Real GDP Growth

Rosen Consulting Group

Real GDP Growth

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

73 75 77 79 81 83 85 87 89 91 93 95 97 99f


U.S. Employment Growth

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

72 74 76 78 80 82 84 86 88 90 92 94 96 98


U.S. Unemployment Rate

4%

5%

6%

7%

8%

9%

10%

72 74 76 78 80 82 84 86 88 90 92 94 96 98


Consumer ConfidenceConference Board Survey

40

60

80

100

120

140

89 90 91 92 93 94 95 96 97 98

Index


U.S. Merchandise Exports to East Asia plus Japan

11,000

11,500

12,000

12,500

13,000

13,500

14,000

14,500

15,000

15,500

1995 1996 1997 1998

3-Month Moving Average

$Million per Month


U.S. Net Exports

-300

-250

-200

-150

-100

-50

1995 1996 1997 1998

$1992 (Billion)


Consumer and Producer Prices

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

72 74 76 78 80 82 84 86 88 90 92 94 96 98e

CPIPPI

Annual Change


3-Month T-Bill vs. 10-Year T-Bond

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98

3-Month10-Year


Equity REIT Offering Volume

0

5

10

15

20

25

30

82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98e

$Billion


Growth in Public Real Estate Securities

6.1 7.6 10.326.2

37.248.7

67.5

129.1 120.3

200.0

0

50

100

150

200

250

1990 1991 1992 1993 1994 1995 1996 1997 1998 2000f

$Billion


Investment PerformanceREITs vs. S&P 500 Index

15.2% 15.1%

2.7%

12.2%

37.0%

19.6%

-17.1%

7.6%10.1%

1.3%

37.6%

23.1%

33.4%

28.6%

-20%

-10%

0%

10%

20%

30%

40%

1992 1993 1994 1995 1996 1997 1998

Wilshire REIT IndexS&P 500 Index

Total Return


REIT Market ValuationStock Market vs. Real Estate Value

2123

30

1517

6 7

1 00

5

10

15

20

25

30

35

-30% -20% -10% -5% 0% 5% 10% 20% 30%

Number of Companies

Discount Real Estate Value Premium


REIT Yield ComparisonAFFO vs. Dividend

5%

6%

7%

8%

9%

10%

11%

AFFO YieldDividend Yield


Relative ValuationS&P 500 P/E vs. REIT AFFO Multiple

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

Dec-93

Mar-94

Jun-94

Sep-94

Dec-94

Mar-95

Jun-95

Sep-95

Dec-95

Mar-96

Jun-9

6

Sep-96

Dec-96

Mar-97

Jun-97

Sep-97

Dec-97

Mar-98

Jun-98

Sep-98

Dec-98

Ratio


Net LendingCommercial Properties

-60

-40

-20

0

20

40

60

80

100

120

70 72 74 76 78 80 82 84 86 88 90 92 94 96 98e-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%$Billion % of GDP


Commercial MBSGross Amount Issued

12.84.8 8.2

14.017.5 20.3 19.0

29.7

44.0

78.3

0

10

20

30

40

50

60

70

80

90

80s 90 91 92 93 94 95 96 97 98

$Billion


CMBS Spreads to Treasuries

50

100

150

200

250

300

350

Dec-93

Mar-94

Jun-94

Sep-94

Dec-94

Mar-95

Jun-95

Sep-95

Dec-95

Mar-96

Jun-96

Sep-96

Dec-96

Mar-97

Jun-97

Sep-97

Dec-97

Mar-98

Jun-98

Sep-98

Dec-98

AAA AAA BBB

Basis Points


Pricing SpreadsCommercial Mortgage Rate vs. 10-Year T-Bond

0

50

100

150

200

250

300

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98

Basis Points


U.S. Employment Growth

Growth Rate

less than 0%

0% to 1.1%

1.2% to 2.4%

2.5% and above


Fastest Growing U.S. MSAsRanked by Annual Absolute Change in Employment

Rank Metropolitan Area Nov-97 Nov-98 Change

1 New York, NY 3,990.2 4,094.1 103.92 Los Angeles, CA 3,941.2 4,031.4 90.23 Phoenix, AZ 1,432.3 1,508.1 75.84 Washington, DC 2,517.0 2,585.3 68.35 Houston, TX 1,936.8 1,993.2 56.46 Atlanta, GA 2,014.0 2,069.8 55.87 Dallas, TX 1,811.3 1,866.7 55.48 Detroit, MI 2,120.6 2,170.2 49.69 Tampa, FL 1,091.8 1,138.3 46.510 Chicago, IL 4,108.6 4,155.0 46.4


Fastest Growing U.S. MSAsRanked by Annual % Change in Employment

Rank Metropolitan Area Nov-98

1 Sarasota, FL 6.6%2 Las Vegas, NV 6.1%3 Phoenix, AZ 5.3%4 Riverside, CA 4.9%5 Orlando, FL 4.7%6 Tampa, FL 4.3%7 West Palm Beach, FL 4.2%8 Jacksonville, FL 4.2%9 Austin, TX 4.0%10 Ventura, CA 3.9%




11 Columbia, SC 3.8%12 Orange County, CA 3.8%13 Grand Rapids, MI 3.6%14 San Antonio, TX 3.6%15 Tulsa, OK 3.5%16 Denver, CO 3.5%17 Baton Rouge, LA 3.4%18 Wilmington, DE 3.3%19 Louisville, KY 3.2%20 Fort Worth, TX 3.2%




21 Seattle, WA 3.2%22 Greenville, SC 3.1%23 Dallas, TX 3.1%24 El Paso, TX 3.0%25 Houston, TX 3.0%26 Tucson, AZ 2.9%27 Cincinnati, OH 2.9%28 Fort Lauderdale, FL 2.8%29 Atlanta, GA 2.8%30 Raleigh, NC 2.8%


Slowest Growing U.S. MSAsRanked by Annual % Change in Employment


1 Honolulu, HI -1.9%2 Allentown, PA -0.3%3 Knoxville, TN -0.3%4 Pittsburgh, PA -0.1%5 Dayton, OH 0.0%6 Toledo, OH 0.0%7 Greensboro, NC 0.1%8 Buffalo, NY 0.2%9 Rochester, NY 0.3%10 Fort Wayne, IN 0.4%11 New Orleans, LA 0.4%12 New Haven, CT 0.4%


Employment GrowthNew York MSA vs. U.S.

-6%

-4%

-2%

0%

2%

4%

6%

72 74 76 78 80 82 84 86 88 90 92 94 96 98e

New York MSAU.S.


Employment GrowthCalifornia vs. U.S.

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

72 74 76 78 80 82 84 86 88 90 92 94 96 98e

CaliforniaU.S.


Real Estate Cycle

Overshooting Phase

AbsorptionPhase

DeclinePhase

GrowthPhase

Sun Belt Apt - 9:30

Industrial - 8:30

Neighborhood/Strip/Suburban Office - 7:30

CBD Office/Full Service Hotel/Regional Mall - 6:30

Single Family/Multifamily - 8:00

12

9 3

6

Factory Outlet - 3:00

Apts Northeast/Calif - 7:00

Power Center - 10:30

Extended Stay Hotel - 12:00


Office ConstructionContracts Awarded - F.W. Dodge

0

50

100

150

200

250

300

350

70 72 74 76 78 80 82 84 86 88 90 92 94 96 98

Million SF


Office Employment GrowthAnnual Change in Jobs

-200

-100

0

100

200

300

400

500

600

700

78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98

Thousand


Office Vacancy RatesDowntown and Suburban

0%

5%

10%

15%

20%

25%

82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98

DowntownSuburban


Downtown Office Rent Growth

-5%

0%

5%

10%

15%

86 87 88 89 90 91 92 93 94 95 96 97 98


Private Market Total Return (NCREIF)Office

26.0%

20.9%

9.9%12.3%12.4%

9.0%

5.7%4.0%

6.0%4.5%

-1.0%

-11.5%

-8.0%

-4.0%

3.9%

7.2%

13.4%

17.4%17.0%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

80 82 84 86 88 90 92 94 96 98e


Real Estate CycleOffice

Overshooting Phase

AbsorptionPhase

DeclinePhase

GrowthPhase

Chicago/Miami/New York/San Francisco - 6:30

Boston/MinneapolisSan Jose - 8:00

12

9 3

6Seattle/Wash, DC - 7:00

Los Angeles - 6:00

Atlanta/Houston - 9:30


Multifamily Housing Starts

440379 400

636665 670

626

474407

373

298

174 170162

259 278313

340 346

0

100

200

300

400

500

600

700

80 82 84 86 88 90 92 94 96 98e

Units, Thousand


Multifamily PermitsCalifornia

8196 102

83

5844

34

70

112

158168

117

93

7560

3221 15 19 16 19 25 30

0

20

40

60

80

100

120

140

160

180

76 78 80 82 84 86 88 90 92 94 96 98e

Units, Thousand


Rental Vacancy Rates

4%

5%

6%

7%

8%

9%

10%

11%

12%

80 82 84 86 88 90 92 94 96 98

5+ UnitsTotal Rentals


Rental Inflation

0%

2%

4%

6%

8%

10%

12%

14%

72 74 76 78 80 82 84 86 88 90 92 94 96 98e

Total CPIRental Component

Annual Change


U.S. Household Formation

0.0

0.5

1.0

1.5

2.0

72 74 76 78 80 82 84 86 88 90 92 94 96 98e

Million


Divorce Rate in the U.S.

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

1920 1930 1940 1950 1960 1970 1980 1990

Rate per 1,000


U.S. Population Growth1995 - 2000f

Absolute Growth

less than 25,000

25,000 to 99,999

100,000 to 249,999

250,000 and above


Private Market Total Return (NCREIF)Multifamily

11.6%

7.1% 6.9%

10.3%

8.8%

5.8%

-1.4%

1.8%

8.7%

11.9%11.7%11.7%12.8%

11.4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

85 86 87 88 89 90 91 92 93 94 95 96 97 98e


Real Estate CycleMultifamily

Overshooting Phase

AbsorptionPhase

DeclinePhase

GrowthPhase

Dallas/San Jose - 8:30

12

9 3

6

San Francisco - 8:00

Atlanta/Las Vegas/Phoenix - 9:30

New York - 7:30Boston/Los Angeles - 7:00


Retail ConstructionContracts Awarded - F.W. Dodge

100

150

200

250

300

70 72 74 76 78 80 82 84 86 88 90 92 94 96 98

Million SF


Real Retail Sales GrowthExcluding Autos

-6%

-4%

-2%

0%

2%

4%

6%

80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98

Annual Change


Private Market Total Return (NCREIF)Retail

10.7%12.3%12.8%

11.0%

7.0%

15.1%

16.9%

14.4%

12.5%12.4%

14.9%

12.5%

6.0%

-1.8%-2.2%

4.9%6.0%

4.0%4.9%

8.4%8.7%

-5%

0%

5%

10%

15%

20%

78 80 82 84 86 88 90 92 94 96 98e


Real Estate CycleRetail

Overshooting Phase

AbsorptionPhase

DeclinePhase

GrowthPhase

12

9 3

6

Atlanta - 9:30

Boston/Chicago/S.F./Seattle - 8:30

Los Angeles/New York/Washington, DC - 6:30


Hotel ConstructionContracts Awarded - F.W. Dodge

0

20

40

60

80

100

80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98

Million SF


Hotel Occupancy Rate

60%

61%

62%

63%

64%

65%

66%

87 88 89 90 91 92 93 94 95 96 97 98


RevPAR Growth

-5%

0%

5%

10%

15%

20%

71 74 77 80 83 86 89 92 95 98e

Annual Change


Hotel Industry ProfitsNet Profit or Loss

-10

-5

0

5

10

15

20

25

78 80 82 84 86 88 90 92 94 96 98e

$Billion


Real Estate CycleHotel

Overshooting Phase

AbsorptionPhase

DeclinePhase

GrowthPhase

Full Service Hotel - 6:30

12

9 3

6

Extended Stay Hotel - 12:00


Industrial ConstructionContracts Awarded - F.W. Dodge

0

50

100

150

200

250

300

350

70 72 74 76 78 80 82 84 86 88 90 92 94 96 98

Million SF


Industrial Vacancy Rate

3%

4%

5%

6%

7%

8%

9%

10%

80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98


Private Market Total Return (NCREIF)Warehouse

14.2%

20.4%

16.2%15.2%

9.0%10.8%

12.4%12.9%

8.9%

12.1%11.2%9.7%

2.4%

-2.9%-2.4%-1.5%

8.5%

12.7%12.7%13.8%

12.0%

-5%

0%

5%

10%

15%

20%

25%

78 80 82 84 86 88 90 92 94 96 98e


Real Estate CycleIndustrial

Overshooting Phase

AbsorptionPhase

DeclinePhase

GrowthPhase

Atlanta/Dallas - 9:30

San Jose - 8:30

12

9 3

6Detroit/Oakland/Portland/Seattle - 7:30

Los Angeles - 7:00Boston/Newark - 6:30

Chicago - 9:00

Real GDP Growth

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