Economic Indicators and Projections

2008 Closing Numbers

2008 World GDP Growth *Source: IMF

Historical World GDP Growth China opensIT Crisis S&L Crisis (90) S&L Crisis (80) End of USSR According to the IMF, GDP growth, for advanced economies, will be the lower than in the last 20 years (1%), but will pick up at the beginning of *Source: IMF

2008 World Stock Markets World’s Least and Most % % % % % % % % % % % % % % % % 0.00% RussiaChinaIndiaUSACanadaBritainChileWorld In December 2008, all stock markets regained on average 7%. China was the only market that continued to lose (8%). *Source: Bloomberg

2008 Mature Stock Markets -52.3% -43.0% -42.7% -42.1% -41.2% -40.4% -39.8% -36.2% -31.3% -42.2% -48.7% -46.3% -60.0% -50.0% -40.0% -30.0% -20.0% -10.0% 0.0% Netherlands Italy Spain Australia France Japan Brazil Germany USA Canada Britain Average *Source: Bloomberg

2008 – 2009 Job Loss For both Canada and US, the largest job losses have occurred since September Canada’s biggest loss was duirng the period of December 2008 to January 2009: 129,000 jobs. December 2008 saw a big loss of full-time jobs but was offset with a gain in part-time jobs. In December 2008, Alberta and Quebec had the biggest losses of full-time jobs. The US had increasing unemployment throughout the period. *Source: US Labor force Organization & Human Resources Development Canada Jobs Lost Unemployment Rate Change (Jan – Mar. 2009) UE Rate Canada 295, %7.7% USA 4,100, %8.1%

Trends

Canadian Key Interest Rate The average duration of a crisis is 2.5 years. IT crisis did not greatly affect consumer spending. In January 2008, interest rate was 4.5%. Since then, there have been 6 drops to the interest rate. Current key interest rate: 0.5% WW II Ends IT Crisis S&L Crisis *Source: Bank of Canada

CAN GDP Growth vs. Key Interest Rate In the ’80s and ’90s interest rates reacted late to the change in GDP growth. Negative GDP growth lasted 1 year in major crisis. Slowing of growth was seen 2 years before reaching negative numbers, but improved within 1 year. IT Crisis S&L Crisis Free Trade with US. *Source: Bank of Canada: Trading Economics

Canadian Trade Both imports and exports behave similary. They diminish during a crisis, obtaining negative changes just for 1 year and picking up normal growth after the 2nd year. % Change * Source: Stats Canada IT Crisis S&L Crisis

Stock Index Crisis lasted 2 years brought us back to 1998 and 2002 values. *Source: Bloomberg,: Djindexes: Euroinvestor S&L Crisis IT Crisis

Unemployment Rate Crisis lasted 2 years. During the S&L crisis, unemployment in Canada took 1 year longer than the US to recover. IT crisis was harder for US. Canada: 7.7% USA: 8.1% Montreal: 7.5% Quebec: 7.9% *Source: US Labor force Organization: Human Resources Development Canada, Canada Stats, Institute de la Stadistique, Quebec. IT crisis S&L Crisis Canada USA Montreal Quebec IT Crisis *Source: US Labor force Organization: Human Resources Development Canada, Canada Stats, Institut de la Stadistique, Quebec

Unemployment Rate by Province Currently Quebec is 0.2% over the country average. Quebec has had one of the lowest percentage changes in the last year. *Source: US Labor force Organization: Human Resources Development Canada UE Rate Newfoundland and Labrador P.E.I. Nova Scotia New Brunswick Quebec Ontario Manitoba Saskatchewan Alberta British Columbia 1 Year Unemployment Change *Source: Labor Force Survey. % Change Newfoundland and Labrador P.E.I. Nova Scotia New Brunswick Quebec Ontario Manitoba Saskatchewan Alberta British Columbia

Greater Montreal Office Vacancy Projection Vacancy rate is strongly influenced by construction. Correlation between unemployment and vacancy rate is: Every 1% change in unemployment represents 2% in vacancy. So for Government forecast of 2009 with unemployment at 7.5% vacancy at end of year would be 8.6%. At the end of a 2 year crisis, vacancy rate would be 9.6%, with a spread of 2% depending on UE rate. IT Crisis 2. S&L Crisis Projection *Source: HR D Canada: Colliers Research

Downtown Values As Montreal is mainly a Downtown office market same correlation was used, assuming no new supply until Negative values in new supply are due to office buildings that have been converted into Hotels or Residential. YearNew Supply (sq. ft.) Project ,000Magil Laurentienne ,000Hines - SITQ ,000WestCliff - Cite Int. II Expected Construction YearAbsorption (sq. ft.)Vacancy Rate 2009 (640,000) to (1,100,000) 6.3% to 7.3% DOWNTOWN PROJECTION

Montreal Office Rate Projection The historical average correlation between vacancy rate and NER is: Every 1% change in vacancy represents $ 0.80/SF in NER. For 2009 NER should range from $13.00 to $ Projection *Source: Colliers Research

Only Toronto and L.A. are mostly Suburban markets. Smallest markets: Calgary and Montreal L.A.CHICAGOMONTREALTORONTOCALGARY CBD INVENTORY SU INVENTORY T INVENTORY Major N.A. Office Markets Market Size in M. SF * Source: Colliers N.A Research NY / NEW JERSEY

Downtown with highest rental rates: New York, Calgary, Toronto. Suburbs with highest rental rates: Calgary, Los Angeles, Toronto. Montreal is in a good position because it has a healthy vacancy rate. * Source: Colliers N.A. Research $40.00 $30.70 $29.80 $58.00 $36.50 $74.00 $52.20 $29.50 $28.00 $21.70 $38.00 $38.50 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 $90.0 L.A.N Y / NEW JERSEYCHICAGOMONTREALTORONTOCALGARY CBD Gross Rental Rate Suburban Gross Rental Rate Major N.A. Office Markets Rental Rates CBD: Average gross rental rate for Class A buildings excluding tenant improvements. Rates for US cities in US $. Rates for Canadian cities in CAD $.

Vacancy rates have gone down in cities coming from high vacancy rates and diminishing construction. All cities have experienced a decrease in absorption. US cities have experienced a decrease in absorption since 2007 whereas Canadian cities just in the last 2 quarters. * Source: Colliers N.A. Research CALGARY L.A. CHICAGO MONTREAL TORONTO Major N.A. Office Markets Historic Vacancy Rates

Summary There are correlations between GDP growth, stock prices, unemployment rate and RE. Previous crisises had an average duration of 2 years. Bottom should be hit at end of 2009 or into mid-2010 with a slow recovery. Montreal and Canada are in a better position than the US, so fall should not be as hard. Change in absorption is felt immediately. Vacancy rate for 2009 should be between 7.6% to 8.6%. NER for Class A Building: $13.00 to $15.00.