Office Market Fundamentals Expected to Stabilize in Louisville

LOUISVILLE, KY — Following three years of improving operations, fundamentals in the Louisville office market are expected to level off through the rest of 2008, according to a second-quarter Office Research Report by Marcus & Millichap, the nation’s largest real estate investment services firm.

Demand for office space persists, driven by healthy office-using employment that is expected to increase by 1 percent this year, significantly outpacing other metros in the region.

“Out-of-state investors have remained active in the metro as a result of attractive yield premiums and continued rent growth,” says Gary R. Lucas, (top right photo) regional manager of the Louisville office of Marcus & Millichap.

Following are some of the most significant aspects of the Louisville Office Research Report:

· Employers are expected to expand payrolls by 0.1 percent, or 500 jobs, this year.

· Developers are on pace to add 200,000 square feet of office space to Louisville this year, boosting metro stock by nearly 1 percent.

· Vacancy is forecast to end the year at 13.8 percent.

· Asking rents are projected to end 2008 at $15.93 per square foot, an increase of 0.9 percent.

· Effective rents will reach $13.07 per square foot, a gain of 0.7 percent.

For a copy of the complete Louisville Office Research Report, as well as reports on other markets nationwide, visit our website at http://www.marcusmillichap.com/.

Press Contact: Stacey Corso, Communications Department,
(925) 953-1716

Institutions Active in Las Vegas, Despite Office Vacancy Rise

LAS VEGAS, NV-- The slowdown in the housing market will weigh heavily on operating fundamentals in the Las Vegas office market through 2008, according to a second-quarter Office Research Report by Marcus & Millichap, the nation’s largest real estate investment services firm.

Long-term projections remain positive, driven by forecasts for robust population growth.

“During the past year, institutional and out-of-state investors have increased their presence in the market, targeting stable-tenanted properties in prime locations with cap rates in the mid- to high-6 percent range,” says John Vorsheck, (top right photo) regional manager of the Las Vegas office of Marcus & Millichap.

Following are some of the most significant aspects of the Las Vegas Office Research Report:

· Developers are on pace to complete more than 1.5 million square feet of office space in 2008.
· Vacancy is forecast to end the year at 19.7 percent.
· Asking rents are projected to finish 2008 at $25.65 per square foot.
· Effective rents will hit $20.63 per square foot.
· Lower-tier and value-add properties will likely be located in established areas, such at the Airport and West submarkets.

For a copy of the complete Las Vegas Office Research Report, as well as reports on other markets nationwide, visit our website at http://www.marcusmillichap.com/.

Press Contact: Stacey Corso, Communications Department, (925) 953-1716

SPECIAL REPORT: Capital Still Flowing at a Cautious Pace

CHICAGO, IL, Sept. 1, 2008--The Real Estate Capital Scoreboard, issued by The Real Estate Capital Institute in Chicago notes that throughout August financial markets digested news about problems in the financial services sector.

(Top right photo, Harold "Skip" Perry, executive managing director, Real Globe Advisors, Chicago, and an Advisory Board member of The Real Estate Capital Institute.)

Real estate was no exception with Government Sponsored Agency woes capturing daily headlines. And while unfavorable news dominates, capital continues flowing, although certainly with more caution.

Major realty finance market highlights today are as follows:

* The 5-year and 10-year treasuries dropped just under 20 basis points.

* Fixed rate spreads for portfolio loans of all terms have increased by at least 20 to 40 basis points across most funding platforms including conventional and Agency debt.

* 65% to 70% leverage remains the maximum standard for permanent loans. Mezz funds bridge the [short-term] gap to about 85% with yields of 12% or more.

* Unless loans are committed and approved with rates and other terms locked, daily market volatility prevents many funding sources from "grandfathering" of loan terms under negotiation.

* Pro forma and projected income streams avoided in favor of actual income as underwriting benchmarks for existing project fundings.

* Hedge funds continue replacing banks for structured short-term floating rate debt.

* Loan syndications required for larger funds, as limited sources exist for loans of $50 million or more.

* Overseas banks (mainly European) active in providing larger-scaleletter of credit and other financial enhancements.

* "RE" is the most common buzz realty finance word including remargining, renegotiating, rebalancing and repositioning.

* Sellers are avoiding placing the asking prices on properties, fearing loss of a potential buyer.

* Quality properties still in demand, secondary markets dramatically affected by lack of liquidity.

Advisory board member of the Real Estate Capital Institute, Harold "Skip" Perry, (top right photo) notes "Low leverage begets low volume." Adding, "Until funding sources are more comfortable with financial market stability, debt and equity players will stay close to the sidelines."

ABOUT US: The Real Estate Capital Institute(r) is a volunteer-based researchorganization that tracks realty rates data for debt and equity yields. TheInstitute posts daily and historical benchmark rates including treasuries,bank prime and LIBOR.

Furthermore, call the Real Estate Capital RateLine at7RE-CAPITAL (773-227-4825) for hourly rate updates.

CONTACT:

Nat Zvislo, Research Director, Toll Free 800-994-RECI (7324). director@reci.com/

The Real Estate Capital Institute(r), 3517 West Arthington Street, Chicago, Illinois USA 60624 http://www.reci.com/