1. Presentation at the Leadership Summit Chicago, IL -- August 18, 2005 Lawrence Yun, Ph.D., Senior Economist NATIONAL ASSOCIATION OF REALTORS ® Economic and Commercial Real Estate Market Trends and Outlook

2. Economy Growing % Source: BEA

3. Decent Job Additions Source: BLS

4. Job Gains/Losses 2005 vs 2001 Source: BLS In thousands

5. Job Gains/Losses in the Recent 12 months Source: BLS In thousands

6. Resilient Consumer Spending Source: BEA

7. Stable Consumer Confidence

8. Despite High Oil Prices Source: Department of Energy

9. Corporate Profits are Strong Source: BEA

10. Business Spending Rising at Double-Digit Pace Source: BEA

11. Stock Market at 3-year High

12. Trade Deficit in Bad Shape Source: BEA

13. Overall Trade Increasing Source: BEA $ millions

14. Dollar Recovering – A Bit Source: Federal Reserve

15. Inflation Building but Still Contained % change from a year ago Source: BLS

16. Fed Nervous About Inflation – Forced to Tighten Credit Forecast to 4.00% by Dec. 2005

17. Narrow Spreads Suggest Further Short-term Fed Rate Hikes Pushing up Long-term Rates

18. Economic Outlook 2.2 million 2.0 million Job Additions 5.0% 4.4% 10-year Treasury 4.0% 3.2% 3-month Treasury 2.7% 3.0% CPI Inflation 5.1% 5.1% Unemployment Rate 3.5% 3.6% GDP 2006 2005

19. Commercial Real Estate Market

22. Commercial Real Estate Loans Performing Source: Federal Reserve %

23. Commercial Property Rate of Return (Return = net operating income + capital appreciation) Source: Haver Analytics, NCREIF

24. Commercial Property Rates of Return by Sectors Source: Haver Analytics, NCREIF Best performer

25. Commercial Construction Disciplined Source: BEA

27. Office Job Creation Growth Source: NAR/Torto-Wheaton In thousands

28. Office Market Fundamentals In thousand square feet Source: NAR/Torto-Wheaton

29. Vacancy Rate Falling % Source: NAR/Torto-Wheaton

30. Office Rent - Gaining Traction Source: NAR/Torto-Wheaton %

32. Business Inventory Change % Source: BEA Negative ???

33. Inventory-to-Sales Ratio Source: Department of Commerce

34. Industrial Market Fundamentals In thousand square feet Source: NAR/Torto-Wheaton Research

35. Industrial Vacancy Rate % Source: NAR/Torto-Wheaton Research

36. Industrial Rent Growth Source: NAR/Torto-Wheaton Research %

38. Retail Rent Growth Source: NAR/Torto-Wheaton Research %

40. Multi-family Market Fundamentals In number of units Source: NAR/Torto-Wheaton Research

41. Multi-family Vacancy Rate % Source: NAR/Torto-Wheaton Research

42. Multi-family Rent Growth % Source: NAR/Torto-Wheaton Research

43. Housing Affordability Slipping Source: NAR

44. Commercial Market Outlook Net Absorption (Based on 57 markets) Source: NAR Forecast 262,000 237,000 Multi-Family (units) 29,000 34,000 Retail ( x 1,000 sq ft) 153,000 133,000 Industrial ( x 1,000 sq ft) 56,000 61,000 Office ( x 1,000 sq ft) 2006 2005

45. Commercial Market Outlook Vacancy Rate Source: NAR Forecast 5.2% 6.2% Multi-Family 6.3% 6.3% Retail 9.8% 10.3% Industrial 13.2% 14.1% Office 2006 2005

46. Commercial Market Outlook Rent Growth Source: NAR Forecast 3.0% 2.5% Multi-Family 4.0% 4.4% Retail 1.8% 0.7% Industrial 3.4% 2.3% Office 2006 2005