1. Market For Property Disposition at Year 15 and Earlier November 20, 2007 Robert L. Sheppard Senior Vice President of Investments Tax Credit Group of Marcus & Millichap

2. State of Todays Sales Market Deals Are Getting Done –Yield buyers carry the day. –Resyndications are exceptions. –100% partnership purchases account for resyndication pipeline. LIHTC property prices have decreased but not as much as the media is conveying about market rate values. –What you see is what you get UW, no Proforma. Surety bond is gone, but is it? –Sellers still want / need protection. Run & Gun is over, now it is Grind it Out.

3. What is the Size of the Market? Huge opportunity within existing portfolio for both sellers and buyers. 2009: 652,000 Units Out of the 15 th Year. (447,000 w/ Extended Use)

4. What Deals Are Getting Done? 80/20 Rule – there are exceptions GP sales years 7-10. Fee simple cash flow sales years 10+. 100% partnership sales years 10-14. –Preserve 10 year ownership. –Wait for credit market to return or 9% execution. –Keeps options open.

5. What Are Prices? Tax Credit Group Assignment National Cap Rate Averages for Current Income 200820072006 Exit / Terminal7.75%7.93%8.07% Closed6.99%6.95%5.46% Escrow7.73%-- Listed7.77%-- Represents only Tax Credit Group of Marcus & Millichap activity: 50,000 units over 220 transactions Almost $2 billion in LIHTC sales

6. Crystal Ball Believe pricing has stabilized, assuming some other shoe doesnt drop. Price is debt dependant – negative change will move prices up but not down. Need Credit Price to increase for resyndication to be competitive with yield buyers in markets without prevalent soft money. LIHTC product makes up approximately 22% of the multi-family rental stock in the United States. –Approximately 50% of rental production in the last 4 years. Institutional equity will start to focus on this market segment for yield purchases. Secondary property sales market will be forced to become more efficient over time. –LIHTC will become a traded deal type.

7. Market For Property Disposition at Year 15 and Earlier Robert L. Sheppard Senior Vice President of Investments Tax Credit Group of Marcus & Millichap Additional information available at: www.tcg-mm.com