-99,999 sf
39.93% 100,000 + sf

80
80
Total Greenwich Madison / Hudson Sq. /

MTS SoHo Village / NoHo Union Square W. Village Chelsea

2nd QTR 2009 $49.55 $50.31 $55.71 $53.71 $46.41 $46.10
1st QTR 2009 $52.48 $54.04 $55.35 $57.01 $47.57 $50.65
2nd QTR 2008 $53.22 $57.44 $61.38 $61.59 $45.82 $51.26
$ Change
($2.93) ($3.73) $0.36 ($3.30) ($1.16) ($4.55)
over Prior QTR
$ Change
($3.67) ($7.13) ($5.67) ($7.88) $0.59 ($5.16)
Year-over-Year
0.7% 1.3%
-2.4%
-5.6%-6.9% -5.8%
-6.9%
-9.0%-10.1%
-12.4% -12.8%
Total Greenwich Madison / Hudson Sq. / Chelsea

MTS SoHo Village / NoHo Union Square W. Village

81
81
600 582.8
557.4

Total Leased
2Q09: 690.9
2Q08: 1,567.7
400
SF in Thousands
285.2
237.5
200
154.3 162.1
132.4
109.7
27.2
10.0
0
SoHo Greenwich/NoHo Madison/Union Sq. Hudson Sq./W. Village Chelsea
2Q08 2Q09

82
82
Midtown South Total

2Q09: (726,948)

200,000
2Q08: (307,421)
129,391
100,000 71,999 62,928

34,945
0
Square Footage
(37,304)
-100,000
(114,856)
-200,000
(204,101)
(260,131)
-300,000
(349,602)
(367,638)
-400,000
SoHo Greenwich/Noho Madison/Union Hudson Sq./W. Chelsea
Square Village
2Q08 2Q09

83
83
Downtown Office Market (87,657,973 SF)

20.0%
18.0%
16.0%
14.0%
12.0%
10.0%
8.7%
6.0% 6.4%
4.0%
2.0% 2.3%
0.0%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2Q09

84
84
Downtown Historical Vacancy & Rental Rates
$60 22%

20%
$50 $47.47 $47.86 18%
$43.41 $43.81
16%
$39.45 $39.17
$38.62
$40 $36.92
14%
$34.40
$31.13 $31.55 $30.89 12%
$29.45
$30 $28.01 $28.00
$26.45 $25.97
$24.80 $25.27 $25.81 10%
8%
$20
6%
$10 4%
2%
$0 0%
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2Q09
Overall Asking Rental Rat es Vacancy Rat e

85
85
Downtown Office Market

20
2Q09: 33 6,944,360
5
2Q08: 41 9,173,647
15
Number of Blocks
3
2
1 1 1
10
14 2 4
1
10
5 10
3
8
6
1
2
0
2Q08 2Q09 2Q08 2Q09 2Q08 2Q09
50,000-99,999 SF 100,000-249,999 SF 250,000 + SF

86
86
1-9,999 sf 35.44%
10,000-24,999 sf

25,000-49,999 sf
50,000-99,999 sf
100,000 + sf
16.77%
22.59%
5.12%
20.08%

87
87
Taking Rents of $45 and Above (Number of Deals)
60

60
6
50 7
44
40
17
30
5 47
20
12
9
10 2 22
3 2
1
2 10
6
0
0 0 1
2004 2005 2006 2007 2008 2Q09
$45 - $54.99 $55 - $59.99 $60+

88
88
Taking Rents of $45 and Above
2005 2006 2007 2008 2Q09

# of # of # of # of # of
Total SF Avg. SF Total SF Avg. SF Total SF Avg. SF Total SF Avg. SF Total SF Avg. SF
Deals Deals Deals Deals Deals
0 0 0 0 0 0 17 885,766 52,104 6 273,107 45,518 2 198,611 99,306
2 135,789 67,895 2 219,734 109,867 5 217,087 43,417 7 96,373 13,768 1 22,000 22,000
1 35,023 35,023 12 499,247 41,604 22 810,756 36,853 47 629,934 13,403 6 59,430 9,905
3 170,812 56,937 14 718,981 51,356 44 1,913,609 43,491 60 999,414 16,657 9 280,041 31,116
$45 - $54.99 $55 - $59.99 $60 + TOTALS

89
89
Total World Financial Financial

DT City Hall Financial West East Insurance

2nd QTR 2009 $43.81 $43.38 $51.11 $40.06 $41.91 $38.67
1st QTR 2009 $44.58 $43.52 $51.90 $41.55 $42.87 $40.16
2nd QTR 2008 $50.74 $49.88 $61.32 $42.56 $47.73 $43.58
$ Change
($0.77) ($0.14) ($0.79) ($1.49) ($0.96) ($1.49)
over Prior QTR
$ Change
($6.93) ($6.50) ($10.21) ($2.50) ($5.82) ($4.91)
Year-over-Year
-0.3% -1.5%
-1.7% -2.2%
-3.6% -3.7%
-5.9%
-12.2% -11.3%
-13.7% -13.0%
-16.7%
Total City Hall World Financial Financial Insurance

DT Financial West East

90
90

Total Leased
1,000 992.6
2Q09: 1,402.9 939.5
2Q08: 2,476.7
800
SF in Thousands
646.8
600
470.5
400
343.1
200 179.4
93.5 110.3
81.8
22.2
0
City Hall World Financial Financial West Financial East Insurance
2Q08 2Q09

ADDENDA:
NY RESIDENTIAL
92
92
Manhattan Housing Inventory

Manhattan Housing Inventory
2004 2005 2006 2007 2008
Total Housing Units 814,227 819,796 840,443 843,349 839,134
Percentage of Ownership to Rental Inventory
2004 2005 2006 2007 2008
Total Owner Units 22.02% 21.99% 22.78% 22.09% 24.09%
Total Rental Units 77.98% 78.01% 77.22% 77.91% 75.91%
Inventory up 3% in past 5 years.

Only 24% home ownership in Manhattan.
Source: US Census Bureau

93
93
2008 Residential Housing By Type
Residential Housing Breakdown* Rental Residential Housing

(Total # of Occupied Units 762,381) (Total # of Renter Units 579,657)
Co nventio nal Rent Co ntro lled

Co ndo minium
Ownership 3.60%
5.31%
0.68% 20,839 Units
40,452 Units
5,157 Units
Co o perative No n-Regulated
16.89% 31.70%
128,798 Units 183,727 Units
M itchell-Lama
1.10%
8,417 Units
Stabilized
51.66%
299,469 Units
P ublic-Ho using
10.53%
61,017 Units
Rental
76.02% M itchell-Lama
579,657 Units 2.52%
14,605 Units
Rental/Owned ratio inverse of US. Free market 32% of rental inventory; 52% stabilized.
* Excludes vacant units not available for sale or rent

Source: US Census Bureau
94
94
Manhattan Residential Rental Vacancy Rate, 1996 – 2Q09

5% 3.9%
3.5%
4%
2.6%
3% 1.9%
1.1% 1.4%
2% 0.9%
0.6%
1%
0%
1996 1999 2002 2005 2006 2007 2008 2Q09
Manhattan Vacancy Rate

Source: Citi Habitats
June 2009 Mean Manhattan Rental Prices
Apartment Type Doorman Non-Doorman

Studio $2,347 $1,996
One-Bedroom $3,320 $2,617
Two-Bedroom $5,148 $3,610
Source: The Real Estate Group New York

95
95
Mean Manhattan Rental Prices, June 2009

$6,000
$5,148
$5,000
$4,000 $3,610
$3,320
$3,000 $2,617
$2,347
$1,996
$2,000
$1,000
$0
Studio One-Bedroom Two-Bedroom
Doorman Non-Doorman

96
96
Mean Manhattan Rental Prices, Year-Over-Year Change
Manhattan Non-Doorman Rents: March 2008 vs. March 2009

$6,000 -8.85% -8.45% -11.28%

$4,069
$3,610
$4,000
$2,859 $2,617
$2,190 $1,996
$2,000
$0
June-08 June-09
Manhattan Doorman Rents: March 2008 vs. March 2009
-11.16% -12.30% -9.68%
$6,000 $5,700 $5,148
$3,786
$4,000 $3,320
$2,642
$2,347
$2,000
$0
M arch-08 M arch-09
97
97
Yearly Volume of Luxury Condominium and Co-Op Sales
(1998 – 2Q09)
1,600

1,400
1,200
1,000
800
600
400
200
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2Q09
Annualized 2009 sales volume of luxury units down 47% since 2008.
Note: Luxury market accounts for top 10% of all Condo and Co-Op Sales
98
98
Residential Unit Permits Issued by Borough
14,000

12,000
10,000
8,000
6,000
4,000
2,000
0
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
*Est. 2009
Manhattan Total Units Brooklyn Total Units Queens Total Units Bronx Total Units Staten Island Total Units
Brooklyn has outpaced Manhattan for new residential

units in each of the prior six years to 2009.
* Annualized based upon first five months of 2009.

Source: U.S. Department of Housing and Urban Development
99
99
New York Capital Markets Group
July 21st, 2009

RICHARD BAXTER JON CAPLAN

Executive Vice President Executive Vice President
(212) 841-5946 (212) 841-5094
richard.baxter@cushwake.com jon.caplan@cushwake.com
YORON COHEN SCOTT LATHAM

Executive Vice President Executive Vice President
(212) 841-5947 (212) 841-5064
yoron.cohen@cushwake.com scott.latham@cushwake.com
Cushman & Wakefield, Inc.

51 West 52nd Street
New York, NY 10019
(212) 841-7500
This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that it is accurate and complete. Cushman & Wakefield accepts no responsibility
if this should prove not to be the case. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to
errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. ©2009 Cushman & Wakefield, Inc. All rights
reserved.

C&amp;W NYCMG Market Overview - Second Quarter 2009 With Addenda

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C&amp;W NYCMG Market Overview - Second Quarter 2009 With Addenda

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MARKET OVERVIEW

Second Quarter 2009

MARKET OVERVIEW - SECOND QUARTER 2009

MARKET OVERVIEW - SECOND QUARTER 2009

■ A record high 5.5% of outstanding CMBS loans in special servicing

■ Unprecedented loan maturities during next five years

■ REIT prices down 60%+ from 2007 peak

* Additional data can be found in the addenda (Slides 32-46).

MARKET OVERVIEW - SECOND QUARTER 2009

7.9% 7.4% 7.8% 7.8%

5.9% 5.9% 6.3%

Recessions Unemployment Rate

6/09 unemployment rate at 9.5% is highest in 25 years.

Source: Bureau of Labor Statistics

MARKET OVERVIEW - SECOND QUARTER 2009

Individual Asset Sales Portfolio (Non-privatization) Privatizations

2008 US investment volume down 63% versus prior 3 year average;

* As of May 31, 2009, except for Hotel as of March 2009.

MARKET OVERVIEW - SECOND QUARTER 2009

Total commercial mortgage maturities from 2009 – 2013

MARKET OVERVIEW - SECOND QUARTER 2009

* CMBS Other represents private deals, not publicly tracked, etc.

MARKET OVERVIEW - SECOND QUARTER 2009

CMBS Origination Year

CMBS Loan Balance on Watchlist

Implied Nominal Cap Rates

MARKET OVERVIEW - SECOND QUARTER 2009

Current cap rates generally in-line with historic levels.

Source: Green Street Advisors

MARKET OVERVIEW - SECOND QUARTER 2009

3,700 Projected total

job loss: 250,000

U.S. unemployment at 9.5%; New York City at 9.3%.

* As per New York City OMB 2009 projections.

US job loss since

MARKET OVERVIEW - SECOND QUARTER 2009

-6.5 million (-4.7%)

NYC job loss since

Source: US Bureau of Labor Statistics

17.0% Office Using Jobs Lost 17.0%

MARKET OVERVIEW - SECOND QUARTER 2009

* Additional job loss from July 1, 2009

MARKET OVERVIEW - SECOND QUARTER 2009

60.0 270 Park Ave - 1,132,460

1 Chase Manhattan Plz - 1,898,158

50.0 153 East 53rd St - 1,492,860 237 Park Ave - 1,142,196

1960s 1970s 1980s 1990s 2000s

MARKET OVERVIEW - SECOND QUARTER 2009

■ Sharp sales volume decline due to:

* Additional data can be found in the addenda (Slides 47-51).

MARKET OVERVIEW - SECOND QUARTER 2009

2Q09 closed and under contract $2.5B.

(1) 2008 Average price PSF excluding GM Building: $832 PSF

MARKET OVERVIEW - SECOND QUARTER 2009

Based on 2008 Total Sales of Based on 2Q09 Total Sales of

Source: Cushman & Wakefield CMG

MARKET OVERVIEW - SECOND QUARTER 2009

*1540 Broadway transaction at approximately 6% cap on in-place NOI (22% vacancy).

Source: Cushman & Wakefield Capital Markets Group

Status / Address Type / Size Sale Price Seller / Buyer Comments

MARKET OVERVIEW - SECOND QUARTER 2009

70 Pine Street 1,243,624 $88 PSF Young Woo and Kumho

MARKET OVERVIEW - SECOND QUARTER 2009

C&W NYCMG Market Overview - Second Quarter 2009 With Addenda

C&W NYCMG Market Overview - Second Quarter 2009 With Addenda