Beyond Distress 1) Transaction volumes were strong in the second quarter and first half of 2011, with a broad rebound in sales across most major property types. Office, apartment, retail, seniors and care facilities, hotels, and industrial properties all saw significant year-over-year increases in sales volumes. 2) However, US investment markets may be stumbling as the commercial mortgage-backed securities (CMBS) market has become turbulent with conduits pulling back on issuance significantly compared to recent quarters. 3) The amount of distressed properties is improving slowly, with additions to distress down but still significant and sales of distressed properties rising, suggesting an end to the "extend and pretend" approach some

1. Beyond Distress
State of the Market
Presentation by the Numbers
Robert M. White, Jr., CRE, FRIC
September 22, 2011

2. Strong Q2 and H1 Transaction Volumes
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3. Broad Rebound in Sales Across Property Types
H1’11 Sales Across Property Types
H1 ‘11 Year-Over-Year
H1 ‘11 Volume Change in Volume
Office $25.9 Seniors & Care 412%
Apartment $23.1 Hotel 154%
Retail $21.8 Apartment 102%
Seniors & Care $16.2 Office 88%
Industrial $11.0 Retail 63% Centro
Hotel $8.7 Industrial 59%
Billions
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4. Broad Rebound in Sales Across Markets
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5. But, US Investment Markets May be Stumbling…
July
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6. CMBS Market Turbulent; Conduits Pulling Back
Quarterly CMBS Issuance
$80
$70
$60
$50
$40
$30
$20
$10
$-
3
4
2
4
3
4
2
4
3
4
2
3
4
3
4
2
3
3
4
2
3
2
3
2
3
2
2
4
2
4
1 '01
1 '03
1 '05
1 '07
1 '09
1 '11
1 '02
1 '04
1 '06
1 '08
1 '10
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7. Forecast: $200 Billion in Property Sales in 2011
450
2007 2006
400
$billion
2005
350
300
250
200 2011e
2008
150
2010
100
2009
50
-
J F M A M J J A S O N D
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8. Distressed Situation Improving Slowly…

9. Additions to Distress Down, But Still Significant

10. Sales of Distressed Properties Rising
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11. An End to Extend & Pretend?
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12. Distress by Property Type
H1’11 Summary
* Recovery Rate before fees and costs

13. Distress by Lender Type
H1’11 Summary
* Recovery Rate before fees and costs

14. Certain Markets Clearing Distress Rapidly
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15. Thank You
rwhite@rcanalytics.com
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