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Colliers International's Quarter 3 2012 North American Retail Highlights Report


Colliers International's Quarter 3 2012 North American Retail Highlights Report. Hurricanes and Holidays: As if the stress of a potential pre-holiday strike from the International Longshoremen's Association wasn't enough, Hurricane Sandy hit the Northeast hard. Despite the impact, many retailers are expected to come in on or above growth targets, and those who integrate promotion across all distribution channels will be most successful. Both Citi and Shop.org release double-digit growth projections for online retail this year; Citi's forecast is the first-ever noted above the teens. Aggressive Price Matching: Target and Best Buy will be offering limited-time price matching programs for brick-and-mortar versus online ordering, as well as for competitor pricing online. This aggressive model represents the shift toward offering consumers low-cost, high-speed solutions for efficient holiday shopping Speed(ier) Deliveries: This holiday season, select "test" markets will have the opportunity to experience same-day delivery from Walmart, eBay and the United States Postal Service. Depending on the initial results, these tests could bring major changes for fulfillment programs. Companies also might begin to trend away from unlimited "free shipping" programs as retailer gross margins diminish. Spending Strength: Although consumer confidence is low by historical standards, there continues to be signs of consumer strength as in the throngs who came out for the release of Apple's new iPhone 5 in September. This resulted in a year-over-year growth rate of 4.5 percent for electronics/appliance sales for the month. Outlet Centers: An increase in consumer confidence also means increased confidence for real estate investors. With the consolidation of department stores, a reduced cost of entry for retailers, and frugal shopping habits stemming from the recession, retailers and developers will continue to embrace the outlet concept and work to attract masses of consumers. More

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									Q3 2012 | RETAIL



                                                    Improving Retail Momentum
                                                    Hinges on “Fiscal Cliff” Outcome
                                                    ANN T. NATUNEWICZ Manager, Retail Research | USA

                                                    •	 Aswe move through the fourth quarter, eight of Colliers’ nine 2012 “Trends to Watch” are playing out
                                                     in the retail marketplace.
                                                    •	 Grossmargin pressures were evident in many retailers’ Q3 earnings reports, suggesting renewed
                                    Q3       Q4
                                   2012*   2012**    focus in 2013 on efficiency and more targeted capital investment.
                                                             the devastating impact of Hurricane Sandy on the Northeast U.S., we predict that U.S.
                                                    •	 Despite
               VACANCY                               year-over-year Holiday sales growth will come in on or above plan for many retailers—even as
                                                     shoppers remain disciplined and thoughtful in their expenditures.
                                                          expansion continues in both Canada and Mexico as higher corporate optimism and consumer
                                                    •	 Retail
     CONSTRUCTION                                    demand attract new brands and spur both new developments and refurbishments.
                                                           indications are that 2013 development activity, while still low by historical standards, will be an
                                                    •	 Early
                                                     increase over 2012 levels and be concentrated in the outlet and single-tenant net lease property sectors.
* Compared with prior period
** Projected, relative to prior period
                                                    The third quarter was an improvement over the second: The sheer passage of time forced decisions
                                                    that have slowly begun to address global economic uncertainty and comfort the financial markets.
                                                    While Europe’s daunting fiscal issues remain, Germany’s signals that it will likely guarantee the debt of
U.S. RETAIL MARKET *                                its less fiscally sound neighbors have more investors modeling risk scenarios that assume the
SUMMARY STATISTICS, Q3 2012                         Eurozone will survive, even if the resolution of its finances remains years away. Here in the U.S., the
                                                    re-election of Barack Obama marks the end of a bitter 18-month campaign and—not a moment too
Vacancy Rate: 10.4%                                 soon—returns national focus to the looming “fiscal cliff,” the potentially disastrous combination of
 Change from Q2 2012: –0.1%
                                                    federal spending cuts and tax increases set to take effect January 2. Despite the potential for politics
Under Construction:                                 to derail policymaking, we believe the only viable late-stage option will have policymakers push off
5.3 Million Square Feet                             “cliff” deadlines into next year, to allow time for long-term solutions to be debated. As this
                                                    postponement translates into ongoing uncertainty, we expect continued bifurcation in all aspects of
New Supply:                                         retail real estate: “flight to quality” for the risk-averse contrasted with selective quest for yield, either in
5.8 Million Square Feet
                                                    secondary markets or more speculative projects, for those with higher tolerance.
Net Absorption:
                                                     HIGHEST              REPORTING      SAME-STORE           LOWEST               REPORTING      SAME-STORE
9.0 Million Square Feet
                                                     RETAILER             PERIOD         SALES GROWTH %       RETAILER             PERIOD         SALES GROWTH %

ASKING RENTS PER SF                                  American Apparel      Q2 2012            16.0            JCPenney              Q3 2012            (26.1)
Shopping Center Space: $15.27
 Change from Q2 2012: –$0.05                         Fresh Market          Q2 2012             8.2            GameStop              Q2 2012             (9.3)
*Subset of Colliers Markets                          Zumiez                                                   Walgreens
Source: CoStar                                                             Q2 2012             9.5                                  Q4 2012            (8.7)

                                                     Limited Brands        Q2 2012             8.0            Supervalu             Q2 2013            (4.3)

                                                     Whole Foods           Q3 2012             8.0            Roundy's              Q2 2012            (3.3)


                                                                                          RETAIL SALES, JUNE-SEPTEMBER 2012

ECONOMIC RECAP                                                                               4

                                                                                                                                                          Percentage Change (%)
The U.S. economy regained its footing in the third quarter,
as illustrated by Colliers Retail’s Bellwether Economic Trends
Scorecard (see chart below). Colliers tracks twelve economic
indicators, some more widely reported than others, that we have found
accurately track the direction of economic activity over time. At the                         1
end of Q2, nine of our 12 indicators were worse than at the end of
Q1. At the end of September, though, ten of the 12 have improved                             0
over their June readings.
                                                                                                     Jun               Jul     Aug            Sep
Leading the improved data was the Commerce Department’s advance
estimate on Q3 GDP growth, which came in at 2.0%. The figure                                         Total             Core     Auto        Gen Mer
reflected resilient consumer spending and improving housing
fundamentals, and exceeded consensus estimates (although, to be fair,                    Source: Commerce Department
the market excitement over the reading also underscores how far
growth expectations have fallen). Personal incomes, driven by higher                     lowest since January 2009—reflected a lower labor force participation
personal consumption of non-durable goods, rose 0.4% in September                        rate and a larger number of workers who settled for part-time work
after an anemic 0.1% uptick in August. The higher expenditure                            because they couldn’t get a full-time position. Finally, the Chicago
numbers confirm retailers’ sales comparables growth trends this                          Fed’s National Activity Index (CFNAI) improved from four straight
summer: Back-to-School (BTS) results were solid, which bodes well                        months of negative values to come in at 0.00, indicating that the
for consumer spending this Holiday shopping season.                                      economy is expanding at its historical rate, although its 3-month
                                                                                         average of (0.37) remains vulnerable to contraction.
Other improved Q3 indicators included the Citibank Economic Surprise
Index (CESI), which turned positive in September for the first time                      Looking ahead to Q4, all eyes will be on the U.S. government and
since April. CESI includes auto sales, retail sales, pending home sales,                 policymakers as they address the “fiscal cliff.” Until decisions are made
initial jobless claims, and the ISM non-manufacturing composite. The                     next year with respect to tax reform, both corporate and personal, we
unemployment rate also moved lower, but September’s 7.8%—the                             don’t expect drastic improvement in the employment markets, for
                                                                                         companies remain wary of hiring. Weather may prove to be 2012’s
                                                                                         year-end wildcard. As this report was being finalized, the U.S. East
                                                                                         Coast was still recovering from Hurricane Sandy, which caused billions
                                                                                         of dollars in damage (Moody’s estimates $50 billion: $20 billion in lost
   TREND                                                            VERSUS
                                                                                         output and $30 billion in property damage). The magnitude and, more
                                                                PRIOR QUARTER
                                                                                         importantly, the timing of insurance payouts will figure prominently into
       Chicago Fed Nat'l Activity Index (CFNAI)                                          Q4 expenditures and whether households and businesses reallocate
       GDP U.S.
                                                                                         funds away from discretionary spending into more essential product
                                                                                         categories. We’ll discuss this more in the next section.
       GDP Hong Kong*

       GDP Germany*
                                                                                         CONSUMER CONFIDENCE, RETAIL SPENDING INCREASE
                                                                                         Retail sales shook off a weak summer to increase an unexpected 1.1%
       NFIB Small Business Optimism Index                                                in September to $412.9 billion, beating economists’ forecasts (see
                                                                                         chart above). Markedly higher consumer confidence readings from
       National Restaurant Performance Index
                                                                                         both the Conference Board (up from 62.0 in August to 70.3 in
       Citibank Economic Surprise Index (U.S.)                                           September) and the University of Michigan Consumer Sentiment Index
                                                                                         (September’s 83.1 reading was its highest in five years) reflected
       CMBS retail delinquencies (% of total)
                                                                                         shoppers’ satisfaction as gas prices fell and equities market values
       National Unemployment Rate                                                        rose, even though confidence is still low by historical standards.
                                                                                         Among other things, September’s retail sales growth demonstrated the
       Retail sales growth (Commerce Dep't)
                                                                                         strength of the “Apple effect” across the broader retail industry:
       Personal Income (% growth)                                                        Electronics/appliance sales spiked 4.5% on the September 21 release
                                                                                         of Apple’s new iPhone 5 (which set a record for opening weekend
       Auto sales (annualized pace in millions)                                          sales: five million handsets, including preorders). In addition to new
                                                                                         technology, consumers also spent more on building materials, garden
Sources: Trepp, National Restaurant Association, Fitch, Commerce Department, Citibank,   equipment, and home furnishings, according to First Data, a global
National Federation of Independent Businesses, AutoData                                  payments processing company.
* Colliers projection; data not yet available

                                                                                   HIGHLIGHTS | Q3 2012 | RETAIL | NORTH AMERICA

HOLIDAY 2012                                                                have chosen the Bay Area as one of their test markets; Wal-Mart is
National sources began releasing their holiday sales growth                 also using Washington D.C., Philadelphia, and Minneapolis. The USPS
predictions just as the Back-to-School selling season was winding           test, set to start in mid-November, could last a year or longer. Shoppers
down. The chart below compares some of the various forecasts issued         would place their orders with selected online retailers (which the
by the retail industry’s most visible associations and/or                   USPS has not yet named) no later than 3:00 pm, with delivery to
investment groups. The National Retail Federation (NRF) led its peers,      consumers occurring between 4 p.m. and 8 p.m. The USPS will limit
projecting 4.1% year-over-year growth and total sales of $586.1 billion;    deliveries to 200 packages a day during the “initial period” of the
this is its most optimistic outlook since the recession. The 4.1%           market test and says that it will charge retailers at least $2.70 per
compares to actual growth of 5.6% achieved during Holiday 2011 and          package, comparable to what some competing parcel carriers charge
a 10-year average of +3.5%. Both Citi and Shop.org released                 for similar services.
double-digit growth projections for online retail; Citi’s forecast is the
first we’ve seen above the teens by anyone. “Must-have” kids’ toys this     Regardless of the outcome of these same-day shipping tests, we
year include the Furby, LeapPad, Barbie, and LEGO. Preorders for            predict that the next 12–18 months will bring major changes in the
Nintendo’s Wii U have already sold out at some online retailers, and the    fulfillment programs for online retail transactions. As package carriers
console won’t be available until November 18.                               and logistics firms continue to streamline their operations and lower
                                                                            costs to end users, shrinking retailer gross margins (which we address
  HOLIDAY SALES GROWTH PROJECTIONS (YEAR-OVER-YEAR)                         again later in this report) may force some firms to reconsider both
                                                                            their ability and their willingness to absorb unlimited shipping costs,
  SOURCE          Total Retail                           Online             especially on returns. We don’t expect that retailers will eliminate free
                                                                            shipping—customers have come to expect it—but it’s possible that they
    Citibank      2.5%–3.5% (Nov.–Dec.)                  20%                might set limits on how much can be returned without a penalty or,
                                                                            potentially, raise the dollar amount that a purchase must total to qualify
    Deloitte      3.5%–4.0% (Nov.–Jan., excl. autos)     15%–17%
                                                                            for free shipping.
    ICSC          3.0%                                   n/a

    NRF           4.1%                                   n/a
                                                                            CURRENT CONDITIONS
    Shop.org      n/a                                    12%

    ShopperTrak   3.3% (Nov.–Dec.)                       n/a                What follows is an overview of market operating trends for Colliers’ U.S.
                                                                            retail markets, along with a short discussion of a few key trends we’ve been
Booz Allen did not commit to an exact year-over-year holiday growth         tracking this quarter.
prediction, but instead offered insight into consumer behavior. Results
from its pre-holiday survey found that: 1) Nearly three-quarters (73%)      METRO MARKET OPERATING RESULTS
of shoppers expect to find “great deals,” up from 62% last year; 2)         The national third-quarter vacancy rate for neighborhood/community
45% will give at least one downloadable gift ; 3) 53% of shoppers will      centers (CoStar calls them “shopping centers”) registered 10.4%,
buy at least one luxury item this year (up from 41%), most likely           down slightly from last quarter’s 10.5% and 0.4% below Q3 2011.
something that the whole family can enjoy; and our favorite, 4) 51%         Vacancy rates moved lower in 35 of the 63 metro markets Colliers
reported that economic survival is a great reason to celebrate this year.

To combat another intensely promotional holiday season, retailers and
their fulfillment partners are expanding their scope of services to
differentiate themselves from competitors. In-store limited-time price
matching programs offered by Target and Best Buy will honor not just
their own online prices but also online prices offered by competitors
,including Amazon.com and Walmart. Critics point out that the
fluctuating nature of online pricing, especially through third-party
vendors, will make it hard for store employees to verify (and honor) a
lower price. We believe that price matching is one of several strategies
that forward-looking retailers have embraced this season, and that
their comfort with omnichannel retailing, combined with capital
investment in effective integration infrastructure, will be what drives
their successful performance.

The other major service expansion this holiday is same-day delivery.
Three entities—Walmart, the United States Postal Service (USPS), and
eBay—are testing same-day delivery programs. Interestingly, all three
                                                                                                                                     Continued on page 5

                                                                                                                    COLLIERS INTERNATIONAL |        P. 3


                                         INVENTORY*      NEW SUPPLY               UNDER           VACANCY RATE VACANCY RATE                YTD           QUOTED RENT Y-O-Y CHANGE
                                      SEPTEMBER 30, 2012  YTD 2012             CONSTRUCTION        SEPTEMBER    SEPTEMBER               ABSORPTION        SEPTEMBER     IN RENT
 MARKET                                      (SF)           (SF)                   (SF)              2011 (%)     2012 (%)               2012 (SF)       2012 (US$PSF)     (%)
 Atlanta, GA                                142,332,261            279,185           76,016             15.1%              14.8%             563,285           $12.79          (3.18)
 Bakersfield, CA                              9,160,200             66,371                0              9.5%              10.5%            (23,985)           $14.87          (2.43)
 Baltimore, MD                               45,935,129            187,533          136,275              8.2%               7.9%             292,827           $18.41          (0.75)
 Birmingham, AL                              26,997,810             14,641                0             14.3%              13.7%              90,437            $8.70         (5.54)
 Boise, ID                                   12,944,997                  0            8,260             11.8%              11.6%               14,063          $11.83            1.20
 Boston, MA                                  87,507,908            244,727           10,000              7.1%               6.4%             553,144           $15.01          (1.90)
 Charleston, SC                              16,741,616              3,500            9,855             10.6%               9.1%               27,958          $13.27          (3.77)
 Charlotte, NC                               52,092,474            155,718           64,064             11.5%              12.3%               78,524          $12.79          (1.24)
 Chicago, IL                                159,908,393             61,904          378,891             12.1%              12.3%           (102,260)           $15.49          (2.39)
 Cincinnati, OH                              35,452,364             12,000                0             14.5%              13.9%             284,650           $10.60          (2.12)
 Cleveland, OH                               60,382,207             37,875            6,000             13.4%              13.2%             246,271           $10.52          (5.57)
 Columbia, SC                                14,997,514                  0                0              8.9%               9.0%              (2,460)          $10.39          (6.40)
 Columbus, OH                                32,336,822             26,135          153,737             12.6%              11.1%             227,892           $11.78          (7.24)
 Dallas/Ft. Worth, TX                       150,104,978            271,762          197,454             14.3%              13.4%           1,548,798           $13.29            1.22
 Denver, CO                                  72,561,302            182,737          240,646              9.6%               9.6%             538,175           $13.90            0.29
 Detroit, MI                                 72,349,467             83,617            8,200             15.6%              15.9%             214,546           $12.44          (0.88)
 Fresno, CA                                  24,932,519             49,940                0             12.3%              12.7%               76,001          $13.70            2.47
 Ft. Lauderdale-Broward, FL                  48,443,974             93,894            9,546             10.0%               9.2%             328,243           $17.62          (0.23)
 Green Bay, WI                                6,653,339                  0            9,000             14.3%              14.1%               65,336          $10.02          (1.18)
 Greenville/Spartanburg, SC                  29,389,039             10,500            4,800             10.4%              10.3%            (45,536)            $8.87          (3.59)
 Hartford, CT                                42,826,149             33,525           51,556              8.7%               9.1%               28,234          $13.21          (2.22)
 Hawaii **                                   22,182,546             25,000           45,000              4.0%               4.3%               92,901          $34.64            9.31
 Houston, TX                                150,785,880            114,774          121,627              9.8%               9.9%           (334,310)           $13.90          (1.84)
 Indianapolis, IN                            40,200,907             16,000                0             12.1%              11.7%               39,571          $11.22          (5.48)
 Jacksonville, FL                            38,681,958            139,616           40,041             12.6%              12.4%           (135,100)           $12.98          (3.42)
 Kansas City, MO-KS                          39,108,011             12,400            6,000             14.0%              13.7%             317,312           $11.88          (2.46)
 Las Vegas, NV **                            44,311,201            195,000                0             11.6%              10.9%             660,679           $16.44          (2.84)
 Little Rock, AR                             15,159,373                  0                0              8.2%               7.8%               60,878          $10.48            8.60
 Long Island, NY                             52,824,286                  0          314,562              5.3%               4.8%               89,404          $23.52          (0.63)
 Los Angeles – Inland Empire, CA             86,954,125             70,627           92,776             11.5%              11.6%             287,493           $17.33          (0.06)
 Los Angeles, CA                            152,842,977            124,711          139,531              6.8%               7.4%           (634,973)           $22.38          (1.15)
 Louisville, KY                              28,303,840             27,428           38,250             11.7%              10.7%            (45,122)           $10.91          (0.37)
 Memphis, TN                                 30,775,001            166,066           14,080             12.7%              14.6%             174,587           $10.92            1.30
 Miami-Dade County, FL                       46,398,939            102,719          113,367              5.9%               5.0%             311,151           $23.54            4.81
 Milwaukee, WI                               34,222,678            307,490           56,279             11.9%              12.1%             336,114           $11.40          (3.23)
 Minneapolis, MN **                          43,747,467            317,000           91,976              7.9%               7.6%             271,630           $16.44            1.48
 Nashville, TN                               29,813,855             49,200           20,053             10.6%              12.6%           (527,543)           $13.19          (3.51)
 New Jersey – Northern                       91,701,291             48,000           10,000              9.8%              10.0%            (17,519)           $19.49          (2.65)
 Oakland/East Bay, CA                        40,304,431            109,607          192,421              6.5%               5.9%             272,500           $21.34            1.09
 Oklahoma City, OK                           26,885,100              2,500                0             10.9%              10.1%               61,738           $9.75            2.31
 Omaha, NE **                                26,750,147             55,520           28,507             11.6%              11.8%             227,531           $12.00            2.83
 Orange County, CA                           65,595,102              7,266           58,601              6.6%               7.1%           (159,765)           $23.02            2.86
 Orlando, FL                                 63,040,768            159,238          190,000             11.6%              12.0%            (95,641)           $14.21          (6.51)
 Palm Beach County, FL                       35,316,798              8,092          385,116             10.5%               9.5%             245,591           $16.95          (3.31)
 Philadelphia, PA                           150,189,318            331,378          111,849              9.8%               9.9%               39,314          $14.33          (0.83)
 Phoenix, AZ                                104,210,622            162,555          124,829             16.6%              16.3%             916,289           $13.83          (3.22)
 Pittsburgh, PA                              32,173,726            168,539                0              6.8%               6.0%             313,106           $11.92            5.58
 Portland, OR                                35,109,945             17,000           11,430              8.2%               9.0%           (279,893)           $16.58          (4.16)
 Raleigh/Durham/Chapel Hill, NC              38,174,756             12,209           60,213              9.4%               9.3%                2,760          $14.84          (4.63)
 Reno, NV                                    13,990,444                  0                0             13.5%              15.1%           (137,374)           $14.96          (4.90)
 Richmond, VA ***                            29,595,663            109,442           79,200             11.0%              11.7%           (144,468)           $13.29          (3.35)
 Sacramento, CA                              50,695,043             17,000            8,800             14.0%              13.7%             263,537           $16.37          (3.31)
 San Diego, CA                               53,447,908             18,065          192,540              7.7%               7.7%             176,915           $20.47          (2.52)
 San Francisco, CA                            9,494,671                  0                0              5.1%               3.9%                3,455          $27.23            1.79
 San Jose/South Bay, CA                      30,526,927            126,562           18,960              7.0%               6.9%            (37,562)           $27.18            7.69
 Savannah, GA                                 7,423,872                  0                0              9.5%               8.8%            (65,225)           $14.11          (0.56)
 Seattle/Puget Sound, WA                     57,970,481            281,234          310,009             10.0%               9.5%             772,860           $18.28            1.67
 St. Louis, MO                               55,237,577            114,417           48,000             10.7%              11.5%               45,195          $12.30          (2.46)
 Stockton, CA                                19,417,410                  0          158,000             11.0%              10.6%               96,586          $14.99          (2.09)
 Tampa/St Petersburg, FL                     87,187,323             55,000           32,032             11.0%              10.7%               48,514          $13.17          (1.20)
 Washington, D.C.                            81,133,765            220,633          294,800              7.4%               7.2%             268,316           $22.20          (0.72)
 West Michigan                               32,400,984             15,500           13,000             17.3%              17.5%            (12,833)             $9.43           1.84
 Westchester County, NY                      50,267,714            290,615          303,179              7.1%               7.1%            202,482            $19.10            0.84
 Totals                                  3,288,605,292           5,813,967        5,289,653             10.8%              10.4%          8,975,224            $15.27        ($0.01)

* Community and Neighborhood Centers ** Select Colliers offices track their own market data *** New market added to sample this quarter; Source: CoStar, Colliers Research

                                                                                    HIGHLIGHTS | Q3 2012 | RETAIL | NORTH AMERICA

tracks, with 18 markets tallying year-over-year declines equal to or        should—if it’s not already—be a key strategic initiative for many
greater than 0.5%. Vacancy rates in San Francisco (3.9%), Hawaii            retailers, both to better manage costs and to better serve customers by
(4.1%), Long Island (4.8%), Miami-Dade County (5.0%), Oakland/East          getting product into their hands faster. As one example, Amazon
Bay (5.9%), Pittsburgh (6.0%), Boston (6.4%), and San Jose/South            opened 18 more fulfillment centers globally in 2012. We continue to
Bay (6.9%) all came in under 7%.                                            track comments made on Q3 and Q4 executive conference calls to
                                                                            assess portfolio management trends that impact retailers’ ability to
West Michigan (17.5%), Phoenix (16.3%), Detroit (15.9%), and Reno           remain competitive in what will continue to be an uncertain consumer
(15.1%) continue to experience vacancy rates above 15%. Over the past       spending environment, at least for the first half of 2013.
year Charleston, Columbus (OH), and Louisville have all seen vacancy
rates drop by 100 basis points as improving employment trends and           SHRINKING RETAILER MARGINS MAY IMPACT 2013 INVESTMENT
corporate activity have re-energized retail markets.                        Overseas demand has buoyed eleven successive quarters of corporate
                                                                            profit growth, even as U.S. consumers and businesses have struggled
National Q3 year-to-date absorption reached nearly nine million SF,         to pay down their debts. Within the past year, U.S. companies have
representing nearly 5.4 million SF of space taken up during the             come under pressure to increase domestic sales to compensate for
quarter. Dallas (+652,600 SF) led the country in Q3 absorption;             slackening global demand. Retail companies met past quarters’
Charlotte, Denver, Minneapolis-St. Paul, Boston, Omaha, Las Vegas,          per-share earnings guidance through cost cutting, both within their
and Baltimore each absorbed more than 300,000 SF. YTD absorption            back-office operations and through rationalization of their real estate
trends have turned positive in a handful of markets including               portfolios. Flattening revenue growth may force another round of
Indianapolis and Hartford. Looking ahead to Q4, though, we expect           internal process and portfolio review.
national absorption rates to stabilize as new developments come
online, including robust activity in some areas that suffered during the    Colliers’ recent survey of 135 retailers revealed that 42% (57
recession. Nowhere is this trend more evident than in West Michigan:        companies) have experienced gross margin erosion over the past 12
our brokers tell us that developers are taking advantage of tax credits     months; 31 companies’ margins have decreased by more than 100
and other funding incentives to kick off new ground-up projects and         basis points. The department store, discounter, and drugstore
significant mixed-use redevelopments.                                       categories have experienced the largest year-over-year declines (see
                                                                            chart below). The grocery sector averaged a positive year-over-year
Third-quarter shopping center rental rates slipped $.05, from $15.32 in     gross margin change, but would have contracted 50 basis points if
Q2 to $15.27 in Q3. As stated last quarter, we believe that metro area      data from Whole Foods and strong regional players Fresh Market and
data aggregations are obscuring rental improvement in many markets          Harris Teeter were excluded. Restaurants, by contrast, had far and
and submarkets, as depressed rental levels in specific distressed assets    away the greatest gains in margins, but the category average obscures
distort the averages. In space-constrained markets such as Boston, more     a wide spread in individual corporate rates.
landlords have regained leverage with retailers and are pushing back on
co-tenancy clauses that until recently were standard in lease language.

                                                                             YEAR-OVER-YEAR CHANGE IN CORPORATE GROSS MARGIN RATE
Much to the relief of the retail industry, the International Longshore-
men’s Association (ILA) agreed on September 20 to postpone its                 RETAILER CATEGORY                                PERCENTAGE
planned strike for 90 days. The strike had been scheduled to take
place October 1 if the ILA and the United States Maritime Alliance              Auto                                                0.236
(USMX) couldn’t agree on terms for a new contract. While the
                                                                                Department Stores                                  (0.824)
postponement provided retailers the opportunity to revert to their
original holiday shipping schedules, the uncertainty leading up to the          Discounters                                        (0.258)
ILA’s last-minute decision forced many to adopt alternative shipping
                                                                                Drug                                               (0.084)
programs as a defensive measure. Many retailers accelerated
overseas cargo delivery to avoid having their goods locked out; data            Grocery                                             0.185
from NRF/Hackett Global Port Tracker reported that September import
                                                                                Hobby                                               0.624
cargo volume rose 8% year-over-year and October’s increased 9.9%.
                                                                                Home                                                0.092
Although the U.S. retail industry avoided what could have been a
                                                                                Quick-Service Restaurants                           0.905
calamity this holiday season, ports staffing and automation remain
hotly contested issues. Within the next 18 months, they must be                 Restaurant                                          3.651
addressed at facilities on both coasts and in the Gulf of Mexico.
High-profile lobbying efforts by the NRF, ICSC, and other retail-focused        Specialty                                           0.114
entities highlight the increasing convergence and overlap of retail and
industrial real estate. This convergence dictates that that rationalizing
                                                                            Source: Bloomberg, Colliers Research
the size, location, and operations of their distribution facilities
                                                                                                                                 Continued on page 8

                                                                                                                   COLLIERS INTERNATIONAL |     P. 5


                                MOST RECENT % CHG IN Y-O-Y   % CHG IN
                                 REPORTING   SALES (MOST   Y-O-Y SALES
RETAILER                          PERIOD     RECENT QTR) (PREVIOUS QTR)                                          COMMENTS                                          OUTLOOK
Advance Auto Parts                 Q2 2012       (2.7)       2.1       weak demand, esp. in cold-weather markets; consumers postponing maintenance
AutoZone (U.S.)                    Q4 2012       2.1         3.9       finished a 3rd consecutive year with 20%+ EPS growth; first Brazil store opening Q1 13
O'Reilly Auto Parts                Q3 2012       1.3         2.5       larger percentage of sales in "hard parts" as DIY auto repairs become more complex
Pep Boys                           Q2 2012       flat       (2.8)      "buy online, pick up in store" launched this quarter; new CFO, Chief Customer Officer
Belk                               Q2 2012        4.9         7.4      opened new 500K fulfillment center to bolster e-commerce business
Dillard's                          Q3 2012        5.3         3.0      strength in men’s apparel, men’s and ladies’ accessories; managing expenses well
JCPenney                           Q3 2012      (26.1)      (21.7)     store traffic fell 12%; corporate promotions strategy still confuses customers
Macy's                             Q3 2012        3.7         3.0      raised full year earnings guidance; upbeat on Holiday despite Sandy’s impact on NE stores
Nordstrom                          Q2 2012        4.5         8.5      raised full-year guidance, plans for 230 Rack stores by 2016
Neiman Marcus                      Q4 2012        7.9         6.7      women's contemporary sportswear, shoes drove stores (+7.9%) and Direct (+18.8%)
Saks Fifth Avenue                  Q2 2012        4.7         4.8      loss on costs for new fulfillment center, store closings; expecting higher 2H margins
Sears (U.S.)                       Q2 2012       (2.9)       (1.0)     operating loss narrows by nearly 50% (~$80M); further asset liquidations coming
The Bon Ton                        Q2 2012        0.1        (1.3)     losses widening with lower revenues and ongoing debt-reduction
Big Lots (U.S.)                    Q2 2012      (1.9)       (0.8)      sales of electronics, hardlines helped Q2 revenue, but operating profits down
Costco (U.S., with/excl. fuel)     Q4 2012     6.0 / 6.0   5.0 / 4.0   recent Citibank study suggested smaller markets will drive growth through 2020
Dollar General                     Q2 2012       5.1         6.7       continuing to take share from competitors in food, drug, and mass-market channels
Dollar Tree                        Q2 2012       4.5         5.6       higher traffic drove Q2 comps; customers responding well to Deals brand
DSW                                Q2 2012       4.2         7.6       declared a special $2.00/share dividend; projecting large earnings growth in Q4
Family Dollar                      Q4 2012       5.4         5.0       consumables focus continues to pressure margins; projecting 4-6% FY13 comps increase
Fred's Super Dollar                Q2 2012      (1.0)       (0.4)      testing new 16,000 SF store formats with pharmacy drive-through windows
Kohl's                             Q3 2012       1.1        (2.7)      improving online market share and conversion rates; stands to benefit from JCP woes
Ross                               Q2 2012       7.0         9.0       sales strength in Juniors, Shoes, and the Florida market; 80 new stores by year end
Sam's Club (U.S., excl. fuel)      Q2 2012       4.5         5.3       comps higher on both average traffic and ticket; strong renewals rate continues
Target                             Q2 2012       3.1         5.3       another strong quarter; all eyes on website ops as high-profile 2H promotions launch
TJ Maxx                            Q2 2013       7.0         8.0       Q2 EPS grew 25%; traffic up significantly in all divisions worldwide
Tuesday Morning                    Q1 2013       1.7         0.2       higher average ticket but lower traffic; projecting flat comp store sales for FY 2013
Walmart (U.S.)                     Q2 2013       2.2         2.6       July was the quarter's strongest sales comp month, bodes well for BTS revenues
The Fresh Market                   Q2 2012        8.0         8.2      watching future pricing strategy as company opens stores in more competitive markets
Harris Teeter                      Q3 2012        3.7         3.9      swapped portfolios of N.C. stores with Lowes Foods; converting three to new format
Kroger (excl. fuel)                Q2 2012        3.6         4.2      record Q2 EPS; comps up in every operating division and store department
Roundy's                           Q2 2012       (3.3)       (2.1)     total sales up on strength of organics and private label; comps down on price pressure
Safeway (total/excl. fuel)         Q3 2012     0.2 / 0.1   1.9 / 0.8   sales flat, but management team predicting market share gains during the next year
Supervalu (Retail food)            Q2 2013       (4.3)       (3.7)     investments in pricing and promotions continue to weigh on comps
Weis Markets                       Q3 2012       (1.7)        0.4      hit unfavorable YoY comp with higher Northeast storm-driven sales in September 2011
Whole Foods                        Q3 2012        8.0         9.5      transactions +7%; on track to reach eventual corporate goal of 1,000 stores
Barnes & Noble                     Q1 2013        4.6         4.5      losses narrowed on both e-book and hardcopy revenues, effective cost controls
Best Buy (U.S.)                    Q2 2013       (3.2)       (3.7)     quarterly profit down 91%; suspended earnings guidance; new CEO
Cabela's                           Q3 2012        3.9         4.7      3rd-highest gross margin in 8 years; strong results but some weakness in Direct
Dick's Sporting Goods              Q2 2012        2.9         7.3      focusing on higher-margin, store-within-a-store shops from Nike, Under Armour
GameStop (global)                  Q2 2012       (9.3)      (12.5)     starting to gain traction in shift to digital product; potential buyout candidate?
hhgregg                            Q1 2013       (5.1)       (0.7)     changes to cost structure expected to show up in better results later in FY 2013
Office Depot (N. America)          Q3 2012       (4.0)       (4.0)     in next five years, will downsize or relocate 500 stores to mid-sized formats
OfficeMax (retail, U.S.)           Q3 2012       (2.6)       (1.8)     merchandise mix changes benefitting margins; Office Depot merger speculation
PetSmart                           Q2 2012        7.0         7.4      7% increase in service revenues; quarter transaction counts move higher
Staples (N. America)               Q2 2012       (2.0)        flat     cutting U.S. real estate 15% by 2015; more closures in Europe

                                                                                                      HIGHLIGHTS | Q3 2012 | RETAIL | NORTH AMERICA


                                        MOST RECENT   % CHG IN Y-O-Y   % CHG IN
                                         REPORTING     SALES (MOST   (Y-O-Y SALES
RETAILER                                  PERIOD       RECENT QTR) PREVIOUS QTR)                                           COMMENTS                                           OUTLOOK
Aaron's (corporate-owned)                 Q3 2012         6.5          6.1        opened 2,000th store; total customer count up 12% year-over-year to 1.66 million
Bed Bath & Beyond                         Q2 2012         3.5          3.0        portfolio square footage, with acquisitions, up 16% year-over-year
Home Depot (U.S.)                         Q2 2012         2.6          6.1        Pro, service businesses led Q2 growth; 35% of mobile sales pick up orders in store
Lowe's (U.S.)                             Q2 2012        (0.2)         2.7        earnings beat expecations as revenues miss
Pier 1                                    Q2 2013         6.1          7.2        margins up on strong inventory management, less promotion; growing market share
Williams-Sonoma, Inc.                     Q2 2012         7.4          5.4        long-term focus on strengthing existing brands, offering new products, and global
CVS                                       Q3 2012         3.6          2.4        expects to retain 60% of WAG Rx business
Rite Aid                                  Q2 2014         flat         2.5        introduced lower 2013 guidance, expecting more negative impact from generics
Walgreens                                 Q4 2012        (8.7)        (6.6)       beat earnings but Wall Street remains skeptical; watching for Balance Rewards upside
Applebee's                                Q3 2012        2.0           0.7        chain is fully franchised; Q3 results reflected higher average check, lower traffic
BJ's Restaurants                          Q3 2012        2.3           4.4        comps gain on new loyalty program, bartender education to drive craft beer sales
Bloomin' Brands (N. America)              Q3 2012        3.6           2.4        all four chains comped higher; raised FY guidance for revenues and earnings
Bob Evans                                 Q1 2013        1.0          (0.6)       slight miss on top and bottom lines but earnings growth is accelerating
Brinker Int'l (system-wide)               Q1 2013        2.7           2.1        both chains' comp store sales trending lower; issued Q2 sales, profit warnings
Buffalo Wild Wings (owned)                Q3 2012        6.2           5.3        higher wing costs hurt profits, but company raised L/T expectations to 1,700 N.A. stores
Burger King (U.S./Canada)                 Q3 2012        1.6           4.4        limited-time summer BBQ and chicken menu items expanded customer base
Cheesecake Factory (total)                Q3 2012        2.5           1.7        Cheesecake (+2.9%) with increases across the U.S. and across dayparts
Chipotle                                  Q3 2012        4.8           8.0        spooked markets with announcement that it's considering menu price increases
Darden (Basic/Specialty)                  Q2 2013     (0.3) / 2.2   (1.9) / 2.7 Basic continues with menu differentiation; Specialty working to integrate Yard House
Denny's (system-wide)                     Q3 2012        0.4           0.8        guest traffic down, but customers willing to trade up to increasing-priced limited offerings
Domino's                                  Q3 2012        3.3           1.7        new store redesign will accommodate higher percentage of carryout purchases
Dunkin' Donuts (U.S.)                     Q3 2012        2.8           4.0        cold beverages, new bakery products, and breakfast sandwiches driving results
Einstein Noah                             Q2 2012        1.3           1.1        fewer transactions but higher avg. ticket driven by more catering, revamped mix
Jack in the Box (system-wide)             Q3 2012        2.8           4.2        breakfast remains strongest day part; continued focus on speed of service
Kona Grill, Inc.                          Q2 2012        0.2           2.3        operating margins remain near the top of their peer group
Krispy Kreme (company stores)             Q2 2013        5.4           2.1        National Doughnut Day and 75th anniversary were big Q2 traffic generators
McDonald's (U.S.)                         Q2 2012        1.2           3.6        weak Q3, sales trending negative in Q4; will re-launch McRib to kick-start momentum
Mimi's Café                               Q1 2013        (3.3)        (3.1)       SSS comps improved each month of the quarter; company adding $1M to marketing
Panera Bread                              Q3 2012        6.2           7.1        newly opened cafes generating weekly sales 14% higher than existing locations
Papa John's (N. America)                  Q3 2012        2.5           5.7        raised FY 2012 sales and earnings guidance; hurricane expected to boost Q4 revenues
Qdoba (system-wide)                       Q3 2012        2.1           3.0        more promotional activity drove higher SSS growth (+3.3%) at company-owned locations
Ruby Tuesday, Inc.                        Q1 2013        1.9          (4.6)       new TV marketing plan drive first positive SSS quarter in seven
Ruth's Hospitality
   Ruth's Chris                           Q3 2012        5.9           6.0        82% of restaurant portfolio comped higher this quarter; FL and CA especially strong
   Mitchell's Fish Market                 Q3 2012        4.6           2.3        sales efforts focused on underperforming days and day parts
Starbucks (Americas)                      Q3 2012        7.0           7.0        comp transactions +5%, average ticket +2%; La Boulange included in 250 net new stores
Yum! Brands (U.S.)                        Q3 2012        6.0           7.0        FY year EPS guidance increased on strong worldwide results
American Apparel (incl./excl. online)     Q2 2012     16.0 / 14.0   16.0 / 14.0   30% of stores had Q2 comps growth > 30%; raised FY12 EBITDA outlook by 12%
Ann Taylor                                Q2 2012         4.7           3.8       profits up 24%; Ann Taylor (+5.6%), Loft (+4.2%)
The Buckle                                Q2 2012        (0.8)          7.4       comps turned negative on tough year-over-year comparisons; good inventory levels
Destination Maternity                     Q4 2012         2.7          (2.4)      store closures hit revenues, but still expects to exceed earnings guidance
Gap                                       Q2 2012         4.0           4.0       WWD called Q2 earnings call "[CEO's] most upbeat" since 2007
H&M                                       Q3 2012         flat          2.0       accelerating full-year store openings from 275 to 300; first South American stores in '13
Hot Topic                                 Q2 2012         3.9           7.5       successful "Hot Cash" promotion in July; unveiled new marketing plan for Torrid
Limited Brands                            Q2 2012         8.0           7.0       Victoria's Secret records its 10th consecutive quarter of SSS < 9%
Men's Wearhouse                           Q2 2012         4.4           3.8       announced strategic partnership with The Knot; new TV advertising campaign effective
Zumiez                                    Q2 2012         3.7           9.5       Q2 earnings miss; executives focused on margin protection for balance of 2012

* Sources: Company Reports, Colliers Research                                                                                                 COLLIERS INTERNATIONAL |            P. 7

If margin compression continues—we expect that it will—then it will          CANADIAN RETAIL ADOPTING NEW BRANDS, FORMATS
necessitate changes to 2013 corporate capital investment levels and          Canadian metropolitan markets are experiencing unprecedented levels
expenditure allocation strategies. Last year at this time, Q3                of both new retail construction and expansion of existing centers. The
earnings calls contained significantly more detail about 2012                country represents a compelling destination for U.S. retailers and outlet
expansion plans. As the “fiscal cliff” approaches, fewer retailers this      mall developers for two reasons. First, despite their rising consumer
season have hinted at, let alone provided, initial guidance on their 2013    debt, Canadians continue to spend at a per capita level on par with their
capital plans. Walmart is a notable exception: its CapEx budget is           American counterparts. Second, Canadian shopping center inventory
down 8% from 2012’s. Fewer dollars doesn’t necessarily mean fewer            falls well short of U.S. inventory on a per capita basis: 16 SF per capita
new stores, though; Walmart seeks to maintain its square footage             as compared to 24 SF per capita. Canadian centers’ productivity levels
growth trend by identifying ways to reduce real estate construction          are 50% more than the U.S. average, although some analysts question
costs. Other strong retailers, such as McDonald’s and Dollar Tree, have      Canada’s ability to accommodate a U.S.-level retail supply given its much
forecast that the next few quarters will be challenging for them, but        lower population density and the proximity of many large Canadian
given their aggressive growth programs, we expect they will find ways        markets to retail destinations south of the border in the U.S.
to cut costs rather than slow their real estate programs.
                                                                             Target’s first round of Canadian stores will open in spring 2013, at
DEVELOPMENT PIPELINE FOCUSED ON                                              which point seven of the 10 largest American retailers (the other six
SINGLE-TENANT NET LEASE, OUTLETS                                             are Walmart, Costco, Sears, Home Depot, Lowe’s, and Best Buy) will be
As rental rates stabilize and vacancy levels fall in many markets,           operating in Canada. Target’s investment in the former Zellers stores is
retailers, developers, and lenders are slowly becoming more comfortable      generating follow-on interest in struggling malls from other retailers. A
with ground-up development. Data from Reed Construction tallies the          large question mark looms over malls anchored by Zellers that are not
dollar volume of U.S. retail construction starts year-to-date to have        part of Target’s Canadian network plans: they are mostly located in
risen 29% compared to the same period in 2011. New retail starts rose        secondary markets where replacement tenants will likely be hard to
33.6% year-over-year to 82.2 million SF. Reed attributes the increase        find and may ultimately be non-retail uses. Target’s Canadian stores
to a combination of more readily available construction financing and        are estimated eventually to capture $6 billion in sales, more than 1.2%
developers catching up on projects that stalled during the recession.        of Canada’s total retail spending. To better compete with Target,
CoStar projects that 52 million square feet will delivered in 2013, and      competitors Walmart, Hudson’s Bay, Canadian Tire, and many regional
that the majority of new construction delivered in 2013 will be              and smaller chains are expanding or otherwise investing in their stores
single-tenant buildings. Colliers’ year-end retail report will include       to differentiate themselves or to bolster their presence.
more detail on 2013 store opening announcements. Tight inventory
levels in this property sector have contributed to marked cap rate
compression and, in the past quarter or two, a slight slowdown in
transaction volume as potential buyers have been unable to find
available properties. We continue to observe foreign investors’
increasing desire to acquire single-tenant properties, which further
expands the competition for inventory.

The U.S. outlet sector is also projected to expand significantly. Colliers
is aware of 190 outlet centers currently operating in the U.S.—including
three set to open in November—representing a total of approximately
72 million SF. Responding to shoppers’ ongoing frugal mindset,
more retailers are now operating outlet divisions, where they enjoy
occupancy cost ratios that often come in 400 to 600 basis points
lower than they might pay at enclosed malls. Outlets’ strengthening
fundamentals have resulted in high rent growth and profitability for
their owners, propelling many traditional retail developers to jump
into the business too. Seeing a development opportunity, most major
traditional retail developers have jumped. An additional 23 projects
have been announced; more than half are slated to open during the
next 18 months. The current slate of proposed projects has an
average footprint of 360,000 SF, somewhat smaller than centers
built earlier. Because of their smaller size, today’s outlet projects can
now be more accommodated easily closer to city centers, such
as Tanger’s partnership with The Peterson Companies on the Outlets
at National Harbor, just outside Washington, D.C.

                                                                                      HIGHLIGHTS | Q3 2012 | RETAIL | NORTH AMERICA

Canadian outlet mall developers, many partnering with their more experienced U.S. peers, are
racing to establish the first traditional outlet malls in Canadian markets. Speakers at October’s
                                                                                                         522 offices in
ICSC’s Toronto convention generally agreed that Canada can support 20 outlet malls; 14 are               62 countries on
currently under development. Outlet developers are in an acknowledged race to secure lease
commitments from premium brands such as Coach, Gap, Tommy Hilfiger, and selected other “outlet           6 continents
anchors.”                                                                                                United States: 147
                                                                                                         Canada: 37
The combination of shopping center expansion and new center development will add approximately           Latin America: 19
2.5 million SF of new retail floor area to Greater Vancouver; more than 10 million SF is planned in      Asia Pacific: 201
Calgary; and in the past year Montreal recorded a net increase of almost 2.6 million SF in shopping      EMEA: 118
center space. Despite the volume of development, the investment climate for existing retail product      •   $1.8 billion in annual revenue
remains relatively strong, with stable cap rates across major markets for all retail product types.      •   1.25 billion square feet under
However, as with all retail markets, the future is in the hands of the consumer, and Canadians may           management
eventually heed the advice to save more and spend less in advance of increases in the central            •   Over 12,300 professionals and staff
bank’s prime lending rates.                                                                              •   400+ Retail professionals in
                                                                                                             68 U.S. Offices
At the end of Q2 2012, Mexico’s retail real estate market contained 497 shopping centers larger          COLLIERS INTERNATIONAL
than 10,000 SM (100,000 SF), and a total net leasable area of 16.051,847 SM. The country’s               601 Union Street, Suite 4800
inventory is concentrated within power center (41% of total), fashion mall (31%) and community           Seattle, WA 98101
center (16%) projects (see pie chart on next page). Currently, Colliers is tracking 44 shopping          TEL +1 206 695 4200
center projects as “under construction,” with a total net leasable area of 890,622 SM. Four of
these projects are expansions to existing malls; the rest are ground-up developments. More than          FOR MORE INFORMATION
one-half (52%) of the projects under construction are in metropolitan Mexico City. Colliers              Ann T. Natunewicz
projects that 27 of them either have opened or will open in the second half of 2012: Gran Terraza        National Manager
Oblatos, a fashion mall in Guadalajara; Gran Terraza Belenes, a community center in Zapopan; and         Retail Research | USA
                                                                                                         TEL +1 202 534 3608
Zentralia Churubusco, a power center in Iztapalapa, are among the highest-profile.
                                                                                                         EMAIL Ann.Natunewicz@colliers.com

                                                                                                         James Smerdon
                                                                                                         Retail and Strategic Planning | Canada
                                                                                                         TEL +1 604 661 0808
                                                                                                         EMAIL James.Smerdon@colliers.com
                                                                                                         Flavio Gomez
  2012 TREND                                            Q1                Q2             Q3 2012         Manager
  TO WATCH                                                                                               Market Research | Mexico
                                                                                                         TEL +52 (55) 5209 3682
   Equities Market Volatility                     Ask Again Later    Outlook Good     Yes - De nitely    EMAIL Flavio.Gomez@colliers.com

   Manufacturing Surges                           Yes - De nitely    Outlook Good      Outlook Good      KC Conway, EMD, Market Analytics, and
                                                                                                         Mike Otillio, Director of Research (Dallas)
   Experience Trumps Price                        Ask Again Later   Ask Again Later   Ask Again Later
                                                                                                         contributed data and/or insights to this
   More Limited Editions                          Yes - De nitely   Yes - De nitely   Yes - De nitely    report.

   More Strategic Acquisitions                    Yes - De nitely   Yes - De nitely   Yes - De nitely    Jennifer Macatiag | Graphic Designer | USA

   Distressed Assets Begin to Move                 Outlook Good      Outlook Good      Outlook Good
                                                                                                         Copyright © 2012 Colliers International.

   Foreign Investors     the U.S.                  Outlook Good     Yes - De nitely   Yes - De nitely    The information contained herein has been obtained from sources
                                                                                                         deemed reliable. While every reasonable effort has been made to
                                                                                                         ensure its accuracy, we cannot guarantee it. No responsibility is
                                                                                                         assumed for any inaccuracies. Readers are encouraged to consult
   Expanded Debt/Equity, Stringent Underwriting    Outlook Good      Outlook Good      Outlook Good      their professional advisors prior to acting on any of the material
                                                                                                         contained in this report.

   Urban In ll Makes a Comeback                   Ask Again Later    Outlook Good      Outlook Good

It is impossible to overstate the gravity and global importance of the decisions facing U.S.
politicians in the waning weeks of the year with respect to the “fiscal cliff.” The retail sector, and
the resilient U.S. consumer, have done their parts to claw forward this year. We hope very much
that the momentum will continue in 2013.                                                                 Accelerating success.

                                                                                                                      COLLIERS INTERNATIONAL |                                P. 9

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