NATIONAL ASSOCIATION of REALTORS RESEARCH DIVISION. Prepared for Florida REALTORS

NATIONAL ASSOCIATION of REALTORS RESEARCH DIVISION Prepared for Florida REALTORS

NATIONAL ASSOCIATION OF REALTORS RESEARCH DIVISION Page 1 Page 3 Page 4 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Economic Overview Economic Forecast Commercial Overview Commercial Forecast Miami Tampa Orlando Fort Lauderdale West Palm Beach Jacksonville Metro Summary THE NATIONAL ASSOCIATION OF REALTORS, The Voice for Real Estate, is America s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

AUTHOR GEORGE RATIU Economist Approaching the midpoint of the year, commercial real estate markets are posting positive signs. With fundamentals improving and investments growing, commercial markets are facing a more optimistic landscape going forward into 2011. However, the economic framework has flattened, posing possible challenges. Economic activity as measured by gross domestic product (GDP) slowed during the first quarter. GDP advanced a modest 1.8 percent during the quarter. Both consumers and businesses reined in their spending, while governments federal, state and local have been cutting expenses across the board. GDP (% Chg-Annual Rate) 1.6 5.0 3.7 1.7 2.6 3.1 1.8 2009 - Q1-4.9-0.7 2009 - Q2 2009 - Q3 2009 - Q4 2010 - Q1 The equipment and software component of business spending has slowed significantly in the past two quarters. From an annual growth rate of better than 20.0 percent in the first half last year, it dropped to 7.7 percent and 11.6 percent in the past two quarters, respectively. A good deal of activity has been focused on increasing inventories, particularly in light of growing export opportunities. During the first quarter, a softer dollar afforded U.S. products a price advantage. Exports of consumer goods increased at a healthy 7.8 percent pace. Imports of goods were also positive at 5.9 percent during the quarter. Increased trade brought higher prices for both exports and imports. In the U.S., consumer prices rose 2.2 percent during the first quarter. While the increase remains mild, rising inflation in producer prices adds pressure on consumer prices. During the first quarter, producer prices for goods by stages of production registered noticeable increases 14.2 percent for crude, 7.6 percent for intermediate and 5.1 percent for finished goods. Given already narrow profit margins, producers have started passing price increases onto consumers. Consumer spending remained positive during the quarter, but moderated. Consumers increased their spending by 2.8 percent, mostly directed at durable goods cars, vehicle parts and recreational goods. (continued on next page) 2010 - Q2 2010 - Q3 2010 - Q4 2011 - Q1 Source: BEA 1

2007 - Jan 2007 - Apr 2007 - Jul 2007 - Oct 2008 - Jan 2008 - Apr 2008 - Jul 2008 - Oct 2009 - Jan 2009 - Apr 2009 - Jul 2009 - Oct FLORIDA 2010 - Jan 2010 - Apr 2010 - Jul 2010 - Oct 2011 - Jan 2011 - Apr (continued from previous page) Consumers also upped their spending on furnishings, clothing and shoes, as well as food and beverages. Spending on services rose only 1.7 percent. Consumers have been facing a double threat higher prices and high unemployment. During the first quarter, only 499,000 jobs were added to the economy. The pace of employment has not matched the pattern of growth normally associated with historic economic recoveries. Unemployment insurance claims continued to be elevated, hovering around 400,000 per week. The number of people receiving unemployment benefits declined below four million in the first quarter. But, the unemployment rate returned to 9.0 in April, after a slight dip in February and March. 12 10 8 6 4 2 0 Unemployment Rate (%) CPI (1982-84=100) Source: BLS Faced with uncertain global conditions and rising prices, consumers remain wary. The main measures of consumer confidence and sentiment have been mirroring the trend. Monthly volatility notwithstanding, surveys of consumers have remained in a sideways slide for the past year. The consumer sentiment index produced by the University of Michigan declined from 74.2 in January to 69.8 in April. The survey generally asks questions related to people s financial wealth and tend to follow the stock market index. 230 225 220 215 210 205 200 195 190 The index tends to be at around 100 or higher during economic expansionary years. It was 89 in the 2001 recession, following the dot-com bust. It fell into the 60s in 2008 and 2009. Commercial real estate markets have regained their foothold. Low levels of new construction in recent years have prevented a run-up in supply. With business investments still positive, demand for commercial space has been improving and availability has been trending down. Just as in the residential sector, lending problems are the biggest issue holding back commercial real estate. Conditions for commercial loans have tightened thus far in 2011, with 60 percent of commercial Realtors reporting that they failed to complete a transaction this year due to financing problems. Markets have bifurcated along property values and geographic locations. Gateway cities, like New York, Boston, San Francisco and Washington, DC are attracting private investors, national banks and global funds to stabilized, high-end assets. Sales of properties over $5 million have doubled over the past year. Meanwhile, investment conditions in mid-tier markets are lagging. Requirements for commercial loans have tightened in secondary and tertiary markets in 2011. In these markets, regional banks provide the majority of commercial loans, followed by private investors; national banks are a distant third. The apartment rental market is the only sector that has clearly turned the corner, resulting in consistently falling vacancy rates and rising rent. Stronger increases in apartment rents will force some renters to consider home ownership as a hedge against inflation. For the remainder of 2011, GDP growth will remain weak less than 3 percent growth. That will translate into about 1.5 million net new jobs. After the sharp 8 million job losses during the recent past Great Recession, the job creation of less than 2 million per year is not at all impressive. 2

Annual Growth 2010 I 2010 II 2010 III 2010 IV 2011 I 2011 II 2011 III 2011 IV 2012 I 2012 II 2009 Rates (%) 2010 2011 2012 Real GDP 3.7 1.7 2.6 3.1 1.8 2.4 2.6 2.3 2.8 2.7-2.6 2.9 2.4 2.6 Nonfarm Payroll -0.3 2.0-0.2 0.8 1.3 1.5 1.3 1.5 1.7 1.7-4.4-0.7 1.1 1.7 Employment Consumer Prices 1.3-0.5 1.4 2.6 5.3 4.5 2.2 2.6 2.8 2.9-0.3 1.6 3.2 2.9 Real Disposable Income 1.3 5.6 1.0 1.8 1.0 0.6 1.6 1.6 3.7 2.1 0.6 1.4 1.5 2.2 Consumer Confidence Unemploymen t (%) 52 58 51 53 67 67 66 68 69 70 45 54 67 70 9.7 9.6 9.6 9.6 8.9 9.0 8.9 8.8 8.7 8.5 9.3 9.6 8.9 8.5 Interest Rates (%) 2010 I 2010 II 2010 III 2010 IV 2011 I 2011 II 2011 III 2011 IV 2012 I 2012 II 2009 2010 2011 2012 Fed Funds Rate 0.1 0.2 0.2 0.1 0.1 0.1 0.1 0.5 1.0 1.3 0.2 0.2 0.2 1.5 3-Month T-Bill Rate 0.1 0.1 0.2 0.4 0.2 0.1 0.3 0.8 1.3 1.5 0.2 0.2 0.3 1.7 Prime Rate 3.3 3.3 3.3 3.1 2.9 2.7 2.9 3.4 4.1 4.8 3.3 3.2 3.2 4.5 Corporate Aaa Bond Yield 5.3 5.0 4.6 4.8 5.1 5.1 5.2 5.4 5.6 5.7 5.3 4.9 5.2 5.8 10-Year Government 3.7 3.5 2.8 3.3 3.4 3.3 3.5 3.7 4.1 4.3 3.3 3.3 3.5 4.3 Bond 30-Year Government Bond 4.6 4.4 3.9 4.2 4.3 4.2 4.4 4.6 4.9 5.0 4.1 4.3 4.4 5.1 Source: National Association of REALTORS 3

Payroll Job Changes in Thousands 2008 2009 2010 2011 2012 Jacksonville -12.3-35.0-5.7 6.0 18.0 Ft. Lauderdale -24.3-52.2-10.3 7.0 22.0 Miami -18.6-57.9-5.8 14.0 29.0 West Palm Beach -20.5-36.6-6.6 5.0 18.0 Orlando -18.1-66.3-4.8 26.0 36.0 Tampa -41.6-69.9-16.9 9.0 14.0 Source: National Association of REALTORS 3

WASHINGTON (May 24, 2011) The improving economy and job creation mean growing demand for commercial real estate, according to the National Association of Realtors. Lawrence Yun, NAR chief economist, said job creation will be the biggest factor moving forward. Job growth creates demand for commercial space, and the economy should be adding between 1.5 million and 2 million jobs annually both this year and in 2012, with the unemployment rate falling to 8.0 percent by the end of next year, he said. Given the minimal new supply in recent years, the rising demand means vacancy rates will be trending down in the commercial real estate sectors. Individual markets are now stabilizing and in some cases rising. From the second quarter of this year to the second quarter of 2012, NAR forecasts vacancy rates to decline 1.0 percentage point in the office sector, 0.9 point in industrial real estate, 0.5 point in the retail sector and 1.1 percentage points in the multifamily rental market. The Society of Industrial and Office Realtors, in its SIOR Commercial Real Estate Index, an attitudinal survey of more than 360 local market experts,1 shows a firming up of market fundamentals. The SIOR index, measuring the impact of 10 variables, rose 6.8 percentage points to 57.5 in the first quarter, the highest since the fall of 2008. The Northeast and South drove improvements in market conditions. Vacancy rates are improving, but concessions continue to make it a tenant s market. Although the SIOR index remains notably lower than a level of 100 that represents a balanced marketplace, this is the sixth consecutive quarterly improvement after almost three years of decline. The last time the index was at 100 was in the third quarter of 2007. A separate NAR commercial lending survey shows 65 percent of Realtors report lending conditions have tightened thus far in 2011, and six out of 10 failed to complete a transaction this year due to financing problems. Regional banks provide the majority of commercial loans, followed by private investors. National banks are a distant third. Just as in the residential sector, lending problems are the biggest issue impacting commercial real estate, Yun noted. The multifamily sector is the only area that has clearly turned the corner, resulting in consistently falling vacancy rates and rising rents. Solid rises in apartment rents will force some renters to consider home ownership, Yun said. NAR s latest COMMERCIAL REAL ESTATE OUTLOOK offers projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data were provided by CBRE Econometric Advisors. Office Markets Vacancy rates in the office sector are expected to fall from 16.3 percent in the second quarter of this year to 15.3 percent in the second quarter of 2012. The markets with the lowest office vacancy rates currently are Honolulu and New York City, each with vacancies below 9 percent. Office rents are projected to rise 0.3 percent this year and another 4.3 percent in 2012. In 57 markets tracked, net absorption of office space, which includes the leasing of new space coming on the market as well as space in existing properties, is likely to be 26.6 million square feet in 2011. Industrial Markets Industrial vacancy rates are expected to decline from 13.9 percent in the current quarter to 13.0 percent in the second quarter of 2012. At present, the areas with the lowest industrial vacancy rates are Los Angeles and Salt Lake City, with vacancies in the 7 to 8 percent range. (continued on next page) 4

(continued from previous page) Annual industrial rent should decline 1.5 percent in 2011 before rising 2.0 percent next year. Net absorption of industrial space in 58 markets tracked is seen at 126.1 million square feet in 2011. Retail Markets Retail vacancy rates are forecast to decline from 13.1 percent in the second quarter of this year to 12.6 percent in the second quarter of 2012. Markets with the lowest retail vacancy rates currently include Honolulu; Long Island, N.Y.; and San Jose, Calif., all with vacancies below 8 percent. Average retail rent is expected to decline 1.4 percent in 2011, and then rise 0.7 percent next year. Net absorption of retail space in 53 tracked markets is projected to be 5.4 million square feet in 2011. Multifamily Markets The apartment rental market multifamily housing is continuing to tighten as household formation grows. Multifamily vacancy rates should drop from 5.8 percent in the current quarter to 4.7 percent in the second quarter of 2012. Areas with the lowest multifamily vacancy rates presently are Pittsburgh; San Jose, Calif.; and Portland, Ore., with vacancies below 3 percent. Average apartment rent is likely to rise 3.4 percent this year and another 4.3 percent in 2012. Multifamily net absorption is forecast at 250,800 units in 59 tracked metro areas in 2011. NATIONAL MARKET ACTIVITY* Office Vacancy Office Net Absorption Office New Completions Office Rent Growth Industrial Vacancy Industrial Net Absorption Industrial New Completions Industrial Rent Growth Retail Vacancy Retail Net Absorption Retail New Completions Retail Rent Growth Multi-Family Vacancy Multi-Family Net Absorption Multi-Family New Completions Multi-Family Rent Growth *2011.Q1 2011.Q2 5

OFFICE 2010 IV 2011 I 2011 II 2011 III 2011 IV 2012 I 2012 II 2010 2011 2012 Vacancy Rate 16.4% 16.4% 16.3% 16.1% 15.9% 15.6% 15.3% 16.6% 16.2% 15.1% Net Absorption ('000 sq. ft.) 10,630 5,045 3,739 7,926 9,868 11,197 11,769 17,733 26,577 49,439 Completions ('000 sq. ft.) 3,791 881 1,348 743 1780 672 519 21,359 7,013 4,675 Inventory ('000,000 sq. ft.) 3,574 3,583 3,584 3,585 3,586 3,587 3,588 3,574 3,586 3,590 Rent Growth -1.1% 0.1% -0.1% 0.0% 0.3% 0.5% 0.8% -4.6% 0.3% 4.3% INDUSTRIAL 2010 IV 2011 I 2011 II 2011 III 2011 IV 2012 I 2012 II 2010 2011 2012 Vacancy Rate 14.3% 14.1% 13.9% 13.7% 13.5% 13.2% 13.0% 14.5% 13.8% 12.8% Net Absorption ('000 sq. ft.) 33,218 27,282 26,946 33,637 38,238 44,429 49,660 11,191 126,104 205,079 Completions ('000 sq. ft.) 5,642 2,679 7,681 5,809 10,699 11,789 13,720 17,388 23,909 54,208 Inventory ('000,000 sq. ft.) 12,572 12,727 12,735 12,741 12,751 12,763 12,777 12,572 12,751 12,808 Rent Growth -1.0% 0.0% -0.8% -0.5% -0.3% -0.3% -0.2% -6.8% -1.5% 2.0% RETAIL 2010 IV 2011 I 2011 II 2011 III 2011 IV 2012 I 2012 II 2010 2011 2012 Vacancy Rate 13.0% 13.1% 13.1% 13.0% 12.9% 12.7% 12.6% 13.0% 13.0% 12.5% Net Absorption ('000 sq. ft.) 1,700-891 1,566 2,123 2,637 3,286 3,664-671 5,435 14,821 Completions ('000 sq. ft.) 1,304 1,078 1,919 982 108 0 1,595 4,385 4,087 6,821 Inventory ('000,000 sq. ft.) 1,697 1,715 1,717 1,718 1,718 1,718 1,720 1,697 1,718 1,726 Rent Growth -1.0% -0.8% -0.4% -0.2% 0.0% 0.2% 0.2% -4.8% -1.4% 0.7% MULTI-FAMILY 2010 IV 2011 I 2011 II 2011 III 2011 IV 2012 I 2012 II 2010 2011 2012 Vacancy Rate 6.0% 6.0% 5.8% 5.3% 5.3% 5.0% 4.7% 6.1% 5.6% 4.5% Net Absorption (Units) -21,839 21,232 87,774 121,218 20,624 57,683 73,730 251,739 250,848 166,616 Completions (Units) 11,012 14,268 15,100 16,647 18,450 19,072 20,867 59,507 64,465 87,059 Inventory (Units in millions) 14.5 14.5 14.5 14.5 14.5 14.6 14.6 14.5 14.5 14.6 Rent Growth 1.2% 0.9% 0.7% 0.8% 0.9% 1.0% 1.2% 0.3% 3.4% 4.3% Source: National Association of REALTORS /CBRE-Econometric Advisors 6

Office Fundamentals Vacancy Rate 20.8 % 717,000 Sq. ft. Absorption 291,000 Sq. ft. Rent Growth -0.1 % Industrial Fundamentals Vacancy Rate 12.0 % 181,000 Sq. ft. Absorption 2,263,000 Sq. ft. Rent Growth -2.2 % Investment Trends MIAMI Office Industrial Retail Apartment Closed Transactions Vol. (Mil.) $350 $39 $324 $67 N 9 4 9 7 Avg PSF/PPU $186 $70 $453 $54,561 Cap Rate - - 6.7% 4.0% Distressed Property N 54 32 27 77 Vol. ($Mil.) $626 $261 $397 $1,343 Source: Real Capital Analytics, 2011 YTD Retail Fundamentals Vacancy Rate 7.8 % 252,000 Sq. ft. Absorption 177,000 Sq. ft. Rent Growth -3.8 % Multi-Family Fundamentals Vacancy Rate 3.8 % 827 Units Absorption 1,522 Units Rent Growth 5.6 % Source: NAR/CBRE-EA $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $0.0 Miami Investor Volume ($ Billion) $5.2 $2.8 $2.2 $1.6 $0.8 2007 2008 2009 2010 2011 Source: Real Capital Analytics, NAR 7

Office Fundamentals Vacancy Rate 22.3 % 88,000 Sq. ft. Absorption -176,000 Sq. ft. Rent Growth -1 % Industrial Fundamentals Vacancy Rate 14.8 % 400,000 Sq. ft. Absorption -428,000 Sq. ft. Rent Growth -1.2 % Investment Trends TAMPA Office Industrial Retail Apartment Closed Transactions Vol. (Mil.) $165 $28 $98 $370 N 11 4 7 19 Avg PSF/PPU $196 $63 $150 $69,700 Cap Rate 8.0% 8.2% 7.8% 7.5% Distressed Property N 46 22 27 52 Vol. ($Mil.) $334 $143 $254 $702 Source: Real Capital Analytics, 2011 YTD Retail Fundamentals Vacancy Rate 13.2 % 59,000 Sq. ft. Absorption -322,000 Sq. ft. Rent Growth -3.1 % Multi-Family Fundamentals Vacancy Rate 7.6 % 1,793 Units Absorption 1,677 Units Rent Growth 3 % Source: NAR/CBRE-EA $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Tampa Investor Volume ($ Billion) $3.3 $1.4 $1.5 $1.1 $0.6 2007 2008 2009 2010 2011 Source: Real Capital Analytics, NAR 8

Office Fundamentals Vacancy Rate 17.5 % 123,000 Sq. ft. Absorption -68,000 Sq. ft. Rent Growth 0.1 % Industrial Fundamentals Vacancy Rate 15.6 % 12,000 Sq. ft. Absorption 1,297,000 Sq. ft. Rent Growth -3.2 % Investment Trends ORLANDO Office Industrial Retail Apartment Closed Transactions Vol. (Mil.) $64 $22 $43 $260 N 2 2 7 13 Avg PSF/PPU $140 $35 $134 $85,762 Cap Rate - - 12.0% 8.0% Distressed Property N 36 14 50 45 Vol. ($Mil.) $320 $123 $611 $862 Source: Real Capital Analytics, 2011 YTD Retail Fundamentals Vacancy Rate 15.0 % 64,000 Sq. ft. Absorption -52,000 Sq. ft. Rent Growth -4.5 % Multi-Family Fundamentals Vacancy Rate 6.6 % 733 Units Absorption 2,316 Units Rent Growth 1.7 % Source: NAR/CBRE-EA $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Orlando Investor Volume ($ Billion) $3.7 $1.8 $1.3 $1.4 $0.6 2007 2008 2009 2010 2011 Source: Real Capital Analytics, NAR 9

Office Fundamentals Vacancy Rate 15.9 % 0 Sq. ft. Absorption 445,000 Sq. ft. Rent Growth -4.8 % Industrial Fundamentals Vacancy Rate 12.7 % 32,000 Sq. ft. Absorption 704,000 Sq. ft. Rent Growth -11.8 % Investment Trends FT. LAUDERDALE Office Industrial Retail Apartment Closed Transactions Vol. (Mil.) $198 $11 $177 $115 N 10 1 10 4 Avg PSF/PPU $202 $121 $150 $204,886 Cap Rate 8.7% - 6.5% - Distressed Property N 30 21 38 52 Vol. ($Mil.) $320 $111 $464 $566 Source: Real Capital Analytics, 2011 YTD Retail Fundamentals Vacancy Rate 12.7 % 43,000 Sq. ft. Absorption -145,000 Sq. ft. Rent Growth -1.5 % Multi-Family Fundamentals Vacancy Rate 5.9 % 110 Units Absorption -1,605 Units Rent Growth 2 % Source: NAR/CBRE-EA $5.0 $4.5 $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Ft. Lauderdale Investor Volume ($ Billion) $4.6 $1.9 $2.1 $0.8 $0.6 2007 2008 2009 2010 2011 Source: Real Capital Analytics, NAR 10

Office Fundamentals Vacancy Rate 19.4 % 30,000 Sq. ft. Absorption 461,000 Sq. ft. Rent Growth -0.2 % Industrial Fundamentals Vacancy Rate 13.0 % 47,000 Sq. ft. Absorption 974,000 Sq. ft. Rent Growth -1.6 % Investment Trends WEST PALM BEACH Office Industrial Retail Apartment Closed Transactions Vol. (Mil.) $358 $0 $115 $63 N 7-7 2 Avg PSF/PPU $223 $0 $194 $72,798 Cap Rate 7.9% - 7.0% 6.2% Distressed Property N 38 17 34 26 Vol. ($Mil.) $716 $99 $482 $440 Source: Real Capital Analytics, 2011 YTD Retail Fundamentals Vacancy Rate 13.4 % 0 Sq. ft. Absorption -12,000 Sq. ft. Rent Growth -3 % Multi-Family Fundamentals Vacancy Rate 5.9 % 77 Units Absorption 1,027 Units Rent Growth 1.1 % Source: NAR/CBRE-EA $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 West Palm Beach Investor Volume ($ Billion) $2.7 $1.4 $1.2 $1.0 $0.4 2007 2008 2009 2010 2011 Source: Real Capital Analytics, NAR 11

Office Fundamentals Vacancy Rate 18.7 % 0 Sq. ft. Absorption 390,000 Sq. ft. Rent Growth 0.1 % Industrial Fundamentals Vacancy Rate 15.4 % 713,000 Sq. ft. Absorption 1,817,000 Sq. ft. Rent Growth -5.1 % Investment Trends JACKSONVILLE Office Industrial Retail Apartment Closed Transactions Vol. (Mil.) $46 $6 $73 $134 N 2 1 6 11 Avg PSF/PPU $128 $50 $141 $43,290 Cap Rate - - 6.8% 6.1% Distressed Property N 8 4 14 58 Vol. ($Mil.) $118 $53 $134 $498 Source: Real Capital Analytics, 2011 YTD Retail Fundamentals Vacancy Rate 15.1 % 73,000 Sq. ft. Absorption -6,000 Sq. ft. Rent Growth -0.9 % Multi-Family Fundamentals Vacancy Rate 9.8 % 173 Units Absorption 456 Units Rent Growth 3.3 % Source: NAR/CBRE-EA $1.8 $1.6 $1.4 $1.2 $1.0 $0.8 $0.6 $0.4 $0.2 $0.0 Jacksonville Investor Volume ($ Billion) $1.5 $0.8 $0.8 $0.4 $0.2 2007 2008 2009 2010 2011 Source: Real Capital Analytics, NAR 12

OFFICE MARKETS Vacancy Rate Vacancy Rate Change Forecast Vacancy Rate 2011.Q1 from 2010.Q1 2011.Q2 Fort Lauderdale 16.8% -2.0% 16.6% Jacksonville 19.5% -2.6% 19.2% Miami 19.9% -0.7% 19.9% Orlando 17.5% -0.2% 17.5% Tampa 21.5% -2.0% 21.6% West Palm Beach 20.7% -1.9% 20.2% National Averages 16.4% -0.4% 16.3% INDUSTRIAL MARKETS Vacancy Rate Vacancy Rate Change Forecast Vacancy Rate 2011.Q1 from 2010.Q1 2011.Q2 Fort Lauderdale 13.3% 0.1% 13.2% Jacksonville 16.2% 1.1% 16.3% Miami 12.6% -0.7% 12.5% Orlando 16.0% -0.3% 16.0% Tampa 14.7% 0.8% 14.8% West Palm Beach 14.4% -1.0% 14.0% National Averages 14.1% -0.1% 13.9% RETAIL MARKETS Vacancy Rate Vacancy Rate Change Forecast Vacancy Rate 2011.Q1 from 2010.Q1 2011.Q2 Fort Lauderdale 12.8% 0.4% 12.8% Jacksonville 14.7% 1.3% 15.1% Miami 7.4% -0.4% 8.2% Orlando 14.7% 1.0% 15.1% Tampa 12.5% 0.2% 12.7% West Palm Beach 13.3% 0.7% 13.5% National Averages 13.1% 0.4% 13.1% MULTI-FAMILY MARKETS Vacancy Rate Vacancy Rate Change Forecast Vacancy Rate 2011.Q1 from 2010.Q1 2011.Q2 Fort Lauderdale 5.5% 0.2% 6.3% Jacksonville 10.2% -1.1% 9.9% Miami 4.1% -0.4% 4.9% Orlando 7.6% -0.7% 7.4% Tampa 8.2% -0.1% 8.1% West Palm Beach 6.9% 1.7% 7.9% National Averages 6.0% -1.5% 5.8% Source: NAR/CBRE-Econometric Advisors 13

The Research Division of the NATIONAL ASSOCIATION of REALTORS provides research products covering commercial real estate: Commercial Member Profile Commercial Real Estate Quarterly Market Survey Commercial Real Estate Outlook NAR Research also provides analysis of monthly economic indicators, such as GDP and employment data that impact commercial markets over time. Additionally, NAR Research evaluates regulatory and legislative policy proposals for their impact on REALTORS, their clients and America s property owners. If you have questions or comments regarding this report or any other commercial real estate research, please contact George Ratiu, NAR Economist at gratiu@realtors.org Although the information presented in this report has been obtained from reliable sources, NAR does not guarantee its accuracy, and such information may be incomplete. This report is for information purposes only. All opinions, assumptions and estimates constitute NAR s judgment as of the date of this publication and are subject to change and evolving events. Actual results may vary from forecast results. Copyright 2011 NATIONAL ASSOCIATION OF REALTORS. Reproduction, reprinting or retransmission in any form is prohibited without written permission. For questions regarding this matter please e-mail eresearch@realtors.org. 500 New Jersey Avenue, NW Washington, DC 20001 2020 800.874.6500 www.realtor.org