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					   Mid-Year 2009 Update2007

A Look at the Washington Area
Multi-Family Real Estate Market


                                  1
Mid-Year 2009 Update2007
                           WASHINGTON
                           METRO
                           CONDOMINIUM
                           MARKET        ®

                                             2
                   NEW UNIT SALES ACTIVITY
                             WASHINGTON METRO AREA 2004 – MID-YEAR 2009
                             3,900
                                                                              = District
                             3,500                                            = Suburban Washington
                             3,100
 Number of New Condo Units




                             2,700

                             2,300

                             1,900

                             1,500

                             1,100

                              700
                                         2004        2005        2006       2007            2008
                              300       = 9,108    = 13,687     = 6,608    = 3,905         = 1,704

                              -100
                                     Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

                                        2004         2005        2006       2007            2008
Source: Delta Associates; July 2009.                                                                     3
   NET SALES VS. GROSS SALES
        WASHINGTON METRO AREA 2006 – 2009

                                 8,617
                                                                                                Kick-outs
                                                                                                Net Sales
                                                             6,879
    Number of Sales




                                 6,320

                                                                     4,396

                                                                                            3,600
                                                             3,732

                                                                                            2,500

                                                                     1,599




Source: McWilliams | Ballard, Delta Associates; July 2009.            Note: Excludes Howard & Anne Arundel Counties   4
YEARS OF CONDOMINIUM SUPPLY
      WASHINGTON METRO AREA 2003 – 2010




                                                                  -9.2%
                                       Price Change*
 Years of Supply




                                                          -0.2%

                                                  -0.1%




                                         24.5%
                               27.2%
                   21.0%




                                                                          *Resales
Source: Delta Associates; July 2009.                                                 5
Mid-Year 2009 Update2007
                           WASHINGTON
                           METRO
                           APARTMENT
                           MARKET       ®

                                            6
           LOWEST APARTMENT VACANCY
                                         SELECT METRO AREAS 2008 VS. 2009
  Vacancy Rate (All Apartment Classes)




                                                                            6.6%

                                                                            5.6%




Source: REIS, Delta Associates; July 2009.                                     7
    CLASS A APARTMENT NET ABSORPTION
                   SELECT METRO AREAS 12 MONTHS ENDING JUNE 2009


                         8,294
                                                       National Net
                                                        Absorption:
                                                       44,027 Units
 Apartment Units




Source: REIS, Delta Associates; July 2009.                            8
   PAYROLL JOB CHANGE
      WASHINGTON METRO AREA 12 MONTHS ENDING JULY 2009




                                                                                  -31,700 jobs




                                                                     Job Change

Source: Bureau of Labor Statistics, Delta Associates; August 2009.                               9
   PAYROLL JOB CHANGE
      NORTHERN VIRGINIA 12 MONTHS ENDING JULY 2009




                                                                                  -10,900 jobs




                                                                     Job Change

Source: Bureau of Labor Statistics, Delta Associates; August 2009.                               10
   PAYROLL JOB CHANGE
      SUBURBAN MARYLAND 12 MONTHS ENDING JULY 2009




                                                                                  -25,600 jobs




                                                                     Job Change

Source: Bureau of Labor Statistics, Delta Associates; August 2009.                               11
   PAYROLL JOB CHANGE
      DISTRICT OF COLUMBIA 12 MONTHS ENDING JULY 2009




                                                                                  +4,800 jobs




                                                                     Job Change

Source: Bureau of Labor Statistics, Delta Associates; August 2009.                              12
         HOUSEHOLD GROWTH
                                 WASHINGTON METRO AREA VS. OTHER METROS


                                                                          407
  Total Households (Thousands)




                                                                          406


                                                                          405


                                                                          404


                                                                          403


                                                                          402


                                                                          401


                                                                          400




Source: Economy.com, Delta Associates; August 2009.                             13
       RISE IN RENTERS
                          WASHINGTON METRO AREA VS. OTHER METROS

                           36.0%

                           35.6%
                                     WASHINGTON
                           35.2%
  Renter Percentage (%)




                                     75 LGST. METROS
                           34.8%

                           34.4%

                           34.0%

                           33.6%

                           33.2%

                           32.8%




Source: Economy.com, Delta Associates; August 2009.                14
  NET APARTMENT UNIT ABSORPTION
                      WASHINGTON METRO AREA
    Unit Absorption – All Types and Classes




                                              Trailing 12 Months Ending in June
Source: Delta Associates; July 2009.                                              15
   EFFECTIVE RENT & VACANCY RATE
     WASHINGTON METRO AREA 1998 – MID-YEAR 2009




                                                               Average Effective Base Rent
                                             4.2% / yr.
                                       Long–Term Rent Growth

Source: Delta Associates; July 2009.                                                     16
                EFFECTIVE RENT & VACANCY RATE
                           WASHINGTON METRO AREA 1998 – MID-YEAR 2009
                           5.0%                                                  PAST 12 MONTHS                       $1,600
                                                                            Washington Metro -1.4%
                           4.5%          Effective Rent                     U.S.              - 8.1%                  $1,500




                                                                                                                               Average Effective Base Rent
                           4.0%          Stabilized Vacancy Rate
                                                                                                                      $1,400
 Stabilized Vacancy Rate




                           3.5%
                                                                                                                      $1,300
                           3.0%
                                                                                                                      $1,200
                           2.5%
                                                                                                                      $1,100
                           2.0%
                                                                                                                      $1,000
                           1.5%

                           1.0%                                                                                       $900

                           0.5%                                                                                       $800

                           0.0%                                                                                       $700
                                  1998   1999   2000   2001   2002   2003   2004   2005   2006   2007   2008    Q2
                                                                                                               2009

                                                                    4.2% / yr.
                                                              Long–Term Rent Growth

Source: MPF, Delta Associates; July 2009.                                                                                                                17
  ABSORPTION PACE PER PROJECT PER MONTH
             WASHINGTON METRO AREA JUNE OF EACH YEAR
   Units per Month




                        26             32          21          14          27        41   47

                                            Number of projects in initial lease-up
Source: Delta Associates; July 2009.                                                           18
                 PIPELINE ACTIVITY SINCE 1998
                                   WASHINGTON METRO AREA 1998 – MID-YEAR 2009


                                                                        Total : 36,952
 Market Rate Units Planned & U/C




                                                       Total : 18,524                    Total : 20,772




Source: Delta Associates; July 2009.                                                                      19
   APARTMENT CONSTRUCTION STARTS
             WASHINGTON METRO AREA


                     2,500


                     2,000
   Apartment Units




                     1,500


                     1,000


                      500


                        0
                             Q2 '08   Q3 '08   Q4 '08   Q1 '09   Q2 '09



Source: Delta Associates; July2009.                                       20
   CLASS A APARTMENT DEMAND & DELIVERIES
     WASHINGTON METRO AREA 36 MONTHS ENDING JUNE 2012


                                                                                       Demand

                                                                                  = 6,167/Yr. = 18,500


                                                                                      Deliveries

                                                                                      Planned and may
                                                                                  =   deliver by 6/2012:
                                                                                      5,883 units


                                                                                  = U/C: 14,889 units
                          3.5%               3.3%                 3.5%

                      District           Sub. MD               No. VA            Total = 20,772 units
                 % = Stabilized Vacancy Rate at 6/2012
                 Estimated Stabilized Vacancy Rate at 6/2012: 3.4% Region-Wide
Source: Delta Associates; June 2009.                                                                       21
       CLASS A APARTMENT RENT GROWTH PER YEAR
                            WASHINGTON METRO AREA 1999 – 2013


                                  16%
                                  14%
  Percent Effective Rent Growth




                                                   Long-Term Average = 4.2%
                                  12%
                                  10%
                                  8%
                                  6%
                                  4%
                                  2%
                                  0%
                                  -2%
                                  -4%   1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

                                  -6%



Source: Delta Associates; June 2009.                                                                                 22
   Mid-Year 2009 Update2007

A Look at the Washington Area
Multi-Family Real Estate Market


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