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					April 15, 2009 April 15, 2009

United States: Real Estate: REITs

United States: Real Estate: REITs

Signs of liquidity in REITs; Conviction List changes: SPG to Buy, ESS to Sell, TCO & PPS off
Industry context
We have begun to see many REITs access the capital markets helping to address concerns over liquidity. In fact, stocks with low earnings multiples (1-3X) have experienced the most significant lift as “going-concern” risk has abated with the capital raises. We want to be clear in our view – 1) we expect REIT shares to remain volatile as long as fundamentals erode, leverage remains high and valuation is unattractive; 2) we continue to favor names with stronger balance sheets and near-term growth (SPG, BXP and TCO); 3) we are stepping out on the risk curve and increasing our exposure to stocks with restructuring / improving balance sheets. In sum, we still recommend an underweight position in REITs, but less so now vs. 3-6 months ago given improving liquidity.

Best buy idea
Our top buy ideas are SPG, BXP and TCO.
UPCOMING EVENTS
1Q 2009 REIT Earnings Season --- April 2009

Best sell idea
Our top sell idea is ESS. RMZ vs. SPX YTD performance
as of 4/14/09
10 1 1 00 90 80 70 60 50

RELATED RESEARCH
United States: Real Estate: REITs: NYU real estate conference: Restructuring to create opportunities, April 3, 2009 United States: Real Estate: REITs: US REIT View: Let the restructuring begin; MAC to Sell; PPS Conviction Sell List, DRE off, March 27, 2009

SPX -7%

SUMMARY OF RATINGS CHANGES
Ticker SPG SLG TCO ESS PPS CUZ CBL GGP From Buy Neutral Conviction Buy Sell Conviction Sell Sell Sell NR To Conviction Buy Buy Buy Conviction Sell Sell Neutral Neutral Sell

RMZ -26% 1-Jan 8-Jan 15-Jan 22-Jan 29-Jan 5-Feb 12-Feb 20-Feb 25-Feb 4-Mar 11-Mar 18-Mar 25-Mar

Source: Goldman Sachs Research estimates.

1-Apr

SPG to CL-Buy, ESS to CL-Sell, and removing TCO and PPS from CL- Buy and Sell positions. Raise SLG to Buy from Neutral and CBL/CUZ to Neutral from Sell. We also make several price target changes, and reinstate a rating for GGP at Sell.
Jonathan Habermann (917) 343-4260 | jonathan.habermann@gs.com Goldman, Sachs & Co. Sloan Bohlen (212) 902-2796 | sloan.bohlen@gs.com Goldman, Sachs & Co. Jehan Mahmood (212) 902-2646 | jehan.mahmood@gs.com Goldman, Sachs & Co. Aigerim Kabdiyeva (212) 902-4736 | aigerim.kabdiyeva@gs.com Goldman, Sachs & Co.

Source: Factset.

The Goldman Sachs Group, Inc. does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Customers in the US can receive independent, third-party research on companies covered in this report, at no cost to them, where such research is available. Customers can access this independent research at www.independentresearch.gs.com or call 1-866-727-7000. For Reg AC certification, see the end of the text. Other important disclosures follow the Reg AC certification, or go to www.gs.com/research/hedge.html. Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.
Global Investment Research

The Goldman Sachs Group, Inc.

Goldman Sachs Global Investment Research

8-Apr

What has changed?

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United States: Real Estate: REITs

Table of Contents
Starting to see signs of improvement – Making several Conviction List changes Raise SPG to Conviction Buy as solid balance sheet and stable growth outlook should drive outperformance Adding ESS to Conviction Sell List with concerns over rich valuation and CA fundamentals Raise SLG to Buy as valuation and n/t catalysts provide a trading opportunity Raising CBL to Neutral as improvements in credit conditions should lift shares higher Raise Cousins Properties to Neutral as valuation is now more inline with NAV Removing TCO from the Conviction Buy List, maintain Buy on solid balance sheet and high quality portfolio Removing PPS from the Conviction Sell List, still maintain Sell on decelerating Southeastern markets trends Reinstating coverage on GGP at Sell: Too many risks; still challenges to unlocking value Sector calls Disclosures 2 7 9 11 13 16 18 20 23 24 31

Starting to see signs of improvement – Making several Conviction List changes
We have begun to see many REITs access the capital markets helping to address concerns over liquidity. In fact, stocks with low earnings multiples (1-3X) have experienced the most significant lift as “going-concern” risk has abated with the capital raises. As such, we want to be clear in our view – 1) we expect REIT shares to remain volatile as long as fundamentals erode, leverage remains high and valuation is unattractive; 2) as before, we continue to favor names with stronger balance sheets and near-term growth (SPG, BXP and TCO); 3) we are stepping out on the risk curve and increasing our exposure to stocks with restructuring / improving balance sheets. In sum, we still recommend an underweight position in REITs, but less so now vs. 3-6 months ago given improving liquidity. We make several changes in our universe of 36 stocks, raising SPG to CL Buy, adding ESS to the CL-Sell list, and removing TCO and PPS from respective CL- Buy and Sell lists. We raise SLG to Buy from Neutral and CBL / CUZ to Neutral from Sell. We maintain our Cautious view on the REIT industry as downside risk (down 20-30%) still outweighs upside potential (+1015%) for the shares in the near term. That said, we do not think the shares will approach the lows of a month ago based on the demonstrated access to capital (both debt and equity sources).

Goldman Sachs Global Investment Research

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Changes to price targets

An improvement in credit conditions has also allowed several REITs to make meaningful progress on refinancing plans and increase balance sheet flexibility. In light of this, we are modestly revising our NAVs and adjusting price targets for a few companies within our coverage universe. These adjustments reflect our increasingly positive bias towards companies with improving balance sheets and decreasing near term refinancing risk. We now see negative 8% total return potential for our coverage universe over the next 6 months, and summarize our changes in exhibit 40. So what has changed? There are several important factors driving our slight positive change in sector outlook: 1) the benefit from recent balance sheet restructuring and more aggressive de-levering; 2) early signs of improving liquidity in the credit markets as several REITs have announced meaningful progress on refinancing plans (exhibits 1 & 2); and 3) we simply anticipate more modest downside for the shares given the nearly 70% sell-off since peak levels of early 2007 - to quantify specifically, we now forecast potential downside risk of 20-30% for the year, but we do not see a re-test of the March lows.
Exhibit 1: Recent REIT equity issuances
as of 4/14/2009
% change share price on day after announcement vs. day of announcement 6% 15% 26% -10% -11% 0% 0% -6% -8% -5% -2%

Exhibit 2: Recent secured and unsecured debt financings / refinancings
as of 4/14/2009
Ticker Type of financing secured financing secured financing secured financing secured financing secured financing Senior unsecured notes secured financing secured financing secured financing secured financing credit facility extension extensions, refinancings secured financing secured financing Senior unsecured notes Interest rate 5.86% L+3.25% 5.60% 6.10% 6.50% 5.95% - 7.625% 7.57% 7.77% 9.02% L+75bp; L+280 4.64% - 7.50% 5.61% 7.10% 10.35% Amount Offer date $714.0 $75.0 $156.0 $620.0 $133.0 $200.0 $212.0 $89.8 $197.5 $120.0 $867.0 $446.0 $34.8 $317.0 $650.0 $4,118.1 14-Apr 8-Apr 7-Apr 7-Apr 7-Apr 6-Apr 2-Apr 1-Apr 31-Mar 31-Mar 31-Mar 30-Mar 27-Mar 25-Mar 19-Mar Originator Deutsche Bank Berkshire mortgage on behalf of Freddie Mac Deutsche Bank Berkshire Mortgage for repurchase by Fannie Mae KeyBank Capital Markets Life insurance companies Prudential Mortgage Life insurance companies PNC ARCS LLC, pursuant to Freddie Mac loan program Life insurance companies -

Ticker PLD AMB KIM DDR ARE DRH AKR VTR EQY SPG OFC

Common shares and units New shares outstanding (mn) issued (mn) 266 101 268 121 32 91 35 143 76 295 57 152 41 92 30 7 16 5 13 7 17 3

% Dilution 57% 41% 34% 25% 22% 17% 14% 9% 9% 6% 5%

Offering announcement date 7-Apr 24-Mar 2-Apr 24-Feb 18-Mar 13-Apr 13-Apr 6-Apr 8-Apr 19-Mar 31-Mar

% change in RMZ 2% 2% 9% -2% -6% -9% -9% -9% 14% -9% -1%

Deal price $6.60 $12.15 $7.10 $3.50 $38.25 $4.85 $11.95 $23.90 $14.30 $31.50 $24.35

% change share price today versus deal price 11% 37% 28% -14% -3% 4% 2% 8% -6% 22% 11%

AVB VNO DRE BRE HCN VTR KIM BDN SPG FCH VTR MAC PPS LRY SPG Total

Source: SNL, company data.

Source: SNL, company data.

So do we think the worst is over for CRE? Not yet. We are certainly not trying to call the bottom nor at the same time are we forecasting a prolonged rebound in REIT shares. In fact, we expect continued volatility in 2009 as long as credit markets remain uncertain, fundamentals are deteriorating at a rapid clip, and significant de-levering needs to take place over the next 12-24 months. So why make several rating changes at this time? As we note, CRE fundamentals should continue to worsen over the next 12-18 months, cap rates should rise (we think up 300 to 500bps), and borrowing costs are returning to mid-1990 levels (8-10%). So to answer the question, we think each of these points has been increasingly discounted by the market. For instance, we project FFO growth of negative 20% and negative 9% in 2009 and 2010, respectively, levels that are far worse than those experienced during the 2001 recession. In addition, many of our stocks trade at discounts to NAV even upon applying our normalized, long-term cap rates (9-12%) and declining cash flow projections. Final point, we think the issuance of equity, further asset sales and widespread dividend cuts should enable companies to conserve cash to address our concerns over high leverage (average debt to EBITDA of
Goldman Sachs Global Investment Research 3

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8.5X) over a multi-year period. In fact, stocks with low earnings multiples (1-3X) have experienced the most significant lift as “going-concern” risk has abated with the capital raises (exhibit 3 & 4).

Exhibit 3: Low multiple stocks have underperformed peers YTD
as of 4/14/2009

Exhibit 4: ..but have outperformed recently on the wave of capital issuance
as of 4/14/2009
70%

Last month price performance

0% -5%

60% 50% 40% 30% 20% 10% 0% -10%

GGP

YTD price performance

DDR

-10% -15% -20% -25% -30% -35% -40% -45% -50% 0x 1x 2x 3x 4x DDR CBL PLD 5x 6x 7x 8x 9x 10x 11x 12x 13x 14x MAC DRE BXP HCP EQR GGP BRE SKT ESS PSA

MAC CBL DRE

PLD

BXP HCP BRE

EQR

SKT PSA ESS

0x

1x

2x

3x

4x

5x

6x

7x

8x

9x

10x

11x

12x

13x

14x

15x

P / FFO 2009

P / FFO 2009

Source: Factset, Goldman Sachs Research estimates.

Source: Factset, Goldman Sachs Research estimates.

Why are we still Cautious on REITs? To be clear, we need to see debt level drop substantially to become positive on the space, as well as an improved outlook for same-store cash flow growth, not to mention positive spread investing (ROIC > WACC). In the short term, however, we think we could have seen the bottom for the sector. The primary reason is the availability of capital sources to help companies reduce debt and extend maturities and thus remove the risk of companies "going to zero". Longer term, however, we still have concerns as stated above that support our Cautious view as we expect market conditions to further deteriorate and credit to remain challenging. As we have stated in prior research, REITs are likely in the early stages of a prolonged period of restructuring and not all companies will survive the spike to debt maturities into 2012/13 (exhibit 5 & 6). As such, we favor owning companies with stronger balance sheets, more stable growth and reasonable valuation as well as companies that we think should benefit from restructuring.

Goldman Sachs Global Investment Research

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Exhibit 5: $1.6 trillion in CRE debt is expected to roll 2009-2013

Exhibit 6: We expect cap rates to continue rising
as of 4Q08

$500 $450 $400

300

12% From 2001-2006, property prices rose as cap rates declined….

$397
NCREIF Property Index

250

10%

$350 $300 $250 $200 $150 $100 $50 $-

200

8%

150 ...but w e now expect cap rates to rise at least 300 500 bps

6%

100

4%

50

2%

2009E

2010E

2011E

2012E

2013E

0 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

0%

CRE refinancing schedule (1995-2008 loans) ($bn)

NCREIF Property Index

Cap rates

Inflation

Source: Goldman Sachs Research estimates.

Source: NCREIF, ERWIN.

So when should you buy REITs again?
With REITs already trading at a price to FAD multiple of 11X, or a free cash flow yield of 9.0% (after cap ex), we think the group is already discounting a return to normalized earning growth. Keep in mind, however, that CRE fundamentals are just beginning to slow and the trough in earnings will not occur until late 2010 or beyond. Our primary concerns focus on the near-term challenges for the industry: debt refinancing, weaker trends, and dividend cuts (stock versus cash). At the same time, we recognize that valuation for REITs is now approaching levels not seen since late 1999, just before REITs began a long period of relative outperformance versus the broader market. In our view, there are several key differences in the current cycle versus the late 1990s, including leverage as well as full utilization (occupancy is already at peak levels today, so there is likely limited upside from here). In addition, institutions are seeking to reduce CRE exposure now versus the late 1990s when they sought to diversify amid the tech bubble.
As we pointed out in our 2009 Outlook report, the key factor that could cause us to become more positive on REITs is investment return, or the spread between returns on invested capital versus the weighted-average cost of capital. With the cost of debt increasing to the 7-8% level (or higher) and the weighted-average cost of capital now above 10% (50% equity), we estimate that cap rates still need to adjust higher to the 9-12% range, thereby allowing REITs to once again fund their investments at profitable levels. Of concern, some REITs grew rapidly during the 2003-2007 period when cap rates fell to all-time lows and debt was inexpensive; as the debt matures and is refinanced, those companies will likely experience a more significant deterioration in future earnings growth, especially companies with large joint ventures.

Goldman Sachs Global Investment Research

Cap rates vs. Inflation

$291

$298

$272

$302

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United States: Real Estate: REITs

Exhibit 7: Fundamentals have just begun to decline and we expect further deterioration
as of 4Q08

30.0% 27.5% 25.0% 22.5% 20.0% Vacancy Rate 17.5% 15.0% 12.5% 10.0% 7.5% 5.0% 2.5% 0.0% 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Historically, commerical real estate fundamentals lag economic trends by roughly 18-24 months.

Suburban Office Retail

Downtown Office

Multifamily

Industrial

Industrial
Source: PPR, CB Richard Ellis, Census.

Downtown Office

Multifamily

Retail

Suburban Office

Goldman Sachs Global Investment Research

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United States: Real Estate: REITs

Add SPG to Conviction Buy List as solid balance sheet and stable growth outlook should drive outperformance
We add Simon Property Group to the Conviction Buy List based on the company's sector leading balance sheet and demonstrated access to capital. Following the recently completed capital raise of over $1bn, Simon benefits from one of the strongest liquidity positions in the industry with over $4bn in dry powder (cash and credit lines combined). Further, the raise marks an important step in increasing the flexibility of SPG's balance sheet and positions the company well for future distress. We highlight the company's stable growth outlook, limited geographic and tenant concentration and minimal development exposure as other strong investment positives. Our new 6 month $46 price target is based on a slight premium to our $43 NAV, and implies 20% total return potential (we outline details below). Along with the upgrade to CL Buy, we are also modestly revising our 2009/2010 FFO estimates to $5.99/$5.57 (from $6.03/$5.61) to account for the upsizing of the equity offering announced a few weeks ago. Recall, SPG announced in March the sale of $650 million of 10.35% senior unsecured notes, and 15 million shares of common stock at $31.50/share, with an over-allotment of 2.25 million shares. Our old estimates included the impact from the 15 million shares announced, but did not include the additional 2.25 million shares that were issued. Our new estimates fully reflect the completed deal of 17.25 million shares. We raise our 6 month price target to $46 (from $43) reflecting a slight premium to NAV (versus in-line previously). Our 6 month price target implies 20% total return. Key reasons behind our Conviction Buy call on SPG are:
(1) Sound balance sheet and proven access to capital markets position the company well if credit market volatility persists. With over $4 billion of near term capacity (line and cash on hand), we expect lenders to favor SPG versus other retail REITs with less attractive balance sheets and liquidity positions. We are also encouraged by the company’s early decision to pay 90% of its common dividend in the form of equity, and highlight that the risk of dilution of future earnings is substantially lower as a result. (2) Premier mall portfolio and low development exposure support stable growth outlook. While a complete recovery in the retail environment could be a more drawn out process, we do not expect store closings and bankruptcies to rise substantially in the next several months. Further, we continue to believe that owners of best in class assets including SPG and TCO should deliver stable results relative to peers given the high sales productivity and favorable locations of owned assets (typically in regions with stronger demographic profiles). We also view positively the company's low development exposure, with just around $300mn in costs towards redevelopment efforts over the next 2 years. Recall we have been cautious on companies with still active development platforms for some time now due to risks of falling yields. However, Simon's demonstrated prudence with regards to capital expenditures strengthens our positive bias. (3) Stable profile should warrant multiple expansion longer time. SPG shares trade at 6.4X FFO, well below the company's longer term average of 11.1X, and below our NAV estimate. Given the company's defensive portfolio (with longer lease terms and no single tenant contributing more than 1.5% of annual rent) and aforementioned capital position, we expect significant upward movement in the shares from current levels.

Key risks include higher levels of store closings and bankruptcies than expected, extended consumer weakness.

Goldman Sachs Global Investment Research

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Exhibit 8: Fundamentals in SPG’s portfolio have held up relatively well
As of 4Q2008
8% 6% 4% 2% 0%

Exhibit 9: Occupancy declines have been less relative to peers
As of 4Q2008
9 4% 9 4% 9 3% 9 3% 9 2% 9 2% 91%

-2 % -4 %

91% 9 0%

2005Q1

2005Q2

2005Q3

2005Q4

2006Q1

2006Q2

2006Q3

2006Q4

2007Q1

2007Q2

2007Q3

2007Q4

2008Q1

2008Q2

2008Q3

2008Q4

Source: Factset, Goldman Sachs Research estimates.

Exhibit 10: We note that no single tenant contributes more than 1.5% of rent
As of 4Q2008

Top Mall tenants by rent The Gap, Inc. Limited Brands, Inc. Abercrombie & Fitch Co. Foot Locker, Inc. Zale Corporation Luxottica Group S.P.A . Express LLC American Eagle Outfitters, Inc. Sterling Jewelers, Inc. Genesco, Inc. Total
Source: Factset, Goldman Sachs Research estimates.

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

12.6%

4.9%

Next 12 Months
Source: Factset, Goldman Sachs Research estimates.

Goldman Sachs Global Investment Research

2008

2005Q 1

2005Q 2

2005Q 3

SS NOI grow th - SPG

2005Q 4

2006Q 1

2006Q 2

2006Q 3

2006Q 4

2007Q 1

SS NOI grow th - mall average

% of minimum base rent % of total sq. ft 2.0% 2.0% 1.7% 1.5% 1.0% 1.0% 0.9% 0.9% 0.8% 0.8% 1.4% 0.7% 0.7% 0.6% 0.1% 0.3% 0.4% 0.4% 0.1% 0.2%

2007Q 2

2007Q 3

2007Q 4

2008 Q1

2008 Q2

2008 Q3

2008 Q4
22x 20x 18x 16x 14x 12x 10x 8x 6x 4x

Occupancy - SPG
Source: Factset, Goldman Sachs Research estimates.

Occupancy - mall average

Exhibit 11: At 6.4X FFO, SPG shares trade well below the historical average
as of 4/14/2009

6.3x Current vs.11.1x Average

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Adding ESS to Conviction Sell List with concerns over rich valuation and CA fundamentals
We add West Coast-focused apartment REIT Essex Property Trust to Americas Conviction Sell list primarily based on its current premium valuation and deteriorating fundamentals in the company’s key markets, California and Seattle. The stock now trades at a 38% premium to the REIT average and a 18% premium to direct peers, vs. a longer-term average premium of 8%. Note that we continue to recommend an underweight position in the apartment sector as we anticipate meaningful declines in same-store NOI growth in the wake of the current US downturn (down 5-10% or more) and now rate four stocks Sell: BRE, UDR, ESS and PPS. While we note that ESS management has a long history of delivering above-average returns for shareholders, we caution that the company’s more concentrated geographic profile could result in underperformance from an operating perspective as occupancy and rents fall from current levels due to expected rise in unemployment over next 12 months. We see negative 23% total return potential to our unchanged 6-month target price of $46, which is based on 15% discount to our forward NAV estimate of $54. Note that our return expectation includes ESS’s annualized dividend yield of 4.6%. Key reasons for our Neutral rating on ESS include:
1. Valuation looks unattractive with deterioration in key markets – ESS trades at an 11.7X multiple of our 2009 FFO estimate of $5.30, a 38% premium to the REIT universe average. We believe this is not justified given the decline in fundamentals in the company’s top markets, Southern California and Seattle. We also highlight that cap rates continue to increase, we see risk that they return to the longer-term average of 8-11% from the 4-5% range at the peak of the real estate boom in 2007, which could indicate substantial declines in commercial property values. 2. Short lease terms a concern central to our bearish view on apartments– As mentioned above, we continue to be cautious on short lease term sectors, including the apartment sector. With an average lease term of roughly one year, we anticipate greater near-term risk to the company’s cash flows as tenants may seek to relocate to obtain lower rents (price sensitivity) or simply because they lose their jobs (employment). Further with recent government initiatives to stabilize the single-family housing market, we could see residents stay put and therefore reduce anticipated demand for for-rental multi-family units. 3. CA trends to soften in 2009; outlook continues to worsen – Essex derives close to 80% of its NOI from CA with large exposures in San Diego, Orange County/LA and San Francisco/Silicon Valley. These markets have thus far proven to be resilient. As we project earnings in 2009 and 2010, we are concerned that trends may deteriorate meaningfully as we have seen at the national level. Trends may not be as bad this time in Silicon Valley as they were in 2001 (tech crash), but the current downturn is impacting all components of the US economy (housing, retail, financials, manufacturing, imports/exports) and therefore could be far worse and more protracted across all of the company’s markets.

Key risks to our call and target price include better-than-expected leasing trends, a recovery in jobs as part of the new administration’s Economic Recovery Plan, and lower than anticipated cap rates.

Goldman Sachs Global Investment Research

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Exhibit 12: 81% of NOI comes from Northern and Southern California

Exhibit 13: We believe ESS’s premium is not justified given its high exposure to weak CA markets
40% 35% 30%

Seattle, 19% Southern California, 55%

25% 20% 15% 10% 5% 0% -5% -10%

11.6% Current Prem. vs. 8.4% Average Prem.

Northern California, 26%

1996

1997

1998

1999

2000

2001

2002

2003

2005

2006

2007

2008

Next 12 Months

Source: Company data.

Source: Factset.

Exhibit 14: Vacancy rates should rise sharply in ESS’s core markets as job losses increase.
9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 1997Q1 1998Q1 1999Q1 2000Q1 2001Q1 2002Q1 2003Q1 2004Q1 2005Q1 2006Q1 2007Q1 2008Q1 San Jose Seattle Vacancy rates should increase in 2009/2010 as job losses accelerates across US. Vacancy rate reached ~8% during 2001-2002 recession in Seattle and San Jose.

Exhibit 15: Same-store NOI fell sharply in 2H 2008 similar to the period of last recession

20% 15% 10% 5% 0% 1999Q1 -5% -10% -15%

ESS's same-store NOI fell sharply in 2H2008 as job losses started to accelerate in key markets

Vacancy Rate

2000Q3

2002Q1

2003Q3

2005Q1

2006Q3

ESS - same-store NOI growth

Source: PPR

Source: Company data

Goldman Sachs Global Investment Research

2009

2008Q1

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Upgrade SLG to Buy as valuation and n/t catalysts provide a trading opportunity
We upgrade NYC office REIT SL Green Realty Corp to Buy from Neutral as we believe the shares are undervalued and that negative sentiment for REITs with greater leverage or refinancing risks has eased in the near-term. In fact, we see SLG as a 3-month trading opportunity as the shares have underperformed in the recent 10% rally for REITs. Potential near-term catalysts for the shares include: 1) Additional capital raising activity amongst REITs as a window for equity and secured financing remains open; 2) better than expected operating results from SLG’s earnings release on April 27th; and 3) additional pricing data points for NYC assets either through sales or refinancing. We currently see 28% potential upside to our new, NAV-derived, 6-month target price of $16 (raised from $12 previously) which includes SLG’s 2009E dividend yield of 4.8%. This compares to an average negative total return expectation of 8.5% across our REIT coverage universe. We highlight the following key reasons for our upgrade:
1.

Tail risk has been mitigated as recently successful REIT equity offerings provide a path to restructuring – In light of
the recent successful REIT equity offerings, we are increasingly confident that default or bankruptcy risk for SLG has been largely reduced. While we do not have a view on whether SLG would issue equity in order to de-leverage, we do believe that REIT dedicated investors would contribute to a restructuring effort given the quality and long-term supply / demand dynamics of SLG’s midtown NYC portfolio. Additionally, it is important to note that although SLG’s leverage is high at roughly 65% debt-to-assets, the company’s ability to address near-term debt maturities seems adequate. Specifically, with nearly $700mn in cash on balance sheet, we believe SLG could self-fund its 2009 / 10 obligations (exhibit 16).

2.

NYC office results - perception vs. SLG’s reality – It is also important to note that SLG’s share performance has possibly correlated too highly with negative news about NYC’s financial tenants and broader market trends. First, although we believe SLG’s 41% exposure to financial services tenants (13% Citi) is a risk, we also believe the near-term impact on earnings should be less negative than perceived by the market. Specifically SLG has been amongst the most proactive office REITs in terms of leasing ahead of its expirations. In fact over the past 5 years SLG has on average leased 2 times its scheduled lease expirations and as a result, the company’s 2009/10 expirations represent just 5% and 6% of base rent (exhibit 18). Valuation is attractive relative to near-term risks – At current levels, we believe SLG represents a compelling buying
opportunity as additional announcements of REIT capital raises could continue to provide a lift for stocks with long-term refinancing or restructuring issues. Specifically SLG now trades at 2.6X our 2010 FFO/sh estimate which is a 70% discount relative to office REIT peers (exhibit 17). Similarly we estimate that SLG’s implied value in the $300/SF range, which is well below conservative estimate of replacement cost of $600-$700/SF.

3.

We naturally acknowledge that SLG’s NYC office exposure at 95% on NOI and 2009E debt/EBITDA ratio of 12.8X are risks and have been core to the underperformance in the shares realized YTD (-51% vs. RMZ at -26%). That said, we believe these risks are conservatively accounted for in our estimates and are also more than priced into the stock at current levels. Specifically our 2009/10 FFO/sh estimates are 5% and 10% below consensus and our NAV estimate of $16 is roughly 50% below Street estimates. Additionally we note that SLG’s net acquisition activity since 2007 of about $4.5bn, which includes Reckson’s former NYC portfolio and 388 & 390 Greenwich St, has been a source of investor concern. We concur and believe many of those investments are likely impaired but also believe it is worth noting that much of this acquisition activity was accomplished at reasonable leverage (around 45% LTV) with a mix of stock, cash and a low amount of assumed mortgage debt, which for the most part, matures beyond 2011.

Goldman Sachs Global Investment Research

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Exhibit 16: SL Green – 2009 -10 sources and uses analysis
as of 4Q08

Exhibit 17: SL Green – Historical next twelve month P/FFO multiples
As of April 14, 2009

Uses Debt maturities Year 2009 2010 SLG share of Wtg ave maturities interest rate 254,361 634,917 7.2% 4.8% Assumed equity / cash needed (1) $ 205,436 321,792 89,000 89,000 705,228
60% 40% 20% 0% -20% -40%

Historically SLG has traded at a 6% premium to peers.

Current annual dividend @ $1.50/sh 2009 2010 Total Uses Sources Cash on balance sheet Annual free cash flow 2009 2010 Total Sources
and 100% paydown of unsecured
Source: Company data, Goldman Sachs Research estimates

$ $

$ $ $

726,889
-60%

54,138 (4,360) 776,668

SLG now trades at a wide 68% discount to office REIT peers that also have significant exposure to NYC. 98 99 00 01 02 03 04 05 06 07 08 09

-80% Next 12 Months

(1) Assumes additional 10% equity contribution for mortgage financing

Source: Goldman Sachs Research estimates, Factset

Exhibit 18: SL Green - leasing activity vs. expected expirations
as of 4Q08

2004 Expiring sq. footage (000) Leased sq. footage (000) Leased/expiring 699 1,834 2.6x

2005 2,414 2,106 0.9x

2006 627 2,006 3.2x

2007 728 2,129 2.9x

2008 1,447 3,292 2.3x
SLG's solid leasing execution over the past few years limits the near-term exposure to expirations.

2009 Rent of expiring leases ($mn) as a % of total
Source: Company data.

2010 $81 6%

2011 $79 6%

2012 $65 5%

Beyond $997 77%

$66 5%

Goldman Sachs Global Investment Research

12

April 15, 2009

United States: Real Estate: REITs

Upgrading CBL to Neutral as improvements in credit conditions should lift shares higher
We are upgrading CBL & Associates to Neutral from Sell. We downgraded CBL to Sell in early January on concerns over near term refinancing requirements and decelerating fundamentals. Since we added CBL to the America’s Sell list on 1/8/2009, the stock has fallen 49.9% versus a 7.5% decrease for the S&P 500 and a 22.5% decrease for the RMZ REIT index. Also, CBL shares have decreased 84.9% over the past 12 months versus respective declines of 36.6% for the S&P 500 and 57.7% for the RMZ. While we highlight the significant amounts of debt CBL faces in maturities through 2011, we view the recent progress made on refinancing activity across the sector as serving to eliminate “bankruptcy risk” from several low multiple stocks. We also expect the retail environment to remain tough over the next 12 months, and for fundamentals to get worse, before they get better. However, we see this as largely reflected in current valuation, with CBL trading at just 1.3X 2009 FFO, versus its regional mall peers at 5.8X. We recommend investors looking for sizeable downside in the retail space to focus on shopping center REITs Federal Realty (FRT; Sell) and Regency Centers (REG; Sell) instead (trading at 14.0X and 10.1X 2009 FFO respectively). We see 19% total return potential to our new 6-month target price of $4 vs $2.50 previously, now in-line with our forward NAV estimate (versus a discount previously). Note that our return expectation includes CBL’s annualized dividend yield of 16.6%. Key reasons for our Neutral rating on CBL include:
1. Easing of concerns over credit issues. We see less risk associated with CBL’s balance sheet for three key reasons. First, the company faces over $2bn of debt maturing through 2011, including the expiration of its $550mn secured credit facility next year. While we acknowledge the above average volume and a heavy weighting towards the near term, recent signs of liquidity in the capital markets have reduced CBL’s refinancing risk in our view. Second, most of the expiring debt (with the exception of the unsecured revolver in 2011) is in the form of mortgage debt held by life insurance companies, an avenue of lending which still seems to be alive (albeit, much reduced). Lastly, CBL has already cut the dividend and opted to pay 60% of the dividend in stock, eliminating the risk of further dilution to forward earnings. 2. Refinancing risk largely reflected in shares – CBL trades at 1.3X our 2009 FFO estimates, versus the regional mall peer group average of 5.5X. As mentioned above, we acknowledge the high volumes of debt to be refinanced over the next 2 years, including the heavily drawn secured and unsecured credit lines (due in 2010 and 2011 respectively). However, we believe these concerns are reflected in the current share price. Further, the company’s 8.7X leverage (we look at Debt to 2009E EBITDA) is roughly in-line with the REIT average, and well below retail peers including MAC and DDR. Yet, CBL shares are much less expensive (see exhibit 19 below). 3. Stay at Neutral for time being as fundamentals should decelerate further. We highlight that fundamentals could display a further moderation over the next 12 months, with NOI growth potentially falling below the company’s current outlook of a (1.5%)(3%). While CBL's portfolio has already been impacted by a number of troubled retailers including Steve and Barry's, Linens 'n Things and Circuit City, we expect the pace of store closings to accelerate in 2009, particularly as weaker retailers concentrate operations at malls demonstrating highest sales productivity and attractive demographic profiles.

Key risks to our call and target price include better-than-expected terms on refinancings (upside risk) and consumer weakness (downside risk).

Goldman Sachs Global Investment Research

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April 15, 2009

United States: Real Estate: REITs

Exhibit 19: CBL’s leverage (8.7X Debt/EBITDA) is in-line with peers…
But the stock is trading well below companies with higher balance sheet concerns

Exhibit 20: ..but fundamentals should stay weak in coming months
as of 4/13/2009
1 0%

18x 16x 14x 12x

bubble area corresponds to YTD % change in price FRT REG negative change in price positivee change in price

8% 6% 4% 2% 0%

While we expect fundamentals to remain weak in 2009, we highlight that performance has been weaker than peers for some time now...

P / 2009 FFO

10x 8x 6x 4x 2x 0x -2x 4x 5x 6x 7x 8x 9x 10x 11x 12x 13x 14x

TCO

SPG WRI CBL

KIM MAC KRG

DDR GGP

-2% -4% -6% 2005Q1 2005Q3 2006Q1 2006Q3 2007Q1 2007Q3 2008Q1 2008Q3

Debt / EBITDA

CBL same store sales grow th

mall average

Source: Factset, Goldman Sachs Research estimates.

Source: Factset, Goldman Sachs Research estimates.

Exhibit 21: Nearly 70% of debt maturing in 2009/10 is held by life companies
This could benefit CBL given the recent completion of deals across the sectors

Exhibit 22: The company faces large volumes of near term debt maturities
However we note that a majority of expiring debt is non-recourse and fixed rate

$50 0 $4 50 $40 0 $3 50 $30 0 $2 50 $20 0 $150 $10 0 $50 $0

$1,2 0 0

$ 59

$1,0 0 0 $8 0 0

54% 59%

$ 181 $ 52

$6 0 0

3%
$4 0 0

11% 43% 100% 30%

$ 252

$ 226

$2 0 0 $0

2009 Lif e insurance Co's CMBS

2010 Banks

2009 Non-recourse debt Secured lines of credit

2010

2011 Construction loans Unsecured lines of credit

Source: Factset, Goldman Sachs Research estimates.

Source: Factset, Goldman Sachs Research estimates.

Goldman Sachs Global Investment Research

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April 15, 2009

United States: Real Estate: REITs

Exhibit 23: Summary of CBL share price performance since 1/8/2009
as of 4/14/2009
Company Americas REITS Peer Group CBL & Associates Properties CBL Alexander & Baldwin, Inc. AXB AMB Property Corp. AMB Apartment Investment & ManagemeAIV AvalonBay Communities Inc. AVB Boston Properties, Inc. BXP BRE Properties, Inc. BRE Brookdale Senior Living Inc. BKD Brookfield Properties Corp. BPO Camden Property Trust CPT CB Richard Ellis Group Inc. CBG Cousins Properties Incorporated CUZ Developers Diversified Realty DDR Duke Realty Corp. DRE Equity Residential EQR Essex Property Trust, Inc. ESS Federal Realty Invmt Trust FRT Forest City Enterprises FCE__A General Growth Properties GGP HCP, Inc. HCP Kimco Realty Corp. KIM Kite Realty Group Trust KRG Liberty Property Trust LRY Mack Cali Realty Corporation CLI Post Properties Inc. PPS ProLogis PLD Public Storage, Inc. PSA Regency Centers Corporation REG Simon Property Group SPG SL Green Realty Corp SLG Tanger Factory Outlet Centers, Inc. SKT Taubman Centers, Inc. TCO The Macerich Co. MAC UDR, Inc. UDR Vornado Realty Trust VNO Weingarten Realty Investors WRI Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 8.35 24.25 23.68 11.91 57.26 54.70 27.29 6.86 7.90 30.41 5.15 12.84 7.87 11.28 26.92 72.56 59.52 8.58 2.09 24.19 19.85 6.36 21.64 22.68 16.01 14.95 67.65 42.54 49.18 23.15 35.58 24.60 19.00 12.98 56.77 19.74 3.61 22.43 16.66 6.13 50.72 39.30 22.40 6.59 6.62 23.93 5.13 7.58 3.01 7.63 20.43 61.81 51.22 7.37 1.04 19.27 9.07 2.49 21.28 22.93 12.03 7.34 58.95 32.90 38.57 12.73 32.04 18.51 11.90 9.15 37.56 12.92 (49.9%) (6.2%) (28.4%) (48.5%) (9.6%) (26.7%) (15.7%) (3.9%) (14.0%) (18.8%) (0.4%) (39.2%) (57.4%) (30.5%) (22.4%) (13.3%) (12.7%) (14.1%) (50.2%) (18.7%) (51.6%) (58.6%) 1.0% 3.5% (23.4%) (48.9%) (12.0%) (20.7%) (21.4%) (43.3%) (8.9%) (23.0%) (32.7%) (26.9%) (33.3%) (31.0%) (36.7%) (4.2%) (10.9%) (35.3%) 4.0% (12.2%) (2.4%) 3.1% 1.5% (2.5%) 28.3% (28.5%) (53.8%) (11.4%) (10.8%) 3.7% 5.7% 3.7% (28.1%) (6.0%) (39.1%) (58.3%) 15.9% 14.6% (8.8%) (29.8%) (0.6%) (9.1%) (3.9%) (25.3%) 9.4% (8.5%) (19.4%) (14.7%) (21.0%) (18.4%) (64.6%) (44.3%) (50.1%) (70.7%) (35.8%) (47.6%) (38.5%) (45.4%) (40.5%) (34.1%) (35.6%) (63.4%) (84.3%) (50.9%) (41.9%) (39.4%) (22.3%) (63.6%) (81.4%) (36.7%) (66.8%) (67.0%) (21.7%) (15.9%) (49.6%) (72.4%) (26.7%) (30.1%) (44.6%) (74.4%) (5.8%) (50.5%) (68.7%) (49.7%) (45.9%) (50.6%) (84.9%) (50.1%) (68.5%) (83.2%) (47.0%) (58.1%) (51.7%) (72.5%) (65.7%) (53.0%) (74.0%) (69.9%) (92.7%) (66.6%) (49.2%) (44.3%) (33.7%) (79.4%) (97.2%) (45.5%) (76.0%) (82.5%) (34.7%) (38.9%) (68.4%) (87.7%) (34.6%) (50.9%) (58.9%) (84.7%) (20.6%) (64.8%) (82.8%) (61.3%) (55.7%) (63.6%) (36.6%) Ticker Primary analyst Price currency Price as of 1/8/2009 Price as of Price performance 3 month price 4/14/2009 since 1/8/2009 performance 6 month price 12 month price performance performance

(7.5%) (1.5%) (14.4%) S&P 500 SPX $ 909.73 841.50 Note: Prices as of most recent available close which could vary from the price date indicated above This table shows movement in absolute share price and not total shareholder return. Results presented should not and cannot be viewed as an indicator of future performance.

Source: Factset, Qube.

Goldman Sachs Global Investment Research

15

April 15, 2009

United States: Real Estate: REITs

Upgrade Cousins Properties to Neutral as valuation is now more inline with NAV
We also upgrade Atlanta-based diversified REIT Cousins Properties to Neutral from Sell as we believe the current share price better reflects the key risks we have highlighted in previous research. Specifically CUZ now trades closer to our forward NAV estimate of $7. As such, we expect negative total return potential of 14% to our unchanged 6-month target price of $6 (14% discount to NAV), which is inline with our coverage universe average of 17%.
We believe a Neutral rating is now appropriate for Cousins but note that the key risks that underpinned our Sell rating remain a concern. Specifically CUZ’s development / lease-up exposure and its future dividend coverage remain the two key risks to the shares in our view. We discuss each risk in greater detail below: 1.

Development risk and deteriorating fundamentals – The key driver of weaker operating performance for CUZ in recent quarters has been the delivery of underleased developments into the in-service portfolio and increased reserves for potential tenant bankruptcies. In fact, retail occupancy rates for CUZ fell 7% to 84% in 4Q due to the challenging lease-up of The Avenue Murfreesboro and Phase II of expansion at The Avenue Carriage Crossing. We remain concerned about further leasing at CUZ’s three main retail developments (The Avenue Forsyth, Tiffany Springs Market Center, The Avenue Murfreesboro) where current yields remain largely earnings-neutral at this point. We are also concerned with leasing prospects at CUZ’s office and condo developments, especially at its 200 Terminus project in Buckhead (see Exhibit 24), where competing supply and higher expected unemployment should continue to pressure demand.

Exhibit 24: Cousins Properties - development pipeline
as of 4Q08

Company owned GLA Office Terminus 200 - (Atlanta, GA) 191 Peachtree Tower - (Atlanta, GA) (1) Palisades West - (Austin, TX) Building 2 Total office Multi-family Glenmore Garden Villas - (Charlotte, NC) Total multi-family Retail Tiffany Springs MarketCenter - (Kansas City, MO) The Avenue Forsyth - (Suburban Atlanta, GA) Total retail Total 249,000 537,000 786,000 2,729,000 71 units 71 units 565,000 1,221,000 157,000 1,943,000

Leased GLA (%)

Cousins' Cousins' share of ownership (%) total cost

Expected delivery

3% 74% 21% 49%

50% 100% 50%

$86,650 $233,750 $19,050 $339,450

3Q - 2009 NM 4Q - 2008

NA

50%

$13,800 $13,800

4Q - 2011

89% 49% 62%

89% 89%

$52,828 $128,400 $181,228 $534,478

3Q - 2008 2Q - 2008

Source: Company data.

Goldman Sachs Global Investment Research

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April 15, 2009

United States: Real Estate: REITs

2.

Dividend shortfall and unattractive investment options – As we have mentioned in previous research, we believe CUZ is
a well capitalized REIT but as a developer and asset recycler, we believe the company will face significant near-term challenges to sustain dividend payments and / or grow earnings. Bottom line is that the transaction markets remain largely frozen and attractive opportunities for value-add uses of capital are scant. We believe smaller transactions like CUZ’s sale of 3100 Windy Hill Rd. may be the only available source of capital in the interim given the challenges mentioned above.

We remove Atlanta-focused diversified REIT Cousins Properties from the Americas Sell List and upgrade the stock to Neutral. Since we added CUZ to the America’s Sell list on 4/24/2008, the stock decreased 69.6% versus a 36.6% decrease for the S&P 500 and a 57.7% decrease for the RMZ REIT index. Also, CUZ shares have decreased 74.6% over the past 12 months versus respective declines of 40.3% for the S&P 500 and 63.4% for the RMZ.

Key upside/downside risks to our call include faster/slower than expected recovery in residential home and land values and better/worse retail / office fundamentals.

Goldman Sachs Global Investment Research

17

April 15, 2009

United States: Real Estate: REITs

Exhibit 25: Summary of CUZ share price performance since 4/24/2008
as of 4/14/2009
Company Americas REITS Peer Group Cousins Properties Incorporated CUZ Alexander & Baldwin, Inc. AXB AMB Property Corp. AMB Apartment Investment & ManagemeAIV AvalonBay Communities Inc. AVB Boston Properties, Inc. BXP BRE Properties, Inc. BRE Brookdale Senior Living Inc. BKD Brookfield Properties Corp. BPO Camden Property Trust CPT CB Richard Ellis Group Inc. CBG CBL & Associates Properties CBL Developers Diversified Realty DDR Duke Realty Corp. DRE Equity Residential EQR Essex Property Trust, Inc. ESS Federal Realty Invmt Trust FRT Forest City Enterprises FCE__A General Growth Properties GGP HCP, Inc. HCP Kimco Realty Corp. KIM Kite Realty Group Trust KRG Liberty Property Trust LRY Mack Cali Realty Corporation CLI Post Properties Inc. PPS ProLogis PLD Public Storage, Inc. PSA Regency Centers Corporation REG Simon Property Group SPG SL Green Realty Corp SLG Tanger Factory Outlet Centers, Inc. SKT Taubman Centers, Inc. TCO The Macerich Co. MAC UDR, Inc. UDR Vornado Realty Trust VNO Weingarten Realty Investors WRI Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 27.06 52.82 59.56 37.32 105.13 103.06 48.77 25.06 20.30 53.77 23.42 25.32 43.84 25.00 43.34 120.25 82.20 37.09 42.38 38.25 41.37 13.79 35.59 39.94 38.28 64.98 97.12 71.81 101.89 93.45 41.24 58.05 74.32 25.64 93.37 38.56 7.58 22.43 16.66 6.13 50.72 39.30 22.40 6.59 6.62 23.93 5.13 3.61 3.01 7.63 20.43 61.81 51.22 7.37 1.04 19.27 9.07 2.49 21.28 22.93 12.03 7.34 58.95 32.90 38.57 12.73 32.04 18.51 11.90 9.15 37.56 12.92 (69.6%) (55.9%) (70.9%) (75.6%) (47.5%) (60.0%) (50.7%) (73.0%) (65.4%) (51.3%) (78.1%) (81.8%) (92.0%) (65.9%) (49.8%) (46.0%) (35.1%) (79.8%) (97.5%) (46.3%) (75.6%) (79.4%) (34.8%) (37.2%) (66.6%) (87.4%) (36.8%) (50.9%) (60.7%) (85.5%) (18.9%) (66.2%) (81.7%) (58.3%) (58.1%) (62.2%) (28.5%) (4.2%) (10.9%) (35.3%) 4.0% (12.2%) (2.4%) 3.1% 1.5% (2.5%) 28.3% (36.7%) (53.8%) (11.4%) (10.8%) 3.7% 5.7% 3.7% (28.1%) (6.0%) (39.1%) (58.3%) 15.9% 14.6% (8.8%) (29.8%) (0.6%) (9.1%) (3.9%) (25.3%) 9.4% (8.5%) (19.4%) (14.7%) (21.0%) (18.4%) (63.4%) (44.3%) (50.1%) (70.7%) (35.8%) (47.6%) (38.5%) (45.4%) (40.5%) (34.1%) (35.6%) (64.6%) (84.3%) (50.9%) (41.9%) (39.4%) (22.3%) (63.6%) (81.4%) (36.7%) (66.8%) (67.0%) (21.7%) (15.9%) (49.6%) (72.4%) (26.7%) (30.1%) (44.6%) (74.4%) (5.8%) (50.5%) (68.7%) (49.7%) (45.9%) (50.6%) (69.9%) (50.1%) (68.5%) (83.2%) (47.0%) (58.1%) (51.7%) (72.5%) (65.7%) (53.0%) (74.0%) (84.9%) (92.7%) (66.6%) (49.2%) (44.3%) (33.7%) (79.4%) (97.2%) (45.5%) (76.0%) (82.5%) (34.7%) (38.9%) (68.4%) (87.7%) (34.6%) (50.9%) (58.9%) (84.7%) (20.6%) (64.8%) (82.8%) (61.3%) (55.7%) (63.6%) (36.6%) Ticker Primary analyst Price currency Price as of 4/24/2008 Price as of Price performance 3 month price 4/14/2009 since 4/24/2008 performance 6 month price 12 month price performance performance

(39.4%) (1.5%) (14.4%) S&P 500 SPX $ 1388.82 841.50 Note: Prices as of most recent available close which could vary from the price date indicated above This table shows movement in absolute share price and not total shareholder return. Results presented should not and cannot be viewed as an indicator of future performance.

Source: Factset, Qube.

Goldman Sachs Global Investment Research

18

April 15, 2009

United States: Real Estate: REITs

Removing TCO from the Conviction Buy List, maintain Buy on solid balance sheet and high quality portfolio
We remove Taubman Centers from the Conviction Buy List and swap it for Simon Property Group as we now see greater relative upside. Since we added TCO to the Conviction Buy List on 03/13/2009, the stock increased 2% versus an 11% rise for the S&P 500 and a 7% increase for the RMZ REIT index. Also, TCO shares have decreased 64.8% over the past 12 months versus respective declines of 36.6% for the S&P 500 and 57.7% for the RMZ. We believe that the underperformance of our call was likely due to concerns over the company’s exposure to luxury retail and its presence in Detroit (with four malls in the region). We do feel however, that these concerns are over-blown as (1) TCO’s top tenants include a number of discount oriented retailers such as Forever 21; and (2) the Detroit area has been in a downturn for some time now (see exhibits 26, 27) and TCO’s assets in the region have held of relatively well over this time period. We therefore do not see substantial downside risk from here. In sum, we still view TCO as one of our top long ideas and favor the company for several positive attributes including a best in class balance sheet with minimal refinancing risk (no debt maturing until Fall 2010), longer average lease terms and a portfolio of class A assets with solid credit tenants. We raise our 6 month price target to $22 (from $20 previously) as we believe that recent signs of liquidity in the capital markets should benefit REITs with more stable credit profiles. Further, TCO continues to pay its dividend in cash, implying a rich 8.9% yield. Given the number of REITs that have opted to pay the dividend in stock, we feel that a pure cash yield also warrants a decrease in the discount we were applying to NAV. Our price target is now roughly in-line with our forward NAV estimate, and implies 23% total return. Key reasons for our Buy call for TCO include:
(1) Low near-term refinancing risk. Taubman’s solid balance sheet and well-staggered debt maturity schedule are strong investment positives. With no debt maturities until late 2010, TCO’s refinancing risk is minimal even if the credit malaise persists beyond 2010. Taubman’s capital strength is further bolstered by ample capacity of $350mn on its $590mn credit facilities (maturity in 2011, with a one-year extension option), and a history of strong relationships with institutional lenders that should position the company well as debt capital becomes more readily available. (2) Quality regional mall portfolio with high credit tenants. Taubman’s mall portfolio benefits from an attractive combination of high end centers such as Short Hills Mall in New Jersey, and more value-oriented centers including Dolphin, in Miami. Further, TCO enjoys high exposure to strong retailers that have been delivering better than expected margins recently such as Forever 21. While the recent deceleration in sales performance across TCO’s higher end asset class is concerning, we note the risk of future earnings being worse than peers is low given TCO’s superior portfolio. In sum, we expect retail fundamentals to be weaker in 2009 than in past years, but our selective view remains that top quality mall owners including TCO and SPG should outperform peers. (3) Uncertainty around development concerning, but largely reflected in multiple. We believe concerns over the outcome of TCO’s various development efforts (domestically and in Asia) are largely reflected in the shares with TCO trading at just 6.9X our 2009E versus the longer term average multiple of 11.9X, and at a discount to our $22 NAV. Further, we expect to see meaningful multiple expansion from current levels as the company de-emphasizes development thereby improving its risk profile.

Key risks to our call and target price include development risk and consumer weakness.

Goldman Sachs Global Investment Research

19

April 15, 2009

United States: Real Estate: REITs

Exhibit 26: Weaker economic conditions in the Detroit area are concerning…
But unemployment has been rising for 2-3 years now
15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Mar-90 Mar-91 Mar-92 Mar-93 Mar-94 Mar-95 Mar-96 Detroit 13.6%

Exhibit 27: Vacancy rates have also been higher for some time now…
And we do not expect a dramatic deceleration in fundamentals from here
25.0% 22.5%

Unemployment Rate (%)

Unem ploym ent in Detroit has been in the 7-8% range s ince 2004-05...

US 8.10%

Vacancy Rate (%)

20.0% 17.5% 15.0% 12.5% 10.0% 7.5% 5.0%

Retail vacancy rates als o began ris ing earlier (1 year before the US avg.)

Detroit 21% US 13%

The national average fell in 04-05, and only s tarted increas ing m id-2007 Mar-97 Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Feb-09

1982Q4

1984Q4

1986Q4

1988Q4

1990Q4

1992Q4

1994Q4

1996Q4

1998Q4

2000Q4

2002Q4

2004Q4

2006Q4

Detroit

US average

Detroit

US Average

Source: Factset, Goldman Sachs Research estimates.

Source: Factset, Goldman Sachs Research estimates.

Exhibit 28: Summary of TCO share price performance since 3/13/2009
Company Americas REITS Peer Group Taubman Centers, Inc. TCO Alexander & Baldwin, Inc. AXB AMB Property Corp. AMB Apartment Investment & ManagemeAIV AvalonBay Communities Inc. AVB Boston Properties, Inc. BXP BRE Properties, Inc. BRE Brookdale Senior Living Inc. BKD Brookfield Properties Corp. BPO Camden Property Trust CPT CB Richard Ellis Group Inc. CBG CBL & Associates Properties CBL Cousins Properties Incorporated CUZ Developers Diversified Realty DDR Duke Realty Corp. DRE Equity Residential EQR Essex Property Trust, Inc. ESS Federal Realty Invmt Trust FRT Forest City Enterprises FCE__A General Growth Properties GGP HCP, Inc. HCP Kimco Realty Corp. KIM Kite Realty Group Trust KRG Liberty Property Trust LRY Mack Cali Realty Corporation CLI Post Properties Inc. PPS ProLogis PLD Public Storage, Inc. PSA Regency Centers Corporation REG Simon Property Group SPG SL Green Realty Corp SLG Tanger Factory Outlet Centers, Inc. SKT The Macerich Co. MAC UDR, Inc. UDR Vornado Realty Trust VNO Weingarten Realty Investors WRI Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 18.11 17.84 13.37 5.85 48.99 37.64 22.25 4.52 5.70 23.30 3.06 2.66 7.23 1.89 5.94 20.33 65.76 46.80 4.32 0.64 18.76 9.18 3.01 20.24 17.79 11.56 6.94 56.77 28.07 34.73 12.31 29.83 8.54 8.49 37.36 10.49 18.51 22.43 16.66 6.13 50.72 39.30 22.40 6.59 6.62 23.93 5.13 3.61 7.58 3.01 7.63 20.43 61.81 51.22 7.37 1.04 19.27 9.07 2.49 21.28 22.93 12.03 7.34 58.95 32.90 38.57 12.73 32.04 11.90 9.15 37.56 12.92 2.2% 25.7% 26.8% 4.8% 5.6% 6.5% 0.7% 45.8% 16.1% 6.0% 67.6% 35.7% 4.8% 59.3% 28.5% 0.5% (4.3%) 11.0% 70.6% 62.5% 2.7% 4.6% (12.5%) 8.0% 32.0% 6.1% 5.8% 3.8% 17.2% 11.1% 6.6% 7.4% 39.3% 11.8% 0.5% 23.2% (8.5%) (4.2%) (10.9%) (35.3%) 4.0% (12.2%) (2.4%) 3.1% 1.5% (2.5%) 28.3% (36.7%) (28.5%) (53.8%) (11.4%) (10.8%) 3.7% 5.7% 3.7% (28.1%) (6.0%) (39.1%) (58.3%) 15.9% 14.6% (8.8%) (29.8%) (0.6%) (9.1%) (3.9%) (25.3%) 9.4% (19.4%) (14.7%) (21.0%) (18.4%) (50.5%) (44.3%) (50.1%) (70.7%) (35.8%) (47.6%) (38.5%) (45.4%) (40.5%) (34.1%) (35.6%) (64.6%) (63.4%) (84.3%) (50.9%) (41.9%) (39.4%) (22.3%) (63.6%) (81.4%) (36.7%) (66.8%) (67.0%) (21.7%) (15.9%) (49.6%) (72.4%) (26.7%) (30.1%) (44.6%) (74.4%) (5.8%) (68.7%) (49.7%) (45.9%) (50.6%) (14.4%) (64.8%) (50.1%) (68.5%) (83.2%) (47.0%) (58.1%) (51.7%) (72.5%) (65.7%) (53.0%) (74.0%) (84.9%) (69.9%) (92.7%) (66.6%) (49.2%) (44.3%) (33.7%) (79.4%) (97.2%) (45.5%) (76.0%) (82.5%) (34.7%) (38.9%) (68.4%) (87.7%) (34.6%) (50.9%) (58.9%) (84.7%) (20.6%) (82.8%) (61.3%) (55.7%) (63.6%) (36.6%) Ticker Primary analyst Price currency Price as of 3/13/2009 Price as of 4/14/2009 Price performance 3 month price since 3/13/2009 performance 6 month price 12 month price performance performance

11.2% (1.5%) S&P 500 SPX $ 756.55 841.50 Note: Prices as of most recent available close which could vary from the price date indicated above This table shows movement in absolute share price and not total shareholder return. Results presented should not and cannot be viewed as an indicator of future performance.

Source: Factset, Qube.

Goldman Sachs Global Investment Research

2008Q4

20

April 15, 2009

United States: Real Estate: REITs

Removing PPS from the Conviction Sell List, still maintain Sell on decelerating Southeastern markets trends
We remove Southeast-focused apartment REIT Post Properties to the Conviction Sell list and swap it for West Coast focused apartment REIT Essex property trust where we now see greater negative total return potential. We believe PPS’s recent success in addressing its 2009 debt maturities led to underperformance of our call. Since we added PPS to the America’s Sell list on 03/27/2009, the stock increased 17% versus a 3% rise for the S&P 500 and a 17% increase for the RMZ REIT index. Also, PPS shares have decreased 68.4% over the past 12 months versus respective declines of 36.6% for the S&P 500 and 57.7% for the RMZ. We still maintain our Sell rating on PPS and believe fundamentals in the Southeastern markets could underperform in the next 12-24 months as unemployment rises and affordability of single family housing becomes more competitive. Recall PPS’s top markets by NOI contribution include Atlanta (25%), Dallas (18%), Washington DC (17%) and Tampa (13%). We see negative 22% total return potential to our unchanged 6-month target price of $9, which is based on a 22% discount to our forward NAV estimate of $12 (based on a 9.3% cap rate). Note that our return expectation includes PPS’s annualized dividend yield of 7%. Key reasons for our Sell call for Post include: (1) Valuation is rich relative to growth – PPS is currently trading at 13.8X our 2010 FFO/sh estimate of $0.87/sh, which represents a 40% premium to the apartment average. While we believe PPS has taken positive steps to mitigate such risks, including a 55% dividend cut in 4Q08 and $28mn of development cancelations / write-downs, PPS should still trade at a discount to apartment peers given its Southeastern geographic exposure and our expectation of earnings deterioration. In our view, PPS should trade in the 810X range, which would represent a 10-20% multiple discount to apartment peers. (2) Weaker operating performance and earnings history – We also believe that PPS deserves a discount versus peers for its history of below average operating performance. Specifically PPS’s portfolio has underperformed apartment peers in SS NOI growth by an average of 200bp over the past 9 years. We expect this trend to continue, given the greater headwinds inherent in PPS’s markets. Additionally we note that PPS’s management decisions, including the failed attempt to sell the company in 2007/8 and the timing of its developments, both canceled and ongoing, have arguably eliminated value and / or impaired earnings performance. (3) Capital headwinds exist for future growth initiatives – While we believe PPS’s capital position has improved since the
development pipeline was rationalized in 2H08 (down around 50%), PPS still has capital expenditures, which should be largely earnings neutral and possibly dilutive in our view. Specifically, we expect initial yields of only 4%-5% on PPS’s ongoing $542mn pipeline ($201mn unfunded). In addition, PPS’s ongoing $45mn remediation of older assets with water damage also represents an unavoidable but lower value use of capital.

Key risks to our call and target price include better-than-expected fundamental results in PPS’s 1Q09 release.

Goldman Sachs Global Investment Research

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April 15, 2009

United States: Real Estate: REITs

Exhibit 29: PPS same-store NOI growth has been below peer average
as of 4Q 2008

Exhibit 30: We expect same-store occupancy to fall similar to last recession
as of 4Q 2008
98%

10% 5% 0% -5% -10%

96%

94%

92%

90%

PP S has yet to experience a sharp decline in SS o ccupancy like it did in the previo us do wnturn.

-15% 1999Q1 2000Q1 2001Q1 2002Q1 2003Q1 2004Q1 2005Q1 2006Q1 2007Q1 2008Q1
88%

1999Q1

2000Q1

2001Q1

2002Q1

2003Q1

2004Q1

2005Q1

2006Q1

2007Q1
2006 2007

PPS - same-store NOI grow th
Source: SNL

Apartment average
Source:SNL

Exhibit 31: PPS at 13.1X looks rich versus peers

Exhibit 32: PPS is trading at premium to peers despite their earnings underperformance

PPS is trading at one of the highest multiple despite having the weak growth profile .
14.0x 12.0x

35%

9.2% Current Prem. vs. 8.0% Average Prem.

PPS

AVB EQR BRE CPT UDR

25%

ESS
15%

P/FFO multiple 09E

10.0x 8.0x 6.0x

Avg: 10.3x

5%

-5%
4.0x 2.0x 0.0x

AIV
-15%

Avg: -9.0%
-10.0% -8.0% -6.0% -4.0% -2.0% 0.0%

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

NOI growth 2-year CAGR 08 -10E

Next 12 Months

Source: Goldman Sachs Research Estimates

Source: Goldman Sachs Research Estimates, Factset

Goldman Sachs Global Investment Research

2008

-20.0% -18.0% -16.0% -14.0% -12.0%

-25%

2008Q1

22

April 15, 2009

United States: Real Estate: REITs

Exhibit 33: Summary of PPS share price performance since 3/27/2009
as of 4/14/2009
Company Americas REITS Peer Group Post Properties Inc. PPS Alexander & Baldwin, Inc. AXB AMB Property Corp. AMB Apartment Investment & ManagemeAIV AvalonBay Communities Inc. AVB Boston Properties, Inc. BXP BRE Properties, Inc. BRE Brookdale Senior Living Inc. BKD Brookfield Properties Corp. BPO Camden Property Trust CPT CB Richard Ellis Group Inc. CBG CBL & Associates Properties CBL Cousins Properties Incorporated CUZ Developers Diversified Realty DDR Duke Realty Corp. DRE Equity Residential EQR Essex Property Trust, Inc. ESS Federal Realty Invmt Trust FRT Forest City Enterprises FCE__A General Growth Properties GGP HCP, Inc. HCP Kimco Realty Corp. KIM Kite Realty Group Trust KRG Liberty Property Trust LRY Mack Cali Realty Corporation CLI ProLogis PLD Public Storage, Inc. PSA Regency Centers Corporation REG Simon Property Group SPG SL Green Realty Corp SLG Tanger Factory Outlet Centers, Inc. SKT Taubman Centers, Inc. TCO The Macerich Co. MAC UDR, Inc. UDR Vornado Realty Trust VNO Weingarten Realty Investors WRI Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann Jonathan Habermann $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 10.28 19.75 14.32 5.45 47.54 34.54 19.62 5.29 5.91 21.97 4.25 2.28 6.57 2.16 5.61 18.50 57.74 43.72 3.74 0.66 17.36 7.65 2.33 19.40 19.56 5.95 54.14 26.62 33.65 12.29 28.63 16.90 5.80 7.88 34.61 9.47 12.03 22.43 16.66 6.13 50.72 39.30 22.40 6.59 6.62 23.93 5.13 3.61 7.58 3.01 7.63 20.43 61.81 51.22 7.37 1.04 19.27 9.07 2.49 21.28 22.93 7.34 58.95 32.90 38.57 12.73 32.04 18.51 11.90 9.15 37.56 12.92 17.0% 13.6% 18.4% 12.5% 8.9% 13.8% 14.2% 24.6% 12.0% 8.9% 20.7% 58.3% 15.4% 39.4% 36.0% 10.4% 7.0% 17.2% 97.1% 57.6% 11.0% 25.5% 13.1% 12.7% 20.1% 23.4% 8.9% 23.6% 14.6% 3.6% 11.9% 9.5% 105.2% 20.5% 8.5% 36.4% (8.8%) (4.2%) (10.9%) (35.3%) 4.0% (12.2%) (2.4%) 3.1% 1.5% (2.5%) 28.3% (36.7%) (28.5%) (53.8%) (11.4%) (10.8%) 3.7% 5.7% 3.7% (28.1%) (6.0%) (39.1%) (58.3%) 15.9% 14.6% (29.8%) (0.6%) (9.1%) (3.9%) (25.3%) 9.4% (8.5%) (19.4%) (14.7%) (21.0%) (18.4%) (49.6%) (44.3%) (50.1%) (70.7%) (35.8%) (47.6%) (38.5%) (45.4%) (40.5%) (34.1%) (35.6%) (64.6%) (63.4%) (84.3%) (50.9%) (41.9%) (39.4%) (22.3%) (63.6%) (81.4%) (36.7%) (66.8%) (67.0%) (21.7%) (15.9%) (72.4%) (26.7%) (30.1%) (44.6%) (74.4%) (5.8%) (50.5%) (68.7%) (49.7%) (45.9%) (50.6%) (68.4%) (50.1%) (68.5%) (83.2%) (47.0%) (58.1%) (51.7%) (72.5%) (65.7%) (53.0%) (74.0%) (84.9%) (69.9%) (92.7%) (66.6%) (49.2%) (44.3%) (33.7%) (79.4%) (97.2%) (45.5%) (76.0%) (82.5%) (34.7%) (38.9%) (87.7%) (34.6%) (50.9%) (58.9%) (84.7%) (20.6%) (64.8%) (82.8%) (61.3%) (55.7%) (63.6%) (36.6%) Ticker Primary analyst Price currency Price as of 3/27/2009 Price as of Price performance 3 month price 4/14/2009 since 3/27/2009 performance 6 month price 12 month price performance performance

3.1% (1.5%) (14.4%) S&P 500 SPX $ 815.94 841.50 Note: Prices as of most recent available close which could vary from the price date indicated above This table shows movement in absolute share price and not total shareholder return. Results presented should not and cannot be viewed as an indicator of future performance.

Source: Factset, Qube.

Goldman Sachs Global Investment Research

23

April 15, 2009

United States: Real Estate: REITs

Reinstating rating on GGP at Sell: Too many risks; still challenges to unlocking value
Source of opportunity
We reinstate a Sell rating on GGP with a 6 month price target of $0.50 implying 52% potential downside. The company continues to undergo substantial restructuring with close to $10bn maturing over the next 2 years. While all options have been laid out on the table, including asset sales, joint venture formations and equity raises, the lack of progress on each of these fronts makes bankruptcy a potential risk in our view.

Catalyst
While we see substantial value trapped in the company’s assets, unlocking the value is entirely dependent on major changes to the existing capital structure. We have begun to see early signs of improving liquidity in the capital markets, as indicated by the refinancings and capital raises completed over the past month (exhibit 1,2). However, this does not necessarily benefit GGP given the large volume of debt rolling each year, well above levels faced by peers. We also point out the difficulty associated with completing significant asset disposals as institutional capital is still largely sidelined, and year to date transaction volumes low (see exhibit 34). We expect investors to avoid the shares, and look for movement towards our $0.50 price target. Our 2009/2010 FFO estimates of $2.30/$2.06 are unchanged.

Valuation
Our $0.50 price target is based on a substantial discount to our NAV estimate of $6, and implies 52% downside.

Key risks
Risks to our price target include better than expected terms on upcoming refinancings, and improving fundamentals. Exhibit 34: We are concerned about GGP’s ability to complete substantial asset sales given the lack in recent transaction activity.

$600 $500 $400 $300 $200 $1 00 $0

Y TD transaction volumes are dow n sharply versus prior years

2002

2003

2004

2005

2006

2007

2008

2009

Transaction volumes ($bn)

Source: Goldman Sachs Research estimates.

Goldman Sachs Global Investment Research

24

April 15, 2009

United States: Real Estate: REITs

MAC - Revising estimates as we see lower dilution to earnings. Raising 6-month price target to $9 (from $8) on higher NAV.
We are raising our 2009/2010 FFO estimates to $4.15/$3.61 (from $4.03/$3.32 previously) based on the revised impact we see from future deleveraging efforts. We recently adjusted our model to account for the dilution we expect from (1) reducing the 2009 annualized dividend to $2.00, and (2) opting to pay 90% of the dividend in stock. While our assumptions are unchanged, the stock has been up over 60% on news of recent refinancing activity, and an improved near term outlook for credit market liquidity. We therefore expect the dilution to forward earnings to be less. Our higher estimates bring our 2009 forward NAV estimate to $10.14 from $9.65. Our new price target is still at a discount NAV, and implies negative 24% total return potential.

Sector calls
Apartments
Our view - We remain cautious on the apartments as the stocks already discount a return to normalized earnings growth, with a current P/FFO multiple of 10X. Moreover, several of the stocks we cover now trade at close to 13X (ESS, BRE, PPS). While we note the superior funding advantage the sector has as a result of FRE and FNM, we caution that near-term fundamentals should be unattractive with continued job losses and favorable mortgage rates (for single-family home buyers). Furthermore, rising home foreclosures and the increasing pool of rental homes should further weight on operating results for the multi-family segment. That said, we note that apartments should be one of the first sectors to rebound when the recovery in GDP growth takes hold, perhaps late this year or in early 2010. Earnings outlook - We recommend an underweight position on apartment REITs heading into Q1 earnings for the reasons stated above: 1) risks to near-term cash flows; 2) continued job losses; 3) competition from rising home foreclosures (sale inventory), home rentals, and low mortgage rates; and 4) unattractive valuation (10-13X FFO for most names). We believe EQR is more reasonable at just 10X as compared to ESS, BRE and PPS, all trading at close to 13X on average.

Goldman Sachs Global Investment Research

25

April 15, 2009

United States: Real Estate: REITs

Exhibit 35: Office – Summary of Goldman Sachs estimates vs. consensus
On average, our estimates are 4% below the street for 2009
Apartments Company
Aimco Avalonbay Communities BRE Properties Camden Property Trust Equity Residential Essex Property Trust HCP, Inc. Post Properties United Dominion Realty

GS Ticker
AIV AVB BRE CPT EQR ESS HCP PPS UDR

Consensus 1Q09E
$0.34 $1.20 $0.62 $0.82 $0.55 $1.47 $0.53 $0.26 $0.33

GS 2009
$1.61 $4.39 $2.32 $3.04 $2.02 $5.30 $2.13 $1.00 $1.22

Consensus 2010
$1.48 $3.86 $2.08 $2.70 $1.85 $4.70 $2.09 $0.87 $1.04

GS Growth 2009
-43.0% -12.5% -16.7% -14.4% -21.7% -9.3% -6.2% -41.5% -15.1%

Consensus Growth 2009
-41.9% -8.9% -12.9% -9.8% -17.5% -3.8% -3.9% NM -14.7%

GS vs. Consensus 2009
-1.9% -4.0% -4.4% -5.1% -5.0% -5.7% -2.4% -10.2% -0.6%

1Q09E
$0.34 $1.19 $0.62 $0.81 $0.55 $1.42 $0.54 $0.26 $0.34

2009
$1.64 $4.57 $2.42 $3.21 $2.12 $5.62 $2.18 $1.11 $1.23

2010
$1.44 $4.33 $2.25 $3.01 $1.98 $5.29 $2.27 $1.06 $1.14

2010
-8.3% -12.1% -10.2% -11.3% -8.1% -11.3% -2.1% -12.8% -14.9%

2010
-11.9% -5.1% -7.2% -6.0% -6.9% -5.8% 4.1% -5.0% -7.3%

2010
2.1% -11.0% -7.5% -10.5% -6.3% -11.1% -8.2% -17.6% -8.7%

Average
Source: Goldman Sachs Research estimates.

-20.0%

-10.1%

-14.2%

-5.7%

-4.3%

-8.8%

Office
Our view - Our outlook for the office sector remains largely unchanged as we still selectively favor certain downtown REITs relative to suburban landlords. To be clear we still expect fundamentals to decline sharply in certain markets including NYC but believe our estimates reflect this outlook. In fact, across our downtown office coverage we expect that vacancy rates could rise as much as 300400bps over the next 12 months and that rents could correct as much as 30-40% from peak levels. That said, in a market where all sectors are feeling pain, we believe well located downtown office assets with some embedded mark-to-market growth and longerterm leases offer investors a better store of value. Specifically we continue to favor Boston Properties (BXP) and SL Green realty Corp.(SLG) as our top Buy ideas in office. Earnings outlook - We recommend a neutral position for office REITs heading into 1Q09 earnings. As mentioned we expect fundamental trends to continue to worsen, possibly at an accelerated rate, but believe current P/FFO multiples are reasonable (7.3X vs. the REIT average of 8.1X) in the context of forecasted earnings declines of 10-15% in 2009. We believe BXP and VNO offer the best value in office given their superior balance sheets and reasonable valuation (8.2X and 7.6X respectively vs. peer average of 7.3X)

Goldman Sachs Global Investment Research

26

April 15, 2009

United States: Real Estate: REITs

Exhibit 36: Office – Summary of Goldman Sachs estimates vs. consensus
On average, our estimates are 5% below the street for 2009
Office Company
Boston Properties Brookfield Properties Cousins Properties Corp. Forest City Enterprises Mack-Cali Realty SL Green Realty Vornado Realty Trust

GS Ticker
BXP BPO CUZ FCEA CLI SLG VNO

Consensus 1Q09E
$1.26 $0.34 $0.23 $0.42 $0.85 $1.50 $1.65

GS 2009
$4.77 $1.37 $0.85 $1.90 $3.20 $4.98 $4.93

Consensus 2010
$4.67 $1.30 $0.90 $1.81 $2.82 $4.44 $4.28

GS Growth 2009
-4.2% -10.2% -30.4% -13.0% -16.5% -20.8% -8.4%

Consensus Growth 2009
-4.1% -8.2% -24.5% -0.6% -12.2% -16.7% -3.7%

GS vs. Consensus 2009
-0.2% -2.2% -7.8% -12.6% -4.9% -5.0% -4.9%

1Q09E
$1.20 $0.37 $0.23 $0.37 $0.84 $1.36 $1.50

2009
$4.78 $1.40 $0.92 $2.18 $3.36 $5.24 $5.18

2010
$4.74 $1.35 $1.00 $2.42 $3.24 $4.97 $4.89

2010
-2.1% -4.9% 5.9% -4.8% -11.7% -10.8% -13.1%

2010
-0.8% -3.9% 8.4% 11.1% -3.6% -5.1% -5.6%

2010
-1.4% -3.2% -9.9% -25.1% -12.8% -10.7% -12.4%

Average
Source: Goldman Sachs Research estimates.

-14.8%

-5.9%

-10.0%

0.1%

-5.4%

-10.8%

Industrial
Our view - We maintain a cautious view on the industrial sector and remain most concerned about the global industrial developers (ProLogis and AMB Property Corp) relative to the suburban industrial and office names (Liberty Property Trust and Duke Realty). Recall the underlying reasons for our cautious view are: 1) Leverage remains too high as development spending, fueled through joint venture take-out vehicles will need to be paid down over time; and 2) global demand for industrial space should deteriorate sharply over the next 12-24 months as consumer spending and GDP growth rates decline or remain depressed. Of course, PLD and AMB’s recent equity offerings certainly help to address maturing debt over the next two years. That said, neither deal completely de-leverages either company (particularly PLD), and both came at a high cost to equity holders as they were 57% and 41% dilutive, respectively. Earnings outlook - We recommend that investors maintain an underweight position in industrial REITs for 1Q09 earnings. The key reason is that shares of AMB and PLD appear fully valued despite the recent equity raises. Specifically, PLD and AMB now trade at implied cap rates of roughly 9.0%, which compares to the REIT average of 9.4%. Despite lower near-term refinancing risk, we believe large developers such as PLD and AMB should trade at some discount given leasing risks and our cautious view on fundamentals. For earnings specifically we look forward to updates on additionally de-leveraging efforts including secured debt financing and asset sales. We believe stock performance could weigh heavily on pricing of such efforts as well as overall progress.

Goldman Sachs Global Investment Research

27

April 15, 2009

United States: Real Estate: REITs

Exhibit 37: Industrial – Summary of Goldman Sachs estimates vs. consensus
On average, our estimates are 18% below the street for 2009
Industrial Company
AMB Property Corporation Duke Realty Liberty Property Trust ProLogis

GS Ticker
AMB DRE LRY PLD

Consensus 1Q09E
-$0.76 $0.51 $0.76 $0.62

GS 2009
$0.27 $1.75 $2.95 $1.68

Consensus 2010
$1.08 $1.60 $2.75 $1.11

GS Growth 2009
NM -31.0% -8.3% -54.3%

Consensus Growth 2009
NM -20.4% -6.6% -54.4%

GS vs. Consensus 2009
-57.6% -13.3% -1.8% 0.1%

1Q09E
-$0.85 $0.47 $0.75 $0.89

2009
$0.63 $2.01 $3.00 $1.68

2010
$1.32 $1.90 $2.95 $1.27

2010
NM -8.5% -6.6% -33.6%

2010
108.1% -5.6% -1.6% -24.3%

2010
-18.0% -16.0% -6.8% -12.2%

Average
Source: Goldman Sachs Research estimates.

-31.2%

-16.2%

-27.1%

19.2%

-18.1%

-13.2%

Retail
Our view –W e remain at neutral on retail REITs with a selective bias towards better-positioned malls, including SPG and TCO, as well as SKT in outlet centers. We still expect fundamentals to decline over the next 12-18 months and believe the risk of sharply higher vacancy still exists with rising store closing as retailers scale back their store counts. Specifically, we see occupancy declines of 300-400bps on average from current levels, and expect rent spreads to be flat to slightly positive. However, retail landlords with higher quality assets, geographical diversification and strong balance sheets (solid liquidity and low refinancing risk) should relatively outperform peers. We accordingly favor Simon Property Group and Taubman Centers in the mall sector. Our top pick in the shopping center space is Kimco Realty, and we highlight Tanger Factory Outlets as a top idea as well. Our best Sell ideas are shopping center REITs Federal Realty and Regency Centers. Earnings outlook - We recommend a neutral position for Retail REITs heading into 1Q earnings. We expect fundamentals to decline further as store closings increase, and consumer weakness extends into the coming months. That said, we see opportunity in select names including SPG and TCO results should be stronger versus peers. Further, both companies boast strong balance sheets, and therefore have low risk of dilution to earnings through the current capital raising cycle. Lastly, valuation is attractive as SPG and TCO trade well below longer term averages, and at discounts to NAV. (6.9X and 6.4X 2009 FFO respectively versus peer average of 5.8X).

Goldman Sachs Global Investment Research

28

April 15, 2009

United States: Real Estate: REITs

Exhibit 38: Regional malls – Summary of Goldman Sachs estimates vs. consensus
On average, our estimates are 4% below the street for 2009
Regional Malls Company
CBL & Associates General Growth Properties Simon Property Group Taubman Centers The Macerich Company

GS Ticker
CBL GGP SPG TCO MAC

Consensus 1Q09E
$0.71 $0.55 $1.47 $0.59 $1.05

GS 2009
$2.75 $2.30 $5.99 $2.69 $4.15

Consensus 2010
$2.32 $2.06 $5.57 $2.55 $3.61

GS Growth 2009
-16.8% -19.9% -8.7% -13.0% -10.7%

Consensus Growth 2009
-10.0% -18.9% -7.0% -12.0% -5.5%

GS vs. Consensus 2009
-7.6% -1.3% -1.8% -1.1% -5.5%

1Q09E
$0.67 $0.53 $1.45 $0.55 $0.95

2009
$2.97 $2.33 $6.10 $2.72 $4.39

2010
$2.61 $2.07 $5.96 $2.69 $4.08

2010
-15.5% -10.6% -6.9% -5.1% -13.1%

2010
-12.0% -11.1% -2.3% -1.4% -7.0%

2010
-11.2% -0.8% -6.5% -4.9% -11.7%

Average
Source: Goldman Sachs Research estimates.

-13.8%

-10.3%

-10.7%

-6.7%

-3.4%

-7.0%

Exhibit 39: Shopping centers – Summary of Goldman Sachs estimates vs. consensus
On average, our estimates are 3% below the street for 2009
Shopping Centers Company
Developers Diversified Federal Realty Trust Kimco Realty Corp Kite Realty Regency Centers Weingarten Realty

GS Ticker
DDR FRT KIM KRG REG WRI

Consensus 1Q09E
$0.65 $0.99 $0.43 $0.21 $0.81 $0.62

GS 2009
$2.10 $3.67 $1.39 $0.83 $3.26 $2.45

Consensus 2010
$1.83 $3.48 $1.14 $0.75 $3.05 $2.20

GS Growth 2009
-36.3% -5.9% -44.7% -30.7% -20.5% -30.7%

Consensus Growth 2009
-36.4% -1.7% -39.6% -29.5% -17.0% -29.2%

GS vs. Consensus 2009
0.2% -4.3% -8.4% -1.8% -4.2% -2.1%

1Q09E
$0.67 $0.90 $0.39 $0.21 $0.73 $0.60

2009
$2.09 $3.83 $1.52 $0.85 $3.41 $2.50

2010
$1.57 $3.86 $1.46 $0.86 $3.25 $2.33

2010
-12.6% -5.2% -17.9% -10.2% -6.5% -10.2%

2010
-24.8% 0.8% -3.7% 1.8% -4.6% -7.0%

2010
16.4% -9.9% -22.0% -13.4% -6.1% -5.4%

Average
Source: Goldman Sachs Research estimates.

-28.1%

-10.4%

-25.6%

-6.3%

-3.4%

-6.7%

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Exhibit 40: Summary of Goldman Sachs estimates and price targets - light blue highlights indicate price target and rating changes We now see negative 9% total return potential for our 36 stock coverage universe. Prices as of 04/14/2009.
6 month dividend yield 9.7% 2.5% 16.5% 8.1% 2.5% 1.8% 6.8% 1.9% 1.9% 4.5% 0.5% 8.3% 0.8% 0.0% 2.8% 2.4% 1.4% 2.2% 4.4% 2.6% 4.8% 1.3% 3.1% 4.7% 4.7% 2.4% 2.4% 2.0% 4.5% 6.6% 0.0% 6.6% 3.9% 11.4% 2.8% 4.7% 5.9% 6.1% 5.0% 3.3% 2.3% 5.2% 6 month dividend yield 0.0% 3.5% 0.0% 1.7% 4.1% Old Forward NAV 9.94 9.91 2.92 8.89 42.48 32.23 Current 2010E Price / 2009 Old Target FFO Price FFO 1.14 6.5 9.00 1.83 1.4 2.00 0.75 3.0 2.50 2.20 5.3 9.00 3.48 14.0 36.00 3.05 10.1 24.00 6.7X 4.63 11.9 11.9X 6.9 6.4 1.3 2.9 0.5 3.6X 2.6 8.2 7.2 4.8 5.7X 4.4 NM 4.4X 9.0 9.0X 11.8 11.8X 7.6 7.2 8.9 3.9 4.4 6.4X 3.8 11.6 10.1 7.9 7.5 9.7 12.0 11.7 9.3X 64.00 Target Price% change 0.0% 50.0% -20.0% 11.1% 11.1% 4.2% 9.4% 0.0% 0.0% 10.0% 7.0% 60.0% 12.5% NA 22.4% 33.3% 14.0% 5.9% 0.0% 13.3% NM 8.3% 8.3% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 100.0% 22.2% 24.4% 0.0% 0.0% 0.0% 0.0% 0.0% -5.6% 0.0% 0.0% (0.7)% Target Price% change 0.0% 0.0% 0.0% 0.0% 9.8% Target Price Premium / (Discount) to NAV (9.5)% (69.7)% (15.6)% (13.0)% (5.8)% (22.4)% (22.7)% (1.9)% (1.9)% (0.0)% 6.2% (16.6)% (11.2)% NA -5.4% (1.9)% (5.2)% (10.1)% (8.3)% -6.4% (16.4)% (17.4)% -16.9% (5.0)% -5.0% 3.7% 3.7% (9.1)% (9.5)% (13.7)% (39.8)% (18.1)% (18.0)% 1.0% (15.8)% (14.5)% (11.0)% (11.3)% (13.2)% (22.2)% (14.8)% (12.7)% Target Price Premium / (Discount) to NAV NA (67.0)% NA (67.0)% (14.5)% Total return potential 8.9% 2.2% -3.2% -14.5% -19.4% -22.2% (8.0)% 10.4% 10.4% 23.3% 19.7% 19.1% -23.5% -51.9% (2.7)% 28.0% 26.1% -19.3% -20.1% 3.7% -13.5% -20.6% -17.1% 13.7% 13.7% 2.2% 2.2% -7.5% -10.9% -14.2% -18.6% -21.4% (14.5)% -7.0% -10.4% -12.1% -14.8% -17.4% -19.1% -21.9% -23.3% (15.7)% Total return potential NM -11.8% -12.3% (12.0)% (7.8)%

Ticker Company KIM Kimco Realty Corp Developers Diversified DDR Kite Realty Group KRG WRI Weingarten Realty FRT Federal Realty Regency Centers Corp REG Shopping Centers Average PSA Public Storage Inc. Self-Storage Average Taubman Centers TCO Simon Property Group SPG CBL CBL & Associates MAC The Macerich Company General Growth GGP Regional Malls Average SL Green Realty Corp SLG Boston Properties BXP Mack-Cali Realty Corp CLI BPO Brookfield Properties Inc. Office Properties Average PLD ProLogis AMB Property Corp AMB Industrial Properties Average HCP HCP, Inc. Health Care Average SKT Tanger Factory Outlet Centers Factory Outlet Centers Average VNO Vornado Realty LRY Liberty Property Trust Cousins Properties Inc. CUZ Forest City Enterprises FCEA Duke Realty Corp DRE Diversified Properties Average AIV Apt. Inv. & Management AVB AvalonBay Communities EQR Equity Residential CPT Camden Property Trust UDR UDR, Inc. BRE Properties Inc. BRE PPS Post Properties Inc. Essex Property Trust ESS Apartments Average

Current rating Buy Neutral Sell Neutral Sell Sell

Share Price 9.07 3.01 2.49 12.92 51.22 32.90

Forward NAV 9.94 9.91 2.37 11.50 42.48 32.23

GS cap rate 10.0% 10.0% 11.0% 9.5% 8.8% 10.5% 10.0% 8.8% 8.8% 9.0% 8.5% 10.8% 9.8% 10.0% 9.6% 8.2% 8.0% 10.5% 8.8% 8.9% 8.8% 8.8% 8.8% 8.8% 8.8% 8.3% 8.3% 9.0% 10.8% 10.0% 9.9% 10.8% 10.1% 9.8% 8.5% 8.3% 9.0% 8.8% 8.5% 9.3% 8.5% 8.8%

2009E FFO 1.39 2.10 0.83 2.45 3.67 3.26 2.28 4.94

Target Price 9.00 3.00 2.00 10.00 40.00 25.00

Risk factors to price targets Consumer confidence, retailer bankruptcies, development risks Consumer confidence, retailer bankruptcies Stronger consumer confidence, fewer than expected retailer bankruptcies Consumer confidence, retailer bankruptcies, mgmt execution Stronger consumer confidence, fewer than expected retailer bankruptcies Stronger consumer confidence, fewer than expected retailer bankruptcies

(1)

Reason for PT change Lower discount due to recent refinancing activity Lower NAV due to concens on leasing and leverage risks Higher NAV due to lower cap rate assumptions Lower discount due to recent refinancing activity Lower discount due to recent refinancing activity

Buy

58.95

65.24

65.24

64.00

US & European economic weakness, slowing home sales

Buy Buy Neutral Sell Sell

18.51 38.57 3.61 11.90 1.04

22.00 43.43 3.52 9.65 3.54

22.00 43.33 4.79 10.14 3.54

2.69 5.99 2.75 4.15 2.30

2.55 5.57 2.32 3.61 2.06

20.00 43.00 2.50 8.00 NA

22.00 46.00 4.00 9.00 0.50

Consumer confidence, retailer bankruptcies, development risks Consumer confidence, retailer bankruptcies, international exposure Stronger consumer confidence, fewer retailer bankruptcies Stronger consumer confidence, fewer retailer bankruptcies NA

Lower discount due to recent refinancing activity Premium to NAV due to recent refinancing activity Due to recent progress on refinancing Lower discount due to recent capital offering in industry No Change

Buy Buy Neutral Neutral

12.73 39.30 22.93 6.62

12.86 47.01 20.02 5.45

16.31 51.67 20.02 5.45

4.98 4.77 3.20 1.37

4.44 4.67 2.82 1.30

12.00 43.00 17.00 5.00

16.00 49.00 18.00 5.00

US economic weakness, job losses US economic weakness, job losses, development risks US economic weakness, job losses Slowing Calgary residential sales, US economic weakness, job losses

Higher NAV due to lower cap rate assumptions Higher NAV due to lower cap rate assumptions Lower discount due to recent refinancing activity

Sell Sell

7.34 16.66

7.18 14.96

7.18 15.73

1.68 0.27

1.11 1.08

6.00 12.00

6.00 13.00

A rise in international trade volumes, lower development risk, credit recovery Global economic recovery, rise in international trade volumes

Higher NAV due to lower cap rate assumptions

Buy

19.27

22.11

22.11

2.13

2.09

21.00

21.00

Acquisition risks, financing risk (Sourcing capital for funds)

Buy

32.04

30.85

30.85

2.72

2.85

32.00

32.00

Consumer confidence, retailer bankruptcies

Neutral Neutral Neutral Neutral Sell

37.56 21.28 7.58 7.37 7.63

37.39 19.88 6.95 9.96 4.99

37.39 19.88 6.95 9.96 6.72

4.93 2.95 0.85 1.90 1.75

4.28 2.75 0.90 1.81 1.60

34.00 18.00 6.00 3.00 4.50

34.00 18.00 6.00 6.00 5.50

US economic weakness, job losses, consumer confidence US economic weakness, job losses US economic recovery, fewer job losses and lower development risk. US economic weakness, job losses, development risk, weaker home sales US economic recovery, higher development gains

No Change Lower discount due to recent refinancing activity Higher NAV due to lower cap rate assumptions

Neutral Neutral Neutral Neutral Sell Sell Sell Sell

6.13 50.72 20.43 23.93 9.15 22.40 12.03 61.81

4.95 52.28 19.89 21.35 7.89 19.60 11.56 54.00

4.95 52.28 19.89 21.35 7.89 19.60 11.56 54.00

1.61 4.39 2.02 3.04 1.22 2.32 1.00 5.30

1.48 3.86 1.85 2.70 1.04 2.08 0.87 4.70

5.00 44.00 17.00 19.00 7.00 18.00 9.00 46.00

5.00 44.00 17.00 19.00 7.00 17.00 9.00 46.00

US economic weakness, job losses, exposure to low barrier markets US economic weakness, job losses, development risks US economic weakness, job losses US economic weakness, job losses, development risk US economic recovery, fewer job losses, lower exposure to low-barrier markets US economic recovery, fewer job losses Deteriorating fundamentals in key markets. US economic recovery, fewer job losses, stronger condo sales US economic recovery, fewer job losses, lower development risk No Change

Ticker

Company

Current rating Neutral Neutral Neutral

Share Price 6.59 22.43 5.13

Old Forward NAV NA NA NA

Forward NAV NA 57.50 NA

GS cap rate NA NA NA

2009E FFO (2.39) 2.00 0.55

Current 2010E Price / 2009 Old Target New Target FFO FFO Price Price (2.24) 2.45 0.62 NM 11.2 9.3 10.2X 7.1X 2.50 19.00 4.50 2.50 19.00 4.50

Risk factors to price targets(1) Oversupply in the market and operational, acquisition and integration risks US economic weakness, job losses Global economic weakness, competition for intellectual capital

BKD Brookdale Senior Living AXB Alexander & Baldwin CBG CB Richard Ellis Average Coverage Universe Average ex-brokers
Note

9.3%

(1) A higher than expected rise in interest rates generally poses a risk to real estate valuation across all REITs. Similarly higher than expected construction and operating costs are a risk across the entire REIT sector. (2) Price targets are derived using a premium/discount to our forward net asset value (NAV) estimate (3) Our Price Targets have been derived on average using (negative 5% - positive 5%) discounts / premiums to NAVs for Buy rated names, (flat - negative 20%) discounts for Neutral rated names, and (negative 10% - negative 30%) discounts for our Sell rated names. (4) All price targets have a 6-month time frame

Source: Goldman Sachs Research estimates, FactSet.

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Exhibit 41: Goldman Sachs recommended and income portfolios
as of 4/14/2009
All amounts in millions, except per share data Current Share Price 4/14/2009 $39.30 19.27 9.07 58.95 32.04 38.57 18.51 Annualized Dividend Yield 6.9% 9.5% 19.4% 3.7% 4.7% 0.9% 9.0% 09E FAD Payout Ratio 88 104 189 50 70 7 69 Premium Debt*/ (Disc.) to EV NAV NAV (%) 58 60 71 4 41 67 64 $52 22 10 65 31 43 22 (24) (13) (9) (10) 4 (11) (16) Avg. daily vol (6 m) (000) 4,411 7,351 10,341 3,993 930 8,853 1,884

Company Recommended Portfolio Boston Properties HCP, Inc. Kimco Realty Corp Public Storage Tanger Factory Outlet Centers Simon Property Group Taubman Centers

Ticker BXP HCP KIM PSA SKT SPG TCO fce__a

GS Rating Buy Buy Buy Buy Buy Buy Buy

FFO/Share Price/FFO FFO Growth FAD/share 09E 09E 08E-09E 09E $4.77 2.13 1.39 4.94 2.72 5.99 2.69 8.2 9.0 6.5 11.9 11.8 6.4 6.9 (4.2) (6.2) (44.7) (4.5) (0.5) (8.7) (13.0) $3.09 1.77 0.93 4.40 2.17 5.26 2.40

EV/ EBITDA 09E 11.5 13.1 12.2 12.5 14.3 11.1 10.2

Ent. Value $13,440 10,565 10,534 14,327 2,195 36,124 4,692

All amounts in millions, except per share data Current Share Price 4/14/2009 $19.27 18.51 22.93 23.93 20.43 21.28 Annualized Dividend Yield 9.5% 9.0% 7.8% 11.7% 9.4% 8.9% 09E FAD Payout Ratio 104 69 70 94 165 85 Premium Debt*/ (Disc.) to EV NAV NAV (%) 60 64 57 67 63 55 $22 22 20 21 20 20 (13) (16) 15 12 3 7 Avg. daily vol (6 m) (000) 7,351 1,884 1,946 1,667 7,924 2,937

Company Income Portfolio HCP, Inc. Taubman Centers Mack-Cali Realty Corp Camden Property Trust Equity Residential Liberty Property Trust

Ticker HCP TCO CLI CPT EQR LRY

GS Rating Buy Buy Neutral Neutral Neutral Neutral

FFO/Share Price/FFO FFO Growth FAD/share 09E 09E 08-09E 09E $2.13 2.69 3.20 3.04 2.02 2.95 9.0 6.9 7.2 7.9 10.1 7.2 (6.2) (13.0) (16.5) (14.4) (7.3) (7.2) $1.77 2.40 2.58 2.97 1.17 2.24

EV/ EBITDA 09E 13.1 10.2 10.5 13.8 14.6 10.2

Ent. Value $10,565 4,692 4,321 4,596 16,345 5,517

*Including share of unconsolidated debt

Source: Factset, Goldman Sachs Research estimates.

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Reg AC
We, Jonathan Habermann, Sloan Bohlen, Jehan Mahmood and Aigerim Kabdiyeva, hereby certify that all of the views expressed in this report accurately reflect our personal views about the subject company or companies and its or their securities. We also certify that no part of our compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

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Buy

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Price target and rating history chart(s)
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Not Rated (NR). The investment rating and target price, if any, have been removed pursuant to Goldman Sachs policy when Goldman Sachs is acting in an advisory capacity in a merger or strategic transaction involving this company and in certain other circumstances. Rating Suspended (RS). Goldman Sachs Research has suspended the investment rating and price target, if any, for this stock,

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The Global Investment Research Division of Goldman Sachs produces and distributes research products for clients of Goldman Sachs, and pursuant to certain contractual arrangements, on a global basis. Analysts based in Goldman Sachs offices around the world produce equity research on industries and companies, and research on macroeconomics, currencies, commodities and portfolio strategy. This research is disseminated in Australia by Goldman Sachs JBWere Pty Ltd (ABN 21 006 797 897) on behalf of Goldman Sachs; in Canada by Goldman Sachs Canada Inc. regarding Canadian equities and by Goldman Sachs & Co. (all other research); in Germany by Goldman Sachs & Co. oHG; in Hong Kong by Goldman Sachs (Asia) L.L.C.; in India by Goldman Sachs (India) Securities Private Ltd.; in Japan by Goldman Sachs Japan Co., Ltd.; in the Republic of Korea by Goldman Sachs (Asia) L.L.C., Seoul Branch; in New Zealand by Goldman Sachs JBWere (NZ) Limited on behalf of Goldman Sachs; in Singapore by Goldman Sachs (Singapore) Pte. (Company Number: 198602165W); and in the United States of America by Goldman, Sachs & Co. Goldman Sachs International has approved this research in connection with its distribution in the United Kingdom and European Union.
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This research is for our clients only. Other than disclosures relating to Goldman Sachs, this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. We seek to update our research as appropriate, but various regulations may prevent us from doing so. Other than certain industry reports published on a periodic basis, the large majority of reports are published at irregular intervals as appropriate in the analyst's judgment. Goldman Sachs conducts a global full-service, integrated investment banking, investment management, and brokerage business. We have investment banking and other business relationships with a substantial percentage of the companies covered by our Global Investment Research Division. Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients and our proprietary trading desks that reflect opinions that are contrary to the opinions expressed in this research. Our asset management area, our proprietary trading desks and investing businesses may make investment decisions that are inconsistent with the recommendations or views expressed in this research. We and our affiliates, officers, directors, and employees, excluding equity analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research. This research is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including tax advice. The price and value of the investments referred to in this research and the

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April 15, 2009

United States: Real Estate: REITs

income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors. Investors should review current options disclosure documents which are available from Goldman Sachs sales representatives or at http://www.theocc.com/publications/risks/riskchap1.jsp. Transactions cost may be significant in option strategies calling for multiple purchase and sales of options such as spreads. Supporting documentation will be supplied upon request. Our research is disseminated primarily electronically, and, in some cases, in printed form. Electronic research is simultaneously available to all clients. Disclosure information is also available at http://www.gs.com/research/hedge.html or from Research Compliance, One New York Plaza, New York, NY 10004. Copyright 2009 The Goldman Sachs Group, Inc. No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of The Goldman Sachs Group, Inc.

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