Transwestern Outlook

Q2:10 SUBURBAN MARYLAND

Health-Related Government Agencies Dominate

Leasing; Overall Office Vacancy Inched Down
During the 2nd Quarter

The Suburban Maryland office market has been affected by a weakened

economic climate. Despite a handful of sizable lease deals from government
agencies, absorption remained negative into the 2nd quarter as tenants
vacated space. Given these conditions, effective rents declined 4.0% during
the past six months, as concessions increased to attract tenants. Closer to the
core submarkets are experiencing lesser declines in rents, compared to those
submarkets located further outside the core. A fully leased project entered
the construction pipeline during the past three months, boosting the pre-
leased rate.

Overall, despite weakened market conditions, Suburban Maryland is poised

to experience long-term steady growth due to its tenant composition,
particularly its focus on health care and as host to key government
agencies.

Second Quarter 2010 Market Highlights:

• Net absorption: Negative 255,000 SF during the 1st half of 2010,
compared to negative 633,000 SF during the 1st half of 2009.
• Overall vacancy rate: 14.7%, up from 13.8% one year ago.
• Direct vacancy rate: 13.5%, up from 12.2% one year ago.
• Sublease space: Decreased by 155,000 SF. Sublease space is 1.2% of
standing inventory, compared to 2.6% at the peak in 2002.
• Pipeline (U/C and U/R): 547,000 SF, down from 1.3 million SF one
year ago.
• Pipeline pre-lease rate: 70%, compared to 44% one year ago.
• Rents: Down 4.0% during the 1st half of 2010, compared to declining
7.3% in 2009.
• Investment sales: $190 million during the first half of 2010, compared
to $98 million during the first half of 2009.
2nd quarter 2010
Q2: Transwestern Outlook
2010 SUBURBAN MARYLAND

OFFICE NET ABSORPTION Net Absorption

Suburban Maryland | 1997 Through First Half 2010

Net absorption totaled negative 74,000 SF during the 2nd quarter of 2010,
compared to negative 177,000 SF during the 1st quarter. This compares to
the quarterly average of negative 162,000 SF during 2009. Net absorption
totaled negative 649,000 SF during 2009, below the 25-year annual average
of 1.4 million SF.

Montgomery County experienced the most negative absorption during

the 1st half of 2010, as weak demand and tenants vacating space limited
absorption. For example:

• Chevy Chase Bank, now Capital One, vacated 250,000 SF at 7501

Wisconsin Avenue in Bethesda/Chevy Chase.

NET ABSORPTION OF OFFICE SPACE • Celera Genomics Corporation vacated 108,000 SF at 45 W. Gude
Suburban Maryland Counties | First Half 2010 Drive.
• GMAC Financial Services vacated 76,000 SF at 7501 Wisconsin
Montgomery Avenue in Bethesda/Chevy Chase.
• Mann Bracken vacated 74,500 SF at 702 King Farm Boulevard.
Prince George's

Net absorption of Class A space totaled negative 19,000 SF during the

Frederick
2nd quarter of 2010, compared to negative 171,000 SF during the 1st
quarter. This compares to the average quarterly net absorption of positive
-200,000 -180,000
180,000 -160,000 -140,000
140,000 -120,000 -100,000
100,000 -80,000 -60,000
60,000 -40,000 -20,000
20,000 0 55,000 SF during 2009.
Square Feet
Source: CoStar, Delta Associates; June 2010.

Class A net absorption totaled 219,000 SF during 2009. Absorption was

positive for Class A assets last year due to pre-leased deliveries and fewer
Class A buildings experiencing tenant move-outs. More move-outs
GROSS LEASING ACTIVITY occurred in Class B and C buildings, as tenants upgraded to newer space.
Suburban Maryland | 2000 Through 2010

Gross Leasing

We estimate gross leasing activity will total 6.0 million SF during 2010 –
below the 15-year average of 6.8 million SF per annum.

The top deal of the 2nd quarter was NIH’s renewal of 160,000 SF at 6700
Rockledge Drive in North Bethesda. The most notable non-renewal deal
during this period was the FDA’s lease of 93,000 SF at 12420 Parklawn
Drive in Rockville.

Also notable, was the Department of Health and Human Services’ lease of
73,000 SF at 7501 Wisconsin Avenue in Bethesda/Chevy Chase. This lease
2nd quarter 2010
Q2: Transwestern Outlook
2010 SUBURBAN MARYLAND

OFFICE LEASING ACTIVITY BY SECTOR was spurred by the new health care law, as the Federal government plans
Suburban Maryland | 2005 - 2009 to hire approximately 300 people to help steer the new law, according to
the Washington Business Journal. This will no doubt help stabilize the
vacancy rate in Bethesda/Chevy Chase, as Chevy Chase Bank/Capital
One vacated space during the 1st quarter and CoStar plans to relocate its
headquarters to The District during the 3rd quarter of 2010.

There are two large requirements from GSA that are out for solicitation.
The Department of Homeland Security (DHS) has a need of a total of 1.2
million SF and Department of Health and Human Services (HHS) has
a need for over 900,000 SF. Although Arlington County in Northern
Virginia is vying for the DHS deal with Montgomery and Prince George’s
Counties, the HHS deal must remain in Montgomery or Prince George’s
Counties. GSA plans to make a decision on the award by year-end 2010.

Blocks of Available Space over 100,000 SF

top five buildings Government leasing activity increased to 14% of all lease deals inked
Suburban Maryland | June 2010 in Suburban Maryland during 2009, compared to 3% during 2008.
Conversely, leasing from professional businesses edged down to 65% in
Submarket SF Submarket 2009, from 67% in 2008.
6710 Rockledge Dr 294,000 N. Bethesda
13900 Connecticut Ave 263,000 Kensington/Wheaton We expect the share of government leasing to increase during 2010, as the
Piedmont Pointe II 236,000 N. Bethesda president’s budget caters to the health field.
530 Gaither Rd 208,000 N. Rockville
6400 Sheriff Rd 192,000 Landover/Largo There are 258 buildings with blocks of space available over 10,000 SF
at June 2010, up from 249 buildings from one year ago. There are 24
Source: CoStar, Delta Associates; June 2010.
buildings with blocks of space available over 100,000 SF, down from 31
buildings one year ago.
BUILDINGS WITH CONTIGUOUS BLOCKS
OF AVAILABLE SPACE VACANCY
Suburban Maryland | June 2010

The Suburban Maryland overall office vacancy rate inched down to

14.7% at mid-year 2010, from 14.8% at the end of the 1st quarter, but is up
from 13.8% one year ago.

The Suburban Maryland direct vacancy rate edged up to 13.5% at June
2010, from 13.4% at March 2010, and 12.2% one year ago.

Sublease space decreased by 155,000 SF during the 2nd quarter of 2010,

after 161,000 SF was removed from the market during the 1st quarter of
2010. During 2009, sublease space increased 113,000 SF. Sublease space is
1.2% of Suburban Maryland’s standing inventory at June 2010.

2nd quarter 2010

Q2: Transwestern Outlook
2010 SUBURBAN MARYLAND

DIRECT OFFICE VACANCY RATE VACANCY RATES AND VACANT SPACE (ALL CLASSES)
Suburban Maryland | 1997 Through Mid-Year 2010 Suburban Maryland | June 2009 vs. June 2010

June 2009 June 2010

Vacancy Rate
Direct 12.2% 13.5%
Sublet 1.6% 1.2%

Vacant Space (Millions of SF)

Direct 10.6 11.9
Sublet 1.4 1.0

Source: CoStar, Delta Associates; June 2010.

The overall Class A vacancy rate is 16.3% at June 2010, down slightly
from 16.5% at March 2010, but up from 15.1% one year ago. Suburban
Maryland’s direct Class A vacancy rate is 14.3%.

NET OFFICE ABSORPTION AND VACANCY BY SUBMARKET

Suburban Maryland

Inventory (SF) Net Absorption (SF) 2nd Quarter 2010 Vacancy

Submarket 2nd Qtr 2010 2007 2008 2009 First Half 2010 Direct w/Sublet

Bethesda/CC 11,293,448 110,000 121,000 (43,000) (181,000) 8.4% 11.6%

N. Bethesda 10,326,658 151,000 (78,000) (248,000) 83,000 12.8% 13.6%
Rockville 8,588,860 (129,000) 144,000 (28,000) 60,000 14.8% 15.2%
N. Rockville 11,820,950 288,000 292,000 65,000 (225,000) 14.7% 16.2%
Gaithersburg 5,281,815 (132,000) 87,000 (85,000) 143,000 13.1% 13.4%
Germantown 2,435,685 52,000 (36,000) (26,000) 5,000 14.7% 16.7%
Kensing./Wheaton 1,406,234 (11,000) (37,000) (33,000) (10,000) 8.9% 9.3%
Silver Spring 6,903,910 (147,000) (76,000) (50,000) (104,000) 9.7% 11.1%
N. S. Spring/Rt. 29 2,980,145 (32,000) (35,000) 22,000 51,000 4.7% 5.4%
Total: Mont. Cnty. 61,037,705 150,000 382,000 (426,000) (178,000) 11.9% 13.3%
Beltsville/ Coll. Prk. 5,304,784 303,000 10,000 (41,000) (11,000) 15.6% 16.0%
Laurel 2,509,823 (27,000) 25,000 (44,000) (8,000) 12.8% 13.1%
Greenbelt 3,016,041 (33,000) (154,000) (42,000) (24,000) 23.1% 25.5%
Lanham/Landover 4,951,020 120,000 (123,000) (134,000) (45,000) 22.2% 22.8%
South P.G. 5,811,217 72,000 187,000 (86,000) 46,000 17.0% 17.9%
Total: P.G. Cnty. 21,592,885 435,000 (55,000 ) (347,000) (42,000) 18.2% 19.1%
Frederick Cnty. 5,798,041 335,000 197,000 124,000 (35,000) 12.7% 13.0%
Total: Sub MD 88,428,631 920,000 524,000 (649,000) (255,000) 13.5% 14.7%

Source: CoStar, Delta Associates; June 2010.

2nd quarter 2010

Q2: Transwestern Outlook
2010 SUBURBAN MARYLAND

OFFICE SPACE U/C OR U/R Construction

Suburban Maryland | June 2010

There is 547,000 SF of office space under construction or renovation in

Submarket SF % Pre-Leased
Suburban Maryland at mid-year 2010, compared to 1.3 million SF one
Beltsville/Calv./Coll. Park 392,000 69%
year ago.
Frederick County 155,000 74%
Total: 547,000 70%
70% of space under construction at mid-year 2010 is pre-leased, a rise
Source: CoStar, Delta Associates; June 2010.
from 44% one year ago. The current pre-lease rate is above the 10-year
average pre-lease rate of 53%.

Natelli Communities broke ground on 115,000 SF in the Urbana Corporate

Center in Fredrick County during the 2nd quarter of 2010. This project
boosted the pre-lease rate this quarter, as it is fully leased to Banner Life
Insurance Company.

With slow market conditions, for the next 24 months new development
projects would appear warranted only for very special projects at superior
locations or with a sizable pre-lease in place.

Although the ceremonial groundbreaking occurred during the 2nd quarter

for the U.S. Nuclear Regulatory Commission’s (NRC) new 362,000 SF space
at North Bethesda Center, the physical construction should start during
the 3rd quarter. The $131 million building is on schedule to be completed
by mid-year 2012. The NRC will be moving over 1,300 employees to the
new site being developed by LCOR.

There were no notable deliveries during the 1st half of 2010. During 2009,
2.2 million SF delivered to the market at 25% leased.

PROJECTED Supply v. Demand

We project the overall office vacancy rate in Suburban Maryland will

edge down from 14.7% at mid-year 2010 to 14.0% during the next 24
months.

We expect vacancy to edge down over the next two years, as Suburban
Maryland has already experienced a swift rise in vacancy due to projects
delivering to market from 2007-2009 and the current pipeline has
declined with pre-leasing rising over the past year. Vacancy will decline
only modestly over the next two years, as we expect demand to pick up
slowly during 2010 as the economy recovers and more jobs are added to
the Suburban Maryland market. However, we expect greater leasing to
occur during 2011, as pent-up demand emerges to the market.

2nd quarter 2010

Q2: Transwestern Outlook
2010 SUBURBAN MARYLAND
EFFECTIVE RENT CHANGES
Selected Submarkets in Suburban Maryland | Dec. 2009 - June 2010
Submarket Rent Change
Bethesda/ChevyChase -2.9%
Silver Spring -2.3%
North Bethesda -4.2%
North Rockville -5.0%
Rockville -5.1%
Source: Delta Associates; June 2010.
Rents
Suburban Maryland office rents declined 4.0% during the 1st
half of 2010, after declining 7.3% during 2009.
Concessions to tenants are rising, as competition to sign tenants
is intense. At mid-year 2010, the average TI cost for new space
ranged between $40 and $50 per SF for all classes of space. The
average free rent offering was 4.0 to 5.0 months.
Although every submarket in Suburban Maryland experienced
rent declines during the 1st half of 2010, submarkets closer to
the core experienced minimal rent declines. Submarkets located
further from the core experienced greater declines, as tenants
are showing preference in location.
We expect rents to decline by 5.0% to 7.0% in 2010 as demand
remains elevated and tenants remain skittish about leasing
space. We anticipate rents will stabilize by late 2011 or into
2012, as the economy recovers and tenants start seeking space.
Investment Sales
There were two notable investment sales during the 2nd
quarter of 2010, compared to three sales during the 1st quarter.
Sales volume totaled $190 million during the 1st half of 2010,
compared to $201 million during 2009.
PS Business Parks, in an all-cash deal, purchased 9201 Corporate
Boulevard in North Rockville for $60 million ($176/SF) during
the 2nd quarter. The property last sold in 2005 for $79 million
($232/SF).
2nd quarter 2010
BioMed Realty Trust continues to purchase buildings in
Suburban Maryland in an all-cash sale-lease back to J. Craig
Venter Institute at 9704 Medical Center Drive in North
Rockville. The trust purchased the asset for $29.9 million
($243/SF) during the 2nd quarter.
Sale prices averaged $229/SF during the 1st half of 2010,
compared to $123/SF in 2009. The average sales price was sunk
in 2009 due to the sale of the former Giant Food HQ office
space in Landover.
Those with cash have an opportunity now to purchase
assets near the bottom of this cycle and reap future benefits.
Regardless, we expect investors to seek assets in Suburban
Maryland over the long-term because of steady and predictable
performance due to a superior tenant base.
Land Sales
There were no notable office land sales during the 1st half
of 2010, compared to two notable sales, totaling $7.0 million,
during 2009. Notably, Avanti Properties Group purchased 17.5
acres at 9307-9311 Largo Drive for $6.0 million during 2009.
We expect limited investment sale activity during the balance
of 2010.
Suburban Maryland Office Market
Outlook
We expect the Suburban Maryland office market to experience
slowly recovering conditions during the balance of the year.
The amount of tenants seeking space will increase over the next
12 months as the economy improves and more blocks of space
are removed from the market. However, we believe government
tenants will drive the market during the remainder of the year and
into 2011 – particularly within the National Institutes of Health,
Food & Drug Administration, and Health & Human Services.
Although we expect vacancy to decline modestly over the next two
years to 14.0%, vacancy will remain elevated at June 2012 when
compared to the cyclical low of 8.7% during 2005.
Q2: Transwestern Outlook
2010 SUBURBAN MARYLAND

We project rents to decline by 5.0% to 7.0% in 2010, as available net absorption

space remains elevated. However, given the reduced pipeline and
anticipated demand in late 2010 rents should decline at a reduced Net absorption of flex/industrial space in Suburban Maryland
pace. totaled positive 16,000 SF during the 1st half of 2010, compared
to negative 879,000 SF during all of 2009. This compares to the 10-
By 2011, a more normalized pace of activity should be returning to year annual absorption average of 885,000 SF per annum.
the Suburban Maryland office market.
flex/industrial net absorption
Overall, we anticipate Suburban Maryland will experience Suburban Maryland | 1997 Through First Half 2010
slowing conditions in the near-term, but is well poised for
steady, long-term growth – as health, life sciences and energy
are of growing importance.

Flex/Industrial Market Stabilizing with

Flat Absorption; Flex/R&D Demand to
Help Restore Supply/Demand Balance
The Suburban Maryland flex/industrial market appeared to
stabilize during the 1st half of 2010, as absorption was flat and
vacancy increased only modestly. Healthy leasing activity boosted
net absorption for flex/warehouse space during the past six months,
while bulk warehouse and flex/R&D experienced slight negative
absorption. Given the elevated vacancy rate, rents reacted by
declining 2.4%. Notably, the construction pipeline is limited due to
market conditions and tight lending.
Mid-Year 2010 Market Highlights:
• Net absorption: Positive 16,000 SF, compared to negative Frederick County.
879,000 SF in 2009.
• Sublease space: Decreased by 10,000 SF. Sublease
space is 1.0% of standing inventory..
• Overall vacancy rate: 12.5%, up from 12.3% one year ago.
Flex/warehouse space experienced positive net absorption during
the 1st half of 2010 due to healthy leasing activity and few tenants
vacating space. However, net absorption for bulk warehouse and
flex/R&D space was negative as demand could not keep pace with
tenants vacating space. For instance:
• Arico Properties vacated 91,000 SF of bulk warehouse
space at 7911 Braygreen Road in Prince George’s County.
• Builders First Source vacated 23,000 SF of bulk
warehouse space at 4600 Wedgewood Boulevard in
• Centex Homes vacated 23,000 SF of flex/R&D space at
15870-15892 Gaither Drive in Montgomery County.
net absorption and deliveries by product type
Suburban Maryland | First Half 2010

• Direct vacancy rate: 11.5%, up from 11.3% one year ago.

• Pipeline (U/C and U/R): 102,000 SF, up from 366,000 SF
one year ago.
• Pipeline pre-lease rate: 0%, compared to 5% a year ago.
• Rents: Down 2.4%, compared to declining 5.9% during 2009.
• Investment sales: $157 million. Average sales price: $89/SF.

2nd quarter 2010

Q2: Transwestern Outlook
2010 SUBURBAN MARYLAND

NET ABSORPTION OF Flex/Industrial Space Prince George’s County experienced healthy net absorption during the
Suburban Maryland | First Half 2010 | Square Feet 1st half of 2010, as tenants inked a handful of deals. Notably, U.S. Electrical
Submarket All Space Built 1988-10 Services leased 120,000 SF at 6500 Sheriff Road and Vocus leased 93,000 SF at
Prince George's County 143,000 (17,000) 12051 Indian Creek Court – both flex/warehouse space.
Montgomery County (90,000) (33,000)
Frederick County (37,000) (17,000) Available sublease space decreased 10,000 SF during the past six months,
Suburban MD Total: 16,000 (66,000) after decreasing 178,000 SF during 2009. Sublease space is 1.0% of the
standing inventory.
Source: CoStar, Delta Associates; June 2010.

Net absorption of newer space (built after 1987) totaled negative 66,000
SF in Suburban Maryland during the 1st half of 2010, compared to
negative 366,000 SF during 2009.
gross leasing activity
Suburban Maryland | 2000 - 2010 Gross Leasing Activity

We estimate gross leasing activity will total 4.0 million SF in 2010, below
the 10-year average of 4.5 million SF per annum. The most notable new deal
during the past six months was U.S. Electrical Services’ lease of 120,000 SF
of flex/warehouse space at 6500 Sheriff Road in Prince George’s County.
Also notable was Vocus Inc. leasing 93,000 SF of flex/warehouse space at
12051 Indian Creek Court in Prince George’s County. Healthy leasing
activity kept flex/warehouse net absorption positive during the past six
months.

There are 315 buildings with contiguous blocks of available space over
10,000 SF, up from 277 one year ago. Prince George’s County is home to
49% of these blocks. The largest block is 500,000 SF of flex/warehouse
space located at 6304 Sheriff Road (Building A) in Landover.

buildings with contiguous blocks Vacancy

of available space
Suburban Maryland | June 2010
Suburban Maryland’s overall flex/industrial vacancy rate decreased to
12.5% at mid-year 2010, from 12.6% at year-end 2009, but is up slightly
from 12.3% one year ago.

The direct vacancy rate is 11.5% at June 2010, unchanged from six months
prior, but is up from 11.3% one year ago.

Suburban Maryland’s overall flex/industrial vacancy rate in newer space

is 14.2% at mid-year 2010, down from 14.3% at year-end 2009, and from
15.3% at mid-year 2009. The direct vacancy rate in newer product is 12.7%
at June 2010.

2nd quarter 2010

Q2: Transwestern Outlook
2010 SUBURBAN MARYLAND

flex/industrial vacancy rate Construction

Suburban Maryland | 1998 Through Mid-Year 2010

There is 102,000 SF of flex/industrial space under construction or

renovation in Suburban Maryland at mid-year 2010, down from 366,000
SF one year ago.

Projects under construction are currently 0% pre-leased. We do not expect

the limited pre-leasing on pipeline projects to be an issue – as the pipeline
is very limited.

Three projects started construction during the past six months, compared
to only one new notable project during 2009. St. John Properties broke
ground on two flex/R&D buildings, totaling 78,000 SF, at 5001 and 5021
Howerton Way in Prince George’s County.

We anticipate groundbreakings to remain limited during the balance of

flex/industrial space under construction 2010 due to weaker market conditions and tight lending.
or renovation
Suburban Maryland | June 2010
There were no flex/industrial deliveries in Suburban Maryland during the
1st half of 2010. During 2009, 387,000 SF of flex/industrial space delivered
Submarket SF % Pre-Leased
at 45% leased upon delivery.
Prince George’s County 102,000 0%
Montgomery County 0 N/A
Projected Supply v. Demand
Frederick County 0 N/A
Suburban MD Total: 102,000 0%
We project Suburban Maryland’s overall flex/industrial vacancy rate will
Source: CoStar, Delta Associates; June 2010. edge down to 11.9% at June 2011, from 12.5% today. Due to a sharp decline
in pipeline projects and interest starting to ramp up for biotech space, we
believe demand will outpace new supply modestly.

Rents
Average asking rents
Suburban Maryland | Flex/Industrial Space
NNN/SF/Annum Flex/industrial asking rents declined 2.4% during the 1st half of 2010,
after declining 5.9% during 2009. All product types experienced rent
Year-End Mid-Year % declines during the 1st half of 2010, with bulk warehouse experiencing
Product Type 2009 2010 Change the greatest decline at 4.0%, as this product type experienced the weakest
Bulk Warehouse $6.25 $6.00 -4.0% absorption.
Flex/Warehouse $6.55 $6.40 -2.3%
Flex/R&D $11.85 $11.60 -2.1% Suburban Maryland rents should decline by 3.5% to 5.5% during 2010.
Source: CoStar, Delta Associates; June 2010.
Although we project vacancy to edge down 60 basis points over the
next year, vacancy remains elevated. We expect slow market conditions
to hamper rent growth, as the national economy recovers from the
recession.

2nd quarter 2010

Q2: Transwestern Outlook
2010 SUBURBAN MARYLAND

Investment Sales Suburban Maryland Flex/Industrial

There were nine notable investment sales in Suburban Maryland
during the 1st half of 2010. Sales volume totaled $157 million
during the past six months, compared to $15 million during
2009.
Suburban Maryland accounted for 51% of total sales volume for
flex/industrial product in the Washington metro area during
the past six months.
Sales prices averaged $89/SF during the 1st half of 2010, up
from $65/SF during 2009. The average sales price was lifted
during the past six months due to BioMed Realty Trust Inc.
purchasing flex/R&D properties.
The trust purchased 9704-9714 Medical Center Drive in North
Rockville for $53 million ($243/SF) and 50 W. Watkins Mill
Road in Gaithersburg for $14 million ($249/SF).
Market Outlook
The Suburban Maryland flex/industrial market should remain
sluggish during the balance of 2010, with signs of recovery
emerging late in the year. We project vacancy will edge down
to 11.9% by June 2011, from 12.5% today, as the construction
pipeline has declined notably and interest is starting to ramp up
for biotech space. Although we project vacancy to edge down
during the next year, vacancy will remain elevated, putting
downward pressure on rents. We expect rents to decline by
3.5% to 5.5% during 2010, as there is currently 9.6 million SF of
direct space on the market.
Overall, Suburban Maryland’s flex/industrial market is
well positioned for long-term, stable growth. We anticipate
growth in the flex/R&D market, as biotechnology advances
in the state.

We expect the investment sales market to remain sluggish

during the balance of the year, as buyers with limited cash
remain on the sidelines and sellers are hesitant to sell at such
a reduced price. However, we anticipate those with cash will
continue to take advantage of purchasing quality assets at a
discount.

Land Sales

There were no notable flex/industrial land sales in Suburban

Maryland during the 1st half of 2010, compared to one notable
sale totaling $8.4 million during 2009.

Matan Realty purchased 35 acres for $8.4 million at 8560

Stagecoach Circle in Frederick County during 2009. A flex/
R&D building will be developed for SAIC.

We expect few land sales during the balance of 2010, as market

weakness should persist at least through year-end.

2nd quarter 2010

Q2: Transwestern Outlook
2010 SUBURBAN MARYLAND

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