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Capital Markets Update Brian Stoffers President CBRE Capital Markets March 30, 2009

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Capital Markets Update Brian Stoffers President CBRE Capital Markets March 30, 2009

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    1. Capital Markets Update Brian Stoffers President CBRE Capital Markets March 30, 2009

    2. This No Longer Looks Like 1990s

    3. Historical Peak Through Recessionary Employment

    4. This Recession is Deeper Already Except for One

    5. But It Is Not the Depression!

    6. Business-Driven Economy: Succumbs

    7. Layoffs and Dwindling Confidence...

    8. …And Higher Personal Savings Rates

    9. CMBS Spreads… Spreads on corporate bonds vs. spreads on CMBS affect investor demand for each. Right now with CMBS spreads being so much higher than corporate bonds, investors are buying CMBS instead of issuing them and that has led to the drying up in liquidity we’ve seen in the CMBS market. A slide comparing the spreads on both CMBS and corporate bonds would illustrate this and show how we’ve gotten to the current state of CMBS being shut down… Spreads on corporate bonds vs. spreads on CMBS affect investor demand for each. Right now with CMBS spreads being so much higher than corporate bonds, investors are buying CMBS instead of issuing them and that has led to the drying up in liquidity we’ve seen in the CMBS market. A slide comparing the spreads on both CMBS and corporate bonds would illustrate this and show how we’ve gotten to the current state of CMBS being shut down…

    10. U.S. Commercial & Multifamily Outstanding

    11. Bank Market Cap

    12. Annual Historical Sales by Property Type

    13. Quarterly Historical Sales by Property Type

    14. Annual Sales Volumes All Core

    15. Potential for Refinance Risk Begins in Earnest in 2010

    16. Estimated Quarterly Mortgage Originations

    18. U.K. Property: Capital Decline is Faster This Time

    19. But Not Here!

    20. How High Will Institutional Cap-Rates Go?

    21. Fundamentals Moving into the Danger Zone

    22. Where Are We? “Too late to sell, too early to buy” … Sellers have regret but under insufficient pressure to sell at the moment. Buyers in no rush Forced sellers will come from Balloon refinancing risk Covenant violation that are enforced Buyers identifying value “Wave”, not “Wall” of equity, but only at the right price Prices on core need to adjust to offer long term value Return of debt market When it happens, it won’t look like it did in 2006/7! Most likely—insurance model Fundamentals will perform poorly in 09/10.

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