September 23, 2009

Jim Casey

Industrial Forecast Luncheon

Industrial DevelopmentCurrent Market Trends - Houston New spec project pipeline is shut down There is reasonable tenant leasing activity, but

commitments are slow There has not been major give-backs of space Generally, the markets are declining slightly, but pretty

stable Need to see job growth to generate meaningful

absorption

Values have declined; but little volume to establish values

Lenders terms have shifted significantly; they don’t want to make new loans right now

Equity is waiting on sidelines for more clarity on values Effects of long term debt roll-overs yet to come REIT’s are recovering, raising equity

Capital Markets

Northwest Largest and most diverse Oilfield services, computer industry, furniture, general goods Modest amount of big new space Sub Market is in balance

Houston Submarkets vary significantly

Southwest Fort Bend County is one of

the fastest growing countiesin the country

Electronics, engineering, oilfield services

Several new projects delivered in 2008 / 2009

Proximity and access to residential areas is key

East Most forward looking

submarket Petrochemical

commodities, container traffic

Big projects delivered; need to see new major increases in are housing to absorb the space

Long-term factors should promote growth, but near-term is going to be difficult

North

Proximity to IAH is key Freight forwarding, oilfield

services Export and import

activities New international cargo

routes developing

Summary Houston industrial market is trending

down, but the slope is shallow Need to watch job losses;….. will there be

job gains in 2010? New construction pipeline has slowed to a

trickle Houston should out-perform most of the

country long-term