VEGAS QUARTERLY Q2/12 LAS. Accelerating success.

LAS VEGAS QUARTERLY Q2/12 Accelerating success.

INDUSTRIAL Glossary Industrial Definitions Incubator: Multi-tenant buildings without dock-high loading doors that have a parking ratio lower than 3.5/1,000 square feet and bay sizes lower than 3,500 square feet. Light Distribution: Multi- or single-tenant buildings that include dock-high loading doors and have bay sizes of less than 15,000 square feet. Light Industrial: Multi- or single-tenant buildings without dock-high loading doors that have a parking ratio lower than 3.5/1,000 square feet and, in the case of multi-tenant buildings, bay sizes of at least 3,500 square feet. Flex: Multi- or single-tenant buildings without dock-high loading doors with parking ratios in excess of 3.5/1,000 square feet. Warehouse/Distribution: Multi- or single-tenant buildings that include dock-high loading doors and have bay sizes of at least 15,000 square feet. Office Definitions Class A Office: Class B Office: Class C Office: Buildings with steel frame construction, high end exterior finish, distinctive lobbies featuring upgraded finishes, amenities including on-site security, state-of-the-art communications and data infrastructure and covered parking. Class A buildings are usually multi-story. Buildings with steel frame, reinforced concrete or concrete tilt-up construction. Class B buildings contain common bathrooms and hallways, and their lobbies may have granite and hardwood detailing. Class B buildings are often multi-story. Buildings of wood frame construction. Class C buildings are often garden-style and are built around courtyards. Retail Definitions Community Center: Neighborhood Center: Power Center: Retail centers anchored by supermarkets, drug stores and discount department stores. Tenants include off-price retailers selling apparel, home improvements/furnishings, toys, electronics or sporting goods. Retail centers anchored by supermarkets and drug stores. Neighborhood centers are intended for convenience shopping for day-to-day needs of consumers. Retail centers dominated by several large anchors including discount department stores, offprice stores, warehouse clubs or category killers. Power centers generally inline space. General Definitions Vacant : Sublease : Net Absorption: P. 2 Space in a building that is unoccupied and offered for lease by the owner of the company. Space in a building that is offered for sub-lease by the primary tenant. This space may or may not be unoccupied. Difference in occupied square footage from one period to another. COLLIERS INTERNATIONAL

LAS VEGAS QUARTERLY SECOND QUARTER 2012 Table of Contents Reviews by John M. Stater, Research Manager Cover The Palazzo Hotel and Casino at night Economic Overview 4 The first quarter of 2012 was an eye opener, with total employment taking a plunge and commercial real estate handing back most of the gains it posted in early to mid-2011. The second quarter has certainly been better, with employment back on track and much of the commercial market following it. Industrial 6 Southern Nevada s industrial market continued to retreat from its gains in 2011, releasing another 50,330 square feet of industrial space (net) back onto the market this quarter, to bring total YTD net absorption in 2012 to negative 389,101 square feet. The vacancy rate, which had hit a new low of 15 percent in the second quarter of 2011, remained at 15.3 percent in the second quarter of 2012. Office 12 Despite office employment still trending downwards, Southern Nevada s office market posted positive net absorption in the second quarter of 2012 and saw vacancy again begin to decline, reaching 23.7 percent. 522 offices in 62 countries on 6 continents United States: 147 Canada: 37 Latin America: 19 Asia Pacific: 201 EMEA: 118 $1.8 billion in annual revenue $1.25 billion square feet under management Over 12,300 professionals COLLIERS INTERNATIONAL LAS VEGAS 3960 Howard Hughes Parkway Suite 150 Las Vegas, NV 89109 TEL +1 702 735 5700 FAX +1 702 731 5709 Retail 16 We can happily report that our predictions for the second quarter of 2012 concerning the retail market were wrong, as retail turned in a surprisingly strong quarter. Even without new construction to bolster it, net absorption of retail space was not only positive, but surpassed net absorption in the first quarter of 2012 if one discounts net absorption from new completions. MANAGING PARTNER Mike Mixer Managing Partner mike.mixer@colliers.com Hotel 20 Hotel occupancy in Clark County has averaged 87 percent in 2012, a 0.1 percent increase over 2011, and a 4 percent increase over 2010, suggesting that Southern Nevada s tourist industry has largely recovered from the Great Recession. RESEARCHER John Stater Research Director john.stater@colliers.com This report and other research materials may be found on our website at www.colliers.com/lasvegas. This quarterly report is a research document of Colliers International Las Vegas, NV. Questions related to information herein should be directed to the Research Department at 702-836-3781. Information contained herein has been obtained from sources deemed reliable and no representation is made as to the accuracy thereof. This report and other research materials may be found on our website at www.colliers.com/lasvegas. This quarterly report is a research document of Colliers International Las Vegas, NV. Questions related to information herein should be directed to the Research Department at +1 702 836 3781. Information contained herein has been obtained from sources deemed reliable and no representation is made as to the accuracy thereof. LAS VEGAS NEVADA P. 3 Accelerating success.

ECONOMIC OVERVIEW Economic Review CLARK COUNTY ECONOMIC DATA 2012 2011 Unemployment Rate (Apr) 11.6% 12.0% Visitor Volume (Apr YTD) 13.1 MM 12.8 MM Gaming Revenue (Apr YTD) $3.21 BB $3.05 BB Taxable Sales (Mar YTD) $7.54 BB $7.16 BB Commercial Occupancy (Q2) 83.8% 83.5% SOURCE: THE CENTER FOR BUSINESS & ECONOMIC RESEARCH, UNLV The first quarter of 2012 was an eye opener, with total employment taking a plunge and commercial real estate handing back most of the gains it posted in early to mid-2011. The second quarter has certainly been better, with employment back on track and much of the commercial market following it. Most of the fundamentals of the local economy are looking better, and Southern Nevada might be ready to give this whole recovery thing another try. From a commercial real estate perspective, the brightest measure of the Valley s nascent recovery is the commercial occupancy rate, which is finally, after about five years, rising. Since April of 2011, commercial occupancy has increased by 0.3 points. This wouldn t be much to get excited about had we not just experienced 57 months of declining occupancy. This rise in commercial occupancy has been driven by sporadic gains in employment, which has been trending up since February 2010. Employment, in turn, has been boosted by gains in the tourism sector. It appears that the only thing still holding Southern Nevada back from full recovery is the very weak construction sector. Fortunately, residential real estate appears to be beginning its own recovery, and some residential developers are preparing to ramp up construction. Industrial build-to-suits and downtown office construction have increased the forward supply of commercial real estate to the highest level it has been in almost two years. The jobs picture at mid-year 2012 is not completely rosy, and, in truth, has some key weaknesses where commercial real estate is concerned. While most sectors of employment have added jobs over the past twelve months, three sectors in particular have posted significant job losses, and all three of these sectors feed directly into commercial real estate. These sectors are construction, which has lost 2,200 jobs over the past twelve months and feeds into industrial real estate, and financial activities and professional and business services, which have together lost 3,300 jobs over the past twelve months and which feed into office real estate. The most impressive job gains have been in leisure and hospitality sector (i.e. tourism), which has added 8,000 jobs since May 2011 and trade, transportation and utilities, which has added 3,900 jobs and which feeds into industrial and retail real estate. The Center for Business & Economic Research at UNLV has predicted 1.2 percent employment growth for Southern Nevada in 2012. This is not enough growth to fuel a burst of demand for commercial real estate, but may be enough to staunch the bleeding and allow the healing process to begin. Las Vegas is the largest city on earth that was born in the 20th century, and population growth has long been an indicator of economic growth in Southern Nevada. Southern Nevada s population grew without fail year after year from 1970 to 2007, despite numerous recessions taking place during that time. In 2009, the unthinkable happened; Southern Nevada s population shrank. This, as much as anything else, tells the true impact the Great Recession has had on Southern Nevada. Fortunately, population edged up in 2010, but was again flat in 2011 and was still below the population level recorded LAS VEGAS GAMING AND EMPLOYMENT STATISTICS Southern Nevada Visitor Volume (Monthly Average) Southern Nevada Gaming Revenue (Monthly Average) Las Vegas MSA Total Employment 3,500,000 $1,050,000,000 1,000,000 3,000,000 $900,000,000 900,000 800,000 2,500,000 $750,000,000 700,000 2,000,000 $600,000,000 600,000 500,000 1,500,000 $450,000,000 400,000 1,000,000 $300,000,000 300,000 500,000 $150,000,000 200,000 100,000 0 2006 2007 2008 2009 2010 2011 2012 $0 2006 2007 2008 2009 2010 2011 2012 0 2006 2007 2008 2009 2010 2011 2012 P. 4 COLLIERS INTERNATIONAL

LAS VEGAS QUARTERLY SECOND QUARTER 2012 in 2008. On the positive side, the monthly driver s license count for Clark County in 2012 has been stronger than in the previous four years, and is almost as strong as in 2007. The return to population growth, probably driven by retirees relocating to sunny and natural disaster-free Southern Nevada, should help the construction sector finally hit bottom and grow a bit. As mentioned above, hiring in the gaming sector has been fairly strong over the past twelve months. Visitor volume is edging toward a new record in 2012, and gaming revenue has shown some recovery from its low points in 2009 and 2010. Hotel/motel occupancy was down year-over-year by 0.5 percent, but with room inventory increasing 0.7 percent over the same period. Maybe more importantly, ADR (average daily room rate) was up by 2.6 percent year-over-year. About 1,000 new rooms are now scheduled to be completed in 2012, most of them at Caesar s Palace. Investment sales of commercial real estate had a slow start early in 2012, but by mid-year are showing some strength. At mid-year, Southern Nevada has had 84 investment sales totaling 2.6 million square feet of space for a total consideration of $183 million. That gives us an average sales price of $72 per square foot (psf) for investment sales. Industrial sales have dominated so far in 2012, making up 42 percent of the space sold. Owner/user sales in 2012 have amounted to 1.3 million square feet (again, most of it industrial) and $92.4 million of total sales volume. The average sales price for owner/user sales was $71 psf. Distressed sales represented 43 percent of the total square footage sold at an average sales price of $57 psf. This compares to an average sales price of $82 psf for non-distressed sales. Cap rate information continues to be scarce, but likely hovers between 7.5 and 8.5 percent. The amount of distressed commercial real estate in Southern Nevada decreased this quarter over last by approximately 183,000 square feet, and the total amount of distressed has decreased by almost 500,000 square feet so far in 2012. Most of this decrease in distressed real estate has taken place in office product, with retail product showing a net gain in distressed square footage so far in 2012. Bank failures so far in 2012 are well below levels seen in 2011 and 2010. According to the FDIC, thirty banks with $7.5 billion in assets have failed so far in 2012 in the United States, compared to forty-eight banks with $19 billion in assets by this time in 2011. No local banks have failed yet in 2012. Government debt issues in Europe threaten this trend of healthier banks, but as of now, one could reasonably say that the banking crisis is now on its last legs. RECOVERY INDEX The Southern Nevada CRE Recovery Index was generally on the rise in 2011, dipping towards the end of the year and predicting a rocky first quarter for 2012. The index has been shaky so far in 2012, increasing in January, going flat in February, growing again in March and then dropping in April. This presages a fairly flat 2012. On a year-over-year basis, the index shows growth in New Home Sales, Gaming Revenue, Visitor Volume, New Residents, Taxable Sales, Container Traffic at the Port of Los Angeles and Personal Consumption in the USA. No measures were down, but two, Commercial Occupancy and Employment were flat. Despite being up year-over-year, taxable sales have been on a downward path in 2012, going from a high of 89 in January (perhaps bolstered by strong Chinese New Year spending on the Strip ) to the present measure of 84. This is not an unusual early-year trajectory for taxable sales, but it is more pronounced this year than last. Southern Nevada s economy presents a small problem for the observer. While various important economic indicators seem to be heading in the right direction over the past two years, the most important measure (at least for commercial real estate), jobs, has shown very little improvement, both overall and in the sectors most imporant to commercial real estate. When gaming employment began to increase in 2010 (very slowly) and that job growth accelerated in 2011, it seemed as though other key sectors of the job market would follow along. To date, that wider growth in employment has not been seen. The most likely culprit for this lack of recovery is the construction sector. While most sectors of employment have shown growth over the past decade, construction has plunged to levels not seen since 1993. The stimulative effect of the 75,000 construction jobs lost over the past five years cannot be underestimated, and the likelihood of those jobs returning or being replaced anytime soon is slim. This portends a slow recovery indeed for Southern Nevada s economy in general and commercial real estate market in particular. LAS VEGAS NEVADA P. 5

INDUSTRIAL MARKET INDICATORS Q2-12 NET ABSORPTION CONSTRUCTION RENTAL Projected Q3-12 Industrial Market Review Southern Nevada s industrial market continued to retreat from its gains in 2011, releasing another 50,330 square feet of industrial space (net) back onto the market this quarter, to bring total YTD net absorption in 2012 to negative 389,101 square feet. The vacancy rate, which had hit a new low of 15 percent in the second quarter of 2011, remained at 15.3 percent in the second quarter of 2012. Asking rents also remained stable at $0.49 per square foot (psf) on a triple net (NNN) basis on a quarter-over-quarter basis, but were down $0.04 psf year-over-year. While some sectors of industrial employment are showing positive growth, construction employment remains a drag. Between May 2011 and May 2012, Las Vegas-Paradise MSA employment in sectors that traditionally occupy industrial space increased by 500 jobs, despite significant job losses in the construction sector. The wholesale sector added 1,200 new jobs year-over-year, transportation and warehousing 1,100 and manufacturing 400. Unemployment in the Las Vegas-Paradise MSA stood at 11.8 percent as of May 2012, down from 13.6 percent in May 2011. Over the same period, total employment in Southern Nevada has increased by 5,900 jobs, the majority in leisure and hospitality and trade, transportation and utilities. 95 215 NORTH LAS VEGAS No new industrial projects were completed in the first half of 2012, though two projects continue to linger in a state of construction limbo. Forward supply of industrial space in the Valley rocketed to 509,320 square feet this quarter, from 100,822 square feet last quarter. Most of this new industrial forward supply is in the form of build-to-suit projects for Switch, which runs a SuperNAP data center in Southern Nevada, and Shuffle Master. NORTHWEST WEST CENTRAL 15 EAST LAS VEGAS 95 Net absorption has now been back in negative territory for two quarters, after three quarters of positive net absorption in 2011. Net absorption was a negative 50,330 square feet in the second quarter of 2012, bringing net absorption for the first half of the year to negative 389,101 square feet. This is still smaller than the positive net absorption of 631,338 square feet experienced between the second and fourth quarters of 2012, but is still a bit disheartening considering the hopes that were raised last year of the industrial market entering a period of sustained recovery. SOUTHWEST 215 AIRPORT HENDERSON Warehouse/distribution space continued to post the worst performance among product types, with negative 439,665 square feet of net absorption year-to-date. It should be noted that most of the positive net absorption in 2011 took place in warehouse/distribution buildings. At mid-year, light distribution space posted negative 141,336 square feet of net absorption, incubator negative 6,950 square feet of net absorption and flex space negative 36,058 square feet of net absorption. Positive net absorption this year was registered in light industrial properties, which posted 234,908 square feet of net absorption; this appears to confirm the increased small business activity we are currently seeing in the market. Year-to-date, net absorption was negative for all submarkets except West Central, with the worst performance in the Southwest submarket at negative 239,645 square feet and East Las Vegas at negative 98,422 square feet. The West Central submarket has seen 64,108 square feet of net absorption so far this year. Gross absorption stood at only 1.82 million square feet in the second quarter of 2012, down by 969,000 square feet from the first quarter of 2012. In all, gross absorption for the first half of 2012 was down by 448,000 INDUSTRIAL DEVELOPMENT PIPELINE PROJECT TYPE SUBMARKET SIZE PRE-LEASING COMPLETION 1981 Pama Lane Light Industrial Airport 50,000 0% Q3-11 5225 Capovilla Ave Warehouse/Distribution Southwest 350,000 100% Q4-11 Jones & I-215 Warehouse/Distribution Southwest 110,000 100% Q3-13 INVESTMENT SALES ACTIVITY Investment Space 2012 (YTD) 2011 2010 Investment Space for Sale (sf) 1,118,000 1,518,000 1,519,000 Investment Average Asking Price/ $80 $92 $119 Investment Average Cap Rate 8.6% 8.0% 8.1% Investment Space Sold (sf) 1,086,000 3,736,000 715,000 Investment Average Price/ $58 $75 $95 Investment Average Cap Rate 7.7% 8.0% 8.9% OWNER/USER SALES ACTIVITY Owner User Space 2012 (YTD) 2011 2010 Owner/User Space for Sale (sf) 3,226,000 3,441,000 3,339,000 Owner/User Average Asking Price/ $95 $92 $116 Owner/User Space Sold (sf) 213,000 1,210,000 799,000 Owner/User Average Price/ $66 $63 $114 P. 6 COLLIERS INTERNATIONAL

LAS VEGAS QUARTERLY SECOND QUARTER 2012 square feet compared to the first half of 2011. This lack of activity might be due to tenants who took space during the recession now renewing those spaces rather than seeking smaller or less expensive space elsewhere. Much of the leasing activity over the past three years has consisted of these lateral movements within the marketplace, and the lack of activity now might be a sign that tenants are finding landlords willing to make deals to hold them in place. Industrial vacancy is once again at record highs. Vacancy in the second quarter of 2012 was 15.3 percent, even with the first quarter of 2012 and up 0.3 points from the second quarter of 2011. About half of the recovery that was posted in 2011 has been reversed in 2012. Southern Nevada s lowest industrial vacancy rate was in the West Central submarket at 10.1 percent. Vacancy was up in East Las Vegas, North Las Vegas and Southwest, and down in Airport, Henderson, Northwest and West Central, indicating that the market, while weak, is not universally weak. Among product types, vacancy was up in warehouse/ distribution, light distribution and flex space, and down in light industrial and incubator space, indicating that most of the activity in the market is with small users. The most active businesses in deals we tracked in 2012 were involved in manufacturing, business services, transportation and motor freight, wholesale, and communications. Companies headquartered outside of Nevada took about 33 percent of the Colliers-tracked square feet leased or sold so far in 2012, down from 59 percent in 2011. 45 percent of the deals done so far in 2012 were with companies with national or regional reach, about even with the mix of companies that took space in 2011. The weighted average asking lease rate for industrial space remained stable this quarter at $0.49 psf NNN, but down from one year ago, when the asking rate was $0.53 psf NNN. If adjusted for inflation, the weighted average asking lease rate dropped by $0.01 to $0.38 psf NNN quarterover-quarter. Adjusted for inflation, the weighted average asking lease rate for industrial product has dropped by $0.33 psf from its peak of $0.71 psf the first quarter of 2007, and is now approximately $0.20 lower than it was a decade ago. The gap between achieved lease rates and asking lease rates averaged $0.12 psf in 2010 and $0.08 psf in 2011. So far in 2012, the gap has decreased to $0.01 psf, suggesting that current pricing is reasonable. The inventory of industrial properties available for owner/ user sale is marginally lower now than one year ago. Current availability of owner/user space for sale was 3,225,000 square feet, compared to 3,253,000 square feet in the second quarter of 2011. Over the same period, the average asking price for owner/user industrial sales decreased to $95 psf from $101 psf at mid-year 2011. The inventory of industrial properties available as investments was also lower now than one year ago. Current availability of investment space for sale was 1,118,000 square feet, compared to 1,270,000 square feet in the second quarter of 2011. Over the same period, the average asking price for investment industrial sales decreased to $80 psf from $100 psf at mid-year 2011. Cap rates on available investment properties had been on the decline between the second quarter of 2011 to the fourth quarter of 2011, but have now increased to 8.6 percent So far in 2012, 1,086,000 square feet of industrial properties have sold as investments at an average price of $58 psf. This represents a slight decline in volume from last year, when investment sales averaged almost 1 million square feet per quarter, and suggests that outside investors could be waiting for the market to cool down or are simply having trouble finding the right price for what investment properties remain on the market. Owner/ user sales are down even more significantly, totaling only 213,000 square feet, about one third the quarterly volume recorded in 2011. The average price per square foot for owner/user sales was $66 per square foot. COMPETING WAREHOUSE S Market Las Vegas, NV Phoenix, AZ Inland Empire, CA Reno, NV Asking Rent (Q4-11) $0.39 psf NNN $0.42 psf NNN $0.33 psf NNN $0.31 psf NNN Source: Colliers International North American Industrial Highlights, Q4-11 While some sectors of industrial employment are showing positive growth, construction employment continues to be a drag. LEASE AND SALES ACTIVITY LEASE ACTIVITY PROPERTY NAME LEASE DATE LEASE TERM SIZE LEASE TYPE Golden Triangle Industrial Park Apr 2012 120 months 111,000 $0.34 NNN Warehouse/Distribution Pacific Business Center Jun 2012 65 months 36,000 $0.36 NNN Warehouse/Distribution Arrowhead Commerce Center Apr 2012 12 months 23,000 $0.67 NNN Light Distribution Valley Freeway Centre Apr 2012 64 months 13,000 $0.71 NNN Flex 4630 Procyon May 2012 65 months 10,000 $0.48 MG Light Industrial SALES ACTIVITY PROPERTY NAME SALE DATE SALE PRICE SIZE PRICE/ TYPE Park West Business Center May 2012 $4,500,000 72,000 $62 Warehouse/Distribution 5220 Cameron May 2012 $3,750,000 54,000 $69 Warehouse/Distribution 2606 La Madre May 2012 $1,700,000 12,000 $144 Light Industrial Sunset Business Park May 2012 $830,000 14,000 $59 Light Industrial WesTech Business Center III May 2012 $800,000 11,000 $75 Light Industrial LAS VEGAS NEVADA P. 7

INDUSTRIAL INDUSTRIAL EMPLOYMENT May 2012 May 2011 Change Construction 35,200 37,400-2,200 Manufacturing 19,800 19,400 +400 Transportation & Warehousing 33,100 32,000 +1,100 Wholesale 21,400 20,200 +1,200 TOTAL 109,500 109,000 +500 Industrial investors need to look for the niches in the market that will outperform the market as a whole Warehouse/distribution space in Southern Nevada has suffered an astounding reversal of fortune over the past six quarters. In the first three quarters of 2011, warehouse/distribution space posted 795,000 square feet of net absorption, almost single-handedly pulling the industrial market into what appeared to be a recovery. Even then, we were warning that this recovery was not broad based, and while welcome was certainly fragile. Over the past three quarters, warehouse/distribution space has given approximately 500,000 square feet back to the market, erasing about 62 percent of the progress made in 2011. At the same time, we have heard anecdotes about large users looking at Southern Nevada as a place to set up shop, but finding a lack of available product sized 300,000 square feet or larger. This mismatch in the space available and the space demanded should stimulate build-to-suit construction over the next few years. Light distribution has fared only slightly better than warehouse/distribution, giving back a total of 141,336 square feet so far this year. Gross absorption of light distribution space is weak compared to last year (and getting weaker), and only flex space has a higher vacancy rate. It seems likely that light distribution space relied heavily on the construction sector, which is still suffering job losses. While warehouse/distribution and light distribution are suffering, light industrial and incubator space are showing some strength in 2012. In the first half of 2012, those two product types have combined for 228,000 square feet of net absorption and 1.9 million square feet of gross absorption. There is anecdotal evidence to suggest that small businesses are again on the move in Southern Nevada. Nevada was just named the 7th most entrepreneurial state in the United States based on its 2011 startup rate by CNNMoney. Flex space posted negative 4,598 square feet of net absorption in the second quarter of 2012, bringing net absorption for the first half of 2012 to negative 36,058 square feet. Asking rates for flex space are now $0.72 psf NNN, still higher than incubator and light industrial asking rates. With a 27.2 percent vacancy rate, Flex is among the least utilized commercial real estate in Southern Nevada, and one might have to chalk the concept up to a failed experiment, as tenants have shown they would rather locate in true retail, office and industrial space rather than product that attempts to combine elements of all three. Southern Nevada s industrial market appears to have played out its recovery last year. While both retail and office product also weathered a tough first quarter of 2012, both of them have begun to show a return to form in the second quarter of 2012. One probably has to pin the industrial sector s woes on the continued weakness of the industrial sector. While most categories of employment in the Valley demonstrated growth over the past decade, construction employment remains well below 2000 levels, and as yet is showing little sign of improvement, though it must be mentioned that some new residential, multifamily and commercial projects are now getting underway. 2012 has not reversed all of 2011 s gains, but it has set recovery back to nearly square one. Industrial employment has shown a propensity for losses or weak growth in the first half of the year, followed by stronger growth in the second half, and if this holds true, 2012 might be turn out to have been more positive than negative. Still, until industrial employment starts posting steady year-over-year expansion, it is not reasonable to expect anything but tepid demand for industrial space for the near future. Industrial investors need to look for the niches in the market that will outperform the market as a whole, and perhaps begin strategic investments in industrial land while that market remains depressed, that they might preposition themselves for potential growth in the years ahead. HISTORICAL NET ABSORPTION VS. COMPLETIONS 500,000 400,000 300,000 200,000 100,000 HISTORICAL & ASKING LEASE S 15.5% 15.4% 15.3% 15.2% 15.1% $0.58 $0.56 $0.54 $0.52 $0.50 0-100,000-200,000 15.0% 14.9% 14.8% 14.7% $0.48 $0.46 $0.44 $0.42-300,000-400,000 3 Q 2010 4 Q 2010 1 Q 2011 2 Q 2011 3 Q 2011 4 Q 2011 1 Q 2012 2 Q 2012 14.6% 3 Q 2010 4 Q 2010 1 Q 2011 2 Q 2011 3 Q 2011 4 Q 2011 1 Q 2012 2 Q 2012 $0.40 Net Absorption Completions Vacancy Asking Rental Rate P. 8 COLLIERS INTERNATIONAL

LAS VEGAS QUARTERLY SECOND QUARTER 2012 MARKET COMPARISONS INDUSTRIAL MARKET TYPE BLDGS TOTAL INVENTORY DIRECT VACANT DIRECT SUBLEASE SUBLEASE VACANT TOTAL VACANT CURRENT QUARTER PRIOR QUARTER NET ABSORPTION CURRENT QTR NET ABSORPTION YTD COMPLETIONS CURRENT QTR COMPLETIONS YTD UNDER CONSTRUCTION PLANNED CONSTRUCTION WEIGHTED AVG ASKING RENTAL AIRPORT SUBMARKET WH 75 4,572,977 438,924 9.6% - 0.0% 438,924 9.6% 9.5% (6,559) (50,370) - - - - $0.42 LD 71 3,272,004 908,160 27.8% 16,872 0.5% 925,032 28.3% 28.6% 21,707 (54,332) - - - - $0.57 LI 197 2,947,065 345,492 11.7% 62,586 2.1% 408,078 13.8% 15.7% 55,040 6,271 - - - 49,320 $0.54 INC 90 1,721,414 378,811 22.0% 26,744 1.6% 405,555 23.6% 24.4% 29,309 33,272 - - - - $0.83 FLX 66 1,339,555 345,942 25.8% 6,854 0.5% 352,796 26.3% 24.5% (17,983) 8,920 - - - - $0.73 Total 499 13,853,015 2,417,329 17.4% 113,056 0.8% 2,530,385 18.3% 18.6% 81,514 (56,239) - - - 49,320 $0.60 EAST LAS VEGAS SUBMARKET WH 23 964,355 113,334 11.8% - 0.0% 113,334 11.8% 11.8% - (59,569) - - - - $0.31 LD 26 463,331 179,581 38.8% - 0.0% 179,581 38.8% 26.8% (55,425) (58,793) - - - - $0.19 LI 91 1,087,355 111,575 10.3% - 0.0% 111,575 10.3% 11.0% 8,250 24,826 - - - - $0.31 INC 12 281,755 74,335 26.4% - 0.0% 74,335 26.4% 25.5% (2,418) (3,468) - - - - $0.43 FLX 10 233,692 123,327 52.8% - 0.0% 123,327 52.8% 50.4% (5,543) (1,418) - - - - $0.63 Total 162 3,030,488 602,152 19.9% - 0.0% 602,152 19.9% 18.1% (55,136) (98,422) - - - - $0.35 HENDERSON SUBMARKET WH 75 6,299,240 526,065 8.4% - 0.0% 526,065 8.4% 8.8% 26,000 (75,209) - - - - $0.34 LD 36 1,681,788 278,737 16.6% - 0.0% 278,737 16.6% 18.5% 19,678 31,562 - - - - $0.45 LI 328 3,298,397 469,040 14.2% 100,375 3.0% 569,415 17.3% 15.9% (45,803) (1,370) - - - - $0.44 INC 29 456,976 36,113 7.9% - 0.0% 36,113 7.9% 7.5% (1,917) (12,606) - - - - $0.44 FLX 82 1,353,434 269,136 19.9% - 0.0% 269,136 19.9% 21.6% 23,597 8,887 - - - - $0.90 Total 550 13,089,835 1,579,091 12.1% 100,375 0.8% 1,679,466 12.8% 13.1% 21,555 (48,736) - - - - $0.49 NORTH LAS VEGAS SUBMARKET WH 177 18,607,185 2,185,896 11.7% 172,807 0.9% 2,358,703 12.7% 13.0% 53,377 6,944 - - - - $0.32 LD 164 4,715,063 1,228,068 26.0% 0 0.0% 1,228,068 26.0% 24.6% (69,202) (110,889) - - - - $0.34 LI 619 7,491,355 1,208,118 16.1% 12,800 0.2% 1,220,918 16.3% 15.8% (29,830) 84,101 - - - - $0.38 INC 34 608,095 221,045 36.4% 0 0.0% 221,045 36.4% 37.7% 8,455 30,624 - - - - $0.56 FLX 48 809,810 181,132 22.4% 0 0.0% 181,132 22.4% 22.0% (3,303) (13,920) - - - - $0.66 Total 1,042 32,231,508 5,024,259 15.6% 185,607 0.6% 5,209,866 16.2% 16.0% (40,503) (3,140) - - - - $0.36 NORTHWEST SUBMARKET WH 5 224,906 32,080 14.3% - 0.0% 32,080 14.3% 14.3% - - - - - - $- LD 1 50,000 36,734 73.5% - 0.0% 36,734 73.5% 92.4% 9,487 (32,939) - - - - $0.97 LI 17 298,896 29,757 10.0% - 0.0% 29,757 10.0% 11.9% 5,812 5,812 - - - - $0.45 INC 4 99,427 9,179 9.2% - 0.0% 9,179 9.2% 11.7% 2,428 2,428 - - - - $0.50 FLX 55 679,250 300,835 44.3% 8,992 1.3% 309,827 45.6% 48.9% 31,068 18,419 - - - - $0.68 Total 82 1,352,479 408,585 30.2% 8,992 0.7% 417,577 30.9% 33.8% 48,795 (6,280) - - - - $0.63 SOUTHWEST SUBMARKET WH 136 12,689,764 1,721,615 13.6% 543,058 4.3% 2,264,673 17.8% 14.7% (107,623) (263,461) - - - 460,000 $0.49 LD 184 7,068,068 1,335,576 18.9% 11,635 0.2% 1,347,211 19.1% 18.8% (17,191) 55,055 - - - - $0.56 LI 753 9,340,558 1,406,266 15.1% 41,150 0.4% 1,447,416 15.5% 15.6% 8,482 78,362 - - - - $0.54 INC 117 2,484,105 486,020 19.6% 2,000 0.1% 488,020 19.6% 18.8% (21,897) (52,655) - - - - $0.57 FLX 105 1,603,204 449,756 28.1% 4,104 0.3% 453,860 28.3% 26.7% (32,434) (56,946) - - - - $0.69 Total 1,295 33,185,699 5,399,233 16.3% 601,947 1.8% 6,001,180 18.1% 16.7% (170,663) (239,645) - - - 460,000 $0.55 WEST CENTRAL SUBMARKET WH 63 1,905,683 125,457 6.6% - 0.0% 125,457 6.6% 6.6% - 2,000 - - - - $0.27 LD 36 698,809 164,928 23.6% 800 0.1% 165,728 23.7% 22.9% (5,400) 29,000 - - - - $0.48 LI 493 6,701,265 492,199 7.3% 44,934 0.7% 537,133 8.0% 8.5% 34,141 36,906 - - - - $0.52 INC 66 2,462,109 396,880 16.1% - 0.0% 396,880 16.1% 17.6% 35,367 (4,545) - - - - $0.61 FLX 12 219,832 26,919 12.2% - 0.0% 26,919 12.2% 12.2% - - - - - - $0.54 Total 670 11,987,698 1,206,383 10.1% 45,734 0.4% 1,252,117 10.4% 11.0% 64,108 63,361 - - - - $0.52 MARKET TOTAL WH 554 45,264,110 5,143,371 11.4% 715,865 1.6% 5,859,236 12.9% 12.2% (34,805) (439,665) - - - 460,000 $0.38 LD 518 17,949,063 4,131,784 23.0% 29,307 0.2% 4,161,091 23.2% 22.7% (96,346) (141,336) - - - - $0.47 LI 2,498 31,164,891 4,062,447 13.0% 261,845 0.8% 4,324,292 13.9% 14.0% 36,092 234,908 - - - 49,320 $0.47 INC 352 8,113,881 1,602,383 19.7% 28,744 0.4% 1,631,127 20.1% 20.5% 49,327 (6,950) - - - - $0.63 FLX 378 6,238,777 1,697,047 27.2% 19,950 0.3% 1,716,997 27.5% 27.3% (4,598) (36,058) - - - - $0.72 Total 4,300 108,730,722 16,637,032 15.3% 1,055,711 1.0% 17,692,743 16.3% 15.9% (50,330) (389,101) - - - 509,320 $0.49 QUARTERLY COMPARISON AND TOTALS Q2-12 4,300 108,730,722 16,637,032 15.3% 1,055,711 1.0% 17,692,743 16.3% 15.9% (50,330) (389,101) - - - 509,320 $0.49 Q1-12 4,300 108,730,722 16,586,702 15.3% 737,902 0.7% 17,324,604 15.9% 15.8% (338,771) (338,771) - - - 100,822 $0.49 Q4-11 4,300 108,730,722 16,247,931 14.9% 888,432 0.8% 17,136,363 15.8% 15.5% 28,218 601,974 131,154 228,154-100,822 $0.51 Q3-11 4,299 108,599,568 16,144,995 14.9% 714,797 0.7% 16,859,792 15.5% 15.8% 228,399 573,756 75,000 97,000 131,154 99,320 $0.52 Q2-11 4,298 108,524,568 16,298,394 15.0% 840,986 0.8% 17,139,380 15.8% 16.3% 374,721 345,357-22,000 156,154 50,000 $0.53 Q1-11 4,298 108,524,568 16,673,115 15.4% 1,052,465 1.0% 17,725,580 16.3% 16.3% (29,364) (29,364) 22,000 22,000 181,154 - $0.54 WH = Warehouse LD = Light Distribution LI = Light Incubator INC = Incubator FLX = Flex LAS VEGAS NEVADA P. 9

OFFICE Office Market Review MARKET INDICATORS NORTHWEST 95 SOUTHWEST NET ABSORPTION CONSTRUCTION RENTAL 215 WEST CENTRAL 215 Q2-12 NORTH LAS VEGAS 15 DOWN TOWN AIRPORT Projected EAST LAS VEGAS 95 Q3-12 HENDERSON Despite office employment still trending downwards, Southern Nevada s office market posted positive net absorption in the second quarter of 2012 and saw vacancy again begin to decline, reaching 23.7 percent. By most measures, the office market in Southern Nevada appears to be on the mend, but the lack of meaningful job growth so far this year makes this nascent recovery perplexing. Asking rental rates decreased by $0.01 to $1.90 per square foot (psf) on a Full Service Gross (FSG) basis. Construction remains constrained. According to the Nevada Department of Employment, Training & Rehabilitation, between May 2011 and May 2012, a net of 1,600 office sector jobs were lost in Southern Nevada. The professional & business services sector, which had been adding jobs in 2011, dropped 1,600 jobs over the past twelve months. The financial activities sector, which includes insurance and real estate, continued its decline, dropping 1,700 jobs over the past twelve months. Even the traditionally bullet-proof health care & social assistance sector has been shaky of late, though comparing May 2012 to May 2011 shows an increase of 1,700 jobs. Unemployment in the Las Vegas-Paradise MSA stood at 11.8 percent as of May 2012, down from 13.6 percent in May 2011. Over the same period, total employment in Southern Nevada has increased by 5,900 jobs, the majority in leisure and hospitality and trade, transportation and utilities. Office completions in the first quarter of 2012 consisted of a single 4,500 square foot Class C buildings on Horizon Ridge Parkway in Henderson, keeping new constructions to a minimum at mid-year 2012. If completions have been constrained, however, the office pipeline is beginning to fill up, at least by the standards of the past five years. There are currently three Class C, three Class B and two Class A projects in development in Southern Nevada. New developments are primarily located in the Downtown and Henderson submarkets, with one project, the Summerlin Centre Office Development located within the Shoppes at Summerlin Mall, apparently rising from the dead and scheduled to finally complete construction sometime over the next two years. After two quarters of rising vacancy, the office market got back on track in the second quarter of 2012 and saw vacancy decline by 0.4 points to 23.7 percent. Current vacancy remains higher now than during the surge in demand experienced in mid-2011, however, job losses in the office sector suggest that this rally may be short lived. The highest vacancy rates by submarket were in the North Las Vegas (29.5 percent), Northwest (26.4 percent), and East Las Vegas (26 percent) submarkets. Downtown continued to boast the market s lowest vacancy rate at 12.7 percent. Vacancy dropped in six of the Valley s submarkets: Airport, Downtown, East Las Vegas, Henderson, North Las Vegas and Southwest, increasing only in the Northwest and West Central submarkets this quarter. Class A office eased back this quarter after posting strong net absorption last quarter. Given the weakness in the finance, insurance, real estate and legal firms that make up the tenant base of Class A office, this is not surprising. So far in 2012, though, activity by gaming corporations is making up for the weakness in those other industries. HISTORICAL AND ASKING S 25.0% 24.0% 23.0% 22.0% 21.0% 20.0% 19.0% 18.0% 17.0% 16.0% $2.20 $2.15 $2.10 $2.05 $2.00 $1.95 $1.90 $1.85 $1.80 $1.75 This quarter s positive net absorption may be short lived considering the continued job losses in the office sector. 15.0% 3 Q 2010 4 Q 2010 1 Q 2011 2 Q 2011 3 Q 2011 4 Q 2011 1 Q 2012 2 Q 2012 $1.70 Vacancy Asking Rental Rate P. 10 COLLIERS INTERNATIONAL

LAS VEGAS QUARTERLY SECOND QUARTER 2012 Vacancy declined for both Class B and Class C properties in the second quarter, reversing weak performance posted last quarter. The return of call center operators to Southern Nevada may keep Class B space headed in the right direction, assuming they are able to find spaces that meet their needs. Net absorption was 188,302 square feet this quarter, a significant improvement over last quarter s negative 40,278 square feet of net absorption. After strong net absorption in mid-2011, demand for Southern Nevada office space turned negative in the fourth quarter of 2011 and first quarter of 2012. This quarter s positive net absorption is the strongest net absorption the market has seen since the fourth quarter of 2009, but may be short lived considering the continued job losses in the office sector. Class A office has absorbed 53,098 square feet of space so far this year. Class B net absorption rebounded this quarter, with 76,445 square feet for the quarter, but only 14,312 square feet of net absorption year-to-date. Class C space has absorbed 80,614 square feet so far in 2012, all of its positive net absorption being recorded in the second quarter. Most of the net absorption in Southern Nevada so far in 2012 has taken place in the Southwest, Northwest and Henderson submarkets. Gross absorption in 2012 has not kept pace with the very strong gross absorption numbers posted in the second and third quarters of 2011, but it remains fairly consistent with the gross absorption numbers we ve seen throughout the Great Recession. In 2012, gross absorption has averaged 1.1 million square feet per quarter, compared to 1.1 million in 2011, 1 million in 2010, 0.9 million in 2009 and 1 million in 2008. As overall demand for office space has remained consistent, the difference is now in how much new space is coming onto the market quarter after quarter. In essence, retention of businesses may be the key to jump starting recovery in Southern Nevada s office sector. Of the office deals we have tracked so far in 2012, the most active industries have been financial services, amusement & recreation (which includes gaming and hospitality companies), business services and education & social services. Local companies made up 66 percent of the tenants taking space so far this year and 58 percent of the total office space taken. The fact that this recovery (such as it is) has been largely homegrown goes a long way in explaining why is has been so slow and uneven. Regional companies made up 17 percent of the tenants taking space and 23 percent of the total office space taken. The amount of distressed office space (i.e. office properties that have received a notice of default or are at some stage in the foreclosure process) has dropped by approximately The Great Recession may have been global, but it looks as though, for Southern Nevada, the recovery is going to local. INVESTMENT SALES ACTIVITY OWNER/USER SALES ACTIVITY Investment Space 2012 YTD 2011 2010 Space for Sale (sf) 710,000 1,125,000 1,504,000 Average Asking Price/ $117 $145 $133 Average Cap Rate 8.5% 9.1% 9.0% Space Sold (sf) 856,000 2,056,000 1,024,000 Average Price/ $58 $85 $96 Average Cap Rate 6.7% 6.9% 8.8% Owner User Space 2012 YTD 2011 2010 Space for Sale (sf) 994,000 1,015,000 1,444,000 Average Asking Price/ $108 $133 $171 Space Sold (sf) 553,000 528,000 510,000 Average Price/ $50 $104 $125 LEASE AND SALES ACTIVITY LEASE ACTIVITY PROPERTY NAME LEASE DATE LEASE TERM SIZE LEASE TYPE McCarran Center II May 2012 48 months 23,000 $0.99 NNN Class C 2690 Decatur Apr 2012 120 months 22,000 $0.47 NNN Class C Quail Alta Apr 2012 120 months 17,000 $1.30 MG Class C Renaissance Office Park May 2012 63 months 8,000 $0.96 FSG Class C Camino Al Norte Business Park May 2012 36 months 6,000 $0.67 NNN Class C SALES ACTIVITY PROPERTY NAME SALE DATE SALE PRICE SIZE PRICE/ TYPE South Pointe May 2012 $3,150,000 21,000 $148 Class C Cambridge Quail Park Apr 2012 $3,045,000 50,000 $61 Class C Las Vegas Technology Center II Jun 2012 $3,040,000 20,000 $152 Class B Spanish Villas Apr 2012 $5,000,000 114,000 $44 Class C Rainbow Oasis Plaza May 2012 $1,850,000 39,000 $47 Class C LAS VEGAS NEVADA P. 11

OFFICE EMPLOYMENT Financial Activities Professional & Business Services Health Care & Social Assistance May 2011 May 2010 Change 38,000 39,700-1,700 99,900 101,500-1,600 66,800 65,100 +1,700 TOTAL 204,700 206,300-1,600 Source: Nevada Department of Employment, Training and Rehabilitation. 400,000 square feet between the end of 2011 and mid-year 2012. Distressed sales have been fair this year, and the amount of new distressed office space has slowed down tremendously over past years. Distressed office properties are, overall, selling for about 83 percent of non-distressed properties this year. The weighted average asking rental rate decreased this quarter to $1.90 per square foot (psf) on a full service gross (FSG) basis. This was a decrease of $0.01 from last quarter, and $0.11 from four quarters ago. Asking rents have been declining since the onset of the Great Recession in 2007/2008. The only large movement in asking rents this quarter, among submarkets or classes, was in North Las Vegas, where the average asking rent increased by $0.11 to $1.65 psf FSG (still among the lowest asking rents in the Valley) and East Las Vegas, where the average asking rent decreased by $0.07 to $1.55 psf FSG. Available office sublease space was increasing in the third and fourth quarters of 2011 a distressing sign since increases in sublease space soon translate into increases in directly leasable space. Fortunately, space available for sublease declined in the first quarter of 2012 and has remained fairly stable in the second quarter of 2012, hitting 338,666 square feet at mid-year. This is still higher than one year ago, but at least is once again heading in the right direction. The amount of office space available for sale on an owner/user basis has decreased by 21,000 square feet since the fourth quarter of 2011, and now stands at 994,000 square feet. The average asking price for owner/user space this quarter was $108 psf, a decrease of $25 from last year. Owner/user sales are significantly stronger this year than in the last four years. A total of 553,000 square feet traded in the first half of 2012 at an average price of $50. Non-distressed owner/user sales accounted for 82 percent of this space, and sold at an average sales price of $45 per square foot. Distressed owner/user sales sold for an average of $69 per square foot. At least some of this seeming discrepancy can be explained by the sale last quarter of the old Southwest Gas facility at 4300 W. Tropicana Avenue, which traded for only $29 psf. Properties available for sale on an investment basis decreased to 710,000 square feet at mid-year 2012 from last year s 1,125,000 square feet. The average asking price for investment sales was $117 psf, a $28 psf decrease from the fourth quarter of 2011, and coupled with the much lower actual sales prices, an indication that office sellers are still probably overvaluing their properties. Investment sales are still lagging this year compared to last, but are stronger than in the other years of the recession. The average sales price of an office investment currently stands at just $58 per square foot. Distressed investment sales amounted to HISTORICAL ABSORPTION VS. COMPLETIONS 5,000,000 Y-O-Y OFFICE CHANGE Office Y-O-Y Vacancy Change 8.0% 4,000,000 6.0% 3,000,000 4.0% 2,000,000 1,000,000 2.0% 0 0.0% -1,000,000-2.0% -2,000,000 2004 2005 2006 2007 2008 2009 2010 2011 Absorption YTD Completions YTD -4.0% Q101 Q201 Q301 Q401 Q102 Q202 Q302 Q402 Q103 Q203 Q303 Q403 Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 1 Q 2011 2 Q 2011 3 Q 2011 4 Q 2011 1 Q 2012 2 Q 2012 OFFICE DEVELOPMENT PIPELINE PROJECT TYPE SUBMARKET SIZE PRE-LEASING COMPLETION Legal Aid Center BTS Class C Downtown 10,000 100% 2012 Horizon Ridge Professional Park Class C Henderson 8,000 0% 2012 Horizon Ridge Professional Park Ph 2 Class C Henderson 13,000 0% 2012/13 Seven Hills Plaza A/B Class B Henderson 68,000 n/a 2012 Seven Hills Plaza C/D Class B Henderson 44,000 n/a 2013 EVAPS Law Office Building Class B Downtown 55,000 n/a 2012/13 Federal Justice Tower Class A Downtown 129,000 100% 2013 Summerlin Centre Office Development Class A Northwest 325,000 0%??? P. 12 COLLIERS INTERNATIONAL

LAS VEGAS QUARTERLY SECOND QUARTER 2012 661,000 square feet at an average sales price of $47 per square foot. Non-distressed sales have sold at an average of $96 per square foot so far in 2012. The Great Recession may have been global, but it looks as though, for Southern Nevada, the recovery is going to be local. Office employment, which posted a nice surge in mid-2011, has been hit hard over the past five years (though not as hard as the construction sector). Since the first quarter of 2008, office employment in Southern Nevada has dropped by over 24,000 jobs. As with construction, the main culprit here appears to be the collapse of residential, and to a lesser extent commercial, real estate in the Valley. When the housing market bubble burst, it took thousands of jobs with it in the financial, real estate and legal sectors. Unless job gains in the leisure and hospitality sector soon translate into demand for commercial real estate, it seems unlikely that the Valley will see significant recovery in the office sector without also seeing recovery in the housing sector. MARKET COMPARISONS OFFICE MARKET TYPE BLDGS TOTAL INVENTORY DIRECT VACANT DIRECT SUBLEASE SUBLEASE VACANT TOTAL VACANT CURRENT QUARTER PRIOR QUARTER NET ABSORPTION CURRENT QTR NET ABSORPTION YTD COMPLETIONS CURRENT QTR COMPLETIONS YTD UNDER CONSTRUCTION PLANNED CONSTRUCTION WEIGHTED AVG ASKING RENTAL AIRPORT SUBMARKET A 6 605,557 224,822 37.1% - 0.0% 224,822 37.1% 38.4% 7,521 20,640 - - - - $2.74 B 43 1,957,902 312,099 15.9% 15,089 0.8% 327,188 16.7% 16.9% (14,607) (25,382) - - - - $1.88 C 266 2,937,554 771,837 26.3% 17,184 0.6% 789,021 26.9% 28.3% 38,958 14,799 - - - - $1.59 Total 315 5,501,013 1,308,758 23.8% 32,273 0.6% 1,341,031 24.4% 25.3% 31,872 10,057 - - - - $1.85 DOWNTOWN A 5 807,588 89,212 11.0% 7,706 1.0% 96,918 12.0% 11.2% (6,077) (23,752) - - - 129,000 $2.57 B 32 2,273,742 309,304 13.6% 1,500 0.1% 310,804 13.7% 14.2% 11,978 14,037 - - - 55,000 $1.90 C 80 1,094,098 132,288 12.1% - 0.0% 132,288 12.1% 13.0% 9,737 2,895 - - - 10,000 $1.54 Total 117 4,175,428 530,804 12.7% 9,206 0.2% 540,010 12.9% 13.3% 15,638 (6,820) - - - 194,000 $1.92 EAST LAS VEGAS A 9 1,351,642 248,644 18.4% 48,845 3.6% 297,489 22.0% 25.7% 57,326 33,717 - - - - $2.83 B 19 1,409,555 498,863 35.4% - 0.0% 498,863 35.4% 34.5% (17,757) (23,069) - - - - $1.20 C 141 2,404,834 596,393 24.8% 12,776 0.5% 609,169 25.3% 25.1% (540) (12,206) - - - - $1.31 Total 169 5,166,031 1,343,900 26.0% 61,621 1.2% 1,405,521 27.2% 27.8% 39,029 (1,558) - - - - $1.55 HENDERSON A 11 787,274 288,092 36.6% 17,824 2.3% 305,916 38.9% 35.5% (26,699) (55,843) - - - - $2.57 B 68 2,285,225 538,214 23.6% 26,728 1.2% 564,942 24.7% 25.7% 22,668 49,026 - - 67,692 44,000 $2.11 C 222 2,148,987 421,274 19.6% 6,159 0.3% 427,433 19.9% 23.4% 81,293 50,903 4,500 13,500-21,620 $1.68 Total 301 5,221,486 1,247,580 23.9% 50,711 1.0% 1,298,291 24.9% 26.2% 77,262 44,086 4,500 13,500 67,692 65,620 $2.07 NORTH LAS VEGAS A - - - n/a - n/a - n/a n/a - - - - - - $- B 8 200,796 73,514 36.6% - 0.0% 73,514 36.6% 38.5% 3,697 5,959 - - - - $1.82 C 49 426,417 111,649 26.2% - 0.0% 111,649 26.2% 25.8% (1,693) (21,442) - - - - $1.53 Total 57 627,213 185,163 29.5% - 0.0% 185,163 29.5% 29.8% 2,004 (15,483) - - - - $1.65 NORTHWEST A 21 1,709,415 714,825 41.8% 7,404 0.4% 722,229 42.3% 41.2% (14,648) 38,277 - - - 200,000 $2.12 B 82 2,988,470 548,246 18.3% 22,549 0.8% 570,795 19.1% 21.2% 63,028 81,296 - - - - $2.15 C 281 2,949,534 752,694 25.5% 16,011 0.5% 768,705 26.1% 24.2% (53,830) (14,545) - - - - $1.77 Total 384 7,647,419 2,015,765 26.4% 45,964 0.6% 2,061,729 27.0% 26.8% (5,450) 105,028 - - - 200,000 $2.00 SOUTHWEST A 3 397,112 169,733 42.7% - 0.0% 169,733 42.7% 44.7% 7,752 53,263 - - - - $2.57 B 70 2,714,887 693,161 25.5% 71,876 2.6% 765,037 28.2% 28.2% 5,837 29,746 - - - - $2.41 C 303 3,298,374 638,591 19.4% 42,415 1.3% 681,006 20.6% 21.8% 38,708 79,702 - - - - $1.85 Total 376 6,410,373 1,501,485 23.4% 114,291 1.8% 1,615,776 25.2% 25.9% 52,297 162,711 - - - - $2.19 WEST CENTRAL A 2 227,624 48,543 21.3% - 0.0% 48,543 21.3% 15.5% (13,204) (13,204) - - - - $2.03 B 46 1,672,458 475,002 28.4% - 0.0% 475,002 28.4% 28.5% 1,601 (117,301) - - - - $1.79 C 165 2,663,939 649,407 24.4% 2,069 0.1% 651,476 24.5% 24.0% (12,747) (19,492) - - - - $1.56 Total 213 4,564,021 1,172,952 25.7% 2,069 0.0% 1,175,021 25.7% 25.2% (24,350) (149,997) - - - - $1.67 MARKET TOTAL A 57 5,886,212 1,783,871 30.3% 81,779 1.4% 1,865,650 31.7% 31.7% 11,971 53,098 - - - 329,000 $2.43 B 368 15,503,035 3,448,403 22.2% 137,742 0.9% 3,586,145 23.1% 23.7% 76,445 14,312 - - 67,692 99,000 $1.96 C 1,507 17,923,737 4,074,133 22.7% 96,614 0.5% 4,170,747 23.3% 23.8% 99,886 80,614 4,500 13,500-31,620 $1.62 Total 1,932 39,312,984 9,306,407 23.7% 316,135 0.8% 9,622,542 24.5% 24.9% 188,302 148,024 4,500 13,500 67,692 459,620 $1.90 QUARTERLY COMPARISON AND TOTALS Q2-12 1,932 39,312,984 9,306,407 23.7% 316,135 0.8% 9,622,542 24.5% 24.9% 188,302 148,024 4,500 13,500 67,692 459,620 $1.90 Q1-12 1,931 39,308,484 9,490,209 24.1% 316,208 0.8% 9,806,417 24.9% 24.8% (40,278) (40,278) 9,000 9,000 133,500 63,190 $1.91 Q4-11 1,929 39,299,484 9,440,931 24.0% 322,029 0.8% 9,762,960 24.8% 24.4% (119,560) 209,462 45,579 478,023 142,500 8,190 $1.95 Q3-11 1,928 39,253,905 9,275,792 23.6% 294,361 0.7% 9,570,153 24.4% 24.9% 482,966 329,022 312,444 432,444-26,190 $1.98 Q2-11 1,925 38,941,461 9,446,314 24.3% 266,009 0.7% 9,712,323 24.9% 25.2% 48,637 (153,944) - 120,000 332,444 26,190 $2.01 LAS VEGAS NEVADA P. 13

RETAIL MARKET INDICATORS Q2-12 NET ABSORPTION CONSTRUCTION RENTAL Projected Q3-12 Retail Market Review We can happily report that our predictions for the second quarter of 2012 concerning the retail market were wrong, as retail turned in a surprisingly strong quarter. Even without new construction to bolster it, net absorption of retail space was not only positive, but surpassed net absorption in the first quarter of 2012 if one discounts net absorption from new completions. Vacancy declined to 11.1 percent in the second quarter of 2012, 0.6 points lower than one year ago. Asking rents for retail space increased this quarter to $1.40 per square foot (psf) per month on a triple net (NNN) basis, though they remain lower than they were one year ago. Retail employment in the Las Vegas MSA increased between May 2011 and May 2012, from 92,600 retail employees to 94,300 retail employees. While retail employment dropped between January 2012 and February 2012, it has been on the rise for the past three months. Over the past twelve months, employment has increased in food and beverage stores and health and personal care stores, and was flat in general merchandise and clothing. Unemployment in the Las Vegas-Paradise MSA stood at 11.8 percent as of May 2012, down from 13.6 percent in May 2011. Over the same period, total employment in Southern Nevada has increased by 5,900 jobs, the majority in leisure and hospitality and trade, transportation and utilities. NORTHWEST 95 SOUTHWEST 215 WEST CENTRAL NORTH LAS VEGAS 15 DOWN TOWN UNIVERSITY RESORT EAST CORRIDOR 215 NORTHEAST 95 HENDERSON Clark County s taxable sales totalled $7.5 billion in the first quarter of 2012, a 5.2 percent increase from one year ago. Pre-recession, Clark County posted a quarterly average of $90,000 of taxable sales per retail employee. In 2012, taxable sales per retail employee are currently averaging $82,000 per retail employee. This marks progress from the low of $74,000 per employee in the third quarter of 2009, but leaves room for improvement. No new retail product was completed in the second quarter of 2012. The Decatur/215 center currently has 160,000 square feet under construction, and another 140,000 square feet is still planned at Green Valley Crossing. Although regional malls are not tracked in this report, it is worth noting that the Shoppes at Summerlin (sometimes referred to as the Summerlin Mall), which stopped construction during the recession, are apparently on track to finish construction in the near future. Assuming this comes to pass, it would add 968,000 square feet of upscale retail space to the market. Vacancy in Southern Nevada retail centers decreased to 11.1 percent in the second quarter of 2012, down from the peak of 11.7 percent reached in the second and third quarters of 2011, and down from one year ago. Since the onset of the recession in the fourth quarter of 2007, retail vacancy has increased by 7.6 points, giving Southern Nevada a long way to go to get back to what would be considered healthy. Just the same, with taxable sales, gaming revenue and hiring on the Strip all heading in the right direction (i.e. up), the prognosis for suburban retail is certainly more positive now than it was one year ago. HISTORICAL AND ASKING LEASE S 11.8% 11.6% 11.4% 11.2% 11.0% 10.8% 10.6% 10.4% 10.2% $1.80 $1.70 $1.60 $1.50 $1.40 $1.30 $1.20 $1.10 $1.00 If Southern Nevada is to extend its retail recovery, it seems likely that it will have to rely on smaller, local retailers to do so. 10.0% 3 Q 2010 4 Q 2010 1 Q 2011 2 Q 2011 3 Q 2011 4 Q 2011 1 Q 2012 2 Q 2012 $0.90 Vacancy Asking Rental Rate P. 14 COLLIERS INTERNATIONAL

LAS VEGAS QUARTERLY SECOND QUARTER 2012 The Valley s highest submarket vacancy this quarter was 15.9 percent in the University East submarket. The Southwest s vacancy of 8.4 percent was the lowest. On a submarket by submarket basis, the move in vacancy was quite mixed. Vacancy went down, quarter-over-quarter, in Henderson, Southwest, University East and West Central, and increased in Downtown, North Las Vegas, Northeast and Northwest. On a year-over-year basis, occupancy is on the rise in all submarkets but North Las Vegas and University East. Vacancy this quarter was down in all product types on a quarter-over-quarter basis. Yearover-year, vacancy has increased in power centers and declined in community centers and neighborhood centers. The weighted average monthly asking rental rate increased for retail space for the first time since the first quarter of 2011, and for only the second quarter in the past fourteen quarters. Whether this is the beginning of a trend or simply another blip will not be clear until perhaps year s end, but it does offer the hope that rental rates are now bottoming out. The largest drop in the Valley was $0.06 in the North Las Vegas submarket, with a $0.13 climb in the University East submarket being the largest increase among submarkets. The Valley s most expensive submarket, Southwest, saw asking rents increase by $0.10 to $1.80 psf NNN. Community centers posted a $0.02 decrease in asking rents, while asking rents increased in neighborhood centers ($0.03) and power centers ($0.09). Sales activity of retail space continued to be weak in 2012. The sale of a Walgreens location on the Strip juiced the single-tenant investment numbers, sending that category s average sales price to a five year high of $514. Average sales price was down, however, for single-tenant owner/user and investment sales of shopping centers, and sales volume is about 40 percent of what it was in 2011. On the bright side, though, institutional buyers are giving Southern Nevada a hard look. While they are not sold on the market in and of itself, the spreads they can find in Southern Nevada make it very attractive. In general, quality retail is doing well and inspiring bidding wars. The distressed, which was once dominating the market, is now beginning to recede in importance. Southern Nevada currently has 1.38 million square feet HISTORICAL NET ABSORPTION VS. COMPLETIONS 250,000 200,000 150,000 100,000 50,000 0-50,000-100,000-150,000-200,000-250,000 OCCUPANCY VS. RETAIL EMPLOYMENT 100,000 98,000 96,000 94,000 92,000 90,000 88,000 86,000 84,000 82,000 92.0% 91.0% 90.0% 89.0% 88.0% 87.0% 86.0% 85.0% 84.0% 83.0% -300,000 3 Q 2010 4 Q 2010 1 Q 2011 2 Q 2011 3 Q 2011 4 Q 2011 1 Q 2012 2 Q 2012 80,000 3 Q 2010 4 Q 2010 1 Q 2011 2 Q 2011 3 Q 2011 4 Q 2011 1 Q 2012 2 Q 2012 82.0% Absorption Completions Retail Jobs Occupancy Rate LEASE AND SALES ACTIVITY LEASE ACTIVITY PROPERTY NAME LEASE DATE LEASE TERM SIZE LEASE TYPE Warm Springs Marketplace May 2012 60 months 13,000 $0.64 NNN Community Center Rainbow Design Center Apr 2012 60 months 10,000 $0.55 NNN Community Center Sundance Plaza May 2012 36 months 5,000 $1.55 NNN Strip Center Siena Promenade Apr 2012 60 months 4,000 $1.17 NNN Community Center Silverado Ranch Plaza Apr 2012 60 months 3,000 $2.15 NNN Freestanding SALES ACTIVITY PROPERTY NAME SALE DATE SALE PRICE SIZE PRICE/ TYPE Walgreens May 2012 $28,000,000 16,000 $1,740 Freestanding 3105 Sahara Apr 2012 $1,400,000 11,000 $131 Freestanding Marie Callenders May 2012 $1,200,000 8,000 $146 Freestanding Ann Professional Plaza Apr 2012 $222,000 2,600 $85 Strip Center LAS VEGAS NEVADA P. 15

RETAIL of big-box space available in the marketplace, representing a vacancy rate of 7.2 percent and at an average asking price of $0.94 psf NNN. Compare this to shop-space, with a vacancy rate of 14.1 percent and asking rate of $1.49 psf NNN. While shop-space has a higher vacancy rate than big-box, the big-box s hold about 28 percent of all the vacant retail space in Southern Nevada s anchored centers. Net absorption (including vacant sublease space) in big-box space over the past quarter was 170,000 square feet. Shop space posted 95,000 square feet of net absorption over the same period. Filling big-box space could be a long process, especially given the current trend in big-box retailing to downsize their stores. MARKET SUMMARY Q2-12 Q1-12 Q2-12 Vacancy Rate 11.1% 11.5% 11.7% Asking Rent (P, NNN) Net Absorption () New Completions () $1.40 $1.38 $1.48 151,251 163,597-235,995 0 195,000 0 Gross absorption, which rebounded last quarter to 655,000 square feet, decreased to 559,000 square feet in the second quarter of 2012. If one were to ignore the two new Winco locations that opened last quarter, however, one would find retail leasing and sales activity on the rise after a fairly disappointing performance in late 2011. Gross absorption was strongest in community centers, and showed the most improvement in power centers. Among submarkets, Henderson showed the most activity in the second quarter of 2012. Distressed retail space totaled 4.3 million square feet this quarter, representing a sizable 310,000 square foot increase from the first quarter of 2012 and a 517,000 square foot decrease from one year ago. So far in 2012, nine distressed retail properties have sold totalling 343,000 square feet at an average sales price of $80 psf. This represents about half of the retail sales so far in 2012 at a sizable discount compared to the non-distressed sales price of $139 psf. Most of the planned expansions in Southern Nevada are by restaurants, which are showing some impressive gains in revenue nationally, but are showing some trepidation towards further expansions in Southern Nevada. The cost-conscious dollar stores appear to be nearing the end of their market expansions, and expansion by grocery stores also appears to be at an end. If Southern Nevada is to extend its retail recovery, it seems likely that it will have to rely on smaller, local retailers to do so. DEMOGRAPHICS Population (2012 estimate) Projected Annual Population Growth (2012-2017) Occupied Retail Space (Q4-11) Downtown 111,000-1.3% 1,078,000 6.4% Henderson 207,000 13.1% 7,703,000 2.4% North Las Vegas 228,000 15.2% 4,361,000-3.1% Northeast 159,000 3.7% 2,421,000 2.7% Northwest 378,000 10.0% 9,558,000 3.3% Southwest 232,000 19.9% 5,297,000 1.1% University East 348,000 8.1% 4,958,000-1.9% West Central 104,000 0.6% 3,904,000 0.1% Occupied Retail Growth ( Last 12 mo.) SALES ACTIVITY Single-Tenant Retail Sales 2012 (TYD) 2011 2010 Owner/User Space Sold (sf) 100,000 251,000 263,000 Owner/User Average Price/ $78 $290 $102 Investment Space Sold (sf) 80,000 825,000 238,000 Investment Average Price/ $514 $213 $180 SALES ACTIVITY Shopping Center Retail Sales 2012 2011 2010 Investment Space Sold (sf) 533,000 2,393,000 206,000 Investment Average Price/ $56 $107 $67 P. 16 COLLIERS INTERNATIONAL

LAS VEGAS QUARTERLY SECOND QUARTER 2012 MARKET COMPARISONS RETAIL MARKET TYPE BLDGS TOTAL INVENTORY DIRECT VACANT DIRECT SUBLEASE SUBLEASE VACANT TOTAL VACANT CURRENT QUARTER PRIOR QUARTER NET ABSORPTION CURRENT QTR NET ABSORPTION YTD COMPLETIONS CURRENT QTR COMPLETIONS YTD UNDER CONSTRUCTION PLANNED CONSTRUCTION WEIGHTED AVG ASKING RENTAL DOWNTOWN SUBMARKET PC - - - n/a - n/a - n/a n/a - - - - - - $- CC 5 684,340 89,076 13.0% - 0.0% 89,076 13.0% 12.3% (5,041) (10,041) - - - - $1.17 NC 5 518,070 35,120 6.8% - 0.0% 35,120 6.8% 7.0% 1,316 1,316 - - - - $0.34 Total 10 1,202,410 124,196 10.3% - 0.0% 124,196 10.3% 10.0% (3,725) (8,725) - - - - $0.94 HENDERSON SUBMARKET PC 8 2,896,215 294,699 10.2% - 0.0% 294,699 10.2% 12.3% 62,597 63,788 - - - - $1.57 CC 20 2,864,154 304,054 10.6% - 0.0% 304,054 10.6% 13.0% 67,756 18,380 - - - 139,407 $1.22 NC 26 2,892,088 350,809 12.1% 57,628 2.0% 408,437 14.1% 13.4% (21,102) 109,732-95,000 - - $1.43 Total 54 8,652,457 949,562 11.0% 57,628 0.7% 1,007,190 11.6% 12.9% 109,251 191,900-95,000-139,407 $1.40 NORTH LAS VEGAS SUBMARKET PC 2 832,000 118,950 14.3% - 0.0% 118,950 14.3% 12.9% (11,667) (11,667) - - - - $2.05 CC 12 2,253,539 243,824 10.8% 2,570 0.1% 246,394 10.9% 10.9% (55,326) (47,976) - - - - $1.08 NC 16 1,832,468 194,704 10.6% - 0.0% 194,704 10.6% 10.6% 173 6,510 - - - - $1.59 Total 30 4,918,007 557,478 11.3% 2,570 0.1% 560,048 11.4% 11.1% (66,820) (53,133) - - - - $1.47 NORTHEAST SUBMARKET PC - - - n/a - n/a - n/a n/a - - - - - - $- CC 8 1,398,026 99,263 7.1% 18,614 1.3% 117,877 8.4% 8.3% (1,521) 7,265 - - - - $1.14 NC 15 1,306,795 184,626 14.1% 58,742 4.5% 243,368 18.6% 18.4% (2,590) 41,029 - - - - $1.36 Total 23 2,704,821 283,889 10.5% 77,356 2.9% 361,245 13.4% 13.2% (4,111) 48,294 - - - - $1.28 NORTHWEST SUBMARKET PC 7 2,840,846 153,960 n/a - n/a 153,960 5.4% 5.5% 2,489 6,065 - - - - $1.67 CC 18 3,970,890 218,242 5.5% - 0.0% 218,242 5.5% 5.8% 13,974 109,004-100,000 160,000 - $1.81 NC 31 3,705,508 586,923 15.8% 75,162 2.0% 662,085 17.9% 17.1% (31,756) 11,459 - - - - $1.24 Total 56 10,517,244 959,125 9.1% 75,162 0.7% 1,034,287 9.8% 9.7% (15,293) 126,528-100,000 160,000 - $1.44 SOUTHWEST SUBMARKET PC 1 944,314 30,908 3.3% - 0.0% 30,908 3.3% 3.3% - - - - - - $3.00 CC 9 3,216,421 258,386 8.0% - 0.0% 258,386 8.0% 8.0% (1,316) (12,071) - - - - $1.79 NC 13 1,623,100 197,585 12.2% - 0.0% 197,585 12.2% 15.4% 51,569 59,102 - - - - $1.62 Total 23 5,783,835 486,879 8.4% - 0.0% 486,879 8.4% 9.3% 50,253 47,031 - - - - $1.80 UNIVERSITY EAST SUBMARKET PC 3 1,210,223 300,487 24.8% - 0.0% 300,487 24.8% 23.7% (13,627) (5,177) - - - - $1.76 CC 18 2,729,409 466,206 17.1% - 0.0% 466,206 17.1% 18.9% 49,188 (106,265) - - - - $1.11 NC 17 1,953,965 168,925 8.6% 1,200 0.1% 170,125 8.7% 10.9% 24,246 24,246 - - - - $1.63 Total 38 5,893,597 935,618 15.9% 1,200 0.0% 936,818 15.9% 17.2% 59,807 (87,196) - - - - $1.41 WEST CENTRAL SUBMARKET PC 3 1,138,224 185,001 16.3% - 0.0% 185,001 16.3% 14.5% (20,095) (47,541) - - - - $1.15 CC 14 1,650,769 241,045 14.6% - 0.0% 241,045 14.6% 17.2% 42,963 92,085 - - - - $1.04 NC 17 1,746,530 205,460 11.8% 1,700 0.1% 207,160 11.9% 11.8% (979) 5,605 - - - - $1.21 Total 34 4,535,523 631,506 13.9% 1,700 0.0% 633,206 14.0% 14.4% 21,889 50,149 - - - - $1.13 MARKET TOTAL PC 24 9,861,822 1,084,005 11.0% - 0.0% 1,084,005 11.0% 11.2% 19,697 5,468 - - - - $1.66 CC 104 18,767,548 1,920,096 10.2% 21,184 0.1% 1,941,280 10.3% 11.2% 110,677 50,381-100,000 160,000 139,407 $1.29 NC 140 15,578,524 1,924,152 12.4% 194,432 1.2% 2,118,584 13.6% 13.9% 20,877 258,999-95,000 - - $1.37 Total 268 44,207,894 4,928,253 11.1% 215,616 0.5% 5,143,869 11.6% 12.1% 151,251 314,848-195,000 160,000 139,407 $1.40 QUARTERLY COMPARISON AND TOTALS Q2-12 268 44,207,894 4,928,253 11.1% 215,616 0.5% 5,143,869 11.6% 12.1% 151,251 314,848 0 195,000 160,000 139,407 $1.40 Q1-12 268 44,207,894 5,079,504 11.5% 290,369 0.7% 5,369,873 12.1% 12.2% 163,597 163,597 195,000 195,000-299,407 $1.38 Q4-11 267 44,012,894 5,048,101 11.5% 321,079 0.7% 5,369,180 12.2% 12.4% 119,287 (282,740) 30,500 33,411 195,000 299,407 $1.38 Q3-11 267 43,982,394 5,136,888 11.7% 320,264 0.7% 5,457,152 12.4% 12.5% 11,735 (402,027) 0 2,911 198,478 326,429 $1.41 Q2-11 267 43,982,394 5,148,623 11.7% 328,686 0.7% 5,477,309 12.5% 11.9% (235,995) (413,762) 0 2,911-494,407 $1.48 Q1-11 267 43,982,394 4,912,628 11.2% 325,498 0.7% 5,238,126 11.9% 11.9% (177,767) (177,767) 2,911 2,911-650,072 $1.56 PC = Power Center CC = Community Center NC = Neighborhood Center LAS VEGAS NEVADA P. 17