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Fresno County
Employees’
Retirement Association
August 2, 2006
INVESCO Real Estate
INVESCO Core Real Estate–U.S.A.
Dallas • San Francisco • Orange County • New York • Atlanta
London • Paris • Munich • Prague • Madrid • Hong Kong
Statements contained in this Presentation that are not historical facts are based on current expectations, estimates, projections, opinions and
beliefs of the Manager partner of the Fund. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance
should not be placed thereon. Additionally, this Presentation contains “forward-looking statements.” Actual events, diversification expectations or
results or the actual performance of the Fund may differ materially from those reflected or contemplated in such forward-looking statements.
Table of Contents
INVESCO Overview Section 1
Investment Process Section 2
INVESCO Core Real Estate–U.S.A. (“ICRE”) Section 3
Performance Section 4
Property Sector Summary Section 5
Portfolio Activity Section 6
Appendix
- Terms
- Strategy Process
- 2005 Transactions
- Investment Process
CONFIDENTIALITY NOTICE: All material presented is compiled from sources believed to be reliable and current, but accuracy cannot
be guaranteed. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply
in any manner that current or past results are indicative of future profitability or expectations. As with all investments there are associated
-2- inherent risks. Please obtain and review all financial material carefully before investing. This publication may contain confidential and proprietary
information of INVESCO Institutional and/or AMVESCAP. Circulation, disclosure, or dissemination of all or any part of this material to any
unauthorized persons is prohibited. Unauthorized reproduction or distribution of all or any part of this material is prohibited.
SECTION 1: INVESCO Overview
INVESCO Real Estate
$27.2 Billion Under Management
191 Employees Worldwide
U.S. Direct Real Estate Investments
— $10.8 BN Under Management
Prague
— Since 1983
London
San Francisco Paris Munich
New York
Madrid Real Estate Securities Management
Orange Atlanta Hong Kong
County Dallas
— $8.0 BN Under Management
— Since 1988
European Direct Real Estate Investments
— $8.4 BN Under Management
— Since 1996
As of June 30, 2006 in US$bn
-4-
INVESCO’s Direct Real Estate U.S. Lines of Business
Open-end Core Fund Open
8 Public Pension Plans $1.3 Billion to Date
3 Private Trusts
3 Taft-Hartley
2 Corporate Pension Plans
2 Foundation/Endowment
Separate Accounts Open
12 Public Pension Plans $6.3 Billion Core
2 Corporate Pension Plans $1.5 Billion Value-Added
2 High Net Worth Groups
2 Foreign Investors
1 Endowment
Closed-end Value-Added Fund Closed
6 Foundations and Endowments $569 Million
5 Public Pension Plans
4 Corporate Pension Plans
4 High Net Worth Groups
2 Foreign Investors
1 Taft-Hartley
-5-
* As of 6/30/06
SECTION 2: Investment Process
INVESCO Core Real Estate-U.S.A.
PORTFOLIO STRATEGY
Core real estate strategy
Diversified portfolio of Long-term property type strategic
Property Type ranges
institutional quality properties Allocation Overweight-industrial
and multi-family
30% maximum leverage Equal weight-retail
Underweight-office
Market (MSA)
Allocation INVESCO Qualified Market Rankings
Objective:
Exceed NCREIF
over 3 and 5 year
rolling basis Property
Specific
Selection On the Ground Real
Estate Expertise and
Market Coverage
Execution of Property
Business Plan
-7-
SECTION 3: INVESCO Core Real Estate–U.S.A. (“ICRE”)
INVESCO Core Real Estate-U.S.A.
PORTFOLIO SUMMARY
06/30/06
•43 investments
Gross Asset Value $1,336,920,000 •Size range from $6.6 million to
$115 million
•Portfolio Occupancy = 93%
•Cash =2.3% of NAV
1
Leverage & Liabilities 364,510,000
•Debt to total fund assets = 25%2
Net Asset Value $972,410,000 •Weighted average interest rate
is 5.7%
Source: INVESCO Real Estate 1 $249,618,000 – market value of permanent debt
Accounting, internal, unaudited $ 79,000,000 – short-term line of credit
results as of 06/30/06 $ 35,892,000 – other liabilities
2 19% without line of credit
-9-
Core Fund Portfolio Diversification
AS OF JUNE 30, 2006
Property Type Mix
50%
INVESCO Core Real Estate-U.S.A. @ 6/30/06 INVESCO Target Range
NCREIF @ 6/30/06 Target*
40% 38%
30%
27% 26%
24% 23% 23%
21%
20% 18%
10%
0%
Industrial Multi-Family Retail Office NCREIF Region Mix
50%
* Target diversification may change based on changing market conditions. INVESCO Core Real Estate-U.S.A. @ 6/30/06
NCREIF @ 6/30/06
40%
35% 36%
32%
30%
30%
22%
Source: NCREIF Index as of 6/30/06 20% 19%
15%
This analysis represents the Core Fund portfolio as of 6/30/06 using 11%
gross property value. Regional allocation versus NCREIF allocation is 10%
shown for informational purposed only and does not reflect an specific
regional allocation decision. Information is taken from sources believed
to be reliable, but accuracy cannot be guaranteed. 0%
West South Midwest East
-10-
ICRE – 2006 Q3 Update
STATUS OF ICRE AS OF JUNE 30, 2006
Net Asset Value Investors
Current Net Asset Value
June 30, 2006 $ 972,410,000 18
July 1, 2006 Capital Call 131,235,000 5
$1,103,645,000 23
Investor Commitments
Signed $ 253,400,000 6 (new)
In Documentation 165,000,000 8
$ 418,400,000 14
Fully Invested NAV 1 $1,522,045,000 37
Gross Potential Fund Size 1, 2 $2,144,824,000
1 At Current Valuations
2 Fully Invested With Available Debt Capacity
-11-
Fund Business Plan
$2.5 billion
2,500
Projected INVESCO Fund Size (Gross Value) 65
2,250 Invest-
Fund 2,000 ments
$1.75 billion
Growth 1,750
50
1,500 $1.34 billion
$ Millions
Invest-
1,250 ments
43
1,000 Invest-
ments
750
500
250
0
Core Fund Portfolio Year End 2006* Year End 2007*
(as of 06/30/06)
* Source: INVESCO Real Estate projections. Information is taken from sources believed to be reliable,
but accuracy can not be guaranteed. All values are approximate and asset growth is estimated.
Portfolio Design
Fund – Maintain overweight to apartment and industrial
Investment – Maintain neutral weight to retail
Strategy – Maintain underweight to office
– Neutral weighting relative to NCREIF regions
Asset Size
– Target investments in $25-100 million range
Performance
– Total return to exceed NCREIF Property Index (NPI) over 3 and 5 year rolling basis
– INVESCO expects to generate excess return through strategic property sector
-12-
weightings, market selection and specific property selection
SECTION 4: Performance
INVESCO Core Real Estate-U.S.A.
PERFORMANCE AS OF JUNE 30, 2006
Investment Level Returns (Leveraged)
Total
Income Appreciation Return
ICRE 1Year Rolling – Gross 6.87% 16.38% 24.09%
ICRE 1 Year Rolling – Net 6.16% 16.38% 23.28%
NCREIF NPI 6.43% 11.69% 18.68%
ICRE Annualized
Since Inception (4Q04-2Q06) – Gross 7.40% 14.59% 22.79%
ICRE Annualized
Since Inception (4Q04-2Q06) – Net 6.69% 14.59% 22.00%
NCREIF NPI 6.71% 11.66% 18.92%
This chart reflects the actual fund performance of the INVESCO Core Real Estate-U.S.A., LLC as of 6/30/06. The fund inception date is 9/30/04. The
returns are leveraged total returns, calculated at an investment level following the Modified Dietz methodology. The net of fee returns are based on the
actual fees charged to current fund investors. Future investor’s fees could differ based on the size of their investment. The highest potential fee would
be 1.1% of NAV assuming a minimum investment of $5 million. Please see fund documents for more detailed information on fund fees. The NCREIF
Property Index (NPI) is shown for illustrative purposes only and is not directly comparable to fund returns as it is reported on an unleveraged, property
level basis.
An investor should only invest in the Fund as part of an overall investment strategy and should not construe that the performance of earlier
investments by INVESCO as providing any assurances regarding the future performance of the fund. There can be no assurance that the Fund will
meet its investment objective.
Investment funds are speculative and involve a high degree of risk. Real property investments are subject to varying degrees of risk including market,
leasing and environmental risks; an investor could lose all or a substantial amount of its investment; there is no secondary market nor is one expected
to develop for investments in the Fund; there are certain restrictions on transferring interests in the Fund; the Fund is expected to be leveraged; the
Fund's performance may be volatile; and the Fund includes management fees and expenses that will reduce returns. Please review the Risk Factor
-14- section of the Private Placement Memorandum for a complete discussion.
SECTION 5: Property Sector Summary
INVESCO Core Real Estate – U.S.A.
INDUSTRIAL PORTFOLIO
Sector Outlook: Overweight Relative to NCREIF Industrial Core Fund Portfolio
50%
14 Investments – 6,035,679* sq ft – 93% Occupied
INVESCO Core Real Estate-U.S.A. @ 6/30/06 INVESCO Target Range
NCREIF @ 6/30/06 Target*
40%
Excellent mix of bulk distribution and office/warehouse
30% 27% product in major national and regional distribution markets
20% 18%
10%
Functional attributes appropriate for the particular market
0%
Industrial Multi-Family Retail Office Solid line-up of regional and national tenants
Demand tends to recover early in
economic cycle
Additional improvement in industrial
utilization expected
Dollar depreciation and globalization
will help trade
Baltimore, MD
Attractive supply dynamics
* Includes non-consolidated joint venture–ICRE’s 50% share in the VIP Hayward, CA
Holdings I Portfolio. Square footage included in the total industrial
portfolio represents the Fund’s proportionate share in this investment.
-16- Data as of 6/30/06.
INVESCO Core Real Estate – U.S.A.
MULTI-FAMILY PORTFOLIO
Sector Outlook: Overweight Relative to NCREIF Multi-Family Core Fund Portfolio
50%
11 Investments – 7,143* units – 94% Occupied
INVESCO Core Real Estate-U.S.A. @ 6/30/06 INVESCO Target Range
NCREIF @ 6/30/06 Target*
40% Excellent locations near major employment centers
30%
26%
Good mix of “A” and “B+” product with competitive attributes
21%
20% and amenities and no major deferred maintenance or capital
10%
issues
0%
Good current income with opportunity for significant
Industrial Multi-Family Retail Office
effective rent growth as market concessions decline
Recovering job markets will increase demand
Rising interest rates will increase demand capture
Favorable long-term demographics
Austin, TX
* Includes non-consolidated joint venture–ICRE’s 25% share in the Milestone Upland, CA
Apartment Portfolio. Number of units included in the total units represents
the Fund’s proportionate share in this investment. Data as of 6/30/06.
-17-
INVESCO Core Real Estate – U.S.A.
RETAIL PORTFOLIO
Sector Outlook: Neutral Weight Relative to NCREIF Retail Core Fund Portfolio
50%
10 Investments – 1,292,290 sq ft – 97% Occupied
INVESCO Core Real Estate-U.S.A. @ 6/30/06 INVESCO Target Range
NCREIF @ 6/30/06 Target*
40%
Neighborhood shopping centers with dominant grocers:
30% Publix, Super Stop & Shop, Harris Teeter, Kroger and
24%
23%
Safeway
20%
10% “A” location power centers with strong national credit
0%
tenants including Bed Bath & Beyond, Borders Books
Industrial Multi-Family Retail Office and TJ Maxx
Expect continued stable income-oriented
returns
Limited appreciation potential
Capital market demand will increase
value of current holdings
San Francisco, CA
Attractive supply dynamics
Chicago, IL
Data as of 6/30/06.
-18-
INVESCO Core Real Estate – U.S.A.
OFFICE PORTFOLIO
Sector Outlook: Underweight Relative to NCREIF Office Core Fund Portfolio
50%
7 Investments – 1,267,439 sq ft – 87% Occupied
INVESCO Core Real Estate-U.S.A. @ 6/30/06 INVESCO Target Range
NCREIF @ 6/30/06 Target*
40% 38%
Mid-size suburban and urban buildings in “A” locations
30%
23%
20%
All in major employment centers well positioned to
capture jobs as the economy improves
10%
0% Good mix of strong national and regional tenants
Industrial Multi-Family Retail Office
Low market occupancies suggest delayed rent
recovery
Slow recovery in demand due to modest initial
job growth and excess space
Boston, MA
Most volatile product type
Boca Raton, FL
Data as of 6/30/06.
-19-
SECTION 6: Portfolio Activity
ICRE Closed & Pending Transactions
STATUS AS OF JUNE 30, 2006
10 Year
Property Closing Gross Acquisition Unleveraged
Property Location Type Quarter Price Equity Debt IRR*
Closed Transactions
55 Cambridge Pkwy. Boston, MA Office 1Q06 $ 115,045,595 $ 62,030,032 $ 53,551,074 8.66%
VIP Holdings II - Remington Lake Chicago, IL Industrial 1Q06 $ 5,980,688 $ 2,724,203 $ 3,256,485 8.90%
Broadstone Foothills Upland, CA Apartment 1Q06 $ 33,055,000 $ 33,055,000 7.46%
The Beacon San Francisco, CA Retail / Parking 1Q06 $ 64,518,462 $ 64,518,462 8.90%
Lenox Distribution Lenexa, KS Industrial 1Q06 $ 9,190,000 $ 9,190,000 7.95%
Oakesdale Commerce Center Seattle, WA Industrial 1Q06 $ 37,381,522 $ 37,381,522 7.37%
Total 1Q06 (Weighted Avg.) $ 265,171,267 $ 208,899,219 $ 56,807,559 8.37%
VIP Holdings I - A** Chicago, IL Industrial 2Q06 $ 22,061,931 $ 22,061,931 8.44%
VIP Holdings I - B (1st Portion)** Chicago, IL Industrial 2Q06 $ 9,400,000 $ 9,400,000 7.41%
Patuxent & Larkin Jessup, MD Industrial 2Q06 $ 30,026,619 $ 30,026,619 8.30%
VIP Holdings II - W.Chicago West Chicago, IL Industrial 2Q06 $ 8,593,561 $ 3,876,183 $ 4,717,378 8.72%
VIP Holdings II - Mourek-Elmhurs Elmhurst, IL Industrial 2Q06 $ 12,746,787 $ 5,774,403 $ 6,972,384 8.89%
VIP Holdings II - Mokena Xing Mokena, IL Industrial 2Q06 $ 11,584,688 $ 5,209,688 $ 6,375,000 8.97%
Milestone Apartment Portfolio** Various Apartment 2Q06 $ 70,425,000 $ 70,425,000 9.34%
Total 2Q06 (Weighted Avg.) $ 164,838,586 $ 146,773,824 $ 18,064,762 8.83%
Total (Weighted Avg.) $ 430,009,853 # $ 355,673,043 $ 74,872,321 8.54%
Pending Transactions*
VIP Holdings I - B (2nd Portion)** Chicago, IL Industrial 2Q06 $ 8,400,000 $ 8,400,000 7.41%
Docks Corner - Land South Brunswick, NJ Industrial 2Q06 $ 9,425,000 $ 9,425,000 9.29%
Folcroft Business Center Folcroft, PA Industrial 2Q06 $ 8,305,349 $ 8,305,349 7.29%
Total (Weighted Avg.) $ 26,130,349 $ 26,130,349 $ - 8.05%
TOTAL 2006 (Weighted Avg.) $ 456,140,202 $ 381,803,392 $ 74,336,810 8.52%
* Projected
**Non-Consolidated Joint Venture - equity only is carried on books
Property Closing Percentage
Property Location Type Quarter Gross Sales Price Previous Carry Value Gained
-21- Closed Sales
Legacy Dunes Kissimmee, FL Apt 2Q06 $ 75,000,000 $ 61,000,000 23%
ICRE Acquisition – Milestone Apartment Portfolio
10 METROPOLITAN CITIES IN 6 STATES
Acquisition (Closed 6/13/06)
Off-market transaction
Favorable basis ($54,000/unit) relative to new construction
($90,000/unit +)
Experienced operating partner
Favorable fundamentals in all markets
Buying at market-cycle trough rents
Strong “same store” occupancy history
Multiple options for incremental revenue creation via unit upgrades,
additional amenities, etc.
Salt Lake City, UT
Portfolio allows for numerous exit strategies
ICRE Co-Investment with other INVESCO clients
ICRE has a 25% share in the portfolio
$70.4 MM initial investment - $75 MM total
commitment 2
Salt Lake
Income-oriented value-added strategy City Nashville
4
Phoenix
93% portfolio occupancy Atlanta
3 3
Dallas 19
6.38% unleveraged going in cap rate 3 Jacksonville
Austin 3
15
9.34% projected 10-year IRR (unleveraged) 2 Houston 3
San Antonio Tam pa
-22-
Source: INVESCO Real Estate (as of 6/30/06)
ICRE Acquisition – VIP Industrial Portfolios
CHICAGO, IL
Acquisition (Various Closing Dates)
In-fill multi-tenant industrial strategy in key national
industrial market
Joint Venture(s) with experienced Chicago industrial firm
Product allows potential for strong rent growth from
stable tenant base
Formulation of two Joint Ventures:
VIP Holdings I (Existing Properties) • VIP Holdings I
• 2.4 MM SF – 46 properties – 50/50 JV
• 96% occupied – Recap of existing portfolio
• 55% LTV
• $164.5 MM – gross
• $38.9 MM – net, ICRE equity • VIP Holdings II
• 6.86% going-in unleveraged cap – 75/25 ICRE/VIP Acquisition JV
• 8.44% unleveraged IRR – Five properties to-date
– Additional acquisitions will
VIP Holdings II (Acquisition JV) be made
• 4 Properties acquired to-date totaling
602,000 square feet
-23-
• 75/25 ICRE/VIP Source: INVESCO Real Estate (as of 6/30/06)
• 55% LTV
ICRE Acquisition – Patuxent & Larkin Industrial
JESSUP (BALTIMORE/WASHINGTON), MD
Acquisition (Closed 5/16/06)
Three highly functional multi-tenant distribution
buildings totaling 429,100 square feet in an “A”
location in the Baltimore/Washington Corridor
industrial market
Strong market fundamentals (93% occupancy in the
submarket), combined with the functionality and
location of the product should allow rapid lease up
Patuxent
from the initial 62% occupancy
$30 MM Total Investment
62% occupied
8.30% projected IRR (unleveraged)-10 year
6.86% stabilized cap rate
Larkin
Source: INVESCO Real Estate (as of 6/30/06)
-24-
ICRE Acquisition – The Beacon Retail & Parking
SAN FRANCISCO, CA
Acquisition (Closed 3/31/06)
Class-A grocery-anchored community shopping center
plus structured parking in downtown San Francisco
84,776 SF of retail – anchors include Safeway and
Borders, which represent 68% of the GLA
951 contiguous structured
parking spaces
Excellent visibility and
located across from AT&T
Park (Giants), as well as
access to public transit
The Beacon
$64.5 MM Total Investment and freeways
Submarket has significant
82% occupied
residential and commercial
growth
8.90% projected IRR (unleveraged)-10 year
6.31% stabilized cap rate
-25-
Source: INVESCO Real Estate (as of 6/30/06)
ICRE Acquisition – 55 Cambridge Parkway
CAMBRIDGE (BOSTON), MA
Acquisition (Closed 1/26/06)
Dominant Class-A Office Building located
directly on the Charles River
Excellent Location with Outstanding Views of
Boston, Amenities and Access including
Public Transit.
Solid Credit Rent Roll with In-place Rents
Below Market
Functional Design with 275,968 square feet
and Structured Parking
$115.0 MM Total Investment
$62.0 MM Equity Investment
$53.6 MM Assumed Debt
94% Leased
8.66% projected IRR (unleveraged)-10 year
9.87% projected IRR (leveraged)-10 year
6.29% going-in cap rate (unleveraged)
-26-
Source: INVESCO Real Estate (as of 6/30/06)
ICRE Quarterly Property Portfolio Summary
AS OF JUNE 30, 2006
Value % Value %
of # Units of Value/Unit
Asset City/State Sq. Ft. Leased Market Value Portfolio Value/SF Asset City/State Sq. Ft. Leased Market Value Portfolio Value/SF
25 & 27 Otis Westborough, MA 214,175 90.7% 15,000,000 1.1% $70.04 Autumn Woods Carrboro, NC 236 95.3% 20,548,485 1.6% $87,070
400& 625 Pierce Franklin Township, NJ 277,949 72.1% 17,800,000 1.4% $64.04 Boca Colony Boca Raton, FL 180 99.4% 22,000,000 1.7% $122,222
Arjons San Diego, CA 244,400 100.0% 25,595,399 2.0% $104.73 Charleston @ Blue Ash Blue Ash, OH 242 98.4% 21,875,468 1.7% $90,394
Garland Gateway Garland, TX 223,569 100.0% 8,400,000 0.6% $37.57 Cross Creek Grapevine, TX 392 100.0% 29,897,654 2.3% $76,270
Gateway Business Park Coppell, TX 150,099 100.0% 8,900,000 0.7% $59.29 Seneca Village Hillsboro, OR 264 98.0% 27,700,000 2.1% $104,924
Hayward Industrial Hayward, CA 691,026 97.3% 47,403,591 3.6% $68.60 Waterhouse Place Beaverton, OR 279 92.8% 23,907,267 1.8% $85,689
Irving Warehouse Irving, TX 210,000 100.0% 8,350,000 0.6% $39.76 GrandeVille at the Commons South Kingstown, RI 234 96.0% 46,095,925 3.5% $196,991
1
Lackman Lenexa, KS 421,991 100.0% 20,500,000 1.6% $48.58 Village Place West Palm Beach, FL 202 93.1% 18,109,474 1.4% $89,651
Auburn Warehouse Auburn, WA 896,827 100.0% 54,111,513 4.1% $60.34 Vinings at Palm Bay
1
Palm Bay, FL 320 96.6% 19,893,035 1.5% $62,166
1
VIP Holdings II Chicago, IL 602,403 95.7% 44,225,542 3.4% $73.42 Broadstone Foothills Upland, CA 128 87.5% 33,035,160 2.5% $258,087
Crossroads Industrial Lenexa, KS 175,014 65.7% 9,145,779 0.7% $52.26
Wholly & Majority Owned Apartment Portfolio 2,477 96.3% $263,062,468 20.2% $106,202
Oakesdale Commerce Ctr Renton, WA 314,699 92.7% 36,637,788 2.8% $116.42
3
Patuxent & Larkin Industrial Jessup, MD 429,100 61.6% 28,930,886 2.2% $67.42 Milestone Apt Portfolio Various Southern States 4,666 93.4% 70,548,250 5.4% $54,250
Wholly & Majority Owned Industrial Portfolio 4,851,252 92.0% $325,000,498 24.9% $66.99 Total Apartment Portfolio 7,143 94.4% $333,610,718 25.6% $58,952
2
VIP Holdings Chicago, IL 1,184,427 95.4% 31,611,527 2.4% $66.16
Total Industrial Portfolio 6,035,679 92.6% 356,612,025 27.3% $66.72
Wholly & Majority Owned Portfolio 9,828,477 93.0% $1,203,199,918
300 Crown Colony Quincy, MA 116,652 96.2% 18,649,779 1.4% $159.88
Boca Corporate Boca Raton, FL 89,503 95.2% 21,000,000 1.6% $234.63 Total Portfolio 14,730,702 93.3% $1,305,359,695
Highland Bank Bloomington, MN 54,769 88.3% 8,046,205 0.6% $146.91
Pacific Corporate Bellevue, WA 84,037 82.2% 18,425,000 1.4% $219.25
Somerset Court Waltham, MA 67,743 96.2% 9,345,563 0.7% $137.96 1 Majority
Meadows Office Complex Rutherford, NJ 578,767 80.3% 106,800,000 8.2% $184.53 controlled joint venture
55 Cambridge Parkway Cambridge, MA 275,968 93.5% 113,495,686 8.7% $411.26
2 Non-consolidated joint venture represents ICRE’s 50% share in the portfolio investment.
Office Portfolio 1,267,439 87.0% $295,762,233 22.7% $233.35
Square footage and market value represent the Fund’s proportionate share.
Broadway at Surf Chicago, IL 134,223 100.0% 33,910,809 2.6% $252.65
Carriagetown Marketplace Amesbury, MA 96,540 98.8% 21,512,021 1.6% $222.83 3 Non-consolidated joint venture represents ICRE’s 25% share in the portfolio investment.
Chandler Pavilion Chandler, AZ 163,551 100.0% 24,000,000 1.8% $146.74 Number of units and market value represent the Fund’s proportionate share.
Matthews Township Matthews, NC 128,651 100.0% 21,100,000 1.6% $164.01
Ramblewood Coral Springs, Fl 143,236 88.7% 26,135,975 2.0% $182.47
Windward Commons Alpharetta, GA 117,234 98.8% 21,800,000 1.7% $185.95
Summit Heights Fontana, CA 197,391 97.7% 31,842,154 2.4% $161.32
Cityline at Tenley Washington, DC 86,270 100.0% 45,946,185 3.5% $532.59
Ridgehaven Shopping Center Minnetonka, MN 140,418 100.0% 29,305,311 2.2% $208.70
The Beacon San Francisco, CA 63,822,264 4.9%
The Beacon Retail San Francisco, CA 84,776 81.6% 42,877,538 3.3% $505.77
The Beacon Garage (units) San Francisco, CA 951 20,944,726 1.6% $22,024
Retail Portfolio 1,292,290 97.0% $319,374,719 24.5% $247.14
-27-
Appendix
INVESCO Core Real Estate–U.S.A., LLC
TERMS
Investment
Strategy: Core Real Estate (Multi-Family, Retail, Industrial, Office)
Geographic Major metropolitan areas within the United States
Focus:
Leverage: Maximum of 30% loan-to-value
Structure: A Delaware limited liability company; open-ended with quarterly liquidity
Eligible Public Pension Funds, Corporate Pension Funds, Jointly Trusteed Benefit Plans,
Investors: Foundations, Endowments, Banks, Insurance Companies, Charitable Trusts, High Net
Worth Individuals and Foreign Investors
Minimum
Investment: $5,000,000
Investment For investors whose subscription is:
Management
Greater than $25 million – 0.9% of NAV
Fee:*
$15 million to $25 million – 1.0% of NAV
$0 million to $15 million – 1.1% of NAV
-29-
* Please see PPM for a more complete description of fees.
Integrated Strategy Process – A Team Approach
Investment Committee
Investment Strategy Committee
Regional Team Members South Office
- Acquisitions Regional Team Specialists
- Market Research
- Property Research
- Asset Management West Retail
Property Type Investment
Regional Team Specialists
Recommend Strategies
Addition/Deletions to
Qualified Market List Locational & Physical
Midwest Industrial Criteria
Regional Team Specialists
Rate Markets &
Recommend
Market/Property
Combinations For East Apartments
Target Markets Regional Team Specialists
-30-
ICRE 2005 Transactions
10 Year
Gross Acquisition Unleveraged
Closed Transactions Price Equity Debt IRR*
8 Transactions Totaled (Weighted Avg.) $ 371,509,642 $ 278,855,290 $ 92,654,352 8.22%
* Projected
Percentage
Closed Sale Gross Sales Price Previous Carry Value Gained
1 Transaction $ 44,500,000 $ 26,000,000 71%
-31-
INVESCO Core Real Estate-U.S.A.
PORTFOLIO STRATEGY
Core real estate strategy
Diversified portfolio of
Property Type
institutional quality properties Allocation
30% maximum leverage
Market (MSA)
Allocation
Objective:
Exceed NCREIF
over 3 and 5 year Property
Specific
rolling basis Selection
Execution of Property
Business Plan
-32-
INVESCO Core Real Estate-U.S.A.
PORTFOLIO STRATEGY
Best Performing Sector Worse Performing Sector Source: NCREIF, INVESCO Real
77-82 Office 19.3% Apartments 19.2% NPI 16.1% Industrial 15.3% Retail 10.6% Estate (4/06). This chart is intended
78-83 Apartments 19.6% Office 17.5% NPI 15.5% Industrial 15.0% Retail 11.2% for illustrative purposes only. It
Property Type 79-84 Office 16.1% Apartments 16.0% NPI 14.2% Industrial 13.9% Retail 12.3% compares the returns of the four
80-85 Apartments 14.6% Industrial 13.1% NPI 12.8% Office 12.8% Retail 12.6% real estate sectors that are the
Allocation
Step 1 81-86
82-87
Apartments
Retail
13.2%
14.0%
Retail
Apartments
12.9%
11.4%
Industrial
Industrial
11.4%
11.4%
NPI
NPI
11.2%
10.9%
Office
Office
9.9%
8.7%
primary focus of INVESCO Real
Estate’s investment strategy. Data
83-88 Retail 14.2% Industrial 10.8% NPI 10.2% Apartments 9.8% Office 7.4% is shown on a rolling five year basis
84-89 Retail 13.3% Industrial 9.9% NPI 9.0% Apartments 8.9% Office 5.8% going back over twenty years to
85-90 Retail 11.6% Industrial 7.8% Apartments 7.8% NPI 7.2% Office 3.7% capture several real estate market
86-91 Retail 8.6% Apartments 6.0% Industrial 5.2% NPI 4.3% Office 0.1% cycles. All data is provided by
87-92 Retail 5.6% Apartments 5.0% Industrial 2.3% NPI 1.8% Office -2.3% NCREIF. All material presented is
88-93 Apartments 4.7% Retail 3.7% Industrial 0.2% NPI 0.2% Office -4.2% compiled from sources believed to
89-94 Apartments 5.3% Retail 2.5% Industrial 0.0% NPI -0.1% Office -4.3% be reliable and current, but
90-95 Apartments 6.4% Retail 2.1% Industrial 2.0% NPI 0.9% Office -2.7% accuracy cannot be guaranteed.
91-96 Apartments 9.1% Industrial 5.4% NPI 4.1% Retail 3.4% Office 2.2% This is not to be construed as an
92-97 Apartments 11.4% Industrial 9.6% NPI 7.8% Office 7.4% Retail 5.6% offer to buy or sell any financial
93-98 Industrial 13.0% Apartments 12.5% Office 12.3% NPI 10.8% Retail 7.2% instruments. It is not our intention to
94-99 Office 14.0% Industrial 13.9% Apartments 12.4% NPI 11.8% Retail 7.9% state, indicate, or imply in any
95-00 Office 15.4% Industrial 14.2% NPI 12.8% Apartments 12.7% Retail 8.7% manner that current or past results
96-01 Office 13.9% Industrial 13.3% Apartments 12.2% NPI 12.2% Retail 9.1% are indicative of future profitability
97-02 Industrial 11.5% Apartments 11.4% Office 10.8% NPI 10.7% Retail 10.1% or expectations. As with all
98-03 Retail 10.9% Apartments 10.3% Industrial 10.0% NPI 9.3% Office 8.1% investments, there are associated
99-04 Retail 13.5% Apartments 10.6% Industrial 10.0% NPI 9.9% Office 8.1% inherent risks. Please obtain and
00-05 Retail 16.0% Apartments 12.2% NPI 11.4% Industrial 11.2% Office 9.1% review all financial material carefully
01-1Q06 Retail 16.3% Apartments 12.4% NPI 11.7% Industrial 11.4% Office 9.4% before investing.
Long-term property type strategic ranges
Overweight-industrial
and multi-family
50% Equal weight-retail
NCREIF @ 3/31/06
INVESCO Target Range
Underweight-office
40% Target * 38%
Tactical Targets–
30% based on current
23% market cycle
19% 20%
20%
10%
0%
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* Target diversification may change based on changing market conditions.
INVESCO Core Real Estate-U.S.A.
PORTFOLIO STRATEGY
Industrial Tier Ratings Retail Qualified Markets*
Seattle
Seattle
Minneapolis Minneapolis
Portland Portland
Chicago Hartford
New York Boston Chicago
Boston
New York
Philadelphia
Denver Philadelphia
Kansas City Denver
Sacramento Kansas City
Market (MSA) No. New Jersey
Baltimore
No. New Jersey
Baltimore
Oakland San Francisco Oakland
Allocation Washington DC Washington DC
Step 2 Orange County
San Jose
Riverside
Phoenix
San Jose
Orange County Riverside
Phoenix
Charlotte
Raleigh
Los Ft. Worth Los Ft. Worth
Angeles Dallas Angeles Dallas
Atlanta Atlanta
San Diego San Diego
Austin
Houston Houston Jacksonville
San Orlando
Antonio West Palm Beach
Tampa
Fort Lauderdale Fort Lauderdale
Miami Miami
* Beginning Spring ‘05, Retail Markets are no longer
being ranked/rated. This is a list of Qualified Markets.
Multi-Family Tier Ratings Office Tier Ratings
Seattle Seattle
Minneapolis Minneapolis
Portland
Chicago New York Boston Chicago New York Boston
Philadelphia Philadelphia
Denver Denver
Sacramento
No. New Jersey
San No. New Jersey
Francisco Baltimore
San Francisco
Oakland Washington DC Oakland Washington DC
San Jose Charlotte San Jose Charlotte
Riverside
Orange County Raleigh Orange County
Phoenix Dallas/Ft. Raleigh
Worth Los Phoenix
Los
INVESCO Qualified
Angeles Atlanta Angeles Dallas
San Diego Atlanta
San Diego
Austin Austin
Houston Jacksonville
Houston
Orlando
Market Rankings
West Palm Beach
Tampa West Palm Beach
Fort Lauderdale Tampa
Market Conditions
Fort Lauderdale
Tier 33
Tier Tier 2
Tier 2 Miami
Strong
Miami
Current
Weak
Tier 4 Tier 1
Tier 4 Tier 1
Weak Strong
Market Outlook
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Source: INVESCO Real Estate Research
INVESCO Core Real Estate-U.S.A.
PORTFOLIO STRATEGY
Midwest
Acquisitions: Market Research:
Steve Eckstein Nick Buss
Brad Takala
Paul Nelson
(Value-Added) Underwriting:
Whitney Farley
Asset Management: Dan Kubiak
Bill Brown Jed Melson
Dave Laner Mike Mauren
Darin Turner
WA MT ND
MN
ME
OR ID SD WI VT
WY MI NY NH
N. IA MA
CA NE CT
PA
San NV UT IL IN OH NJ RI
CO MD
Francisco KS MO
KY WV VA DE New York
S. D.C.
Property CA NC
Specific AZ NM
Selection
Step 3 Orange OK AR
TN SC
County
MS AL GA Atlanta
LA
TX
FL East
West
Dallas Acquisitions: Market Research:
Acquisitions: Market Research:
Steve Eckstein Sara Rutledge John Blaylock Nick Buss
Mike Tyre Chris Schmidt
Paul Nelson (Value-Added) Brad Takala
Paul Peszt Paul Nelson (Value-Added)
Chris Cole
South Asset Management: Underwriting:
David Bass John Kiernan
On the Ground Real
Asset Management: Underwriting: Ken Kaminski Dan Kubiak
Duncan Walker Whitney Farley Acquisitions: Market Research:
Kevin Johnson Dan Kubiak Steve Eckstein Mike Sobolik Cain Kirk Mike Mauren
Tom Hurst Mike Mauren Chris Schmidt Dave Laner Jed Melson
Paul Nelson (Value-Added)
Estate Expertise
Darin Turner Cheryl Ruff
Darin Turner
Asset Management: Underwriting:
Bill Brown Mike Mauren
and Market
Terrell Boiko Whitney Farley
Steve Harrell Dan Kubiak
Cain Kirk Cheryl Ruff Qualified Markets
Sally Kittles Darin Turner
Data as of 07/01/06
Coverage Personnel listed are employed by INVESCO Real
Estate and provide these areas of coverage on
behalf of all real estate clients.
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INVESCO Core Real Estate-U.S.A.
PORTFOLIO STRATEGY
Asset
Research Management
Execution of Property Step 4 Acquisitions/
Business Plan Portfolio
Management Dispositions
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