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					C O L L I E R S I N T E R N AT I O N A L


US Real Estate
Review 2008




                                           colliers.com
           COLLIERS RESEARCH
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Colliers Research has developed powerful technological tools to provide
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demand, absorption data, and transaction comparables. Research uses this
information to produce quarterly surveys of office and industrial markets
in over 70 North American metropolitan areas.
Colliers research reports provide standardized information for each market.
Market Highlights reports based upon quarterly surveys include inventory,
vacancy, absorption and rental rates in side-by-side comparisons for
North American markets as well as quarter-to-quarter comparisons and
aggregated national statistics. Investment sales prices and cap rates are
reported as well.
Research groups across the country also have expertise in location and
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To ensure that our clients’ real estate decisions are thoroughly informed,
our researchers perform numerous financial analyses. Options include
comprehensive occupancy cost comparisons for potential lease locations
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The information contained herein has been obtained from sources deemed reliable. While every reasonable
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       C O L L I E R S I N T E R N AT I O N A L   l   U S R E A L E S TA T E R E V I E W 2 0 0 8




                     TABLE OF CONTENTS
 colliers.com




UNITED STATES REAL ESTATE REVIEW
Letter from the Director of Market and Economic Research                                             1
US Real Estate                                                                                       3
  – US Office Market                                                                                 3
  – US Industrial Warehouse Market                                                                   4
  – US Retail Centers                                                                                5
  – US Investment Sales Market                                                                     5–6


US CITY ANALYSES AND FORECASTS

Atlanta, GA                                   9         Louisville, KY                             37
Bakersfield, CA                              10         Memphis, TN                                38
Baltimore, MD                                11         Miami/Dade County, FL                      39
Boise, ID                                    12         Milwaukee, WI                              40
Boston, MA                                   13         Minneapolis, MN                            41
Charleston, SC                               14         Nashville, TN                              42
Charlotte, NC                                15         New Jersey – Central                       43
Chicago, IL                                  16         New Jersey – Northern                      44
Cincinnati, OH                               17         New York, NY                          45 – 47
Cleveland, OH                                18         Oakland, CA                                48
Columbia, SC                                 19         Orange County, CA                          49
Columbus, OH                                 20         Orlando, FL                                50
Dallas/Ft. Worth, TX                         21         Philadelphia, PA                           51
Denver, CO                                   22         Phoenix, AZ                                52
Detroit, MI                                  23         Pleasanton/Walnut Creek, CA                53
Ft. Lauderdale/Broward County, FL            24         Portland, OR                               54
Fresno, CA                                   25         Raleigh/Durham, NC                         55
Greenville, SC                               26         Reno, NV                                   56
Hartford, CT                                 27         Sacramento, CA                             57
Honolulu, HI                                 28         San Diego, CA                              58
Houston, TX                                  29         San Francisco, CA                          59
Indianapolis, IN                             30         San Francisco/San Mateo Peninsula, CA      60
Jacksonville, FL                             31         San Jose/Silicon Valley, CA                61
Kansas City, MO-KS                           32         Seattle/Puget Sound, WA                    62
Las Vegas, NV                                33         St. Louis, MO                              63
Little Rock, AR                              34         Stockton, CA                               64
Los Angeles, CA                              35         Tampa Bay, FL                              65
Los Angeles/Inland Empire, CA                36         Washington, DC                        66 – 67
                                                        West Palm Beach, FL                        68


Glossary                                                                                            70
Colliers USA Office Locations                                                                       71
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LETTER FROM THE DIRECTOR OF RESEARCH

 At Times Like This, Good Information, Good Advice and a Little Perspective are Critical
 In last year’s US Real Estate Review we listed a number              For commercial real estate owners a slow recovery is
 of “crises” that might derail a near perfect period for              never good news but the industry is entering into this
 commercial real estate. Being somewhat prescient, one                period of sluggishness in reasonably good shape.
 such item was a debt crisis which of course is exactly               The biggest concern in going into a slowdown has
 what transpired beginning in August and continuing                   historically been an unusually large development
 into 2008. The subprime lending debacle has been well                pipeline. But this time around development activity
 chronicled and is a story that still is without an end.              is abnormally low. A surge in sublease space is highly
 For readers of this report, the concern now is how will              unlikely because firms weren’t generally “space banking”
 events transpiring in the residential world impact our               as was the case in the last downturn. Lastly, for the most
 universe as leases come up for renewal, development                  part owners are also better capitalized meaning landlords
 projects get a second look, mortgages are refinanced and             won’t be forced to act hastily.
 investment decisions are made. The outlook has never
                                                                      This is not to suggest the coming months and quarters
 been so murky but the key to navigating safely through
                                                                      won’t be full of tension and anxiety – they will.
 such dangerous waters is good information, good advice
                                                                      Whenever the economy slows substantially, as recent
 and a little perspective. That is the intent of this report.
                                                                      data has indicated, there is good reason to be cautious.
 In the following pages we have provided market by                    Leasing activity will slow, real estate transactions will be
 market data and commentary for 57 metropolitan areas                 down considerably and many developments will be put
 across the country. Local researchers have provided                  on hold. The key to any sense of normalcy will be the
 insight into likely market movements bearing in mind                 public debt markets. Until stability returns to the world’s
 market conditions and current fundamentals. The result               credit markets commercial real estate will continue to
 is one of the most comprehensive reviews of its kind.                tread water. Access to debt has always been a critical
                                                                      ingredient for our industry and that is no less true today.
 So what are the common themes coming through in
                                                                      Real estate markets will fluctuate over the coming year
 this year’s report? The overwhelming concern from every
                                                                      but the general direction is still up as fundamentals are
 corner of the country is the economy and specifically the
                                                                      unlikely to weaken substantially and actions by the
 housing market. Almost every city listed housing as the
                                                                      Federal Reserve and other policymakers eventually take
 number one issue likely to affect the local economy and
                                                                      effect. As always, the road ahead no doubt will offer
 the possible impact on income-producing real estate.
                                                                      many opportunities and it is often at times like this
 Layered on top was the availability of credit and the
                                                                      that “once in a life-time opportunity” comes a along.
 likely impact of a significant pullback by lenders for a
                                                                      Be assured everyone at Colliers is available to help you
 prolonged period.
                                                                      achieve your goals and hope this report goes someway
 Difficulties in credit markets are nothing new and                   to help you navigate through this restless period.
 financial markets have demonstrated a talent for being
 flexible enough to avert a material downturn. This time              Ross Moore
 however, the problem is considerably larger and much                 Senior Vice President, Market & Economic Research
 more complicated. This begs the question whether the                 ross.moore@colliers.com
 Federal Reserve, along with other central banks, can
 provide the much needed support and liquidity that
 is required. The answer is “probably” but, any such
 treatment will take time to see the results, thus a quick
 turnaround is highly unlikely.




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                                                       US REAL ESTATE

       US Office Market                                                                    • Vacancy rates fell marginally in 2007 but for 2008 the
                                                                                             national vacancy rate will rise in the face of modest
       • Demand for office space off from 2005/2006 levels as
                                                                                             construction but below trend absorption
         the national economy slowed and hiring declined
         through 2007                                                                      • 2008 absorption is expected to be down from
                                                                                             2007 levels
       • Office rents increased again led by New York,
         San Francisco, Boston and Washington, DC                                          • Office construction will increase relative to 2007
                                                                                             levels but a sharp drop-off is anticipated by year-end
       • Relative to 2006, rental increases were more broad
         based, both regionally and CBD vs. non-CBD                                        • Very few markets could be described as oversupplied
       • Rental growth is almost certain to slow even though                               • Sublease space is not anticipated to spike as signs of
         many markets report balanced market conditions                                      “over leasing” by tenants has not been observed


DOWNTOWN OFFICE                                                                            SUBURBAN OFFICE
               Inventory                New          Absorption   Vacancy      Class A                    Inventory                New          Absorption    Vacancy         Class A
                  (SF)               Supply (SF)        (SF)      Rate (%)   Rent ($PSF)                     (SF)               Supply (SF)        (SF)       Rate (%)      Rent ($PSF)
1999 1,231,905,000                9,773,000          17,713,000     8.4         36.81      1999 2,373,162,000             113,866,000           86,297,000     10.0            26.53
2000 1,372,195,000               16,158,000          24,735,000     7.5         42.83      2000 2,502,093,400              98,170,000         103,518,000       9.4            27.23
2001 1,403,246,000               11,048,000        (53,388,000)    11.9         38.10      2001 2,829,102,000             116,661,000         (22,501,000)     14.5            26.40
2002 1,423,336,000               20,249,000        (15,171,000)    14.1         33.20      2002 2,904,501,000              70,187,000         (10,299,000)     16.7            23.90
2003 1,441,446,000               14,562,000           4,767,000    14.7         32.00      2003 2,949,460,000              37,666,000           21,178,000     17.2            23.60
2004 1,478,242,000                9,939,000          12,752,000    14.4         33.25      2004 3,012,205,000              37,219,000           65,950,000     15.6            23.48
2005 1,489,610,000               11,461,000          28,190,000    12.8         34.69      2005 3,047,315,000              35,611,000           78,632,000     13.6            24.04
2006 1,499,672,000               10,276,000          32,299,000    11.4         41.09      2006 3,099,134,000              48,191,000           64,525,000     12.8            25.83
2007 1,562,178,000               12,035,000          21,394,000    10.7         48.58      2007 3,199,869,000              61,896,000           43,076,000     13.0            28.68
2008P 1,574,070,000              11,892,000          17,885,000    10.2         50.52      2008P 3,268,072,000             68,203,000           42,564,000     13.5            29.25
Source: Colliers Research Services                                                         Source: Colliers Research Services




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     US Industrial Warehouse Market                                • The housing market a long with the auto sector are
                                                                     expected to be key sources of weakness in 2008
     • Demand for warehouse space down relative to 2006,
       year-end particularly slow                                  • Trade is again expected to be a bright spot
     • As anticipated construction activity picked up as the       • Manufacturing, while sluggish, is anticipated to be
       year progressed                                               relatively healthy
     • Warehouse rents posted similar increases as recorded
       in 2006
                                                                   INDUSTRIAL
     • Demand for warehouse space fell short of expectations                      Inventory                New         Absorption Vacancy Warehouse Land
       as economic stalled particularly at year-end                                  (SF)               Supply (SF)       (SF)    Rate (%) Rent ($PSF) ($PSF)
     • Full year completions came in marginally below 2006         1999       9,027,196,000         201,214,000       177,753,000    6.8      4.81      2.65
                                                                   2000       9,647,919,000         203,515,000       212,480,000    6.4      5.51      2.68
       levels- 2008 construction is expected to drop further       2001       9,999,449,000         221,535,000         6,112,000    8.8      4.88      4.67
     • With a drop-off in construction, the national vacancy       2002      10,587,718,000         128,987,000        16,200,000   10.1      4.65      4.80
                                                                   2003      10,842,256,000         102,853,000        83,237,000   10.0      4.73      5.95
       rate is expected to move marginally lower
                                                                   2004      11,022,474,000         133,411,000       193,992,000    9.2      4.73      6.23
     • Warehouse rents are expected to show surprising             2005      11,169,324,000         153,475,000       239,559,000    8.4      4.99      8.02
       strength as landlords attempt to hold rents steady even     2006      11,385,152,000         186,596,000       186,138,000    8.2      5.28      9.47
                                                                   2007      11,862,539,000         181,151,000       142,622,000    8.1      5.62      9.74
       with a slower leasing market                                2008P     12,000,262,000         137,723,000       152,852,000    7.8      5.79      9.74
                                                                   Source: Colliers Research Services




4
US Retail Centers                                                                                               • Rising gasoline prices stealing retail sales, at least
                                                                                                                  at the low end
• Retail spending down but still growing, albeit slowly
                                                                                                                • Regional malls continue to hold up well despite the
• Vacancies are expected to move marginally higher
                                                                                                                  surge in Lifestyle centers
  as construction remains elevated and certain
  retailers/sectors consolidate                                                                                 • Grocery stores should continue to act as strong
                                                                                                                  anchors for community and neighborhood centers
• But rents are expected to hold steady
                                                                                                                • Urban retail continues to flourish with many
• Cities with above average tourism will be somewhat
                                                                                                                  “suburban” retailers exploring downtown locations
  immune to a slowdown in retail spending
                                                                                                                • Further declines by department stores continue to pose
• Growth sectors - warehouse clubs, grocery stores, food
                                                                                                                  challenges for mall owners, however, many have been
  services and drinking places, non-store retailers, luxury
                                                                                                                  able to re-lease space at a higher rate
  retailers and foreign retailers
                                                                                                                • Warehouse clubs and superstores have been the
• Shrinking sectors – home furnishings, building,
                                                                                                                  primary beneficiary of declining sales by the
  materials, department stores and sporting goods
                                                                                                                  department store sector
• Mixed use open-air retail still flourishing, despite
  housing woes


    YEAR-TO-DATE SALES ENDING DECEMBER                                                                              2005     2006        2007      % CHANGE (06/07)
    All Stores                                                                                              4,115,815      4,330,457   4,511,870          4.2%
    Motor Vehicle and Parts Dealers                                                                           895,250        901,112     924,623          2.6%
    Gasoline Stations                                                                                         388,261        404,485     428,729          6.0%
    Food and Beverage Stores                                                                                  519,292        541,688     572,474          5.7%
    Grocery Stores                                                                                            463,905        482,805     509,581          5.5%
    Health and Personal Care Stores                                                                           208,376        224,169     236,848          5.7%
    Building Material and Garden Equipment Stores                                                             326,993        358,569     353,791         -1.3%
    General Merchandise Stores                                                                                525,726        552,191     576,793          4.5%
    Department Stores (excluding leased departments)                                                          214,658        212,181     209,181         -1.4%
    Clothing and Accessories Stores                                                                           201,682        214,732     224,953          4.8%
    Furniture, Home Furnishings, Electronics and Appliance Stores                                             211,733        230,168     235,852          2.5%
    Furniture and Home Furnishing Stores                                                                      111,293        121,190     123,287          1.7%
    Electronics and Appliance Stores                                                                          100,440        108,978     112,565          3.3%
    Sporting Goods, Hobby, Book and Music Stores                                                               81,853         87,200      89,734          2.9%
    Miscellaneous Store Retailers                                                                             111,001        119,493     123,450          3.3%
    Nonstore Retailers                                                                                        249,011        270,498     296,166          9.5%
    Food Services and Drinking Places                                                                         396,637        426,152     448,457          5.2%
    Source: US Census Bureau. All Values are expressed in millions of US dollars and are not seasonally adjusted.




US Investment Sales Market                                                                                      • Lending standards tightening – loan-to-value,
                                                                                                                  debt coverage ratios and fully costing vacancy
• Investment market now characterized by slower
                                                                                                                  and rollover risk
  volume, apprehensive buyers, longer due
  diligence periods                                                                                             • 10 yr Treasurys yields/LIBOR down but still very tough
                                                                                                                  for leverage buyers
• Values down by approx. 10%
                                                                                                                • Spreads up from 120 basis points to 250 basis points
• But considerable variation exists within property type,
                                                                                                                  and more
  location and quality
                                                                                                                • Lot’s of equity capital, no so much debt capital
• Significant upward pressure on cap rates, 25 to
  75 basis points


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     US Investment Sales Market (Continued)
                                                                                                                           INVESTMENT MARKET RANKINGS
     • CMBS market shut down                                                                                                   – ALL PROPERTY TYPES
     • But deals still getting done                                                                                                   (BY SALES VOLUME, DOLLARS)

     • Large portfolio sales and/or privatizations will be                                                   City                                                2007 Sales in Millions
       largely absent                                                                                        1. New York, Manhattan . . . . . . . . . . . . . . . . . . . . . . . 40,922
                                                                                                             2.Washington, DC. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,239
     • Sovereign wealth funds (SWF) are expected to be
                                                                                                             3. San Francisco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,429
       increasingly active in 2008                                                                           4. Los Angeles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,993
     • Led by German, Australian, Irish and Middle Eastern                                                   5. Chicago . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,730
       buyers, foreign investors in general are expected to be                                               6. Seattle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,161
       a significant buyer group in 2008                                                                     7. Boston . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,110
                                                                                                             8. Orange County . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,910
     • Many investors will be looking for more “visibility” in                                               9. Houston. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,277
       leasing markets before acting                                                                         10. San Diego. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,792
                                                                                                             Source: Real Capital Analytics




                                                                                             CAP RATE TRENDS

                                            10.00
                                             9.75
                                             9.50
                                             9.25
                                             9.00
                                             8.75
                                             8.50
                 Capitalization Rates (%)




                                             8.25
                                             8.00
                                             7.75
                                             7.50
                                             7.25
                                             7.00
                                             6.75
                                             6.50
                                             6.25
                                             6.00
                                             5.75
                                             5.50
                                                    Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

                                                        2002                  2003                2004                  2005                   2006                   2007

                                                               Multi-Family          Industrial     Office-CBD          Office-Sub             Retail (Neighborhood)

            Source: Real Estate Research Corp.




6
US CITY ANALYSES   AND   FORECASTS
C O L L I E R S I N T E R N AT I O N A L             l   U S R E A L E S TAT E R E V I E W 2 0 0 8



ATLANTA, GA
OFFICE                                                                       INDUSTRIAL
• Office absorption reached the 3 million SF mark for the fourth             • For the fourth straight year, absorption in Atlanta has surpassed
  straight year.                                                               9 million SF.
• The largest leases signed in 2007 were InterContinental Hotel              • The largest lease transactions were Sears Logistics leasing 772,800 SF
  Group’s renewal and expansion of 361,000 SF in Central Perimeter,            in Northeast Atlanta, Dick’s Sporting Goods signing for 657,200 SF
  Georgia DOT taking 284,000 SF downtown, and Invesco signing for              near the airport and Whirlpool which recently announced plans for a
  178,000 SF in Midtown for relocation of their global headquarters.           1.5 million SF build-to-suit in South Atlanta.
• Affected by the turmoil in the capital markets, office investment in       • Industrial deliveries totaled 9.5 million SF in 2007 which was well off
  Atlanta is down 12% from 2006.                                               of the record square feet delivered in 2006.
• Development activity is focused mostly in Midtown and Buckhead.            • The manufacturing industry in Atlanta continued to take a hit
  Combined, these submarkets account for half of new construction              with over 4,000 jobs lost in 2007. The closings of the Ford and GM
  in Atlanta.                                                                  vehicle assembly plants were major contributors to these job losses.
Office Outlook                                                               Industrial Outlook
• In 2008, office absorption is expected to be lower than previous years     • Leasing activity will remain steady in 2008 with the bulk of the
  at around 2.5 million SF.                                                    activity taking place in the first half of the year. Absorption is
• New development will mainly be tied to mixed-use projects and                expected to total between 7 to 9 million SF.
  occurring in office buildings with significant equity upfront.             • The average rental rate for industrial space may begin to see some
• The ongoing drought and availability of water are the most serious           consistent, upward movement over the course of the year.
  factors affecting metro Atlanta’s economic vitality. These issues are      • The influx of Asian investment to the state and metro Atlanta area
  tarnishing the city’s appeal as a corporate headquarters destination.        will have a positive impact to the industrial market in the coming
                                                                               years. Over 5,000 new industrial jobs are expected to be added from
                                                                               these Asian companies.
                                                                             • Manufacturing and construction as it relates to single-family
                                                                               residential will continue to struggle in 2008. The slack, however,
                                                                               will be picked up by the transportation and logistical industries.




DOWNTOWN OFFICE                                                              INDUSTRIAL
          Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999     47,578,000     290,000   (151,000)    7.4        22.20       –      1999    450,600,000 18,629,000    15,507,000       8.5      3.75      –      –
2000     48,228,000     650,000   1,397,000    5.7        24.20    9.25      2000    467,289,000 16,689,000    16,064,000       8.3      3.70      –      –
2001     51,188,000   2,960,000   (166,000)   11.3        24.90   12.30      2001    486,710,000 19,421,000      3,504,000     11.2      3.60   2.50   9.75
2002     52,413,000   1,225,000      59,000   13.3        23.50    9.40      2002    493,957,000 7,247,000     (1,550,000)     12.9      3.35   2.87   8.50
2003     52,901,000     488,000     203,000   13.7        23.30    9.75      2003    496,986,000 3,029,000       1,369,000     13.1      3.30   3.80   9.15
2004     53,454,000     553,000     348,000   13.9        21.90    9.00      2004    504,632,000 7,646,000     13,946,000      11.7      3.50   1.40   9.00
2005     53,774,000     320,000     721,000   13.1        22.40    7.50      2005    514,033,000 9,401,000     11,800,000      11.0      3.75   1.85   8.40
2006     54,484,000     710,000     321,000   13.6        21.90    6.50      2006    534,363,000 20,330,000    12,882,000      11.9      3.80   1.95   7.30
2007     55,712,000   1,164,000   1,077,000   13.5        20.50    7.40      2007    555,246,000 9,491,000       9,439,000     11.3      3.83   2.30   8.00
2008P    55,962,000     250,000     650,000   12.7            –       –      2008P   561,246,000 6,000,000       7,500,000     10.9         –      –      –

SUBURBAN OFFICE                                                              METROPOLITAN INDICATORS – 2008
          Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                                • Gross Metro Product Percent Change: 2.8
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    139,295,000 10,259,000    8,485,000   10.6        23.00       –         • Total Employment Increase/Decrease: 4,325
2000    146,658,000 7,363,000     6,588,000   10.6        23.30    9.50           Percent Change: 1.8
2001    154,643,000 7,985,000       560,000   14.8        23.80   10.50
                                                                                • Unemployment Rate: 4.6
2002    158,961,000 4,318,000       406,000   16.9        22.40   10.00
2003    161,856,000 2,895,000     1,194,000   17.6        21.50   10.00         • Population (000): 5,361.4
2004    163,198,000 1,342,000     3,841,000   15.9        21.30    8.50
                                                                                Source: Moody’s Economy.com
2005    165,760,000 2,562,000     4,127,000   14.7        21.40    8.10
2006    168,656,000 2,896,000     3,848,000   13.9        21.50    7.50
2007    171,985,000 2,986,000     1,929,000   14.4        23.60    6.50
2008P   175,152,000 3,167,000     1,800,000   14.9            –       –      P = Projection. Please see Glossary page for explanation.

                            CONTACT: Mike Spears • mike.spears@colliers.com l RESEARCH: Scott Amoson • scott.amoson@colliers.com                              9
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BAKERSFIELD, CA
OFFICE                                                                        INDUSTRIAL
• The amount of available office sublease space doubled over the last         • Bakersfield’s industrial absorption was robust in 2007, surpassing
  year due to closures, downsizing and mergers of residential real estate       levels recorded in 2006.
  offices, title companies and mortgage firms.                                • The overall vacancy rate reached a historical low at
• Office absorption for the year measured approximately 170,000 SF.             approximately 3%.
• Bakersfield’s overall vacancy was 4.77% at year-end, up slightly from       • Tejon Ranch and Rockefeller Group were near completion
  4.33% in 2006.                                                                on a 603,000 SF high cube warehouse space in the Tejon
• Land prices held steady at $10 to $15 per SF due to the                       Industrial Center.
  limited availability.                                                       • Class A warehouse rents ranged between $0.34 per SF and
• Average rental rates for Class A space rose to average between                $0.40 per SF NNN with NNN charges of $.05 per SF to $.08 per SF.
  $1.90 per SF and $2.05 per SF plus janitorial and utilities.                • Land prices ranged between $5.00 per SF and $7.00 per SF due to
                                                                                limited inventory.
Office Outlook
                                                                              • The amount of investment activity remained strong.
• Construction starts will begin to decrease over the next                      Institutional developers continued to assess the market as
  twelve months.                                                                Los Angeles markets were further impacted.
• Office rental rates will continue to rise slightly and level off
  over the next 24 months.                                                    Industrial Outlook
• New freeway infrastructure to alleviate increasing traffic burdens in       • Big box distribution will continue to look at the Central Valley just
  the city is being planned for 2008 and beyond.                                as IKEA, Sears, Target, Oneida and Wal-Mart have in recent years.
• The owner-user market in the northwest submarket will continue to           • North Meadows Industrial Park, consisting of 150 acres, will be
  flourish due to the rising rents, availability and competitive financing.     completed mid-2008.
• The availability of sublease space will continue to increase as             • Industrial warehouse rental rates will continue to hold over the
  the effects of the housing market continue to affect businesses               next twelve months.
  in these markets.
                                                                              • New construction will continue to chase demand.
                                                                              • Industrial land prices are expected to level off in 2008.




DOWNTOWN OFFICE                                                               INDUSTRIAL
          Inventory       New        Absorption     Vacancy       Class A              Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
             (SF)      Supply (SF)      (SF)        Rate (%)    Rent ($PSF)               (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999      2,658,000           0         50,000           4.8       21.00      1999    21,468,000 300,000 722,000                 3.0      3.00      –     –
2000      2,758,000     100,000         94,000           5.8       16.20      2000    21,908,000 440,000 800,000                 2.7      3.10      –     –
2001      2,826,000      68,000        119,000           5.5       16.20      2001    23,224,000 1,316,000 1,243,000             3.5      3.20   1.25 10.00
2002      2,860,000      34,000         73,000           4.0       17.40      2002    25,717,000 2,493,000 1,576,000             4.9      3.20   1.38 10.00
2003      2,860,000           0         14,000           3.2       17.40      2003    25,974,000 257,000 (263,000)               7.0      3.20   1.90 9.75
2004      2,860,000           0         24,000           2.7       17.40      2004    26,457,000 483,000 1,018,000               5.0      3.20   2.50 9.25
2005      2,860,000           0         86,000           5.2       17.40      2005    27,027,000 570,000 870,000                 3.5      3.60   5.00 8.50
2006      2,860,000           0         89,000           4.3       17.40      2006    27,708,000 681,000 662,000                 3.5      3.60   5.02 8.00
2007      2,868,000           0         13,000           4.1       17.40      2007    28,498,000 739,000 870,000                 2.9      4.00   5.50 7.50
2008P     2,910,000      42,000         50,000           3.8           –      2008P   29,298,000 800,000 498,000                 3.8         –      –     –

SUBURBAN OFFICE                                                               METROPOLITAN INDICATORS – 2008
          Inventory       New        Absorption     Vacancy       Class A
                                                                                 • Gross Metro Product Percent Change: 1.8
             (SF)      Supply (SF)      (SF)        Rate (%)    Rent ($PSF)
1999      4,526,000     (86,000)      (453,000)         14.9       21.00         • Total Employment Increase/Decrease: 177
2000      4,586,000       60,000        122,000         16.3       18.60           Percent Change: 0.7
2001      4,586,000            0        125,000         13.5       19.20
                                                                                 • Unemployment Rate: 8.7
2002      4,732,000     146,000         106,000         14.0       18.60
2003      4,829,000       97,000        307,000          9.4       19.80         • Population (000): 799.9
2004      4,857,000       28,000         99,000          7.8       19.80
2005      5,047,000     190,000         218,000          8.2       19.80         Source: Moody’s Economy.com
2006      5,206,000     159,000         391,000          4.2       19.80
2007      5,447,000            0        157,000          5.1       24.00
2008P     5,663,000     216,000          93,000          7.1           –      P = Projection. Please see Glossary page for explanation.

10      CONTACT: David Williams • dwilliams@tingey.com l RESEARCH: Debbie Kidd • debbie.kidd@colliers.com
C O L L I E R S I N T E R N AT I O N A L            l   U S R E A L E S TAT E R E V I E W 2 0 0 8



BALTIMORE, MD
OFFICE                                                                      INDUSTRIAL
• The market sagged under the weight of too much construction and           • The majority of new supply consisted of speculative bulk distribution
  too little absorption after three years of building and absorbing more      space. The market received 349,000 SF of flex space and 349,000 SF
  than 2 million SF. Absorption at 782,000 SF fell 67% from 2006,             of new office warehouse space.
  while the market added over 1.8 million SF, elevating the vacancy         • ATEC leased 345,000 SF and CPEEC, leased 343,000 SF.
  rate to 15.2%.                                                              Other leases included Restoration Hardware leasing 602,000 SF,
• Legg Mason signed a lease 400,000 SF in Harbor East to be completed         Frederick P Winner taking 302,000 SF, and Rite Aid leasing
  in 2009. T. Rowe Price expanded at 100 E. Pratt Street and will add         266,000 SF.
  400,000 SF at its Owings Mills campus. Morgan Stanley leased              • Zais Group acquired the 530,000 SF 504 Advantage Avenue property
  130,000 SF in a new project in Harbor East, where Laureate, Inc.            for $51 per SF. RREEF Funds paid $67 per SF for the 1.9 million SF
  moved its new headquarters.                                                 Gateway Commerce Center. AMB acquired a four-building portfolio
• Arc Wheeler acquired the venerable B&O Building for $267 per SF             for $71 per SF, and Exeter Property Group acquired 5107 North Point
  to convert to a mixed use project. The recently completed 500 E.            Boulevard and the 338,000 SF Baltimore Air Coil facility.
  Pratt Street sold for $282 per SF. The new Johns Hopkins Applied
  Physics building sold for $235 per SF, while the Micros Headquarters
                                                                            Industrial Outlook
  building sold for $250 per SF.                                            • The outlook is cautionary as 80% of new bulk distribution space
                                                                              delivered in 2007 is still available, as is 95% of the 1 million SF of
Office Outlook                                                                new bulk space coming in 2008.
• The market added 1.8 million SF of space in 2007 with 830,000 SF          • Higher lease rates for new properties could be problematic for tenants
  still available. Another 2.6 million SF is under construction,              are uncertain if the economy will slow down or worsen.
  2.1 million SF of which remains unleased. 791,000 SF of this 2008
  new construction is in the BWI market, which is expected to be a
  principal beneficiary of the BRAC relocations.
• Several large defense contractors, such as CSC and Booz Allen
  Hamilton have offered to sublease some of their space in the
  BWI market, so the overhang is of potential concern.




DOWNTOWN OFFICE                                                             INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999    12,963,000     161,000    593,000     9.2        25.00       –      1999    75,749,000    2,529,000    2,608,000      11.6      4.75      –     –
2000    13,187,000     224,000    171,000     9.3        26.50       –      2000    77,050,000    1,301,000    3,616,000       7.7      4.70      –     –
2001    13,795,000     608,000    299,000    11.4        24.10       –      2001    80,951,000    3,901,000      917,000      13.3      4.50   3.45 10.00
2002    15,485,000   1,690,000     33,000    19.6        21.40   10.00      2002    82,258,000    1,307,000    (322,000)      16.8      5.00   6.00 9.80
2003    15,650,000     165,000    296,000    18.4        24.30   10.00      2003    84,590,000    2,332,000    2,250,000      17.0      5.60   4.90 8.00
2004    16,031,000     381,000    294,000    17.7        24.00    9.00      2004    85,728,000    1,138,000    (814,000)      18.7      5.40   5.17 8.60
2005    16,214,000     183,000    316,000    17.2        23.20    8.00      2005    88,255,000    2,527,000    3,924,000      16.5      5.90   5.75 7.50
2006    16,739,000     525,000    511,000    17.0        23.80    7.25      2006    89,242,000      987,000    1,169,000      15.2      6.46   6.31 6.50
2007    17,076,000     190,000     36,000    17.1        24.10    7.25      2007    95,566,000    2,458,000    1,944,000      14.2      7.08   6.31 6.25
2008P   17,136,000      60,000    220,000    16.1            –       –      2008P   97,299,000    1,733,000    1,272,000      14.4         –      –     –

SUBURBAN OFFICE                                                             METROPOLITAN INDICATORS – 2008
         Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                               • Gross Metro Product Percent Change: 1.6
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    30,598,000   1,856,000   1,400,000    8.4        23.50       –         • Total Employment Increase/Decrease: 609
2000    33,044,000   2,446,000   1,913,000    9.9        23.70    9.50           Percent Change: 0.5
2001    35,252,000   2,208,000     418,000   14.6        22.50   10.50
                                                                               • Unemployment Rate: 4.3
2002    36,253,000   1,001,000      14,000   17.4        18.40   10.00
2003    36,902,000     649,000   1,114,000   16.0        21.30   10.00         • Population (000): 2,678.8
2004    38,577,000   1,675,000   2,213,000   14.2        22.50    9.25
2005    40,641,000   2,064,000   1,797,000   14.0        24.30    8.50         Source: Moody’s Economy.com
2006    42,392,000   1,751,000   1,847,000   13.4        24.55    7.25
2007    43,773,000   1,655,000     746,000   14.5        25.90    6.60
2008P   45,838,000   2,065,000     581,000   17.1            –       –      P = Projection. Please see Glossary page for explanation.

                         CONTACT: Peter McGill • pmcgill@collierspinkard.com l RESEARCH: James Murray • james.murray@colliers.com                       11
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BOISE, ID
OFFICE                                                                      INDUSTRIAL
• The Boise office market saw an increase in tenant activity during         • The beginning of 2007 saw very low vacancies (5.4%) and very little
  2007 with regional and national companies looking for expansion             speculative development; creating limited opportunities to meet
  into the Boise market.                                                      tenant demands for space in Boise.
• 2007 saw 100% absorption of Idaho’s first LEED certified green office     • One of the most prohibitive factors to industrial speculative
  building; the 180,000 SF Banner Bank building in downtown Boise.            development is high priced industrial-zoned land in areas with
• Idaho Power leased 50,000 SF in the former Boise Cascade                    desirable freeway access.
  Corporation headquarters building in downtown Boise which                 • High land prices during 2006 and 2007 pushed some industrial
  effectively reduces the vacancy in Boise’s top five office buildings        development west of the Valley closer to the Oregon border, but
  to near zero percent.                                                       tenant demand has forced development projects back to south Boise
• Downtown Boise has been the most active office leasing area in the          near Interstate 84 and the Boise airport region.
  Valley since mid-2006.                                                    • The latter half of 2007 saw a leveling off of industrial pricing that had
                                                                              been consistently increasing since 2005.
Office Outlook
                                                                            • Even with continued strong population growth, slowdown in the
• Key suburban office parks to the west of Boise will see sustained           residential home sales has resulted in downsizing in residential based
  activity because of increased options for company parking and the           companies in the Boise market national and regional firms such as
  lack of large continuous space in downtown Boise.                           Perdue Woodworks and BMC West.
• Suburban Boise office markets will remain strong for leasing because      • Commercial construction growth has continued unaffected by
  of the high population growth west of Boise which is also sustaining        downward trends in the residential construction in the Boise market.
  high amounts of retail growth.
• Boise surface uncovered parking lots are seeing up to two-month           Industrial Outlook
  waiting lists with no significant development planned for covered         • The city of Boise backed out of initial plans to provide services and
  or uncovered parking planned.                                               infrastructure for a large tract of industrial zoned land near the Boise
                                                                              airport which will hinder warehouse development in southeast Boise.




DOWNTOWN OFFICE                                                             INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999     1,935,000     242,000    181,000     8.9        19.00       –      1999    20,858,000 396,000 345,000                 2.3      4.90      –      –
2000     1,975,000      40,000     17,000     9.1        18.80    9.00      2000    22,219,000 1,361,000 1,558,000             1.5      5.00      –      –
2001             –           –           0      –            –       –      2001    22,300,000    81,000 (712,000)             5.0      4.50      –      –
2002             –           –           0      –            –       –      2002    22,445,000 145,000 (476,000)               7.7      3.50      –      –
2003     3,210,000      75,000     (4,000)   10.6        18.90    8.75      2003    22,532,000    87,000 (468,000)            10.1      4.40      –   8.75
2004     3,462,000     252,000    187,000    11.7        18.80    8.75      2004    22,669,000 137,000 146,000                10.0      4.60   5.00   8.75
2005     3,551,000      89,000    206,000     7.6        18.90    8.80      2005    22,757,000    88,000 288,000               9.1      4.60   4.00   8.80
2006     3,731,000     180,000     88,000     9.7        20.00    7.20      2006    22,937,000 180,000 754,000                 5.7      6.03   3.94   7.85
2007     3,470,000      81,000    126,000     9.3        19.90    7.90      2007    26,904,000 297,000 (83,000)                6.0      6.96   4.00   7.80
2008P    3,470,000           0     85,000     6.8            –       –      2008P   27,254,000 350,000 683,000                 4.7         –      –      –

SUBURBAN OFFICE                                                             METROPOLITAN INDICATORS – 2008
         Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                               • Gross Metro Product Percent Change: 2.7
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999     4,833,000     331,000     244,000   15.3        17.00       –         • Total Employment Increase/Decrease: 470
2000     5,034,000     201,000     234,000   12.6        17.00    8.75           Percent Change: 1.7
2001             –           –           0      –            –       –
                                                                               • Unemployment Rate: 2.4
2002             –           –           0      –            –       –
2003     6,933,000     442,000     323,000   15.6        16.60    8.50         • Population (000): 597.3
2004     7,102,000     169,000     157,000   19.2        17.60    8.50
2005     7,981,000     879,000   1,068,000   13.4        16.90    9.40         Source: Moody’s Economy.com
2006     8,157,000     176,000     197,000   12.9        16.20    7.20
2007     9,242,000     318,000     113,000   15.6        16.50    7.90
2008P    9,542,000     300,000     211,000   16.1            –       –      P = Projection. Please see Glossary page for explanation.

12      CONTACT: Pete Draper • pete.draper@colliersidaho.net l RESEARCH: Cory Read • cory.read@colliers.com
C O L L I E R S I N T E R N AT I O N A L             l   U S R E A L E S TAT E R E V I E W 2 0 0 8



BOSTON, MA
OFFICE                                                                       INDUSTRIAL
• Boston’s overall office vacancy rate measured 11.1% at year-end. In        • Boston’s industrial market witnessed a decline in vacancy over
  the downtown, the office market absorbed 742,000 SF as the vacancy           2007 from 22.8% to 18.2% after three years of the vacancy rate
  decreased from 9.8% to 8.6%. In the suburban market, the vacancy             being over twenty percent of inventory.
  rate fell from 12.7% to 12.0% over the year.                               • Demand was slow to begin the year but picked up in the fourth
• Overall absorption measured almost 1.8 million SF, and new                   quarter which accounted for 77% of the year’s absorption.
  construction in 2007 measured just over half a million square feet,          Annual absorption measured 4,089,000 SF in total.
  mainly in the suburban market.                                             • New supply introduced in the year measured 830,000 SF, a notable
• Although the injection of completed new supply was minimal for               drop from the 2.1 million SF injected in 2005 and 1.2 million SF
  the year, an additional 2.57 million SF was under construction, fairly       in 2006.
  balanced between the CBD and the suburbs.                                  • Asking rents for warehouse/distribution space averaged $5.78 per SF
• In both the downtown and suburban markets, absorption and new                and flex space went for an average of $9.84 per SF.
  supply levels were significantly less than 2005 and 2006 levels.           • For industrial investments, the average cap rate on sales
• The lack of new construction capped absorption levels while placing          measured 6.6%.
  strong upward pressure of rental rates. The average annual quoted
  rent at year end skyrocketed 40.5% to $64.60 per SF for Class A
                                                                             Industrial Outlook
  space in the downtown.                                                     • After a quieter year of new supply, 2008 will see a resurgence of
• Office investment began the year with a fervor including the                 new construction with 1.8 million SF anticipated for the year.
  Blackstone/EOP sale but cooled off in the second half of 2007.
  Despite a slowing of sales, investment fundamentals remained
  strong in Boston.
Office Outlook
• Boston’s office market in 2008 will see a return of new construction
  in both the downtown and suburban submarkets.
• Vacancy rates are expected to decline across submarkets.
• Rental rate growth is anticipated as well, albeit at a slower pace
  than in 2007.




DOWNTOWN OFFICE                                                              INDUSTRIAL
          Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999     58,904,000     844,000     812,000    5.5        50.50       –      1999    142,309,000     795,000     2,170,000      9.7      6.00      –     –
2000     60,754,000   1,850,000 2,290,000      4.5        72.00    8.00      2000    144,744,000   2,435,000     3,030,000      8.2      7.00      –     –
2001     62,928,000   2,174,000 (1,935,000)   11.9        55.30    8.50      2001    146,806,000   2,062,000   (1,726,000)     14.6      7.00   1.95 10.00
2002     64,660,000   1,732,000 (860,000)     16.2        43.70    7.50      2002    147,664,000     858,000      (60,000)     15.9      6.00   1.95 9.50
2003     65,914,000   1,254,000     368,000   17.4        38.40    7.50      2003    148,421,000     757,000   (1,248,000)     19.2      6.00   1.70 8.90
2004     66,722,000     808,000    (61,000)   17.9        38.20    6.75      2004    149,036,000     615,000   (1,767,000)     23.0      5.50   2.87 8.00
2005     66,942,000     220,000 2,045,000     12.6        41.40    6.50      2005    151,142,000   2,106,000       503,000     23.7      5.50      – 7.00
2006     66,942,000           0 1,773,000      9.8        46.00    5.50      2006    152,380,000   1,238,000       488,000     22.8      5.84      – 6.80
2007     67,816,000      12,000     742,000    8.6        64.60    5.60      2007    219,834,000     830,000     4,089,000     18.2      5.78      – 6.60
2008P    67,816,000           0     745,000    7.5            –       –      2008P   221,634,000   1,800,000     2,159,000     17.9         –      –     –

SUBURBAN OFFICE                                                              METROPOLITAN INDICATORS – 2008
          Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                                • Gross Metro Product Percent Change: 1.2
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999     90,941,000 5,599,000 7,904,000       12.3        25.60       –         • Total Employment Increase/Decrease: 442
2000     95,894,000 4,953,000 9,241,000        6.2        38.90    9.00           Percent Change: 0.4
2001    102,727,000 6,833,000 (6,570,000)     21.0        31.00   10.00
                                                                                • Unemployment Rate: 4.8
2002    106,177,000 3,450,000 (1,766,000)     26.0        25.00   10.50
2003    108,561,000 2,384,000 (290,000)       28.2        21.00    9.50         • Population (000): 1,848.7
2004    108,383,000 (178,000) 1,810,000       25.6        20.80    8.00
2005    107,341,000 (1,042,000) 3,363,000     18.8        20.10    8.00         Source: Moody’s Economy.com
2006    108,091,000     750,000 2,616,000     12.7        24.00    7.00
2007    113,132,000     516,000 1,046,000     12.0        36.70    6.40
2008P   114,132,000 1,000,000 1,196,000       11.7            –       –      P = Projection. Please see Glossary page for explanation.

                                CONTACT: Tom Hynes • tom.hynes@colliersmg.com l RESEARCH: Mary Kelly • mary.kelly@colliersmg.com                         13
C O L L I E R S I N T E R N AT I O N A L             l   U S R E A L E S TAT E R E V I E W 2 0 0 8



CHARLESTON, SC
OFFICE                                                                       INDUSTRIAL
• The Charleston office market maintained a steady overall vacancy           • SC and Georgia agreed to collectively purchase the 1,400 acres
  rate of 12%.                                                                 for the Jasper Terminal located on the state line with the intention
• Charleston won large projects from GE, Vought/Alenia (Boeing 787),           to operate the terminal jointly. Many operational issues remain
  Damlier (Sprinter Van).                                                      to be resolved.
• Land prices for the office market stabilized in both the CBD and           • Bulk warehouse lease rates ranged between $4.35 to $4.65 per SF
  suburban office markets. The prices for Class A office market                for new facilities and $3.65 to $4.10 per SF for older facilities.
  are $30 per SF for CBD and $26 per SF for suburban.                          Absorption measured 1,227,800 SF, off from 2006’s 2,885,900 SF
                                                                               while vacancy measured 8%.
Office Outlook                                                               • Investment interest remained strong. The Macalloy site sold for
• The vacancy rate is expected to increase to a level of at least 15%          $33 million and interest in Chevron Terminal (40 acres) was strong
  by the second quarter of 2008. This vacancy will be reflective of the        despite a $26 million price tag. The Johnson Development Package
  shift in the housing market with homebuilders, mortgage companies            of $1.4 million SF sold for $45 per SF. The 886,900 SF Leeds Park
  and residential real estate firms placing excess space on the market.        building sold for $58 per SF. Port proximate land tracts per acre sold
• 2008 office absorption is anticipated to decrease from past years of         for $125,000 per acre.
  450,000 to 600,000 SF.
                                                                             Industrial Outlook
• Delivery of new supply will be limited to those that broke ground in
  2007 and office construction slated for 2008 will be delayed until the     • Large institutional developers will deliver sorely needed functional
  overall market shows more promise.                                           industrial space to the market. Some significant projects include
                                                                               Childress Klein’s 351,000 SF project, Hillwood Development’s
                                                                               400,000 SF development and Lauth Development Group’s
                                                                               300,000 SF project.
                                                                             • Reduced Army and Marine Corp demand for Mine Resistant
                                                                               Ambush Protected vehicles will lead to a slowing of production
                                                                               at Force Protection and could lead to vacancy in smaller
                                                                               supplier buildings.
                                                                             • Vought and its suppliers will expand as orders for 787 Dreamliner
                                                                               continue to grow. Automobile, aviation and military vehicle
                                                                               manufacturers will lead the industrial growth sector.




DOWNTOWN OFFICE                                                              INDUSTRIAL
         Inventory       New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)      Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999              –          –           0       –            –       –      1999    14,446,000 450,000 917,000                20.4      3.00      –      –
2000      1,403,000          0      50,000     8.0        23.75       –      2000    14,859,000 413,000 948,000                19.1      3.30      –      –
2001      1,734,000    331,000    200,000      9.0        24.00       –      2001    15,559,000 700,000 442,000                21.0      3.30   2.30      –
2002      1,764,000     30,000      17,000    10.3        24.40    9.25      2002    16,159,000 600,000 545,000                21.0      3.35   2.00      –
2003      1,890,000    126,000    (76,000)    13.3        24.30    8.90      2003    16,959,000 800,000 1,447,000              18.5      3.40   1.50   9.00
2004      1,949,000     59,000      31,000    11.3        25.10    7.50      2004    18,029,000 1,070,000 1,389,000            18.4      3.50   2.53   7.50
2005      2,045,000     96,000      55,000    11.5        27.45    7.00      2005    18,029,000 350,000 1,692,000               7.8      3.70   1.26   7.00
2006      2,045,000          0      79,000     7.6        27.20    7.40      2006    24,135,000    95,000 3,468,000             6.2      3.73   2.53   7.35
2007      2,064,000          0      51,000     5.9        27.80    6.50      2007    25,192,000 1,200,000 1,355,000             6.8      4.00   2.87   7.85
2008P     2,064,000          0      43,000     3.8            –       –      2008P   26,092,000 900,000 517,000                 8.0         –      –      –

SUBURBAN OFFICE                                                              METROPOLITAN INDICATORS – 2008
         Inventory       New      Absorption Vacancy Class A Cap Rate
                                                                                • Gross Metro Product Percent Change: 2.2
            (SF)      Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999              –          –           0       –            –       –         • Total Employment Increase/Decrease: 413
2000              –          –           0       –            –       –           Percent Change: 1.4
2001              –          –           0       –            –       –
                                                                                • Unemployment Rate: 4.4
2002      4,797,000    220,000      64,000    16.1        19.45    9.50
2003      5,579,000    782,000     413,000    20.5        19.10    9.00         • Population (000): 624.7
2004      5,687,000    108,000     479,000    13.5        19.60    9.00
2005      6,016,000    329,000     442,000    10.8        23.60    8.00         Source: Moody’s Economy.com
2006      6,815,000    799,000     515,000    14.3        24.50    8.00
2007      7,204,000    369,000     174,000    16.0        25.50    7.50
2008P     7,454,000    250,000     133,000    17.1            –       –      P = Projection. Please see Glossary page for explanation.

14      CONTACT:Woody Moore • wmoore@collierskeenan.com l RESEARCH:Terry Ansley • terry.ansley@colliers.com
C O L L I E R S I N T E R N AT I O N A L          l     U S R E A L E S TAT E R E V I E W 2 0 0 8



CHARLOTTE, NC
OFFICE                                                                      INDUSTRIAL
• Downtown vacancy measured 2.5%, the tightest downtown market in           • High growth industries and companies included the power industry
  the nation. The suburbs offered more availability at 12.2% vacancy.         (Shaw, SPX Corp), defense-related manufacturing (General
• High growth industries included financial services, legal, government       Dynamics, Indigen Armor, Goodrich) and high tech manufacturing.
  and defense-related.                                                      • Much of the speculative development subsided by year-end 2007 as
• New CBD towers under construction included BOA, Wachovia,                   land became scarce. Under construction was Beacon Partner’s
  NASCAR and Cornerstone. For the suburbs, City Park was a                    77 Overlook consisting of 112,600 SF.
  175-acre mixed-use redevelopment of the former Charlotte Coliseum.        • Two large headquarter relocations were announced – Shaw Group
  Outer belt commercial development continued to surge.                       and Freightliner. Target began construction on a 1.5 million SF
                                                                              distribution center located between Charlotte and Hickory, NC.
Office Outlook                                                                Ross Dress For Less leased a 423,000 SF speculative building.
• The NASCAR Hall of Fame arrives in 2009 which will have a large             The year registered absorption of 2,824,900 SF, the majority in
  economic impact on the city.                                                small to medium sized transactions.
• The bio-tech and pharmaceutical sectors will pick up momentum             • Industrial land in the Charlotte metro area sold for between $85,000
  while the textile market is expected to wane. Banking and finance           to $125,000 per acre while land in the outlying counties went for
  will take a breather in 2008 due to the subprime market issues.             between $35,000 to $65,000 per acre. Speculative developers
• Land rates will rise in 2008. As infill spikes considerably, the trend      continued to seek tracts of land for industrial build-to-suits.
  will push developers further out.
                                                                             Industrial Outlook
• Following the first light rail line opening in 2007, the next completed
  line will be a north line to the University area. The project has a       • Employment growth in the Charlotte area will be led by education
  25-year timeline and will transform Charlotte. Another project is           and health care in 2008, with 3,000 net new jobs, then leisure and
  the I-485 outerbelt which will be completed in 2013.                        hospitality, and professional and business services, with 2,500 and
                                                                              1,800 jobs, respectively. Healthcare, logistics and transportation
                                                                              could also be a source of new jobs. The NC Research Campus is
                                                                              projected to create nearly 40,000 jobs over 20 years.




DOWNTOWN OFFICE                                                             INDUSTRIAL
          Inventory       New        Absorption    Vacancy      Class A              Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
             (SF)      Supply (SF)      (SF)       Rate (%)   Rent ($PSF)               (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999     17,251,000    1,145,000       938,000         5.1       28.00      1999    159,077,000   1,959,000    2,044,000      13.0      4.30      –      –
2000     18,003,000      752,000       947,000         3.2       25.30      2000    160,427,000   1,350,000    1,712,000       9.7      3.80      –      –
2001     18,670,000      667,000       126,000         5.4       24.50      2001    162,917,000   2,490,000      233,000       7.1      3.88   1.49   9.50
2002     19,668,000      998,000       364,000         9.5       22.90      2002    164,802,000   1,885,000    1,442,000       8.6      3.72   1.50   9.80
2003     19,768,000      100,000        (7,000)       10.2       23.80      2003    165,439,000     637,000    (274,000)       8.9      3.12   1.70   9.50
2004     19,768,000            0        77,000         9.7       23.80      2004    166,239,000     800,000      102,000       9.2      3.31   1.75   9.00
2005     19,858,000       90,000       463,000         5.2       21.30      2005    166,994,000     755,000    1,648,000       9.2      3.65   2.06   9.00
2006     19,858,000            0       157,000         4.7       22.80      2006    167,962,000     968,000    2,231,000       8.3      3.79   2.29   9.00
2007     19,865,000       41,000       363,000         2.5       29.00      2007    169,106,000   1,144,000    2,825,000       7.4      3.85   1.95   7.50
2008P    20,005,000      140,000       484,000         0.8           –      2008P   170,056,000     950,000    3,915,000       5.6         –      –      –

SUBURBAN OFFICE                                                             METROPOLITAN INDICATORS – 2008
          Inventory       New        Absorption    Vacancy      Class A
                                                                               • Gross Metro Product Percent Change: 2.5
             (SF)      Supply (SF)      (SF)       Rate (%)   Rent ($PSF)
1999    33,835,000      420,000      1,558,000        13.0      24.00          • Total Employment Increase/Decrease: 1,088
2000    34,972,000    1,137,000      1,423,000        11.8      21.80            Percent Change: 1.3
2001    36,825,000    1,853,000        215,000        17.8      20.30
                                                                               • Unemployment Rate: 5.2
2002    37,682,000      857,000         98,000        19.8      20.00
2003    38,074,000      392,000        539,000        18.9      19.30          • Population (000): 1,666.4
2004    38,737,000      663,000         89,000        20.7      19.30
2005    39,690,000      953,000      1,551,000        15.3      19.40          Source: Moody’s Economy.com
2006    41,250,000    1,560,000      1,273,000        15.7      19.70
2007    50,991,000      858,000      1,624,000        12.2      20.00
2008P   52,751,000    1,760,000      1,119,000        13.1          –       P = Projection. Please see Glossary page for explanation.

                          CONTACT: Rob Cochran • rcochran@collierspinkard.com l RESEARCH: Matt Russell • matt.russell@colliers.com                       15
C O L L I E R S I N T E R N AT I O N A L             l   U S R E A L E S TAT E R E V I E W 2 0 0 8



CHICAGO, IL
OFFICE                                                                       INDUSTRIAL
• CBD vacancy declined by nearly 2%. Absorption was driven by the            • In 2007, 14.2 million SF of new space was completed, just short
  lack of new supply and expanding tenants.                                    of the all-time high posted in 1999 at 22.2 million SF.
• Large CBD leases included CME Group’s renewal/expansion for                • Leasing volume fell from 38.5 million SF in 2006 to 34.9 million SF
  360,000 SF, Citigroup’s new lease for 235,000 SF and Blue Cross              in 2007 due to fewer large deals of over 250,000 SF. Fourteen such
  Blue Shield Association’s renewal for 215,000 SF. Suburban leases            leases were completed totaling 5.9 million SF, compared to 34 leases
  included Fenwal’s 145,000 SF lease and Career Education’s                    in 2006, absorbing 13.5 million SF.
  180,000 SF renewal/expansion.                                              • Demand was strongest in the 10,000 SF to 50,000 SF range making
• Tishman Speyer purchased Blackstone Group’s seven-building                   up 69.7% of deals. Warehouse distribution firms accounted for the
  downtown portfolio for $1.7 billion. GE Capital purchased the                majority transactions.
  Blackstone portfolio for $1.1 billion, comprised of 20 properties.         • User-building sales closely matched the 2006 level of 18.69 million
Office Outlook                                                                 SF. Sales volume reached 18.75 million SF, consistent with historical
                                                                               user sale volume.
• Investment activity will taper off as landlords wait for the market to
  rebound, but demand will remain strong for new, top-tier office towers     Industrial Outlook
  in the CBD.                                                                • Rental rates will remain compressed as availability has not
• Approximately 480,000 SF of new supply is expected in 2008                   diminished and more sublease space may be returned in 2008.
  downtown. The addition of over 4 million SF to inventory between           • Land prices skyrocketed over the past 18 months and will still
  2008 and 2010 could cause vacancy rates to climb upon delivery.              climb in 2008, though at a slower pace.
• CBD rents are expected to rise, particularly in some recently traded
                                                                             • Cap rates will stabilize for core assets. Class B product will
  assets where landlords increase rates to justify the purchase prices.
                                                                               experience a slight up tick in cap rates. Sale prices will rise due in
  Suburban lease rates will also climb.
                                                                               part to businesses in search of buildings in an ever-shrinking pool.
                                                                             • Speculative development will continue at a feverish pace.
                                                                               Six buildings commenced construction, all over 500,000 SF, and
                                                                               will add 4.5 million SF to available supply. Eleven additional
                                                                               projects have developer commitment that could add another
                                                                               11.6 million SF by the end of 2008.




DOWNTOWN OFFICE                                                              INDUSTRIAL
          Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999    118,962,000     333,000     355,000    9.9        34.00      –       1999 988,381,000 22,227,000 24,189,000             5.6      5.20      –      –
2000    120,235,000   1,273,000     178,000   10.7        36.00   9.50       2000 1,007,524,000 19,143,000 15,680,000           5.8      5.60      –      –
2001    121,981,000   1,746,000 (2,826,000)   14.3        35.00   8.50       2001 1,017,872,000 10,348,000 (10,978,000)         8.0      5.10   4.68   9.00
2002    122,764,000     782,000 (207,000)     15.0        32.00   8.50       2002 1,031,233,000 13,361,000 1,305,000            8.9      4.40   3.90   8.50
2003    124,268,000   1,504,000 (535,000)     16.5        32.00   8.25       2003 1,044,699,000 13,466,000 7,392,000            9.4      4.60   4.80   8.10
2004    126,095,000   1,827,000 (141,000)     17.8        32.00   7.50       2004 1,061,977,000 17,278,000 13,221,000           9.5      4.50   4.20   7.35
2005    127,992,000   1,896,000 1,545,000     17.8        34.00   7.50       2005 1,080,869,000 18,892,000 19,349,000           9.0      4.60   5.17   6.75
2006    128,471,000     479,000 3,520,000     15.4        36.00   5.50       2006 1,098,495,000 17,626,000 14,077,000           9.0      4.56   6.01   6.65
2007    128,319,000           0 2,622,000     13.2        40.00   5.50       2007 1,128,267,000 14,160,000 11,833,000           8.8      4.64   6.39   6.75
2008P   128,799,000     480,000 1,447,000     12.4            –      –       2008P1,136,352,000 8,085,000 13,375,000            8.3         –      –      –

SUBURBAN OFFICE                                                              METROPOLITAN INDICATORS – 2008
          Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                                • Gross Metro Product Percent Change: 1.3
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999     93,130,000   3,984,000 1,681,000     11.7        27.00      –          • Total Employment Increase/Decrease: -313
2000     97,059,000   3,929,000 1,383,000     13.8        28.50   9.50            Percent Change: -0.1
2001    101,232,000   4,173,000 (3,010,000)   20.7        29.00   9.25
                                                                                • Unemployment Rate: 5.6
2002    102,945,000   1,713,000 (793,000)     23.4        25.00   9.50
2003    103,347,000     402,000 (1,283,000)   23.9        25.00   9.00          • Population (000): 7,994.7
2004    103,886,000     539,000 2,501,000     21.8        22.00   8.00
2005    104,112,000     226,000 1,365,000     21.1        23.60   7.25          Source: Moody’s Economy.com
2006    104,245,000     133,000 1,385,000     18.9        22.30   7.25
2007    104,732,000     534,000 (176,000)     19.3        27.80   7.25
2008P   105,767,000   1,035,000 1,099,000     19.1            –      –       P = Projection. Please see Glossary page for explanation.

16      CONTACT: David Bercu • dbercu@colliersbk.com l RESEARCH: George Cutro • george.cutro@colliers.com
C O L L I E R S I N T E R N AT I O N A L              l   U S R E A L E S TAT E R E V I E W 2 0 0 8



CINCINNATI, OH
OFFICE                                                                        INDUSTRIAL
• The overall vacancy rate decreased in 2007 to 17.70% from 19.08%            • The market experienced growth with absorption of 2.4 million SF
  in 2006.                                                                      in 2007.
• The office market gained over 600,000 SF in new Class A space in            • New construction exceeded the previous year’s for the fourth
  the suburbs.                                                                  consecutive year.
• New construction took place along transportation corridors of I-71          • Vacancy increased in 2007, mostly as a result of much needed new
  and I-75.                                                                     space delivered to the market.
• There was a significant increase in the number of educational               • Quality land sites in the West Chester and Northern Kentucky
  facilities that have leased office space in the market.                       Airport quadrants continued to be developed, pushing
• Out-of-town investors continued to find value in the Cincinnati               development outward.
  office market.                                                              • Development started on the 429-acre Corridor 75 Park in Monroe.
                                                                                The site was designed and approved for over 6 million SF and will be
Office Outlook                                                                  the next large industrial development hub of Northern Cincinnati.
• Economic incentives will lure companies to the area and foster
  expansion of businesses.                                                    Industrial Outlook
• “Green” practices will be incorporated in the construction and              • The outlook for Cincinnati’s industrial market is steady: activity and
  redevelopment of buildings.                                                   demand is expected to remain at the levels of 2007.
• Approximately 750,000 SF of new product will be completed in                • Speculative construction will slow as demand catches up with supply.
  the next year.                                                              • There will be continued outward development in growth areas of
• The future of the CBD office market will continue to evolve as                Monroe, Ohio and Richwood, Kentucky.
  buildings face conversion to other uses and the Banks Project               • Lease rates and sale prices are forecast to rise for industrial product.
  comes to fruition.                                                          • The owner/user market is expected to remain active with good
• The CBD market faces competition not only from the northern                   functional buildings and quality land sites charging a premium.
  suburbs, but also from the Northern Kentucky area.




DOWNTOWN OFFICE                                                               INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                   Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                      (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999    13,312,000      36,000       93,000     7.6        20.80       –      1999    228,634,000   9,000,000    2,163,000       5.0      4.30      –      –
2000    13,325,000      13,000       97,000     6.9        20.90   10.10      2000    236,634,000   8,000,000    2,500,000       6.0      3.30      –      –
2001    13,332,000        7,000   (288,000)    10.5        21.30    9.00      2001    242,073,000   5,439,000      464,000       7.6      3.20   1.38   9.75
2002    13,695,000     363,000    (221,000)    12.2        21.20   10.00      2002    244,173,000   2,100,000    1,003,000       8.5      3.20   1.85   9.50
2003    13,098,000   (597,000)     (56,000)    13.0        21.20   10.00      2003    245,215,000   1,042,000     (35,000)       8.9      3.20   1.40   9.00
2004    13,097,000      (1,000)     120,000    11.9        21.00   10.00      2004    247,872,000   2,657,000    6,134,000       7.8      3.20   1.78   9.00
2005    13,256,000     159,000     (78,000)    13.7        21.80    9.00      2005    250,900,000   3,028,000    7,636,000       5.8      3.20   1.25   8.50
2006    12,368,000   (888,000)    (311,000)    17.5        21.80    8.00      2006    256,033,000   5,133,000    4,694,000       5.9      3.20   1.25   8.75
2007    12,368,000            0     175,000    17.3        22.30    7.50      2007    263,065,000   5,256,000    2,397,000       6.6      3.25   1.50   7.00
2008P   12,368,000            0      47,000    17.0            –       –      2008P   265,995,000   2,930,000    1,134,000       7.2         –      –      –

SUBURBAN OFFICE                                                               METROPOLITAN INDICATORS – 2008
         Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                                 • Gross Metro Product Percent Change: 0.5
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    15,228,000     409,000         2,000   11.6        22.00       –         • Total Employment Increase/Decrease: -645
2000    16,212,000     984,000    (319,000)    12.9        19.20   10.10           Percent Change: -0.6
2001    17,349,000 1,137,000         (6,000)   19.2        19.30    9.85
                                                                                 • Unemployment Rate: 5.3
2002    17,992,000     643,000         3,000   20.3        19.70   10.85
2003    16,475,000 (1,517,000)    (142,000)    23.1        19.80   10.75         • Population (000): 2,116.3
2004    16,611,000     136,000      189,000    21.8        19.80   10.50
2005    17,284,000     673,000      675,000    21.0        19.80    6.50         Source: Moody’s Economy.com
2006    17,935,000     651,000      552,000    20.2        19.80    8.25
2007    18,698,000     614,000      796,000    21.1        20.20    7.50
2008P   19,450,000     752,000       68,000    23.8            –       –      P = Projection. Please see Glossary page for explanation.

               CONTACT: Laura Brunner • lbrunner@ctmt.com l RESEARCH: MaryAnn Christenson • maryann.christenson@colliers.com                               17
C O L L I E R S I N T E R N AT I O N A L            l   U S R E A L E S TAT E R E V I E W 2 0 0 8



CLEVELAND, OH
OFFICE                                                                      INDUSTRIAL
• Investment sales included Eaton Center ($71 million),                     • The newly redeveloped Baumhart Road industrial park began to
  45 Erieview Plaza ($53 million), 1100 Superior ($47 million),               fill up with three tenants signing during the year. The park brought
  and 800 Superior (estimated $66 million).                                   3 million SF to the market in 2007.
• In the suburbs, Veyance Technologies leased 50,400 SF with plans to       • Sale transactions included Griffin Capital’s acquisition of 630,000 SF
  expand, and Tele Tech Corp leased 46,000 SF for a new call center.          of suburban warehouse/distribution space for $35.8 million.
• The Cleveland Clinic purchased a $115 million property including            Argo-Tech sold its 157 acre, 1.7 million SF headquarters in one
  707,000 SF on 53 acres in the east suburbs. Duke Realty Corp.               of the largest sale-leaseback deals seen in the region.
  sold its 2 million SF portfolio in two packaged sales – a nine            • Large investment portfolios put millions in square footage up for the
  building set for $141 million and a 14-building package for an              taking. Local developer Geis received $51 million for a portfolio
  estimated $166 million.                                                     encompassing almost 1 million SF. This sale followed a 1.8 million
                                                                              SF transfer when Duke Realty sold its Cleveland industrial portfolio
Office Outlook                                                                last year.
• In the CBD, high-end space will be at a premium for large tenants.
  The need for modern space, coupled with several anchor tenants            Industrial Outlook
  nearing lease expirations, point to the possibility of a new office       • Three separate construction projects are expected to add nearly
  tower downtown.                                                             800,000 SF of modern warehouse space in the east suburbs and
• Refurbished downtown offices have caught the attention of tech              nearby Summit County. Because the projects bring much needed
  companies looking for space. Among others, the Hanna building               high-bay distribution and warehouse space, the market is expected
  and Idea Center have become home to several high-tech tenants               to absorb the new square footage.
  and interest is growing.                                                  • Many vacated or outdated sites are seeing new life with a surge
                                                                              in industrial conversion projects. Examples include a 3 million SF
                                                                              park created on the grounds of a shuttered Ford assembly plant
                                                                              and a possible conversion of an 85-acre site upcoming at a vacant
                                                                              Hoover Plant.




DOWNTOWN OFFICE                                                             INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999    28,669,000      26,000 (134,000)     15.3        23.00       –      1999    349,708,000   3,300,000     3,724,000      7.4      5.50      –     –
2000    28,706,000      37,000     352,000   13.9        22.50    9.50      2000    351,607,000   1,899,000   (3,088,000)      8.9      5.50      –     –
2001    28,706,000           0 (429,000)     14.0        21.20   10.00      2001    353,555,000   1,948,000   (7,162,000)      9.4      4.50   1.72 11.00
2002    29,411,000     705,000 (1,285,000)   22.1        20.00   10.25      2002    355,296,000   1,741,000   (1,120,000)      9.6      3.50   1.95 9.50
2003    29,426,000      15,000 (575,000)     23.5        20.50   13.85      2003    356,313,000   1,017,000   (5,682,000)     10.3      4.10   5.50 9.00
2004    29,426,000           0    (79,000)   23.9        20.50   12.10      2004    358,697,000   2,384,000     2,372,000     10.1      3.60   1.14 10.80
2005    29,426,000           0      45,000   21.2        20.90   10.25      2005    359,511,000     814,000     3,928,000      9.2      3.55   1.25 9.50
2006    29,426,000           0     784,000   18.7        20.30   10.25      2006    359,757,000     246,000   (2,071,000)      9.1      3.74   1.37 8.50
2007    31,858,000           0     107,000   17.0        20.00    9.00      2007    383,278,000     815,000     3,845,000      8.3      3.50   1.32 9.00
2008P   31,858,000           0    (90,000)   17.3            –       –      2008P   384,478,000   1,200,000   (1,201,000)      8.9         –      –     –

SUBURBAN OFFICE                                                             METROPOLITAN INDICATORS – 2008
         Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                               • Gross Metro Product Percent Change: -0.3
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    58,343,000     578,000     218,000   14.9        22.50       –         • Total Employment Increase/Decrease: -1,122
2000    59,211,000     868,000     771,000   15.4        23.30   10.50           Percent Change: -1.0
2001    59,637,000     426,000     173,000   17.1        22.00   10.50
                                                                               • Unemployment Rate: 6.3
2002    59,834,000     197,000     348,000   15.4        21.60   10.50
2003    59,944,000     110,000    (61,000)   18.3        20.90   10.50         • Population (000): 2,094.7
2004    60,035,000      91,000     311,000   16.5        19.10   10.60
2005    60,151,000     116,000     107,000   11.6        21.00   10.60         Source: Moody’s Economy.com
2006    60,430,000     279,000   (381,000)   12.8        21.70    8.75
2007    65,876,000     614,000     391,000   11.2        20.60    8.50
2008P   66,376,000     500,000     351,000   11.4            –       –      P = Projection. Please see Glossary page for explanation.

18      CONTACT: Joseph Martanovic • joseph.martanovic@colliers.com l RESEARCH: Jennifer Wilms • jennifer.wilms@colliers.com
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COLUMBIA, SC
OFFICE                                                                       INDUSTRIAL
• Job growth created by new companies locating in the Columbia               • In 2007, the Columbia industrial market experienced an increase in
  market drove office absorption to exceed 200,000 SF for the year.            activity from national developers due to the stability of the market
• Healthcare providers and service center operations also helped to fuel       and lack of available product.
  the growth of the office market in 2007.                                   • The majority of leasing activity was driven by the warehousing and
• Two significant new tenants moving into the market during 2007               distribution-based businesses, which have been buoyed by Columbia’s
  included a Staples accounting operation and Performance Food                 central location in the state and its proximity to Interstates 20, 26
  Group. These two new companies accounted for over 450 jobs                   and 77.
  announced in the Columbia area during 2007.                                • While the market has maintained a 5% vacancy over the past several
                                                                               years, lack of new product and increased absorption resulted in a 2.4%
Office Outlook                                                                 vacancy rate at year-end 2007. New space was at a premium, while
• Columbia’s CBD will expand notably during 2008 as two new office             older Class C space remained vacant.
  projects are announced and construction begins. Innovista, the
  University of South Carolina’s in-town and on-campus research              Industrial Outlook
  institute, will greatly impact the future of the office market as public   • A shortage of distribution space is the key factor that may hinder this
  and private multi-tenant office space becomes available in 2008.             market in 2008. At year-end 2007, approximately 20 prospects were
• The trends for 2008 will be a stabilized economy with moderate,              looking for new space ranging from 20,000 to 300,000 SF.
  sustainable, office absorption.                                            • Approximately 400,000 SF of new industrial space is anticipated
• The Columbia office market is poised for new speculative                     in 2008.
  development in the CBD. These developments will play a significant         • The 600-acre Saxe Gotha Industrial Park owned by Lexington
  role in forcing landlords to be more aggressive in getting deals done.       County has been taken off of the market due to little interest shown
• With tightened occupancies and new developments in the near                  by major manufacturing tenants.
  future, rent growth will become apparent in all property sectors           • Kirco will begin development of a 126 acre parcel at the Carolina
  during 2008.                                                                 Pines Industrial Park off of Interstate 77. The project will begin with
                                                                               a 184,000 SF speculative building and will ultimately total roughly
                                                                               2 million SF at final build-out.




DOWNTOWN OFFICE                                                              INDUSTRIAL
          Inventory      New         Absorption    Vacancy       Class A              Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
             (SF)     Supply (SF)       (SF)       Rate (%)    Rent ($PSF)               (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999              –           –               0           –       18.80      1999    29,531,000 1,048,000 1,183,000             6.8      3.25      –     –
2000      3,975,000           0          50,000         4.6       18.50      2000    30,612,000 1,081,000 781,000               8.0      3.25      –     –
2001      4,055,000      80,000       (267,000)        10.9       18.80      2001    31,386,000 774,000 1,298,000               5.2      3.25   1.00 11.50
2002      4,111,000      56,000        (18,000)        11.2       18.00      2002    32,991,000 1,605,000 (143,000)            10.6      3.25   1.25 9.50
2003      4,111,000           0          97,000         8.9       17.80      2003    32,991,000         0 (1,082,000)          15.4      3.25   0.90 9.50
2004      4,461,000     350,000       (135,000)        14.4       19.70      2004    33,209,000 218,000 1,253,000              10.5      3.65   1.00 9.25
2005      4,461,000           0        (10,000)        12.8       19.80      2005    33,461,000 252,000 1,745,000               5.1      3.90   1.00 7.25
2006      4,461,000           0          52,000        12.4       19.70      2006    33,940,000 479,000 539,000                 4.6      3.90   1.10 7.00
2007      4,383,000           0        (40,000)        13.6       19.90      2007    34,299,000 359,000 753,000                 2.4      3.95   1.00 7.00
2008P     4,508,000     125,000          87,000        14.0           –      2008P   34,699,000 400,000 770,000                 1.3         –      –     –

SUBURBAN OFFICE                                                              METROPOLITAN INDICATORS – 2008
          Inventory      New         Absorption    Vacancy       Class A
                                                                                • Gross Metro Product Percent Change: 2.3
             (SF)     Supply (SF)       (SF)       Rate (%)    Rent ($PSF)
1999              –           –               0           –       16.50         • Total Employment Increase/Decrease: 519
2000      4,273,000      90,000         103,000         7.6       17.00           Percent Change: 1.4
2001      4,308,000      35,000        (41,000)        15.2       18.00
                                                                                • Unemployment Rate: 5.0
2002      4,408,000     100,000         236,000        12.4       18.00
2003      4,483,000      75,000       (248,000)        21.3       17.50         • Population (000): 729.3
2004      4,483,000           0          72,000        23.5       16.20
2005      4,518,000      35,000         229,000        22.4       17.10         Source: Moody’s Economy.com
2006      4,518,000           0         157,000        19.5       17.80
2007      4,516,000      14,000         204,000        15.0       16.90
2008P     4,554,000      38,000          88,000        13.8           –      P = Projection. Please see Glossary page for explanation.

                            CONTACT:Woody Moore • wmoore@collierskeenan.com l RESEARCH: Ryan Hyler • ryan.hyler@colliers.com                             19
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COLUMBUS, OH
OFFICE                                                                      INDUSTRIAL
• Columbus was the only city in Ohio with positive growth from              • The Columbus industrial market benefited from its central location
  2000 to 2006, and was the third fastest growing city in the Midwest.        and access to major railroads, ideal for distribution businesses.
• A growing economy led to increased demand in the office market.           • Wholesale trade grew consistent with the state, and transportation
  Leading the charge were the business and professional services sectors      and utilities sectors have grown 33% since 2001.
  which outperformed the national average in 2007. Businesses in the        • A new intermodal facility adjacent to the airport drove demand for
  educational, health and social services sectors were also healthy but       more industrial parks, and developers stockpiled land in the area.
  grew at a slower pace than previous years.                                  The facilities also fueled sales in the Southeast submarket.
• Nationwide expanded their headquarters complex with the                   • The vacancy rate decreased to 10.13%. Bulk vacancy decreased since
  construction of a 125,000 SF building located in the CBD.                   the third quarter, down from 16.18% to 15.85%. Busy Southeast
  Grange Insurance agreed to complete a 240,000 SF expansion                  Construction saw largest decrease in Vacancy from 15.9% to 14.7%.
  of their existing facility also in the Columbus CBD.
• Significant sales included the sale of Fifth Third Center for over
                                                                            Industrial Outlook
  $46 million, Capital Square for $40 million and Time Warner for           • Columbus will see continued infrastructure development.
  $23 million.                                                                The intermodal yard will double the amount of cargo through
• The vacancy rate registered 14.61%, down more than one point                central Ohio by 2010, creating more than 20,000 jobs over
  from the third quarter. Downtown year-end vacancy registered                next 30 years.
  12.8%, down over third quarter vacancy at 13.57%.                         • New construction will continue with large, speculative bulk
                                                                              facilities of 400,000 SF and larger, mostly around airport and
Office Outlook
                                                                              new industrial yard.
• Upcoming downtown infrastructure initiatives will include the
  mayor’s streetcar proposal connecting neighborhoods on the High
  Street corridor, and the major reconstruction of several highways.
• Mixed-use developments are becoming increasingly attractive,
  and several speculative buildings and build-to-suits underway.
• The business and professional services sectors will continue to
  lead growth in demand for space in the Columbus office market.




DOWNTOWN OFFICE                                                             INDUSTRIAL
         Inventory       New        Absorption    Vacancy      Class A                Inventory        New      Absorption       Vacancy    Warehouse      Land
            (SF)      Supply (SF)      (SF)       Rate (%)   Rent ($PSF)                 (SF)       Supply (SF)    (SF)          Rate (%)   Rent ($PSF)   ($PSF)
1999             –           –          30,000         6.4           –      1999              –              –             0          –           –           –
2000     6,696,000     305,000         125,000         7.4       22.46      2000    210,433,000              0    12,813,000        6.6        3.14           –
2001     7,549,000     853,000       (340,000)        13.4       21.70      2001    214,443,000      4,010,000    10,628,000        8.3        3.05           –
2002     7,627,000      78,000       (137,000)        15.8       20.30      2002    216,551,000      2,108,000    11,041,000        9.1        2.88           –
2003     7,767,000     140,000          68,000        17.3       18.80      2003    218,282,000      1,731,000     8,563,000        9.5        3.00           –
2004     7,929,000     162,000         106,000        17.6       18.80      2004    221,363,000      3,081,000    13,317,000       10.9        2.87           –
2005     7,929,000           0         115,000        18.5       17.30      2005    224,945,000      3,582,000    14,578,000       11.2        2.87        1.60
2006     8,142,000     213,000         125,000        18.9       16.90      2006    232,667,000      7,722,000     7,208,000       13.2        3.27        1.60
2007     8,343,000     201,000         312,000        12.8       21.70      2007    235,613,000      2,037,000     3,617,000       10.1        3.03        3.18
2008P    8,483,000     140,000          47,000        13.7           –      2008P   238,222,000      2,609,000     1,371,000       10.5           –           –

SUBURBAN OFFICE                                                             METROPOLITAN INDICATORS – 2008
         Inventory       New        Absorption    Vacancy      Class A
                                                                               • Gross Metro Product Percent Change: 0.6
            (SF)      Supply (SF)      (SF)       Rate (%)   Rent ($PSF)
1999             –            –      1,261,000         6.0           –         • Total Employment Increase/Decrease: -643
2000    11,467,000    (831,000)      1,002,000        10.8       19.80           Percent Change: -0.7
2001    12,034,000      567,000      (336,000)        15.9       19.80
                                                                               • Unemployment Rate: 5.1
2002    14,308,000    2,274,000        460,000        20.9       19.15
2003    14,041,000    (267,000)      (136,000)        21.0       18.10         • Population (000): 1,750.5
2004    14,609,000      568,000        219,000        22.9       18.20
2005    14,802,000      193,000       (32,000)        22.2       17.20         Source: Moody’s Economy.com
2006    15,443,000      641,000        776,000        19.6       16.30
2007    16,176,000      733,000        411,000        16.9       18.50
2008P   17,073,000      897,000        650,000        17.5           –      P = Projection. Please see Glossary page for explanation.

20      CONTACT: Steve Falor • sfalor@ctmt.com l RESEARCH: Zane Fry • zane.fry@colliers.com
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DALLAS/FT. WORTH, TX
OFFICE                                                                       INDUSTRIAL
• Vacancy remained at 17.1% at year-end, the same as year-end 2006;          • Dallas had over a dozen large construction projects underway, each
  absorption reached 2.7 million SF, a decrease of 2.8 million SF              supplying over 500,000 SF or more of new industrial supply.
  over 2006.                                                                 • Ground broke on the Dallas Logistics Hub, a 6,000-acre park that will
• The largest lease signings included Bank of America leasing                  have the capacity for 60 million SF of commercial space. BNSF has
  350,000 SF and Verizon Communications Inc. leasing 253,000 SF                a 350-acre tract under option for an Intermodal facility, which would
  of space.                                                                    make the Dallas Logistics Hub the only U.S. Inland Port with two
• The largest construction projects in Uptown/Turtle Creek submarket           Tier 1 railroads.
  included One Victory Park adding 458,000 SF to inventory and               • Significant leases/move-ins included Unilever at 800,000 SF, Plains
  Rosewood Court supplying 400,000 SF.                                         Cotton Cooperative Associations at 650,000 SF, Cadbury Schweppes
• Uptown/Turtle Creek and Far North Dallas had a combined total of             with 594,000 SF, and Service Craft Logistics at 420,000 SF.
  more than 3 million SF in the construction pipeline.                       • Absorption was up measuring 15,689,000 million SF compared to
• For suburban office properties, sales averaged $121 per SF and a cap         14,797,000 SF at year-end 2006.
  rate of 6.9% compared to $128 per SF at 7.7% in 2006.                      • Cap rates for industrial properties moved higher averaging 7.0%, up
                                                                               marginally from 6.9% at the end of 2006.
Office Outlook
• The Dallas CBD and Uptown markets have several projects                    Industrial Outlook
  underway in the Arts District and near Victory Park, contributing          • The market will continue to hold steady in 2008 as manufacturing
  to a downtown Dallas revitalization.                                         and employment woes experienced in other parts of the country have,
• It is expected that rental rates and demand for space will continue          for the most part, by-passed this area.
  to be robust in 2008.                                                      • The Dallas Logistics Hub will continue to have a huge impact
• The credit crunch could serve to slow construction on speculative            on South Dallas and the region as more companies move into the
  properties and this may serve to moderate the imbalance of                   area to take advantage of the distribution efficiencies within
  demand and supply.                                                           the development.
                                                                             • New industrial supply is projected to be over 17 million SF for 2008.




DOWNTOWN OFFICE                                                              INDUSTRIAL
          Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999     33,977,000          0           0    18.9        21.00       –      1999    570,445,000 20,437,000    11,941,000       6.5      3.00      –     –
2000     33,977,000          0   (308,000)    19.8        22.50    8.50      2000    587,101,000 16,656,000    14,566,000       7.0      4.10      –     –
2001     34,020,000     43,000      75,000    19.7        25.00   10.00      2001    610,983,000 23,882,000    14,665,000       9.9      3.50   2.75 10.50
2002     34,123,000    103,000   (562,000)    21.6        19.00   10.00      2002    622,642,000 11,659,000    18,302,000      10.1      3.00   2.60 8.75
2003     34,123,000          0   (438,000)    22.9        18.50   10.00      2003    628,783,000 6,141,000     11,619,000      11.1      3.00   2.50 8.00
2004     34,123,000          0     123,000    22.5        18.50    7.50      2004    640,677,000 11,894,000    10,159,000      11.7      3.00   2.35 8.25
2005     34,123,000          0      66,000    22.3        19.10    7.50      2005    640,677,000 6,316,000     12,608,000      10.6      3.35   2.60 7.80
2006     34,123,000          0     270,000    21.5        19.50    7.80      2006    658,841,000 11,848,000    14,797,000      10.2      3.50   2.95 6.90
2007     34,054,000    878,000     305,000    21.9        25.00    7.40      2007    683,019,000 12,527,000    15,689,000       9.0      3.40   1.75 7.00
2008P    34,054,000          0     745,000    19.7            –       –      2008P   688,720,000 5,701,000     17,402,000       7.2         –      –     –

SUBURBAN OFFICE                                                              METROPOLITAN INDICATORS – 2008
          Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                                • Gross Metro Product Percent Change: 2.8
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    199,469,000 15,644,000 11,727,000     12.9        23.00       –         • Total Employment Increase/Decrease: 3,744
2000    205,262,000 5,793,000 6,196,000       12.3        22.70    8.50           Percent Change: 1.8
2001    214,429,000 9,167,000     336,000     15.9        23.50   10.00
                                                                                • Unemployment Rate: 4.4
2002    218,150,000 3,721,000 (1,749,000)     18.1        21.00   10.00
2003    220,692,000 2,542,000     446,000     18.8        20.50    9.50         • Population (000): 4,184.9
2004    224,466,000 3,774,000 5,844,000       17.6        20.00    7.90
2005    227,179,000 2,713,000 2,897,000       17.3        22.00    9.10         Source: Moody’s Economy.com
2006    231,508,000 4,329,000 5,221,000       16.5        22.50    7.45
2007    241,528,000 3,287,000 2,393,000       16.5        26.50    6.90
2008P   246,142,000 4,614,000 5,647,000       15.8            –       –      P = Projection. Please see Glossary page for explanation.

                                 CONTACT: Mark Noble • mark.noble@colliers.com l RESEARCH: Mike Otillio • mike.otillio@colliers.com                      21
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DENVER, CO
OFFICE                                                                       INDUSTRIAL
• Investment sales volume totaled $3.3 billion in Metro Denver               • Notable 2007 deliveries included the unoccupied 406,959 SF
  through the third quarter of 2007. In 2007, office sales prices              Aurora Commerce Center Building C and ProLogis Park 70 Phase I
  averaged $223 per SF.                                                        Building 8, a 360,000 SF building, also unoccupied.
• Metro Denver office rents continued their cyclical rise; year-to-date      • One of the largest lease signings included the 150,000 SF renewal by
  rents increased 5.5%. Metro rents for Class A product rose                   TSA Stores, Inc.
  6.5% year-to-date.                                                         • The average cap rate declined in 2007, averaging 6.5%, compared to
• There was 2.3 million SF under construction or renovation in the             the first six months of last year when the average was 7.24%.
  third quarter 2007 with 22% pre-leased.                                    • DCT Industrial Trust bought Centerpark, a 431,600 SF Class A
• Available sublease space in Metro Denver declined by 418,000 SF              industrial park, in a joint venture with JPMorgan Asset Management.
  in 2007 so far. As a result, sublease space represented just 0.9% of         Lowe Enterprises was the seller. Alliance Commercial Properties sold
  standing inventory.                                                          a 300,300 SF building at 200 Bromley Business Parkway in Brighton
• The largest lease signings in 2007 included 160,600 SF United                for $16.19 million to BS Properties LLC. Staples occupied the
  Launch Alliance and 84,700 SF by Gambro BCT at Signature                     property via a 10-year lease. A landmark industrial property near the
  Centre at Denver West.                                                       crossroads of Interstate 70 and I-25 sold to a Denver-based REIT in
• Cap rates averaged 6.2%, down from 7.0% in 2006.                             multimillion-dollar deal.
                                                                             • The largest sale was the Seagate/Maxtor Campus in Longmont, a
Office Outlook                                                                 450,090 SF industrial building for $60.5 million.
• Vacancy rates are expected to drop and lease rates to increase.            • Industrial sales activity in 2007 was up from 2006. The first six
• Speculative development will remain balanced as demand                       months of 2007 saw 125 industrial sales transactions with a total
  requires additional supply.                                                  volume of over $434 million.
• Capital market turmoil should have the effect of increasing
                                                                             Industrial Outlook
  cap rates in 2008.
                                                                             • Colorado’s economy will grow modestly in 2008, and should
• Market trends project strong demand for green, high
                                                                               outperform the national economy according to economist
  performance buildings.
                                                                               Richard Wobbekind.




DOWNTOWN OFFICE                                                              INDUSTRIAL
          Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999    25,015,000      22,000     288,000     7.3        24.40        –     1999    219,414,000   1,800,000    (471,000)       5.5      4.00      –      –
2000    25,597,000     582,000     665,000     5.5        27.50     8.75     2000    223,806,000   4,392,000    2,434,000       6.5      4.50      –      –
2001    25,803,000     206,000 (793,000)      10.8        25.40     9.25     2001    228,195,000   4,389,000    1,920,000       7.1      5.90   2.75   9.10
2002    25,803,000           0 (1,206,000)    14.9        22.40     9.00     2002    232,650,000   4,455,000    (264,000)       8.5      5.65   3.00   8.90
2003    25,803,000           0 (123,000)      15.3        20.50     9.00     2003    235,338,000   2,688,000    (666,000)       9.6      5.60   3.00   8.10
2004    25,803,000           0 (173,000)      14.8        18.20     8.05     2004    237,351,000   2,013,000    2,105,000       9.5      5.60   3.25   7.50
2005    25,803,000           0     447,000    14.0        18.50     7.00     2005    238,974,000   1,623,000    2,850,000       8.8      5.55   3.00   7.20
2006    26,179,000     376,000     705,000    11.8        23.80     7.00     2006    240,709,000   1,735,000    2,545,000       7.3      4.25   3.50   7.30
2007    26,867,000           0     351,000    12.3        30.00     6.20     2007    246,890,000   1,900,000    3,698,000       6.4      4.70   4.00   6.50
2008P   27,587,000     720,000     495,000    12.8            –        –     2008P   248,615,000   1,725,000    4,851,000       5.1         –      –      –

SUBURBAN OFFICE                                                              METROPOLITAN INDICATORS – 2008
          Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                                • Gross Metro Product Percent Change: 2.1
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    72,371,000    5,028,000 2,106,000      9.5        26.50        –        • Total Employment Increase/Decrease: 850
2000    77,399,000    5,028,000 7,495,000      8.3        22.90     9.50          Percent Change: 0.7
2001    81,998,000    4,599,000 1,652,000     15.1        21.50     9.25
                                                                                • Unemployment Rate: 4.2
2002    84,113,000    2,115,000 (1,300,000)   18.7        19.00     9.00
2003    84,889,000      776,000     381,000   18.0        19.30     9.30        • Population (000): 2,481.6
2004    85,832,000      943,000 1,052,000     16.3        19.45     8.75
2005    86,040,000      208,000 2,130,000     14.5        20.40     7.25        Source: Moody’s Economy.com
2006    86,702,000      662,000 1,896,000     13.4        21.10     7.00
2007    88,291,000      395,000 1,851,000     12.3        23.50     6.20
2008P   89,200,000      909,000 1,626,000     11.4            –        –     P = Projection. Please see Glossary page for explanation.

22      CONTACT: Bob Whittelsey • rwhittelsey@colliersb-k.com l RESEARCH: Julie Duran • julie.duran@colliers.com
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DETROIT, MI
OFFICE                                                                      INDUSTRIAL
• The Detroit office market slowed considerably with much of the            • The Detroit sector reported 3.34 million square feet of new supply in
  activity consisting of companies exchanging buildings back and forth.       2007, the most since 2001.
• Lease rates depended less on the sector of the market but more on the     • Major new construction was underway at Brownstown Business
  specific building with rates ranging anywhere between $15 per SF to         Center, Bldg. 6, a 267,500 SF warehouse & distribution building
  $27.50 per SF.                                                              in Brownstown Twp.
• Wayne County purchased the historic Guardian Office Building for          • Overall lease rates trickled down with the lowest in the City of
  $14.5 million.                                                              Detroit. R&D and flex lease rates were double that of warehouse/
• The I-696-corridor is seeing strong growth along with the usual             distribution rents in almost all submarkets across Detroit with the
  Birmingham/Bloomfield areas. Increased retail and apartment/                highest reaching $13.78 per SF in the Washtenaw County market.
  condominium activity occurring along Jefferson, extending east            • Vacancy rates were still relatively high in all sub-markets but
  from the CBD, to the Grosse Pointe border.                                  increased only slightly compared to last year. Vacancy in Royal Oak,
• On the weaker side were the Southfield and Troy areas, both                 Farmington Hills and Washtenaw stabilized around 10%.
  experiencing higher office vacancy rates.                                 • A large sale transaction occurred on 2110 Executive Hills Dr.,
                                                                              Auburn Hills. The 103,819 SF R&D property sold for $19 million.
Office Outlook
• State and local incentives plus the three pending Detroit casinos         Industrial Outlook
  will spark new opportunities for future growth in the Detroit CBD.        • National investors are continuing to take advantage of Detroit’s lower
  Large companies like Quicken Loans are currently considering their          than average prices, which will result in increasing sales prices and
  relocation options.                                                         continued interest.
• Medical office properties are still in high demand bringing positive      • Incentives from the State and local cities will spark interest in
  activity and much desired new job opportunities.                            many companies to consider the Detroit area in their relocation
• Office investment is appealing to West Coast investors due to               or expansion plans.
  Detroit’s higher cap rate opportunities. The Detroit office market        • Manufacturing tenants are still dealing with the continued
  is expected to improve over the next 18 months.                             uncertainty surrounding the automotive industry resulting in the
                                                                              preference of shorter lease terms and renewals as well as requests
                                                                              for lease rate reductions.




DOWNTOWN OFFICE                                                             INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999    25,871,000           0   (104,000)    8.6        25.75       –      1999    397,895,000   5,000,000 (593,000)          7.0      5.80      –     –
2000    25,871,000           0     187,000   11.0        27.80   10.00      2000    405,726,000   7,831,000 (1,752,000)        9.0      5.70      –     –
2001    25,871,000           0   (218,000)   11.4        25.80   12.00      2001    411,782,000   6,056,000 (11,789,000)      12.6      6.00   7.00 11.00
2002    26,017,000     146,000   (319,000)   16.5        24.00   12.00      2002    414,111,000   2,329,000 (12,891,000)      13.1      4.80   3.40 11.00
2003    27,097,000   1,080,000     569,000   17.3        21.00   12.00      2003    415,255,000   1,144,000 (5,626,000)       14.2      4.80   4.50 9.50
2004    27,097,000           0     588,000   14.3        21.50   10.00      2004    416,539,000   1,284,000 1,647,000         13.0      4.80   4.00 10.50
2005    27,097,000           0   (172,000)   15.9        22.50   10.00      2005    417,952,000   1,413,000 7,914,000         11.6      5.00   3.75 8.90
2006    27,452,000     355,000     303,000   16.6        22.00   12.00      2006    420,001,000   2,049,000 (9,959,000)       13.6      4.75   5.50 9.00
2007    47,130,000           0     852,000   16.4        23.70   10.00      2007    435,578,000   3,340,000 (7,078,000)       13.3      4.59   4.50 7.80
2008P   47,130,000           0   (401,000)   17.2            –       –      2008P   436,053,000     475,000 (3,839,000)       14.3         –      –     –

SUBURBAN OFFICE                                                             METROPOLITAN INDICATORS – 2008
         Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                               • Gross Metro Product Percent Change: -1.0
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    85,435,000   1,345,000     971,000    6.5        24.50       –         • Total Employment Increase/Decrease: -1,820
2000    87,333,000   1,898,000 (236,000)      7.1        24.30   10.50           Percent Change: -2.3
2001    89,250,000   1,917,000 (1,927,000)   12.8        25.30   11.00
                                                                               • Unemployment Rate: 9.8
2002    90,686,000   1,436,000 (3,015,000)   15.0        24.80   10.00
2003    91,526,000     840,000 (807,000)     16.4        23.00    9.00         • Population (000): 1,932.4
2004    92,357,000     831,000     598,000   16.0        22.00   10.00
2005    93,062,000     705,000     777,000   16.6        23.50    8.50         Source: Moody’s Economy.com
2006    93,502,000     440,000 (663,000)     17.5        23.50    9.00
2007    98,835,000     928,000     536,000   17.6        23.50    9.00
2008P   98,835,000           0     733,000   16.8            –       –      P = Projection. Please see Glossary page for explanation.

CONTACT: Cameron McCausland • cameron.mcCausland@colliers.com l RESEARCH: Michelle McGuzkin • michelle.mcguzkin@colliers.com                            23
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FT. LAUDERDALE/BROWARD COUNTY, FL
OFFICE                                                                      INDUSTRIAL
• The Broward County office market ended 2007 with a vacancy rate of        • Low vacancy, solid demand, rising rents and lack of land for new
  11.3% as supply outpaced current demand needs with the completion           construction continued to attract private and institutional investment
  of three projects adding a total of 269,000 SF of new inventory.            dollars into the area.
• Class A office space experienced positive absorption while Class B        • Industrial condominiums returned to the market as buyers did not
  and C space experienced negative absorption in 2007.                        purchase as much as developers had anticipated and are expected to
• Rental rates averaged $32.40 per SF for Class A downtown space and          be absorbed by tenants in the next 12 to 18 months.
  $28.60 per SF for Class A suburban space, a slight increase from the      • Construction completions totaled over 1.8 million SF in 2007.
  prior year.                                                               • The $30 million “Marina Mile Business Park” industrial complex
• Bentley Forbes’ purchase 350 and 450 Las Olas Center with 416,700           was completed in early 2007. This was the biggest venture yet in
  SF of office space, and 52,500 SF of street front retail in Ft.             the revitalization of Marina Mile Road which today houses
  Lauderdale set a new record for South Florida office buildings,             70 corporations and 30,000 employees.
  fetching a sales price of $492 per SF.
                                                                            Industrial Outlook
Office Outlook                                                              • Asking rates are expected to stabilize in 2008 as new space arrives on
• Rental rates should begin to stabilize as new construction and              the market.
  sublease options enter the market in 2008.                                • Increases in building operating expenses continue to affect tenants’
• Approximately 1.8 million SF of office space remained under                 bottom lines and some have begun to consolidate or simply downsize.
  construction at the end of 2007, several of which are slated for          • Many projections show that residential land will be rezoned back to
  2008 delivery.                                                              industrial as the residential market continues to decline.
• A prime parcel on Las Olas Boulevard in downtown Ft. Lauderdale           • Port Everglades released its latest version of its 20-year, $2 billion
  which was purchased for residential condos will now be changed for          vision plan for general infrastructure work to support cruise and
  mixed-use development. This is evidence of project restructuring as         cargo activities, which is anticipated to attract new companies
  developers move increasingly away from residential and financially-         into the area.
  stressed homebuilders begin to divest.




DOWNTOWN OFFICE                                                             INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                  Inventory        New      Absorption       Vacancy      Warehouse      Land
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                     (SF)       Supply (SF)    (SF)          Rate (%)     Rent ($PSF)   ($PSF)
1999     6,646,000     406,000    (71,000)    6.3        29.00       –      1999     97,591,000      2,794,000      (885,000)           7.7         –           –
2000     6,905,000     259,000     200,000    6.4        26.70       –      2000    100,532,000      2,941,000      4,060,000           6.8      6.70           –
2001     7,082,000     177,000      49,000   12.5        25.50       –      2001    103,862,000      3,330,000      2,049,000           9.4      5.80        8.57
2002     7,525,000     443,000    (55,000)   17.5        26.20       –      2002    105,406,000      1,544,000      1,014,000           8.9      6.00        5.00
2003     7,579,000      54,000     189,000   15.9        26.40       –      2003    106,937,000      1,531,000      2,379,000           8.0      6.30       10.00
2004     7,629,000      50,000       1,000   16.7        26.70       –      2004    109,063,000      2,126,000      2,797,000           7.3      6.30        8.00
2005     7,679,000      50,000     187,000   11.6        27.40    5.50      2005    110,473,000      1,410,000      3,675,000           4.8      6.95        9.00
2006     7,679,000           0     176,000    9.0        30.30    6.60      2006    111,834,000      1,361,000      1,534,000           3.8      7.46       20.00
2007    10,135,000     269,000   (170,000)   11.3        32.40    7.10      2007    125,918,000      1,830,000        762,000           5.5      8.63       15.00
2008P   10,150,000      15,000     198,000    9.5            –       –      2008P   129,203,000      3,285,000      2,619,000           5.9         –           –

SUBURBAN OFFICE                                                             METROPOLITAN INDICATORS – 2008
         Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                               • Gross Metro Product Percent Change: 2.2
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    37,097,000   1,245,000   (686,000)   10.1        21.50       –         • Total Employment Increase/Decrease: 1,324
2000    38,336,000   1,239,000     555,000   10.4        18.70       –           Percent Change: 1.7
2001    40,790,000   2,454,000     967,000   16.3        24.70       –
                                                                               • Unemployment Rate: 4.0
2002    41,261,000     471,000    (12,000)   15.5        23.70   10.70
2003    41,791,000     530,000     976,000   13.8        24.10   10.00         • Population (000): 1,852.9
2004    42,472,000     681,000   1,285,000   11.9        23.90    8.50
2005    42,920,000     448,000   1,115,000    7.8        25.10    7.00         Source: Moody’s Economy.com
2006    43,567,000     647,000   1,259,000    8.0        28.00    6.70
2007    43,802,000   1,099,000     127,000   10.1        28.60    6.80
2008P   46,547,000   1,745,000     866,000   13.6            –       –      P = Projection. Please see Glossary page for explanation.

24      CONTACT: Steve Wasserman • swasserman@msn.com l RESEARCH: Pani Roshani • pani.roshani@colliers.com
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FRESNO, CA
OFFICE                                                                       INDUSTRIAL
• The Fresno office market consisted of 20.2 million SF of space             • Fresno’s industrial inventory consisted of approximately 75%
  with another 4.5 million SF in government-owned and occupied                 warehouse/distribution facilities, 20% manufacturing facilities,
  office buildings.                                                            and 5% R&D facilities.
• New construction was strong with approximately 817,000 SF added            • Vacancy at the end of 2007 registered 4.6%, representing a
  in 2007. Of that, three-quarters of the square footage was leased by         comparatively low vacancy rate for the market.
  tenants or built for owners-users.                                         • Lack of new construction contributed to low vacancy as developers
• The increase in metro vacancy from 8.35% to 11.84% was primarily             wait for rents to catch up with construction costs before kick-starting
  due to remaining vacancy in new product.                                     new projects.
• There was an increase in sublease space as home builders, title            • A handful of large leases and sales contributed to a record absorption
  companies and mortgage companies were affected by the housing                of over 1 million SF of industrial space in 2007.
  market downturn.                                                           • The majority of small businesses preferred to buy rather than lease
Office Outlook                                                                 industrial facilities. The existing market was characterized as offering
                                                                               more space for lease than for sale, thereby creating an imbalance of
• Fresno’s Central Valley will continue to see strong growth as both           demand for space for lease.
  population and businesses move inland for more affordable housing
  and better opportunities.                                                  Industrial Outlook
• The office market remains favorable for high growth industries such        • As record low vacancy, steady demand, and higher rents justify
  as financial services and medical services.                                  new projects, there will be a return of new construction of Class A
• As the region grows, infrastructure will expand to meet population           facilities in 2008.
  needs. Three freeways expanded and will undergo further expansion.         • Demand for improved industrial land will increase as the variety
• There continues to be an abundance of land available for                     of available existing buildings becomes limited and small businesses
  development. Construction costs have tapered in the past few                 continue their desire to own property.
  months due to the slowdown in the residential housing market.
• Rents will remain stable but incentives will start to favor tenants.
  Purchase prices are not likely to increase in 2008.




DOWNTOWN OFFICE                                                              INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                  Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                     (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999             –            –           0      –        19.50       –      1999    43,164,000 750,000 2,800,000               8.6      3.60      –      –
2000     2,085,000            0    150,000    12.3        15.60   11.00      2000    44,164,000 1,000,000 1,200,000             6.0      3.20      –      –
2001     2,195,000     110,000     149,000    10.9        15.60   12.00      2001    44,364,000 200,000 100,000                 8.0      3.40   2.25   9.00
2002     2,342,000     147,000       86,000   12.7        18.00   10.75      2002    44,764,000 400,000           0             9.0      3.20   2.50   8.50
2003     2,844,000     502,000     440,000    13.7        19.20    9.00      2003    45,564,000 800,000 (30,000)               10.8      3.20   2.50   8.50
2004     2,930,000      86,000     101,000    10.6        22.80    8.50      2004    45,964,000 400,000      20,000            11.6      3.20   3.00   7.75
2005     2,928,000      (2,000)    (19,000)   11.2        23.00    7.50      2005    46,764,000 800,000 1,923,000               9.1      3.20   4.25   7.75
2006     2,976,000      48,000     157,000     7.3        24.00    9.00      2006    47,204,000 440,000 786,000                 7.6      3.20   4.00   8.00
2007     3,060,000      84,000       12,000    9.5        27.60    8.00      2007    48,304,000 100,000 1,393,000               4.6      4.08   7.00   7.50
2008P    3,110,000      50,000       47,000    9.4            –       –      2008P   48,604,000 300,000 784,000                 3.5         –      –      –

SUBURBAN OFFICE                                                              METROPOLITAN INDICATORS – 2008
         Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                                • Gross Metro Product Percent Change: 1.7
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    12,410,000     213,000      160,000   12.0        23.50       –         • Total Employment Increase/Decrease: 212
2000    12,713,000     303,000      830,000   11.3        19.20   10.00           Percent Change: 0.7
2001    13,274,000     561,000      694,000   10.4        19.20   10.25
                                                                                • Unemployment Rate: 9.0
2002    14,444,000   1,170,000    1,343,000    8.1        16.20    9.00
2003    14,503,000      59,000       60,000    7.0        19.20    8.40         • Population (000): 915.0
2004    15,422,000     919,000      601,000    7.9        25.20    8.00
2005    15,767,000     345,000      417,000    6.3        26.40    7.00         Source: Moody’s Economy.com
2006    16,440,000     673,000      544,000    8.8        26.40    7.25
2007    17,436,000     733,000      364,000   11.9        27.60    8.00
2008P   17,836,000     400,000      261,000   12.4            –       –      P = Projection. Please see Glossary page for explanation.

                                      CONTACT: Mike Schuh • mschuh@tingey.com l RESEARCH: Debbie Kidd • debbie.kidd@colliers.com                          25
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GREENVILLE, SC
OFFICE                                                                      INDUSTRIAL
• The Greenville office market experienced another significant year of      • High growth industries include research and development,
  absorption in the office market of 655,000 SF.                              warehouse/logistics, and light manufacturing. Expansion locally
• The suburban office market reported 12.36% absorption to 87.47%             and regionally with some potential manufacturing companies
  occupancy, and is swinging to the landlords’ favor.                         relocating to the Upstate.
• Reported suburban rental rates remained constant while there              • New developments include 342,000 SF speculative building,
  were less “below market” rate deals made as the market continued            126,000 SF speculative building, and 108,000 SF flex space building.
  to tighten.                                                               • In Greenville, the construction of Adidas’ new distribution center
• The Fifth RiverPlace mixed-use building, The Terrace, was delivered         is underway.
  to the market fully occupied by the Bounce Agency, Allora, Inc, and       • Significant transactions included 215,000 SF leased by Cliffstar Corp.,
  Don Gardner Architects.                                                     116,400 SF leased by Edward B. Dee Lee Co., 100,000 SF leased by
                                                                              Sun Paper Co., 100,000 SF leased by CWC Logistics, and 80,000 SF
Office Outlook                                                                leased by STI.
• The mixed-use project planned by Bo Aughtry at South Main and             • On the investment side, C.F. Sauer purchased a 148,800 SF
  Broad Streets is expected to break ground in the first quarter of           distribution building, and a local developer sold 2 million SF of its
  2008 with 30,000 SF of Class A office space already pre-leased.             industrial portfolio in the upstate.
• Other new office development in the CBD is stymied by the lack            • Land prices were varied: rough grade sold from $20,000 to $39,500
  of parking availability.                                                    per acre; pad ready ranged from $65,000 to $75,000 per acre. The size
• Merrifield Partners announced a mixed-use project on 26 acres near          of acreage ranged from 8 to 72 acres.
  the Fluor Corporation campus with 26,000 SF of new office space.          • The market witnessed an influx of suppliers migrating to be
• The Erwin-Penland marketing agency announced hiring and                     closer to BMW.
  expansion plans that could further tighten or grow the office
  space capacity in the CBD.                                                Industrial Outlook
                                                                            • In 2008, Greenville will see several new developments including the
                                                                              construction of a 200,000 SF speculative building in Spartanburg by
                                                                              an Atlanta, GA developer.
                                                                            • It is becoming more difficult to find entitled property, and the
                                                                              problem is increasing as re-zoning issues continue.




DOWNTOWN OFFICE                                                             INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999             –           –          0       –            –      –       1999             –            –             0        –         –      –      –
2000     2,695,000           0     88,000    14.0        18.25      –       2000             –            –             0        –         –      –      –
2001     2,356,000      45,000   107,000     14.3        18.25      –       2001             –            –             0        –         –      –      –
2002     2,581,000     183,000   154,000     13.8        18.25      –       2002    43,161,000      343,000             0     20.5      3.30   0.80   9.50
2003     3,120,000      29,000      1,000    16.1        18.25      –       2003    43,423,000      262,000   (1,090,000)     23.5      3.20   0.80   9.50
2004     3,182,000      62,000      9,000    16.3        18.50      –       2004    43,787,000      364,000     1,099,000     21.5      3.20      –   9.50
2005     3,269,000      87,000   102,000     10.7        18.90   9.00       2005    43,787,000            –             0        –         –      –      –
2006     3,101,000           0     15,000    11.4        19.60   8.00       2006    60,586,000      900,000             0     13.0      3.50   0.92   9.00
2007     3,050,000     123,000   (43,000)    12.8        18.00   8.00       2007    62,526,000      601,000     1,157,000     10.3      3.13   0.92   8.25
2008P    3,050,000           0     64,000    10.7            –      –       2008P   62,904,000      378,000     1,346,000      8.7         –      –      –

SUBURBAN OFFICE                                                             METROPOLITAN INDICATORS – 2008
         Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                               • Gross Metro Product Percent Change: 2.4
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999             –           –          0       –            –      –          • Total Employment Increase/Decrease: 469
2000     2,894,000           0     64,000    21.0        17.25      –            Percent Change: 1.5
2001     3,328,000     434,000   113,000     19.6        17.25      –
                                                                               • Unemployment Rate: 5.2
2002     3,461,000           0   (50,000)    28.1        16.75      –
2003     3,780,000      75,000   (77,000)    30.7        16.00      –          • Population (000): 617.0
2004     3,808,000      28,000     60,000    28.8        16.75      –
2005     3,837,000      29,000   107,000     21.0        16.70   7.50          Source: Moody’s Economy.com.
2006     3,801,000           0   232,000     16.2        18.50   8.50
2007     3,989,000     126,000   698,000     12.5        18.00   8.50
2008P    3,989,000           0     84,000    10.4            –      –       P = Projection. Please see Glossary page for explanation.

26      CONTACT: Frank Hammond • fhammond@collierskeenan.com l RESEARCH: Kitty Allen • kitty.allen@colliers.com
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HARTFORD, CT
OFFICE                                                                      INDUSTRIAL
• The CBD Class A vacancy rate registered 13.16% and the suburban           • Demand was led by warehouse/distribution users and third-party
  Class A vacancy rate was 14.17%.                                            logistics companies.
• MetLife closed on a 500,000 SF CIGNA building and will                    • Build-to-suit activity included a 482,000 SF warehouse/distribution
  consolidate to the suburbs and ING’s 400,000 SF suburban,                   facility for ALDI’s, Emhart Glass for a specialized manufacturing
  build-to-suit, was occupied. Hartford Insurance Group’s 450,000 SF          and R&D facility of 45,000 SF, a warehouse for William B. Meyer of
  project neared completion, while UTC early extended its lease               100,000 SF, and a regional distribution center for Walgreen’s
  on 173,000 SF.                                                              of 800,000 SF.
• Four sizeable law firms relocated to a repositioned Class A CBD           • Larger leases included King Koil for 150,000 SF, Shuco USA for
  property, collectively leasing over 100,000 SF.                             60,000 SF, Electrical Wholesalers taking 135,000 SF, Ardent Displays
• Prime CBD gross lease rates averaged $23.97 per SF, and prime               leasing 81,500 SF.
  suburban space averaged $20.90 per SF.                                    • Equity Industrial sold as part of a $516 million national portfolio sale
• Sixteen sales over 25,000 SF occurred during 2007. Four were                the 1 million SF Lego facilities and another 400,000 SF building to
  Class A properties ranging from $100 to $146 per SF and the                 a joint venture of KBS, Hackman Capital and Calare Properties.
  remainder sold for under $100 per SF. Cap rates ranged between              Ford-leased distribution center of 226,700 SF was sold for
  7.5% and 8.4%.                                                              $14.3 million, and Namco completed a sale-leaseback of their
                                                                              headquarters/distribution facility of 190,000 SF for $10.3 million.
Office Outlook
• Leasing activity will be modest for the first half of 2008, however,      Industrial Outlook
  rates will creep up slightly between 1% and 5%.                           • Leasing activity is anticipated to improve as the year progresses to
• Hartford’s office absorption will be modest. There are no speculative       come close to 2007 levels.
  construction projects except for a handful of medical buildings.          • Demand for smaller buildings around 20,000 SF will be strong for
• Rental concessions, especially waivers, will be case-specific but           purchase by local companies. Buildings are in short supply and prices
  generally non-existent.                                                     have appreciated but are still below costs of new construction.
                                                                            • Warehouse facilities with good clear height will be highly desired.
                                                                            • Demand will continue for investment opportunities – deals that make
                                                                              sense will get financed.




DOWNTOWN OFFICE                                                             INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999    10,944,000           0     122,000   25.5        22.00   10.30      1999    61,361,000      150,000      150,000      14.5      4.00      –     –
2000    10,929,000           0     310,000   20.8        22.10    9.25      2000    61,611,000      250,000      250,000      14.3      4.50      –     –
2001    10,929,000           0     125,000   19.8        24.00   12.30      2001    61,761,000      150,000      160,000      14.2      4.50   1.10 10.00
2002    10,727,000           0   (305,000)   19.9        24.20    9.40      2002    61,861,000      100,000      300,000      13.9      4.50   1.03 10.00
2003    10,631,000           0   (141,000)   20.5        24.20    9.75      2003    62,678,000      817,000      900,000      13.2      4.30   1.00 9.00
2004    10,198,000           0      48,000   18.8        24.00    9.00      2004    62,932,000      254,000      484,000      13.4      4.30   1.70 9.00
2005    10,103,000           0     210,000   20.6        24.30    7.50      2005    63,082,000      150,000      241,000      13.2      4.50   1.72 9.00
2006    10,057,000           0     521,000   15.8        24.20    6.50      2006    63,282,000      200,000      200,000      13.1      4.50   1.72 8.50
2007    10,050,000           0      71,000   15.4        24.00    7.45      2007    96,875,000      130,000      478,000      10.3      6.00   2.30 9.00
2008P   10,050,000           0      40,000   15.0            –       –      2008P   97,005,000      130,000      409,000      10.0         –      –     –

SUBURBAN OFFICE                                                             METROPOLITAN INDICATORS – 2008
         Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                               • Gross Metro Product Percent Change: 0.5
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    12,881,000           0     240,000   15.7        18.80   10.15         • Total Employment Increase/Decrease: -197
2000    13,204,000     235,000     250,000   11.9        19.60    9.50           Percent Change: -0.3
2001    13,535,000     125,000   (486,000)   16.1        20.30   10.50
                                                                               • Unemployment Rate: 4.9
2002    13,693,000           0   (157,000)   18.1        19.90   10.00
2003    14,157,000     150,000    (97,000)   20.5        20.20   10.00         • Population (000): 1,197.1
2004    13,745,000           0     214,000   18.2        19.70    8.50
2005    14,102,000     125,000     316,000   17.7        20.10    8.10         Source: Moody’s Economy.com
2006    14,286,000      90,000     539,000   15.6        20.10    7.50
2007    14,273,000           0   (213,000)   16.9        20.90    7.65
2008P   14,310,000      37,000      56,000   16.8            –       –      P = Projection. Please see Glossary page for explanation.

                CONTACT: Keith J. Kumnick, SIOR • kumnick@dowcondon.com l RESEARCH: James Stanulis • james.stanulis@colliers.com                        27
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HONOLULU, HI
OFFICE                                                                       INDUSTRIAL
• The professional and business services sectors remained healthy            • For the past several years Honolulu’s industrial market was the
  despite financial services being affected by struggling debt markets.        tightest in the country, averaging vacancy in the 2% range, at
  Year-end absorption posted negative 9,000 SF, a dramatic reversal            year-end vacancy rates rose to 3.01%. As a result, landlords boosted
  in direction after having posted 112,000 SF of positive absorption           rents by more than 42% over the past four years.
  at mid-year.                                                               • The availability of industrial-zoned parcels fell to single digits.
• Both Class A and B average asking rents surpassed $36 per SF, the            Kapolei land jumped from $12 per SF in 2003 to $37 per SF land
  first time in over fifteen years.                                            for 2007.
• Suburban rents exceeded CBD Class A levels by as much as 20% to            • The success of the Kapolei Spectrum industrial condominium
  30%, and office development began in the Leeward and West Oahu               project spurred more than 600,000 SF of industrial condominium
  markets. Asking rents for these proposed developments in Kapolei             development in Leeward and West Oahu markets, selling often
  ranged from $36 to $42 per SF triple net.                                    with prices over $300 per SF.
Office Outlook                                                               • Absorption dropped into negative territory for the first time since
                                                                               2001. For 2008, new supply is likely to result in negative absorption.
• For 2008, the market is projected to post negative absorption resulting
  in the overall Oahu island-wide vacancy rate to fluctuate between          Industrial Outlook
  7.5% and 8.0%.                                                             • Rental rates will continue rising as new ‘for lease’ developments are
• After a nearly 24% increase in rents over the past three years, growth       not planned for the near future.
  rates should range between to 4% to 6% over the next year.                 • Morgan Stanley’s acquisition of 100 acres of land in Kapolei is the
• Although Hawaii appears insulated from the initial shocks                    only industrial park slated for near-term development. Infrastructure
  experienced from the subprime debacle, should the U.S. fall into             improvements are needed prior to land sales or development resulting
  a recession, Hawaii’s tourist based economy will feel the affect             in a target date of 2009 before additional land is added to the market.
  of slowing discretionary spending.                                         • Between 2009 and 2012, a significant portion of Honolulu’s leasehold
                                                                               lands come up for rent renegotiations. As land prices escalate
                                                                               dramatically, negotiations are likely to be contentious as lessees,
                                                                               tenants and investors will face difficult financial positions.




DOWNTOWN OFFICE                                                              INDUSTRIAL
         Inventory       New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)      Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999      7,932,000          0    (82,000)    14.3        27.20    9.25      1999    34,925,000       20,000 350,000            6.4       6.00    6.00      –
2000      7,932,000          0      78,000    11.8        27.70    9.00      2000    34,965,000       40,000 833,000            4.0       8.64    6.00      –
2001      7,932,000          0    (75,000)    12.0        26.50   10.25      2001    35,000,000       35,000 (181,000)          4.4       8.30    6.00      –
2002      7,932,000          0    (12,000)    12.3        27.60    9.00      2002    35,100,000      100,000 174,000            3.6       8.00    6.00   8.50
2003      7,932,000          0      19,000    12.1        27.80    7.50      2003    35,150,000       50,000 199,000            2.7      10.92   10.00   7.65
2004      7,932,000          0      90,000    11.0        29.40    7.20      2004    35,270,000      120,000 340,000            1.7      11.50   13.00   6.80
2005      7,932,000          0     184,000     8.7        31.50    7.00      2005    35,620,000      350,000 425,000            1.8      11.85   26.50   6.15
2006      7,932,000          0     162,000     6.7        34.20    6.50      2006    36,245,000      625,000 452,000            2.3      13.10   31.00   5.50
2007      8,057,000          0   (118,000)     8.0        36.40    6.50      2007    36,387,000      286,000 (269,000)          3.0      15.72   31.00   5.40
2008P     8,057,000          0    (60,000)     8.8            –       –      2008P   36,662,000      275,000 (200,000)          4.3          –       –      –

SUBURBAN OFFICE                                                              METROPOLITAN INDICATORS – 2008
         Inventory       New      Absorption Vacancy Class A Cap Rate
                                                                                • Gross Metro Product Percent Change: 2.5
            (SF)      Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999      7,383,000          0      19,000    12.7           –    10.25         • Total Employment Increase/Decrease: 734
2000      7,383,000          0      80,000    10.1           –     9.50           Percent Change: 1.6
2001      7,383,000          0   (146,000)    13.4           –     9.75
                                                                                • Unemployment Rate: 2.5
2002      7,383,000          0   (116,000)    15.0           –     8.50
2003      7,383,000          0     174,000    11.5           –     7.00         • Population (000): 920.6
2004      7,383,000          0     133,000     9.6           –     7.50
2005      7,383,000          0      65,000     8.6           –     7.00         Source: Moody’s Economy.com
2006      7,405,000          0      87,000     7.4           –     6.75
2007      7,645,000     13,000     109,000     6.5           –     6.80
2008P     7,645,000          0      10,000     6.3           –        –      P = Projection. Please see Glossary page for explanation.

28      CONTACT: James Piane • james@colliershawaii.com l RESEARCH: Mike Hamasu • mike.hamasu@colliers.com
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HOUSTON, TX
OFFICE                                                                        INDUSTRIAL
• Single-digit vacancy for CBD Class A space at year-end 2007                • Record-breaking positive absorption of 10.2 million SF highlighted
  marked a significant decrease from vacancy in the high teens                 Houston’s industrial market in 2007.
  twelve months earlier.                                                     • Robust leasing activity included eight leases over 200,000 SF
• Above-average rental rate growth in CBD and all major suburban               citywide, with top leases in the Southeast Corridor led by Wilson
  submarkets continued as supply levels dwindled and landlords                 Industries (450,000 SF), Packwell (423,700 SF), WSP USA
  maintained market control.                                                   (339,600 SF), and Frontier Logistics (206,300 SF).
• Robust leasing activity citywide was driven by tenant expansions in        • Single-digit vacancy for all major corridors and submarkets
  the energy, finance, and law sectors of business.                            contributed to the year-end 6.1% vacancy rate citywide.
• Speculative construction surged in submarkets with limited Class A         • Houston’s industrial market added 9.2 million SF in 2007, including
  space on the market including the Energy Corridor, Westchase                 Transwestern’s 1.2 million SF Port 225 Distribution Center
  and CBD.                                                                     (Southeast); National Property Holdings’ 909,900 SF Port Crossing
• New office completions reached 756,000 SF in 2007, with an                   Commerce Center (Southeast); Clay Development’s 423,700 SF
  additional 2.6 million SF under construction at year-end.                    Packwell build-to-suit (Southeast); and ProLogis’ 323,700 SF Jersey
                                                                               Village Corporate Center (Northwest).
Office Outlook                                                               • Under construction projects totaled 5.7 million SF at year-end, led
• Following double-digit growth in 2007, rental rates are expected             by North, Southeast, and Northwest corridors.
  to stabilize in 2008 to average $30 per SF and $40 per SF gross for
  suburban and CBD space, respectively.                                      Industrial Outlook
• Key office projects set to break ground in 2008 include two new            • Strong demand will drive 3% to 4% rent growth for key product lines
  CBD buildings – Hines’ 1 million SF Main Place and Trammell                  including warehouse distribution space.
  Crow’s 868,000 SF Discovery Tower.                                         • While much of Houston’s new industrial construction is speculative,
• Houston’s strong local economy is expected to continue                       the Simpkins Group is developing a 500,000 SF Walgreens
  outperforming the nation in job growth, driven by expansions                 build-to-suit distribution warehouse.
  in the energy sector, Port of Houston, Houston Airport System,             • Active construction pipeline to continue with developers including
  NASA/Johnson Space Center, and Texas Medical Center.                         ProLogis, Clay Development, Verde, Liberty Property Holdings,
                                                                               Vantage, and First Industrial proposing significant industrial projects
                                                                               for 2008.




DOWNTOWN OFFICE                                                              INDUSTRIAL
          Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999     35,000,000           0     293,000    8.9        24.40       –      1999    373,832,000   8,352,000    1,975,000       5.5      4.24   0.75       –
2000     35,000,000           0     182,000    8.4        27.80       –      2000    382,800,000   8,968,000    3,327,000       6.5      4.44   1.00       –
2001     35,000,000           0 (786,000)     10.6        28.70    9.00      2001    389,905,000   7,105,000    4,941,000       7.0      4.31   1.05   10.00
2002     35,581,000     581,000 (1,209,000)   15.5        24.40    9.00      2002    395,993,000   6,088,000    1,279,000       8.0      4.22   1.00   11.10
2003     37,114,000   1,533,000 (621,000)     20.6        22.70    9.00      2003    400,142,000   4,149,000      546,000       8.7      4.34   1.10   10.60
2004     37,114,000           0       3,000   20.6        21.50    8.40      2004    403,957,000   3,815,000    7,818,000       7.8      4.29   1.20   10.00
2005     37,114,000           0 (730,000)     22.6        21.40    7.50      2005    412,851,000   8,894,000   13,650,000       6.5      4.46   1.30    9.65
2006     37,114,000           0 1,641,000     18.2        24.20    6.60      2006    415,979,000   3,128,000    4,131,000       6.6      4.45   1.50    7.40
2007     36,941,000           0 2,010,000     12.1        36.40    6.00      2007    436,582,000   9,235,000   10,175,000       6.1      5.61   5.00    7.10
2008P    37,184,000     243,000 1,104,000      9.7            –       –      2008P   442,082,000   5,500,000   13,939,000       4.1         –      –       –

SUBURBAN OFFICE                                                              METROPOLITAN INDICATORS – 2008
          Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                                • Gross Metro Product Percent Change: 3.4
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    131,261,000   3,474,000     322,000   12.4        21.30       –         • Total Employment Increase/Decrease: 5,710
2000    135,069,000   3,717,000      41,000   14.8        21.50       –           Percent Change: 2.3
2001    136,534,000   1,465,000   (411,000)   16.1        21.90   10.50
                                                                                • Unemployment Rate: 4.4
2002    137,825,000     947,000   (704,000)   17.4        20.60    9.30
2003    138,649,000     583,000   (429,000)   18.2        20.50    8.90         • Population (000): 5,784.8
2004    139,486,000     506,000   1,166,000   17.8        19.80    8.80
2005    140,163,000     623,000   2,447,000   16.5        20.10    7.50         Source: Moody’s Economy.com
2006    141,039,000     877,000   4,374,000   13.9        22.60    7.20
2007    142,211,000     756,000   3,838,000   11.8        26.60    7.10
2008P   144,434,000   2,223,000   4,267,000   10.2            –       –      P = Projection. Please see Glossary page for explanation.

                       CONTACT: Gary Mabray • gmabray@collierstexas.com l RESEARCH: Rosalinda Engle • rosalinda.engle@colliers.com                         29
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INDIANAPOLIS, IN
OFFICE                                                                       INDUSTRIAL
• The cost of doing business in the metropolitan area has always been        • High quality free-standing facilities remained in high demand
  lower than the national average and continued to decline.                    as increased construction costs prompted buyers to seek less
• New office construction in 2007 measured its highest level                   expensive alternatives.
  since 2001.                                                                • New construction spread further out in the MSA along the major
• The CBD showed a decrease in the vacancy and rental rates                    interstate routes.
  increased in both the CBD and suburban markets.                            • The market continued to grow in 2007 with 1.2 million SF of
                                                                               absorption. The market grew by 27.4 million SF since the beginning
Office Outlook                                                                 of 2002. Thirty-nine industrial projects added 7.1 million SF to
• Employment growth in the city is expected to continue outpacing              the market.
  the national average.                                                      • Modern bulk projects drove construction with 5.3 million SF
• State and local taxes are expected to remain lower than the                  completed, but 2007 also saw more mid-sized construction, a total
  national average.                                                            of 1.8 million SF than in recent years.
• Low office rents continue to attract business and professional services.
                                                                             Industrial Outlook
• Speculative office construction continues to add about 500,000 SF
  per year to the inventory and net absorption is expected to keep pace.     • With companies requiring specialized site criteria, the market will see
                                                                               increased build-to-suit construction of over 3.5 million SF.
                                                                             • Speculative construction, particularly of modern bulk product, will
                                                                               slow in 2008 due to a large supply already on the market.
                                                                             • Medium distribution and office/showroom rents will remain stable
                                                                               or could rise due to healthy demand. Rents for modern and
                                                                               traditional bulk product could soften due to the current bulk supply.
                                                                               Developers may attempt to raise rental rates due to increased
                                                                               real estate taxes.
                                                                             • As land prices, materials and gas costs rises, the option of adapting
                                                                               older space, particularly in the city, to suit users and developers will
                                                                               become more attractive.
                                                                             • Landlords will look to renew leases early, as much as two to three
                                                                               years prior to expiration, especially in the modern bulk market.




DOWNTOWN OFFICE                                                              INDUSTRIAL
          Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999     10,691,000      54,000       4,000   12.0        21.00        –     1999    188,566,000   5,912,000     4,461,000      6.7      4.25   1.20      –
2000     10,905,000     214,000   (270,000)   16.0        21.00    10.00     2000    193,890,000   5,324,000     8,117,000      5.1      3.50   1.05      –
2001     11,270,000     365,000      22,000   18.5        21.50    10.00     2001    198,371,000   4,482,000   (1,195,000)      7.8      4.50   1.72   8.90
2002     11,270,000           0     117,000   17.5        19.60    10.50     2002    203,776,000   5,405,000     3,563,000      8.5      5.90   1.50   8.90
2003     11,286,000      16,000     193,000   15.9        19.60    10.50     2003    207,898,000   4,122,000     3,902,000      8.4      4.80   2.40   9.25
2004     11,348,000      62,000     129,000   15.2        19.60     8.50     2004    214,694,000   6,796,000     7,796,000      7.7      4.30   1.49   9.00
2005     11,348,000           0     112,000   14.6        19.60     7.50     2005    217,137,000   2,443,000     4,777,000      6.5      5.90   1.25   8.50
2006     11,412,000      64,000    (84,000)   18.3        19.40     7.50     2006    222,822,000   5,685,000     6,102,000      6.2      5.75   1.85   8.50
2007     11,518,000     147,000     208,000   15.3        19.50     8.50     2007    229,942,000   7,121,000     1,222,000      8.6      5.00   3.55   8.00
2008P    11,518,000           0     199,000   13.5            –        –     2008P   232,519,000   2,577,000     4,285,000      7.7         –      –      –

SUBURBAN OFFICE                                                              METROPOLITAN INDICATORS – 2008
          Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                                • Gross Metro Product Percent Change: 2.0
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999     14,466,000     972,000    647,000    10.9        21.00        –        • Total Employment Increase/Decrease: 517
2000     16,034,000   1,568,000    640,000    15.7        23.00    10.00          Percent Change: 0.6
2001     16,488,000     454,000    622,000    16.0        20.80     9.00
                                                                                • Unemployment Rate: 4.4
2002     16,927,000     439,000    (66,000)   18.8        19.00    10.00
2003     17,502,000     575,000    135,000    20.7        19.00    10.00        • Population (000): 1,704.2
2004     17,936,000     434,000    689,000    18.7        19.00     8.50
2005     18,203,000     267,000    297,000    18.3        19.10     7.50        Source: Moody’s Economy.com
2006     18,530,000     327,000    502,000    17.8        19.30     7.50
2007     19,124,000     533,000    163,000    18.6        19.40     8.50
2008P    20,042,000     918,000    358,000    20.5            –        –     P = Projection. Please see Glossary page for explanation.

30      CONTACT: Luke Wessel • lwessel@ctmt.com l RESEARCH: Matt Briggs • matt.briggs@colliers.com
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JACKSONVILLE, FL
OFFICE                                                                       INDUSTRIAL
• Investors went on a buying spree in the first half of 2007, spending       • Warehouse and distribution development companies jockeyed for
  over $212 million for various prime office buildings – a new sales           position near Jacksonville’s port and major highways, heralding the
  record for a six-month period.                                               early stages of the city’s biggest industrial boom in decades. In 2007,
• Improving conditions were due to the overall strength of the                 three build-to-suit projects, each around 800,000 SF, began
  local economy, population growth, and the city's anticipated                 construction – an unprecedented event in Jacksonville.
  port expansion.                                                            • Two major international ocean shipping carriers, Mitsui O.S.K. Lines
• Downtown vacancy declined with little new construction and                   and Hanjin Shipping Co., have each made a commitment to build
  shrinking supply. Activity focused on conversions of older office            their East Coast hub in Jacksonville.
  buildings to mixed-use and residential use.                                • The TraPac Container Terminal, Mitsui O.S.K. Lines’ new
• Office condominiums gained strength as entrepreneurs and small               $220 million state-of-the-art facility, is scheduled to open by
  businesses preferred owning space over renting.                              year-end 2008.
                                                                             • Hanjin Shipping Co. has a written understanding with the
Office Outlook                                                                 Jacksonville Port Authority to develop a $360 million container
• Vacancy is expected to drop to 10% in 2008 due to a relative lack of         terminal by 2011.
  new construction, which has been at a subdued level for the past
  seven years.                                                               Industrial Outlook
• Jacksonville’s office rents are expected to increase at least 3% to        • The greatest space demand will be for bulk warehousing and
  5% in 2008.                                                                  distribution, with new facilities from 300,000 to 500,000 SF
• Office growth and development will continue to shift with the                becoming the norm.
  expanding population toward the southern reaches of the city               • Most of the city’s construction activity will occur on the Northside
  and into St. Johns and Clay counties.                                        and Westside, and increasingly in outlying counties where land is
• Class A office construction will be driven by build-to-suit deals.           available. Build-to-suit construction is expected to nearly match
                                                                               the level of speculative industrial development in 2008.
                                                                             • Vacancy rates should remain in the 5% to 7% range, with new
                                                                               product delivery being absorbed by pent-up demand.
                                                                             • Asking rents will surpass the rate of inflation due to low vacancy
                                                                               as well as rising construction, entitlement and land costs.




DOWNTOWN OFFICE                                                              INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                  Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                     (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999             –           –           0       –            –       –      1999             –            –             –        –         –      –     –
2000             –           –           0       –            –       –      2000             –            –             –        –         –      –     –
2001    12,191,000      49,000   (269,000)     9.7        18.90   10.00      2001    77,944,000      438,000   (1,800,000)     10.0      3.40   0.75 11.00
2002    12,218,000      27,000      27,000    10.4        19.60   10.00      2002    78,414,000      470,000     (418,000)      8.7      3.50   0.80 10.10
2003    12,358,000     140,000   (146,000)    12.3        20.00    9.00      2003    80,190,000    1,776,000     2,126,000      8.7      3.50   1.25 9.00
2004    12,358,000           0   (120,000)    16.7        19.50    9.00      2004    81,803,000    1,613,000       605,000      7.9      3.60   1.75 9.50
2005    12,358,000           0     514,000    16.7        23.00    9.00      2005    83,759,000    1,956,000     2,073,000      8.1      3.70   2.00 7.00
2006    12,838,000     480,000     913,000    12.7        20.00    8.00      2006    85,117,000    1,358,000     2,700,000      6.2      3.75   2.50 7.00
2007    12,838,000           0     205,000    11.1        20.00    8.00      2007    86,039,000    3,249,000     1,286,000      5.6      4.00   3.50 7.00
2008P   12,878,000      40,000     254,000     9.4            –       –      2008P   91,039,000    5,000,000     4,000,000      6.3         –      –     –

SUBURBAN OFFICE                                                              METROPOLITAN INDICATORS – 2008
         Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                                • Gross Metro Product Percent Change: 2.1
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999             –           –           0       –            –       –         • Total Employment Increase/Decrease: 640
2000             –           –           0       –            –       –           Percent Change: 1.0
2001    23,502,000     688,000     137,000    14.0        18.00   10.00
                                                                                • Unemployment Rate: 4.1
2002    23,880,000     378,000   (170,000)    16.1        18.50   10.00
2003    24,523,000     643,000   1,057,000    13.6        18.00    9.00         • Population (000): 1,309.5
2004    24,815,000     292,000     372,000    10.7        19.80    9.00
2005    25,023,000     208,000     224,000    13.2        19.80    8.00         Source: Moody’s Economy.com
2006    25,592,000     569,000     858,000    11.8        20.50    8.00
2007    26,007,000     414,000     362,000    11.8        20.50    7.50
2008P   26,421,000     414,000     510,000    11.3            –       –      P = Projection. Please see Glossary page for explanation.

                           CONTACT: Kim Conlee • kconlee@colliersdickinson.com l RESEARCH: Louis Galant • louis.galant@colliers.com                      31
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KANSAS CITY, MO-KS
OFFICE                                                                       INDUSTRIAL
• The office market continued to improve, but overall vacancy               • Kansas City’s industrial absorption of 4.8 million SF made 2007 the
  remained higher than national averages for both the downtown                most productive of the last ten years.
  and suburban areas.                                                       • The overall vacancy at year-end registered 7.1%, and for modern
• The two suburban markets of South Johnson County, Kansas and                distribution space, year-end vacancy was tight at 3.7%.
  South Kansas City, Missouri continued to outperform the rest of the       • No large industrial portfolios traded in 2007, but investor interest
  metro area.                                                                 remained strong. A total of 2.5 million SF of industrial space sold
• Kansas City’s largest investment transaction was the sale of the            during the year.
  1 million SF Summit Tech Center for $140 per SF.                          • During the last four years, most new construction was in build-to-suit
• Construction of leasable space has been limited over the last few           projects driven by users. Recently completed projects included
  years. Current construction projects included the West Edge                 446,000 SF for Kimberly-Clark, 250,000 SF for Corporate Express,
  (220,000 SF on the Plaza) and the Hilltop at Briarcliff (200,000 SF         and 100,000 SF for Complete Home Concepts.
  within view of the Missouri River).
                                                                            Industrial Outlook
• Major growth companies in the Kansas City area included
  Burns & McDonnell, Cerner Corporation, Garmin International,              • In Kansas City, a planned build-to-suit distribution facility may add as
  and Lockton Companies.                                                      much as 1.3 million SF to the industrial market.
                                                                            • Low distribution vacancy and the rush of recent build-to-suit projects
Office Outlook                                                                have prompted action on speculative construction. 2008 will see the
• Early in 2008 a 620,000 SF building will be completed for the               start of at least one speculative project of 600,000 SF. As many as
  Federal Reserve Bank of Kansas City.                                        three are possible in the range of 250,000 to 600,000 SF.
• MARC projects that KC’s employment growth will be 1.4% in 2008            • Two new intermodal facilities have been in the planning stages.
  and accelerate to 2.6% in 2009.                                             Construction will start on both in 2008. The intermodal facilities
• Downtown is undergoing a major revitalization. Sprint Arena                 and recent distribution new construction mark Kansas City’s
  opened in 2007. Kansas City Live entertainment district is                  transition to a prominent regional and national distribution hub.
  opening in 2007 – 2008. The Kauffman Performing Arts Center
  is under construction.




DOWNTOWN OFFICE                                                             INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999     9,984,000     241,000     333,000   10.3        21.30       –      1999    158,727,000   3,662,000     3,486,000      4.9      3.80      –     –
2000     9,984,000           0      20,000   10.1        21.70   10.00      2000    164,080,000   5,354,000     4,325,000      5.4      4.40      –     –
2001    10,258,000     274,000       9,000   12.5        20.90       –      2001    167,445,000   3,364,000   (2,471,000)      8.8      4.40   1.70 10.00
2002    10,528,000     270,000   (299,000)   17.5        21.00       –      2002    170,164,000   2,719,000     1,617,000      9.3      3.80   1.70 9.75
2003    11,017,000     489,000   (186,000)   22.9        20.35   10.00      2003    171,346,000   1,182,000     (759,000)     10.4      3.80   1.70 9.75
2004    10,877,000   (139,000)   (384,000)   25.4        20.35   10.00      2004    173,119,000   1,774,000     3,821,000      9.1      3.80   1.80 9.00
2005    11,248,000     371,000     216,000   26.0        20.50    9.25      2005    175,228,000   2,109,000     1,473,000      9.3      3.95   1.80 8.25
2006    11,321,000      73,000     427,000   22.7        20.20    8.50      2006    176,545,000   1,317,000     2,754,000      8.4      4.10   2.00 7.00
2007    11,124,000   (197,000)      97,000   20.4        20.40    7.00      2007    179,310,000   2,764,000     4,807,000      7.1      4.15   2.00 7.00
2008P   11,124,000           0     107,000   19.5            –       –      2008P   181,710,000   2,400,000     2,008,000      7.2         –      –     –

SUBURBAN OFFICE                                                             METROPOLITAN INDICATORS – 2008
         Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                               • Gross Metro Product Percent Change: 1.2
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    27,344,000   1,206,000 1,140,000      6.3        23.50       –         • Total Employment Increase/Decrease: -365
2000    29,033,000   1,689,000     909,000    8.7        22.40    9.00           Percent Change: -0.4
2001    30,600,000   1,567,000      96,000   13.0        22.10   10.00
                                                                               • Unemployment Rate: 5.3
2002    31,294,000     694,000 (1,551,000)   19.9        21.70   11.00
2003    31,938,000     643,000     429,000   20.2        21.60   10.00         • Population (000): 1,996.3
2004    32,401,000     464,000     867,000   18.6        20.90    8.00
2005    32,727,000     325,000     791,000   17.0        20.10    8.00         Source: Moody’s Economy.com
2006    33,549,000     822,000     656,000   17.1        20.90    8.00
2007    34,086,000     544,000 1,437,000     14.2        22.40    7.00
2008P   35,286,000   1,200,000     353,000   16.1            –       –      P = Projection. Please see Glossary page for explanation.

32      CONTACT: Frazier Bell • fbell@ctmt.com l RESEARCH: Carolyn Bagnall • carolyn.bagnall@colliers.com
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LAS VEGAS, NV
OFFICE                                                                       INDUSTRIAL
• Over the past 18 months, Las Vegas office occupancy has fallen from        • Over the past 18 months, industrial occupancy dropped from 96.5%
  91.3% to 87.8% while asking rents rose 19% over the same period.             to 94.5%.
• Office absorption was stronger in 2007 than 2006, but was                  • Las Vegas lost 2,000 construction jobs since June 2007 due to the
  overwhelmed by the influx of new office space. Over 4 million SF             lagging residential market.
  of new space was completed.                                                • Absorption registered over 4.2 million SF, below the influx of new
• Approximately 272,000 SF of sublease space was available at                  supply and below the levels recorded in the last three years.
  year-end, up from 196,000 SF in 2006.                                      • Construction rose steadily since 2005, initially spurred by strong
• Newer projects out-performed older projects throughout 2007,                 demand and falling vacancy rates.
  despite being significantly more expensive.                                • Asking rental rates hovered between $0.80 and $0.82 per SF during
• Weakness in the residential market impacted the office market                2007; this is approximately $0.05 per SF higher than in 2006.
  directly through the decreased office space requirements of                • Small dock-high projects have been difficult to lease throughout
  home developers.                                                             the Valley.
Office Outlook                                                               Industrial Outlook
• New jobs created by newly completed resorts will impact the office         • Investment sales have been slow and will likely remain that way for
  market indirectly, and the impact will probably not be felt until the        most of 2008.
  second half of 2008 at the earliest.                                       • Prices for industrial land have not yet fallen, but may begin to drop in
• Office demand will decrease in 2008 if the residential and investment        the very near future. The cost of construction materials is expected
  markets remain in a slump.                                                   to increase while the cost for construction labor falls.
• With 1.5 million SF of office space under construction and another         • 2008 will likely see continued weak demand and continued robust
  3.8 million SF planned to begin construction within the next                 development. There is currently 3.7 million SF of industrial space
  twelve months, demand will continue to fall behind the rate                  under construction, and another 4.4 million SF planned to begin
  of supply in 2008.                                                           construction in the next twelve months.




DOWNTOWN OFFICE                                                              INDUSTRIAL
          Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999      2,071,000      26,000      14,000   11.5        28.20       –      1999     64,641,000   3,711,000    2,477,000       7.2      3.84       –      –
2000      2,129,000      58,000      14,000   13.3        29.00       –      2000     67,976,000   3,335,000    4,192,000       5.6      3.84       –      –
2001      2,248,000     119,000     103,000   13.2        28.00       –      2001     72,674,000   4,698,000    2,812,000       7.8      4.08    9.43      –
2002      2,530,000     282,000     264,000   13.6        27.20       –      2002     76,993,000   4,319,000    2,866,000      10.0      3.84    2.88   9.45
2003      2,538,000       8,000       8,000   13.6        28.20       –      2003     79,809,000   2,816,000    1,342,000      11.5      4.80    2.90   8.50
2004      2,754,000     216,000      33,000   19.2        28.80       –      2004     83,687,000   3,878,000    6,110,000       8.3      4.92    7.00   7.50
2005      2,754,000           0      89,000   15.9        28.80       –      2005     87,277,000   3,590,000    6,695,000       4.4      5.52    6.66   7.00
2006      2,754,000           0     261,000    6.4        28.80    6.50      2006     92,738,000   5,461,000    5,379,000       4.2      5.52    6.42   6.80
2007      3,363,000     609,000     589,000    5.9        39.00    6.70      2007     99,359,000   6,621,000    4,277,000       6.3      7.18   29.13   7.10
2008P     3,363,000           0      13,000    5.5            –       –      2008P   103,861,000   4,502,000      373,000      10.0         –       –      –

SUBURBAN OFFICE                                                              METROPOLITAN INDICATORS – 2008
          Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                                • Gross Metro Product Percent Change: 0.4
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    16,910,000    1,665,000   1,108,000   10.8       26.00        –         • Total Employment Increase/Decrease: -442
2000    18,316,000    1,406,000   1,827,000    7.6       27.50        –           Percent Change: -0.5
2001    20,118,000    1,802,000     962,000   11.2       26.20        –
                                                                                • Unemployment Rate: 5.4
2002    22,191,000    2,073,000   1,717,000   12.7       27.20     8.75
2003    23,284,000    1,093,000     853,000   13.2       30.10    12.65         • Population (000): 1,905.6
2004    25,451,000    2,167,000   2,059,000   12.5       29.00     7.25
2005    28,136,000    2,685,000   3,481,000    8.4       29.90     7.50         Source: Moody’s Economy.com
2006    31,092,000    2,956,000   2,173,000   10.2       32.20     7.35
2007    34,661,000    3,569,000   2,039,000   13.5       38.20     6.30
2008P   38,056,000    3,395,000     120,000   20.9           –        –      P = Projection. Please see Glossary page for explanation.

                                      CONTACT: Mike Mixer • mmixer@lvcolliers.com l RESEARCH: John Stater • john.stater@colliers.com                       33
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LITTLE ROCK, AR
OFFICE                                                                       INDUSTRIAL
• In Little Rock, the high growth industries proved to be the insurance      • In 2007, one large manufacturing facility consisting of 800,000 SF was
  and banking sectors.                                                         in the process of being converted into high density office space.
• The investment in infrastructure, with plans made to extend the            • Manufacturers such as Welspun and LM Glasfiber which were based
  main cross-town freeway, helped the city.                                    outside the U.S. moved to Little Rock in 2007.
• New development in the city consisted of more downtown                     • There was some loss of “traditional” domestic manufacturing such as
  condominiums and small user-driven buildings.                                clothing or hat manufacturing in 2007 and the trend is expected to
• The migration of retail growth trended towards the city’s Western            continue next year.
  suburbs. Throughout Little Rock, similar to most markets, the              • Rental rates remained flat throughout the year. Warehouse/
  housing market was flat.                                                     distribution space averaged rental rates of $3.13 per SF.
• Traditional indoor malls were converted into mixed-use                     • The year ended with positive absorption of industrial space at about
  developments, and former manufacturing/assembly plants                       191,000 SF. Vacancy at year-end registered 16.7%.
  were converted into high density office use space.
                                                                             Industrial Outlook
• Absorption measured 120,000 SF for the downtown market, more
  than half of which occurred in Class A buildings, and was less for the     • A soggy industrial market is projected for 2008.
  year in the suburbs at 25,000 SF.                                          • Up to 2 million SF of second generation space is expected to come
• There was little activity in the land market, and prices ranged in           onto the market in 2008 which will add to vacancy.
  general between $6 and $12 per SF.                                         • A total of 700,000 SF of new industrial supply is expected for
                                                                               Little Rock in 2008.
Office Outlook
• Both downtown and suburban office rental rates are expected to
  continue to move slightly higher in 2008.
• New construction will be subdued, and most new office development
  will continue to be limited to smaller, owner-occupied properties.




DOWNTOWN OFFICE                                                              INDUSTRIAL
         Inventory       New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)      Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999              –           –          0       –            –       –      1999             –            –            0         –         –      –      –
2000              –           –          0       –            –       –      2000             –            –            0         –         –      –      –
2001              –           –          0       –            –       –      2001             –            –            0         –         –      –      –
2002              –           –          0       –            –       –      2002             –            –            0         –         –      –      –
2003              –           –          0       –            –       –      2003             –            –            0         –         –      –      –
2004      5,879,000      53,000    149,000    14.7        14.10       –      2004    15,284,000      215,000      327,000      12.5      3.80   2.50   8.00
2005      5,717,000   (162,000)    173,000    15.2        14.20    8.75      2005    15,438,000      154,000       14,000      13.3      3.25   1.95   8.25
2006      5,669,000    (48,000)     84,000    12.3        14.80    8.75      2006    15,438,000            0      449,000      10.3      3.25   2.00   8.25
2007      5,669,000           0    120,000    10.9        15.20    8.75      2007    17,051,000            0      191,000      16.7      3.13   2.00   8.50
2008P     5,669,000           0    121,000     8.8            –       –      2008P   17,751,000      700,000      341,000      18.1         –      –      –

SUBURBAN OFFICE                                                              METROPOLITAN INDICATORS – 2008
         Inventory       New      Absorption Vacancy Class A Cap Rate
                                                                                • Gross Metro Product Percent Change: 2.4
            (SF)      Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999              –          –           0       –            –       –         • Total Employment Increase/Decrease: 553
2000              –          –           0       –            –       –           Percent Change: 1.6
2001              –          –           0       –            –       –
                                                                                • Unemployment Rate: 4.8
2002              –          –           0       –            –       –
2003              –          –           0       –            –       –         • Population (000): 666.8
2004      7,129,000     20,000    (39,000)     8.8            –       –
2005      7,189,000     60,000    117,000      8.8        17.90       –         Source: Moody’s Economy.com
2006      7,232,000     43,000      80,000     9.8        17.90    9.00
2007      7,270,000     38,000      25,000     9.9        18.00    9.00
2008P     7,360,000     90,000    157,000      8.9            –       –      P = Projection. Please see Glossary page for explanation.

34      CONTACT: Steve Lane • slane@colliersdfp.com l RESEARCH: Marolyn Dorman • marolyn.dorman@colliers.com
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LOS ANGELES, CA
OFFICE                                                                       INDUSTRIAL
• With 0.75 million SF absorption and minimal construction, the              • Los Angeles is the largest industrial market in the nation, and
  market ended 2007 in good condition.                                         continued to have the lowest vacancy rate of any market.
• Vacancy rates ranged from 7% in West Los Angeles to 15% in the             • A lack of vacant land continued to constrain construction activity.
  South Bay.                                                                 • Vacancy rates were in the 2% to 3% range across all submarkets.
• Availability was limited in certain segments such as large contiguous      • Demand remained strong, however, a lack of available space
  blocks of Class A space in downtown Los Angeles, West Los Angeles,           constrained sales and leasing activity.
  Burbank, and Pasadena.                                                     • Sales prices nearly doubled in the past five years, and increased
• Rental rates climbed by 12.6%, however, in West Los Angeles they             approximately 7% in 2007.
  were up 25%. Even so, rents were still relatively inexpensive when         • A weak dollar slowed import growth, but boosted U.S. exports
  compared to other major cities in the U.S.                                   thereby maintaining strong demand for warehouse and distribution
Office Outlook                                                                 space in Los Angeles.
• New supply in 2008 is roughly equal to growth in demand, and will          Industrial Outlook
  cause vacancy to hover in the low teens.                                   • With tight market conditions, Los Angeles should continue to see
• Growth in rents is expected to continue, albeit at a more moderate           upward pressure on rents.
  pace. Rental rates in tight markets of West Los Angeles and                • Construction and planned development are far below projected
  Tri Cities will continue to climb significantly.                             demand, thus vacancy will remain between 2% and 4% in
• South Bay, downtown Los Angeles and Glendale will benefit from               all submarkets.
  tight conditions in adjacent submarkets; a continued decline in
                                                                             • The lack of available space will continue to limit activity. Firms will
  vacancy rates is expected in these areas.
                                                                               experience significant difficulty finding available space that meets
• Cap rates will remain low for institutional grade assets in good             their needs.
  locations. Elsewhere, cap rates are expected to increase slightly
                                                                             • Los Angeles will remain a key point-of-entry to the U.S. market and
  in 2008.
                                                                               will continue to have strong investment demand. These factors will
                                                                               support prices and keep cap rates from rising significantly over the
                                                                               near term.




DOWNTOWN OFFICE                                                              INDUSTRIAL
          Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999     31,153,000   (100,000)   (622,000)   18.9        24.00   8.70       1999    659,137,000 26,408,000    38,090,000       5.4      6.60       –   9.10
2000     31,153,000           0    (88,000)   19.4        24.50   9.00       2000    694,174,000 35,037,000    44,337,000       4.4      6.10       –   9.30
2001     31,227,000      74,000     478,000   18.4        24.60   9.00       2001    723,978,000 29,804,000    14,628,000       6.3      6.60    5.00   8.50
2002     31,227,000           0    (67,000)   19.5        24.00   9.00       2002    732,201,000 8,223,000      6,233,000       6.4      7.00   12.00   8.25
2003     31,227,000           0    (86,000)   19.8        24.20   8.20       2003    739,308,000 7,107,000     11,085,000       3.6      6.40   13.00   7.75
2004     31,227,000           0     162,000   20.3        25.20   7.50       2004    746,191,000 6,883,000     10,951,000       2.8      6.50   13.80   7.60
2005     31,282,000      55,000   1,186,000   16.3        27.70   6.50       2005    752,664,000 6,473,000     11,075,000       2.7      6.85   25.00   6.50
2006     31,282,000           0      48,000   15.8        34.40   6.00       2006    757,502,000 4,838,000      5,037,000       2.6      7.67   30.00   6.20
2007     31,282,000           0     441,000   14.4        37.10   5.00       2007    761,353,000 3,845,000        897,000       3.0      8.04   30.00   6.30
2008P    31,282,000           0     371,000   13.2            –      –       2008P   765,853,000 4,500,000      5,000,000       2.9         –       –      –

SUBURBAN OFFICE                                                              METROPOLITAN INDICATORS – 2008
          Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                                • Gross Metro Product Percent Change: 1.9
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    129,936,000   5,788,000 6,654,000     11.9        28.00   9.00          • Total Employment Increase/Decrease: 1,765
2000    138,007,000   8,071,000 11,159,000    11.9        31.00   8.75            Percent Change: 0.4
2001    140,947,000   2,940,000 (2,938,000)   14.2        30.30   8.75
                                                                                • Unemployment Rate: 5.3
2002    143,813,000   2,866,000 (1,864,000)   16.7        29.00   8.50
2003    145,164,000   1,351,000 1,252,000     17.0        28.30   7.75          • Population (000): 10,034.3
2004    145,679,000     515,000 2,944,000     14.0        29.30   7.30
2005    146,473,000     794,000 5,042,000     10.7        30.10   6.40          Source: Moody’s Economy.com
2006    147,291,000     818,000 3,636,000      9.4        32.40   6.00
2007    149,131,000   1,843,000     287,000   10.5        40.20   5.10
2008P   151,419,000   2,288,000 1,268,000     11.0            –      –       P = Projection. Please see Glossary page for explanation.

                           CONTACT: Carla Gazzolo • carla.gazzolo@colliers.com l RESEARCH: Michael Gold • michael.gold@colliers.com                        35
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LOS ANGELES/INLAND EMPIRE, CA
OFFICE                                                                       INDUSTRIAL
• The Inland Empire’s office inventory increased by 7.4%, due to             • The Inland Empire benefited from the proximity to the Ports
  over 1.7 million SF of new completions.                                      of Los Angeles and Long Beach, the availability of large tracks of
• This increase in new supply caused vacancy rates to rise from 10.2%          developable land, and well-developed transportation infrastructure.
  to 13.0% over the year.                                                    • The Ports handled 40% of all U.S.-bound containers and much of
• There was a wedge driven between rents for the older product and             these imported goods found their way into the warehouses in the
  recently constructed office space; average rents for space constructed       Inland Empire.
  prior to 2003 averaged $1.80 per SF per month while the average rent       • Third-party logistics firms and large multinationals that run their own
  for post 2003 space averaged $2.25 per SF per month.                         supply chain were responsible for the majority of warehouse demand.
• Significant risk of overdevelopment occurred as large amounts                These firms often chose to construct modern buildings that met their
  of office product were being completed at the same time and                  current requirements while also providing room to expand.
  without sufficient levels of pre-leasing activity to keep market           • These demand factors led to the Inland Empire accounting for 10%
  wide rents stable.                                                           of all absorption in the U.S. in 2007.
Office Outlook                                                               • Developable land and available locations were scarce in the
                                                                               West Inland Empire, thus firms had to locate further east away
• Planned projects are anticipated to remain in the pipeline longer as         from the ports.
  financing for speculative product has dried up and developers wait
  and see how these demand factors are resolved.                             Industrial Outlook
• At current absorption rates, a two to three-year supply of office space    • A possible recession will decrease consumer spending nationwide,
  exists currently in the market which will likely put downward pressure       hurting warehouse demand significantly as fewer goods and services
  on rents while also decreasing new construction activity.                    are consumed.
                                                                             • Downward pressure on the dollar will propel domestic exports at the
                                                                               price of imports. The Inland Empire is poised to benefit more from
                                                                               import trade since Asian countries account for about 25% of foreign
                                                                               imports but are responsible for only 11% of domestic exports.




SUBURBAN OFFICE                                                              INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                  Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                     (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999    14,627,000      121,000    (53,000)   12.7        21.00   10.70      1999              –          –             0         –         –      –   8.70
2000    14,794,000      167,000     169,000   12.5        21.20   10.30      2000              –          –             0         –         –      –   9.30
2001    15,312,000      518,000     520,000   12.1        22.30   10.00      2001              –          –             0         –         –      –   8.60
2002    15,618,000      306,000     336,000   11.7        22.60    9.30      2002    286,740,000 168,000        1,594,000       9.0      4.70   5.50   8.50
2003    16,081,000      463,000     682,000   10.0        23.40    9.00      2003    293,192,000 6,452,000      9,149,000       6.2      4.70   5.80   5.75
2004    16,936,000      855,000     546,000   11.3        24.60    8.10      2004    300,061,000 6,869,000      7,147,000       5.8      4.70   5.75   7.70
2005    18,175,000    1,239,000   1,444,000    9.4        25.40    7.10      2005    311,771,000 11,710,000    11,783,000       4.0      5.15   7.25   7.20
2006    19,250,000    1,075,000     822,000   10.2        27.20    6.30      2006    338,140,000 26,369,000    18,359,000       5.4      5.58   8.15   6.50
2007    21,017,000    1,767,000     993,000   13.0        27.10    6.20      2007    359,046,000 19,786,000    10,091,000       7.4      5.84   7.20   5.70
2008P   23,017,000    2,000,000     500,000   15.0            –       –      2008P   379,446,000 20,400,000     9,645,000       9.8         –      –      –
                                                                             METROPOLITAN INDICATORS – 2008

                                                                                • Gross Metro Product Percent Change: 2.9
                                                                                • Total Employment Increase/Decrease: 2,268
                                                                                  Percent Change: 1.7
                                                                                • Unemployment Rate: 6.3
                                                                                • Population (000): 4,197.0
                                                                                Source: Moody’s Economy.com



                                                                             P = Projection. Please see Glossary page for explanation.

36      CONTACT: Carla Gazzolo • carla.gazzolo@colliers.com l RESEARCH: Michael Gold • michael.gold@colliers.com
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LOUISVILLE, KY
OFFICE                                                                       INDUSTRIAL
• The Louisville economy remained strong and continued to                    • Louisville’s industrial absorption measured 919,000 SF in 2007.
  grow in 2007.                                                              • Contributing to the city’s growth as the $1 billion airport expansion
• Office inventory at year-end totaled nearly 20 million SF of leasable        project which was underway in the year. The housing market slowed,
  Class A and B space.                                                         but sales exceeded that of the national average.
• These are some speculative construction this year, albeit limited.         • Pharmaceutical distribution operations continued to consider metro
  A 150,000 SF Class A office building was completed in the first              Louisville as a distribution hub.
  quarter of 2007, and by year-end, had leased approximately one-third       • Major industrial lease and sale transactions included Asus leasing
  of its space.                                                                200,000 SF, GSI Commerce Solutions leasing 273,000 SF of space,
• The vacancy rates in both Class A and B submarkets continued                 and JOM Pharmaceutical purchasing a 322,526 SF property.
  to decline.                                                                • Lauth announced a 936,000 SF speculative project, becoming the
• PharMerica, an industry-leading pharmaceutical services company,             largest speculative distribution facility ever built in metro Louisville.
  selected Louisville for its headquarters. Major growth companies in        • River Ridge in Southern Indiana secured two tenants and speculative
  include Humana Healthcare, ResCare, and Kindred Healthcare.                  construction began for a total of over 1.1 million SF of space.
Office Outlook                                                               • On the investment side, eleven acquisitions occurred during 2007.
• Growth is expected to continue in Louisville’s office market, but at a     Industrial Outlook
  slower pace in 2008.                                                       • Speculative construction of 2.8 million SF available by end of
• The CBD will continue its revitalization, which includes an increased        1st Quarter 2008.
  supply of residential units, additional retail expansion, and the          • A limited number of bulk distribution sites will cause developers
  welcoming of new top-tier hotels.                                            to consider alternatives in Southern Indiana and Shelby County.
• New projects announced for the CBD include a 61-story mixed-use
  tower, a new sports arena, a 230,000 SF office/retail building and a
  major expansion to the Cordish 4th Street Live development.




DOWNTOWN OFFICE                                                              INDUSTRIAL
         Inventory       New          Absorption   Vacancy      Class A               Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)      Supply (SF)        (SF)      Rate (%)   Rent ($PSF)                (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999             –           –                 0          –          –       1999             –            –            0         –         –      –      –
2000             –           –                 0          –          –       2000             –            –            0         –         –      –      –
2001     8,791,000           0          (90,000)       15.8      20.20       2001             –            –            0         –         –      –      –
2002     9,010,000     219,000         (201,000)       20.0      20.00       2002    78,733,000      561,000    (231,000)      19.0      3.40   2.30   9.50
2003     9,010,000           0          (25,000)       20.3      19.50       2003    79,458,000      725,000    1,716,000      16.7      3.30   2.30   8.75
2004     9,147,000     137,000            10,000       20.1      19.10       2004    80,707,000    1,249,000    1,854,000       7.5      3.80   2.18   8.00
2005     9,171,000      24,000            54,000       19.5      19.40       2005    82,767,000    2,060,000    2,734,000       7.9      3.95   3.09   8.00
2006     9,171,000           0           383,000       15.3      20.00       2006    86,567,000    3,800,000    4,517,000       6.7      3.95   3.32   8.00
2007     9,171,000           0           494,000        9.9      19.50       2007    89,330,000    2,220,000      919,000       8.6      3.60   3.79   8.00
2008P    9,171,000           0            91,000        9.0          –       2008P   91,226,000    1,896,000      899,000       9.5         –      –      –

SUBURBAN OFFICE                                                              METROPOLITAN INDICATORS – 2008
         Inventory       New          Absorption   Vacancy      Class A
                                                                                • Gross Metro Product Percent Change: 1.1
            (SF)      Supply (SF)        (SF)      Rate (%)   Rent ($PSF)
1999             –           –                –           –          –          • Total Employment Increase/Decrease: 55
2000             –           –                –           –          –            Percent Change: 0.1
2001     7,982,000     647,000          120,000        19.6      17.70
                                                                                • Unemployment Rate: 5.5
2002     8,251,000     269,000          258,000        19.1      17.50
2003     8,347,000      96,000          192,000        17.7      17.60          • Population (000): 1,240.0
2004     8,424,000      77,000          151,000        15.8      17.60
2005     8,665,000     241,000           61,000        16.5      16.90          Source: Moody’s Economy.com
2006     8,849,000     184,000          124,000        16.4      17.10
2007     9,020,000     171,000          287,000        14.8      20.00
2008P    9,110,000      90,000           85,000        14.7          –       P = Projection. Please see Glossary page for explanation.

                                    CONTACT: Doug Owen • dho@harrykmoore.com l RESEARCH: Doug Owen • doug.owen@colliers.com                               37
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MEMPHIS, TN
OFFICE                                                                       INDUSTRIAL
• Memphis rents, both CBD and suburban managed a slight increase             • Over 2.7 million SF of new construction occurred in DeSoto County,
  during 2007.                                                                 Mississippi, plus a building of 525,000 SF in the Southeast submarket.
• Wright Medical began the first of three major expansions of its              Active developers included ProLogis, Panattoni, Hillwood, and IDI.
  corporate headquarters. The $60 million expansion will add                 • Some large transactions included Diamond Comics leasing 600,000
  60,000 SF and 129 jobs to the metropolitan area.                             SF, ScanSource taking 592,700 SF, Trane leasing 373,000 SF, Philips
• Memphis Bioworks Foundation announced the launch of                          Electronics leasing 200,000 SF, and Smith & Nephew taking
  INNOVA, an accelerator/seed fund to drive the development                    210,0000 SF of space.
  of new technology-based companies to Memphis.                              • The announcement of Toyota’s new production plant in Tupelo,
• Due to mergers and acquisitions of two of the three largest local banks      Mississippi, excited developers in the Memphis area with
  by larger regional banks, Memphis experienced increased demand for           opportunities for Toyota-supplier locations.
  branch sites by smaller regional banks.                                    • With the continued expansion of I-69 and US 385, industrial
                                                                               development reached existing outlying markets of Tunica County,
Office Outlook                                                                 Southern DeSoto County and Marshall County in Mississippi.
• In 2008, Memphis will continue to benefit from healthy job and
  revenue growth in the medical industry with hospital-driven projects       Industrial Outlook
  and company expansions, due in part to being home to FedEx.                • With the presence of Federal Express’ worldwide headquarters and
• LeBonheur Children’s Medical Center began its $327 million                   WorldHub, distribution companies will continue to find many
  expansion which when complete, will bring the campus to almost               advantages to settling in the metropolitan area.
  1 million SF of space. Completion is expected in the summer                • A new 1 million SF distribution center facility, announced by Nike in
  of 2010.                                                                     2007, will house operations from Nike’s existing Memphis location as
• Medtronics, the Minneapolis-based manufacturing giant of medical             well as operations from its distribution center in Oregon.
  devices, currently employs 1,200 in Memphis and is adding a new            • The BNSF Tennessee Yard is expanding and will reach a 400,000 lift
  6-story, 176,532 SF office building and 7-story parking structure            annual capacity in 5 years and 1 million lifts in 15 years.
  to its existing campus.




DOWNTOWN OFFICE                                                              INDUSTRIAL
         Inventory       New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)      Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999      6,240,000          0     (20,000)   25.0        19.00       –      1999    118,312,000   4,900,000     5,600,000     14.4      4.00      –   8.00
2000      6,415,000    175,000     200,000    24.2        18.00       –      2000    124,812,000   6,500,000     8,200,000     12.8      2.80      –   8.50
2001      6,430,000     15,000     (27,000)   21.2        18.80    9.50      2001    128,162,000   3,350,000     2,100,000     14.0      3.00   2.00   9.00
2002      6,430,000          0     206,000    21.5        16.60   10.00      2002    130,662,000   2,500,000   (2,700,000)     16.9      2.50   1.60   9.00
2003      6,430,000          0     (18,000)   23.4        17.00    9.50      2003    134,660,000   3,998,000     3,972,000     16.3      2.40   1.50   9.00
2004      6,430,000          0       80,000   21.4        16.70   10.00      2004    135,699,000   1,039,000     3,164,000     17.2      2.60   1.03   8.75
2005      6,430,000          0       91,000   19.0        16.60   10.00      2005    141,636,000   5,937,000     7,398,000     15.1      2.60   2.12   8.50
2006      6,430,000          0        3,000   16.5        16.60    9.50      2006    145,679,000   4,043,000     7,059,000     13.4      2.70   2.25   7.75
2007      6,526,000          0     (30,000)   17.9        17.00    7.50      2007    161,561,000   3,490,000     2,471,000     15.3      2.71   2.00   8.40
2008P     6,526,000          0       91,000   16.5            –       –      2008P   163,674,000   2,113,000     2,325,000     15.0         –      –      –

SUBURBAN OFFICE                                                              METROPOLITAN INDICATORS – 2008
         Inventory       New      Absorption Vacancy Class A Cap Rate
                                                                                • Gross Metro Product Percent Change: 1.7
            (SF)      Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    22,395,000      240,000     100,000   14.5        19.00       –         • Total Employment Increase/Decrease: 359
2000    23,110,000      715,000     600,000   12.7        21.00       –           Percent Change: 0.6
2001    24,408,000    1,298,000   (117,000)   14.5        18.80    9.50
                                                                                • Unemployment Rate: 4.9
2002    25,188,000      780,000      70,000   15.6        18.90    9.75
2003    25,436,000      248,000     159,000   15.4        19.50    9.50         • Population (000): 1,294.5
2004    25,470,000       34,000     278,000   16.7        20.40    9.00
2005    25,561,000       91,000     317,000   14.5        20.50    9.00         Source: Moody’s Economy.com
2006    25,676,000      115,000     138,000   15.5        20.80    9.00
2007    26,392,000       32,000     351,000   12.4        21.00    7.00
2008P   26,691,000      299,000     393,000   11.9            –       –      P = Projection. Please see Glossary page for explanation.

38      CONTACT: Gene Woods • gwoods@colliersws.com l RESEARCH: Lindsey Browndyke • lindsey.browndyke@colliers.com
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MIAMI/DADE COUNTY, FL
OFFICE                                                                     INDUSTRIAL
• The Miami-Dade office market ended 2007 with a vacancy rate              • The Miami Dade County industrial market ended 2007 with a
  of 8.9%, which marked a modest increase over the previous year.            vacancy rate of 5.5%, up from 4.5% for year-end 2006, mostly due to
• CBD Rental rates ended the year at $36.90 per SF, while suburban           one of South Florida’s largest buildings (978,200 SF), Centergate at
  rents finished 2007 at $33.20 per SF. This left downtown rents up          Gratigny, being vacated in the fourth quarter. Despite this increase,
  slightly while suburban rents slipped marginally.                          vacancies continued to remain below the national average.
• Class B and C space experienced negative absorption in 2007, while       • Lease rates ended the year at $8.05 per SF, an increase over the
  Class A space experienced positive absorption.                             previous quarters.
• Over 4.5 million SF of Class A office space was under construction       • Over 3.3 million SF of industrial space was under construction as the
  in the Miami market at year-end. The Brickell and downtown                 end of 2007, of which roughly 2 million SF was pre-leased.
  submarkets show the most construction activity in Miami-Dade             Industrial Outlook
  County with 2 million SF of Class A office under construction.
                                                                           • Low availability of new product for lease is expected to continue
• Many buildings in Miami-Dade County have begun to quote triple             pushing industrial space rents upwards and keep vacancy rates low
  net rates to compensate for increased operating expenses.                  in the county.
• Office investment cap rates moved higher in 2007, averaging              • The upward trend of operating expenses such insurance and real
  6.52% compared to 6.21% in 2006.                                           estate taxes has resulted in rental rates beginning to be quoted on a
Office Outlook                                                               triple net basis.
• More mixed-use buildings are anticipated in 2008 as investors attempt    • Lack of developable industrial land still continues to keep the
  to lease off any space not sold during condo conversion.                   industrial market in Miami Dade tight, yet developers are now
• The buzzword in development will continue to be “Green”.                   seeking new opportunities as land shifts away from residential use.
  In the Miami area, several developers are working on the new
  LEED concept (Leadership in Energy and Environmental Design).




DOWNTOWN OFFICE                                                            INDUSTRIAL
         Inventory      New        Absorption    Vacancy      Class A                Inventory        New      Absorption       Vacancy      Warehouse      Land
            (SF)     Supply (SF)      (SF)       Rate (%)   Rent ($PSF)                 (SF)       Supply (SF)    (SF)          Rate (%)     Rent ($PSF)   ($PSF)
1999     8,194,000           0      (154,000)        10.0      28.00       1999    196,535,000      2,355,000 (2,589,000)              6.9         –           –
2000     8,194,000           0         34,000        10.0      28.00       2000    197,954,000      1,419,000 1,319,000                7.1      6.00           –
2001     8,194,000           0               0       10.7      27.80       2001    200,849,000      2,895,000   (556,000)              9.8      5.00       20.18
2002     8,194,000           0      (284,000)        11.9      28.20       2002    202,576,000      1,727,000 1,302,000                9.4      5.90       15.00
2003     8,194,000           0         42,000        11.6      29.60       2003    203,590,000      1,014,000 2,934,000                8.2      5.90       11.00
2004     8,194,000           0         72,000        12.4      30.30       2004    204,814,000      1,224,000 2,881,000                6.5      6.00       10.00
2005     8,194,000           0        158,000         9.2      30.40       2005    206,262,000      1,448,000 4,524,000                4.3      7.35        9.00
2006     8,194,000           0         (2,000)        9.2      33.10       2006    207,709,000      1,447,000     346,000              4.5      7.63       21.00
2007     8,177,000           0         19,000         9.0      36.90       2007    228,475,000      2,580,000   (433,000)              5.5      8.05       23.00
2008P    8,177,000           0        164,000         7.0          –       2008P   230,541,000      2,066,000 4,752,000                4.3         –           –

SUBURBAN OFFICE                                                            METROPOLITAN INDICATORS – 2008
         Inventory      New        Absorption    Vacancy      Class A
                                                                              • Gross Metro Product Percent Change: 2.2
            (SF)     Supply (SF)      (SF)       Rate (%)   Rent ($PSF)
1999    60,259,000     624,000      (744,000)         8.4          –          • Total Employment Increase/Decrease: 1,315
2000    60,259,000           0      1,541,000         6.5      27.20            Percent Change: 1.2
2001    61,734,000   1,475,000      (449,000)        11.8      28.00
                                                                              • Unemployment Rate: 4.1
2002    63,167,000   1,433,000      (114,000)        12.3      28.70
2003    63,892,000     725,000        533,000        12.5      29.70          • Population (000): 2,460.4
2004    64,996,000   1,104,000      2,062,000        11.3      28.90
2005    65,703,000     707,000      1,746,000         8.4      30.00          Source: Moody’s Economy.com
2006    66,126,000     423,000      1,324,000         7.8      34.50
2007    62,164,000   1,748,000        387,000         8.8      33.20
2008P   65,095,000   2,931,000      1,247,000        11.0          –       P = Projection. Please see Glossary page for explanation.

                                   CONTACT: Michael Fay • mfay@colliersawf.com l RESEARCH: Pani Roshani • pani.roshani@colliers.com                           39
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MILWAUKEE, WI
OFFICE                                                                     INDUSTRIAL
• Companies such as American Family, GE Medical, Stark                     • Printing, financial processing, crane manufacturing and large-scale
  Investments, Johnson Controls, Infinity Healthcare, Integrated             distribution have grown the most, while other heavy manufacturing
  Mail Services and NML absorbed the largest contiguous new or               industries have seen low growth. Bucyrus, QuadGraphics,
  repositioned office space.                                                 S.C. Johnson & Co., GE Medical and Michels Pipeline were
• The biggest new developments included Pabst City, Pabst Farms,             growing companies.
  Bayshore and NML’s Franklin campus. The Milwaukee County                 • Completion of the $1 billion Marquette freeway interchange and
  Research Park also matured quite rapidly.                                  commencement of improvements on the South I-94 corridor from
• Municipalities continued to become more “hands-on” with regard to          Chicago to Milwaukee were the newest infrastructure initiatives
  regulating real estate and development, to the point approaching a         in this area.
  burden on the market.                                                    • New developments included the 73-acre new development in
• The largest investment deal was the sale of the 500,000 SF GE              Pewaukee for Irgens Development and a potential 55-acre industrial
  Healthcare Information Services building in Wauwatosa, WI.                 park in Menomonee Falls for First Industrial REIT.
  The largest lease deal was R.W. Baird’s 250,000 SF renewal of            • One of the most significant transactions of 2007 was Bentley
  the US Bank tower in downtown Milwaukee.                                   Worldwide Packaging’s 260,000 SF sale/leaseback to Stag Partners.
• Developers, especially REITs, continued to land bank (this is okay       • Companies such as Abbott Labs and Uline continued to migrate from
  as-is), perhaps more so than in past years. In-fill developments           northern Illinois to Kenosha County in southeast Wisconsin.
  (rather than larger business park) were the most desirous.               • Availability of large blocks of industrial space or large land sites was
  Land prices continued an upward trend, but are still steady.               very limited except in outlying areas. Most in-fill or conversion sites
Office Outlook                                                               were spoken for.
• UW-Milwaukee has plans in the works to expand its campus at              Industrial Outlook
  the Zoo interchange, which may increase office development and           • Most municipalities are in the process of finalizing detailed master
  investment in the submarket.                                               plans, which will govern future zoning. Rezoning is becoming more
• Opportunities in downtown Milwaukee will continue to                       and more difficult as delineated uses have become more settled.
  present themselves.
• Suburban development will be slow, but investment and leasing
  activity will be steady.




DOWNTOWN OFFICE                                                            INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                   (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999    15,007,000    167,000     105,000   15.7            –       –      1999    252,203,000   2,000,000     3,750,000      2.9      4.00      –     –
2000    15,122,000    115,000      74,000   15.0        23.50    9.00      2000    255,203,000   3,000,000     4,000,000      3.7      4.00      –     –
2001    15,122,000          0 (976,000)     14.5        23.00   10.00      2001    257,703,000   2,500,000     1,200,000      6.0      4.00   1.75 10.50
2002    15,317,000    195,000     250,000    9.3        23.00   10.00      2002    259,203,000   1,500,000   (1,500,000)      7.7      4.00   2.05 10.10
2003    15,838,000    521,000 1,003,000     10.7        23.00    9.50      2003    264,523,000   5,320,000   14,376,000       6.7      4.30   2.00 9.50
2004    15,838,000          0     121,000    9.9        22.00    9.50      2004    271,011,000   6,488,000     4,933,000      7.1      4.30   2.25 9.25
2005    15,838,000          0 (1,029,000)   11.9        22.00    7.50      2005    272,050,000   1,039,000       537,000      7.2      4.20   1.72 8.50
2006    15,838,000          0     494,000   14.1        22.00    7.50      2006    274,900,000   2,850,000     (650,000)      7.7      4.20   1.85 8.25
2007    16,785,000          0     322,000   14.7        22.00    8.00      2007    277,200,000   2,300,000     1,300,000      7.4      4.30   1.75 8.50
2008P   16,785,000          0     103,000   14.0            –       –      2008P   278,400,000   1,200,000     1,846,000      7.1         –      –     –

SUBURBAN OFFICE                                                            METROPOLITAN INDICATORS – 2008
         Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                              • Gross Metro Product Percent Change: 0.7
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    36,077,000    550,000     110,000   10.9            –       –         • Total Employment Increase/Decrease: -63
2000    36,594,000    517,000     318,000    9.1        21.50    9.00           Percent Change: -0.1
2001    37,188,000    594,000     371,000    1.5        21.00   10.00
                                                                              • Unemployment Rate: 5.6
2002    37,394,000    206,000           –   11.9        21.00   10.00
2003    37,894,000    500,000     918,000   10.8        21.00    9.50         • Population (000): 1,522.7
2004    38,394,000    500,000   1,398,000    8.3        21.00    9.50
2005    38,416,000     22,000   (341,000)    8.9        21.00    8.00         Source: Moody’s Economy.com
2006    38,416,000          0      16,000   12.0        21.00    8.00
2007    40,469,000    874,000   1,275,000   11.3        21.00    8.00
2008P   40,469,000          0     258,000   10.7            –       –      P = Projection. Please see Glossary page for explanation.

40      CONTACT: Bill Quinlivan • wquinlivan@colliers-barry.com l RESEARCH: Nicole Benish • nicole.benish@colliers.com
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MINNEAPOLIS, MN
OFFICE                                                                         INDUSTRIAL
• Demand for Minneapolis office space remained relatively steady in            • Manufacturing jobs continued to decline.
  2007 with declining vacancy and positive absorption.                         • Most deals were done at either less than 30,000 SF or over
• There was limited new speculative construction completed in 2007.              60,000 SF, with limited number of lease transactions in the
• Minnesota’s unemployment rate climbed above the national average               mid-range. However, many users adopted the “wait and see” attitude
  for the first time in 25 years.                                                as the economy continued to fluctuate.
• Due to limited large blocks of space and no new construction in              • Minneapolis saw plenty of new speculative industrial construction
  the near future, large tenants in the CBD opted to renew their                 in the Northern markets.
  leases early.                                                                • The industrial market witnessed a large number of investment
• Office building sales slowed, but still reflected a strong showing             sales in 2007.
  in 2007.                                                                     Industrial Outlook
Office Outlook                                                                 • Speculative construction will continue to remain strong, especially
• The addition of new office construction will drive vacancy rates               in the Northeastern and Northwestern markets.
  higher in the suburban market 2008.                                          • It is expected that leasing activity will remain high, but deals will
• Companies that grew rapidly when there was no space available will             take longer to close.
  be able to consolidate space as previously limited large blocks of space     • Tenants may seek shorter term renewals until the economic
  become available.                                                              uncertainty diminishes.
• Companies will continue to right-size, limiting expansion until the          • Users remain skittish given the unknowns surrounding the election
  economic worries have been addressed.                                          year and the possible nationwide negative fallout from the housing
• Cap rates will rise, especially for leveraged buyers, and there will still     and subprime mortgage crisis.
  be plenty of unleveraged capital in the investment market.                   • A lowering of land prices may stimulate development and
• In 2008, it is expected that the inventory of large blocks of sublease         build-to-suit activity.
  space will increase, especially in the Southwest metropolitan area.




DOWNTOWN OFFICE                                                                INDUSTRIAL
          Inventory      New      Absorption Vacancy Class A Cap Rate                   Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                      (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999     21,445,000            0     370,000     7.1        28.40        –     1999    102,612,000   3,600,000    2,870,000       8.6      4.60      –     –
2000     22,372,000      927,000     573,000     7.2        28.70     9.00     2000    104,812,000   2,200,000    1,846,000       9.4      4.70      –     –
2001     24,288,000    1,916,000     513,000    12.2        27.60     9.50     2001    108,075,000   3,263,000    1,084,000      13.4      4.30   3.00 10.50
2002     25,216,000      928,000 (1,400,000)    20.3        23.50     9.50     2002    111,059,000   2,984,000    1,546,000      17.0      4.40   3.00 9.75
2003     24,991,000    (224,000)    (35,000)    21.9        25.10     9.50     2003    111,259,000     200,000    1,673,000      12.4      4.10   3.00 9.00
2004     24,991,000            0 (323,000)      22.5        26.00     8.00     2004    111,389,000     130,000      113,000      14.8      4.25   3.00 8.00
2005     24,991,000            0     485,000    20.6        24.70     7.50     2005    113,181,000   1,792,000    4,918,000      11.8      4.30   5.00 8.60
2006     24,647,000    (344,000)     293,000    18.3        24.40     6.90     2006    114,623,000   1,442,000    2,796,000      10.5      4.55   7.23 7.50
2007     24,418,000            0     191,000    16.7        26.40     7.50     2007    116,031,000   1,408,000      943,000      10.6      4.80   5.00 7.50
2008P    24,418,000            0     237,000    15.8            –        –     2008P   117,031,000   1,000,000    1,207,000      10.4         –      –     –

SUBURBAN OFFICE                                                                METROPOLITAN INDICATORS – 2008
          Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                                  • Gross Metro Product Percent Change: 1.2
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999     37,456,000    1,154,000     366,000    10.5        26.00        –        • Total Employment Increase/Decrease: -1,427
2000     39,270,000    1,814,000   1,489,000    12.7        27.50     9.50          Percent Change: -0.8
2001     41,372,000    2,102,000   1,664,000    17.6        27.00    10.50
                                                                                  • Unemployment Rate: 4.6
2002     42,711,000    1,339,000     180,000    20.3        23.50    10.00
2003     42,711,000            0   2,038,000    20.8        27.40     9.50        • Population (000): 3,240.2
2004     42,842,000      131,000     473,000    19.9        26.30     8.00
2005     42,744,000     (98,000)   1,115,000    17.1        23.20     7.50        Source: Moody’s Economy.com
2006     42,861,000      117,000     500,000    16.2        24.00     7.50
2007     43,481,000      724,000     639,000    16.1        26.60     7.75
2008P    44,981,000    1,500,000     425,000    17.9            –        –     P = Projection. Please see Glossary page for explanation.

                                       CONTACT: Jeffrey LaFavre • jlafavre@ctmt.com l RESEARCH: Jim Mayland • jim.mayland@colliers.com                     41
C O L L I E R S I N T E R N AT I O N A L            l   U S R E A L E S TAT E R E V I E W 2 0 0 8



NASHVILLE, TN
OFFICE                                                                      INDUSTRIAL
• In Nashville, Class A space was at a premium in some                      • Big box leasing activity decreased in the last 6 months of 2007.
  office submarkets.                                                        • Interest existed for large blocks of space with few closed deals, but
• Demand slowed for large blocks of space but remained high                   improved by the close of the year.
  for smaller spaces.                                                       • Nashville’s properties for sale in the 20,000 SF to 40,000 SF range
• Nashville’s CBD benefited from low vacancy rates in                         were at a premium.
  adjacent submarkets.                                                      • As with the office investment market, investment activity became
• Asking rates stabilized but were up over $2 per SF in high demand           more selective based on credit worthiness and risk.
  submarkets. Developers responded with additional Class A product.         • The inventory of Class A bulk buildings was sufficient to handle
Office Outlook                                                                current needs.
• Nashville maintains attractiveness and accolades as a desired             • 2007 witnessed a slowdown in speculative industrial
  relocation city – more companies are expected to relocate                   new construction.
  to Nashville.                                                             • High demand continued for stand-alone buildings in the 20,000 SF
• Investors will become more selective and will scrutinize credit             to 40,000 SF range.
  worthiness and risk.                                                      Industrial Outlook
• There will be continued development of Class A office supply, offered     • Build-to-suit development will continue in the North and
  as both speculative and build-to-suit space.                                Southeast submarkets.
• The CBD vacancy rate may increase when short-term tenants move            • Rental rates are expected to stabilize but are up significantly
  and new facilities come on line.                                            over the past two years.
• Rental rates will stay at current levels in the suburban markets, with    • A slowdown in big box activity will reflect national
  increased incentives to be offered in Nashville’s CBD.                      economic uncertainties.
                                                                            • Small space flex activity will be on the upswing in 2008.




DOWNTOWN OFFICE                                                             INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999     5,929,000           –      32,000    6.6        20.00    9.75      1999    156,340,000   3,722,000     4,913,000      3.2      3.50      –     –
2000     6,611,000     682,000     330,000   12.0        19.80    9.75      2000    161,637,000   5,297,000     4,394,000      3.4      3.30      –     –
2001     6,633,000      22,000   (143,000)   14.7        18.50   11.00      2001    166,358,000   4,721,000     1,539,000      5.1      3.00   1.25 9.50
2002     6,752,000     119,000     184,000   12.2        18.30   10.25      2002     16,854,000   2,181,000   (2,428,000)      7.8      3.00   1.06 9.50
2003     6,752,000           0     166,000   11.7        18.80   10.25      2003    170,693,000   2,154,000      (13,000)      9.0      3.00   3.10 10.50
2004     6,788,000      36,000   (227,000)   15.5        18.80   10.25      2004    173,349,000   2,656,000     4,807,000      7.6      2.90   2.90 9.00
2005     6,815,000      26,000      87,000   14.5        17.50    8.75      2005    177,137,000   3,788,000     4,567,000      7.0      3.10   1.29 8.50
2006     6,815,000           0     213,000   11.4        20.90    7.00      2006    180,704,000   3,567,000     6,507,000      5.3      3.71   1.45 8.00
2007     7,143,000     333,000     306,000   11.3        20.00    8.25      2007    182,977,000   2,512,000     2,042,000      5.5      4.18   0.78 7.75
2008P    7,143,000           0     133,000    9.4            –       –      2008P   185,632,000   2,655,000     3,633,000      4.9         –      –     –

SUBURBAN OFFICE                                                             METROPOLITAN INDICATORS – 2008
         Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                               • Gross Metro Product Percent Change: 2.1
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    16,289,000   1,260,000   1,115,000    8.5        19.00    9.50         • Total Employment Increase/Decrease: 788
2000     1,746,400   1,175,000     731,000   10.5        19.50    9.50           Percent Change: 1.0
2001    18,904,000   1,440,000     549,000   14.8        18.50   10.00
                                                                               • Unemployment Rate: 3.7
2002    19,899,000     995,000     478,000   16.6        18.50   10.00
2003    19,985,000      85,000       6,000   16.5        18.80   10.00         • Population (000): 1,482.7
2004    20,309,000     324,000     939,000   13.2        19.00   10.00
2005    20,461,000     152,000     491,000   11.5        18.80    8.25         Source: Moody’s Economy.com
2006    21,777,000   1,317,000   1,305,000   10.9        20.00    7.75
2007    22,502,000     763,000   1,104,000    9.2        20.10    7.25
2008P   23,851,000   1,349,000     429,000   12.5            –       –      P = Projection. Please see Glossary page for explanation.

42      CONTACT: Doug Brandon • dbrandon@ctmt.com l RESEARCH: Dominic Minadeo • dominic.minadeo@colliers.com
C O L L I E R S I N T E R N AT I O N A L             l   U S R E A L E S TAT E R E V I E W 2 0 0 8



NEW JERSEY – CENTRAL
OFFICE                                                                       INDUSTRIAL
• In 2007, 1,773,000 SF of new office space was delivered. As not all        • Continuing the construction boom, over 5 million SF of space was
  the space was absorbed, the vacancy rate rose to 14.4% from 13%              under construction at year-end 2007.
  a year ago.                                                                • Average asking rates started to inch up as rents moved back toward
• Data center demand became a new growth driver. New York                      $5.10 per SF.
  financial firms and New Jersey’s life-sciences companies led the trend     • Expansion Westward into Mercer County picked up pace in 2007.
  by establishing off-site data backup facilities throughout the region.       Interstate 195 continued to play a larger and larger role in the
• This market is home to some of the largest pharmaceutical companies          construction boom.
  in the world. Merck and Johnson & Johnson each maintain                    • KTR Capital Partners purchased the New York Times printing and
  substantial facilities on several campuses.                                  distribution facility in Edison. The deal included a 25-acre tract that
• Asking rents for Class A and B space showed little movement,                 KTR was considering redeveloping.
  averaging $24.90 per SF.                                                   • Exit 8A remained the epicenter of development in Central New
Office Outlook                                                                 Jersey. In the last three years over 7.7 million SF of space was
                                                                               delivered to that submarket.
• The Princeton submarket should begin to tighten as the recent
  construction boom winds down.                                              Industrial Outlook
• The amount of new construction should decrease significantly               • Central New Jersey’s vacancy rates will continue to rise throughout
  throughout Central New Jersey. Although there is much more                   2008 as the market experiences difficulty absorbing the new space
  developable land, the amount under construction should be similar            coming on the market. As a result, the pace of new construction
  to that in Northern New Jersey.                                              will finally slow in the second half of the year.
• Office rents will fall slightly in 2008 despite the lack of new            • This market is dependent upon consumer spending since the vast
  construction. Landlords will reduce rates to lure tenants.                   majority of its space is distribution and warehousing facilities. If the
                                                                               credit crunch or an economic downturn affects consumer spending,
                                                                               the market will experience the full force of slackening demand.
                                                                             • As the speculative projects started in 2007 are completed and
                                                                               experience difficulty leasing up, build-to-suit projects will comprise
                                                                               the majority of new construction in 2008.




SUBURBAN OFFICE                                                              INDUSTRIAL
          Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999     91,990,000   3,651,000 3,010,000      9.4        29.00      –       1999    253,307,000   3,675,000     3,927,000      7.2      5.20       –      –
2000     93,767,000   1,777,000 2,524,000      6.0        26.90   9.50       2000    256,557,000   3,250,000     3,725,000      5.7      5.50       –      –
2001     95,934,000   2,167,000 1,330,000     11.8        24.30   9.00       2001    263,712,000   7,155,000     1,479,000      7.0      5.00    4.00   9.00
2002     98,433,000   2,499,000 (1,387,000)   15.3        23.50   8.75       2002    268,989,000   5,277,000   (2,031,000)      8.3      5.00    3.75   9.00
2003     99,007,000     574,000     719,000   15.5        24.00   8.75       2003    269,848,000     859,000     7,137,000      5.9      4.50    5.00   8.00
2004     99,537,000     530,000 1,717,000     14.2        25.50   7.75       2004    272,207,000   2,359,000     7,066,000      4.3      4.20    4.50   8.00
2005    100,815,000   1,278,000 2,821,000     12.5        25.30   7.00       2005    278,844,000   6,637,000       709,000      6.6      4.70   18.00   8.00
2006    101,646,000     831,000     218,000   13.0        25.50   7.00       2006    284,290,000   5,446,000     2,575,000      7.5      5.05   18.50   7.00
2007    103,419,000   1,773,000     377,000   14.4        26.60   7.00       2007    288,070,000   3,780,000     4,641,000      8.1      5.28    1.65   7.00
2008P   103,769,000     350,000     885,000   13.9            –      –       2008P   291,570,000   3,500,000     2,648,000      8.3         –       –      –
                                                                             METROPOLITAN INDICATORS – 2008 (EDISON)

                                                                                • Gross Metro Product Percent Change: 1.0
                                                                                • Total Employment Increase/Decrease: 295
                                                                                  Percent Change: 0.3
                                                                                • Unemployment Rate: 4.3
                                                                                • Population (000): 2,318.4
                                                                                Source: Moody’s Economy.com



                                                                             P = Projection. Please see Glossary page for explanation.

                        CONTACT: Jon Tesser • jtesser@colliershouston.com l RESEARCH: Michael Gottilla • michael.gottilla@colliers.com                     43
C O L L I E R S I N T E R N AT I O N A L              l   U S R E A L E S TAT E R E V I E W 2 0 0 8



NEW JERSEY – NORTHERN
OFFICE                                                                        INDUSTRIAL
• The disparity between rental rates in New Jersey and Manhattan              • Demand for space was consistently strong. The vacancy rate ranged
  reached an all-time high. Northern New Jersey office owners                   between 5.7% and 6.2% for the last twelve quarters.
  marketed this fact to lure tenants from the City.                           • The average asking rental rate hit an all-time high of $6.69 per SF
• There were a few successful speculative projects. Mack-Cali majority          by year-end.
  leased its speculative project to Deloitte & Touche. Regardless,            • There was 800,000 SF under construction at year-end. The majority
  developers were still wary of over-building.                                  of this space was in the form of state-of-the-art distribution space near
• Despite tumultuous credit markets, cap rates did not rise significantly.      Port Newark/Elizabeth.
• The vacancy rate for Class A and B properties held steady                   Industrial Outlook
  throughout 2007.
                                                                              • As foreign trade has become a larger and larger percentage of GDP,
Office Outlook                                                                  Port Newark/Elizabeth has thrived. The recent depreciation in the
• Positive net absorption will continue to be limited because of                dollar may alter the mix of imports to exports, however, the port will
  New Jersey’s slow rate of job creation.                                       still see record container volume in 2008.
• Several large-scale, mixed-use redevelopment projects have stalled          • Manufacturing will continue to have a diminished impact on demand
  recently for a variety of reasons. Regardless, such projects will             for space. Distribution and warehousing will play an ever more vital
  become increasingly popular due to the limitations placed on                  role in the market.
  development by the state.                                                   • Consumer spending will play a large role in the strength of the
• Goldman Sachs received approval for a second tower on the Jersey              market in 2008 since the distribution market is directly tied to the
  City Waterfront. The investment bank planned a 30-story building              health of the retail sector.
  to be constructed in late 2009.                                             • The majority of new construction in 2008 will be close to the port.
• Unemployment in New Jersey has been at or below the national                  The aging stock of facilities in that submarket has become obsolete
  average for twelve consecutive months. That trend should hold                 and many redevelopment opportunities exist.
  through 2008.
• Rental rates should rise slightly over the first half of 2008 as the
  effects of the credit crunch ebb and the economy stabilizes.




SUBURBAN OFFICE                                                               INDUSTRIAL
          Inventory      New      Absorption Vacancy Class A Cap Rate                  Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                     (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999    142,458,000   3,750,000   4,100,000    13.1        29.00       –      1999    417,089,000 946,000 4,902,000              5.3      5.50       –      –
2000    145,458,000   3,000,000   4,600,000     8.8        29.00    9.50      2000    418,449,000 1,360,000 6,630,000            3.6      5.90       –      –
2001    148,571,000   3,113,000     510,000    11.1        30.00    9.00      2001    420,323,000 1,874,000 (2,493,000)          5.5      6.30    5.75   9.00
2002    152,752,000   4,181,000   1,449,000    12.6        25.00    8.25      2002    420,874,000 551,000 1,602,000              5.3      6.20    9.00   8.75
2003    155,099,000   2,347,000   (318,000)    13.6        28.70    8.25      2003    421,699,000 825,000 2,811,000              4.9      5.90    7.00   8.00
2004    156,766,000   1,667,000   3,607,000    12.2        27.10    7.75      2004    422,859,000 1,160,000 914,000              4.8      6.10   11.00   8.00
2005    157,078,000     312,000   (609,000)    12.0        27.40    7.75      2005    422,975,000 116,000 (3,773,000)            5.7      6.20   22.00   8.00
2006    157,271,000     193,000     550,000    11.8        28.20    7.00      2006    423,877,000 902,000 278,000                5.9      6.63   23.00   7.00
2007    158,269,000     998,000   1,850,000    11.2        28.90    7.00      2007    424,837,000 960,000 4,400,000              6.1      6.69   25.00   7.00
2008P   158,519,000     250,000     703,000    10.8            –       –      2008P   425,387,000 550,000 1,995,000              5.7         –       –      –
                                                                              METROPOLITAN INDICATORS – 2008 (NEWARK)

                                                                                 • Gross Metro Product Percent Change: 0.5
                                                                                 • Total Employment Increase/Decrease: 489
                                                                                   Percent Change: 0.5
                                                                                 • Unemployment Rate: 4.7
                                                                                 • Population (000): 2,151.4
                                                                                 Source: Moody’s Economy.com



                                                                              P = Projection. Please see Glossary page for explanation.

44      CONTACT: Jon Tesser • jtesser@colliershouston.com l RESEARCH: Michael Gottilla • michael.gottilla@colliers.com
C O L L I E R S I N T E R N AT I O N A L               l   U S R E A L E S TAT E R E V I E W 2 0 0 8



NEW YORK, NY
OFFICE
New York, Midtown Manhattan                                                    New York, Midtown South Manhattan
• Class A average asking rent rose 20% to $95.04 per SF, close to the          • The overall vacancy rate rose from 7.6% to 9.3%. The general trend
  highest ever.                                                                  across all submarkets was a tightening for the first half of 2007, then
• Trophy buildings along prestigious Avenues, especially in the Plaza            looser in the latter part of the year. Hudson Square registered the
  district, commanded rents in excess of $150 per SF with a few                  highest vacancy at over 23%.
  approaching $200 per SF. Sales prices for such buildings continued to        • Several large blocks became available in Midtown South totaling
  soar, with some exceeding $1,500 per SF.                                       over 1.8 million SF, contributing to the rise in vacancy.
• Class A vacancy remained fairly flat, falling from 5.6% in 2006 to           • Overall asking rents increased 26% from $37.86 per SF to $47.71 per
  5.2% in mid-year 2007, before ticking back up to 5.8% by year-end.             SF, although most of the jump occurred early in the year.
  Several large blocks of space became available, causing the year-end         • The largest blocks of availability were at 532 Washington Street with
  rise in vacancy.                                                               750,000 SF, and 200 Fifth Avenue with 400,000 SF.
• Major new construction was ongoing in the Times Square submarket,            • Demand was driven by companies seeking cheaper alternatives
  including One Bryant Park and 11 Times Square. Two boutique office             to Midtown and the emergence of a high tech/media cluster
  buildings broke ground on Madison Avenue in the Plaza District.                in the vicinity.
New York, Midtown Manhattan Outlook                                            New York, Midtown South Manhattan Outlook
• Additional blocks of space will be added to the Midtown market in            • Continued relocations, especially among broadcast/media firms, are
  2008 as several firms relocate to One Bryant Park while others move            expected for 2008 which may drive the vacancy rate lower, especially
  less expensive markets such as Midtown South and Downtown.                     in Chelsea and Hudson Square.
• Layoffs likely to occur in the first quarter of 2008 may add sublease        • Asking rents across Midtown South will hold flat to somewhat
  space to availability.                                                         higher because of the increased popularity among Midtown firms
• The average asking rent for Midtown will remain steep though its               with leases expiring.
  ascent will slow or level for at least the first half of 2008.               • Midtown South will not be immune to the “layoff bug” with financial
• Investment sales will not dry up completely with well-located properties       and professional/business service firms being affected.
  commanding top prices, however, financing options will not be as lenient.    • An announcement will be made early in 2008 regarding the choice
• Further announcements are anticipated for new residential and office           of developer(s) for the Hudson Yards project in West Chelsea.
  towers along Eighth Avenue and points west (Times Square and                 • Additional hotel and residential condominium projects will get
  Penn/Garment submarkets).                                                      underway across Midtown South.



MIDTOWN MANHATTAN OFFICE                                                       MIDTOWN SOUTH MANHATTAN OFFICE
          Inventory       New      Absorption Vacancy Class A Cap Rate                     Inventory        New      Absorption Vacancy Class A Cap Rate
             (SF)      Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                        (SF)       Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    239,008,000    1,600,000 3,900,000       6.4        54.00       –      1999               –              –           0            –       –      –
2000    239,008,000            0 1,445,000       5.4        65.40    9.00      2000      98,218,000              0     787,000          5.5   38.00   8.50
2001    239,863,000      855,000 (12,916,000)   10.4        61.30    8.00      2001      98,218,000              0 (7,256,000)         12.9   43.80   9.00
2002    242,369,000    2,506,000 (573,000)      11.4        54.70    7.25      2002      98,218,000              0 (998,000)           14.0   34.00   8.00
2003    244,267,000    1,898,000     888,000    11.8        52.40    6.75      2003      98,218,000              0 1,460,000           12.5   27.60   7.00
2004    247,250,000    2,983,000 5,846,000      10.5        57.50    6.40      2004      98,218,000              0 1,054,000           11.4   33.70   6.50
2005    250,385,000    3,135,000 7,065,000       8.0        59.60    5.00      2005      98,218,000              0 3,114,000            8.3   36.00   5.30
2006    251,516,000    1,131,000 4,607,000       6.5        79.60    5.00      2006      98,218,000              0     689,000          7.6   44.50   5.80
2007    253,887,000    2,371,000 1,476,000       6.8        95.00    4.00      2007      98,339,000        122,000 (1,524,000)          9.3   60.10   5.30
2008P   255,987,000    2,100,000 2,009,000       6.8            –       –      2008P     98,339,000              0     757,000          8.5       –      –




                                                                               P = Projection. Please see Glossary page for explanation.

                      CONTACT: Nicola Heryet • nheryet@colliersabr.com l RESEARCH: Robert Sammons • robert.sammons@colliers.com                         45
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NEW YORK, NY
OFFICE
New York, Downtown Manhattan
• The downtown office market saw a significant tightening in 2007
  with vacancy falling from 8.9% to 6.8%. Overall asking rents
  climbed 15% to $47.56 per SF.
• Downtown Class A had the lowest vacancy in Manhattan at 3.9%,
  the lowest since 2001. This represented a 320 basis point drop
  since 2006. Class A average asking rents rose 13% to $54.50 per SF.
  The downtown benefited from its relatively discounted rents
  compared to Midtown.
• Construction continued on two major trophy buildings: the Goldman
  Sachs Tower, due for completion in 2009, and the Freedom Tower,
  due for completion in 2012.
• Among the submarkets, World Trade saw a marked drop in vacancy,
  and the highest Class A average asking rent at $74.68 per SF.
  Leasing activity was strong, most recently with Omnicom taking
  184,000 SF at 195 Broadway in a move from Midtown.
New York, Downtown Manhattan Outlook
• Downtown will see vacancy increase as some availability from
  Goldman Sachs enters the market due to the early-2009 opening
  of its World Financial Center headquarters tower.
• Sublease availability may rise as financial service firms and others
  cut back on staff.
• Asking rents will be restrained due to impending vacancies.
• Downtown will remain popular as a relocation option for firms
  with leases expiring in the most costly Midtown submarket.
• Additional construction should begin at the World Trade Center
  site with Towers 2, 3 and 4 totaling 6.5 million SF.




DOWNTOWN MANHATTAN OFFICE
            Inventory        New      Absorption Vacancy Class A Cap Rate
               (SF)       Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999 101,469,000            0 2,255,000                  8.2        37.00      –
2000 101,469,000            0 4,021,000                  4.5        46.20   9.00
2001  88,069,000 (13,400,000)(19,195,000)               11.4        42.50   9.00
2002  88,069,000            0 (2,742,000)               14.4        36.40   8.00
2003  88,069,000            0     446,000               14.2        33.90   7.10
2004  88,069,000            0     536,000               13.6        33.60   7.10
2005  88,069,000            0 2,494,000                 11.3        33.80   5.50
2006  89,744,000 1,675,000 3,217,000                     8.9        48.40   5.50
2007  89,744,000            0 1,895,000                  6.8        54.50   5.30
2008P 89,744,000            0     710,000                6.0            –      –




P = Projection. Please see Glossary page for explanation.

46       CONTACT: Nicola Heryet • nheryet@colliersabr.com l RESEARCH: Robert Sammons • robert.sammons@colliers.com
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NEW YORK, NY
OFFICE
New York – Westchester County, NY                                            New York – Fairfield County, CT
• Westchester County’s Class A vacancy rate closed the year down just        • Fairfield County performed better than Westchester County with its
  10 basis points from 20.3% to 20.2%.                                         Class A vacancy rate ending the year at 16.5%, down approximately
• The White Plains submarket had a sluggish year due primarily to the          100 basis points for the year.
  subprime mortgage meltdown, though the Class A vacancy rate                • Stamford saw its vacancy rate close 2007 at 21.3%. The average
  pulled back to 25.6% from almost 30% a year ago.                             asking rent jumped approximately 63%.
• The Class A average asking rent climbed just over 10% to close at          • The greater Greenwich submarket performed well, remaining red-hot
  almost $31 per SF. For White Plains, asking rents jumped 14% to              with demand from financial service firms and hedge funds. Class A
  over $32 per SF. This was the first major annual jump in average             average asking rents jumped a whopping 63%.
  asking rents since 1998 though that paled in comparison.                   • Investment sales hit new heights with steep prices recorded in
• There were fewer leasing transactions than expected by New York              Stamford ($518 per SF for the seven-building EOP portfolio) and
  City firms looking for less expensive space in Westchester County –          Greenwich ($1,083 per SF for 55 Railroad Avenue).
  this was both due to the changing economy as well as the desire of
                                                                             New York – Fairfield County, CT Outlook
  companies to remain in Manhattan.
                                                                             • Fairfield County, heavy with financial service firms, could see an
New York – Westchester County, NY Outlook                                      increase in availability due to the economic downturn. UBS, with
• The vacancy rate for Westchester County will remain steep at least           major operations in Stamford, announced global layoffs though it’s
  through mid-year 2008 as tenants cut back on their space needs.              unclear how many of these cuts will be here.
• The average asking rent is expected to flatten once again or even fall     • Asking rents should remain flat for Fairfield County though
  somewhat after a rather sharp increase in 2007.                              Greenwich may see increases due to high tenant demand plus
• Only one office property is due to be delivered in 2008 – a 53,000 SF        with no new inventory.
  building in Armonk.                                                        • No major office buildings are due to come on-line in 2008 though
• Sales prices will most likely remain subdued as investors focus on core      25 office developments are proposed.
  assets in major markets.                                                   • The saving grace for Stamford for 2008 may be hedge funds, fed up
• Additional layoffs in financial and professional services will push the      with the lack of space and pricing in Greenwich, looking to this less
  unemployment rate closer to 4%.                                              expensive submarket.




WESTCHESTER COUNTY, NY SUBURBAN OFFICE                                       FAIRFIELD COUNTY, CT SUBURBAN OFFICE
         Inventory       New      Absorption Vacancy Class A Cap Rate                    Inventory        New      Absorption Vacancy Class A Cap Rate
            (SF)      Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                       (SF)       Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999             –           –           0       –            –       –      1999               –              –           0            –       –      –
2000             –           –           0       –            –       –      2000               –              –           0            –       –      –
2001    39,873,000           0 (2,074,000)    16.5        26.30       –      2001      60,241,000              0 (3,797,000)         14.1   30.80      –
2002    39,873,000           0     704,000    14.8        26.10    8.00      2002      60,241,000              0 (1,810,000)         17.3   30.80   7.50
2003    39,873,000           0     407,000    13.7        27.00    7.00      2003      60,241,000              0      29,000         17.3   28.80   8.00
2004    39,873,000           0 (991,000)      16.2        27.60    7.50      2004      60,241,000              0    (73,000)         17.4   28.60   7.50
2005    39,873,000     788,000 1,231,000      15.1        27.20    6.00      2005      61,510,000      1,269,000 1,640,000           15.6   28.00   6.50
2006    43,423,000           0 (711,000)      15.5        27.60    6.75      2006      61,510,000              0     932,000         14.1   30.40   5.40
2007    43,823,000           0      95,000    16.1        30.60    5.80      2007      61,510,000              0     114,000         14.0   34.70      –
2008P   43,823,000           0     312,000    15.4            –    5.75      2008P     61,510,000              0     449,000         13.3       –      –
                                                                             METROPOLITAN INDICATORS – 2008

                                                                                • Gross Metro Product Percent Change: 0.8
                                                                                • Total Employment Increase/Decrease: 3,711
                                                                                  Percent Change: 0.7
                                                                                • Unemployment Rate: 5.5
                                                                                • Population (000): 11,564.6
                                                                                Source: Moody’s Economy.com



                                                                             P = Projection. Please see Glossary page for explanation.

                     CONTACT: Nicola Heryet • nheryet@colliersabr.com l RESEARCH: Robert Sammons • robert.sammons@colliers.com                        47
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OAKLAND, CA
OFFICE                                                                       INDUSTRIAL
• Despite sluggish leasing activity, most of Oakland’s submarkets            • Oakland’s industrial market remained healthy, with a slight increase
  experienced rapidly escalating rents. The average asking rent for both       in vacancy to 6.7%. This bump was attributed to several larger
  Class A and B/C and flex categories rose to $2.23 per SF per month,          vacant facilities remaining unleased. Absorption for the year
  nearly a 10% increase from 2006.                                             was negative 1,607,400 SF.
• Class A rents increased by 15% to $2.74 per SF per month.                  • The warehouse/distribution sector was the most active, with
  Emeryville led the charge where rents rose to $3.00 per SF per month.        3.9 million SF of leasing and sales activity by the end of the third
• Downtown Oakland had a surge in rents to $2.72 per SF per month.             quarter. The vacancy rate for warehouse/distribution product
  Asking rents in Oakland remained lower than San Francisco,                   increased slightly to 5.3%.
  enticing tenants to Oakland.                                               • Vacancy rates for light industrial and R&D/flex product also rose
• The metro-wide vacancy rate increased during 2007 due to the                 slightly to 6.6% and 15.5% respectively. Asking rents for the overall
  addition of two new buildings – Center Twenty One in downtown                market remained steady at $0.46 NNN per SF per month.
  and EmeryStation East in Emeryville.                                       • Larger tenants such as Simpson Strong Tie, Albertson’s, Sears, and
                                                                               Pechiney Plastics shut down their local operations. Local developers
Office Outlook                                                                 and investors stepped in to redevelop these facilities into more
• The Southern end’s Marina Village, Harbor Bay and the Oakland                functional industrial space for smaller users.
  Airport, which all had vacancy rates over 20%, will see improvement
  in 2008 as the overall region tightens.                                    Industrial Outlook
• The 1100 Broadway project involves the historic renovation of the          • The Oakland metropolitan area will continue to be active in all
  Key Systems building plus twenty stories of new office space.                market segments. The lack of available developable land, rising
                                                                               development costs, and a strong economy will ensure that the area’s
                                                                               commercial real estate market remains tight throughout future
                                                                               economic swings.
                                                                             • There has been much turmoil in the financial markets over the
                                                                               subprime loan crash, but it is unknown yet how this may affect
                                                                               the industrial market. The biggest concern is an overall economic
                                                                               slowdown or recession.




DOWNTOWN OFFICE                                                              INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                  Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                     (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999    12,641,000           0     515,000     7.6        30.00       –      1999    127,054,000 1,619,000 3,135,000            5.3       6.20       –      –
2000    12,641,000           0     334,000     4.8        51.20    8.50      2000    127,964,000 910,000 3,455,000              3.8      10.40       –      –
2001    12,641,000           0   (278,000)     8.9        37.20    8.50      2001    129,529,000 1,565,000 (4,148,000)          8.0       5.70   14.00   8.70
2002    13,169,000     528,000   (238,000)    15.5        26.70   10.00      2002    130,417,000 888,000 (1,544,000)            9.3       4.60    8.29   8.50
2003    13,169,000           0   (130,000)    15.7        26.20    9.00      2003    130,586,000 169,000 276,000                9.1       4.50   11.00   7.20
2004    13,169,000           0     124,000    14.6        24.40    8.00      2004    130,921,000 335,000 1,494,000              8.0       4.20   12.00   7.40
2005    13,169,000           0     212,000    12.7        25.70    7.40      2005    131,078,000 157,000 1,895,000              6.7       4.30   13.62   8.60
2006    13,169,000           0     101,000    11.9        28.20    7.40      2006    131,170,000    92,000 1,712,000            5.4       5.16   17.00   7.50
2007    13,384,000     215,000   (107,000)    14.2        32.60    6.50      2007    131,233,000    63,000 (1,607,000)          6.7       5.52   29.37   6.00
2008P   13,384,000           0     207,000    12.6            –       –      2008P   131,284,000    51,000 2,204,000            5.0          –       –      –

SUBURBAN OFFICE                                                              METROPOLITAN INDICATORS – 2008
         Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                                • Gross Metro Product Percent Change: 1.8
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999     8,934,000   1,741,000 1,957,000       5.3        30.00       –         • Total Employment Increase/Decrease: 339
2000     9,818,000     884,000 3,204,000       1.7        44.00    8.25           Percent Change: 0.3
2001    12,731,000   2,913,000 (396,000)      12.9        35.30    8.00
                                                                                • Unemployment Rate: 5.1
2002    14,073,000   1,342,000 (1,129,000)    17.8        28.20    8.50
2003    15,077,000   1,004,000 1,431,000      16.3        23.50   10.80         • Population (000): 2,521.5
2004    15,077,000           0 (277,000)      19.8        24.10    7.70
2005    15,113,000      36,000     836,000    14.4        25.40    7.50         Source: Moody’s Economy.com
2006    15,113,000           0      (9,000)   17.3        28.10    7.50
2007    15,749,000     249,000     270,000    16.4        30.20    4.40
2008P   15,749,000           0     237,000    14.9            –       –      P = Projection. Please see Glossary page for explanation.

48      CONTACT: Mike Burke • mburke@colliersparrish.com l RESEARCH: Glenda Cheng • glenda.cheng@colliers.com
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ORANGE COUNTY, CA
OFFICE                                                                       INDUSTRIAL
• The downturn in the mortgage finance industry, which is highly             • Strong demand and a lack of available space caused rents to climb
  concentrated in Orange County, was largely responsible for negative          by over 15%. This marked record-high rates for Orange County and
  absorption of over 1.6 million SF in 2007.                                   registered amongst the highest in the Los Angeles Basin.
• Space givebacks outpaced demand causing vacancy rates to increase          • Sales and leasing activity and absorption remained low due primarily
  from 9% to 15% over the year.                                                to a lack of available space.
• The recent decline in demand clashed with the delivery of several          • Construction activity remained at a low level due to a general lack
  large office projects. In 2007, 3.1 million SF of new office space           of vacant land and high land prices. Approximately 1,126,000 SF of
  was completed.                                                               new construction was delivered in 2007.
• Despite these trends, asking rental rates in Orange County climbed         • Average sale prices dropped slightly, bucking the robust growth from
  by 11.1% in 2007.                                                            2002 through early 2006.
• Higher interest rates and fewer buyers for investment properties           Industrial Outlook
  caused cap rates to increase slightly over the past year.
                                                                             • With almost no new construction and vacancy rates close to their
Office Outlook                                                                 all-time lows, the market should continue to see upward pressure
• As the market tilts toward the tenant; landlord concessions will             on lease rates.
  become more abundant in 2008.                                              • There will be a continued decline in vacancy rates over the next six
• An additional 1.2 million SF of office construction is underway.             to twelve months, with very tight market conditions.
• It is likely that vacancy rates may climb another one to two               • Lack of available space in the County will continue to limit the
  percentage points as new space comes on line and the mortgage                amount of activity that can take place.
  and finance industries continue to contract.                               • Current and planned projects total less than one million SF; the
• The growth in rental rates is expected to level off in 2008.                 outlook is for continued tight market conditions.
• Cap rates are expected to increase 80 to 100 basis points; and there
  may be fewer leveraged buyers. Although Class A product will hold
  steady due to demand from institutional and cash investors, prices for
  value-add property will soften.




SUBURBAN OFFICE                                                              INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                  Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                     (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999             –            –           –      –            –    9.00      1999              –         –         0              –         –       –   8.50
2000             –            –           –      –            –    9.20      2000              –         –         0              –         –       –   8.40
2001    68,769,000    3,522,000 (644,000)     17.7        31.10    9.10      2001              –         –         0              –         –       –   8.90
2002    69,855,000    1,086,000     288,000   18.8        29.80    8.50      2002    204,298,000 892,000 (1,458,000)            6.6      7.00   14.00   8.25
2003    70,862,000    1,007,000 2,918,000     16.2        27.40    7.75      2003    205,521,000 1,223,000 2,083,000            6.6      7.20   17.00   7.60
2004    70,897,000       35,000 2,580,000     12.4        27.90    7.75      2004    206,153,000 632,000 5,218,000              4.5      6.50   13.63   7.50
2005    71,003,000      106,000 3,021,000      8.0        31.30    6.50      2005    206,663,000 510,000 2,667,000              3.6      7.20   23.00   7.00
2006    71,977,000      974,000     204,000    9.0        34.30    5.90      2006    207,969,000 1,306,000 498,000              4.0      8.40   32.00   6.00
2007    74,972,000    3,128,000 (1,635,000)   15.2        38.30    5.70      2007    206,491,000 1,126,000 613,000              3.9      8.58   32.00   6.30
2008P   75,778,000      806,000           0   16.1            –       –      2008P   206,991,000 500,000 505,000                3.9         –       –      –
                                                                             METROPOLITAN INDICATORS – 2008

                                                                                • Gross Metro Product Percent Change: 1.1
                                                                                • Total Employment Increase/Decrease: -695
                                                                                  Percent Change: -0.5
                                                                                • Unemployment Rate: 4.4
                                                                                • Population (000): 3,028.7
                                                                                Source: Moody’s Economy.com



                                                                             P = Projection. Please see Glossary page for explanation.

                           CONTACT: Carla Gazzolo • carla.gazzolo@colliers.com l RESEARCH: Michael Gold • michael.gold@colliers.com                        49
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ORLANDO, FL
OFFICE                                                                      INDUSTRIAL
• One of the largest transactions in 2007 was the sale of the One           • The industrial market continued to be the strongest market
  Orlando Centre building for $90,625,000 or $255.28 per SF.                  in Central Florida in terms of vacancy, demand and growth.
  The buyer was EOLA Capital and the seller was The Praedium                  Vacancy edged down half a percent to 6.2%.
  Group LLC.                                                                • Industrial land was hard to come by. Nearly all developable and
• The current unemployment rate for Central Florida remained                  available industrial land throughout Central Florida had either
  at a positive level of 4% and was unchanged since mid-year.                 been bought or was being developed, contributing to the increase
                                                                              in land values.
Office Outlook
                                                                            • New construction activity continued to thrive with over 3.4 million
• The office market is forecasted to remain fairly unchanged and              SF completed in 2007. Rental rates increased throughout 2007 and
  comparable to the current statistics. Rental rates will continue to         registered $5.84 per SF at year-end.
  rise but at a slower pace and vacancy will fall as demand slowly
  catches up to supply.                                                     • One of the larger transactions in 2007 was the sale of the Agere
                                                                              Systems Campus on South John Young Pkwy. The property of
• Going beyond 2009 construction is anticipated to slow compared to           1.37 million SF sold for $50 million.
  previous years due to the restrictive conditions experienced in the
  lending and credit markets across the nation.                             Industrial Outlook
• The Southeast region of Orlando and Orange County is positioned           • In the coming year, the Orlando industrial market is positioned
  to experience strong growth within the coming years. Known as the           to continue with its strong performance.
  “Medical City” of Lake Nona this area will include the University         • Vacancy will continue to fluctuate near current levels as projects
  of Central Florida’s Medical School, Burnham Institute for Medical          under construction are delivered to the market.
  Research, a new VA Hospital and Nemours Children’s Hospital.              • In the long term outlook, many new opportunities will be formed as
                                                                              the main rail line used will be converted over to the commuter rail
                                                                              and rail traffic will shift to the west of Orlando. This will open up
                                                                              many new opportunities for industrial parks and structures along
                                                                              the new rail line.
                                                                            • Rental rates are forecasted to remain nearly unchanged with slight
                                                                              increases throughout 2008.




DOWNTOWN OFFICE                                                             INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999     9,102,000     337,000     216,000    6.1        25.20         –    1999    108,221,000     813,000    (339,000)       7.2         –      –      –
2000     9,859,000     757,000     414,000    9.0        25.40      9.25    2000    110,067,000   1,846,000    1,658,000       7.3      5.90      –      –
2001     9,945,000      86,000   (104,000)   12.0        25.30      9.25    2001    113,647,000   3,580,000    2,859,000       9.4      4.20   3.00   9.75
2002     9,945,000           0   (149,000)   11.8        23.60      9.20    2002    115,253,000   1,606,000      924,000      10.1      4.30   3.50   8.50
2003    10,165,000     220,000     135,000   12.5        22.80      9.70    2003    116,680,000   1,427,000    (154,000)      11.6      4.10   2.60   9.15
2004    10,165,000           0      13,000   11.1        21.00      8.50    2004    119,916,000   3,236,000    6,191,000       8.6      4.50   3.63   9.00
2005    10,430,000     265,000      81,000   11.9        24.00      8.00    2005    121,766,000   1,850,000    2,909,000       8.1      4.75   4.00   8.40
2006    11,007,000     577,000     927,000    8.0        26.50      7.50    2006    124,522,000   2,756,000    4,344,000       6.7      5.25   6.50   7.30
2007    11,334,000      26,000     323,000    8.5        27.90      6.50    2007    131,790,000   3,403,000    2,197,000       6.2      5.84   4.50   7.00
2008P   11,590,000     256,000     301,000    7.9            –         –    2008P   133,837,000   2,047,000    3,585,000       5.0         –      –      –

SUBURBAN OFFICE                                                             METROPOLITAN INDICATORS – 2008
         Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                               • Gross Metro Product Percent Change: 2.9
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    35,628,000     490,000     438,000    6.8        18.00         –       • Total Employment Increase/Decrease: 2,237
2000    37,565,000   1,937,000   2,212,000    7.9        19.80      9.25         Percent Change: 2.0
2001    40,178,000   2,613,000     672,000   11.6        20.60      9.25
                                                                               • Unemployment Rate: 4.2
2002    41,011,000     833,000     187,000   12.4        20.30      9.30
2003    41,729,000     718,000    (97,000)   14.1        20.20      9.70       • Population (000): 2,076.1
2004    42,131,000     402,000     291,000   11.9        19.70      8.50
2005    42,454,000     323,000   1,204,000    8.9        19.00      9.00       Source: Moody’s Economy.com
2006    43,590,000   1,136,000   1,703,000    7.6        22.60      8.60
2007    47,286,000   1,614,000     402,000    9.9        25.10      6.50
2008P   49,272,000   1,986,000   1,235,000   11.0            –         –    P = Projection. Please see Glossary page for explanation.

50      CONTACT: Matt Sullivan • msullivan@colliersarnold.com l RESEARCH: Danny Rice • danny.rice@colliers.com
C O L L I E R S I N T E R N AT I O N A L              l   U S R E A L E S TAT E R E V I E W 2 0 0 8



PHILADELPHIA, PA
OFFICE                                                                        INDUSTRIAL
• The office market experienced strong build-to-suit activity, but            • Absorption was strong, boosted by major build-to-suit projects in
  speculative projects were slow to lease and absorb.                           the Lehigh Valley and Southern New Jersey.
• There were eight new office leases of over 100,000 SF during the            • The inner-ring counties had very few industrially-zoned parcels
  first half of the year and only two during the last half.                     of land available for development. Land prices reflected the
• The largest investment transactions involved REITs realigning                 short supply.
  portfolios or acquiring assets through corporate mergers.                   • Demand for user sales remained high despite a lack of quality
• Downsizing in the mortgage industry resulted in a loss in occupancy           buildings for sale in all size ranges. The volume of investment
  in a few suburban submarkets, but have not had a major impact on              sales dropped off as a result of the increasingly stringent lending.
  the Philadelphia office market overall.                                       Sale prices began to level off and cap rates rose.
                                                                              • Asking rents increased during the first six months, but leveled off
Office Outlook                                                                  in the last two quarters. Quoted rents for bulk warehouse space
• Asking rents are forecasted to remain flat, but not decrease in 2008.         were adjusted down because of increased competition.
  Landlords are likely to increase concessions rather than drop rates.
• Due to the cost of new construction and longer stabilization                Industrial Outlook
  proformas, landlords, particularly REITs, who have new construction         • A disputed and postponed plan to dredge the shipping channel on
  and second generation vacancies, are likely to be more aggressive in          the Delaware River is finally moving forward, which will boost the
  leasing their existing product. This will result in a slower lease-up         capability of the Ports of Philadelphia and New Jersey. As a result,
  time for new construction.                                                    a major expansion of the Port of Philadelphia is planned, which
• Investment sales activity is likely to be constrained due to stricter         includes 400,000 SF of new warehouse space.
  lending requirements for potential buyers but also a lack of offerings.     • Flip sales and other value added acquisitions that were common
  However, there is a sizeable suburban portfolio on the market as well         during the last two years will be difficult to finance. There will still
  as a few major CBD buildings.                                                 be opportunities for well-located, credit-tenant leased properties;
                                                                                however, offerings of this type of product will remain limited.




DOWNTOWN OFFICE                                                               INDUSTRIAL
          Inventory      New      Absorption Vacancy Class A Cap Rate                  Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                     (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999     27,984,000     215,000 1,517,000      10.7        25.00       –      1999    393,268,000     350,000     1,227,000     13.1      2.50      –      –
2000     27,984,000           0     727,000     8.8        28.40    9.00      2000    395,853,000   2,585,000     3,446,000      8.5      3.90      –      –
2001     27,984,000           0 (1,349,000)    12.3        23.50    9.25      2001    402,239,000   6,386,000   (2,422,000)     12.7      4.00   2.53   9.50
2002     27,984,000           0 (816,000)      14.4        23.00    8.50      2002    403,643,000   1,404,000   (6,367,000)     13.8      4.00   2.50   8.50
2003     27,984,000           0     561,000    13.0        23.30    9.25      2003    404,829,000   1,186,000     4,281,000     12.3      4.00   2.90   9.00
2004     27,984,000           0     244,000    12.4        23.30    9.25      2004    409,128,000   4,299,000     5,782,000     12.2      4.00   3.04   9.50
2005     28,937,000     953,000      68,000    13.9        23.20    7.30      2005    413,972,000   4,844,000   11,390,000      10.5      4.25   4.00   8.00
2006     28,937,000           0     556,000    12.4        23.70    7.50      2006    418,115,000   4,143,000   10,810,000       8.6      4.75   4.00   6.80
2007     41,464,000   1,253,000 2,060,000      10.7        25.50    7.50      2007    419,301,000   6,372,000     8,167,000      7.9      4.75   3.44   7.70
2008P    41,464,000           0     647,000     9.1            –       –      2008P   424,336,000   5,035,000     6,741,000      7.4         –      –      –

SUBURBAN OFFICE                                                               METROPOLITAN INDICATORS – 2008
          Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                                 • Gross Metro Product Percent Change: 1.7
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999     90,902,000   1,885,000     699,000     7.9        25.00       –         • Total Employment Increase/Decrease: 622
2000     92,660,000   1,758,000 (1,741,000)     9.4        23.50    8.50           Percent Change: 0.3
2001     95,441,000   2,781,000 (1,465,000)    13.2        24.00    9.25
                                                                                 • Unemployment Rate: 4.8
2002     97,714,000   2,273,000 (1,003,000)    13.7        23.00    8.75
2003     99,488,000   1,774,000 (880,000)      17.4        24.30    9.50         • Population (000): 3,885.5
2004    100,675,000   1,187,000 1,900,000      16.1        23.30    9.50
2005    101,443,000     768,000 1,197,000      15.5        22.90    7.30         Source: Moody’s Economy.com
2006    103,086,000   1,643,000 2,834,000      13.9        22.95    7.00
2007    107,729,000   2,789,000 2,640,000      13.6        24.70    7.50
2008P   108,446,000     717,000 1,624,000      12.7            –       –      P = Projection. Please see Glossary page for explanation.

                                     CONTACT: Greg West • greg.west@colliers.com l RESEARCH: Rose Penny • rose.penny@colliers.com                          51
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PHOENIX, AZ
OFFICE                                                                        INDUSTRIAL
• Phoenix’s office absorption totaled over 2.5 million SF for 2007.           • Year-end absorption activity posted 4.73 million SF. Warehouse/
  Markets recording the most activity were the Northwest Valley                 distribution projects experienced the most activity, recording
  at 1.23 million SF and the Southeast Valley at 701,400 SF.                    2.88 million SF of absorption.
• Office vacancy rates fluctuated during 2007 with the year ending            • New construction posted 6.82 million SF. The pipeline of new
  at 13.2%.                                                                     projects increased during the fourth quarter with 7.91 million SF
• Office deliveries totaled 6.62 million SF at year-end, a significant          under construction, and actively proposed projects at 17.8 million SF.
  jump from the 1.9 million SF seen in 2006. Under construction               • The vacancy rate posted 10.1 %, up from 9% seen in 2006.
  was 7.27 million SF, the highest level in several years.                      Increases in vacancy were caused mainly by massive new
• Office sales activity remained strong. Total sales volume posted              construction deliveries.
  $769 million with the average price posting $191.14 per SF.                 • Asking rents for first generation space increased slightly in 2007 from
• The economic base in metro Phoenix is extremely diverse.                      $0.70 per SF per month in 2006 to $0.75 per SF per month.
  Recent industries driving the majority of activity were as follows:         • The average investment sales price was $86.50 per SF, while the
  high-tech (semiconductors), aerospace, advanced business                      average cap rate registered 7.0 %.
  services, transportation, distribution & wholesale trade, tourism
  and retirement & second home.
                                                                              Industrial Outlook
                                                                              • The only stressed area of the metro Phoenix economy, the housing
Office Outlook                                                                  market, is projected to rebound in late 2008 or 2009 according to the
• High levels of new office construction activity and slightly                  Greater Phoenix Blue Chip Panel.
  decreasing absorption volume are expected to cause vacancy                  • Projections indicate industrial absorption levels in 2008 will be
  rates to increase.                                                            slightly reduced from previous years, but demand will remain
• The economic outlook for Arizona and the metro Phoenix area                   firmly in place.
  remains positive with forecasts calling for a slower rate of growth         • 2008 will be another banner year for development and construction
  than what was experienced over the last several years.                        activity as long as the demand for new product remains strong.
• While demand is expected to be slightly less than what was
  experienced in prior years, continued high levels of job creation
  and population inflow will continue to drive activity forward.




DOWNTOWN OFFICE                                                               INDUSTRIAL
          Inventory      New      Absorption Vacancy Class A Cap Rate                  Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                     (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999     19,097,000     399,000   (128,000)     9.2        29.40        –     1999    200,362,000   9,447,000    6,918,000       8.2      5.70       –     –
2000     19,111,000      14,000   (185,000)    10.5        22.00        –     2000    206,071,000   5,709,000    5,069,000       8.3      4.00       –     –
2001     20,237,000   1,126,000   (115,000)    17.0        21.80        –     2001    212,248,000   6,177,000    2,491,000      10.1      4.80    2.84     –
2002     20,237,000           0   (449,000)    18.6        18.40    10.40     2002    217,498,000   5,250,000    1,338,000      12.1      5.40    5.47 10.60
2003     20,362,000     125,000   (109,000)    19.0        17.50     9.40     2003    220,398,000   2,900,000      215,000      13.2      5.90    4.50 9.90
2004     20,530,000     168,000     111,000    18.3        19.40     8.25     2004    224,101,000   3,703,000    4,546,000      11.4      5.80    1.80 7.80
2005     20,530,000           0     976,000    15.1        21.20     7.25     2005    228,470,000   4,369,000    8,766,000       9.5      6.30    4.58 7.70
2006     20,530,000           0   1,165,000    10.6        21.40     7.50     2006    236,932,000   8,462,000    9,351,000       9.0      6.54    5.68 7.00
2007     19,076,000     150,000   (188,000)    13.1        28.10        –     2007    219,479,000   6,828,000    4,733,000      10.1      5.98   15.46 7.10
2008P    19,647,000     571,000    (66,000)    16.0            –        –     2008P   225,395,000   5,916,000    (789,000)      12.8         –       –     –

SUBURBAN OFFICE                                                               METROPOLITAN INDICATORS – 2008
          Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                                 • Gross Metro Product Percent Change: -0.4
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999   65,406,000     5,630,000   2,392,000    11.3        27.90        –        • Total Employment Increase/Decrease: -2,976
2000   68,960,000     3,554,000   3,920,000    10.1        24.00     9.50          Percent Change: -1.5
2001   74,361,000     5,401,000   1,785,000    16.9        24.00     9.85
                                                                                 • Unemployment Rate: 3.6
2002   77,433,000     3,072,000   1,457,000    17.9        20.90    10.05
2003   79,118,000     1,685,000   2,618,000    16.1        20.10     9.00        • Population (000): 4,226.1
2004   82,569,000     3,451,000   2,694,000    15.8        23.00     8.80
2005   85,351,000     2,782,000   5,676,000    13.5        22.70     7.85        Source: Moody’s Economy.com.
2006   87,275,000     1,924,000   5,020,000    12.9        23.40     6.80
2007 105,382,000      6,476,000   2,693,000    14.5        28.20     6.20
2008P 109,724,000     4,342,000   (360,000)    18.2            –        –     P = Projection. Please see Glossary page for explanation.

52      CONTACT: Mike Fitz-Gerald • mike.fitz-gerald@colliers.com l RESEARCH: Stewart Park • stewart.park@colliers.com
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PLEASANTON/WALNUT CREEK, CA
OFFICE                                                                         INDUSTRIAL
• Technology and financial companies not related to real estate took           • Pleasanton’s vacancy rates slowly edged downward but not enough to
  office space, while companies related to home building including               push the market rents up.
  construction, finance, and sales continued to give back space.               • The majority of local tenants continued to renew their existing leases
• Record high office building sales prices artificially pushed                   as opposed to relocating due to growth.
  rents up regardless of actual tenant demand and in spite of                  • Deal velocity dropped dramatically during the second half of 2007.
  increasing vacancies.                                                          The industrial market continued to show only moderate leasing
• The Lafayette Mercantile completed construction in the                         activity in the last half of the year.
  fourth quarter.                                                              • Sales remained the strongest part of the market, especially for owner/
• Deal velocity dropped during the second half of 2007.                          users looking to take advantage of low interest rates and favorable
• The sale of Vodafone Plaza and pending sale of Treat Towers will               loan structures such as the SBA 504 loan. Prices of small light
  be two of the most significant transactions towards the end of 2007.           industrial buildings hit record highs in the $200 to $250 per SF range.
                                                                               • Completion of new Benicia bridge induced more Concord area
Office Outlook                                                                   companies to look at relocating to Benicia.
• The opening of the Highway 4 Bypass will ease traffic for commuters          • Opportunities for purchases of developable land remained limited due
  going to and from Brentwood.                                                   to geographical constraints.
• The housing market will continue to slow.
                                                                               Industrial Outlook
                                                                               • Vacancy rates are expected to decrease as companies continue to
                                                                                 migrate from San Francisco and Silicon Valley.
                                                                               • As rents rise in other Bay Area cities and available space becomes
                                                                                 limited, the Tri-Valley will be an attractive place for companies to
                                                                                 relocate which will allow landlords to push up the asking rents.
                                                                               • Construction will slow as existing space is waiting to be absorbed.
                                                                                 With the short supply of land, land values will continue their upward
                                                                                 trend, driving many types of users out of this market.
                                                                               • The East Bay region will continue to experience an outpace of private
                                                                                 educators, healthcare services, financial services and food services
                                                                                 compared to surrounding cities in 2008.




DOWNTOWN OFFICE                                                                INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                    Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                       (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999             –            –           0      –            –   8.38         1999             –            –         0            –         –       –      –
2000             –            –           0      –            –   8.00         2000             –            –         0            –         –       –      –
2001             –            –           0      –            –   7.50         2001             –            –         0            –         –       –   8.70
2002             –            –           0      –            –   7.50         2002             –            –         0            –         –       –   8.50
2003             –            –           0      –            –   7.00         2003             –            –         0            –         –       –   7.20
2004    21,465,000            0     354,000   12.2        26.10   6.75         2004    31,804,000       66,000 206,000            8.6      4.80   10.00   7.20
2005    21,465,000            0     783,000   11.1        25.80   5.60         2005    31,933,000       88,000    39,000          8.6      4.35   10.17   7.00
2006    21,085,000    (380,000)   (256,000)   11.3        26.90   5.50         2006    32,966,000      126,000     1,000          8.6      4.93   10.55   7.00
2007    21,163,000       78,000   (112,000)   12.2        28.10   6.00         2007    33,313,000      346,000 (391,000)         10.1      4.80   12.27   7.00
2008P   21,301,000      138,000     335,000   11.2            –      –         2008P   33,380,000       67,000 539,000            8.7         –       –      –

SUBURBAN OFFICE                                                                METROPOLITAN INDICATORS – 2008
         Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                                  • Gross Metro Product Percent Change: 1.8
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999             –           –            0      –            –   8.88            • Total Employment Increase/Decrease: 339
2000             –           –            0      –            –   8.50              Percent Change: 0.3
2001             –           –            0      –            –   8.00
                                                                                  • Unemployment Rate: 5.1
2002             –           –            0      –            –   8.00
2003             –           –            0      –            –   7.50            • Population (000): 2,521.5
2004    18,499,000           0      185,000   13.6        22.90   7.25
2005    18,499,000           0      321,000   10.5        24.40   6.10            Note: Metropolitan Indicators are for Oakland
2006    20,899,000   2,400,000    1,256,000   13.5        26.40   5.75            Source: Moody’s Economy.com
2007    21,001,000     104,000        2,000   13.9        27.20   6.60
2008P   21,113,000     112,000      326,000   12.8            –      –         P = Projection. Please see Glossary page for explanation.

CONTACT: Mike Burke • mburke@colliersparrish.com l RESEARCH: Lisa Kohler • lisa.kohler@colliers.com Kevin Bailey • kevin.bailey@colliers.com                 53
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PORTLAND, OR
OFFICE                                                                      INDUSTRIAL
• The fastest growing sectors driving demand were the construction and      • Industrial new construction was planned for 6.68 million SF with
  financial industries. Growing companies were the Sabre Corp.,               3.44 million SF under construction as of year-end 2007. The largest
  InsightsNow Inc., and Korvis Automation.                                    delivery this year, Bybee Lake Logistics Center, Phase II added
• Despite trouble nationally in the residential market, Portland’s home       290,400 SF to the Portland industrial supply. The largest project
  prices increased 6.5% in 2007.                                              under construction was Rivergate Corporate Center’s Phase III with
• Developers started new office projects. New construction totaled            an additional 573,400 SF of space.
  324,000 SF with 1.29 million SF under construction including              • The vacancy rate registered 7.3%, down drastically from 9.6%
  multiple buildings in CBD.                                                  year-end 2006.
• The vacancy rate registered 10.6% at year-end 2007, down from             • Sizeable leases signed during the year included Bybee Lake Logistics
  11.7% year-end 2006.                                                        Center, Phase II leasing 136,000 SF, Allegro Corporation leasing
• The largest leases signed in 2007 involved Farmer’s Insurance               131,000 SF. The largest sale involved SolarWorld’s 419,200 SF for
  committing to 103,300 SF, and Waggener Edstrom Worldwide                    $40 million or $95.43 per SF.
  opting for 70,100 SF. The largest sale to occur in Portland in the        • The largest land sale involved the property at NE 117th Ave,
  year was the purchase of Shorenstein’s portfolio of fifty properties        Vancouver. A total of 25.57 acres sold for $5.5 million or
  for $1.125 billion.                                                         $4.94 per SF.
• Land sales volume and prices are up from 2006. Largest commercial         Industrial Outlook
  land sale in the metro area was 75 acres for $17.8 million.               • The industrial market is expected to continue steady growth through
• TriMet began construction on the MAX light rail line at the                 2008, with slowing starting at the end of the year as the effects of the
  beginning of 2007. Rail ran from downtown Portland to                       economy start to show up in industrial activity.
  Clackamas County.                                                         • Portland is expected to see continued growth in the “green” industries
Office Outlook                                                                such as wind and solar power companies.
• Several developers have announced intentions to built new Class A
  office buildings in the CBD. The first will be completed in late 2009.
• Home sales in Portland will slow but is not expected to slow down as
  much as other parts of the U.S. This trend is expected to continue.




DOWNTOWN OFFICE                                                             INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999    18,846,000           0      56,000    6.3        27.30       –      1999    141,131,000   2,087,000     1,683,000      8.1      4.10      –      –
2000    19,300,000     454,000     758,000    5.4        25.00    9.50      2000    142,544,000   1,413,000     2,466,000      4.8      3.50      –      –
2001    19,370,000      70,000   (814,000)   11.3        27.00    9.50      2001    143,596,000   1,052,000   (1,219,000)      8.5      5.00   5.50   9.00
2002    20,138,000     768,000   (214,000)   15.1        22.00    9.25      2002    144,532,000     936,000       455,000     16.4      5.00   5.00   9.00
2003    20,326,000     188,000     212,000   12.7        21.00    8.25      2003    146,885,000   2,353,000     2,609,000     16.4      4.80   4.70   8.50
2004    20,326,000           0     113,000   12.8        20.10    8.10      2004    147,998,000   1,113,000     5,001,000     13.9      4.60   4.40   8.00
2005    20,326,000           0     104,000   12.7        20.50    7.00      2005    149,317,000   1,319,000     4,839,000     10.8      4.55   7.61   8.95
2006    20,326,000           0     280,000   11.7        21.30    7.25      2006    151,843,000   2,526,000     4,189,000      9.6      4.71   6.51   7.65
2007    30,565,000           0   1,399,000    8.5        23.60    6.20      2007    149,645,000   2,946,000     4,061,000      7.3      7.60   4.51   7.00
2008P   31,165,000     600,000     755,000    7.8            –       –      2008P   151,895,000   2,250,000     3,745,000      6.2         –      –      –

SUBURBAN OFFICE                                                             METROPOLITAN INDICATORS – 2008
         Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                               • Gross Metro Product Percent Change: 2.7
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    36,516,000     464,000     243,000   10.0        21.50       –         • Total Employment Increase/Decrease: 1,442
2000    37,333,000     817,000   1,306,000    7.9        23.50    9.50           Percent Change: 1.4
2001    38,687,000   1,354,000    (18,000)   12.0        23.00    9.50
                                                                               • Unemployment Rate: 5.1
2002    38,827,000     140,000   (794,000)   14.0        23.00    9.25
2003    40,373,000   1,546,000   (252,000)   17.3        21.00    8.10         • Population (000): 2,201.1
2004    40,930,000     557,000   1,536,000   14.3        20.60    8.00
2005    41,174,000     244,000   1,369,000   10.9        21.80    8.00         Source: Moody’s Economy.com
2006    41,817,000     643,000     442,000   11.7        21.80    7.50
2007    36,429,000     324,000     884,000   11.6        23.90    6.50
2008P   36,779,000     350,000     870,000   10.0            –       –      P = Projection. Please see Glossary page for explanation.

54      CONTACT:Tom Lawwill • tom.lawwill@colliers.com l RESEARCH: Jazmyne Thompson • jazmyne.thompson@colliers.com
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RALEIGH/DURHAM, NC
OFFICE                                                                      INDUSTRIAL
• In 2007, sectors that showed growth included gaming, contract             • The Raleigh/Durham industrial market was fueled by strong
  research organizations, education, healthcare, and government.              business growth in the pharmaceutical and manufacturing sectors.
  Companies which demonstrated high growth were Quintiles                     Facilities for Novartis and Merck were under construction.
  Transnational, Network Appliance, Time Warner, NC State,                  • New development was limited with 400,000 SF developed in 2007.
  UNC, and Duke Universities. Struggling was Biogen Idec.                     Only two projects delivered institutional grade warehouse space.
• Approximately 3 million SF of Class A space was under construction        • Amongst the larger lease deals were Hallmark Cards for 412,000 SF
  for a 2008 and early-2009 delivery. Approximately 35% of the space          at Carolinas Distribution Center, and Amerisource leasing
  was pre-leased.                                                             164,000 SF at Air Park. On the sales side, the 1.5 million SF
• Significant lease signings included Quintiles Transnational leasing         Research Tri-Center traded hands from Transwestern Investment
  250,000 SF of space at Imperial Center, NIEHS taking 80,000 SF at           Services to Grosvenor Investment Management for $105 million.
  Keystone Park, and AKC committing to 75,000 SF at Brier Creek.              Crown West purchased the 1,150,000 SF Carolinas Distribution
• Wind Realty sold a six building portfolio at Meridian Corporate Park        Center from JER Fulcra for $62.25 million.
  for $48 million to America’s Capital Partners, and American Realty        Industrial Outlook
  Investors sold the 300,000 SF Durham Center to Craig Davis
  Properties for $19.2 million. Suburban office land sites sold for         • As vacant space continues to get absorbed, new development is
  between $3 and $9 per SF.                                                   expected to increase.
                                                                            • Very few blocks of institutional grade warehouse space above 100,000
Office Outlook                                                                SF will be available which should drive new construction including a
• In 2008, possible new infrastructure initiatives aiding the                 150,000 SF building at Falls Lake Commerce Center and potentially
  Raleigh/Durham office market include the Durham Expressway                  a 300,000 SF project at the Carolinas Distribution Center.
  extension into RTP as a toll road.                                        • Prices will continue to escalate as it becomes increasingly difficult to
• Over 500,000 SF of existing Class B product will come available             find quality suitable land for larger parks.
  in 2008 and early 2009 as companies relocate to newly constructed
  facilities. Another 3 million SF of Class A projects are planned but
  will not break ground without significant pre-lease commitments.
• For office investment properties, prices will continue to escalate,
  as viable sites become scarcer.




DOWNTOWN OFFICE                                                             INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999     2,842,000       95,000   178,000     6.8            –       –      1999    30,019,000 442,000 1,988,000              11.9         –      –      –
2000     2,933,000       91,000   156,000     5.1        19.00   10.50      2000    30,955,000 936,000 868,000                12.3      4.30      –      –
2001     3,120,000      187,000    46,000     9.8        18.00   10.50      2001    33,895,000 2,940,000 101,000              21.9      4.30   3.00   9.50
2002     3,179,000       59,000    30,000     8.7        18.00    9.50      2002    34,234,000 339,000 (464,000)              26.5      4.00   1.85   9.00
2003     3,226,000       47,000    (3,000)   10.3        18.00   10.00      2003    34,450,000 216,000 (106,000)              27.3      3.50   2.00   8.80
2004     3,513,000      287,000   250,000    10.5        18.00    9.50      2004    34,630,000 180,000 661,000                26.0      3.50   2.00   8.60
2005     3,648,000      135,000   198,000     8.4        19.00    8.25      2005    34,785,000 155,000 1,924,000              21.5      3.75   1.72   8.50
2006     3,712,000       64,000    32,000    10.6        19.30    8.50      2006    34,985,000 200,000 1,413,000              15.5      4.25   2.25   8.00
2007     3,457,000    (198,000)    31,000     6.9        21.00    7.50      2007    38,586,000 400,000 1,911,000              16.3      4.50   2.75   7.25
2008P    3,789,000      332,000    84,000    12.9            –       –      2008P   39,136,000 550,000 839,000                15.4         –      –      –

SUBURBAN OFFICE                                                             METROPOLITAN INDICATORS – 2008
         Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                               • Gross Metro Product Percent Change: 2.6
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    25,217,000   3,586,000 2,551,000      6.9            –       –         • Total Employment Increase/Decrease: 800
2000    28,299,000   3,082,000 2,186,000      7.7        19.50    9.75           Percent Change: 1.6
2001    31,455,000   3,156,000 (2,473,000)   20.0        18.50    9.50
                                                                               • Unemployment Rate: 4.1
2002    32,620,000   1,165,000 (148,000)     21.4        18.00    9.00
2003    33,017,000     397,000     179,000   21.7        18.00    9.25         • Population (000): 1,068.6
2004    34,639,000   1,622,000 1,761,000     19.7        18.00    8.50
2005    35,597,000     958,000 1,625,000     17.1        19.00    7.00         Source: Moody’s Economy.com
2006    37,236,000   1,639,000 1,279,000     15.8        19.80    7.75
2007    38,536,000   1,300,000 1,384,000     15.7        21.60    7.00
2008P   40,511,000   1,975,000     845,000   17.7            –       –      P = Projection. Please see Glossary page for explanation.

         CONTACT: Bob Van Wormer • bvanwormer@collierspinkard.com l RESEARCH: Suzy McPherson • suzy.mcpherson@colliers.com                               55
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RENO, NV
OFFICE                                                                       INDUSTRIAL
• Housing-related industries not only discontinued growth plans,             • 2007 brought the largest construction boom in Northern Nevada
  but put space back on the market in the form of sublease or                  history with 4.3 million SF completed. An additional 2.7 million SF
  direct vacancy.                                                              was under construction with another 6 million SF planned.
• Vacancy increased due to the large amount of sublease space added          • The sale of jointly owned DP Partners and CalSTRS industrial
  to the market.                                                               portfolio to Prologis for $1.85 billion elevated Prologis to the largest
• Throughout 2007, only three new buildings over 10,000 SF were                single industrial owner in Northern Nevada with approximately
  completed. The Mt. Hood Building added 35,300 SF at the Sierra               16.4 million SF.
  Corporate Center, while 1170 S. Rock Blvd of 32,400 SF and 10765           • The vacancy rate reached the highest peak since 2003 due to
  Double R Blvd of 15,000 SF were completed.                                   new construction coming on-line.
• A significant transaction in the Reno office market in 2007 was the        Industrial Outlook
  80,000 SF build-to-suit for Employer’s Insurance. Also, a record office
  property sale was that of 100 W. Liberty for $38.25 million.               • Under construction was the USA Parkway that will connect I-80
                                                                               at Tracy Clark Station in Story County to US 50 in Silver Springs
Office Outlook                                                                 in Lyon County. It is estimated the completion of USA Parkway
• Rent rates will drop in order to stay competitive and to lease second        will cut one hour off the trip between Las Vegas and Reno and will
  generation space.                                                            provide access to convenient air-freight by linking Silver
• Construction will be minimal in 2008 mostly consisting of                    Springs Airport.
  build-to-suit and garden office construction.                              • Migration of existing tenants from the Sparks industrial core to the
• Due to the lack of construction in the next 18 months, land sales            new Tahoe Reno Industrial Center.
  will be sluggish. Land prices should remain constant ranging from          • With the vacancy rising, industrial rents are flattening as landlords
  $10 to $18 per SF.                                                           are motivated to remain competitive.
                                                                             • Within the Reno and Sparks industrial core, land remains scarce.
                                                                               However, an abundance of rail served and non-rail served land is
                                                                               available in the outer submarkets ranging from $2 to $6 per SF.




DOWNTOWN OFFICE                                                              INDUSTRIAL
         Inventory       New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)      Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999              –          –           0       –            –       –      1999             –            –            0         –         –      –      –
2000              –          –           0       –            –       –      2000             –            –            0         –         –      –      –
2001      1,429,000          0    (28,000)    13.8            –       –      2001    55,032,000    2,543,000    1,526,000       8.8      3.70   2.50   8.75
2002      1,429,000          0      19,000    12.6        20.00    9.50      2002    56,291,000    1,259,000      717,000       9.8      3.50   2.20   9.30
2003      1,429,000          0      22,000    11.3        20.50    9.50      2003    57,383,000    1,092,000      269,000      10.9      3.50   2.20   8.60
2004      1,429,000          0    (24,000)    12.4        20.20    9.00      2004    58,950,000    1,567,000    2,805,000       8.7      3.50   2.00   8.25
2005      1,429,000          0    (91,000)    17.9        21.00    8.90      2005    60,554,000    1,604,000    1,986,000       6.2      3.50   3.75   7.50
2006      1,429,000          0    132,000      8.5        23.50    9.00      2006    61,845,000    1,291,000    2,210,000       5.0      4.08   3.75   6.50
2007      1,425,000          0     (8,000)    17.8        22.90    7.50      2007    67,185,000    4,319,000    1,658,000       8.9      4.32   3.88   6.75
2008P     1,425,000          0           0    17.8            –       –      2008P   69,855,000    2,670,000       20,000      12.4         –      –      –

SUBURBAN OFFICE                                                              METROPOLITAN INDICATORS – 2008
         Inventory       New      Absorption Vacancy Class A Cap Rate
                                                                                • Gross Metro Product Percent Change: 0.0
            (SF)      Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999              –          –           0       –            –       –         • Total Employment Increase/Decrease: -227
2000              –          –           0       –            –       –           Percent Change: -1.0
2001      4,018,000     70,000      98,000    12.4            –       –
                                                                                • Unemployment Rate: 5.1
2002      4,244,000    226,000    317,000     10.3        20.60    9.00
2003      4,478,000    234,000    238,000      9.4        20.50    9.00         • Population (000): 417.9
2004      4,751,000    273,000      79,000    13.3        21.10    8.00
2005      4,971,000    220,000      87,000    14.2        22.80    7.50         Source: Moody’s Economy.com
2006      4,971,000          0      31,000    12.3        24.00    7.00
2007      5,004,000     83,000    (85,000)    14.9        24.00    7.50
2008P     5,207,000    203,000       1,000    18.2            –       –      P = Projection. Please see Glossary page for explanation.

56      CONTACT: Mike Burke • mburke@colliersparrish.com l RESEARCH: Krystal Christiaens • krystal.christiaens@colliers.com
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SACRAMENTO, CA
OFFICE                                                                       INDUSTRIAL
• Office demand was down from most private sector sources and a              • Industrial vacancy dropped to 10.7%. Demand from construction
  significant amount of space was returned to market from various              trades virtually disappeared and absorption in 2007 was at its lowest
  mortgage and title companies. However, the public sector’s                   level since 2003. However, construction levels were at their lowest
  requirements drove leasing activity in 2007. Large leases by the             levels. As a result, occupancy growth still outpaced deliveries.
  State of California helped contribute to over 1.1 million SF of            • Only 910,000 SF of product was in the construction pipeline when
  occupancy growth throughout the year.                                        the market averaged 2.1 million SF under construction since 1999.
• Supply outpaced demand as developers brought over 1.7 million SF of        • Asking rates jumped significantly as quality institutional-grade
  new product to the market. This particularly impacted Sacramento’s           product became scarce.
  premier suburban submarket, Roseville/Rocklin, now overbuilt with
  vacancy at 17.3%.                                                          Industrial Outlook
• Vacancy crept up throughout the region and stood at 12.9%, up              • Despite expected slowing in the leasing market, record low levels
  from 12.6% in 2006.                                                          of construction will mitigate the impact and vacancy will continue
• Despite increased vacancy, asking rents in the region rose.                  to decrease.
  The overall average asking rent was $25.56 compared to                     • While demand will be impacted by a weakening economy, the
  $23.76 per SF a year ago.                                                    housing and construction sectors were already pummeled in 2007.
• The Downtown, Highway 50 and Roseville/Rocklin trade areas                   Transportation, distribution, logistics, warehousing, and business
  recorded the strongest occupancy growth in 2007. However, new                services will likely slow slightly.
  development continued to outpace net absorption in the latter.             • A worsening overall economy in 2008 will flatten rental rate growth,
                                                                               but it will not reverse for all products. In fact, for some property types
Office Outlook                                                                 in stronger submarkets there may be minimal increases.
• Over 3.1 million square feet of new office space is currently under        • FEMA’s reclassifying the flood zoning for much of the Natomas area
  construction throughout the region, with as much as 1.7 million              near Sacramento Airport may stall new development there until
  square feet of that scheduled for 2008 delivery. Supply will continue        2010. This includes the largest industrial project currently in the
  to outpace demand.                                                           planning stages, the Metro Air Park. Industrial construction may
• Lease rates are expected to be flat at best in 2008.                         remain limited in the coming two years.




DOWNTOWN OFFICE                                                              INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                  Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                     (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999    12,184,000     398,000     335,000     8.3        26.75      –       1999    151,466,000   3,528,000     2,782,000      7.5      4.20       –      –
2000    12,184,000           0     172,000     6.8        27.95   9.25       2000    153,667,000   2,201,000     1,163,000      8.1      4.43       –      –
2001    12,184,000           0      (1,000)    6.9        27.95   9.50       2001    157,003,000   3,336,000   (6,611,000)     14.2      4.66    3.75   9.15
2002    12,334,000     150,000   (118,000)     8.9        29.25   9.60       2002    160,203,000   3,200,000     2,537,000     14.3      4.90    3.40   9.00
2003    12,576,000     242,000   (272,000)    12.8        29.80   8.50       2003    161,434,000   1,231,000     1,623,000     14.0      5.20    3.30   8.50
2004    12,576,000           0    (85,000)    13.5        28.90   8.00       2004    163,789,000   2,355,000     2,779,000     13.5      5.48   10.50   8.15
2005    13,126,000     550,000     661,000    12.1        30.30   6.60       2005    166,143,000   2,354,000     4,370,000     12.1      5.76   11.17   7.45
2006    13,126,000           0   (274,000)    14.2        30.30   6.00       2006    167,891,000   1,748,000     3,079,000     11.1      6.04   15.00   7.00
2007    14,231,000           0     367,000     9.6        35.90   6.50       2007    179,168,000   1,925,000     2,102,000     10.7      7.04   10.00   7.10
2008P   14,597,000     366,000     167,000    10.8            –      –       2008P   180,168,000   1,000,000     2,081,000     10.0         –       –      –

SUBURBAN OFFICE                                                              METROPOLITAN INDICATORS – 2008
         Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                                • Gross Metro Product Percent Change: 1.3
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    48,404,000   2,454,000   2,056,000     9.1        19.50      –          • Total Employment Increase/Decrease: 105
2000    50,325,000   1,921,000   1,137,000    10.4        21.35   9.50            Percent Change: 0.1
2001    52,352,000   2,027,000   1,134,000    11.7        21.70   9.50
                                                                                • Unemployment Rate: 5.5
2002    54,204,000   1,852,000     326,000    14.1        22.00   9.10
2003    55,699,000   1,495,000   1,423,000    13.9        23.10   8.50          • Population (000): 2,125.8
2004    57,030,000   1,331,000     747,000    14.6        23.50   7.70
2005    58,202,000   1,172,000   1,880,000    12.7        24.50   7.15          Source: Moody’s Economy.com
2006    59,702,000   1,500,000     629,000    13.6        25.80   6.50
2007    64,895,000   1,718,000     754,000    13.7        27.20   6.80
2008P   66,549,000   1,654,000     728,000    14.7            –      –       P = Projection. Please see Glossary page for explanation.

                 CONTACT: Dennis Shorrock • dennis.shorrock@colliers.com l RESEARCH: Garrick Brown • garrick.brown@colliers.com                            57
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SAN DIEGO, CA
OFFICE                                                                        INDUSTRIAL
• Nearly 2.3 million SF of new construction was completed in 2007,            • In 2007, the industrial market experienced significant negative
  close to matching the 2006 ten-year high of 2.8 million SF.                   absorption. Almost 3 million SF was completed during the year.
• Positive absorption occurred only in Class A space with the Class B         • Average asking office space rents remained flat over the year at
  submarket experiencing considerable negative absorption.                      $11.52 per SF on a triple-net basis compared to $11.40 per SF
• Class A average asking rents rose slightly in the downtown. In the            a year ago.
  suburban markets, they rose by 6%.                                          • Land availability was limited, forcing land prices to be prohibitively
• Class A sales activity of over $1.9 billion in twenty transactions            expensive for new development. In the last few years, North County
  marked the highest volume for any year on record. The overall sales           and South County have been where most new warehouse and
  dollar volume was 56% higher than in 2006. The median price per               multi-tenant construction occurred due to relatively lower land costs.
  SF of $492 was a 42% increase over 2006.                                      Central County’s industrial development was focused on R&D/flex,
                                                                                two-story corporate headquarters, and laboratory space.
Office Outlook                                                                • The majority of development was built on a speculative basis with
• Continued job losses, declining consumer confidence, and negative             nearly two-thirds over all buildings under 10,000 SF.
  net migration will contribute to weakened economy, however, a local
  recession is not likely since the majority of San Diego’s industries will   Industrial Outlook
  not be as adversely affected by the economic downturns. In fact, the        • Future redevelopment trends in the county will focus on razing older
  major industries of tourism and defense continue to see strong growth.        manufacturing facilities with the intention of redeveloping them as
• An additional 2.2 million SF of new office space under construction           office projects.
  will create an oversupply situation countywide since demand is not          • An additional 400,000 SF of new supply is expected in the first half of
  expected to keep a similar pace.                                              2008. Vacancy is expected to rise slightly but will stabilize or decrease
• In 2008, sublease vacancy should remain within the 2% to 3% range.            in the last half of the year. Vacancy will remain in the 7% to 9%
                                                                                range with sublease vacancy staying below 1.5%.
                                                                              • Rents should remain relatively flat throughout 2008.




DOWNTOWN OFFICE                                                               INDUSTRIAL
          Inventory      New      Absorption Vacancy Class A Cap Rate                  Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                     (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999      9,371,000     120,000      52,000    10.2        25.80        –     1999    166,537,000 11,380,000     7,102,000       7.9      7.20       –      –
2000      9,371,000           0     140,000     8.4        26.40     9.00     2000    170,091,000 3,554,000      4,565,000       5.6      7.80       –      –
2001      9,371,000           0     178,000     7.6        28.40     8.40     2001    173,528,000 3,437,000      2,363,000       8.2      7.50    8.50   8.75
2002      9,371,000           0   (171,000)    10.1        27.20     7.00     2002    175,145,000 1,617,000        213,000       9.1      6.50    9.00   8.70
2003      9,371,000           0      (6,000)   10.2        29.10     8.80     2003    177,161,000 2,016,000        684,000       9.8      7.60    5.50   8.20
2004      9,371,000           0      43,000     9.4        31.10     7.30     2004    179,981,000 2,820,000      2,493,000       7.8      8.00    5.94   7.05
2005      9,752,000     381,000     179,000    11.0        30.40     6.10     2005    182,603,000 2,622,000      3,423,000       6.8      8.50   12.90   5.65
2006      9,888,000     136,000    (39,000)    13.5        34.20     6.10     2006    185,713,000 3,110,000      2,801,000       6.9      9.00   16.52   6.30
2007     10,123,000     237,000      65,000    14.9        35.40     5.10     2007    187,174,000 2,966,000      (274,000)       8.3      8.64   12.50      –
2008P    10,123,000           0     155,000    13.4            –        –     2008P   188,420,000 1,246,000      3,088,000       7.3         –       –      –

SUBURBAN OFFICE                                                               METROPOLITAN INDICATORS – 2008
          Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                                 • Gross Metro Product Percent Change: 1.8
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999     52,370,000   2,250,000 2,784,000       7.4        27.00     9.50        • Total Employment Increase/Decrease: 635
2000     52,870,000     500,000 1,786,000       4.6        24.70     9.20          Percent Change: 0.5
2001     54,409,000   1,539,000 (385,000)      10.1        23.60     9.10
                                                                                 • Unemployment Rate: 5.0
2002     55,736,000   1,327,000 (1,900,000)    12.8        22.50     9.20
2003     56,290,000     554,000     757,000    11.3        29.40     8.50        • Population (000): 2,960.5
2004     56,545,000     255,000     102,000    11.6        32.90     6.90
2005     58,119,000   1,574,000 2,409,000       8.9        33.60     6.90        Source: Moody’s Economy.com
2006     60,796,000   2,677,000 1,220,000      11.1        35.90     6.10
2007     63,377,000   1,992,000     128,000    13.8        38.20     6.75
2008P    67,089,000   2,200,000     984,000    15.2            –        –     P = Projection. Please see Glossary page for explanation.

58      CONTACT: Jim Zimsky • jim.zimsky@colliers.com l RESEARCH: Chris Reutz • chris.reutz@colliers.com
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SAN FRANCISCO, CA
OFFICE
• Leasing activity exhibited a healthy performance enabling the year
  to post nearly 6.4 million SF of activity. Some large office lease
  transactions included O’Melveny & Meyers leasing 170,000 SF at
  Two Embarcadero Center, Barclay’s Global Investors’ renewing
  112,000 SF at 45 Fremont, and Sega’s ten-year, 70,000 SF
  commitment at 350 Rhode Island Street.
• High tech companies were active, specifically in the South of
  Market with activity by Sega of America, H5 Technologies and
  Service Sources.
• Average effective rental rates surged over the last 12 months.
  The financial district’s average weighted effective Class A rents
  increased 31% to $55.80 per SF and Class B rents rose 24.2%
  to $38.40 per SF.
• The high turnover in building ownership at record high prices led to
  upward pressure on rental rates. The average price paid on Class A
  assets was $535 per SF, a 58% increase since 2005. Over the same
  period, average Class B prices rose by 30% to $337 per SF.
Office Outlook
• Tenants will have more options as new and renovated blocks of space
  hit the market in the South Financial and Yerba Buena submarkets.
• The credit crunch will slow down the investment activity.
  The market has already seen a dramatic slowdown in buying
  of core assets.
• Sharp increases in rental rates will likely taper off, although premium
  space in the Financial District will continue to trade for top-dollar.
• The demand for office space from the growing technology sector will
  continue to increase throughout 2008.




DOWNTOWN OFFICE
            Inventory        New      Absorption Vacancy Class A Cap Rate
               (SF)       Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999      71,903,000        525,000 2,634,000            2.6        45.10      –
2000      74,837,000      2,934,000 3,093,000            3.6        78.10   8.00
2001      77,010,000      2,173,000 (5,011,000)         13.5        40.90   9.00
2002      79,353,000      2,343,000 (1,137,000)         16.9        32.00   8.50
2003      79,578,000        225,000     138,000         16.9        29.10   8.00
2004      79,578,000              0 1,237,000           15.4        31.30   8.00
2005      79,328,000      (250,000) 1,700,000           13.2        35.40   7.00
2006      79,154,000      (174,000) 1,139,000           11.6        42.60   6.25
2007      81,087,000        411,000 1,665,000            9.9        55.80   5.80
2008P     82,914,000      1,827,000     750,000         11.0            –      –
METROPOLITAN INDICATORS – 2008

   • Gross Metro Product Percent Change: 3.6
   • Total Employment Increase/Decrease: 720
     Percent Change: 0.7
   • Unemployment Rate: 4.4
   • Population (000): 1,719.2

   Source: Moody’s Economy.com


P = Projection. Please see Glossary page for explanation.


                                         CONTACT: Glen Esnard • glen.esnard@colliers.com l RESEARCH:Tove Nilsen • tove.nilsen@colliers.com   59
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SAN FRANCISCO/SAN MATEO PENINSULA, CA
OFFICE                                                                      INDUSTRIAL
• Overall vacancy fell from 15.8% at the beginning of 2007 to               • The market was steady with vacancy between 4% and 5.5%,
  end at 11.3%.                                                               bolstered by its proximity to San Francisco International Airport.
• Central County performed the strongest, with vacancy dropping from        • Average asking rents ranged from $0.82 per SF NNN in the North
  15.4% in 2006 to 9.9% in 2007.                                              County and $0.95 per SF NNN in the Central and South counties.
• Asking rents increased from $2.47 per SF to $3.35 per SF by year-end.     • R&D vacancy dropped from 9.3% beginning the year to 6.4%
• YouTube leased 180,000 SF LEED certified Class A space at 901               by year-end.
  Cherry from The Gap in San Bruno. These companies were also               • From 2006 to 2007, R&D asking rents rose from $1.65 per SF
  involved in San Francisco at Hill Plaza for 210,000 SF.                     to $1.95 per SF.
• Taking significant sublease space off the market at the former Seibel     • Amgen Pharmaceuticals put 365,000 SF of sublease space onto
  campus were Guidewire subleasing 88,200 SF at 2211 Bridgepointe             the market at a three-building project in Oyster Point; two of the
  Parkway, Actuate Corp. taking 83,200 SF and GLU Mobile                      buildings are in shell condition, with the other ready for occupancy.
  occupying 52,100 SF at 2207 Bridgepointe Parkway.
                                                                            Industrial Outlook
• Meyers Development broke ground on Centennial Towers in
  South San Francisco - 333,000 SF and 364,000 SF tower.                    • Anticipating continuing long term strength in the R&D Life Science
                                                                              sector in South San Francisco, Brisbane and Daly City, construction
• Hines sold Parkside Towers to Harvest Properties and Invesco for            of up to 1,495,000 SF of office/R&D space is expected over the
  $180 million, then bought 600 Clipper in Belmont for $52 million.           next 12-18 months.
Office Outlook                                                              • The warehouse sector looks to remain steady as no new
• San Mateo Executive Office Park, the former Visa Headquarters,              construction is slated in the near future and demand is expected
  will add 270,000 SF of space after Class A upgrades are completed           to remain consistent.
  mid-2008.
• Rents look to increase in 2008 as vacancy diminishes and the
  downward pressure of the sublease market dwindles.
• The Peninsula Office market should hold strong with good demand
  from tech companies and startups, coupled with the low supply of
  space straddling the Highway 101 corridor.




SUBURBAN OFFICE                                                             INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999    26,022,000   2,118,000 2,084,000      0.7        56.05   9.00       1999    43,952,000      100,000        297,000     1.8       9.60       –   8.70
2000    28,600,000   2,578,000 3,215,000      2.6        70.90   8.00       2000    43,933,000      (19,000)       682,000     2.5      31.20       –   6.30
2001    29,731,000   1,131,000 (4,363,000)   22.4        36.95   9.00       2001    43,933,000             0   (3,333,000)     9.8      10.10       –   7.50
2002    30,221,000     490,000 (1,104,000)   28.3        28.45   9.00       2002    43,973,000        40,000   (1,877,000)    11.6      10.00       –   8.00
2003    30,388,000     167,000     189,000   29.3        25.10   8.50       2003    43,973,000             0       436,000    10.6       8.60   60.00   7.60
2004    30,388,000           0     644,000   25.4        24.70   7.70       2004    43,973,000             0     1,179,000     8.3       7.90   65.00   8.75
2005    30,388,000           0 1,548,000     20.4        25.70   7.20       2005    43,973,000             0     1,051,000     6.2       9.25   73.00   8.40
2006    30,388,000           0     710,000   15.8        29.60   6.50       2006    43,973,000             0       327,000     5.4       9.36   73.11   6.30
2007    31,091,000           0 1,483,000     11.3        43.80   5.50       2007    43,154,000             0       602,000     4.3      10.80   42.00   5.75
2008P   31,091,000           0     800,000    8.8            –      –       2008P   43,154,000             0     1,197,000     1.6          –       –      –
                                                                            METROPOLITAN INDICATORS – 2008

                                                                               • Gross Metro Product Percent Change: 2.9
                                                                               • Total Employment Increase/Decrease: 257
                                                                                 Percent Change: 0.3
                                                                               • Unemployment Rate: 5.2
                                                                               • Population (000): 1,816.5
                                                                               Note: Metropolitan Indicators are for San Jose
                                                                               Source: Moody’s Economy.com


                                                                            P = Projection. Please see Glossary page for explanation.

60      CONTACT: Mike Burke • mburke@colliersparrish.com l RESEARCH: Jeff Dizon • jeff.dizon@colliers.com
C O L L I E R S I N T E R N AT I O N A L            l   U S R E A L E S TAT E R E V I E W 2 0 0 8



SAN JOSE/SILICON VALLEY, CA
OFFICE                                                                      INDUSTRIAL
• The vacancy rate continued to fall in 2007, however, at a much            • The Silicon Valley continued to be very tight with the vacancy rate
  slower pace compared to 2005 and 2006. Office vacancy dropped               under 5% for industrial space and under 4% for warehouse space.
  below 9% for the first time since 2001.                                   • The R&D market’s vacancy rate continued to fall, posting a rate
• Overall demand fell as absorption was much lower compared to                below 13% for the first time since 2002.
  the previous two years. After recording eight consecutive quarters        • R&D gross absorption was greater in 2007 compared to 2006, but net
  of positive absorption, the Silicon Valley experienced negative             absorption was significantly less in 2007. Activity slowed down in
  absorption in the second quarter of 2007. Additionally, the amount          both industrial and warehouse markets as the gross absorption total
  of available sublease space on the market increased.                        for 2007 was the lowest in over five years.
• Rents increased dramatically and some submarkets saw rents                • Average R&D asking rates increased over 30% while industrial and
  climb over 50% in the past year. Overall, Silicon Valley average            warehouse rents modestly increased during the year.
  asking rents increased over 17%, compared 10.6% in 2006 and               • Venture capital spending continued to focus on software and life
  2.4% in 2005.                                                               science industries, however, there was also significant growth in
• BEA Systems, Inc. purchased a new 381,000 SF Class A                        semiconductor and alternative energy (green energy) industries.
  office building in downtown San Jose from Sobrato
  Development Companies.                                                    Industrial Outlook
• Higher rents were met with some resistance, and demand shifted            • Over 1.7 million SF of R&D product is under construction with
  towards high-end R&D industrial space as a cheaper alternative.             plenty of Class A space becoming available in 2008.
                                                                            • Businesses related to new construction and home improvement will
Office Outlook                                                                likely be affected by the subprime financial shock.
• Unless office demand picks up in 2008, asking rates will stay flat,       • The industrial and warehouse markets will continue to see a
  or possibly fall.                                                           slowdown in activity during 2008 with limited space alternatives
• Tenants will take more time to make their real estate decisions, and        for users, and virtually no new construction in the pipeline.
  as uncertainty continues to cloud the national and local economic
  outlook, demand will continue to slow.




DOWNTOWN OFFICE                                                             INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999     6,174,000           0      96,000    5.4        45.10       –      1999    237,972,000     253,000 4,680,000          4.2      10.50       –   9.25
2000     6,174,000           0     260,000    1.2        60.00    9.00      2000    242,960,000   4,988,000 11,230,000         1.3       8.40       –   9.00
2001     6,516,000     342,000   (151,000)    8.7        57.10   10.00      2001    251,531,000   8,571,000 (7,312,000)        7.6       8.40   32.50   8.50
2002     6,516,000           0   (292,000)   13.2        39.30   10.00      2002    253,861,000   2,330,000 (8,607,000)       11.7       4.30   35.00   8.00
2003     7,172,000     656,000    (77,000)   20.3        32.70    8.00      2003    253,883,000      22,000 (12,987,000)      16.8       5.50   25.00   8.00
2004     7,172,000           0    (10,000)   20.6        33.00    8.00      2004    253,964,000      81,000 951,000           16.4       5.20   25.00   7.00
2005     7,172,000           0   (286,000)   24.6        30.30    7.50      2005    254,470,000     506,000 4,311,000         14.5       4.90   25.00   7.00
2006     7,172,000           0     310,000   20.0        30.40    6.25      2006    254,511,000      41,000 5,333,000         12.2       5.11   30.00   6.25
2007     7,275,000           0     423,000   13.0        35.80    5.00      2007    252,895,000      99,000 1,078,000          8.9       6.36   56.10   6.10
2008P    7,275,000           0   (100,000)   14.4            –       –      2008P   254,211,000   1,316,000 1,000,000          9.0          –       –      –

SUBURBAN OFFICE                                                             METROPOLITAN INDICATORS – 2008
         Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                               • Gross Metro Product Percent Change: 2.9
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    42,119,000   1,704,000 1,455,000      4.6        42.40    9.50         • Total Employment Increase/Decrease: 257
2000    44,142,000   2,023,000 2,559,000      1.9        84.00    9.00           Percent Change: 0.3
2001    47,634,000   3,492,000 (171,000)     10.7        42.20   10.00
                                                                               • Unemployment Rate: 5.2
2002    49,566,000   1,932,000     216,000   13.1        29.20    9.00
2003    49,875,000     309,000 (2,389,000)   17.3        25.90    8.50         • Population (000): 1,816.5
2004    49,881,000       6,000 1,035,000     15.2        24.80    8.50
2005    49,895,000      14,000 1,875,000     11.5        27.20    8.50         Source: Moody’s Economy.com
2006    50,146,000     251,000 2,327,000      6.9        32.10    6.75
2007    50,633,000      70,000 (205,000)      8.1        41.00    5.70
2008P   50,675,000      42,000 (650,000)      9.5            –       –      P = Projection. Please see Glossary page for explanation.

                                  CONTACT: Mike Burke • mburke@colliersparrish.com l RESEARCH: Jeff Dizon • jeff.dizon@colliers.com                        61
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SEATTLE/PUGET SOUND, WA
OFFICE                                                                      INDUSTRIAL
• Seattle’s downtown office vacancy rate ended 2007 at 8.4%.                • Seattle’s industrial market absorbed over 5.7 million SF in 2007,
• Total downtown absorption registered only 471,000 SF, less than a           the second-highest mark of the decade.
  third of 2006’s total.                                                    • The overall vacancy rate fell to finish 2007 at 6.2%.
• Vulcan’s Westlake Terry Buildings delivered 277,400 SF of Class A         • Close-in manufacturing space remained scarce with only
  space in South Lake Union submarket.                                        3.28% vacant.
• South King County’s vacancy rate dropped to 18.4%, its lowest rate        • The Kent Valley submarket stayed consistent with 1,750,000 SF of
  in five years. Total absorption was over 469,000 SF.                        absorption. AMB Valley Distribution Center delivered 766,200 SF
• The Eastside’s average asking rates climbed 21% in 2007, going from         of new space in Auburn.
  $27.20 per SF to $32.87 per SF. New supply registered 925,000 SF          • New construction was built on the outskirts of the Eastside market
  while 2.6 million SF was under construction. In this market,                mainly because industrial space close to downtown Bellevue was
  Microsoft pre-leased 1.3 million SF of space.                               converted into other uses. The Bel-Red Corridor is evidence of
• Tacoma’s CBD ended the year with a 5.55% vacancy rate, two                  the growing change.
  percentage points below the Pierce County average. 250,000 SF of          • The Northend’s vacancy rate dropped from 16.33% to 6.43% in 2007,
  new office space added to the Pierce County market in 2007 and              absorbing 1.1 million SF in the process. Boeing’s 150,000 SF lease
  nearly half of it already absorbed.                                         was the biggest of the year on the Northend.
Office Outlook                                                               Industrial Outlook
• Most of the new supply that will be added to the market in 2008 is        • Manufacturing will continue its strength in the Northend, spurred by
  already pre-leased. Unless demand drops significantly, asking rates         the success of Boeing.
  will continue escalating.                                                 • As more space is converted to other uses like residential and office,
• Vacancy rates are expected to remain low in the Puget Sound.                industrial supply will shrink. Lease rates are expected to escalate in
                                                                              the process.
                                                                            • Industrial new construction will continue to be built farther and
                                                                              farther from city centers. Areas far north and south of Seattle should
                                                                              benefit from the shift.




DOWNTOWN OFFICE                                                             INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                 Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                    (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999    30,961,000     428,000     741,000    2.5        32.00       –      1999    196,165,000 5,292,000         607,000      4.7      4.90       –      –
2000    32,892,000   1,931,000 1,819,000      3.5        37.00    8.50      2000    196,881,000 716,000           643,000      5.2      4.60       –      –
2001    34,879,000   1,987,000 (1,405,000)   12.6        35.00    8.25      2001    199,991,000 3,110,000     (4,646,000)      8.6      5.50    8.00   8.00
2002    35,732,000     853,000    (45,000)   14.6        29.50    8.25      2002    201,140,000 1,149,000     (2,380,000)     10.4      5.50    9.70   8.00
2003    36,577,000     845,000     311,000   15.3        26.30    8.00      2003    201,988,000 848,000       (1,057,000)     11.1      5.50    8.00   8.00
2004    36,665,000      88,000 (167,000)     15.2        25.80    7.00      2004    205,112,000 3,124,000       6,496,000      9.3      5.50    6.00   7.85
2005    36,665,000           0     763,000   12.8        25.20    6.50      2005    215,141,000 10,029,000      8,102,000      7.4      5.60    6.75   6.50
2006    36,850,000     185,000 1,487,000      8.5        27.50    6.50      2006    219,360,000 4,219,000       5,595,000      6.5      6.36    7.50   6.50
2007    37,402,000     392,000     471,000    8.4        32.30    5.80      2007    225,157,000 5,782,000       5,736,000      6.2      6.48   11.46   6.54
2008P   38,256,000     854,000 1,200,000      7.3            –       –      2008P   228,355,000 3,198,000       7,394,000      4.2         –       –      –

SUBURBAN OFFICE                                                             METROPOLITAN INDICATORS – 2008
         Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                               • Gross Metro Product Percent Change: 3.5
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    43,380,000   3,943,000 1,670,000      6.7        22.50       –         • Total Employment Increase/Decrease: 2,378
2000    45,962,000   2,582,000 3,769,000      5.3        24.00    9.50           Percent Change: 1.6
2001    49,500,000   3,538,000 (1,222,000)   15.6        25.00    9.50
                                                                               • Unemployment Rate: 4.1
2002    50,593,000   1,093,000     166,000   17.5        23.00    9.50
2003    50,803,000     210,000    (90,000)   17.6        22.90    8.75         • Population (000): 2,582.8
2004    50,874,000      71,000     965,000   15.4        23.60    7.00
2005    51,270,000     396,000 2,031,000     12.0        21.80    6.50         Source: Moody’s Economy.com
2006    51,320,000      50,000     779,000   10.6        26.00    6.25
2007    51,630,000   2,310,000 1,300,000     11.0        31.00    5.26
2008P   54,930,000   3,300,000 1,731,000      6.8            –       –      P = Projection. Please see Glossary page for explanation.

62      CONTACT: John Powers • john.powers@colliers.com l RESEARCH: Jeff Bonar • jeff.bonar@colliers.com
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ST. LOUIS, MO
OFFICE                                                                       INDUSTRIAL
• The market witnessed strong overall absorption of 1.5 million SF,          • St. Louis ranked second among Expansion Management Magazine’s
  the most since 2000. Absorption was positive in suburban                     most logistics-friendly metro areas in the US. While auto
  markets but negative downtown as the downtown moved toward                   manufacturing employment fell, suppliers to the local Chrysler plant
  entertainment, cultural, and residential development in new and              leased several hundred thousand SF of just-in-time warehouse and
  converted historic structures.                                               assembly space.
• Class A suburban space had a vacancy rate of 6.8%, while downtown          • Over 70% of construction was in the form of modern bulk space,
  Class A vacancy was 16.9%.                                                   serving as distribution centers for consumer products companies and
• New construction was dominated by build-to-suit as developers                third party logistics providers. Nearly all of the 2.5 million SF was
  remained cautious.                                                           built speculatively.
• Large contiguous blocks of space were in short supply with only three      • Significant leases included True Manufacturing, maker of commercial
  suburban Class A buildings able to accommodate a 50,000 SF tenant.           refrigeration equipment, and Spectrum Brands, which manufactures
                                                                               lawn and garden products locally, each leasing over 400,000 SF of
Office Outlook                                                                 distribution space.
• Speculative construction is underway with 600,000 SF scheduled
  for 2008 completion; most projects are in the West St. Louis               Industrial Outlook
  County market.                                                             • The first speculative building in NorthPark will be completed in 2008
• Express Scripts announced plans for a second building in North               – a 550-acre office, retail, and industrial development one-half mile
  St. Louis County, and Centene Corporation announced plans to                 east of Lambert St. Louis Airport.
  move its headquarters into downtown while retaining Clayton                • Two million SF of space was under construction leading into 2008.
  space as the company grows.                                                  Illinois and North St. Louis County each accounted for over half
• Lumiere Place, a $500 million casino with two hotels, will expand            a million SF.
  and enhance the downtown entertainment district, and employ                • An alphabet soup of logistics technology – RFID, SCM, WMS,
  over 1,000 people.                                                           EDI, and TMS – will enable the efficient operation of ever larger
• Reconstruction of Highway 40/I-64 from Kingshighway to Spoede                distribution centers while utilizing fewer workers.
  Road in West St. Louis County will take two years starting 2008.           • Industrial land availability is limited to small portions of northwest
                                                                               St. Louis County, to central St. Charles County, and to larger
                                                                               tracts in Illinois.




DOWNTOWN OFFICE                                                              INDUSTRIAL
         Inventory      New      Absorption Vacancy Class A Cap Rate                  Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                     (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999    11,476,000     165,000      153,000   13.2        18.50   10.50      1999    217,784,000   4,569,000     3,926,000      3.4      4.25      – 9.50
2000    11,521,000      45,000      153,000   12.2        20.00   10.50      2000    221,603,000   3,819,000     2,122,000      4.1      5.00      – 9.50
2001    11,521,000            0   (241,000)   14.6        19.50   10.50      2001    226,709,000   5,106,000   (1,947,000)      7.1      4.00   2.75 10.00
2002    11,519,000      (2,000)   (506,000)   18.7        18.80   10.50      2002    230,107,000   3,398,000     1,856,000      7.6      3.30   3.50 9.50
2003    11,523,000        4,000   (345,000)   21.7        18.80   10.50      2003    231,703,000   1,596,000       573,000      8.0      3.50   4.50 9.25
2004    11,297,000   (226,000)    (163,000)   21.5        18.50   10.50      2004    233,133,000   1,430,000     3,961,000      6.5      3.50   3.50 8.50
2005    11,250,000    (47,000)       54,000   20.8        19.30    8.00      2005    234,834,000   1,701,000     3,985,000      5.5      3.75   3.25 8.00
2006    11,221,000    (29,000)      178,000   19.0        20.60    7.75      2006    238,137,000   3,304,000     2,428,000      5.8      4.00   3.85 7.50
2007    11,437,000            0    (22,000)   19.0        20.60    9.00      2007    242,912,000   3,065,000     1,786,000      5.9      4.00   3.50 6.90
2008P   11,437,000            0      68,000   18.4            –       –      2008P   244,847,000   1,935,000     1,680,000      6.0         –      –     –

SUBURBAN OFFICE                                                              METROPOLITAN INDICATORS – 2008
         Inventory      New      Absorption Vacancy Class A Cap Rate
                                                                                • Gross Metro Product Percent Change: 0.7
            (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    30,418,000   2,296,000    1,853,000    6.6        26.30   10.00         • Total Employment Increase/Decrease: 633
2000    32,113,000   1,696,000    1,381,000    7.1        25.50   10.50           Percent Change: 0.5
2001    34,459,000   2,346,000      435,000   12.2        24.50   10.75
                                                                                • Unemployment Rate: 5.7
2002    35,333,000     874,000      294,000   13.6        24.50   10.75
2003    35,970,000     636,000    (248,000)   15.9        23.50   10.25         • Population (000): 2,838.9
2004    35,889,000    (81,000)      376,000   14.7        23.00    9.75
2005    36,348,000     459,000      925,000   13.2        23.00    7.50         Source: Moody’s Economy.com
2006    36,758,000     410,000      923,000   11.6        23.00    7.50
2007    37,606,000     854,000    1,513,000    9.6        23.00    7.50
2008P   39,055,000   1,449,000      250,000   12.3            –       –      P = Projection. Please see Glossary page for explanation.

                            CONTACT: Rick Messey • rmessey@ctmt.com l RESEARCH: Jeradawn Vaughn • jeradawn.vaughn@colliers.com                           63
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STOCKTON, CA
OFFICE                                                                    INDUSTRIAL
• The Central Valley office market shifted in 2007 with supply            • San Joaquin County remained an ideal distribution point for
  outpacing demand.                                                         Northern California and the eleven western states based upon its
• Vacancy rose in all classes. For the first time in over five years        proximity to major freeway arterials, access to west coast ports and
  sublease inventory was available and growing.                             intermodal rail infrastructure.
• Medical and professional service (accounting, engineering, etc.)        • The expanding Port of Stockton became a large participant in
  companies faced limited choices as new construction and speculative       attracting new and expanding industries to San Joaquin County
  building tapered.                                                         and the City of Stockton.
• The City of Stockton is set to capitalize on an opportunity to          • Over 5 million SF of new high-cube warehouse space was under
  purchase the 247,000 SF WAMU building in downtown Stockton                construction at year-end.
  for $35 million.                                                        • Sales in the industrial condo market slowed down as a result of the
                                                                            availability of inventory and the softening in demand partly due to
Office Outlook                                                              the correction of the residential real estate market.
• Opportunities are strong for investors to purchase at favorable         • Higher costs for building permits, development impact & mitigation
  prices or prospective tenants to lease at below prior market rates.       fees continued to affect the bottom line for developers and users.
  Sales and leases are anticipated to continue as a result of the
  economic adjustment.                                                    Industrial Outlook
• The Bay Area Markets, particularly downtown San Francisco and           • Stockton/San Joaquin County will continue to be considered a viable
  its environs continue to show record levels of demand. This trend         location to distribute goods and services. Although values are on the
  typically overflows into the East Bay Region and the Central Valley       rise, land prices will continue to look attractive in comparison to Bay
  Region eventually.                                                        Area and Southern California markets.
• Vacancy is expected to plateau.                                         • Both private and institutional capital will continue to seek
                                                                            opportunities in San Joaquin County.
                                                                          • Speculative construction for general purpose high-cube warehouse
                                                                            distribution facilities, ranging in size from 250,000 SF to in excess
                                                                            of 1 million SF, will remain active.
                                                                          • Industries linked to the housing market will retrench and position
                                                                            for uncertain conditions.




DOWNTOWN OFFICE                                                           INDUSTRIAL
         Inventory       New        Absorption   Vacancy      Class A               Inventory        New      Absorption       Vacancy    Warehouse      Land
            (SF)      Supply (SF)      (SF)      Rate (%)   Rent ($PSF)                (SF)       Supply (SF)    (SF)          Rate (%)   Rent ($PSF)   ($PSF)
1999             –           –              –        –             –      1999           –                 –              –         –           –           –
2000             –           –              –        –             –      2000           –                 –              –         –           –           –
2001             –           –              –        –             –      2001           –                 –              –         –           –           –
2002             –           –              –        –             –      2002           –                 –              –         –           –           –
2003             –           –              –        –             –      2003           –                 –              –         –           –           –
2004             –           –              –        –             –      2004           –                 –              –         –           –           –
2005             –           –              –        –             –      2005           –                 –              –         –           –           –
2006             –           –              –        –             –      2006           –                 –              –         –           –           –
2007     6,921,000     131,000              0    16.58         19.00      2007 81,348,000          2,861,000        117,000      11.7        4.08        6.00
2008P    7,093,000     172,000         87,000     17.4             –      2008P 85,598,000         4,250,000      1,077,000      14.8           –           –
                                                                          METROPOLITAN INDICATORS – 2008

                                                                             • Gross Metro Product Percent Change: 1.5
                                                                             • Total Employment Increase/Decrease: 83
                                                                               Percent Change: 0.4
                                                                             • Unemployment Rate: 8.5
                                                                             • Population (000): 694.7
                                                                             Source: Moody’s Economy.com



                                                                          P = Projection. Please see Glossary page for explanation.

64      CONTACT:Tim Mustin • tim.mustin@colliers.com l RESEARCH: Maria Marquez • maria.marquez@colliers.com
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TAMPA BAY, FL
OFFICE                                                                         INDUSTRIAL
• The vacancy rate increased to 10.7% from 9.6% over the year.                 • Approximately 4,112,000 SF of new supply was added in 2007.
  Absorption was down significantly compared to the two previous                 Under construction at year-end was approximately 3 million SF.
  years. The 2007 total was 845,000 SF compared to 1,462,000 SF                • Industrial/flex vacancy rate rose to 5.7% compared to 2006 at 4.7%.
  for 2006.                                                                    • Increases in lease rates continued in 2007 due to new construction
• Overall asking lease rates registered $21.21 per SF compared to                and shrinking availability. Warehouse/distribution rose to $5.86 per
  $20.16 per SF at year-end 2006. Class A rents were $23.92 per SF.              SF. Flex building rents climbed to $10.69 per SF.
• Approximately 1,650,000 SF of new supply was completed in                    • Total absorption was at 2,073,000 SF, however, this fell short of the
  2007 with 62% pre-leased or pre-sold by year-end. Two mixed-use                2006 total of 5,273,000 SF.
  buildings containing office space were completed in downtown                 • Largest industrial lease was for VF Image Ware who leased 217,100 SF
  Tampa for the first time in two and a half years. Grand Central East           at 6422 Harney Rd in the East Side submarket.
  & West contained 70,000 SF of office condominiums which were
  48% pre-sold by year-end.                                                    Industrial Outlook
• One of the largest leases involved Network Centric Systems                   • Vacancy rates are expected to climb in 2008 due to abundance of
  leasing 146,802 SF of office at 8333 Bryan Dairy Rd in the                     new product delivered in the latter part of 2007 and upcoming
  Gateway submarket.                                                             completions throughout 2008.
                                                                               • Continued port growth will benefit industrial market.
Office Outlook
                                                                                 Additional container freight capabilities offer future port growth.
• Approximately 1,585,000 SF is currently under construction with
                                                                               • Lakeland/Polk County and East Side industrial submarkets battle for
  25% pre-leased or pre-sold. The I-75 Corridor submarket leads the
                                                                                 the hottest spots for industrial development. East Side industrial is
  area for current construction with ten buildings going up totaling
                                                                                 slightly busier with current construction totaling approximately
  approximately 620,000 SF.
                                                                                 1.35 million SF.
• Asking lease rates will likely increase in 2008 due to slower
  job growth.
• The vacancy rate may continue to rise due to slower job growth
  and increased speculative space now under construction.




DOWNTOWN OFFICE                                                                INDUSTRIAL
          Inventory       New      Absorption Vacancy Class A Cap Rate                  Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
             (SF)      Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                     (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999      8,548,000            0     (62,000)   11.1        19.30       –      1999    166,408,000     507,000    1,021,000       4.5      4.44      –      –
2000      8,548,000            0    (164,000)   13.0        19.80    9.25      2000    169,526,000   3,118,000    1,341,000       5.5      4.68      –      –
2001      8,548,000            0    (132,000)   14.5        19.70    9.25      2001    173,010,000   3,484,000    1,818,000       6.7      4.50   2.00      –
2002      8,548,000            0    (143,000)   16.2        19.70    9.00      2002    174,512,000   1,503,000    1,531,000       6.6      4.25   2.50   9.38
2003      8,559,000       11,000       58,000   15.8        19.50    9.00      2003    176,344,000   1,832,000    2,288,000       6.3      4.32   3.90   9.00
2004      8,559,000            0       35,000   15.4        19.90    8.50      2004    177,223,000     878,000      873,000       6.3      4.33   5.00   8.50
2005      8,591,000       32,000      105,000   14.5        19.70    8.00      2005    179,276,000   2,053,000    2,256,000       6.1      4.65   5.00   8.50
2006      8,661,000       70,000       25,000   14.2        20.70    8.00      2006    182,333,000   2,957,000    5,273,000       4.8      5.44   5.50   8.00
2007      8,731,000       70,000      117,000   13.2        21.80    7.25      2007    188,062,000   4,112,000    2,073,000       5.7      5.86   5.50   7.75
2008P     8,764,000       33,000      129,000   12.0            –       –      2008P   190,935,000   2,873,000    2,500,000       5.8         –      –      –

SUBURBAN OFFICE                                                                METROPOLITAN INDICATORS – 2008
          Inventory       New      Absorption Vacancy Class A Cap Rate
                                                                                  • Gross Metro Product Percent Change: 2.1
             (SF)      Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    58,366,000    2,557,000      661,000     7.4       20.50        –         • Total Employment Increase/Decrease: 1,492
2000    60,668,000    2,302,000      290,000    10.5       21.80     9.25           Percent Change: 1.1
2001    62,537,000    1,869,000      633,000    12.2       20.60    10.00
                                                                                  • Unemployment Rate: 4.6
2002    63,202,000      665,000      890,000    11.7       20.00    10.50
2003    64,119,000      917,000      471,000    12.2       20.80     8.50         • Population (000): 2,768.2
2004    65,707,000    1,588,000    1,668,000    11.8       21.10     8.50
2005    66,881,000    1,174,000    2,262,000     9.9       21.40     7.75         Source: Moody’s Economy.com
2006    67,820,000      939,000    1,437,000     9.1       24.00     7.85
2007    69,402,000    1,582,000      728,000    10.2       24.40     7.25
2008P   70,705,000    1,303,000    1,000,000    10.5           –        –      P = Projection. Please see Glossary page for explanation.

                      CONTACT: Russ Sampson • rsampson@colliersarnold.com l RESEARCH: Karen Temmen • karen.temmen@colliers.com                              65
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WASHINGTON, DC
OFFICE                                                                      INDUSTRIAL
• The office market in Washington D.C. remained healthy with a lean         • Total inventory accounted for 188 million SF in the Washington
  vacancy rate at around 7.4% and steadily rising rentals rates.              metro area with a total 4604 building structures. Most of this supply
• Office absorption measured over 1,489,000 SF for 2007.                      is located in suburban Maryland and Northern Virginia.
• Fundamentals in Washington D.C. remained healthy. The metro               • The Washington metro industrial market ended the fourth quarter
  area was on pace to add 40,000 to 50,000 jobs in 2007.                      with a vacancy rate around 10.0%.
• In terms of office investment, the total dollar volume of sales           • Net absorption was a positive at 645,000 SF in the fourth quarter,
  eclipsed $4 billion in 2007. Once again, blockbuster portfolio deals        compared to negative 467,000 SF in the third quarter. Overall, 2007
  contributed to the healthy activity.                                        registered over 1 million SF of absorption.
                                                                            • Asking rents for available warehouse space averaged $7.84 per SF.
Office Outlook
• The mega portfolio sales that accounted for a significant percentage      Industrial Outlook
  of total sales volume in 2006 and 2007 are not likely to occur in         • Activity continues with 3.09 million SF under construction at the
  2008, which will see lower sales volume.                                    end of 2007.
• Prices are expected to soften in certain secondary and tertiary           • The outlook is for a moderate year of activity with absorption and
  markets, but top assets in core markets will still garner                   vacancies staying right near historical average for the past 10 years.
  healthy returns.                                                          • Industrial rental rates should continue to rise, as supply of available
• New development will be constrained, so vacancy rates are expected          space will remain fairly constrained.
  remain low.
• Overall, strong economic fundamentals and a flight to quality
  should help Washington D.C. mitigate some of the fallout from
  the credit correction.




DOWNTOWN OFFICE                                                             INDUSTRIAL
          Inventory      New      Absorption Vacancy Class A Cap Rate                Inventory    New      Absorption Vacancy Warehouse Land Cap Rate
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                   (SF)   Supply (SF)    (SF)    Rate (%) Rent ($PSF) ($PSF) (%)
1999     91,968,000   1,598,000   1,979,000   5.7        39.10   8.55       1999              –           –             0        –         –      –     –
2000     93,579,000   1,611,000   2,774,000   4.0        39.40   9.00       2000    164,666,000   2,700,000     1,400,000      6.1         –      –     –
2001     97,784,000   4,205,000   2,223,000   5.3        40.75   9.20       2001    168,013,000   3,347,000        21,000      8.5      6.70   5.00 10.20
2002     99,492,000   1,708,000     209,000   6.4        41.90   8.00       2002    169,777,000   1,764,000   (2,999,000)     10.2      7.50   6.00 10.50
2003    102,135,000   2,643,000     911,000   7.2        42.20   8.00       2003    172,218,000   2,441,000       656,000     11.2      7.20   5.00 9.00
2004    103,802,000   1,667,000   1,667,000   7.5        43.20   7.00       2004    174,977,000   2,759,000     3,438,000     10.6      8.80   5.50 8.00
2005    106,573,000   2,771,000   1,809,000   7.2        44.10   5.95       2005    178,972,000   3,995,000     3,027,000      9.2      7.80   6.00 7.75
2006    111,351,000   4,778,000   3,213,000   7.1        46.70   5.80       2006    182,233,000   3,261,000     2,095,000      9.4      8.38   6.23 7.00
2007    112,513,000   2,794,000   1,489,000   7.4        51.00   6.00       2007    187,928,000   2,839,000     1,014,000     10.0      7.84      – 7.80
2008P   114,625,000   2,112,000   1,636,000   7.7            –      –       2008P   189,190,000   1,262,000     2,657,000      9.2         –      –     –
                                                                            METROPOLITAN INDICATORS – 2008

                                                                               • Gross Metro Product Percent Change: 1.6
                                                                               • Total Employment Increase/Decrease: 6
                                                                                 Percent Change: 0.0
                                                                               • Unemployment Rate: 3.4
                                                                               • Population (000): 4,231.5
                                                                               Source: Moody’s Economy.com



                                                                            P = Projection. Please see Glossary page for explanation.

66      CONTACT: Paul Darr • pdarr@cassidypinkard.com l RESEARCH: Kevin Thorpe • kevin.thorpe@colliers.com
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WASHINGTON, DC
OFFICE
Washington, DC – Northern Virginia                                            Washington, DC – Suburban Maryland
• The office market in Northern Virginia remained healthy with                • Suburban Maryland had a strong run up in office sales in 2005 and
  a lean vacancy rate at around 11.3% and rentals rates holding in              2006 which left very little demand for 2007.
  submarkets outside the Beltway and steadily rising in submarkets            • Dollar volume of office building sales declined for the second straight
  inside the Beltway.                                                           year, from $1.7 billion to $1.0 billion.
• Total office absorption measured over 1.9 million SF for 2007.              • Leasing velocity gained momentum despite a slowdown in large
• The presence of the Federal government and procurement                        Federal requirements. Total office net absorption reached 732,000 SF
  help this suburban market to remain stable during regional                    compared to 339,000 SF in 2006.
  economic downturns.                                                         • Year-over-year vacancy increased, moving from 9.9% to 10.8%.
• In terms of office investment, the total dollar volume of sales totaled     • The rise in vacancy can be attributed to the delivery of available
  $6.9 billion in 2007- the sixth consecutive record-setting year in a          space to the market and the downsizing of private sector tenants.
  row. Once again, blockbuster portfolio deals contributed to the
  healthy activity.                                                           Washington, DC – Suburban Maryland Office Outlook
                                                                              • Healthy leasing activity is likely to continue into the early
Washington, DC – Northern Virginia Office Outlook                               part of 2008 in submarkets that lie inside the Beltway such as
• The mega portfolio sales that accounted for a significant percentage          Bethesda/Chevy Chase and North Bethesda.
  of total sales volume in 2006 and 2007 are not likely to occur in           • As tenants face renewal options for high rents, submarkets like
  2008, which will see lower sales volume.                                      Rockville and North Rockville may begin to attract the attention
• Prices are expected to soften in certain secondary and tertiary               of tenants who are seeking lower rents.
  markets, particularly outside the Beltway. Top assets inside the            • Suburban Maryland is projected to add 10,000 new jobs in 2008
  Beltway markets will still garner healthy returns.                            most of which will be office related.
• New construction starts will be constrained, which will help lower
  the impact of vacant speculative projects delivering throughout the
  remainder of 2008.
• Overall, strong economic fundamentals and a flight to quality
  should help Northern Virginia mitigate some of the fallout from
  the credit correction.




NORTHERN VA OFFICE                                                            SUBURBAN MD OFFICE
          Inventory      New      Absorption Vacancy Class A Cap Rate                     Inventory        New      Absorption Vacancy Class A Cap Rate
             (SF)     Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)                        (SF)       Supply (SF)    (SF)    Rate (%) Rent ($PSF) (%)
1999    108,681,000 10,036,000 8,642,000        4.9        30.50   10.05      1999      61,556,000      1,432,000     2,099,000        8.3       –    9.15
2000    116,959,000 8,278,000 10,212,000        3.1        35.00   10.20      2000      63,667,000      2,111,000     3,008,000        6.0   32.00    9.25
2001    125,781,000 8,822,000 (5,479,000)      14.2        34.00   10.80      2001      66,397,000      2,730,000     (242,000)       11.7   31.00   10.50
2002    131,816,000 6,035,000    (34,000)      18.2        28.00    9.75      2002      68,802,000      2,405,000       313,000       15.7   28.50    9.00
2003    133,753,000 1,937,000 3,068,000        16.3        26.75    8.75      2003      70,097,000      1,295,000      (27,000)       17.3   26.50    8.75
2004    136,734,000 2,981,000 6,057,000        12.8        28.85    8.50      2004      71,448,000      1,351,000     2,743,000       13.6   26.10    7.50
2005    138,906,000 2,172,000 3,920,000        10.6        30.30    7.50      2005      71,721,000        273,000     1,020,000        9.7   26.30    7.25
2006    142,437,000 3,531,000 2,973,000        10.3        32.50    6.25      2006      72,330,000        609,000       339,000        9.9   27.20    6.50
2007    145,525,000 3,088,000 1,971,000        11.3        30.60    5.70      2007      72,997,000      1,246,000       732,000       10.9   28.80    7.00
2008P   150,602,000 5,077,000 2,027,000        12.9            –       –      2008P     73,989,000        992,000     1,040,000       10.7       –       –
                                                                              METROPOLITAN INDICATORS – 2008

                                                                                 • Gross Metro Product Percent Change: 1.6
                                                                                 • Total Employment Increase/Decrease: 6
                                                                                   Percent Change: 0.0
                                                                                 • Unemployment Rate: 3.4
                                                                                 • Population (000): 4,231.5
                                                                                 Source: Moody’s Economy.com



                                                                              P = Projection. Please see Glossary page for explanation.

                                CONTACT: Paul Darr • pdarr@cassidypinkard.com l RESEARCH: Kevin Thorpe • kevin.thorpe@colliers.com                      67
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WEST PALM BEACH, FL
OFFICE                                                                       INDUSTRIAL
• West Palm Beach showed a noticeable increase in vacancy rate               • Palm Beach County closed 2007 with low vacancy rates of 6.6% and
  from 8.8% at year-end 2006 to 13.7% at year-end 2007. This was               rental rates of approximately $10.72 per SF.
  attributed to the addition of new product in the market.                   • Absorption remained negative across the majority of the Palm Beach
• The average asking rent for 2007 ended at $19.75 per SF on a triple          submarkets as available space being marketed increased over last
  net basis for the Palm Beach market, an increase of 2.1% from 2006.          year and can be expected to rise as new product is being constructed
• Average asking rents across all submarkets remained flat from                in the market.
  mid-year numbers at $28.81 per SF.                                         • A total of 26 new buildings were completed for the county. As of the
• Absorption was negative, with the Boca Raton submarket registering           end of 2007, there was approximately 1.1 million SF of industrial
  the highest total negative square feet, primarily in the Class B office      inventory under construction.
  space category.                                                            • Cap rates were higher in 2007, averaging 6.3%, compared to 2006
                                                                               when they averaged 5.52%.
Office Outlook
• The Palm Beach office market should continue stabilizing into              Industrial Outlook
  2008 as year-end absorption rates and rental rates remain flat over        • Although vacancy rates increased, asking rental rates remained
  mid-year 2007 figures.                                                       about the same from mid-year figures and should stabilize as increased
• The increased availability of sublease space and new product in              operating expenses begin to impact the market and more product
  the market should keep prices stable or begin to pressure prices             comes to the market.
  down by providing tenants with further leverage to negotiate               • The market will shift as tenants begin to downsize and consolidate
  more favorable rents.                                                        their industrial space obligations due to increased operating costs
• Construction activity is expected to continue despite rising land            impacting their profits.
  costs in the Palm Beach market over the past two years.                    • The leasing demand in Palm Beach County continues to be strong
                                                                               and it should be a good year for sales of institutional-grade product.




DOWNTOWN OFFICE                                                              INDUSTRIAL
          Inventory      New         Absorption    Vacancy       Class A               Inventory        New      Absorption       Vacancy      Warehouse      Land
             (SF)     Supply (SF)       (SF)       Rate (%)    Rent ($PSF)                (SF)       Supply (SF)    (SF)          Rate (%)     Rent ($PSF)   ($PSF)
1999              –           –               0           –           –      1999              –              –              0             –         –           –
2000      9,445,000      65,000       (176,000)        10.4       29.90      2000     45,583,000        773,000       (45,000)           6.1      6.50           –
2001      9,953,000     508,000         415,000        14.6       28.40      2001     46,303,000        720,000        229,000           6.1      6.80           –
2002      9,953,000           0        (26,000)        13.3       30.30      2002     46,662,000        359,000        154,000           6.3      6.40       11.00
2003      9,993,000      40,000        (37,000)        13.8       30.00      2003     47,676,000      1,014,000      (103,000)           8.6      6.70       10.00
2004     10,011,000      18,000         311,000        10.8       27.80      2004     48,399,000        723,000        643,000           6.4      6.70        8.00
2005     10,045,000      34,000         281,000         8.7       30.20      2005     49,145,000        746,000      1,868,000           3.4      7.00       11.00
2006     10,065,000      20,000         638,000         8.9       35.10      2006     49,703,000        558,000      (116,000)           4.4      8.44       20.00
2007      7,120,000      48,000       (242,000)         9.6       34.20      2007     40,190,000        328,000      (897,000)           6.6      9.25       12.88
2008P     7,346,000     226,000         142,000        10.4           –      2008P    41,162,000        972,000        826,000           6.8         –           –

SUBURBAN OFFICE                                                              METROPOLITAN INDICATORS – 2008
          Inventory      New         Absorption    Vacancy       Class A
                                                                                • Gross Metro Product Percent Change: 2.2
             (SF)     Supply (SF)       (SF)       Rate (%)    Rent ($PSF)
1999              –           –               0           –           –         • Total Employment Increase/Decrease: 870
2000     27,761,000     835,000         831,000         8.7       27.20           Percent Change: 1.5
2001     28,374,000     613,000       (226,000)        14.0       28.60
                                                                                • Unemployment Rate: 4.6
2002     28,514,000     140,000       (286,000)        13.0       27.60
2003     28,953,000     439,000         421,000        12.7       27.60         • Population (000): 1,338.5
2004     29,206,000     253,000         932,000        10.5       25.80
2005     29,432,000     226,000         377,000         7.6       24.80         Source: Moody’s Economy.com
2006     29,994,000     562,000         641,000         9.1       28.00
2007     28,498,000     630,000       (786,000)        14.8       30.80
2008P    31,211,000   2,713,000         534,000        20.5           –      P = Projection. Please see Glossary page for explanation.

68      CONTACT: Steve Wasserman • swasserman@msn.com l RESEARCH: Pani Roshani • pani.roshani@colliers.com
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                                                            GLOSSARY

OFFICE                                                                       Triple Net Rent – Includes rent payable to the landlord and does
Inventory – Includes all existing multi or single tenant leased and          not include additional expenses such as taxes, insurance, maintenance,
owner-occupied office properties greater than or equal to 10,000             janitorial and utilities. All industrial and high-tech/ R&D rents in
square feet (net rentable area). In some larger markets this minimum         this report are quoted on an annual, triple net per square foot basis
size threshold may vary up to 50,000 square feet. Does not include           in U.S. dollars.
medical or government buildings.                                             Vacancy Rate – Percentage of total inventory available (both vacant
Vacancy Rate – Percentage of total inventory physically vacant as at         and occupied) as at the survey date including direct vacant and
the survey date including direct vacant and sublease space.                  sublease space.
Absorption – Net change in physically occupied space over a given            Warehouse – 50,000 square feet or more with up to 15 percent office
period of time.                                                              space, the balance being general warehouse space with 18 to 30 foot
New Supply – Includes completed speculative and build-to-suit                ceiling heights. All loading is dock-height.
construction. New supply quoted on a net basis after any
demolitions or conversions.
                                                                             RETAIL
                                                                             Community Shopping Center – Usually configured as a strip often
Annual Quoted Rent – Includes all costs associated with occupying            in a straight line or “L” or “U” shape. Anchor tenant is typically a
a full floor in the mid-rise portion of a Class A building inclusive of      discount department store (i.e. Wal-Mart, Target), supermarket or
taxes, insurance, maintenance, janitorial and utilities (electricity         super drug store. A community center typically offers a wider range
surcharges added where applicable). All office rents in this                 of apparel and other soft goods than a neighborhood center does.
report are quoted on an annual, gross per square foot basis.                 Total gross leasable area is often between 100,000 and 400,000
Rent calculations do not include sublease space.                             square feet.
Cap Rate – (Or going-in cap rate) Capitalization rates in this survey        Neighborhood Shopping Center – These centers are designed to
are based on multi-tenant institutional grade buildings fully leased at      provide convenience shopping for the day-to-day needs of consumers
market rents. Cap rates are calculated by dividing net operating             in the immediate neighborhood. Anchors are likely to be
income (NOI) by purchase price.                                              supermarkets or drugstores. Other tenants might include
Note: SF = Square Feet PSF = Per Square Foot                                 stores providing sundries, snacks and personal services.
      CBD = Central Business District                                        Generally, neighborhood centers are 30,000-150,000 SF in size
                                                                             and are configured as strip centers without an enclosed walkway
INDUSTRIAL                                                                   or mall area, but may possibly have a canopy to connect the storefronts.
Absorption – Net change in occupied space over a given period of time.       Power Center – These centers are designed to provide tremendous
Bulk Space – 100,000 square feet or more with up to 10 percent office        selection in a particular merchandise category at low prices.
space, the balance being general warehouse space with 20 to 36 foot          Anchors are likely to be category killers, home improvement stores,
ceiling heights. All loading is dock-height.                                 discount department stores, warehouse clubs or off-price stores.
Flex Space – Single-story buildings having 10 to 18 foot ceilings with       Generally, regional centers are 250,000-600,000 SF in size and are
both floor-height and dock-height loading. Includes wide variation in        configured with several freestanding (unconnected) anchors and a
office space utilization, ranging from retail and personal service through   minimal number of small specialty tenants.
distribution, light industrial and occasional heavy industrial use.          Lifestyle Center – Nonanchored open-air specialty center with
Inventory – Includes all existing multi or single tenant leased and          high concentration of mall type fashion, home, restaurant and
owner-occupied industrial warehouse, light manufacturing, flex and           entertainment retailers.
R&D properties greater than or equal to 10,000 square feet.                  Premier Fashion Streetfront – Destination retail corridor in urban
Land Value – Land values are based on prime logistics/industrial             center typically occupied by fashion retailers and able to command
locations and are based on approximately 3 acres of fully serviced           top rents.
entitled land.                                                               Rents – All retail rents in this report are quoted on an annual, triple
New Construction – Includes completed speculative and                        net per square foot basis.
build-to-suit construction. New construction quoted on a net                 Note: SF = Square Feet PSF = Per Square Foot
basis after any demolitions or conversions.
Service Space – Single story (or mezzanine) with 10 to 16 foot               PROJECTIONS
ceilings with frontage treatment on one side and dock-height loading         Projections made based on economic forecasts by Moody’s Economy.com
or grade level roll-up doors on the other. Less than 15% office.             and local input by Colliers researchers. Projections are subject to
                                                                             economic conditions that may or may not change and are only
Tech/R&D – One and two story, 10 to 15 foot ceiling heights with             intended to be a general guide. For a more detailed forecast readers
up to 50% office/dry lab space (remainder in wet lab, workshop, storage      are encouraged to contact the researcher listed for each city.
and other support), with dock-height and floor-height loading.


70
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              COLLIERS USA OFFICE LOCATIONS
                                                                                              267 OFFICES WORLDWIDE
Colliers International is a corporation of leading real estate firms committed to
delivering consistently superior commercial real estate services, wherever, and               129 Americas
whenever needed.                                                                                  95 United States
• US $1.6 Billion in Revenue                  • 57 Countries                                      17 Canada
                                                                                                  17 Latin America
• 673 Million SF Under Management             • 6 Continents                                   85 Europe, Middle East & Africa
• 10,092 Professionals                                                                         53 Asia Pacific

COLLIERS USA OFFICE LOCATIONS                                                                 57 COUNTRIES ON 6 CONTINENTS
AR                           FL                           NJ                                  Argentina               Mexico
Bentonville                  Boca Raton                   Cherry Hill                         Australia               Netherlands
Little Rock                  Clearwater                   Parsippany                          Austria                 New Zealand
AZ                           Ft. Lauderdale               Princeton                           Belgium                 Norway
Phoenix                      Ft. Myers                    Somerset                            Brazil                  Pakistan
Scottsdale                   Jacksonville                 Teaneck                             Bulgaria                Peru
                             Miami                        NV
CA                                                                                            Canada                  Philippines
                             Orlando                      Las Vegas
Bakersfield                                                                                   Chile                   Poland
                             Tampa                        Reno
Carlsbad                                                                                      China                   Portugal
Fairfield                    GA                           NY
                             Atlanta                                                          Colombia                Romania
Foster City                                               New York                            Costa Rica              Russia
Fresno                       HI                           OH                                  Croatia                 Saudi Arabia
Gilroy                       Honolulu                     Akron
Los Angeles                                                                                   Czech Republic          Serbia
                             ID                           Cincinnati
                                                                                              Denmark                 Singapore
Oakland                      Boise                        Cleveland
Palo Alto                    Sun Valley                   Columbus                            Estonia                 Slovak Republic
Pleasanton                                                Dayton                              Finland                 South Africa
                             IL
Roseville                                                 Pepper Pike                         France                  South Korea
                             Chicago
Sacramento                                                                                    Germany                 Spain
                             IN                           OR
San Diego                                                                                     Greece                  Sweden
                             Indianapolis                 Portland
San Francisco                                                                                 Hong Kong               Switzerland
San Jose                     KY                           PA
                                                          Allentown                           Hungary                 Taiwan
San Mateo                    Louisville
                                                          Conshohocken                        India                   Thailand
Santa Rosa                   MA
                                                          Philadelphia                        Indonesia               Turkey
Stockton                     Boston
Walnut Creek                                              SC                                  Ireland                 Ukraine
                             MD                                                               Israel                  United Arab Emirates
CO                                                        Charleston
                             Baltimore                                                        Italy                   United Kingdom
Denver                                                    Columbia
                             MI                           Greenville                          Japan                   United States
CT                           Ann Arbor
                             Detroit                      TN                                  Latvia                  Vietnam
Hartford
New Haven                                                 Memphis                             Lithuania
                             MN
Stamford                     Minneapolis                  Nashville
DC                           St. Paul                     TX                                   Colliers International 2008
Washington                   MO                           Dallas/Ft. Worth                    National Market Analyst – Michele Reitman

                             Kansas City                  Houston
DE
Wilmington                   St. Louis                    WA
                             NC                           Bellevue
                             Charlotte                    Seattle
                             Raleigh                      Tacoma
                                                          WI
                                                          Milwaukee

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