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25/7/20152 A WORLD WITHOUT BORDERS Frank N. Simpson, CCIM 2011 CCIM Institute President

Agenda: Presentation I:  Welcome & Introduction  The Global Real Estate Market Today Presentation II:  CCIM Institute Facts

Frank N. Simpson, CCIM CCIM Designated in 1997 – Designee # 7306  2004 president of the 300+-member Georgia CCIM Chapter  25-year Commercial Real Estate

Introduction In addition:  Economic Development Council of the Greater Hall - Chamber of Commerce  Founding President of the Hall County YMCA.  Board of Trustees – Wesleyan School

Family Wendi, Sam, Mike, Frank

United States Economy 2011 What We Read

Economy Comments “Economy Remains Sluggish” “High Unemployment “ “Continues Consumers Still Wary” “Foreclosures Pull Housing Market Down Further” “ Community Banks Continue to Struggle ” “One in ten mortgage borrowers owe more than 125% of today’s value of their home” “Housing prices have further to slide” “Say Good-bye to Saturday mail delivery”

Economy Comments “The “Great Recession” is over” “Retail sales are rising – estimated at 5% annually” “Personal consumption is rising” “Existing home sales are improving” “Industrial production has been rising during the past 18 months” “Consumer prices are stable and reflect neither inflationary nor deflationary tendencies” “When will we be at the bottom of the commercial real estate market? Perhaps now – indications are very good” “Dow to top 12,500 by EOY 2011”

RE Market Theme Greed

GREED INSIGHTFUL –Warren Buffett says: “Be fearful when others are greedy; Be greedy when others are fearful”

Sector Ratings

14 U.S. CAP RATES DOWN!

Home Supply

Source: Goldman Sachs and REIT filings LOOMING DEBT - $1.8 TRILLION

2011 Economy The economy will show more job growth - Private sector up, Government down. Housing starts increase More CRE transactions Dow up US dollar strengthens Federal Government zero interest policy continues United States will see 3-4% Growth in 2011 (Bernanke) On and On

Is the Recession over? Technically Yes –2 Qtrs. Of Positive GDP growth, But… Slow/Prolonged Recovery Unemployment Still Too High! Devaluation in Pricing still to occur More deals happening.

vs – Differences  There is Less Competition!  Globally, prices are lower, still have some downward pressure  U.S. is starting a recovery  Capital Markets:  Bad, but not as bad as ‘08.  Global Economy - Varies

Ken Riggs, CCIM CCIM – Chief Economist “The recovery will vary by geography and property type, but for investors seeking to seize market opportunities, 2010 & 2011 will be the best time in generations to buy well-priced, quality commercial real estate,…Investors should view 2010/2011 as a once-in-a-lifetime opportunity to snag key long-term investments.”

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Moscow Office Vacancy Class A 19.6% Class B+15.3% Class B-12.7% Overall Average Vacancy 15.1% *Jones Lang LaSalle

Moscow Office Overview The recovery of the Moscow office market continued in st Quarter completion volume was 198,800 sq m. Prime rents reached USD 1,000 per sq m per year, a 11% growth. Classes A, B+ and B- rents remained unchanged Jones Lang LaSalle

Warehouse Overview Cont. Vacancy rate continues to decrease Currently 3.7% Vacancy rates expected to decline further, indicating increase in rents. 76,200 Sq M constructed in 1 st Quarter Moscow remains 2 nd in all of Europe for costs of Rents (2 nd to London) * Jones Lang LaSalle

Moscow Warehouse Overview Due to the high tenant activity, the vacancy rate continued to decrease in Q1 200 to 3.7%. Absorption volume for 1 st Quarter 2011 accounted for 215,670 mn sq m. Driven by low vacancy rate prime warehouse rents increased by 8.7%. *Jnes Lang LaSalle

Commercial Real Estate Partners Largest Network on Earth

Realtor Stats 2006 Peak of 1.5+ million Realtors ,063 Million Realtors 30+/- Percent Decrease

Countries with courses & members Countries with members

International Membership 1500 International Members 36 Countries Courses: Russia, Poland, South Korea, Canada, Mexico, Dubai, Egypt, Taiwan, China Studying Vietnam, India New CCIMs in Taiwan

40 Ken Riggs, CCIM CCIM – Chief Economist “For investors who wish to minimize the uncertainty and the amount of risk in their investment, commercial real estate remains attractive because it is tangible and more transparent than other investments—investors can actually see the number of tenants in a building and the rent they are paying.”

Financial Status

Membership 2010 vs % Designees Candidates Total

Membership 2011 Budget: Current Designees:9012 * % Candidates:5885 * % Total:14,897 *12,533 84% * As of April 11, 2011

Education Update (All core courses) Total StudentsBudget StudentsDiff Total DollarsBudget DollarsDiff $516,905 $868,471. $351,566

Education Deferred Revenue: (Not included) –GSA$60,000 –GE$196,000 –Bank (1 st TN)$34,000. Total$290,000+/- Colliers $100,000. (Potential Rev.)

CCIM Institute Equipping the best minds in commercial and investment real estate. 47

Only 6 percent of estimated 150,000 commercial real estate practitioners nationwide hold the CCIM designation 48 A CCIM is elite

To earn the CCIM designation:  Member must become a Candidate  Pass four core courses (take or challenge)  Take 200 classroom hours  Earn three elective credits  Submit a Portfolio of Qualifying Experience  Pass the comprehensive exam

CCIM Education  Premier commercial real estate education  Over 18,000 students  Outstanding instructor cadre of real estate practitioners

CCIM Education  Premier commercial real estate education  Over 18,000 students  Outstanding instructor cadre of real estate practitioners  $2.6 million curriculum redesign

CCIM Education  Premier commercial real estate education  Over 18,000 students  Outstanding instructor cadre of real estate practitioners  $2.6 million curriculum redesign  Online education offerings

CCIM Education  Premier commercial real estate education  Over 18,000 students  Outstanding instructor cadre of real estate practitioners  $2.6 million curriculum redesign  Online education offerings

CCIM Education  Premier commercial real estate education  Over 18,000 students  Outstanding instructor cadre of real estate practitioners  $2.6 million curriculum redesign  Online education offerings  Non-designation education

Location. Location. Location.  Multiple course offerings annually

Location. Location. Location.  Multiple course offerings annually  Primary and secondary cities

Location. Location. Location.  Mulitple course offerings annually  Primary and secondary cities  More than 50 markets worldwide

Location. Location. Location.  Multiple course offerings annually  Primary and secondary cities  More than 50 markets worldwide  Three continents

CI Financial Analysis  Cash flow model  Time value of money  Appraisal  Investment value and performance  Tax implications  Internal rate of return  Net present value  Compounding and discounting

CI Market Analysis  Evaluating the market  Market analysis model  Market data and GIS  Supply and demand factors  Property types  Technology  Site selection and feasibility  Mapping and demographics

CI User Decision Analysis  Lease terminology  Leasing versus owning  Buying versus building  Lease valuation  Lease comparisons Transaction management and alternative user decision process

CI Investment Analysis  Investment as a process  Tax implications  Disposition options  Acquisition strategies  Profitability ratios  Valuation  Asset management Impact of financing and risk

Training Customized Training Corporate Training  Colliers  Re/Max  CB Richard Ellis  ICSC  Coldwell Banker  GVA  Grubb & Ellis  CREW Network  Ernst & Young  GE Real Estate  Wal-Mart  Walgreen's  McDonald’s  AEGON

Educating the Industry Worldwide 65

Benefits of Membership  CCIM Network  STDB Online  Online directory of CCIMs  Legislative affairs  Continuing education  MailBridge  RERC/CCIM ITQ  Cultural diversity  Research

CCIM Chapter Network  61 chapters worldwide  Local networking  Local education  1,000 markets  Branded web sites – (continued work)  The grassroots of the CCIM Institute

CCIM Networking  Close more deals  Grow your network  Expand your knowledge  Gain industry recognition  Increase your net worth

GIS – What Is It? A geographic information system (GIS) integrates hardware, software, and data for capturing, managing, analyzing, and displaying all forms of geographically referenced information. GIS allows us to view, understand, question, interpret, and visualize data in many ways that reveal relationships, patterns, and trends in the form of maps, globes, reports, and charts.

GIS – Why Use It? GIS can integrate and relate any data with a spatial component, regardless of the source of the data. Rather than you working hard to understand your data, GIS puts your data to work for you. GIS can provide you with powerful information -not just how things are, but how they will be in the future based on changes you apply.

Annotate Uploaded Image

Technology Provides Better Decisions The Old Way Location The Technology Way Location Timing Demographics Today Commercial Real Estate is: Where, When, Who, What, How and Why!

MARKETING

Leo Burnett – Client Sampling

96 CCIM Russia  Model to CCIM for International Growth  Important Political Partner to U.S.  Expect Russia’s Impressive Growth & Expansion To Continue

Success “Success always involves risk. You must take a change by investing your time, money, and effort. It pays to be thoughtful and deliberate in your analyses of opportunities, but don’t let timidity hold you back… No one on earth is going to force success upon you; you will find it only to the degree that you actively seek it out.

JOIN & BE ACTIVE IN CCIM! WE ARE THE SOURCE FOR EDUCATION IN COMMERCIAL REAL ESTATE –Everyone in CRE should attend! Networking –WORLDWIDE –GLOBAL OPPORTUNITES

Thank You Frank Simpson, CCIM Office Cell