1 Presented By: Christopher Lee, President & Chief Executive Officer CEL & ASSOCIATES, INC. (310) 571-3113 “Get Ready For The Age Of Real Estate” Portland

1

Presented By:Christopher Lee, President & Chief

Executive Officer CEL & ASSOCIATES, INC.

(310) 571-3113

“Get Ready For The Age Of Real Estate”Portland State University

Center For Real Estate

Portland, OregonJune 5, 2008




CEL & Associates, Inc.

2

Future Headlines Real Estate Growth Cycles – What’s Ahead Five Cornerstones Of Change & Opportunity

My Advice To You

• Demographic Shifts• Employment & Market Shifts• Sustainability Shifts• Capital Shifts• Industry Shifts & Career Opportunities

TODAY’S PRESENTATION


3

A LOOK AHEAD…HEADLINES YOU MIGHT

SEE


4

eBay Becomes The #1 Source For Selling Commercial Real Estate

Monday, February 18, 2011 Daily .25¢

Today's

Highlights

NYC Office

5

Fortune 500 Firms Mandate Green Building Standard By 2015

Monday, February 18, 2012 Daily .25¢

Today's

Highlights

NYC Office

6

© 2009 Dow Jones & Company, Inc. All Rights Reserved

Tuesday, September 15, 2011

What’s News

020406080

100

1stQtr

3rdQtr

East

West

North

First High-Rise Farm Announced“12 Stories Is Now Equal To 600 Acres.”

7

TSA Announces Terrorist Threat Labeling Policy For Buildings

Tuesday, July 14, 2012 Daily .25¢

Today's

Highlights

NYC Office

8

Facebook Creates First Virtual Office

“Y Generation Declares Office Space Obsolete.”

Thursday, June 10, 2015 Daily .25¢

Today's

Highlights

NYC Office

9

REAL ESTATE CYCLES1973 – 2032

“Over the past 30+ years, there has never been a time

one could not make money in real estate!”


10

1973-1978 Growth From Pent-Up Demand Caused By Oil Embargo & Stagnation

1979-1982 Transition Period

1983-1988 Growth From The Abundance Of Capital & Financial Engineering


1993-1998 Growth From Consolidation, Securitization & The Digital Economy


2003-2008 Growth From Customer Connectivity, Talent & Capital Shifts


Historical

Forecast


REAL ESTATE GROWTH CYCLES

11









2013-2018 Growth From Globalization, Generational Shifts, New Urbanism & Greening


Historical

Forecast



12









2013-2018 Growth From Globalization, Generational Shifts, New Urbanism & Greening


2023-2028 Growth From Life Sciences, Suburban Recycling & Retirees


Historical

Forecast



13

THE FIVE INDICATORS WHY 2008 – 2030

WILL BE THE AGE OF REAL ESTATE


14

Get Ready For The Age Of Real Estate

1st Indicator:Emerging Demographic

Trends


15

U.S. POPULATION CONTINUES TO GROW

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 20500

50

100

150

200

250

300

350

400

Population(Millions)

Source: U.S. Census Bureau.

Nearly 100 Million New Residents!


16

THE SOUTH AND THE WEST WILL GROW DRAMATICALLY

Northeast Midwest South West0

10

20

30

40

50

4.1m6.1m

43.0m

28.9m

Millions

Source: U.S. Census Bureau, Population Division, Interim State Population Projections, 2005.Regional Population change from 2000 to 2030.

- Bureau Of Labor Statistics

“64 new jobs are created for every 100 additional

residents”


“What matters most is not where most people live…but where the greatest

number of skilled people locate.”

17

GENERATION GROUPINGS2008

Source: CEL & Associates, Inc., 2005 Projected U.S. Census data.

Silent Generation (1926 - 1945)63 - 82 years36.2 million

Boomer Generation (1946 - 1964)44 - 62 years77.2 million

X Generation (1965 - 1976)32 - 43 years49.4 million

Y Generation (1977 - 1996)12 - 31 years84.0 million

83+years

78 - 82years

73 - 77years

68 - 72years

63 - 67years

59 - 62years

54 - 58years

49 - 53years

44 - 48years

38 - 43years

32 - 37years

27 - 31years

22 - 26years

17 - 21years

12 - 16years

6 - 11years

< 6years

GI Generation (Pre-1926)> 82 years7.8 million

New Millennium Generation

(1997 - )< 12 years

48.9 million

0

5

10

15

20

25

30

Millions

18

GROWING POPULATION AGE 60+


1900 1910 1920 1930 1940 1950 1960 1970 6.4% 6.8% 7.5% 8.5% 10.4% 12.2% 13.2% 14.1% 1980 1990 2000 2010 2020 2030 2040 2050

15.7% 16.8% 16.3% 18.4% 22.5% 25.1% 25.5% 26.0%

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 20500

10

20

30

40

50

60

70

80

90

100

110

120Millions

52.2m New 60+ Citizens

Millions


• Life expectancy now 78 years.• Over 75 years group will

double by 2033 and triple by 2050.

19

# of Owners

Millions

Source: Ernst & Young, LLP.

GROWING TIMESHARE OWNERSHIP


20

GROWING NUMBER OF FULL-TIME STUDENTS

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 20165,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

14,000

Millions

Source: National Center For Educational Studies.

Universities currently supply only 35% of student housing needs…and endowments now total $411 billion.


21

GROWING PRIMARY RENTER GROUP

18 – 34 YEARS OF AGE


1995 2000 2005 2010 2020 2030 2040 2050 65.8m 63.5m 64.6m 68.4m 72.9m 74.6m 80.5m 85.7m

1995 2000 2005 2010 2020 2030 2040 205060

65

70

75

80

85

90Millions

17.3 Million Potential Renters

• Emerging Y Generation (75+ million).

• Emerging Millennials (48+ million).

• 74% 15-24 years old rent.

• 51% 25-34 years old rent.


22

1980 1990 2000 2010 2020 2030 2040 2050 14.6m 22.4m 35.3m 47.8m 59.8m 73.1m 87.6m 102.6m

GROWING HISPANIC POPULATION


1980 1990 2000 2010 2020 2030 2040 205010

20

30

40

50

60

70

80

90

100

110

• Excludes an estimated 12m illegal aliens.• $1 trillion in purchasing power by 2010.• Household size 3.5 (vs. 2.6).• Median age 25.9 years (vs. 35.3 years).• 61% population growth from 1990-2005.• 54% of Hispanics are renters. 54.8 million new

Hispanic Residents

Millions


23

2000 2010 2020 2030 2040150

160

170

180

190

200

210

220

230

240

250

CONTINUED JOB GROWTH

Source: Arthur C. Nelson, March 2006.

Sunbelt Prospers• Pacific/Mt. Region 24%• Southeast Region 35%• South Central Region 11% Percent Jobs Created 70%

47.8m Total Jobs Created

Millions


24

Household Type 1950 1960 1970 1980 1990 2000 2030

Family Households

89% 85% 80% 73% 70% 68% 65%

Non-Family Household

11% 15% 20% 27% 30% 32% 35%

Living Alone 9% 13% 18% 23% 25% 26% 29%

By 2030 the U.S. population will be nearly 400 million and 50% of those under 18 will be a minority.

SHIFTING TRADITIONAL HOUSEHOLD



25



2nd Indicator:Shifting Employment &

Market Trends

26

GROWING NUMBER OFJOBS OCCUPYING SPACE

Projected Employment (Millions)*

Area 2000 2010 2020 2030

TotalChange00 - 30

%Change00 - 30

U.S. 166.8 177.8 193.3 209.3 42.5 25.5%Northeast 31.0 31.9 33.3 34.8 3.8 12.3%East N. Central 27.0 27.6 29.5 31.4 4.4 16.3%West N. Central 12.7 13.5 14.6 15.8 3.1 24.4%South Atlantic 30.7 33.7 37.3 40.9 10.2 33.2%East So. Central 9.7 10.3 11.2 12.2 2.5 25.8%West So. Central 18.2 19.9 22.2 24.5 6.3 34.6%Mountain 11.1 12.7 14.8 16.9 5.8 52.3%Pacific 26.4 28.2 30.4 32.8 6.4 24.2%

* Numbers are rounded.Source: Arthur Nelson, FAICP.


27

GROWING TOTAL SPACE NEEDS

2000 – 2040Total Growth &Non-ResidentialSpace Needed

Region billions s.f. %Northeast (CT, MA, ME…) 11.7 10%East North Central (IL, OH, MI…) 16.2 14%West North Central (MN, NE, MO…) 7.4 7%South Atlantic (FL, GA, NC…) 27.6 25%East South Central (KY, IN, AL…) 7.0 6%West South Central (TX, OK, AR…) 17.0 15%Mountain (NV, CO, UT…) 9.2 8%Pacific (CA, OR, WA…) 16.1 14%U.S. 112.2 100%

Source: Arthur Nelson, FAICP.

In 2030, 50% of all space in America will have been built AFTER 2000 and only 25-50% will be conventional sprawl.

54% Of

Total


28

Software Development Waste Management

Healthcare Emerging Technologies

Life Sciences/Biotech Colleges/Universities

Technology Aging Population/Retirees

Government Gaming

Financial Services Science

Defense/Security Nonprofits

Communications Foreign Enterprises

Trade/Logistics Banks/Lenders

Data Centers Pharmaceutical

Leisure/Food Service F.I.R.E.

Research & Development Entertainment

Green Industries Energy

GROWING INDUSTRY SECTORS

“Regional economic growth is driven by the locational choices of creative people.” Richard Florida


29

Anything Around: Anything Involving:

Colleges/Universities Mixed-Use Projects

Transportation Hubs Close-In Recreation Destinations

Ports/Coastal Cities High Security Business Parks

Biotechnology Enterprises Affordable/Workforce Housing

Government Centers Pedestrian-Friendly Retail Centers

Lifestyle Locations Retirement

Digital/High Tech Enterprises Corporate Campuses

Medical/Healthcare Urban/Suburban Redevelopment

Large/Midsize Airports Technology

Research Centers Non-Commodity Based Industries

CAN’T MISS GROWTH AREAS


30

Centers of Knowledge (San Francisco Bay Area, Boston, New York City, Austin, Seattle)

Ports (Long Beach, New York, Seattle, Oakland, Charleston, Norfolk, Savannah, Miami and Houston)

Lifestyle Cities (Phoenix, Tampa, South Florida, Portland, San Diego, Minneapolis)

Gateway and Hub Cities (Dallas/Ft. Worth, Atlanta, Miami, Los Angeles/Orange Counties, Charlotte, Chicago)

Capital Cities (Nashville, Austin, Washington, D.C./Northern Virginia) Energy States (Texas, Colorado, Central Plains States) Coastal Cities (52% Of U.S. Population) Theme Cities (Las Vegas, Orlando, Nashville) Corridors (Atlanta to Raleigh, Kansas City to Dallas to San Antonio,

Boston to No. Virginia, Sacramento to San Jose, Los Angeles to Riverside/San Bernardino to Las Vegas, Portland to Seattle)

GROWTH MARKETS – U.S.


31

Among the Top 10 Places To Live.

Acknowledged “lifestyle” city.

Diverse population of nearly 2 million.

Strong job growth.

“Biking-friendly” environment.

Ten colleges and universities.

One of America’s Top 50 “Green” cities.

Ranked by AARP as one of Top 5 cities in which to live.

Home to major employers.

PORTLAND HAS IT ALL…


32



3rd Indicator:Shift To Sustainability

33

U.S. buildings consume 39% of U.S. energy.

U.S. buildings account for 70% of U.S. electricity consumption.

Less than 1% of all commercial buildings are LEED certified.

More than 50% of corporate CEOs rated energy efficiency as a corporate priority.

Green buildings can generate a 12%-15% return on cost, and achieve a 90% tenant retention rate.


SHIFT TO SUSTAINABLE ASSETS

34

The Energy Independence and Security Act of 2007 allocates more than $1.0 billion to improve energy efficiency in buildings.

The Zero Net Energy Commercial Buildings Initiative sets a carbon neutrality in all commercial buildings by 2050.

All existing GSA leases beginning in 2010 must be in an Energy Star-designated building (impacting 100 million square feet of privately-owned buildings).

All new GSA leases after 2011 must be in a LEED certified building.


INCREASING GOVERNMENT FOCUS

35

Difference Over Non-Sustainable Buildings Category Energy Star Buildings LEED Buildings

Occupancy 3.6% 4.1%

Energy Usage 40%

Carbon Emissions 35%

GREEN BUILDINGS WORK!

Source: 1,300 LEED And Energy Star Buildings. Co-Star.


36



4th Indicator:An Abundance Of

Capital

37

There are over $15 trillion of global commercial real estate properties…35% of which are in the U.S.

50% of all global direct real estate investments occurs in North America.

There is estimated to be $1.5 trillion in global capital seeking real estate opportunities.

$1.5 trillion (or over 32,000 properties) in total transactions in 2007…a trend likely to continue.

Dramatic increase in fund buyers.


THE OPPORTUNITY

38

TYPE OF BUYER2001 - 2008

(Billions of Dollars)1 Buyer Composition 2001 2002 2003 2004 2005 2006 2007 20082

2001 % Tot.

2007 % Tot.

2008 % Tot.2

Condo Converter $0.7 $1.0 $2.9 $12.5 $31.1 $10.0 $2.5 $0.2 0.9% 0.6% 0.4% Cross-Border $3.0 $7.6 $9.0 $14.0 $19.9 $16.3 $34.6 $2.3 3.9% 8.1% 5.8% Fund $6.7 $8.4 $8.5 $13.1 $23.0 $47.6 $100.6 $4.2 8.7% 23.5% 10.4% Inst'l $17.4 $17.5 $16.3 $31.6 $50.9 $61.6 $97.3 $8.3 22.5% 22.8% 20.7% Private - Local $15.0 $18.3 $24.8 $35.3 $47.8 $58.2 $60.6 $9.7 19.4% 14.2% 24.0% Private - Nat'l $12.3 $14.0 $17.1 $24.6 $33.9 $53.6 $52.9 $5.8 15.9% 12.4% 14.3% Reit/Public $8.6 $22.2 $21.4 $27.1 $34.8 $26.6 $42.3 $3.7 11.1% 9.9% 9.2% Syndicator $1.3 $3.4 $7.8 $11.1 $14.0 $9.9 $15.5 $1.5 1.7% 3.6% 3.7% User/Other $7.5 $5.5 $6.6 $7.7 $9.2 $10.1 $11.0 $2.0 9.7% 2.6% 4.9% (N/A) $4.9 $4.0 $6.0 $10.4 $11.2 $13.4 $10.3 $2.7 6.3% 2.4% 6.7% Grand Total $77.4 $101.9 $120.4 $187.3 $275.8 $307.4 $427.6 $40.2 100.0% 100.0% 100.0%

1 Rounded. 2 First Quarter 2008 data.

Source: ©2007 Real Capital Analytics, Inc. All rights reserved.


39

There are over $15 trillion of global commercial real estate properties…35% of which are in the U.S.

The 20 largest economies in the world produce 65% of the world’s GDP and 90% of its investable real estate.

50% of all global direct real estate investments occurs in North America.

There is estimated to be $1.5 trillion in global capital seeking real estate opportunities.

$1.5 trillion (or over 32,000 properties) in total transactions in 2007…a trend likely to continue.

Dramatic increase in fund buyers. Real estate has become a preferred asset class.


THE OPPORTUNITY

40

REAL ESTATE OUTPERFORMS

THE STOCK MARKET


Total Return: A stock's dividend income plus capital appreciation, before taxes and commissions. * June 2, 2008.

Source: NAREIT and CEL & Associates, Inc.

41

* Projected.Source: AMG Data, BB&T Capital Markets and CEL & Associates, Inc.

1992 1998 2001 2003 2005 2010 2030$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

Billions

$90 billion

* *

GROWING VALUE OF REAL ESTATE ASSETS HELD IN EQUITY MUTUAL FUNDS


42

GROWTH IN SYNDICATOR BUYERS

OVERALL 2001 - 2008

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4$0

$1

$2

$3

$4

$5

$6

0.1 0.2 0.20.3 0.3

0.5

0.7

1.2

0.7

1.4

0.8

2.5

1.3

2.42.3

2.7

2.0

3.1

4.4

3.7

2.9

3.8

2.5

4.0

2.7

3.4

5.0

5.7

1.5

Sales (in billions)

20062002 2003 2004 20052001 2007 2008



43

GROWTH IN CROSS-BORDER BUYERS OVERALL 2001 -

2008


$2

$4

$6

$8

$10

$12

$14

$16

0.7

1.4

0.60.9 0.9

2.42.2

2.8

2.01.4

3.2 3.12.6

3.8 4.0

4.8

3.6

7.7

5.15.5

5.95.5

6.8

4.7 4.9

14.5

11.0

6.5

2.3

Sales (in billions)

20062002 2003 2004 20052001 2007 2008


• Foreign investors own $230 billion in U.S. real estate assets.


44

SALES VOLUME – OFFICE2001 - 2008


$10

$20

$30

$40

$50

$60

$70

$80

$90

7.6 8.96.4

9.26.5

9.511.8

13.6

9.2 8.3

14.0 15.312.2

16.4

22.5 23.4

18.7

27.6 27.830.6

23.5

34.3 34.2

46.4

79.4

60.5

47.2

28.8

14.4

Office - CBD Office - Sub

20062002 2003 2004 20052001

Sales (in billions)

2007 2008


Portland (Past 12 Months)

• $1.2 billion sold• 6.8% average cap rate• 93% of asking price


45

OFFICE FLIGHT TO QUALITY

Source: Bank of America, Real Capital Analytics, SNL Financial and CEL & Associates, Inc.


46

SALES VOLUME – RETAIL2001 - 2008


$5

$10

$15

$20

$25

$30

3.8

1.92.6

3.43.9

9.5

5.8

7.6

6.1 6.3 6.3

11.4

9.2 9.6

12.5

27.2

9.2

16.5

11.2

14.1

9.1

12.6

14.8

17.4

26.5

20.0

17.5

11.0

6.5

Mall & Other Strip

Sales (in billions)

20072002 2003 2004 20052001 2006 2008



• $280 million sold• 6.6% average cap rate• 93% of asking price


47

RETAIL LIKELY TO SLOW



There could be as many as 5,800 store closings in 2008.

48

SALES VOLUME – APARTMENTS2001 - 2008


$5

$10

$15

$20

$25

$30

$35

$40

4.35.2 5.6 5.5 4.9

5.8 5.76.7

5.3

8.17.2

9.89.1

11.3

13.3

17.418.3 17.7

28.2

24.826.1

18.2

20.3

27.2

20.4 19.8

23.2

36.9

12.0

Garden Mid/Highrise

Sales (in billions)

20072002 2003 2004 20052001 2006 2008



• $1.1 billion sold• 5.2% average cap rate• 95% of asking price


49

MULTIFAMILY WILL BENEFIT FROM SUBPRIME MALAISE


Home prices will decline 8%-12% nationwide in 08 after a 12% decline in 07…which means 15 million mortgages (30% of total or

$3 trillion) will be worth more than the homes they financed.

Source: Bank of America, Real Capital Analytics, SNL Financial, CEL & Associates, Inc., Wall St. Journal.

50

DEMISE OF CONDO CONVERTER BUYERS – OVERALL 2001 - 2008


$1

$2

$3

$4

$5

$6

$7

$8

$9

$10

0.2 0.2 0.2 0.1 0.10.3 0.3 0.3

0.50.7 0.8 0.9

1.5

2.0

3.9

4.95.2

6.7

9.18.7

5.7

2.1

1.4

0.7 0.7

0.3 0.3 0.30.2

Sales (in billions)

20072002 2003 2004 20052001 2006 2008



51


$2

$4

$6

$8

$10

$12

$14

$16

3.1 3.22.4

4.9

2.02.4 2.6

4.5

3.0 3.22.7

5.4

3.53.8

6.1

7.5

6.7

9.59.9

10.5

11.7

10.8

9.0

11.911.2

13.413.9

9.8

7.1

Flex Warehouse

SALES VOLUME – INDUSTRIAL2001 - 2008

Sales (in billions)

20072002 2003 2004 20052001 2006 2008



• $486 million sold• 6.6% average cap rate• 93% of asking price


52

INDUSTRIAL REMAINS HEALTHY



53

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4$0.0

$0.2

$0.4

$0.6

$0.8

$1.0

$1.2

$1.4

$1.6

$1.8

0.1 0.1

0.2 0.2

0.1 0.1

0.30.4

0.1

0.30.2

0.9

0.4

0.80.9

0.7

0.50.6

0.8

1.4

1.11.0

0.9

1.4

1.1

1.6

1.3

1.0

0.9

Medical Office

Sales (in billions)

SALES VOLUME – MEDICAL OFFICE

2001 - 2008

20072002 2003 2004 20052001 2006 2008


• 3 out of 10 jobs created between 2007-2015 will be in healthcare.

• Healthcare to be 20% of GDP by 2015.


54

TOTAL SALES VOLUME – COMBINED2001 - 2008


$20

$40

$60

$80

$100

$120

$140

$160

19 19 1723

17

27 26

33

24 2630

43

34

42

55

76

53

7278

81

7177 79

104

139

115

103

87

41

Sales (in billions)

20072002 2003 2004 20052001 2006 2008



During the past 12 months, Portland had over $3.4 billion in asset sales.

55

CAP RATES – U.S. OVERVIEW2001 - 2008

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q15.0%

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

9.5%

10.0%

10.5%

11.0%

Apartment Industrial Office Retail Medical Combined

Cap Rate

7.0%6.9%6.8%6.7%

6.2%

20072002 2003 2004 20052001 2006 2008


56

Continued increase in public-private partnerships.

Continued investments in real estate resulting from a $45 trillion wealth transfer (1997 – 2052).

Continued increase in the number of “green building conversions.”

Continued scarcity of developable land within “reasonable” commuting distances of the CBD.

Continued increase in pension fund target allocations into real estate (up 100bsp – 250bsp).

PLUS…


57

Cap rates will remain low by historical standards.

New valuation methodologies will likely sustain an active acquisition environment.

“Fringe-based” opportunistic investors will be “flushed-out” during this downturn leaving a more structured and organized investment environment.

Continued growth in new urbanism and use of real estate assets to revitalize cities and communities.

Credit crisis will be cured within 24 – 36 months.

PLUS…


58



5th Indicator:Real Estate Industry Shifts

& Career Opportunities

59

2008 – CEO PRIORITIES

Top CEO Priorities Rank

Retention Of Talent 1 Recruitment Of Talent 2 Business Development 3 Managing Client Relationships 4 Creating A Differentiating Story 5 Increasing Broker Production 6 Improving Leadership/Communications 7 Getting Brokers To Collaborate 8 Controlling Operating Costs 9 Getting Brokers To Share Information 10 Integrating Technology 11 Working Within Corporate Structure 12 Managing Prima Donnas 13

Source: CEL & Associates, Inc. and Participating Firms.


60

UNEMPLOYMENT RATECOLLEGE GRADUATES

1996 1997 1998 1999 2000 20012001 2002 2003 2004 2005 20062006 2007 20080.00%

0.25%

0.50%

0.75%

1.00%

1.25%

1.50%

1.75%

2.00%

2.25%

2.50%

2.75%

3.00%

3.25%

3.50%

Source: Bureau of Labor Statistics.

Percent

2.1% (04/08)


Females now comprise 57% of college enrollment.

61

30% - 40% of real estate service companies that exist today will be gone by 2017.

The emergence of the Big 3 or Big 4 will create 3 - 4 niche opportunities for everyone else.

By 2017, 50% of today’s Brokers will be replaced by collaborative teams of professionals and Advisors. A new Brokerage Model will emerge.

The shift to a knowledge-based, client-centric and talent-focused business model will be fairly commonplace.


EMERGING REAL ESTATE SERVICE COMPANY TRENDS

62

Current Model Future Model Dominated By Personalities Dominated By Knowledge

Staffed By Employees Comprised Of Free Agents

Hierarchical Structure/Silos Virtual Integration & Teams

Geo-Centric Knowledge-Centric

Driven By Process Driven By Creators Of Value

Governed By Organizational Charts Consisting Of Networks & Alliances

Controlling Power Shared Power

Based On Contracts Based On Relationships & Connectivity

On-Time Fulfillment Real-Time Fulfillment

Commodity-Driven Experience-Driven

Explaining Competitor Differences Creating A Differentiating Story

Focus On Service Focus On Solutions

THE NEW BUSINESS MODEL


63

REAL ESTATESERVICE COMPANY

PERFORMANCE

Percent Change Over Prior Year

Category 2008 2009 2010

Leasing -9.0% to -17.0% -7.0% to -11.0% +6.0% to +9.0%

Investment Sales -17.0% to -25.0% -6.0% to -12.0% +5.0% to +8.0%

Property Management +7.0% to +10.0% +9.0% to +12.0% +6.0% to +9.0%

NOIs -10.0% to -14.0% -8.0% to -11.0% +7.0% to +10.0% Source: CEL & Associates, Inc.


64

Employee Turnover Rate

Overall Rate

Senior Executive

Regional Executive

On-Site Manager

On-Site Leasing

On-Site Maintenance

1998 Average 35.6% 6.8% 10.5% 19.7% 32.4% 42.7% 1999 Average 36.3% 6.4% 9.9% 20.5% 33.7% 41.8% 2000 Average 34.5% 5.8% 9.2% 18.3% 31.3% 39.3% 2001 Average 32.5% 5.2% 8.4% 17.2% 30.8% 37.9% 2002 Average 34.3% 5.4% 7.6% 16.1% 29.1% 36.7% 2003 Average 29.1% 4.9% 7.3% 17.4% 26.7% 35.2% 2004 Average 28.4% 4.2% 6.9% 16.6% 25.5% 34.4% 2005 Average 29.2% 4.1% 7.1% 17.1% 26.3% 33.7% 2006 Average 27.9% 3.8% 6.8% 16.8% 25.1% 31.9% 2007 Average 28.5% 3.9% 7.0% 17.9% 24.8% 32.5%

Average Employee Tenure: 3.5 Years. Average Age of a Construction Executive: 51.4 years. Average Age of a Construction Superintendent: 48.6 years. Average Age of a Property Manager: now 43.5 years. Average Age of a Broker: now 46.2 years.

EMPLOYEE TURNOVER TRENDS

COMMERCIAL


Source: CEL & Associates, Inc.

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EMERGING TRENDSBASE SALARIES*


Line Position 2004 2005 2006 2007 2008

%Change04–08

1 Chief Executive Officer/CEO $390,100 $414,500 $520,800 $550,400 $636,300 41.1%

2 Chief Operating Officer/COO $348,100 $363,300 $376,800 $427,800 $491,500 22.9%

3 Chief Investment Officer $309,600 $325,500 $394,000 $435,600 $494,000 40.7%

4 CFO/Top Financial Executive $242,600 $251,900 $266,100 $290,200 $368,400 19.6%

5 Top Business Development Exec. $230,000 $246,400 $254,500 $263,100 $292,400 14.4%

6 Top Human Resources Executive $118,600 $122,800 $126,600 $135,600 $174,200 14.3%

7 Payroll Manager/Specialist $62,900 $64,300 $66,200 $68,800 $77,700 9.4%

8 Benefits Manager/Specialist $70,500 $73,000 $75,000 $75,800 $78,000 7.5%

9 General Counsel $247,100 $256,900 $278,800 $303,700 $338,700 22.9%

10 Top MIS Executive/IT Director $131,100 $134,300 $138,400 $147,400 $184,900 12.4%

11 Network Administrator $77,000 $79,000 $81,400 $82,600 $92,700 7.3%

12 Corp. Comm./Investor Relations $161,000 $168,800 $175,200 $178,700 $190,300 11.0%

* 75th Percentile.

Source: CEL & Associates, Inc. 2007 National Real Estate Compensation Survey (Office/Industrial).

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Line Position 2004 2005 2006 2007 2008

%Change04–08

13 Research Director $143,200 $147,100 $151,900 $156,400 $158,900 9.20%

14 Training Director/Manager $92,800 $105,300 $114,100 $116,800 $120,000 25.9%

15 Finance Director $176,400 $183,800 $194,000 $199,800 $213,400 13.3%

16 Controller $118,500 $121,400 $125,300 $143,000 $163,700 20.7%

17 Accounting Supervisor $73,800 $76,600 $79,900 $82,100 $90,700 11.2%

18 Property Accountant - Senior $59,900 $62,200 $63,900 $65,500 $72,600 9.3%

19 Property Accountant $47,400 $48,900 $51,300 $52,600 $61,200 11.0%

20 Financial Analyst $75,000 $77,100 $79,400 $82,200 $91,500 9.6%

21 Tax Manager $97,800 $104,100 $111,000 $114,400 $145,200 17.0%

* 75th Percentile.


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Line Position 2004 2005 2006 2007 2008

%Change04–08

22 Top Division Executive $217,400 $227,500 $241,200 $261,800 $282,100 20.4%

23 Top Regional Executive $223,900 $231,500 $244,500 $252,600 $272,200 12.8%

24 Top Acquisitions Executive $185,600 $193,700 $206,100 $219,800 $230,500 18.4%

25 Acquisitions Associate $95,200 $98,600 $103,000 $111,100 $116,400 16.7%

26 Top Asset Mgmt. Executive $191,300 $197,700 $208,500 $221,700 $235,200 15.9%

27 Portfolio Manager $105,400 $110,600 $114,700 $121,000 $134,000 14.8%

28 Top Property Mgmt. Exec. $175,200 $182,100 $190,700 $201,600 $209,700 15.1%

29 Off/Ind Prop. Mgr. (< 500k sf) $72,300 $74,600 $76,900 $79,600 $83,400 10.1%

30 Off/Ind Prop. Mgr. ( 500k-1m sf) $88,600 $91,500 $94,400 $98,400 $102,300 11.1%

31 Off/Ind Prop. Mgr. (>1m sf) $119,800 $123,900 $128,600 $135,200 $139,800 12.9%

* 75th Percentile.


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UNLIMITEDCAREER

OPPORTUNITIES!


69

Profession always in demand. Highly Rewarding. Opportunity to shape live, work, play shop

environments. Opportunity to create communities. Shortage of talent. Growing opportunities. Opportunity to start your own business. Independence. Not a desk job. Work with others who share the same passion.

WHY A CAREER IN THE REAL ESTATE INDUSTRY


70

Advisors Mutual Funds

Appraisal Firms Non-Profits

Commercial Banks Partnerships

Construction Firms Pension Funds

Consultants Private Investors

Corporate Public Sector

Foreign Investors REITs

Fund Sponsors REOCs

Insurance Companies Service Companies

Investment Banks Syndicators Source: CEL & Associates, Inc.

EMPLOYERS


71

Academic Training Global Perspective

Analytical Skills Integrity

Business Acumen Interpersonal Skills

Collaboration Skills Leadership Skills

Communication Skills Relationship Builders

Creativity Self-Motivators

Entrepreneurial Attitude Value Creators

Flexibility Writing Skills

Source: CEL & Associates, Inc

EMPLOYERS ARE SEEKING


72

www.realestatejobs.com

www.retsusa.com

www.californiarecruiter.com

www.specon.com

www.christophergroup.net

www.jcrexecutivesearch.com

www.heidrick.com

www.crownsearch.com

POPULAR JOB SEARCH WEBSITES


http://www.realestatejobs.com/

http://www.retsusa.com/

http://www.californiarecruiter.com/

http://www.specon.com/

http://www.christophergroup.net/

http://www.jcrexecutivesearch.com/

http://www.heidrick.com/

http://www.crownsearch.com/

73

American Hotel & Lodging Association (AH & LA). . . . . . . . . . . . . . . . . www.ahla.com

American Planning Association (APA). . . . . . . . . . . . . . . . . . . . . . . . . . www.planning.org

American Real Estate Society (ARES) . . . . . . . . . . . . . . . . . . . . . . . . . www.aresnet.org

American Society Of Appraisers (ASA). . . . . . . . . . . . . . . . . . . . . . . . . www.appraisers.org

Building Owners Managers Association (BOMA). . . . . . . . . . . . . . . . . www.boma.org

Commercial Real Estate Women (CREW). . . . . . . . . . . . . . . . . . . . . . www.crewnetwork.org

Counselors Of Real Estate (CRE). . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.cre.org

Institute Of Real Estate Management (IREM). . . . . .. . . . . . . . . . . . . . . www.irem.org

International Council Of Shopping Centers (ICSC). . . . . . . . . . . . . . . . www.icsc.org

International Facility Management Association (IFMA). . . . . . . . . . . . . www.ifma.org

National Apartment Association (NAA). . . . . . . . . . . . . . . . . . . . . . . . . www.naahq.org

National Association Of Home Builders (NAHB). . . . . . . . . . . . . . . . . . www.nahb.com

National Association Of Industrial And Office Properties (NAIOP). . . . www.naiop.org

National Association Of Real Estate Investment Managers (NAREIM) www.nareim.org

National Association Of Real Estate Investment Trusts (NAREIT). . . . www.nareit.com

National Association Of Realtors (NAR). . . . . . . . . . . . . . . . . . . . . . . . www.realtor.org

National Multi Housing Council (NMHC). . . . . . . . . . . . . . . . . . . . . . . . www.nmhc.org

Real Estate Research Institute (RERI). . . . . . . . . . . . . . . . . . . . . . . . . www.reri.org

Urban Land Institute (ULI). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.uli.org

Source: CEL & Associates, Inc.

REAL ESTATE ORGANIZATIONS


74

TAKE A GUESS…

How ManyWebsite Hits Under“Real Estate Jobs” ?


75

TAKE A GUESS…

1,060,000,000!!


76

MY ADVICE TO YOU…


77

For Lenders…2010 will be your transformative year.

MY ADVICE TO YOU…


78


For Developers…Focus on building valued Tenant relationships.

MY ADVICE TO YOU…


79



For Brokers…Find your niche and be the best at it!

MY ADVICE TO YOU…


80




For Investors…Capitalize on a market in transition.

MY ADVICE TO YOU…


81





For Real Estate CEOs…Surround yourself with the best talent.

MY ADVICE TO YOU…


82






For Students & Recent Grads…Pursue your dreams in an industry poised for incredible opportunities for decades to come.

MY ADVICE TO YOU…


83






For Students & Recent Grads…Pursue your dreams in an industry poised for incredible opportunities for decades to come.

For Everyone…Have fun…the next 20 years will be the best time of your life!

MY ADVICE TO YOU…


84

Presented By:Christopher Lee, President & Chief

Executive Officer CEL & ASSOCIATES, INC.

(310) 571-3113








Documents

1 Presented By: Christopher Lee, President & Chief Executive Officer CEL & ASSOCIATES, INC. (310) 571-3113 “Get Ready For The Age Of Real Estate” Portland