Fred S h idt F d Schmidt

President & COO Coldwell Banker Commerical

Agenda
• Overview of Global Economy & Commercial Real Estate markets • M k Vi Market View of M j P d f Major Product T Types: Office, Industrial, Retail, Multi-family • Market Direction and Forecast

“May “M you li live in interesting times”

GDP Growth
• US • China • India 5.6% 10% 8%

• EU / Japan <1%

Real GDP Forecast

Equally Strong Tailwind – Headwinds
• Strong Tailwinds • Government Stimulus, Improved Financial Conditions, P Fi i l C di i Pent U D Up Demand d • Strong Headwinds • Unemployment Remnants Housing Unemployment, Bubble, Financial Crisis.

Global Forecast
• US recovery will start slowly y y • Europe and Japan will rebound even more slowly • Interest Rates in the G-8 economies will remain low • Fiscal stimulus will begin to ease • Commodity Prices will move sideways • Inflation should not be a problem

US
2009 Was a Year of Severe Correction in Commercial and Residential Demand Driven Downturn Commercial Lagging Indicator

Commercial: Avg. Price/SF 2001-2007 Avg 2001-

* Real Capital Analytics

Commercial Mortgage Backed g g Securities Issuances 2005-2009 2005-

* Real Capital Analytics

Decline 75% in 2008 over same period in 2007

Job Loss

Current Unemployment is 9.7%

US Property Sales
Office, Industrial, Retail, Apartment Properties $5m+

* Real Capital Analytics

Commercial Real E C i l R l Estate T d Today
• Not expected to turn until 2011

• Job picture is improving

• Significant debt set to refinance fi

Multi-F il Multi M lti-Family
Vacancy Rents Absorption 2009 8.0% 8 0% $1,026 -8.5% 2010 8.0% 8 0% $995 -

Source: Reis.com

MultiMulti-Family
Feb 10’ Sales - $1B Listings Outpaced Closed Transactions 2:1 Cap Rate 7.0%

Industrial
Vacancy Rents Absorption 2009 10.2% 10 2% $4.96 -39.1% 2010 11.4% 11 4% $4.71 -0.4%

Source: Reis.com

Industrial
Jan 10’–$624m Closed Over $3B in newly listed li d properties i Cap Rate 8.75%
(highest since 03’)

Retail
Vacancy Rents Absorption 2009 10.6% 10 6% $19.52 -3.5% 2010 12.0% 12 0% $19.13 -4.0%

Source: Reis.com

Retail
2009’–$11.6B Closed 44% Reduction Year over Year Close to $2B in newly listed properties Cap Rate 7.75% 86 BPS Increase

Office
Vacancy Rents Absorption 2009 17.6% 17 6% $29.18 -1.5% 2010 18.6% 18 6% $26.58 -0.6%

Source: Reis.com

Office
2009’–$15.8B Closed $ 71% Reduction Almost $3B properties came to market YTD Cap Rate 9.2% 215 BPS Increase

Opportunities pp
• Keep an eye on your market • Lots of Purchasing Opportunities Student housing will g pp g continue to perform • H lth care will continue t h Health ill ti to have d demand d • Other Federal Government related business • Tenants – Blend and Extend – Move-up in Quality

Opportunities pp
“there

have been more millionaires created in a recession than any other time in an economic cycle" y