1. MODULE 0

2. Real Estate Markets & The Economy: An Empirical View

3. Real Estate Markets & The Economy: A Conceptual View

4. Digital Economy Paradigm Information Flows @ All Levels Integration & Globalization of Markets Securitization of Debt & Equity Speed of Adjustment & Volatility

5. Three Evaluation Elements Efficiency Effectiveness Equity

6. The Three Stages of IT Economic Development Development of Technology Gestation for Aggregation, Access, Integration, Implementation, Adoption and Branding Maturation- Reintegration of Cyberspace with Bricks and Mortar

7. Real Estate Investment Analysis IS Risk Management

8. Identify Risks Risk Modification Strategies Alter Risk Evaluate Risk Removal Strategies

9. Yes, Virginia, there are three things that matter in Real Estate Investment Decision Making LOCATION, LOCATION, LOCATION

10. LOCATION Macro-Environment Sub-Region, City Level, Neighborhood Property Specific

11. GDP Growth % Source: Dept. of Commerce

12. Consumer Confidence Index Source: Conference Board

13. Personal Consumption Growth Rate % Source: BEA, DOC

14. Real Retail Sales Growth: Less Autos % Source: US Census

15. Growth in Consumer Credit % Source: Federal Reserve

16. Unemployment Rates: US & California % Source: BLS

17. Employment Growth Rate by Sector: December 1997 to December 1998 % Source: BLS

18. Annual Employment Change, California and US, 1973-Q2 1999 Source: FCREUE from BLS data.

19. Capacity Utilization in Manufacturing % Source: Federal Reserve

20. Growth Rate of Real NonResidential Fixed Investment % Source: Bureau of Economic Analysis

21. Fixed Business Investment As Proportion of GDP (Including Structures & Equipment) Source: BEA

22. Residential Fixed Investment As Proportion of GDP Source: BEA

23. Interest Rates: 6 month vs. 30 year % Source: Federal Reserve

24. Spread Between MBS and 10 yr. Treasuries Source: FNMA, Federal Reserve %

25. Change In Consumer Price Index & Producer Price Index % Source: Bureau of Labor Statistics

26. Change in Labor Productivity in Manufacturing Source: BLS %

27. Change in Unit Labor Costs: Nonfarm Business Sector Source: BLS %

28. US Exports & Imports as Percentage of GDP % Source: Dept. of Commerce

29. US Trade Balance in Goods & Services $, Bill. Source: US Census Bureau

30. US Export Performance 1998 % Change Source: US Census Bureau

31. US Import Performance 1998 % Change Source: US Census Bureau

32. Growth Rate for Prices of Asian Imports % Source: DOC

33. Growth Rate of Export and Import Price Indices (EPI & IPI) % Source: DOCNote: EPI is ex-agricultural goods & IPI is ex-oil

34. Asian Exchange Rates: 1989=1 Source: Asian WSJ

35. Asian Exposure: US vs. California Percent of trade with Asia in total foreign trade ? Source: FCREUE calculations from US Dept. of Commerce & Census Bureau data

37. California's Computer Industry & Asia Source: FCREUE from MISER $, Bill.

38. Countervailing Drivers For US Economy Consumer is Happy (For the Moment) Employment Growth is Uneven Fixed Business Investment Remains Strong Housing Sector is Relatively Robust

39. Countervailing Drivers For US Economy Stable Energy Prices World-wide Generated Price Inertia High Real Interest Rates Low Nominal Interest Rates

40. Countervailing Drivers For US Economy Monetary & Fiscal Policy Prerogatives Export-Import Imbalance

41. Debt Owed By Non-Financial Sectors: As of 4th Quarter 1998 Source: Federal Reserve Flow of Funds

42. Commercial Mortgages: Assets Held by Sector $, Bill. Source: FRB

43. Net Commercial Mortgage Flows $, Bill. Source: Federal Reserve; Annualized quarterly data

44. CMBS Issuance $, Billions Source: Commercial Mortgage Alert, Lehman Brothers

45. Equity Capital Raised By REITS $, Millions Source: NAREIT, Lehman Brothers

46. Source: FHLMC

47. Median Sales Price of Existing Homes: US & California $, Thousands Source: NAR, CAR

48. Existing Single Family Home Sales Source: NAR Millions

49. US Housing Starts: Single Family & Multi-Family In Thousands. Source: US Bureau of the Census

50. Home Price Index Northern and Southern California Source: Real Estate Research Councils of Northern/Southern CA Price Index, April 1990=100

51. United States Office Vacancy Rates % Source: CB Commercial

52. US Residential Vacancy Rates % Source: CB Commercial

53. California’s Fastest Growing Large Sectors Annual Percent Change, Midyear 1998-1999 Source: FCREUE from California EDD data.

54. California’s Fastest Growing Metropolitan Areas Annual Percent Change, Midyear 1998-1999 Source: FCREUE from California EDD data.

55. California Metropolitan Areas with Largest Annual Employment Increases Midyear 1998-1999 Source: FCREUE from California EDD data.

56. California Population and Household Growth Annual Percent Change, 1981-1998 19901998 Source: FCREUE from California Dept. of Finance data.

57. Percent Change in Median Home Price Major California Metropolitan Areas * Includes Santa Clara. Source: California Association of Realtors.

58. Housing Affordability Index: US Vs. Selected California Areas, 1989, 1991, 1993 and 1999 Source: California Association of Realtors.

59. California Residential Building Permits Total Number of Units, 1967-1999E Source: FCREUE from Construction Industry Research Board data.

60. US Apartment Rents per Sq.Ft.: 1985-1998 $/Sq.Ft Source: NREI

61. US Apartment Price per Sq.Ft.: 1985-1998 $/Sq.Ft Source: NREI

62. US Office Price per Sq.Ft.: 1985-1998 $/Sq.Ft Source: NREI

63. US Office Rent per Sq.Ft.: 1985-1998 $/Sq.Ft Source: NREI

64. US Warehouse Rent per Sq.Ft.: 1985-1998 $/Sq.Ft Source: NREI

65. US Warehouse Price per Sq.Ft.: 1985-1998 $/Sq.Ft Source: NREI

66. US Retail Price per Sq.Ft.: 1985-1998 $/Sq.Ft Source: NREI

67. US Retail Cap Rates.: 1985-1998 Source: NREI

68. US Warehouse Cap Rates.: 1985-1998 Source: NREI

69. US Office Cap Rates.: 1985-1998 Source: NREI

70. US Apartment Cap Rates.: 1985-1998 Source: NREI