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SMITH-TRG Insight Actionable Strategies for Proactive Commercial Real Estate Value Creation

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A Owners/Investors Briefing Presentation

This is a collateral piece provided to Commercial Real Estate

and Retail client personnel for reading, not presenting.

Presentation excludes SMITH-TRG and client

proprietary or confidential information.

Vision. Insight. Innovation. Strategy. Solution. Value Creation. SMITH-TRG

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Vision. Insight. Innovation. Strategy. Solution. Value Creation. SMITH-TRG

Market Environment

Actionable Strategies –Hidden Asset Value Solutions (HAVS)

Why Act NOW?

contents

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Market Environment…

Many suburbs and smaller

cities are dotted with buildings

that are no longer generating

enough cash to pay their

mortgages.Source: Reis

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Plainfield, New Jersey 219,000-square-foot strip mall whose Kmart

closed and boosted vacancy rate above 50%.

Center also lost a Pathmark grocery store, Ruby

Tuesday, and J.P. Morgan Chase bank branch. Source: city officials

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Westminster, Colorado 1.2-million-square-foot 34 year old mall, once

home to a Macy's, Trail Dust Steak House and

Mervyn's, sales-tax generation plummeted in

2010 to $1.5 million from $8.5 million in 2000 Source: city officials

SMITH-TRG

Vacancy rates of country’s

four billion square feet

of office space still

near a record 18%

… about 250 empty

Empire State Buildings.

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Even as the economy picks

up steam, many of nation's

malls and shopping centers

are suffering a hangover due

to massive building boom

and changing consumer

shopping habits.

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Outlook is especially bad for

strip malls & neighborhood

shopping centers.

11.1% vacancy rates

expected 4Q-2011…

up from 10.9% and

highest since 1990.Source: Reis

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Malls and strip centers were built for growth

that never came. One billion square feet of

retail space was added in 54 largest U.S.

markets since start of 2000Source: CoStar Research

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Retail demand and supply index gap remains.Chart Source: MIT Center for Real Estate

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Retailing ‘ONLINE’ surged to 12% of total

sales during 2010 holidays.

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Collectively -- such problems are driving up

delinquency rates on commercial mortgage

backed securities (CMBS) to record 9.34%

... less than 1% in 2007.Source: Reis

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Actionable strategies . . .

H A V S‘Hidden-Asset Value Solutions’

(HAVS a proprietary service offering of SMITH-TRG)

Vision. Insight. Innovation. Strategy. Solution. Value Creation. SMITH-TRG

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HAVS enables CRE holders/owners to

create new sources of sustainable value

from non or underperforming assets

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H A V Squalified

candidate properties

• Office Buildings

• Shopping Malls (Mega or Regional)

• Strip Malls (Regional or Community)

• City Center Developments

• Hotels/Resorts/Golf Courses

• Sport Stadiums (Pro & Collegiate Venues)

• Entertainment Complexes

• Big Box Retailers

• Retail Chains (National/Regional)

• Undeveloped Land

• Mass Transit Systems

• Parking Lots (Covered Structures or Open)

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Will your

assets

qualify?

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Of 1,000+ commercial properties surveyed –

99.8% classified as HAVS eligible

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New Value ‘HAVS’ Opportunity

monthly recurring revenue

income drops to bottom line

potential upside - $5 dollars

per square foot, per month

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Results will vary by asset type, size & location

Why Act NOW?

Vision. Insight. Innovation. Strategy. Solution. Value Creation. SMITH-TRG

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Pay Now

or

Pay Later, the

cost of not pursuing

proactive strategies

SMITH-TRG

Sustaining asset value is more complex than ever.Source Fragile Recovery Chart: JP Morgan Chase

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Contact SMITH-TRG today and schedule your CRE Owners/Investors Briefing.

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