1. HARTFORD COUNTY COMMERCIAL REAL ESTATE MARKET NOVEMBER 2008
Presented by:
Andrews & Galvin Appraisal Services, LLC
16 Spring Lane, Farmington, CT

2. REAL ESTATE MARKET PRESENTATION OVEVIEW
What is Current Perception in Hartford County
Property Type Snap Shot & General Trends
Where are We Going From Here

3. Connecticut Counties

4. Hartford County Map

5. HARTFORD MARKET AREA City of Hartford Downtown
North Market – North Suburbs
South Market – South Suburbs
East Market – East Suburbs
West Market – West Suburbs

6. What Does the Hartford Commercial Real Estate Market Look Like?

7. Where Are We Now?

8. What Segment of the Coaster Do You Operate In?

9. Total Number of Sales Tracked by Conn-comps November 1989 to 2008

10. Feeling the Trend?

11. Growth – Core Growth How Much Are We Talking?
Housing Units
348,252 units in 1997 to 367,078 Units 2006
18,827 Net Gain in Housing Units
Population
825,141 in 1997 to 878,298 in 2006
53,000 + more people
Industrial Growth – Added 5 +/- Million SF (past 5 yrs)
Office Growth – Added 2.2 +/- Million SF (past 5 yrs)
Retail Growth – Expansions in All Four Quadrants

12. Value Trends Industrial Apartment Office Retail
Starting From the Back Of the Coaster
Industrial
Apartment
Office
Retail

13. Typical Sales Activity 2008
46 Kennedy Road, South Windsor
5,628 SF, Built 1966, 1.24 acres
-- 7 Months to Market / 4 tenants
-- 20% Owner Occupied ($550,000)
Sold January 2008 for $68.51/SF
(Previous sale April 2004 for $28.25/SF)
375 Lake Avenue, Bristol
11,520 SF, Built 1959, 2 acres
-- Several Months / Owner Occupied
-- Seller Relocated ($662,000)
Sold Nov 2007 for $57.42/SF
(Previous sale June 2002 for $28.65.SF)

14. 780 James P. Casey Rd Bristol, CT
Former General Motors Plant from 1968 to 1996
-- 1,200,000 SF on 182 Acres
-- 5 Credit Tenants / 28’ Height
-- 30,000 SF $2.75/SF NNN
Acres Excess $50,000/acre
-- @ 7+% Cap Rate – 97.5% occupied
Sold January 2008 for: $60,500,000 - $50.42/SF
Sold November 2006 for: $28,300,000 - $23.58/SF
Sold June 2003 for: $23,500,000 - $19.58/SF
Sold Sept 1997 for: $ 4,280,000 - $ 3.57/SF

15. Industrial Survey Results
CBRE – Market Overview 2nd Qtr 2008
Overall Vacancy Rate 10.8% 2nd Qtr – Jumped 11.34% 3rd Qtr
-- (7% in the West / 14.6% in the East 2nd Qtr)
Industrial Rental Rates $4.50 to $5.70 with $5.00/SF NNN
-- (Landlord negotiating to keep tenants)
Absorption – Negative 650,000 SF YTD
-- (However - 300,000 SF New Constriction & 300,000 SF Raymore & Flanagan Leased at 61 Chapel Road, Manchester)
Reason – lower demand for space

16. Industrial Survey Results
Cushman & Wakefield – Market Beat 2nd Qtr 2008
Overall Vacancy Rate 9.5%, down from 10.2% in 2007
Absorption – positive 180,000 +/- SF
Rental Rates - $4.25/SF NNN +/- Slight increase over 1st Qtr - below 2007
Conclusion:
Sales have slowed but pricing stable – low inventory
Industrial Users Have Prepared for Slow Down
Market is Still Active With Leasing but Less Demand Causing Owners to Negotiate
Cost of Business in CT is Still High – Manchester Industrial User Consolidated down South / Expansions put on hold / 15-30% drop in Revenues / Defense Budgets
770,000 SF Walgreen's Facility in Windsor & 260,000 SF BJ Facility in Rocky Hill

17. Apartment Trends Year No of Sale Avg. $/Unit 1999 177 $ 17,349.01 2000
No of Sale
Avg. $/Unit
1999
177
$ 17,349.01
2000
151
$ 19,802.58
2001
173
$ 22,291.40
2002
225
$ 26,131.49
2003
236
$ 32,324.90
2004
281
$ 38,811.40
2005
331
$ 48,018.02
2006
269
$ 54,823.46
2007
185
$ 55,384.58
2008 86
$ 56,063.65

18. Apartment Trends No of Sales Has Tapered Off ……
Average Sale Price Stabilized Off ….
Vacancy Rates Remain Stable ….
Rents Slight Increases with Expenses ….
Municipalities Concerned with Absentee Landlords ..
Out of State Investors – No more Bi-model Data …
Job Losses – Foreclosures – Housing Age …
Sellers Still Want Higher Prices – Buyers waiting for fall .
Leveraged Properties – Economic Life vs. Physical Life
Mortgage Financing Nearly Gone …. Or Is It?

19. Recent Apartment Sales (Both Openly Marketed)
12 Maple Street, Plainville
Sold June 2008 for $66,000/Unit ($660,000)
5,595 SF – 0.41 acres – 1980
9 Efficiency – 1 one-bed – retail
7.6% Overall Rate / No vacancy
(Previously Sold July 2004 for $380,000
or $34,545/Unit) - Just Four Years
851 Wethersfield Ave, Hartford
Sold July 2008 for $56,250/Unit ($1,350,000)
19,640 SF – 0.46 acres – 1935 / Updated
12 one-bedroom & 12 two-bedroom
6.6% Overall Rate / No vacancy
(Previously Sold June 1988 for $1,032,000 or $43,000/Unit) - Bought by Local Investors

20. What Has Changed? Hartford County Apartment Stabilized 1999 2007
Rents:
$475 – $500
$565 (2%/year)
Vacancy: EGIM:
10% vacant
1.63x 4%
7.3x
OER:
Taxes:
NOI:
60.7%
$720/unit
$50,500 +/-
59%
$605/unit
$68,100 (4%/year)
Overall Rate:
12.5%
?? Below 6%
Mortgage:
Equity Expectation:
75% L/V
7.7% Fixed
20 yr Term
20% +/-
76% L/V
6% 5 yrs Fixed
30 yr Term
?? 1.02x DSCR
?? Increase Rents
Hartford County Apartment
Sold March 2007 for $58,833/Unit ($1,220,000 – 5.8x original purchase)
18,369 SF acres – Built 1966
24 Units – all One-bedroom – 96% Occp.
Updated – new roof – Walk to Downtown
(Previously Sold January 1998 for $210,000 or $8,750/unit) – Stabilized Occupancy 1999
Some of Value Increase is due to Rent Increases, Lower Vacancy, Lower Expense – But what about Investor Expectations?
Most Likely not going to decrease to 1999 Point

21. Hartford County Office Market
Met-Life Relocated to Cigna Complex in Bloomfield (375,000 SF)
--1,300 employees Moving From City Place & 450 From Glastonbury
Rents: $16 - $20/SF with low end in the north market higher in the west market
Vacancy: Class A 7% in South / 35% North – Class B Below 7% in south to 44% in City – Overall 15% - 20%
Leasing Activity: Slower but still active for smaller spaces – 1,000 to 5,000 SF – Build-outs a concern -
Sales: No indication Values are Declining – No unusual Speculation
Overall Cap Rates 7.5% to 9.5%

22. Recent Office Sales Hartford County
86 Hopmeadow Street, Simsbury
Sold May 2008 for $3,800,000 - $89.50/SF 42,456 SF of GBA – 4.9 acres
Buyer secured tenant prior to closing for a vacating tenant / Factoring in Build-out for new tenant and deferred maintenance, overall cap rate of 8.7%
43 Western Blvd, Glastonbury
Sold Jan for $5,250,000 - $92.43/SF
56,798 SF – 8.33 acres – 1979
Buyer purchased vacant as part of 1031 but seller elected to stay and lease back space after the sale was negotiated, overall capitalization rate 9.89% perceived at time of sale

23. Retail Market Hartford Count
--The most uncertainty in terms of potential income growth
--National Retailers pulling back on expansions
--Everyone waiting for holiday / year end sales
--No new concepts coming on line to replace vacating retailer
--Tenants having more control during new construction – lease renewals
--Tenants paying for build-outs for lower rents
-Concepts of Retailers have changed to more of a free standing building – ground leases
--Vacancy starting to increase
--Less activity on leases
--Low inventory of Available For Sale

24. What Are Lenders Doing? Hartford County Market
Increasing Credit Terms – Lowering loan to value ratios and increasing debt service coverage ratios
Points – ½ to a 1.5 points
Rates – Spreads nearly all increased and now tied to FHLBB 5 yr mostly
Recourse is Back
Why – less competition

25. Thank you … Andrews & Galvin Appraisal Services, LLC
16 Spring Lane, Farmington, CT