R Davidson

Rick D

President & COO

Coldwell Banker Commercial
 Agenda

• Overview of International Commercial

Real Estate markets
• Di
Discussion
i off Major
M j Product
P d Types:
T
Office, Industrial, Retail, Multi-family
• Market Direction
Widening of the Financial Crisis
Seized by: British Government

Acquired by:

Acquired by:

Collapsed

Filed for Bankruptcy

Placed into Federal Conservatorship

Widening of the Financial Crisis
Acquired by:

Taken Over by:

Infused dollars from:

Federal
Government

Sold Assets to:

Became Bank Holding Companies

 Unemployment and Job Loss
Unemployment
M 09’ 8
Mar 8.5%
5%

Job Loss

Education Level
Global Markets
Real GDP Growth Rates: 2008-
2008-2011

Source: Economist Intelligence Unit, ING Economics, ING Real Estate Research & Strategy as of 14 November 2008.

Note: Countries and regions are ranked, left to right, by the difference between their forecast GDP growth rate of 2009 and their average long-
term GDP growth rate (Geometric average 1998-2011). Historical data is from EIU. Forecasts are from ING Economics
 AsiaPac
Leasing Markets will see a turn
Vacancy Rates
Rents

In Markets including:
g
Hong Kong
Singapore
Shanghai
Tokyo
New Delhi
Mumbai
 EURO ZONE
UK will be the worse performing
Projected negative growth of 1.7%
1 7%

leasing Markets
Vacancy Rates
Rents

In Markets including:
London
Madrid
Milan
Paris
Warsaw
 Canada
Economic Growth is projected below LT

Market Fundamentals
Vacancy Rates
Rents (softening)

Office Vacancy:
6 7%
6.7%
 Latin America

Expected
p Positive Economic Growth:
Brazil
Mexico
Argentina
Chile
Venezuela
 US
4thh Year of decline in Housing Sector

Declining Consumer Spending

Declining Access to Capital

Illiquidity of Credit Markets

 The Great Deleveraging

Capital Values are falling as investors

reappraise their appetite for risk

As commercial real estate

fundamentals decline – there will be a
direct impact on real estate values
CMBS Issuances
I 1990
1990--2008

Decline 75% in 2008 over same period in 2007

 Office

Jan 09 – fewer than

$1B Closed

Listings
Li i O
Outpaced
d
Closed Transactions
41
4:1

Cap Rate 7.5%

(45 bps increase since Sep 08)
Distressed Office Assets
297 Properties

$11.5B in Value

Notable Markets:
Austin
Los Angeles
Detroit
Cleveland
Kansas City
Offi Buyer
Office B C
Composition
iti
 Office

Vacancy (14%)

Rents (5-6%)

Absorption
 Industrial

Jan 09 – fewer than

$400m Closed

Close to $2B iin newly

Cl l
listed properties

Cap
p Rate 8.4%
(80 bps increase since Sep 08)
Distressed Industrial Assets

170 Properties
p

$1.3B in Value

Notable Markets:
Austin
Columbus
I d t i l Buyer
Industrial B C
Composition
iti
Industrial

Vacancy (8.8%)

Rents (1.7% Warehouse)

(3.6% R&D)
(1.1 Manufacturing)

Absorption
 Retail

Jan 09 –$876m Closed

Close to $2B in newly

li d properties
listed i

Cap Rate 7.3%

(20 bps increase since Sep 08)
Distressed Retail Assets

$6 7B iin V
$6.7B Value
l

Notable Markets:
Las Vegas
Indianapolis
San Jose
Retail Buyer Composition
 Retail
Vacancy (8.9%)
(8 9%)

Rents (1.1%)

Absorption
 Multi--Family
Multi

Jan 09 – fewer than

$600m Closed

Listings
Li i O
Outpaced
d
Closed Transactions
51
5:1

Cap Rate 6.4%

(50 bps increase since Sep 08)
Distressed Multi-
Multi-Familyy Assets
906 Properties

$9 2B in Value
$9.2B

Notable Markets:
Miami
Las Vegas
P l Beach
Palm B h
Multi--Family Buyer Composition
Multi
Multi-
M lti-Family
Multi F il

Vacancy (6.6%)
(6 6%)

Rents

Absorption
 Market Outlook
• Rents will fall; Concessions will grow

• Retail product is and will suffer the most;

• Office product will continue to be weak with

f th growth
further th iin unemployment
l t

• Industrial will be impacted less but still

impacted
p

• MF will perform better than the rest from an

operational standpoint
 Opportunities
pp
• For Tenants – take advantage
g of the
market and lock in for longer terms

• For landlords – keeping tenants is key

• Smaller sales transactions with private

investors

• REO transactions
 Opportunities
pp
• NPL portfolios and other distressed debt
purchases
h

• Student
S d h
housing
i will
ill continue
i to perform
f

• Health care will continue to have demand

• Other Federal Government related business

• “Keep some powder dry”

Big Brothers Big Sisters
2007 Climb for Kids’
Kids Sake
2008 Climb for Kids’
Kids Sake
2009 Climb for Kids’
Kids Sake

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