1. Capital Markets Overview Dennis Williams Managing Director NorthMarq Capital April 2012

2. Key Themes of 2012 2012 has seen much more activity from life insurance companies, commercial banks and value add lenders. – Underwriting more aggressive and “strike zone” widening CMBS Delinquency has leveled off but could spike again. Originations have picked up pace again but remain vulnerable to market shocks. – Total delinquency rate currently 9.5% as of April 2012 – Defaults likely to increase when aggressive originations from 2005-07 mature. New underwriting standards and projected loan volumes still not sufficient to rollover debt maturities (but getting closer).

3. Commercial/Multi-Family Less Than ¼ of All Mortgage Debt Source : Federal Reserve Flow of Funds Report Q4’11 Mortgage Debt Outstanding ($ Trillion)

4. GSE’s Nearly Half of Multi-Family Market & Growing Source: Federal Reserve Flow of Funds Report Q4’11 Multi-Family Outstanding ($Billion)

5. Banks Hold a Majority of CRE Loans Source: Federal Reserve Flow of Funds Report Q4’11 Commercial Outstanding ($ Billion)

6. CMBS Market: Maturities Through 2017

7. Commercial Mortgage Delinquency Rates by Lender Type Source: Mortgage Banking Association CMBS: 8.56%; Life Companies: 0.17% Fannie Mae: 0.59%; Freddie Mac: 0.22%; Banks and Thrifts: 3.55% Year End 2011

8. A New World: Commercial Mortgage Underwriting 2007 to Present 2007 Underwriting2009 UnderwritingNew Underwriting 5% NOI Decline NOI$5,000,000 $4,750,000 Purchase Price$100,000,000$62,500,000$79,200,000 Lender Cap Rate5.00%8.00%6.00% Loan to Value80%55%70% Loan Amount$80,000,000$34,375,000$55,400,000 Equity$20,000,000$28,125,000$23,800,000 Interest Rate5.75%8.00%4.25% AmortizationI/O30 Debt Service$4,638,940$3,026,779$3,270,000 Debt Service Coverage1.08x1.65x1.45x

9. Looking Ahead : 1.Agencies Remain Reliable: –Rates and terms remain attractive, and underwriting guidelines less conservative. 2.Rebirth of Life Companies and Banks: –In 2012 most life companies in the market and originating at or near 2007 levels. –Most large banks remain active, while regional banks starting to lend again. 3.CMBS Doing Some Business: –Rates have dropped from the high 5’s to high 4’s, up to 75% LTV, all property types. 4.Underwriting: –Special attention to rollover (reserves/cash flow sweeps). –Single tenant problematic. –LTV: 50-70% on real cap rate –DSC: 1.30x–1.50x.