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					                                                                                                                          2Q 2008 | Lee County, Florida
                                                                                                                                                                                              INDUSTRIAL

Industrial Vacancy and Lease Rates
                       23,000,000                                                                                         $9                                          This quarter we focused our study on the
                       21,000,000                                                                                         $8                                          warehousing and distribution market whereas
                       19,000,000                                                                                                                                     we have previously studied a combination of




                                                                                                                                Dollars/SF/Year
                                                                                                                          $7
 Square Feet




                       17,000,000                                                                                                                                     flex and industrial. The flex market is hard hit
                       15,000,000                                                                                         $6
                                                                                                                                                                      as many developers rushed to meet the false
                       13,000,000                                                                                         $5                                          demand of small spaces and condo units and
                       11,000,000                                                                                                                                     the flex market currently sits with vacancy
                                                                                                                          $4
                        9,000,000            Vacant:           Vacant:          Vacant:         Vacant:        Vacant:                                                exceeding 20%.
                        7,000,000             3.8%              4.0%            5.1%             6.1%           7.8%      $3

                        5,000,000                                                                                         $2                                          Warehousing and distribution facilities ended
                                       2007 2Q 2007 3Q 2007 4Q 2008 1Q 2008 2Q                                                                                        the second quarter at an average lease rate of
                                    Total RBA                   Occupied                 NNN Lease Rate                                                               $6.85 per sq. ft. down from $7.30 per sq. ft. in
                                                                                                                                                                      the first quarter and $7.78 per sq. ft. one year
Industrial Deliveries and Absorption                                                                                                                                  ago. Some newly built facilities are being
                                                                                                                                                                      offered at or below $5.00 per sq. ft. We
                       300,000                                                                                                                                        anticipate the market average lease rate to
                       200,000                                                                                                                                        contract further until positive absorption takes
                                                                                                                                                                      place.
 Square Feet




                       100,000

                              0                                                                                                                                       185,000± sq. ft. less industrial space was
                                                                                                                                                                      occupied at the end of the second quarter
                       (100,000)
                                                                                                                                                                      than the first quarter. During the same time
                       (200,000)                                                                                                                                      period over 200,000 sq. ft. was delivered.
                       (300,000)
                                                                                                                                                                      These changes combined increased the
                                      2007 2Q              2007 3Q            2007 4Q            2008 1Q          2008 2Q                                             vacancy percentage 1.7% to a total vacancy of
                                                                                                                                                                      7.84%.
                                                         Net Absorption                   Delivered RBA
                                                                                                                                                                      New construction has continued to outpace
Industrial Sales Volume and Rates                                                                                                                                     absorption and there are still more deliveries
                                                                                                                                                                      to come. We expect the industrial market to
                       350,000                                                                                             $125                                       recover after the office market and after
                       300,000                                                                                                                                        residential inventory reaches a six month
                                                                                                                           $100
 Sq. Ft. Volume Sold




                                                                                                                                                                      supply.
                       250,000
                                                                                                                                                  Avg. $/Sq. Ft.




                       200,000                                                                                             $75

                       150,000                                                                                             $50
                       100,000
                                    Transactions:      Transactions:     Transactions:    Transactions:   Transactions:    $25
                        50,000
                                       17                 16                13               17               9
                             0                                                                                             $-
                                    2007 2Q          2007 3Q             2007 4Q          2008 1Q         2008 2Q                                                   Jim Garinger, CCIM, SIOR
                                                                                                                                                                                     239.418.0300 x203
                                                        Sq. Ft. Sold                 Avg. $/Sq. Ft.
                                                                                                                                                                           jgaringer@colliersarnold.com

                                                                                                                                                                                    Andrew Falde
                                                                                                                                                                                    239.418.0300 x226
                                                                                                                                                                             afalde@colliersarnold.com

                                                                                                                                                                   More market information available at www.JimGaringer.com
                                                                                                                                                                2Q 2008 | Lee County, Florida
                                                                                                                                                                                                    OFFICE

                Office Vacancy and Lease Rates
                                                                                                                             $22
                                                                                                                                                                Office vacancy increased another percent
                            11,000,000                                                                                                                          ending at 13.4% in the second quarter and
                                                                                                                             $17                                overall lease rates dropped approximately




                                                                                                                                            Dollars/SF/Year
              Square Feet




                             9,000,000
                                                                                                                                                                $0.50± per sq. ft.
                                                                                                                             $12
                                                                                                                                                                Net absorption was approximately -30,000 sq.
                             7,000,000                                                                                       $7                                 ft. in the second quarter. This in comparison
                                                 Vacant:         Vacant:        Vacant:        Vacant:        Vacant:
                                                 6.5%            8.3%           9.1%           12.5%          13.4%
                                                                                                                                                                with -300,000± sq. ft. in the first quarter is an
                                                                                                                                                                improvement however we are still in a
                             5,000,000                                                                                       $2
                                                                                                                                                                contracting market and we expect overall
                                            2007 2Q 2007 3Q 2007 4Q 2008 1Q 2008 2Q
                                                                                                                                                                lease rates to drop faster in the coming
                                         Total RBA               Occupied                 Direct Lease Rate
                                                                                                                                                                months.

Office Deliveries and Absorption                                                                                                                                Many tenants are looking for office spaces that
                             200,000
                                                                                                                                                                will meet their basic needs for operating while
                                                                                                                                                                they wait for business conditions to improve.
                             100,000                                                                                                                            Businesses that are not negatively affected are
                                                                                                                                                                looking to take advantage of landlord
              Square Feet




                                     0
                                                                                                                                                                incentives and move into higher quality
                            (100,000)                                                                                                                           buildings and lock in long term leases.
                            (200,000)
                                                                                                                                                                93,882 sq. ft. traded in the second quarter
                            (300,000)
                                                                                                                                                                down from 101,365 sq. ft. in the first quarter,
                            (400,000)                                                                                                                           while sale prices decreased to an average of
                                            2007 2Q           2007 3Q           2007 4Q            2008 1Q         2008 2Q                                      $142 per sq. ft. from $178 per sq. ft.
                                                                                                                                                                respectively.
                                                             Net Absorption                 Delivered RBA

                                                                                                                                                                As the office sector continues its decline it
        Office Sales Volume and Rates                                                                                                                           does so at a less dramatic pace than previous
                                                                                                                                                                quarters. As residential activity increases,
                                                                                                                        $300                                    even at reduced prices, we will see an increase
                      150,000
                                                                                                                                                                in demand by related businesses for many of
                                                                                                                        $250
                                                                                                                                                                the vacated office spaces at reasonable prices.
Sq. Ft. Volume Sold




                                                                                                                                                                Landlords that offer turn-key space with
                                                                                                                                  Avg. $/Sq. Ft.




                                                                                                                        $200
                      100,000                                                                                                                                   incentives for new leases will attract these
                                                                                                                        $150
                                                                                                                                                                tenants.
                                                                                                                        $100
                            50,000   Transactions:   Transactions:   Transactions: Transactions:   Transactions:

                                         16             20              28                17             10             $50

                                0                                                                                       $-
                                     2007 2Q         2007 3Q         2007 4Q        2008 1Q        2008 2Q                                                     Jim Garinger, CCIM, SIOR
                                                                                                                                                                               239.418.0300 x203
                                                       Sq. Ft. Sold            Avg. $/Sq. Ft.                                                                        jgaringer@colliersarnold.com

                                                                                                                                                                              Andrew Falde
                                                                                                                                                                               239.418.0300 x226
                                                                                                                                                                        afalde@colliersarnold.com

                                                                                                                                                              More market information available at www.JimGaringer.com
                                                                                  2Q 2008 | Lee County, Florida
                                                                                                                                                       SHOPPING CENTERS

Vacancy and Lease Rates
                                                                                                                          $25                        This quarter we have studied specifically the
                       25,000,000                                                                                                                    shopping centers in Lee County as they relate
                                                                                                                          $20                        more to the investment market than previous




                                                                                                                                Dollars/SF/Year
                                                                                                                                                     studies of all retail types combined.
 Square Feet




                       20,000,000
                                                                                                                          $15                        The second quarter ended with slightly higher
                                                                                                                                                     occupancy than first quarter while still with 2%
                       15,000,000           Vacant:         Vacant:        Vacant:          Vacant:            Vacant:                               higher vacancy than one year ago. Shopping
                                                                                                                          $10
                                             3.9%           4.3%            4.9%            6.2%               6.0%
                                                                                                                                                     centers overall are out performing office and
                                                                                                                                                     industrial properties with positive absorption
                       10,000,000                                                                                         $5
                                                                                                                                                     and nearly stable rental rates.
                                       2007 2Q 2007 3Q 2007 4Q 2008 1Q 2008 2Q
                                    Total RBA                Occupied                NNN Lease Rate
                                                                                                                                                     As we move further into the slow summer
                                                                                                                                                     season, we expect fewer deliveries in the
Deliveries and Absorption                                                                                                                            coming months and some increased availability
                                                                                                                                                     in the sub-lease market with many stores
                                                                                                                                                     looking to consolidate their operations.
                       400,000

                                                                                                                                                     While the number of sale transactions was
 Square Feet




                       200,000                                                                                                                       lower in the second quarter, the volume of
                                                                                                                                                     space sold was more than double last quarter
                                                                                                                                                     with transactions such as Gulf Coast Plaza on
                             0
                                                                                                                                                     Cape Coral Pkwy (71,051± sq. ft. trading for
                                                                                                                                                     $9 million), and Coral Walk on NE Pine Island
                       -200,000                                                                                                                      Rd. (300,000± sq. ft. trading for $27 million).
                                    2007 2Q            2007 3Q         2007 4Q           2008 1Q               2008 2Q
                                                                                                                                                     We believe there will be additional vacancy as
                                                      Net Absorption               Delivered RBA                                                     small national and local tenants react to the
                                                                                                                                                     overall decline in economic conditions.
Sales Volume and Rates                                                                                                                               Generally these tenants pay a significant
                       500,000                                                                                           $300
                                                                                                                                                     premium compared to large tenants and
                                                                                                                                                     anchors. This movement will place further
                       400,000
                                                                                                                                                     pressure on the performance of shopping
 Sq. Ft. Volume Sold




                                                                                                                                                     centers.
                                                                                                                                Avg. $/Sq. Ft.




                                                                                                                         $200
                       300,000


                       200,000
                                                                                                                         $100
                                  Transactions:   Transactions:   Transactions:    Transactions:      Transactions:
                       100,000
                                     19               23              23              10                   5
                            0                                                                                            $-
                                  2007 2Q         2007 3Q         2007 4Q          2008 1Q            2008 2Q
                                                                                                                                                   Jim Garinger, CCIM, SIOR
                                                                                                                                                                    239.418.0300 x203
                                                      Sq. Ft. Sold           Avg. $/Sq. Ft.                                                               jgaringer@colliersarnold.com

                                                                                                                                                                   Andrew Falde
                                                                                                                                                                   239.418.0300 x226
                                                                                                                                                            afalde@colliersarnold.com

                                                                                                                                                  More market information available at www.JimGaringer.com
                                    2Q 2008 | Lee County, Florida
                                                                                            Commercial Real Estate Study

   Q2 2008 SNAPSHOT                            Q1 vs Q2



   INDUSTRIAL RENTAL RATES PSF ..                                         SUMMARY
   INDUSTRIAL OCCUPANCY ............
                                                                                 •   Industrial continues to decline
   INDUSTRIAL SALE VOLUME ............                                           •   Office declines at slower pace
                                                                                 •   Shopping centers remain the strongest sector
                                                                                 •   Banks remain tight
   RETAIL RENTAL RATES PSF .............

   RETAIL OCCUPANCY........................

   RETAIL SALE VOLUME .......................
                                                                          OUR OUTLOOK

                                                                                 •   Industrial still continues its decline
                                                                                 •   Office first to recover with residential activity
   OFFICE RENTAL RATES.....................
                                                                                 •   Shopping centers see increased vacancy in smaller spaces
   OFFICE OCCUPANCY .......................                                      •   Interest reserves to come under revue
   OFFICE SALE VOLUME.......................

Market information and data is provided by CoStar Property, Lee County Property Appraiser, Real Capital Analytics, and Colliers Arnold agents. Information contained herein has been obtained
from sources deemed reliable but not guaranteed. No representation is made as to the accuracy thereof. Colliers Arnold is a member firm of Colliers International, a worldwide affiliation of
independent companies with over 267 offices throughout more than 60 countries. Lease data is derived from a survey of properties over 10,000 sq. ft. Please contact us for further information.
239.418.0300 x226. This information is not intended to be a valuation tool for individual properties. Please consult your broker or appraiser for specific valuation for your property.




                           Jim Garinger, CCIM, SIOR
                           Colliers Arnold Commercial Real Estate
                           12730 New Brittany Blvd, Suite 300
                           Fort Myers, FL 33907




                                                                                                            More market information available at www.JimGaringer.com

				
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