DISTRESSED RETAIL MARKET ANALYSIS

SELECT MAJOR U.S. MARKETS

YEAR-END 2008
Total Retail Vacancy Velocity Change in Vacancy Index Net Absorption Benchmark (SF) Retail Inventory Additions (SF) Total Inventory Increase Potential Inventory Impact / Distress
% Vacancy &
Change in Under Remaining Total -Remaining Remaining to % of Distress
Major Market State 4Q07 4Q08 Change Space (SF) 4Q07 4Q08 Index % YTD Absorption Inventory % Deliveries Construction Total To Lease To Lease % of Base Index Lease (SF) Inventory Index Index
Atlanta GA 7.8% 9.1% 1.3% 25,115,877 128 136 8 106% 1,286,502 277,318,388 0.5% 5,374,292 2,535,932 7,910,224 52% 4,078,728 2.9% 109 29,194,605 10.5% 133 140
Austin TX 6.9% 7.0% 0.1% 4,420,918 113 104 (9) 92% 795,111 62,962,634 1.3% 936,149 576,171 1,512,320 57% 864,236 2.4% 92 5,285,154 8.4% 106 99
Baltimore MD 5.4% 4.8% -0.6% 5,354,333 89 72 (17) 81% 1,947,480 110,876,833 1.8% 1,353,460 1,014,444 2,367,904 42% 999,236 2.1% 82 6,353,569 5.7% 72 59
Birmingham AL 6.5% 8.8% 2.3% 6,819,232 107 131 25 123% (883,789) 77,270,059 -1.1% 976,372 690,481 1,666,853 2% 36,211 2.2% 83 6,855,443 8.9% 112 140
Boston MA 5.3% 5.3% 0.0% 13,194,035 87 79 (8) 91% 2,040,794 251,071,147 0.8% 2,124,266 2,136,979 4,261,245 36% 1,545,154 1.7% 65 14,739,189 5.9% 74 71
Broward County FL 3.4% 5.8% 2.4% 6,733,731 56 87 31 155% (383,265) 115,373,845 -0.3% 2,515,062 775,230 3,290,292 73% 2,400,564 2.9% 109 9,134,295 7.9% 100 116
Charlotte NC 5.1% 5.9% 0.8% 3,251,450 84 88 4 105% 267,486 54,907,834 0.5% 744,117 200,393 944,510 36% 341,129 1.7% 66 3,592,579 6.5% 83 89
Chicago IL 7.6% 8.4% 0.8% 36,007,183 125 125 1 101% 2,718,284 427,942,869 0.6% 6,930,890 4,078,443 11,009,333 60% 6,559,676 2.6% 99 42,566,859 9.9% 126 126
Cincinnati OH 8.7% 8.5% -0.2% 8,371,627 143 127 (16) 89% 1,015,374 98,748,665 1.0% 1,053,855 191,079 1,244,934 87% 1,087,655 1.3% 48 9,459,282 9.6% 121 112
Cleveland OH 7.5% 7.3% -0.2% 10,764,598 123 109 (14) 89% 1,002,808 147,543,274 0.7% 781,435 665,214 1,446,649 36% 517,797 1.0% 38 11,282,395 7.6% 97 92
Columbus OH 8.3% 8.6% 0.3% 7,439,358 136 128 (8) 94% 654,670 86,335,896 0.8% 988,146 162,106 1,150,252 38% 432,822 1.3% 51 7,872,180 9.1% 115 116
Dallas / Ft Worth TX 9.5% 9.1% -0.4% 29,655,776 156 136 (20) 87% 8,889,076 325,003,061 2.7% 8,673,534 6,125,298 14,798,832 56% 8,286,259 4.6% 175 37,942,035 11.7% 147 127
Dayton OH 9.4% 9.7% 0.3% 5,950,369 154 145 (9) 94% (159,878) 61,130,153 -0.3% 117,361 62,480 179,841 15% 27,376 0.3% 11 5,977,745 9.8% 123 127
Denver CO 7.7% 8.2% 0.5% 13,535,054 126 122 (4) 97% 904,817 164,524,418 0.5% 2,664,491 2,078,995 4,743,486 23% 1,093,208 2.9% 111 14,628,262 8.9% 112 114
Detroit MI 10.7% 10.6% -0.1% 19,659,188 175 158 (17) 90% 1,609,995 185,371,128 0.9% 1,556,699 1,208,997 2,765,696 24% 659,479 1.5% 57 20,318,667 11.0% 138 135
East Bay / Oakland CA 3.6% 4.2% 0.6% 5,318,981 59 63 4 106% 1,359,915 126,048,189 1.1% 2,291,239 844,238 3,135,477 39% 1,218,517 2.5% 95 6,537,498 5.2% 66 67
Greensboro / Winston-Salem NC 5.7% 6.6% 0.9% 5,495,457 93 99 5 105% (110,231) 83,247,340 -0.1% 646,765 525,508 1,172,273 43% 507,806 1.4% 54 6,003,263 7.2% 91 99
Greenville / Spartanburg SC 7.1% 7.1% 0.0% 4,949,968 116 106 (10) 91% 326,297 69,712,038 0.5% 368,232 599,938 968,170 21% 198,592 1.4% 53 5,148,560 7.4% 93 92
Hampton Roads / Norfolk VA 4.7% 5.6% 0.9% 5,457,199 77 84 7 108% 554,111 96,984,181 0.6% 1,544,881 1,287,916 2,832,797 42% 1,194,445 2.9% 112 6,651,644 6.9% 87 90
Hartford CT 5.6% 6.4% 0.8% 8,233,646 92 96 4 104% (508,591) 127,747,082 -0.4% 615,880 2,486,615 3,102,495 31% 957,008 2.4% 93 9,190,654 7.2% 91 96
Houston TX 8.5% 9.0% 0.5% 25,254,819 139 134 (5) 96% 4,279,145 281,841,052 1.5% 6,045,989 3,204,231 9,250,220 41% 3,750,134 3.3% 126 29,004,953 10.3% 130 128
Indianapolis IN 9.6% 9.9% 0.3% 8,824,158 157 148 (10) 94% 993,443 89,036,519 1.1% 1,442,694 428,548 1,871,242 64% 1,204,888 2.1% 81 10,029,046 11.3% 142 138
Inland Empire CA 4.9% 7.0% 2.1% 11,774,387 80 104 24 130% 2,973,361 168,291,227 1.8% 6,770,796 1,718,122 8,488,918 35% 2,975,772 5.0% 193 14,750,159 8.8% 111 126
Jacksonville FL 4.6% 6.7% 2.1% 5,247,297 75 100 25 133% 364,582 78,694,661 0.5% 2,106,952 1,222,821 3,329,773 40% 1,323,968 4.2% 162 6,571,265 8.4% 105 121
Kansas City MO 9.4% 10.0% 0.6% 9,025,130 154 149 (5) 97% 483,189 89,864,890 0.5% 1,512,374 202,537 1,714,911 61% 1,047,141 1.9% 73 10,072,271 11.2% 142 142
Las Vegas NV 4.7% 7.6% 2.9% 8,537,818 77 113 36 147% 1,085,680 112,231,387 1.0% 4,598,862 3,157,166 7,756,028 29% 2,224,362 6.9% 265 10,762,180 9.6% 121 145
Long Island NY 5.5% 4.3% -1.2% 8,470,638 90 64 (26) 71% 3,645,488 194,949,811 1.9% 2,009,105 949,859 2,958,964 47% 1,387,455 1.5% 58 9,858,093 5.1% 64 45
Los Angeles CA 2.5% 3.9% 1.4% 15,116,778 41 58 17 142% (1,726,866) 383,597,727 -0.5% 4,338,312 2,665,698 7,004,010 53% 3,743,744 1.8% 70 18,860,522 4.9% 62 73
Madison WI 4.8% 5.8% 1.0% 2,009,003 79 87 8 110% 76,998 34,702,073 0.2% 455,005 59,560 514,565 92% 471,705 1.5% 57 2,480,708 7.1% 90 94
Memphis TN 9.1% 9.8% 0.7% 6,371,198 149 146 (3) 98% 532,331 65,002,537 0.8% 1,167,138 749,304 1,916,442 26% 503,165 2.9% 113 6,874,363 10.6% 134 138
Miami-Dade County FL 3.1% 4.3% 1.2% 5,029,850 51 64 13 126% 1,569,034 117,918,214 1.3% 3,060,087 1,463,754 4,523,841 31% 1,423,250 3.8% 147 6,453,100 5.5% 69 77
Milwaukee WI 6.6% 6.6% 0.0% 8,754,717 108 99 (10) 91% 739,596 131,957,848 0.6% 927,742 271,933 1,199,675 46% 547,067 0.9% 35 9,301,784 7.0% 89 86
Minneapolis MN 4.8% 5.1% 0.3% 9,587,827 79 76 (3) 97% (20,435) 187,272,028 0.0% 828,115 358,572 1,186,687 58% 683,510 0.6% 24 10,271,337 5.5% 69 71
Nashville TN 4.9% 5.7% 0.8% 5,253,046 80 85 5 106% 1,623,082 92,027,471 1.8% 2,486,982 1,347,765 3,834,747 51% 1,974,058 4.2% 160 7,227,104 7.9% 99 96
New York City NY 3.9% 2.4% -1.5% 1,789,490 64 36 (28) 56% 1,689,231 73,574,555 2.3% 706,417 1,383,617 2,090,034 41% 866,773 2.8% 109 2,656,263 3.6% 46 20
Northern New Jersey NJ 5.9% 6.1% 0.2% 15,959,868 97 91 (6) 94% 3,507,185 262,535,064 1.3% 4,278,587 6,256,177 10,534,764 71% 7,469,805 4.0% 154 23,429,673 8.9% 113 98
Oklahoma City OK 7.3% 7.0% -0.3% 5,317,349 120 104 (15) 87% 637,852 76,428,656 0.8% 386,795 255,613 642,408 34% 219,863 0.8% 32 5,537,212 7.2% 91 87
Orange County CA 2.9% 3.8% 0.9% 4,461,651 48 57 9 119% (153,813) 118,201,357 -0.1% 939,808 455,174 1,394,982 1% 15,560 1.2% 45 4,477,211 3.8% 48 59
Orlando FL 4.8% 6.1% 1.3% 8,822,837 79 91 12 116% 1,400,115 144,098,744 1.0% 3,519,143 845,426 4,364,569 28% 1,221,727 3.0% 116 10,044,564 7.0% 88 99
Palm Beach County FL 5.0% 6.3% 1.3% 4,762,303 82 94 12 115% (69,247) 75,144,104 -0.1% 965,911 1,059,502 2,025,413 29% 597,082 2.7% 103 5,359,385 7.1% 90 101
Philadelphia PA 7.4% 7.4% 0.0% 28,855,088 121 110 (11) 91% 2,695,705 388,208,596 0.7% 2,853,118 4,145,603 6,998,721 47% 3,308,195 1.8% 69 32,163,283 8.3% 105 99
Phoenix AZ 6.4% 9.3% 2.9% 17,934,207 105 139 34 132% 1,685,013 193,168,311 0.9% 7,847,296 2,110,717 9,958,013 53% 5,283,842 5.2% 198 23,218,049 12.0% 152 171
Pittsburgh PA 6.6% 6.8% 0.2% 7,419,681 108 101 (7) 94% 543,522 109,040,527 0.5% 858,889 835,116 1,694,005 66% 1,124,341 1.6% 60 8,544,022 7.8% 99 95
Portland OR 4.5% 5.3% 0.8% 4,846,488 74 79 5 107% 574,837 91,067,846 0.6% 1,377,299 431,809 1,809,108 37% 665,363 2.0% 76 5,511,851 6.1% 76 82
Providence RI 5.3% 7.5% 2.2% 3,583,607 87 112 25 129% (576,573) 47,917,323 -1.2% 483,800 921,508 1,405,308 63% 882,027 2.9% 113 4,465,634 9.3% 118 134
Raleigh / Durham NC 6.8% 6.7% -0.1% 4,720,519 111 100 (11) 90% 1,415,363 70,524,053 2.0% 1,448,730 923,165 2,371,895 23% 539,747 3.4% 129 5,260,266 7.5% 94 88
Richmond VA 5.8% 6.2% 0.4% 4,511,062 95 93 (3) 97% 1,226,082 72,622,069 1.7% 1,622,414 1,770,197 3,392,611 30% 1,031,965 4.7% 179 5,543,027 7.6% 96 93
Sacramento CA 6.0% 7.9% 1.9% 8,628,701 98 118 20 120% (489,993) 109,847,360 -0.4% 1,637,569 2,901,687 4,539,256 42% 1,891,036 4.1% 159 10,519,737 9.6% 121 134
Salt Lake City UT 5.1% 5.2% 0.1% 6,007,214 84 78 (6) 93% 791,655 114,799,378 0.7% 1,120,894 1,146,914 2,267,808 80% 1,807,420 2.0% 76 7,814,634 6.8% 86 77
San Antonio TX 7.0% 7.2% 0.2% 7,969,780 115 107 (7) 94% 3,174,616 111,208,195 2.9% 3,623,275 2,835,712 6,458,987 40% 2,601,920 5.8% 223 10,571,700 9.5% 120 108
San Diego CA 3.1% 3.6% 0.5% 4,989,923 51 54 3 106% (401,990) 138,426,623 -0.3% 363,724 456,428 820,152 39% 316,339 0.6% 23 5,306,262 3.8% 48 53
San Francisco CA 3.1% 2.6% -0.5% 2,106,615 51 39 (12) 76% 453,459 80,442,883 0.6% 65,590 144,404 209,994 74% 156,440 0.3% 10 2,263,055 2.8% 36 28
Seattle / Puget Sound WA 4.0% 4.5% 0.5% 6,814,174 66 67 2 102% 3,588,049 150,917,857 2.4% 4,557,295 1,358,707 5,916,002 60% 3,535,005 3.9% 150 10,349,179 6.9% 87 78
South Bay/San Jose CA 3.2% 3.6% 0.4% 2,845,769 52 54 1 102% 406,286 80,047,287 0.5% 710,694 343,171 1,053,865 55% 582,343 1.3% 51 3,428,112 4.3% 54 55
Southwest Florida FL 3.8% 6.0% 2.2% 4,675,411 62 90 27 144% 931,666 77,586,710 1.2% 2,792,949 1,080,732 3,873,681 31% 1,191,300 5.0% 192 5,866,711 7.6% 95 113
St. Louis MO 7.9% 8.4% 0.5% 10,234,422 130 125 (4) 97% (28,778) 122,101,369 0.0% 743,939 587,572 1,331,511 30% 393,007 1.1% 42 10,627,429 8.7% 110 115
Tampa / St Petersburg FL 4.6% 6.0% 1.4% 11,708,779 75 90 14 119% 979,036 196,358,537 0.5% 3,783,608 2,804,020 6,587,628 29% 1,898,125 3.4% 129 13,606,904 6.9% 88 99
Toledo OH 7.9% 7.6% -0.3% 4,930,410 130 113 (16) 88% 375,770 65,144,483 0.6% 177,092 24,361 201,453 0% 0 0.3% 12 4,930,410 7.6% 96 92
Tucson AZ 4.3% 6.4% 2.1% 3,381,540 70 96 25 136% 1,381,326 52,840,987 2.6% 2,609,162 980,195 3,589,357 43% 1,537,367 6.8% 261 4,918,907 9.3% 118 125
Tulsa OK 7.5% 7.3% -0.2% 4,763,796 123 109 (14) 89% 1,454,851 65,085,972 2.2% 1,448,103 105,557 1,553,660 32% 501,127 2.4% 92 5,264,923 8.1% 102 95
Washington DC 3.4% 4.2% 0.8% 8,286,431 56 63 7 112% 1,351,663 195,901,235 0.7% 3,045,247 2,102,864 5,148,111 49% 2,545,336 2.6% 101 10,831,767 5.5% 70 71
West Michigan MI 8.0% 8.6% 0.6% 10,592,320 131 128 (3) 98% (545,342) 122,866,105 -0.4% 277,710 76,144 353,854 81% 285,336 0.3% 11 10,877,656 8.9% 112 118
Westchester / So Connecticut CT 6.6% 6.7% 0.1% 10,213,079 108 100 (8) 92% 926,430 151,482,172 0.6% 1,217,249 2,641,446 3,858,695 25% 973,200 2.5% 98 11,186,279 7.4% 93 90

Grand Total / Average -- 6.1% 6.7% 0.6% 576,117,160 100 100 0 100% 68,869,570 8,535,094,837 0.8% 135,469,586 87,029,865 222,499,451 45% 99,707,712 2.6% 100 675,824,872 7.9% 100 100

NOTE: "Distress Index" adjusts the Additions & Vacancy Index to reflect the magnitude of 4th quarter 2007 and 2008 vacancy levels relative to the U.S. and the vacancy increase between 4th quarter 2007 and 2008.

Source: CoStar, Madison Marquette Market Research.

R:\Dc_research\Distressed Properties - 2008\CoStar Total Retail - 4q_YTD

 POTENTIALLY DISTRESSED RETAIL REAL ESTATE MARKETS
AS OF YEAR-END 2008

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Distress Index (U.S. Average = 100)

Source: CoStar; Madison Marquette Market Research.

0

Source: CoStar; Madison Marquette Market Research.

 Major Market Index
Phoenix 171

Las Vegas 145

Kansas City 142

Atlanta 140

Birmingham 140

Indianapolis 138

Memphis 138

Detroit 135

Sacramento 134

Providence 134

Houston 128

Dayton 127

Dallas / Ft Worth 127

Chicago 126

Inland Empire 126

Tucson 125

Jacksonville 121

West Michigan 118

Broward County 116

Columbus 116

St. Louis 115

Denver 114

Southwest Florida 113

Cincinnati 112

San Antonio 108

Palm Beach County 101

Philadelphia 99

Tampa / St Petersburg 99

Orlando 99

Austin 99

Greensboro / Winston-Salem 99

Northern New Jersey 98

Hartford 96

Nashville 96

Pittsburgh 95

Tulsa 95

Madison 94

Richmond 93

Toledo 92

Cleveland 92

Greenville / Spartanburg 92

Westchester / So Connecticut 90

Hampton Roads / Norfolk 90

Charlotte 89

Raleigh / Durham 88

Oklahoma City 87

Milwaukee 86

Portland 82

Seattle / Puget Sound 78

Salt Lake City 77

Miami-Dade County 77

Los Angeles 73

Washington 71

Boston 71

Minneapolis 71

East Bay / Oakland 67

Baltimore 59

Orange County 59

South Bay/San Jose 55

San Diego 53

Long Island 45

San Francisco 28

New York City 20