C&w Nycmg Market Overview - Second Quarter 2009 With Addenda

MARKET OVERVIEW Second Quarter 2009

NEW YORK CAPITAL MARKETS GROUP

■ Executive Summary –

Economic Overview

–

NY Capital Markets

–

NY Office Leasing

–

NY Residential

■ Addenda –

Economic Overview

–

NY Capital Markets

–

NY Office Leasing

–

NY Residential

MARKET OVERVIEW - SECOND QUARTER 2009

Table of Contents

22

Economic Overview - National

33

■ 9.5% unemployment rate highest since 1984; projected to reach 10% by year-end ■ TALF and CMBS Public-Private Investment Program underway to help unfreeze commercial loan market – market impact TBD ■ A record high 5.5% of outstanding CMBS loans in special servicing ■ Unprecedented loan maturities during next five years ■ 2008 real estate investment activity down 82% versus 2007; 2009 running 86% below 2008 ■ REIT prices down 60%+ from 2007 peak

* Additional data can be found in the addenda (Slides 32-46).

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Executive Summary

44

Economic Overview - National Civilian Unemployment Rate

10%

9.5% 9.0%

8%

7.9%

7.8%

7.4%

7.8%

6.9% 5.9%

6.3%

5.9%

6%

`

4%

2% 1949

1954

1959

1964

1969

1974

Recessions

1979

1984

1989

1994

Unemployment Rate

6/09 unemployment rate at 9.5% is highest in 25 years. Two-thirds of jobs lost have occurred since 3Q08. Source: Bureau of Labor Statistics

1999

2004

2009

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

10.8%

55

Economic Overview - National

$512 $500 $128

$352

$400 $ Billions

NEW YORK CAPITAL MARKETS GROUP

$600

$303

$29

$9

$66

$300

$62

$204 $200

$79 $100 $15

$102 $22

$123

$137

$144

$3 $43

$0.2 $232

$23

$256

$247

$34

$158

$63

$79

$100

2001

2002

2003

$110

$13

$0

Individual Asset Sales

2004

2005

2006

Portfolio (Non-privatization)

2007

2008

2009YTD*

Privatizations

2008 US investment volume down 63% versus prior 3 year average; down 72% versus 2007. 2Q09 annualized $31 billion; lowest this decade.

* As of May 31, 2009, except for Hotel as of March 2009. Source: Real Capital Analytics, Cushman & Wakefield Capital Markets Group

MARKET OVERVIEW - SECOND QUARTER 2009

US Historical Investment Volume (Billions), 2001-2009 YTD

66

Economic Overview - National

$350 BN $300 BN $250 BN $200 BN $150 BN $100 BN $50 BN $0 BN 2009

2010

2011

2012

2013

2014

2015

CMBS

2016

2017

2018

Non-CMBS

Total commercial mortgage maturities from 2009 – 2013 estimated at $1.4 trillion or almost $300 billion per annum.

Source: Mortgage Bankers Association, Trepp, Foresight Analytics, UBS Investment Research

2019

2020

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Total Commercial Mortgage Maturities

77

Economic Overview - National CMBS Loan Maturities $ Billions

$140

CMBS Floating Rate CMBS Fixed-rate Conduit

$120 $100 $80 $60 $40 $20

$265 billion matures from 2009 to 2012; $371 billion matures from 2015 to 2017. 2Q09 CMBS in special servicing up 170% from 4Q08; $14.3 billion to $39.9 billion.

* CMBS Other represents private deals, not publicly tracked, etc. Source: Mortgage Bankers Association, Realpoint

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

$0

MARKET OVERVIEW - SECOND QUARTER 2009

CMBS Other *

2009

NEW YORK CAPITAL MARKETS GROUP

$160

88

Economic Overview - National

Loan Balance (Millions) $60,000

24.0% 23.6%

$50,000

$40,000

$30,000

12.2% $20,000

11.6% $10,000

6.7%

6.9%

7.1%

8.7% 1.0%

$0 2000

2001

2002

2003

2004

2005

2006

2007

CMBS Origination Year Note: % is percentage of each year’s total issuance on watchlist. CMBS Loan Balance on Watchlist

16% all CMBS loans issued since 2000, or $153 billion, on watchlist. Source: Bloomberg

2008

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

CMBS Loans on Watchlist

99

Economic Overview - National Current Implied Public Market Pricing

Nominal Cap Rates for NAV Peak: 5.2 Current: 9.0 ’99-’08 Avg: 7.8 ’99-’05 Avg: 8.7

Nominal Cap Rates for NAV Peak: 6.2 Current: 8.8 ’99-’08 Avg: 7.9 ’99-’05 Avg: 8.6

Nominal Cap Rates for NAV Peak: 5.4 Current: 7.6 ’99-’08 Avg: 7.4 ’99-’05 Avg: 8.2

Nominal Cap Rates for NAV Peak: 6.1 Current: 8.6 ’99-’08 Avg: 7.6 ’99-’05 Avg: 8.3

Nominal Cap Rates for NAV Peak: 6.2 Current: 9.3 ’99-’08 Avg: 8.2 ’99-’05 Avg: 8.8

% 12 10

9.1

8.5

7.5

8 6

8.6

8.5

5.2

5.8

5.5

4.9

5.3

4 2 0 Office

Industrial

Apartment Peak

Mall Current

Current cap rates generally in-line with historic levels. Source: Green Street Advisors

Strip Center

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Implied Nominal Cap Rates

10 10

Economic Overview - New York

3,900 3,800 3,700

Projected total job loss: 250,000

3,600

4Q 2010 Vacancy Projection: 15%

3,500 3,400 3,300

National Recessions

NYC Em ploym ent

Source: Cushman & Wakefield Research

2010

2009

2008

NYC Employment Projection

U.S. unemployment at 9.5%; New York City at 9.3%.

* As per New York City OMB 2009 projections.

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

3,200

MARKET OVERVIEW - SECOND QUARTER 2009

June 2009 10.5% Vacancy $60 PSF Rents 117,000 Jobs Lost (thru 6/09)

12% Vacancy $44 PSF Rents 140,000 Jobs Lost

18% Vacancy $30 PSF Rents 150,000 Jobs Lost

Thousands of Persons

NEW YORK CAPITAL MARKETS GROUP

NYC Employment,1988-2010

11 11

Economic Trends & Forecast

NYC 3,800

135,000 3,700 130,000

3,600

125,000

120,000

3,500

NYC job loss since August 2008: -117,400 (-3.0%)

115,000

3,400

110,000 3,300 105,000

National Recessions

Source: US Bureau of Labor Statistics

NYC Employment

National Employment

2009

2007

2005

2003

2001

1999

1997

1995

1993

1991

1989

3,200 1987

100,000

MARKET OVERVIEW - SECOND QUARTER 2009

US job loss since December 2007: -6.5 million (-4.7%)

National

Thousands of Persons

NEW YORK CAPITAL MARKETS GROUP

U.S. Payroll Employment Compared with NYC

12 12

NYC Potential Job Loss Impact on Vacancy 18.0%

Historical +40,000* +65,000* +125,000*

15.0% 14.0%

14.3% 13.2%

13.0% 12.0% 11.0% 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 2002

2003

2004

2005

2006

2007

2008

2009

60,000 office using jobs lost since the start of the recession, approximately 50% of NYC total job loss.

* Additional job loss from July 1, 2009

2010

MARKET OVERVIEW - SECOND QUARTER 2009

17.0%

Office Using Jobs Lost

16.0%

Vacancy Rate

NEW YORK CAPITAL MARKETS GROUP

17.0%

13 13

Economic Overview – New York New Office Building Construction, By Decade 65.3

60.0

1285 Aven of the Ame - 1,473,950

270 Park Ave - 1,132,460

54.6

55.9

50.0

1 Chase Manhattan Plz - 1,898,158 399 Park Ave - 1,250,000 60 Broad St - 1,014,041 200 Park Ave - 2,254,274

40.0

1290 Ave of the Ame - 1,987,328 277 Park Ave - 1,529,945 1301 Ave of the Ame - 1,764,411

30.0

59 Maiden Ln - 1,043,007 245 Park Ave - 1,611,046 26 Federal Plz - 1,109,969 140 Broadway - 1,200,000

20.0

909 Third Ave - 1,125,000 767 Fifth Ave - 1,637,379 1345 Ave of the Ame - 1,640,000 2 Penn Plz - 1,500,000

10.0

1 NY Plz -2,103,750 345 Park Ave - 1,600,519 450 West 33rd St - 1,500,000

153 East 53rd St - 1,492,860

237 Park Ave - 1,142,196

1166 Ave of the Ame - 1,430,000

55 East 52nd St - 1,050,000

1211 Ave of the Ame - 1,734,105

101 Park Ave - 1,137,000

1 Bankers Trust Plz - 1,363,334

590 Madison Ave - 1,016,413

1633 Broadway - 2,240,000

335 Madison Ave - 1,046,984

1 Penn Plz - 2,072,136

85 Broad St - 1,040,000

1 Liberty Plz - 2,121,437

101 Barclay St - 1,140,000

55 Water St - 3,600,000

787 Seventh Ave - 1,429,610

9 West 57th St - 1,500,000

1 WFC - 1,461,365

1114 Ave of the Ame - 1,310,000

3 WFC - 2,300,000

1185 Ave of the Ame - 1,000,000

4 WFC - 1,600,000

1221 Ave of the Ame - 2,200,000

2 WFC - 2,200,000

1251 Ave of the Ame - 1,893,652

7 WTC - 1,855,000

1515 Broadway - 1,417,450

Financial Sqr - 1,000,301

Average = 15.0 MSF per decade Inventory reduced 25 MSF due to World Trade Center (15 MSF) and residential conversion (10 MSF)

17.6 12.5

1 WTC - 3,958,091

825 Eighth Ave - 1,550,212

2 WTC - 3,958,091

388 Greenwich St - 1,600,000

1585 Broadway - 1,220,732

2 NY Plz - 1,345,919

60 Wall St - 1,587,849

4 Times Square - 1,477,631

0.0 1960s

1970s

1980s

1990s

Net addition to supply over last 20 years = 6.5 MSF. Long term, NYC faces space supply shortage. Note: New buildings identified > 1,000,000 SF; total construction SF includes all new office buildings above 100,000 SF. Source: Cushman & Wakefield Research

383 Madison Ave - 1,200,000 745 Seventh Ave - 1,036,741 5 Times Square - 1,062,203 Columbus Center - 1,016,000 300 Madison Ave - 1,200,000 7 Times Square - 1,000,000 7 WTC - 1,700,000 1101 Ave of the Ame - 2,100,000 620 Eighth Ave - 1,500,000

2000s

MARKET OVERVIEW - SECOND QUARTER 2009

70.0

643 West 43rd St - 1,128,000

S q u a r e F e e t (m illio n s )

NEW YORK CAPITAL MARKETS GROUP

Average = 58.6 MSF per decade

NY Capital Markets

14 14

Manhattan Overview

■ Sharp sales volume decline due to: –

Real estate debt illiquidity

–

Lack of available product

–

Declining fundamental and lack of completed transactions

■ Declining fundamentals, lack of financing and increased yield requirements have caused values to fall as much as 60%+ ■ Only two Midtown Class A office transactions closed in 2009, accounting for 38% of sales volume YTD –

1540 Broadway – sale price represents a 6% cap on in-place income and an 8% cap on stabilized income

–

World Wide Plaza – $315 PSF price reportedly includes projected leasing costs

■ The sales of the former Macklowe/EOP properties reflect an estimated value decline (from 1/07 prices) of 30% for those properties sold in 2008, and 65% for those properties sold in 2009

* Additional data can be found in the addenda (Slides 47-51).

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

■ 2009 YTD sales volume down 95% from 2007 peak; down 90% from 2004-2008 average

15 15

NY Capital Markets Manhattan Annual Investment Sales Activity Price PSF (1)

$941

$55.0

$1,000

$875

$50.0 $45.0

$900 $800

$749

$40.0

$700

$35.0 $421

$25.0 $20.0 $15.0

$600

$549

$30.0 $336

$308

$443

$475

$500

$434

$340

(2)

$392

$253

$400 $300 $200

$10.0 $5.0

$1.8B

$0.0

$100 $0

1997

# of Deals 128 Total

1998

173

1999

155

2000

111

2001

78

Midtown and Midtown South

2002

2003

2004

2005

2006

2007

2008

2Q09

58

83

165

170

259

346

191

28

Downtown

Weighted Average Midtown Class A Office Price PSF

2Q09 closed and under contract $2.5B.

(1) 2008 Average price PSF excluding GM Building: $832 PSF (2) Based on the only Class A sale through 2Q09: 1540 Broadway Source: Cushman & Wakefield Capital Markets Group

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Sales Activity (Billions)

16 16

Investment Sales by Investor Profile

NEW YORK CAPITAL MARKETS GROUP

Corporate / User 1%

Based on 2007 Total Sales of $48.5 Billion Corporate / User 1% Pension Fund 4%

Other 2%

Pension Fund 10%

Other 3%

REIT 19%

REIT 18% Foreign 13%

Foreign 13% Private Capital 56%

Private Capital 55%

Based on 2008 Total Sales of $19.8 Billion Corporate / User 6% Pension Fund 10%

Other 1%

REIT 11%

Based on 2Q09 Total Sales of $1.8 Billion (Closed) Corporate / User 25%

Private Capital 37%

Foreign 39% Private Capital 33%

Source: Cushman & Wakefield CMG

Foreign 5%

Pension Fund 33%

MARKET OVERVIEW - SECOND QUARTER 2009

Based on 2006 Total Sales of $34.8 Billion

17 17

NY Capital Markets

Cap Rate 10.00%

10.00%

9.00% 8.00%

9.00% 7.91% 7.30%

7.58%

8.00%

7.34%

7.00%

6.34%

6.00%

6.00% 4.93%

5.00%

4.64% 4.04%

4.00%

7.00% 6.00% 5.00%

4.45% 3.55%

4.00%

3.00%

3.00%

2.00%

2.00%

1.00%

1.00%

0.00%

0.00% 1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2Q09*

*1540 Broadway transaction at approximately 6% cap on in-place NOI (22% vacancy).

Source: Cushman & Wakefield Capital Markets Group

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Midtown Class A Cap Rates - Weighted Overall Cap Rates, 1999 – 2Q09

NEW YORK CAPITAL MARKETS GROUP

Manhattan Notable 2009 Sales Status / Address

Type / Size

Sale Price

Seller / Buyer

Comments

Under Contract

Office

$110,000,000

AIG, Inc.

AIG will vacate in December 2010. Mixed use development planned.

70 Pine Street (AIG)

1,243,624

$88 PSF

Young Woo and Kumho Investment Bank

Closed 7/09

Office

$605,000,000

Deutsche Bank

825 Eighth Avenue (World Wide Plaza)

1,919,000 SF

$315 PSF

George Comfort & Sons, Longview Capital and DRA Advisors

Closed 1Q09

Condo Unit

$355,000,000

Deutsche Bank

1540 Broadway

905,533 SF

$392 PSF

CBRE Investors

Closed 1Q09

Condo Unit

$225,000,000

New York Times

620 Eighth Avenue (New York Times Building)

750,000 SF

$300 PSF

W.P. Carey & Co.

Price reportedly includes projected leasing costs; 40% vacant. Approximately $470 million seller financing.

Sale of the office condominium portion of the property. 78% leased at time of sale; price represents a 6% cap on in-place income. Part of the 2007 EOP/Macklowe portfolio transaction. New York Times entered into a 10year sale-leaseback transaction for 21 floors or 58% of the building. Sale price represents an 11% coupon. New York Times has an option to purchase the property at end of lease at set price.

MARKET OVERVIEW - SECOND QUARTER 2009

18 18

NY Office Leasing Market

19 19

Overview

■ Leasing statistics through 3Q08 lagged downturn; showing impact 4Q08 - 2Q09 ■ Vacancy 10.5% vs. the low of 5.3% in 2Q07; may reach 15% over next year ■ Midtown Class A net effective rents down 48% from peak ■ Midtown Class A vacancy 12.7%; availability 14.2% ■ Tenants seeking short-term extensions or blend-and-extend; more tenants focusing on potential long-term opportunities to lock in low net effective rents ■ Leasing velocity picking up – more upcoming expirations, and tenants taking advantage of the market

* Additional data can be found in the addenda (Slides 52-90).

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Manhattan

20 20

NY Office Leasing Market Inventory

Direct Vacancy

Total Vacancy(1)

Total Availability(2)

Rent

240,433,464 sf

8.3%

11.7%

12.8%

$66.82

Midtown South

64,504,640 sf

6.7%

8.7%

9.3%

$49.55

Downtown

87,656,973 sf

6.4%

8.7%

9.6%

$43.81

Manhattan

392,595,077 sf

7.6%

10.5%

11.5%

$60.23

NEW YORK CAPITAL MARKETS GROUP

Midtown

21.0%

19.0% 17.0% 15.0% 13.0% 11.0% 9.0%

Equilibrium 7-9% 7.0% 5.0% 3.0% 1987

1988

1989

1990

1991 1992

Recessions 1) 2)

1993

1994

1995 1996

1997

Manhattan

1998

1999

2000 2001

MT

Total Vacancy is defined as available space that is currently vacant or will be vacant within 6 months. Total Availability is defined as available space that is currently vacant or will be vacant within 12 months.

Source: Cushman & Wakefield Research

2002

2003

2004 2005

MTS

2006

2007

DT

2008 2Q09

MARKET OVERVIEW - SECOND QUARTER 2009

Overall Vacancy Rates

21 21

NY Office Leasing Market

$90.00 $80.00

2Q09 Overall Asking Rents Manhattan MT MTS DT

$60.23 $66.82 $49.55 $43.81

$70.00 $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2Q09

Recessions

Manhattan

MT

MTS

DT

Asking rents down 21% in Midtown and 14% in Downtown compared to 3Q08.

Source: Cushman & Wakefield Research

MARKET OVERVIEW - SECOND QUARTER 2009

$100.00

$/sf

NEW YORK CAPITAL MARKETS GROUP

Overall Average Asking Rental Rates

22 22

NY Office Leasing Market

Average Gap (1995-2008): $5.40 Current Gap: $17.68

$85.00

$75.00

$76.99

$65.00 $59.31

$55.00

$45.00

$35.00

Midtown Direct

Midtown Sublease

Midtown direct and sublease asking rent spread at $17.68 per square foot, approximately 23% delta, highest since 1996.

Source: Cushman & Wakefield Research

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

$25.00

MARKET OVERVIEW - SECOND QUARTER 2009

$95.00

$/SF

NEW YORK CAPITAL MARKETS GROUP

Midtown Office Market | Class A Asking Rental Rates Direct rent vs. Sublease

23 23

NY Office Leasing Market

$46.15

$60.00

$63.32

$63.89

$71.58

$70.00

$50.00

$40.00 2Q08

3Q08

Midtown Asking

4Q08

1Q09

Midtown Net Effective

2Q09 Net effective rents 35.5% less than asking rents. 2Q09 Asking rents down 22.4% versus 2Q08.

Source: Cushman & Wakefield Research

2Q09

MARKET OVERVIEW - SECOND QUARTER 2009

$79.13

$78.75

$80.42

$80.00

$86.40

$92.59

$92.30

$90.00

$/SF

NEW YORK CAPITAL MARKETS GROUP

Midtown Class A Rents | Asking Vs. Net Effective

24 24

NY Office Leasing Market 2003-2005 Recovery | Asking Vs. Net Effective Rents

$29.79

$27 $25 1Q03

4Q03

1Q04

2Q04

Net Effective Rent

3Q04

4Q04

1Q05

2Q05

3Q05

Asking Rent

In 2003-2005 recovery asking rents remained stagnant while net effective rents grew significantly as concessions declined. Rent spikes followed. Source: Cushman & Wakefield Research

4Q05

MARKET OVERVIEW - SECOND QUARTER 2009

$40.58

$42.48

$41.35

$40.80

$39.94

$40.28

$38.11

$39.53

$40.51

$40.54

$40.06

$40.53

$37.00 3Q03

$32.26

2Q03

$29

$33.37

$31

$32.57

$33

$33.71

$35

$33.68

$37

$37.79

$39

$40.39

$41

$41.12

$41.97

$43

$43.29

$45

$/SF

NEW YORK CAPITAL MARKETS GROUP

Manhattan Overall Rents

25 25

NY Office Leasing Market Midtown Class A Forecast

$83.40

$80 $75

14% 12% 10% 8%

$50 6%

$45 $40

4%

$35 $30

2%

$25 $20

0%

Asking Rents

Vacancy Rate

Vacancy is expected to peak in 2009 and asking rents projected to bottom in 2010 as vacancy turns the corner. Source: Cushman & Wakefield Research

Vacancy

$71.56

$55

$67.90

$60

$66.85

$65

$66.25

$71.40

$70 $/SF per Year

$86.40

$85

MARKET OVERVIEW - SECOND QUARTER 2009

16%

13 20 12 20 11 20 10 20 09 20 08 20 07 20 06 20 05 20 04 20 03 20 02 20 01 20 00 20 99 19 98 19 97 19 96 19 95 19

NEW YORK CAPITAL MARKETS GROUP

$90

NY Residential Market

26 26

■ Manhattan residential fundamentals weakening, but not as dramatically as the office sector ■ Condominium market hit hard as debt market dries up – Since its peak in 1Q08, average pricing per unit dropped 22.6%; Luxury Sector witnessed a 37.9% decrease in average unit pricing – Annualized sales volume down 44.5% since year ending 2008 ■ Projected 2009 permits down 87% from 2008 peak ■ Peak to trough condo pricing estimated to drop 35% to 45% ■ Peak to trough rental rates estimated to drop 20% - 30%

* Additional data can be found in the addenda (Slides 91-98).

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Manhattan Overview

27 27

NY Residential Market

$ PSF $1,600

$2,000,000 $1,800,000

$1,400

$1,600,000 $1,200 $1,400,000 $1,000

$1,200,000

$800

$1,000,000 $800,000

$600

$600,000 $400 $400,000 $200

$200,000

Average Unit Price

Average Price Per Square Foot

Average unit pricing has dropped 16.0% since the prior quarter and a total of 22.6% since 1Q08 peak.

Source: Miller Samuel, Inc.

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

$0 1999

$0

MARKET OVERVIEW - SECOND QUARTER 2009

$ Per Unit

1998

NEW YORK CAPITAL MARKETS GROUP

Manhattan Residential Condo Sale Prices, 1998 – 2Q09

28 28

NY Residential Market

$ PSF

$1,600,000

$1,400

$1,400,000

$1,200

$1,200,000

$1,000

$1,000,000 $800 $800,000 $600 $600,000 $400

$400,000

$200

$200,000

Average Unit Price

Average Price Per Square Foot

Average Co-Op unit pricing has dropped 10.4% since the prior quarter and a total of 23.3% since 1Q08 peak.

Source: Miller Samuel, Inc.

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

$0 1999

$0

MARKET OVERVIEW - SECOND QUARTER 2009

$ Per Unit

1998

NEW YORK CAPITAL MARKETS GROUP

Manhattan Residential Co-Op Sale Prices, 1998 – 2Q09

29 29

NY Residential Market

$ PSF $3,000

$8,000,000 $7,000,000

$2,500

$6,000,000 $2,000

$5,000,000 $4,000,000

$1,500

$3,000,000

$1,000

$2,000,000 $500

$1,000,000

Average Unit Price

Average Price Per Square Foot

Luxury unit pricing down 39.0% and sales volume down 27.5% since 1Q09.

Note: Luxury market accounts for top 10% of all Condo and Co-op Sales Source: Miller Samuel, Inc.

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

$0 1999

$0

MARKET OVERVIEW - SECOND QUARTER 2009

$ Per Unit

1998

NEW YORK CAPITAL MARKETS GROUP

Manhattan Luxury Residential Condo and Co-op Sale Prices, 1998 – 2Q09

30 30

Manhattan Residential Overview Yearly Volume of Condominium & Co-Op Sales

14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 1998

1999

2000

2001

2002

Condos

2003

2004

2005

2006

2007

2008

Q209

Co-ops

Annualized 2009 sales volume of Manhattan condominium and co-op units down 47% since 2008. Source: Miller Samuel, Inc.

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

16,000

31 31

Manhattan Residential Overview Residential Unit Permits Issued for New York City

30,000

25,000

20,000

15,000

10,000

5,000

Estimated 2009 issued permits have dropped by 87% from 2008. 421a program influenced peak issuance in 2008.

* Annualized based upon first five months of 2009. Source: U.S. Department of Housing and Urban Development

*Est. 2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

1987

1986

1985

1984

1983

1982

1981

0

MARKET OVERVIEW - SECOND QUARTER 2009

35,000

1980

NEW YORK CAPITAL MARKETS GROUP

40,000

ADDENDA: ECONOMIC OVERVIEW

33 33

US Banks Rapidly Shrinking Banking Industry US Banks

Non-US Banks

Mar. 1, 2007

Government stake*

July 10, 2009***

Mar. 1, 2007

Deutsche Bank

$45bn

Government stake:

July 10, 2009

None

225.3

JP Morgan Chase

Government stake*

$25bn

75.1

170.9

38.4

96.0

33.6

Goldman Sachs $10bn

HSBC

200.5 124.8

Government stake*

67.8

72.3

14.4

49.4

Government stake:

None

UBS

123.9

Swiss government stake:

$5.3bn

96.3 250.4

BNP Paribas

French government stake:

$3.9bn Citigroup

Government stake*

$52bn

Sources: Thomson Reuters, Atlantic Equities; companies

Potential value of hybrid planned

* US government investments are in preference shares and are non-comparable to ordinary shares ** Total value of outstanding shares *** Market caps at 6pm GMT July 10, 2009

MARKET OVERVIEW - SECOND QUARTER 2009

Market caps ($bn) Bank of America

.1 82

NEW YORK CAPITAL MARKETS GROUP

Market caps ($bn)

34 34

Economic Overview - National

REIT's 1.1% Finance Companies 2.1%

Commercial/Savings Banks 50.3%

All Other 4.4%

Govt. Entities 7.5%

Life Insurance Cos 9.1%

Commercial/Savings Banks - $1.7T CMBS - $891B Life Insurance Cos - $316B Govt. Entities - $261B All Other - $153B CMBS 25.6%

Source: Mortgage Bankers Association

Finance Companies - $72B REIT’s - $37B

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

U.S. Commercial Real Estate Debt Markets, $3.5 Trillion

35 35

Economic Overview - National

REIT's 0.3% Finance Companies 3.3% Credit Unions 3.1% Govt. Entities 0.9%

Commercial/Savings Banks 26.4%

All Other 5.5% Life Insurance Cos 0.1%

Commercial/Savings Banks - $2.9T MBS, ABS and Agency - $6.6T Life Insurance Cos - $12B MBS, ABS*and Agency/GSE ** Mortgage Pools 60.3%

All Other - $604B Govt. Entities - $102B Credit Unions - $346B Finance Companies - $368B REIT’s - $31B

* **

ABS containing home equity loans only. Fannie Mae, Freddie Mac, Ginnie Mae

Source: Mortgage Bankers Association

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

U.S. Residential Real Estate Debt Markets, $11 Trillion

36 36

Economic Overview - National

$230 $203

200 $169

150

$93

100 $78 $67

50

$52

$47

$12 $0

0 2000

2001

2002

2003

2004

2005

2006

2007

No US CMBS Issuance in first-half 2009; 2008 down 95% from 2007.

Source: CMAlert.com, Cushman & Wakefield Capital Markets Group

2008

2Q09

MARKET OVERVIEW - SECOND QUARTER 2009

250

$Billions

NEW YORK CAPITAL MARKETS GROUP

US Annual CMBS Issuance

37 37

Economic Overview - National

2004 $4.9

2005

2006

2007

2008

May-09

$53.2

$208.5

Office $3.0

$37.4

$101.3

Apartment $2.6

$20.6

$67.1

Retail $0.6 1

$11.8

$89.0

Hotel $1.9

Industrial $0

$21.5

$51.1

$50

$100

$150

$200

Dollar Volume (billions)

All property types nationally reflect major downdraft in sales.

1

As of 1Q09

Source: Real Capital Analytics, Cushman & Wakefield Capital Markets Group

$250

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

US Annual Sales Volumes by Core Property Type, 2004 - May 2009

38 38

US Top CBD Office Investment Markets Sales Volume 2005 – MAY 2009 2006

2007

2008

May-09

$1.7 1

$13.1

Manhattan

$37.5

$0.3 $2.4

Washington DC

$6.0

$0.2 $1.4

Chicago

$7.9

$0.2 $1.0

San Francisco

$10.2

$0.6 $0.9

Boston

$7.0

$0

$5

$10

$15

$20

$25

Sales Volume (Billions) 1

As of June 2009

Source: Real Capital Analytics, Cushman & Wakefield Capital Markets Group

$30

$35

$40

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

2005

39 39

US Top CBD Office Investment Markets Average Capitalization Rate, 2005 – 1Q2009* 2006

2007

2008

1Q09 6.0%

4.7% 4.5%

Manhattan

6.6% 5.8%

Washington DC

5.0%

8.1% 8.0%

Chicago

5.8%

6.5% 6.1%

San Francisco

4.3%

6.9% 5.8%

Boston

4.9%

2%

3%

4%

5%

6%

7%

Weighted Average Cap Rate * Fall off in investment sales activity make quarterly cap rate changes unreliable due to lack of trades. Source: Real Capital Analytics, Cushman & Wakefield Capital Markets Group

8%

9%

10%

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

2005

40 40

US Top CBD Office Investment Markets

NEW YORK CAPITAL MARKETS GROUP

2005

2006

2007

2008

1Q09 $392 * $787

Manhattan

$703

$570 $564

Washington DC

$440

$177 $230 $244

Chicago

$396 $390

San Francisco

$479

$301 $343 $370

Boston

$0

$100

$200

$300

$400

$500

$600

Average Sales Price per Square Foot * Based on the only Class A sale through 1Q09: 1540 Broadway Source: Real Capital Analytics, Cushman & Wakefield Capital Markets Group

$700

$800

$900

MARKET OVERVIEW - SECOND QUARTER 2009

Average Sales Price PSF, 2005 – 1Q2009

41 41

US Top CBD Office Markets Vacancy Rates, 1997 – 1Q 2009 Chicago

Manhattan

San Francisco

Washington DC

30%

25%

20%

15%

10%

5%

0% 1997

1998

1999

2000

2001

2002

2003

Source: Cushman & Wakefield Research, Cushman & Wakefield Capital Markets Group

2004

2005

2006

2007

2008

1Q09

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Boston

42 42

US Top CBD Office Markets Average Asking Rents, 1997 – 1Q 2009 Chicago

Manhattan

San Francisco

Washington DC

$80

$70

$60

$50

$40

$30

$20

$10

$0 1997

1998

1999

2000

2001

2002

2003

Source: Cushman & Wakefield Research, Cushman & Wakefield Capital Markets Group

2004

2005

2006

2007

2008

1Q09

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Boston

Manhattan Employment And Office Space Demand: Conservative

43 43

Employment Forecast: 1990 – 2016 and Implied Space Demand

Thousands

1,250 1,200 1,150 1,100 1,050

Cumulative Space Demand 0 -5 -10 -15 -20 -25 2008

2009

2010

2011

2012

2013

2014

2015

2016

Employment and Office Space Demand: Forecasted return to pre-2008 levels after 2016. Source: Bureau of Labor Statistics, Moody’s Economy.com

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1,000

MARKET OVERVIEW - SECOND QUARTER 2009

1,300

Thousands of Square Feet

NEW YORK CAPITAL MARKETS GROUP

Office Using

Manhattan Employment And Office Space Demand: Aggressive

44 44

Employment Forecast: 1990 – 2016 and Implied Space Demand

Thousands

1,250 1,200 1,150 1,100 1,050

15

Cumulative Space Demand

10 5 0 -5 -10 -15 -20 -25 2008

2009

2010

2011

2012

2013

2014

2015

2016

Employment and Office Space Demand: Forecasted return to pre-2008 levels in 2015. Source: Bureau of Labor Statistics, Moody’s Economy.com

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1,000

MARKET OVERVIEW - SECOND QUARTER 2009

1,300

Thousands of Square Feet

NEW YORK CAPITAL MARKETS GROUP

Office Using

45 45

Impact of the Securities Industry Percent of Jobs 5.2% 5.0% 4.8% 4.6% 4.4% 4.2% 4.0% 1990

1992

1994

1996

1998

2000

2002

2004

2006

2002

2004

2006

Percent of Income

18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 1990

1992

Source: Cushman & Wakefield Research

1994

1996

1998

2000

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

5.4%

46 46

Manhattan Office Market Manhattan Office Construction – Annual Added Inventory 10.0

7.0

New Construction (In Process)

6.0

Potential Future Developments

5.0 4.0 3.0 2.0 1.0

NEW CONSTRUCTION (IN PROCESS): 2009 510 Madison Avenue

Macklowe Organization

11 Times Square

SJP Properties

450 West 14th Street/HighLine Building

Charles Blaichman

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

1987

1986

1985

1984

1983

1982

1981

0.0

2009 +: New Construction (In Process): 5.5 msf The Drawing Board: 30.7 msf

POTENTIAL FUTURE DEVELOPMENTS (cont’d):

350,000 1,100,000 88,300

2010 Goldman Sachs HQ/200 West St./6 WFC

Goldman Sachs/ Madison Equities

2,000,000

2013 World Trade Center: Tower 1 (Freedom Tower)

Port Authority of NY & NJ

2,000,000

MT MT MTS

World Products Center

Extell Development

1,500,000

MT

8th Avenue & 46th Street

Boston Properties/ Related Companies

1,000,000

MT

World Trade Center: Tower 4

Silverstein Properties

1,800,000

DT

20 Times Square/641 Eighth Avenue

Lawrence Ruben Company/ Vornado Realty Trust

1,300,000

MT

World Trade Center: Tower 5

Port Authority of NY & NJ

2,000,000

DT

4 Hudson Square

Trinity Real Estate

1,310,000

MTS

Brookfield Site: South Tower

Brookfield Properties

3,400,000

MT

Brookfield Site: North Tower

Brookfield Properties

2,300,000

MT

Vornado Realty Trust

3,000,000

MT

DT

DT

POTENTIAL FUTURE DEVELOPMENTS: 855 Avenue of the Americas

Cherit Group

355,279

MT

Hotel Pennsylvania

360 Tenth Avenue

Extell Development

140,000

MT

One Penn East

Vornado Realty Trust

2,000,000

MT

World Trade Center: Tower 3

Silverstein Properties

2,100,000

DT

World Trade Center: Tower 2

Port Authority of NY & NJ

2,300,000

DT

Madison Square Garden/Moynihan Station

Vornado Realty Trust/ Related Companies

3,000,000

MT

708 First Avenue

Sheldon Solow

1,100,000

MT

51 Astor Place/Cooper Union Tech School

Minskoff Properties

325,000

MTS

Extell Diamond Tower/West 47th Street

Extell Development

800,000

MT

250 West 55th Street/920 Eighth Avenue

Boston Properties/ Madison Equities

1,000,000

MT

Source: Cushman & Wakefield Research

MARKET OVERVIEW - SECOND QUARTER 2009

Historical Construction Completions

8.0

(msf)

NEW YORK CAPITAL MARKETS GROUP

9.0

ADDENDA: NY CAPITAL MARKETS

NEW YORK CAPITAL MARKETS GROUP

Manhattan Investment Sales Summary

Summary of Manhattan Sales Activity (Rounded to the nearest $1 Million) As of June 30, 2009 Midtown Closed $1,529,000,000 Under Contract

$627,000,000

Total $2,156,000,000

Midtown South

Downtown

Uptown

TOTAL

$176,000,000

$0

$80,000,000

$1,786,000,000

$0

$110,000,000

$0

$737,000,000

$176,000,000

$110,000,000

$80,000,000

$2,523,000,000

Note: Includes transactions of $10 million and higher Closed and Under Contract

Source: Cushman & Wakefield Capital Markets Group

MARKET OVERVIEW - SECOND QUARTER 2009

48 48

49 49

Manhattan Year-to-Year Comparison

Midtown

Midtown South

Downtown

TOTAL

% Change vs. '07

Class A Office

$580

$0

$0

$580

-89.1%

Other Office

$167

$82

$0

$249

-74.9%

Multifamily

$174

$18

$0

$192

-82.3%

All Other

$688

$77

$0

$765

-55.5%

TOTAL

$1,610

$176

$0

$1,786

-80.4%

2Q08 Closed Sales, as of June 30 ($ Million) Midtown

Midtown South

Downtown

TOTAL

$4,992

$310

$19

$5,320

Other Office

$376

$532

$84

$992

Multifamily

$822

$139

$126

$1,087

All Other

$864

$597

$259

$1,719

TOTAL

$7,054

$1,578

$487

$9,118

Class A Office

Source: Cushman & Wakefield Capital Markets Group

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

2Q09 Closed Sales, as of June 30 ($ Million)

Manhattan Investment Sales by Market

50 50

Midtown $1.6 Billion – 90%

Midtown South $176 Million – 10%

Note: No 2009 Downtown transactions have closed. AIG/70 Pine is under contract for $110 Million. Source: Cushman & Wakefield Capital Markets Group

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Closed as of June 30, 2009 ($1.8 Billion)

Manhattan Investment Sales by Product Type

51 51

All Other $520 Milion – 29% Class A Office $580 Million – 33%

Retail $23 Million – 1%

Hotel $223 Million – 13%

Other Office $249 Million – 14% Multifamily $192 Million – 11%

Source: Cushman & Wakefield Capital Markets Group

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Closed as of June 30, 2009 ($1.8 Billion)

ADDENDA: NY OFFICE LEASING

53 53

Manhattan Office Market

Manhattan

LEASING FUNDAMENTALS

MT

MTS

DT

Vacancy

10.5%

9%

11.7%

11%

8.7%

7%

8.7%

7%

Overall Asking Rents

$60.23

-7%

$66.82

-9%

$49.55

-6%

$43.81

-2%

Class A Asking Rents

$67.24

-9%

$71.58

-10%

$53.27

-10%

$48.47

-1%

Leasing Activity (SF)*

6,383,685

-45%

4,289,864

-43%

690,908

-56%

1,402,913

-43%

• Leasing activity only reflects new leases (i.e. not renewals). • Leasing activity compares 2Q09 vs. 2Q08 due to the cyclical nature of leasing over a year.

Source: Cushman & Wakefield Research

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Manhattan Leasing Fundamentals 2Q09 vs. 1Q09

54 54

Manhattan Office Market (392,595,077 SF)

14.0%

12.0%

10.5%

10.0%

8.0%

Equilibrium 7-9%

7.6%

6.0%

4.0%

2.9% 2.0%

0.0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2Q09

Total

Source: Cushman & Wakefield Research

Sublease

Direct

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Overall Vacancy Rates

55 55

Manhattan Office Market

14.0%

11.5%

12.0%

10.0%

8.0%

7.6%

Equilibrium 7-9%

6.0%

4.0%

3.9%

2.0%

0.0% 1997

1998

1999

2000

2001

2002

Total

Source: Cushman & Wakefield Research

2003 Direct

2004

2005

Sublease

2006

2007

2008

2Q09

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Class A Vacancy Rates

56 56

Manhattan Office Market

18%

$ 69. 44

$70

$ 65. 08 $ 60. 23

16%

$60 $ 50. 92

$50

14%

$ 50. 56 $ 46. 69

12%

$ 42. 96 $ 40. 53 $ 39. 55

$ 38. 04

$40

$ 40. 58

10%

$ 35. 31 $ 31. 26 $ 29. 03

$30

$ 27. 37 $ 26. 77 $ 26. 90

8%

$ 28. 79 $ 26. 22 $ 26. 71

6% $20 4% $10

2%

Overall Asking Rent al Rates

Source: Cushman & Wakefield Research

Vacancy Rate

2Q09

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

0%

1991

$0

MARKET OVERVIEW - SECOND QUARTER 2009

20%

$80

1990

NEW YORK CAPITAL MARKETS GROUP

Overall Rental Rates vs. Overall Vacancy Rates

57 57

Manhattan Office Market

$80.00

$71.58

$70.00 $60.00

$53.27

$50.00

$48.47 $40.00 $30.00 $20.00 1997

1998

1999

2000

2001

MT Class A

Source: Cushman & Wakefield Research

2002

2003

2004

MTS Class A

2005

2006

2007

DT Class A

2008

2Q09

MARKET OVERVIEW - SECOND QUARTER 2009

$90.00

$/sf

NEW YORK CAPITAL MARKETS GROUP

Class A Average Asking Rental Rates

58 58

World’s ten most expensive cities

Rank 2008 2007

Country

City

Market

$/SF/Yr

1

1

United Kingdom

London

West End

$311

2

3

China

Hong Kong

CBD

$238

3

2

Japan

Tokyo

CBD

$210

4

5

India

Mumbai

Cetral - Worli

$166

5

7

Russia

Moscow

CBD

$158

6

4

France

Paris

CBD

$141

7

n/a

Singapore

Singapore

CBD

$130

8

10

United Arab Emirates

Dubai

CBD

$126

9

6

Ireland

Dublin

2/4 Districts

$112

10

9

United States

New York

Midtown

$100

Source: Cushman & Wakefield Research Office Space Across the World 2008

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Occupancy Costs

59 59

Manhattan Office Market

35

33.4 30

33.1 31.2

31.5 29.5

25

25.5

27.1 23.6

20

20.8 18.9

20.1

19.1

15

2Q08 10

11.5 5

6.4

0 1997

1998

1999

Source: Cushman & Wakefield Research

2000

2001

2002

2003

2004

2005

2006

2007

2008

2Q09

MARKET OVERVIEW - SECOND QUARTER 2009

40

Millions SF

NEW YORK CAPITAL MARKETS GROUP

New Leasing Activity

60 60

Manhattan Office Market

4,000,000

2,000,000

0

-2,000,000

-4,000,000

-6,000,000

-8,000,000 1997

1998

1999

2000 Midtown

Source: Cushman & Wakefield Research

2001

2002

2003

2004

Midtown South

2005

2006

2007

Downtown

2008

2Q09

MARKET OVERVIEW - SECOND QUARTER 2009

Manhattan Total 2Q09: (7,849,420) 2008: (3,910,360) 2Q08: (1,983,351) 2007: (972,073)

6,000,000

Square Feet

NEW YORK CAPITAL MARKETS GROUP

Comparative Direct Net Absorption

61 61

Manhattan Office Market

Financial Services 33.1%

Other 21.3%

Legal Services 12.3%

Apparel 3.8% Communications 4.1% Advertising 4.3%

Source: Cushman & Wakefield Research

Business Services 8.2%

Printing & Publishing 7.8%

Gov't/Education/Soc Svcs 7.2%

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Tenant Industry Breakdown – By % of SF Occupied, 2Q09

62 62

Manhattan Office Market

80.0

70.0

60.0

50.0

40.0

53.7

58.5

62.9 61.0 58.1 51.6

30.0

30.1

35.7

45.4 32.9

20.0

29.8

33.3 21.6 20.4

22.2

10.0 14.3

18.7 12.1

12.2

11.1

8.4

0.0

12.3 6.8

6.8

5.4

5.2

5.7

23.6

26.3

27.3

4.1

16.3

2.7

12.9

9.6

6.4

5.7

8.2

11.4

3.5

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2Q09

Sublease

Source: Cushman & Wakefield Research

Direct

MARKET OVERVIEW - SECOND QUARTER 2009

Total Available Area

(in million SF)

NEW YORK CAPITAL MARKETS GROUP

Total Available SF – Direct VS Sublease

63 63

Manhattan Office Market

Period

75

# of Blocks

Available SF

2Q09:

154

24,641,230

4Q08:

126

22,663,000

3Q08:

129

23,425,000

4Q07:

104

16,808,000

70 65 60 55 50 45 40 35

73

55

30

59

59

25

52

51 42

20 15

30

10

26

25

3Q08

4Q08

19

22

5 0 4Q07

3Q08

3Q08

50,000-99,999 SF

Source: Cushman & Wakefield Research

2Q09

4Q07

3Q08

4Q08

2Q09

100,000-249,999 SF

4Q07

250,000 + SF

2Q09

MARKET OVERVIEW - SECOND QUARTER 2009

80

Number of Blocks

NEW YORK CAPITAL MARKETS GROUP

Size Distribution of Available Space (Contiguous Blocks)

64 64

Manhattan Office Market

50

50 44

40

42

30

30

30 27

25 20

32

22

21

10

14

15

2002

2003

12

0 1997

1998

1999

Source: Cushman & Wakefield Research

2000

2001

2004

2005

2006

2007

2008

2Q09

MARKET OVERVIEW - SECOND QUARTER 2009

60

Number of Leases

NEW YORK CAPITAL MARKETS GROUP

100,000 SF+ Leases (including renewals)

65 65

NY Office Leasing Market Average Asking Rent By Submarket Midtown

% Change Year-over-Year

-2.0% -8.9%

-7.9% -12.4%

-11.7%

-8.2% -14.9%

-16.1%

-20.4%

-11.6%

-17.4%

-4.5%

-8.5%

-14.0% -20.1%

-25.2% Total MT

Murray Hill

Grand Central

% Change over Prior QTR

-32.0% Park Avenue

East Side

Madison / Fifth

-32.6% Sixth Rock Ctr.

% Change Year-over-Year

1.3%

0.7%

Midtown South -5.6% -6.9%

-2.4%

-5.8%

-6.9%

-9.2%

-12.4%

Total MTS

West Side

Greenwich Village / NoHo

SoHo

-9.0%-10.1%

-12.8%

Madison / Union Square

Hudson Sq. / W. Village

Chelsea

Downtown -1.7%

-13.7%

-0.3%

-1.5%

-3.6% -5.9%

-2.2%

-12.2%

-13.0%

-3.7% -11.3%

-16.7%

Total DT Source: Cushman & Wakefield Research

City Hall

World Financial

Financial West

Financial East

Insurance

Times Sq. South

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

% Change over Prior QTR

66 66

Midtown Office Market (240,433,464 SF)

14.0%

12.0%

11.7%

10.0%

8.0%

8.3%

Equilibrium 7-9%

6.0%

4.0%

3.4% 2.0%

0.0% 1996 1997

1998 1999

2000 2001

Total

Source: Cushman & Wakefield Research

2002 2003

Sublease

2004 2005

Direct

2006 2007

2008 2Q09

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Overall Vacancy Rates

67 67

Midtown Office Market

22% $76.26 $79.81

$80

$66.82

$70

$50 $34.19 $31.56

$30

14%

$47.41 $48.15 $45.37$45.98

$43.03 $40.36

18% 16%

$58.92

$56.56 $52.83

$60

$40

20%

12% 10%

$33.23

$30.40 $28.97 $28.86 $30.56 $28.52

8% 6%

$20

4%

$10

2%

Overall A sking Rental Rates

Source: Cushman & Wakefield Research

Vacancy Rate

2Q09

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

0% 1991

$0

MARKET OVERVIEW - SECOND QUARTER 2009

$90

1990

NEW YORK CAPITAL MARKETS GROUP

Historical Rental Rates vs. Overall Vacancy Rates

68 68

Midtown Office Market Size Distribution of Available Space (Contiguous Blocks) 1

50

4 2

Period

# of Blocks

Available SF

2Q09:

101

14,237,517

2Q08:

84

14,204,189

40 35 30

3 2

2 6 10

7

6

25

46

4

20

7

15 25

22

10 13

5

2 2

5 5

8

3

0 2Q08

2Q09 3 Months

50,000-99,999 SF

2Q08 6 Months

2Q09 12 Months

2Q08 24 Months

100,000-249,999 SF

Total available space increased 63% year over year. Source: Cushman & Wakefield Research

2Q09

250,000 + SF

MARKET OVERVIEW - SECOND QUARTER 2009

55

45 Number of Blocks

NEW YORK CAPITAL MARKETS GROUP

60

69 69

Midtown Office Market

6.9%

42.7%

10.8%

15.1%

1-9,999 sf 10,000-24,999 sf 25,000-49,999 sf 50,000-99,999 sf 24.4%

Source: Cushman & Wakefield Research

100,000 + sf

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Leasing Activity by Block Size, Total SF Leased – 2Q09

70 70

Midtown Office Market

NEW YORK CAPITAL MARKETS GROUP

200

171

180

167

160 42

140 120

47

100 51

100 16

43

80 27

60 40 20 0

35

39 23 4

23 1 10 7

9 3 7

21

2004

2005

$80 - $89.99

Source: Cushman & Wakefield Research

25

34

2006 $90 - $99.99

23 43

2007 $100 - $124.99

52

1 7 3 12

2008

2Q09 $125 +

MARKET OVERVIEW - SECOND QUARTER 2009

Taking Rents of $80 and Above (Number of Deals)

71 71

Midtown Office Market Taking Rents of $80 and Above 2006

2007

2008

2Q09

# of Deals

Total SF

Avg. SF

# of Deals

Total SF

Avg. SF

# of Deals

Total SF

Avg. SF

# of Deals

Total SF

Avg. SF

# of Deals

Total SF

Avg. SF

1

2,500

2,500

16

633,784

39,612

42

810,939

19,308

47

866,129

18,428

1

8,000

8,000

10

135,132

13,513

27

729,918

27,034

51

1,864,720

36,563

43

1,701,187

39,562

7

56,471

8,067

7

162,104

23,158

23

684,491

29,760

35

1,025,601

29,303

25

442,848

17,714

3

160,419

53,473

21

329,429

15,687

34

1,655,633

48,695

43

2,151,873

50,044

52

1,507,959

28,999

12

272,022

22,669

39

629,165

16,132

100

3,703,826

37,038

171

5,853,133

34,229

167

4,518,123

27,055

23

496,912

21,605

$80 - $89.99

Source: Cushman & Wakefield Research

$90 - $99.99

$100 - $124.99

$125 +

TOTALS

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

2005

72 72

Midtown Office Market Average Asking Rent By Submarket OVERALL Total Wtd. Avg. Rental Rate

Total MT

Murray Hill

Grand Central

East Side

Park Avenue

Madison / Fifth

Sixth Rock Ctr.

West Side

Times Sq. South

2nd QTR 2009 $66.82

$50.42

$60.74

$62.61

$75.88

$96.87

$71.05

$65.25

$46.40

1st QTR 2009 $73.31

$51.47

$65.96

$74.64

$89.18

$105.58

$80.33

$71.30

$48.57

2nd QTR 2008 $83.96

$57.08

$69.30

$83.65

$111.65

$117.34

$105.39

$81.71

$53.98

$ Change over Prior QTR

($6.49)

($1.05)

($5.22)

($12.03)

($13.30)

($8.71)

($9.28)

($6.05)

($2.17)

$ Change ($17.14) Year-over-Year

($6.66)

($8.56)

($21.04)

($35.77)

($20.47)

($34.34)

($16.46)

($7.58)

-2.0% -8.9%

-11.7%

-7.9% -12.4%

-8.2% -16.1%

-14.9%

-20.4%

-4.5% -11.6%

-17.4%

-8.5% -14.0% -20.1%

-25.2% Total MT

Murray Hill

% Change over Prior QTR

Source: Cushman & Wakefield Research

Grand Central

East Side

% Change Year-over-Year

-32.0% Park Avenue

Madison / Fifth

-32.6% Sixth Rock Ctr.

West Side

Times Sq. South

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

MIDTOWN

73 73

Midtown Office Market

2,000

1,920.5

1,800

2Q08:

7,488.6

2Q09:

4.289.9

1,600 1,400 1,148.0

1,200 1,012.2

948.9

1,000 866.0 800

722.0

600

512.8

477.0

437.2

425.0

730.0

675.9 509.0

357.0

400 211.0

178.0

200 0 Murray Hill

Grand Central

East Side

Park Avenue

2Q08

Source: Cushman & Wakefield Research

Madison/Fifth

2Q09

Sixth/Rock Ctr.

Westside

Times Sq. South

MARKET OVERVIEW - SECOND QUARTER 2009

Total Leased

SF in Thousands

NEW YORK CAPITAL MARKETS GROUP

Leasing Activity, 2Q08 vs. 2Q09

74 74

Midtown Office Market

Midtown Total 2Q09: (6,029,623) 2Q08: (537,141) 1,912,590

2,000,000

1,500,000

1,000,000

500,000 86,575

0 (38,624) (209,132)

(210,437) (241,511)

-500,000 (409,409) (411,570)

(476,811)

(540,305) (704,941)(767,399)(696,641)

-1,000,000

(600,653)

(1,274,881)

-1,500,000 (1,627,208)

-2,000,000 Grand Central

East Side

Park Avenue

Madison/ Fifth

2Q08

Source: Cushman & Wakefield Research

6 Ave/ Rock Cntr

2Q09

Westside

Penn Station

Times Sq South

MARKET OVERVIEW - SECOND QUARTER 2009

2,500,000

Square Footage

NEW YORK CAPITAL MARKETS GROUP

Comparative Direct Net Absorption

75 75

Midtown Office Market

1.8

1.7

1.8

1.5

1.6 1.5 1.3

1.3 1.3

1.4

1.4

1.4 1.1

1.0

1.3

1.2

1.2

0.9

1.3

1.3

1.4

1.3

1.2 1.1 1.0

0.9

0.8

0.9 0.7

0.6 0.6

0.6 0.5

0.5

0.5

0.4

0.3

0.0 July

Aug

Sep

Oct

Nov

Dec

6 Year Average

Source: Cushman & Wakefield Research

Jan

2008

Feb

Mar

2009

Apr

May

Jun

MARKET OVERVIEW - SECOND QUARTER 2009

October - December preceding 6-yr average total: 3.9 msf October - December 2008 total: 2.1 msf

2.0

MSF Leased

NEW YORK CAPITAL MARKETS GROUP

Leasing Activity by Month – 6 Yr Avg 2002-2007 vs. 2Q09

Midtown South Office Market (64,504,640 SF)

76 76

16.0% 14.0% 12.0% 10.0% 8.0%

8.7%

Equilibrium 7-9%

6.7%

6.0% 4.0% 2.0%

2.0%

0.0% 1996

1997

1998

1999

2000

2001

Total

Source: Cushman & Wakefield Research

2002

2003

Sublease

2004

2005

Direct

2006

2007

2008

2Q09

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Overall Vacancy Rates

77 77

Midtown South Office Market

22% $54.09 $49.55

$50

$46.89

$45.65

$40

18% 16%

$40.55

$38.74

14%

$33.23

$20

$33.63 $31.34 $30.37

$29.37

$30

20%

12%

$25.73

10%

$20.23 $19.54 $19.10 $17.40 $16.99 $17.08 $16.65 $14.73

8% 6% 4%

$10

2%

Overall Asking Rent al Rat es

Source: Cushman & Wakefield Research

Vacancy Rat e

2Q09

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

0% 1991

$0

MARKET OVERVIEW - SECOND QUARTER 2009

$60

1990

NEW YORK CAPITAL MARKETS GROUP

Historical Rental Rates vs. Overall Vacancy Rates

78 78

Midtown South Office Market

1

Period 2Q08: 2Q09:

# of Blocks 19 20

Available SF 2,810,397 3,459,353

1

2 9 5 1 7 1

7 1

1

4 1 2 1 0 2Q08

2Q09 3 Months

50,000-99,999 SF

Source: Cushman & Wakefield Research

2Q08 6 Months

2Q09 12 Months

100,000-249,999 SF

2Q08

2Q09

24 Months

250,000 + SF

MARKET OVERVIEW - SECOND QUARTER 2009

10

Number of Blocks

NEW YORK CAPITAL MARKETS GROUP

Size Distribution of Available Space (Contiguous Blocks)

79 79

Midtown South Office Market

52.09%

0.00% 7.98%

39.93%

Source: Cushman & Wakefield Research

1-9,999 sf 10,000-24,999 sf 25,000-49,999 sf 50,000-99,999 sf 100,000 + sf

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Leasing Activity by Block Size, Total SF Leased – 2Q09

80 80

Midtown South Office Market

Total MTS

Greenwich Madison / Hudson Sq. / Village / NoHo Union Square W. Village

SoHo

2nd QTR 2009

$49.55

$50.31

$55.71

$53.71

$46.41

$46.10

1st QTR 2009

$52.48

$54.04

$55.35

$57.01

$47.57

$50.65

2nd QTR 2008

$53.22

$57.44

$61.38

$61.59

$45.82

$51.26

$ Change over Prior QTR

($2.93)

($3.73)

$0.36

($3.30)

($1.16)

($4.55)

$ Change Year-over-Year

($3.67)

($7.13)

($5.67)

($7.88)

$0.59

($5.16)

Chelsea

1.3%

0.7% -2.4% -5.6%-6.9%

-5.8%

-6.9% -12.4%

Total MTS

SoHo

% Change over Prior QTR Source: Cushman & Wakefield Research

-9.0%-10.1%

-12.8%

Greenwich Village / NoHo

Madison / Union Square

% Change Year-over-Year

Hudson Sq. / W. Village

Chelsea

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Average Asking Rent By Submarket

81 81

Midtown South Office Market Leasing Activity, 2Q08 vs. 2Q09 600

582.8

2Q09: 690.9 2Q08: 1,567.7 400

285.2 237.5 200 162.1

154.3 132.4 109.7

27.2 10.0 0 SoHo

Greenwich/NoHo

Madison/Union Sq. 2Q08

Source: Cushman & Wakefield Research

2Q09

Hudson Sq./W. Village

Chelsea

MARKET OVERVIEW - SECOND QUARTER 2009

Total Leased

SF in Thousands

NEW YORK CAPITAL MARKETS GROUP

557.4

82 82

Midtown South Office Market

129,391

100,000

71,999

62,928 34,945

0 (37,304)

-100,000 (114,856)

-200,000 (204,101) (260,131)

-300,000 (349,602)

(367,638)

-400,000 SoHo

Greenwich/Noho

Madison/Union Square

2Q08 Source: Cushman & Wakefield Research

2Q09

Hudson Sq./W. Village

Chelsea

MARKET OVERVIEW - SECOND QUARTER 2009

Midtown South Total 2Q09: (726,948) 2Q08: (307,421)

200,000

Square Footage

NEW YORK CAPITAL MARKETS GROUP

Comparative Direct Net Absorption

83 83

Downtown Office Market (87,657,973 SF)

20.0% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0%

8.7%

Equilibrium 7-9%

6.4%

6.0% 4.0%

2.3%

2.0% 0.0% 1996

1997

1998

1999

2000

2001 Total

Source: Cushman & Wakefield Research

2002

2003

Sublease

2004

2005 Direct

2006

2007

2008

2Q09

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Overall Vacancy Rates

84 84

Downtown Historical Vacancy & Rental Rates

22% 20%

$50

$47.47 $47.86

16%

$39.45 $39.17

$40

18% $43.81

$43.41 $38.62

$36.92

14%

$34.40

$30

$29.45

$31.13 $28.01 $28.00

$26.45 $25.97

12%

$31.55 $30.89

$24.80 $25.27 $25.81

10% 8%

$20

6% 4%

$10

2%

Overall Asking Rental Rat es

Source: Cushman & Wakefield Research

Vacancy Rat e

2Q09

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

0% 1991

$0 1990

NEW YORK CAPITAL MARKETS GROUP

$60

MARKET OVERVIEW - SECOND QUARTER 2009

Historical Rental Rates vs. Overall Vacancy Rates

85 85

Downtown Office Market

5

Period

# of Blocks

Available SF

2Q09:

33

6,944,360

2Q08:

41

9,173,647

15

3

2 1

1

10

14

1

2

4 1

10 10

5

3

8 6

1 2

0 2Q08

2Q09

2Q08 3 Months

50,000-99,999 SF

Source: Cushman & Wakefield Research

6 Months

2Q09 12 Months

100,000-249,999 SF

2Q08 24 Months

250,000 + SF

2Q09

MARKET OVERVIEW - SECOND QUARTER 2009

20

Number of Blocks

NEW YORK CAPITAL MARKETS GROUP

Size Distribution of Available Space (Contiguous Blocks)

86 86

Downtown Office Market

1-9,999 sf 10,000-24,999 sf 25,000-49,999 sf 50,000-99,999 sf 100,000 + sf

35.44%

16.77%

22.59%

5.12%

20.08%

Source: Cushman & Wakefield Research

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Leasing Activity by Block Size, Total SF Leased – 2Q09

87 87

Downtown Office Market

NEW YORK CAPITAL MARKETS GROUP

60 60 6

50

7

44 40 17

30 5

20

47

12 9

10

3 2

0

0 0

1

2004

2005

$45 - $54.99

Source: Cushman & Wakefield Research

2

22 2 1

10

2006

6

2007

$55 - $59.99

2008

$60+

2Q09

MARKET OVERVIEW - SECOND QUARTER 2009

Taking Rents of $45 and Above (Number of Deals)

88 88

Downtown Office Market Taking Rents of $45 and Above 2006

2007

2008

2Q09

# of Deals

Total SF

Avg. SF

# of Deals

Total SF

Avg. SF

# of Deals

Total SF

Avg. SF

# of Deals

Total SF

Avg. SF

# of Deals

Total SF

Avg. SF

0

0

0

0

0

0

17

885,766

52,104

6

273,107

45,518

2

198,611

99,306

2

135,789

67,895

2

219,734

109,867

5

217,087

43,417

7

96,373

13,768

1

22,000

22,000

1

35,023

35,023

12

499,247

41,604

22

810,756

36,853

47

629,934

13,403

6

59,430

9,905

3

170,812

56,937

14

718,981

51,356

44

1,913,609

43,491

60

999,414

16,657

9

280,041

31,116

$45 - $54.99

Source: Cushman & Wakefield Research

$55 - $59.99

$60 +

TOTALS

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

2005

89 89

Downtown Office Market

Total DT

City Hall

World Financial

Financial West

Financial East

Insurance

2nd QTR 2009

$43.81

$43.38

$51.11

$40.06

$41.91

$38.67

1st QTR 2009

$44.58

$43.52

$51.90

$41.55

$42.87

$40.16

2nd QTR 2008

$50.74

$49.88

$61.32

$42.56

$47.73

$43.58

$ Change over Prior QTR

($0.77)

($0.14)

($0.79)

($1.49)

($0.96)

($1.49)

$ Change Year-over-Year

($6.93)

($6.50)

($10.21)

($2.50)

($5.82)

($4.91)

-1.7%

-13.7%

-0.3%

-1.5%

-3.6% -5.9%

-2.2%

-12.2%

-13.0%

-3.7% -11.3%

-16.7%

Total DT

% Change over Prior QTR Source: Cushman & Wakefield Research

City Hall

World Financial

% Change Year-over-Year

Financial West

Financial East

Insurance

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Average Asking Rent By Submarket

90 90

Downtown Office Market

992.6 939.5

2Q09: 1,402.9 2Q08: 2,476.7 800

646.8 600 470.5 400 343.1

200

179.4 93.5

110.3

81.8 22.2

0 City Hall

World Financial

Financial West

2Q08 Source: Cushman & Wakefield Research

Financial East

2Q09

Insurance

MARKET OVERVIEW - SECOND QUARTER 2009

Total Leased

1,000

SF in Thousands

NEW YORK CAPITAL MARKETS GROUP

Leasing Activity, 2Q08 vs. 2Q09

ADDENDA: NY RESIDENTIAL

92 92

Manhattan Residential Overview

Manhattan Housing Inventory

Total Housing Units

2004

2005

2006

2007

2008

814,227

819,796

840,443

843,349

839,134

Percentage of Ownership to Rental Inventory 2004

2005

2006

2007

2008

Total Owner Units

22.02%

21.99%

22.78%

22.09%

24.09%

Total Rental Units

77.98%

78.01%

77.22%

77.91%

75.91%

Inventory up 3% in past 5 years. Only 24% home ownership in Manhattan.

Source: US Census Bureau

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Manhattan Housing Inventory

93 93

Manhattan Residential Overview

Residential Housing Breakdown* (Total # of Occupied Units 762,381)

Co nventio nal Ownership 0.68% 5,157 Units

Rental Residential Housing (Total # of Renter Units 579,657)

Rent Co ntro lled 3.60% 20,839 Units

Co ndo minium 5.31% 40,452 Units Co o perative 16.89% 128,798 Units

No n-Regulated 31.70% 183,727 Units

M itchell-Lama 1.10% 8,417 Units

P ublic-Ho using 10.53% 61,017 Units

Rental 76.02% 579,657 Units

Rental/Owned ratio inverse of US.

* Excludes vacant units not available for sale or rent Source: US Census Bureau

Stabilized 51.66% 299,469 Units

M itchell-Lama 2.52% 14,605 Units

Free market 32% of rental inventory; 52% stabilized.

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

2008 Residential Housing By Type

94 94

Manhattan Residential Overview

5% 4%

3.9%

3.5% 2.6%

3% 2%

0.9%

1%

0.6%

1.1%

1.4%

2007

2008

1.9%

0% 1996

1999

2002

2005

2006

Manhattan Vacancy Rate

Source: Citi Habitats

June 2009 Mean Manhattan Rental Prices Apartment Type

Doorman

Non-Doorman

Studio

$2,347

$1,996

One-Bedroom

$3,320

$2,617

Two-Bedroom

$5,148

$3,610

Source: The Real Estate Group New York

2Q09

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Manhattan Residential Rental Vacancy Rate, 1996 – 2Q09

95 95

Manhattan Residential Overview

$6,000 $5,148

$5,000 $4,000

$3,610 $3,320

$3,000

$2,617 $2,347

$2,000

$1,996

$1,000 $0 Studio

One-Bedroom

Doorman

Source: The Real Estate Group New York

Non-Doorman

Two-Bedroom

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Mean Manhattan Rental Prices, June 2009

96 96

Manhattan Residential Overview Mean Manhattan Rental Prices, Year-Over-Year Change

$6,000

-8.85%

-8.45%

-11.28% $4,069

$4,000

$2,859 $2,190

$3,610

$2,617

$1,996

$2,000 $0 Studio

One-Bedroom June-08

Two-Bedroom June-09

Manhattan Doorman Rents: March 2008 vs. March 2009

-11.16%

-12.30%

-9.68% $5,700

$6,000 $3,786

$4,000 $2,642

$5,148

$3,320

$2,347

$2,000 $0 Studio

One-Bedroom M arch-08

Source: The Real Estate Group New York

M arch-09

Two-Bedroom

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Manhattan Non-Doorman Rents: March 2008 vs. March 2009

97 97

Manhattan Residential Overview

1,600 1,400 1,200 1,000 800 600 400 200 0 1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Annualized 2009 sales volume of luxury units down 47% since 2008.

Note: Luxury market accounts for top 10% of all Condo and Co-Op Sales Source: Miller Samuel, Inc.

2Q09

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

Yearly Volume of Luxury Condominium and Co-Op Sales (1998 – 2Q09)

98 98

Manhattan Residential Overview Residential Unit Permits Issued by Borough

10,000

8,000

6,000

4,000

2,000

Manhattan Total Units

Brooklyn Total Units

Queens Total Units

Bronx Total Units

Brooklyn has outpaced Manhattan for new residential units in each of the prior six years to 2009. * Annualized based upon first five months of 2009. Source: U.S. Department of Housing and Urban Development

*Est. 2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

1987

1986

1985

1984

1983

1982

1981

0

Staten Island Total Units

MARKET OVERVIEW - SECOND QUARTER 2009

12,000

1980

NEW YORK CAPITAL MARKETS GROUP

14,000

99 99

New York Capital Markets Group

RICHARD BAXTER

JON CAPLAN

Executive Vice President (212) 841-5946

Executive Vice President (212) 841-5094

[email protected]

[email protected]

YORON COHEN

SCOTT LATHAM

Executive Vice President (212) 841-5947

Executive Vice President (212) 841-5064

[email protected]

[email protected]

Cushman & Wakefield, Inc. 51 West 52nd Street New York, NY 10019 (212) 841-7500 This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that it is accurate and complete. Cushman & Wakefield accepts no responsibility if this should prove not to be the case. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. ©2009 Cushman & Wakefield, Inc. All rights reserved.

MARKET OVERVIEW - SECOND QUARTER 2009

NEW YORK CAPITAL MARKETS GROUP

July 21st, 2009