Steve Witten, Senior Director National Multi Housing Group

1. Steve Witten, Senior Director National Multi Housing Group

2. Unusual RecessionThe Perfect Storm for Apartment Fundamentals A Mild GDP Recession, Severe Job Recession Unprecedented Home Buying Wave Active Development Pipeline

3. 3 Severe Corporate Earnings Downturn Recession Recession S&P 500 Operating Earnings ($ Bil.) Long-Term Trend Line Source: Standard & Poors, Operating Earnings (vs. Reported Earnings) Through 2003 Q1

4. 4 Employment Lags Broad Recovery Avg. GDP Avg. Employment Annualized % Change 20-yr Avg. Employment Growth: 1.9% 20-yr Avg. GDP Growth: 3.3% Source: Economy.com, BEA

5. Youngest and Oldest Cohorts Have Experienced the Largest Increases Sources: Marcus & Millichap Research Services, U.S. Census Bureau

6. Absorption Plummeted, Has Stabilized *Forecast Sources: Marcus & Millichap Research Services, REIS, BLS

7. Drop in Rent Growth Inline with Incomes Sources: Marcus & Millichap Research Services, Reis, Economy.com

8. National Apartment Prices and Rents Sources: Marcus & Millichap Research Services, NREI, Comps, REIS; National data for transactions valued at $500,000 and above

9. Why a Strong Apartment Investment Outlook? Apartment Demand Will Turn and Grow

10. 10 Business Recovery Forming Corporate Profits 2003 Q1 $ 115.2 Bil. S&P 500 Operating Earnings rebounding 2000 Q2 (high) $ 127.7 Bil. 2001 Q2 (low) $ 81.2 Bil. Capital Expenditures 2003 Q2 $ 1.61 Tril. Fixed investment recovering, but still below 2000 levels 2000 Q3 (high) $ 1.70 Tril. 2002 Q3 (low) $ 1.57 Tril. Manufacturing Activity August ‘03 54.7 ISM Index above 50 benchmark Past 12 month average 50.3 October ’01 (low) 38.9 Corporate Bond Spread August ‘03 1.4% October ’01 (high) 2.5% Spread between 10-yr T-Note and AAA bonds tightening July ’96 (low) 0.8%

11. 11 Consumers Still Holding Up Moderate Unemployment August ‘03 6.1% Will Remain Elevated Due to Discouraged Workers Past Recessions Avg. 7.7% Highest: 1982 10.8% Increasing Confidence August ‘03 81 Employment Weak, but Expectations Remain Steady November ‘01 85 February ’92 47 Income Growth ’03 Q2 Income 2.4% Weak Employment Market Dampening Income Growth ’03 Q2 CPI 2.2% Retail Sales (Excl. Auto) August ‘03 8.1% Spending Remains Strong First Half ‘03 5.9% Second Half ‘02 3.1% Source: Economy.com; Percentages Annualized

12. 12 Job Loss Recovery Ending – Interest Rates Rising Sources: Blue Chip Economic Indicators, Economy.com, Consensus; YTD Employment through Aug = -437,000

13. Higher Home Prices Lowering Affordability Existing Home Prices 1990-2003 Median Home Price Sources: National Association of Realtors, Marcus & Millichap Research Services

14. Renter Demographics Turning Positive Sources: Marcus & Millichap Research Services, Economy.com

15. U.S. Immigration - a Demand Generator **Forecast Sources: Marcus & Millichap Research Services, U.S. Census Bureau; INS

16. 2004 Vacancy Forecast <5% Vacancy 5.0% to 6.9% Vacancy 7.0% to 13.0% Vacancy Los Angeles Riverside-S.B. Orange County San Diego New York Philadelphia Northern New Jersey Boston Minneapolis New Haven Oakland San Francisco Fort Lauderdale San Jose St. Louis Washington, D.C. Cleveland Sacramento Chicago Miami Detroit Las Vegas Seattle Salt Lake City Stamford Tucson Portland Columbus Kansas City Indianapolis Hartford West Palm Beach Cincinnati Houston Milwaukee Orlando Tampa Charlotte Dallas/Ft. Worth Phoenix Denver Atlanta Austin Sources: Marcus & Millichap Research Services, Reis

17. Why a Strong Apartment Investment Outlook? Expect a Capital Shift - Not “Flight”

18. Rising Apartment Prices, Falling Rents Sources: Marcus & Millichap Research Services, Comps, REIS; National data for transactions valued at $500,000 and above

19. 01-03 Chge. 01-03 Chge Most Alligned Med. Price Eff. Rents Dallas/Ft. Worth 8% -5.9% Phoenix 7% -4.8% San Francisco 7% -22.6% Cincinnati 6% -2.5% Denver 4% -9.8% West Palm Beach 1% -0.1% Seattle -4% -6.7% San Jose -4% -31.8% Orlando -8% -3.1% Atlanta -10% -8.8% Balance Between Change in Price and Rents 01-03 Chge. 01-03 Chge Least Alligned Med. Price Eff. Rents Washington, D.C. 59% 3.6% Sacramento 47% 6.2% Jacksonville 44% 4.4% San Diego 43% 7.0% Riverside-S.B. 38% 10.9% Connecticut 19.7% 9.0% Boston 31% -2.7% Orange County 27% 4.0% Ft. Lauderdale 27% 0.2% New York City 26% -8.0% Sources: Marcus & Millichap Research Services, Reis

20. High-Growth* 2003-07 Supply Constrained/ Low Affordability Strong Fundamentals Atlanta Austin Las Vegas Orlando Phoenix Riverside-S.B W. Palm Beach Dallas-Ft. Worth Boston Los Angeles NYC-Manhattan Oakland Orange County San Diego San Francisco Philadelphia Sacramento Rhode Island Wash., D.C. N. New Jersey Connecticut Growth Cycle Drivers * Based on projected percent increase in jobs, households, renter population and inmigration Sources: Marcus & Millichap Research Services; Economy.com; Census Bureau

21. Apartment Sellers’ Re-Investment Choices Survey of 400+ Transactions – Past 12 Months Sources: Marcus & Millichap Research Services; Based on a custom survey of apartment sellers nationwide

22. Apartment Sales 1996-2003Connecticut Statewide Synopsis ($ per Unit) Average $ per unit

23. Apartment Sales 1996-2002Statewide Synopsis ($ per S/F) Average $ per square foot

24. Apartment Investment Market Summary • Macro Forces Supporting Values: • Job growth and leveling off of home ownership • Echo boomers, empty nesters entering the market • Shift in capital and cap rates to be moderate • Recovery of Markets Requires Local “Look” • Investment Strategies Need a Fresh “Look”

25. Apartment Sales 1996-2002New Haven County Average $ per unit

26. Apartment Sales 1996-2003Hartford County Average $ per unit

27. Apartment Sales 1996-2003Fairfield County Average $ per unit

28. Apartment Sales 1996-2003New London County Average $ per unit

29. Apartment Sales 1996-2003Tolland County Average $ per unit

30. Steve Witten, Senior Director National Multi Housing Group switten@marcusmillichap.com