330 Hudson Street Redevelopment Project

1. 330 Hudson StreetRedevelopment Project Office Market Overview Presented by: Joseph J. Simone President Tishman Real Estate Services

2. Office Market Overview • Qualities of a Top Building • Age & Image • Floorplate Configuration • Floorplate Size Center Core 330 Hudson Side Core

3. Office Market Overview • Qualities of a Top Building • Common Areas • Mechanical Systems • Quality of Ownership • Tenant Roster – Office & Retail

4. Office Market Overview • Leasing Deals • Length of Leases • Concession Packages (Free Rent & TI) • Commissions (1 or 1.5) • Escalations (Direct Pass Through) • Electricity (Direct or Submeter) • Loss Factor

5. Calculating NOI • Gross Rental Revenue - $/sf • Taxes • Operating Expenses (for Class A 500K SF Building) • Repair & Maintenance • Cleaning • Utilities • Administrative Costs/Management Fees • Insurance • Downtime • Free Rent

6. Construction Upgrade Costs • Infrastructure • Tenant Improvements

7. Office Hotel Comparative Return Rates

8. Office Hotel Debt Service/Coverage Ratios

9. Current Office Market Conditions • Primary Indicators • Vacancy Rates • Asking Rents • Net Absorption

10. Manhattan – Overall (1Q 2007) • Inventory: 390.7 Million SF • Vacancy Rate: 5.5% • Average Asking Rents: $56.15 • Net Absorption: +1,128,672 SF

11. Hudson Square Submarket (1Q 2007) • Inventory: 17.8 Million SF • Vacancy Rate: 11.6% • Average Asking Rents: $41.79 PSF • Net Absorption: (116,400) SF

12. Asking Rent Comparables • 345 Hudson Street - 288,647 RSF Directly Available, $42 to $44 per RSF • 75 Varick Street – 331,081 RSF Directly Available, $47 per RSF • 100 Ave of the Americas – 64,935 RSF Directly Available, $42 per RSF • 185 Varick Street – 63,431 RSF Directly Available, $37 per RSF • 325 Hudson Street – 37,031 RSF Directly Available, $42 per RSF • 304 Hudson Street – 92,624 RSF Directly Available, $37 per RSF

13. Recent Deal Comparables

14. Predictions/Projections for Manhattan Office Market • 8 Reasons For Continued Market Strength: • Office Employment , Office Space Inventory  • Rent growth lags inflation • Vacancy rate below equilibrium • Limited new construction projected • Rent Paid/GCP Ratio Decline • Hot Investment sales market • Manhattan Class A Rents lag global competitors • High construction costs put upward pressure on rents

15. 1. Office Employment , Office Space Inventory 

16. 2. Rent growth lags inflation

17. 3. Vacancy rate below equilibrium

18. 3. Vacancy rate below equilibrium

19. 4. Limited new construction projected

20. 4. Limited new construction projected

21. 5. Rent Paid/GCP Ratio Decline

22. 6. Hot Investment Sales Market • Cap rate compression • Expectation of higher rents? • Negative debt coverage ratios?

23. 7. Manhattan Class A Rents lag global competitors

24. 8. High construction costs put upward pressure on rents • Midtown Class A development might need rents of $118+ psf to justify returns

25. Relevance to Hudson Square? • How will a new (or newly refurbished) building in Hudson Square meet the market?