2013 Real Estate Forecasts - Retail2013 Real Estate Forecasts - Retail

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Retail Market Areas

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Regional Retail Performance

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Louisville MSA Retail Performance – Stabilized and Non-Stabilized Occupancy

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0%

5%

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0.000

2.000

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6.000

8.000

10.000

12.000

14.000

Vac

ancy

Pe

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MS

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Ret

ail S

.F. S

pace

X 1

,000

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Market Acceptability of Retail Space

NOT STABILIZED SF STABILIZED SF NOT STABLIZED VACANCY Vacancy Rate -STABLE RATE

Louisville MSA Retail Overall Performance

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-40%

-30%

-20%

-10%

0%

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20%

30%

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Market Performance

Total 2012 Poly. (Total 2012)

Market Participants Expectations on Current Inventory

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0.00

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4.00

5.00

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7.00

8.00

9.00

10.00

Jun-01

Dec-01

Jun-02

Dec-02

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Dec-05

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Su

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f Tr

affi

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Future Market Performance

Retail Total

Area Participants Expectations on Current Activity

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0.001.002.003.004.005.006.007.008.009.00

10.00

SU

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Future Market Performance

Area 4 Eastern Jefferson Cty

0.001.002.003.004.005.006.007.008.009.00

10.00S

UM

OF

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AF

FIC

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EA

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Future Market Performance

Area 2 Souuth West Jefferson Cty

0.001.002.003.004.005.006.007.008.009.00

10.00

SU

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FFIC

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D L

EA

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Future Market Performance

Area 7 Southern Ind

0.001.002.003.004.005.006.007.008.009.00

10.00

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Future Market Performance

Area 6 Oldhan,Shelby & Bullitt Cty

Louisville MSA Retail Rental Rates Compared to CPI

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$10.00

$11.00

$12.00

$13.00

$14.00

$15.00

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$18.00

$19.00

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History of Retail Rental Rates and CPI

Class "A" Rent Class "B" Rent Street Rent

Space Absorption in MSA and Jefferson County

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-300

-200

-100

0

100

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Abs

orpt

ion

SF

X 1

000

LOUISVILLE MSA & JEFFERSON COUNTY RETAIL ABSORPTION

Estimated Absorption-MSA Estimated Absorption Jefferson Cty.

2 per. Mov. Avg. (Estimated Absorption-MSA) 2 per. Mov. Avg. (Estimated Absorption Jefferson Cty.)

Jefferson County Neighborhood Centers Rents, Rent Growth Rates and Vacancy

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2012 Neighborhood Strip Centers Vacancy, Rent and Rent Increases

Jefferson County Community Centers Rents, Rent Growth Rates and Vacancy

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2012 Community Centers Vacancy,Rent and Rent Increases

Retail Vacancy for Space Above and Below the Market Average

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0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12

26.00%

26.86%21.83%

30.00%

25.86%

31.71%

Non Stablized Vacancy Rate 0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12

3.83%

3.14%2.86%

3.43%

2.71%

3.43%

Stable Vacancy Rate

Retail Properties

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Area Recent Retail Sales

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Number of Transactions Date

Average sq ft

Total sq ft

Year Built Total Price in $

Average Price in $

Average of $/sq ft

Cap Rate Qualifier

Land Area in Acres Occupancy

34 2009 36,416 946,818 1995 $91,824,907 $3,992,387 $192.27 8.5% 5.8 91%64 2010 62,259 1,681,002 1998 $145,996,692 $5,839,868 $186.56 8.5% 11.8 97%

Regional Retail Sales GA,TN, NC and SC

Date Property Name Local sq. ft. Price in $ $/sq. ft. Buyer Type OccupancyCap Rate Comment

Jul-09 BB&T Bank Louisville 4,000 2,640,000 660 by Stan Johnson Company Bank 100%Aug-09 Springhurst Towne Center Louisville 422,035 42,400,000 100 The Hocker Group LLC StripFeb-10 Hunters Ridge Louisville 26,565 4,700,000 177 Hunter Ridge LLC Strip 60%Mar-10 CVS Louisville 10,125 1,380,700 136 by Stan Johnson Co PortfolioMar-10 Garden Ridge Louisville 162,000 4,000,000 25 Garden Ridge LP Big BoxSep-10 Tractor Supply Sellersburg 19,097 2,606,061 136 Cole Real Estate Investments Single Tenant 100%Oct-10 Walgreens Louisville 14,820 by Hogan Real Estate Single Tenant 100%Nov-10 Dixie Depot Plaza Louisville 7,964 2,000,000 251 by Cooper Commercial Investment Group Strip 100%Feb-11 CVS Louisville 12,000 999,768 83 by Stan Johnson Co Drug 100%Dec-11 Springhurst Towne Center Louisville 422,035 78,000,000 185 CalSTRS Strip 100% 6.5%Jan-12 CVS Sellersburg 13,325 4,882,893 366 The Landes Group Drug 100% 6.5%Feb-12 Central Station Louisville 146,570 10,850,000 74 Stream Realty Partners Inc. Strip 85%Mar-12 Mount Washington Commons Mount Washington, 14,600 3,037,000 208 TJ Development LLC Strip 93%May-12 Blankenbaker Place Louisville 88,275 12,474,890 141 Strip defaultJun-12 Stonefield Square Louisville 90,887 Viking Partners Strip 90% 8.3% defaultOct-12 Walgreens La Grange 14,455 5,859,375 405 Drug 100% 9.8% defaultDec-12 Hurstbourne Forum Louisville 139,661 7,050,000 50 Altus REA from C-III Asset Management Strip 51%Dec-12 Prospect Village Shopping Center Prospect 153,000 19,500,000 127 Kroger Inc. Strip 88% 6.0%

Significant Local Retail Sales

A Look Into 2013 and Beyond

1. Slightly higher sales transaction volumes2. Stable interest rate environment3. Stable cap rate environment4. Multifamily construction activity increases overbuilding risk5. Continued changing dynamics influenced by E-commerce6. Improved industrial demand along with the economy7. Concern about office absorption

Local expertise nationally

• Slightly higher sales transaction volumes

• Improvement of retail sector fundamentals as American consumer sentiment returns

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