1

1:30 PM – 2:45 PM

, 2011

2

Welcome and Introduction

ModeratorKelly Wrenn

PanelistsStacey Berger

Andrew Hundertmark

Thomas Nealon

Jenna Unell

Partner, Ballard Spahr LLP Washington, DC

Executive Vice President, Midland Loan Services, Inc. Washington, DC

Senior Vice President, CWCapital Asset Management LLCBaltimore, MD

Vice Chairman/General Counsel, LNR Partners, LLC.Miami, FL

Senior Managing Director/General Counsel, C-III Asset Management LLCDallas, TX

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3

FROTHY 2007

4

TSUNAMI – 2009 and 2010

5

2011 – HAS THE SNAKE FULLY DIGESTED THE RAT?

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Office30.22%

Retail29.98%

Multifamily14.24%

Industrial4.79%

Other11.35%

Lodging9.42%

CMBS Market Composition

Source: TREPP LLC, Market Snapshot, October 24, 2011

As of September 2011, the total amount of outstanding CMBS

loans was approximately $618 billion.

7

There is currently a 9.63% delinquency rate for CMBS real

estate loans nationwide.

Source: TREPP LLC, Market Snapshot, October 24, 2011

Commercial R/E Loan Delinquency Rates

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

2005 2006 2007 2008 2009 2010 2011

Del

inqu

ency

Rat

e

8

Loans in Special Servicing

Approximately 13% or 4,400 of CMBS real estate loans are in Special Servicing, representing a total loan balance of

nearly $82 billion.

UP

B (

$b

illi

on

)

% o

f to

tal

CM

BS

un

ive

rse

Source: Fitch Ratings, CMBS 2Q2010 Servicing Update, August 11, 2010; TREPP LLC, Market Snapshot, October 24, 2011

0

20

40

60

80

100

120

2005 2006 2007 2008 2009 2010 Q2 20110

2

4

6

8

10

12

14

16

2005

2006

2007

2008

Q4

2009

Q4

2010

Q4

2011 Q2

9

Types of Collateral in Special Servicing

Office projects represent 29% of current Special Servicing

volume — up almost 17% from year-end 2009.

Source: TREPP LLC, Market Snapshot, October 24, 2011

Office

Multifamily

Retail

Lodging

Other

Industrial

5% 10% 15% 20% 25% 30% 35%

29.0%

20.1%

21.1%

14.3%

10.9%

4.7%

10

Underlying Collateral in Special Servicing:Geographic Distribution

3.0%

24.6%

19.2%3.1%

7.4%

10.4%2.9%11.1%

15.0%

Collateral outside US: 0.3%

Source: TREPP LLC, Market Snapshot, October 24, 2011

11

REO Properties Held by Special Servicers: Geographic Distribution

Source: TREPP LLC, Market Snapshot October 24, 2011

3.5%

8.6%

23.0%5.0%

14.5%

11.5%1.8%16.0%

15.9%

Properties outside US: 0.2%Approx. Count: 980 REO

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Types of REO Properties in Special Servicing

Source: TREPP LLC, Market Snapshot October 24, 2011

Office

Multifamily

Retail

Lodging

Other

Industrial

5% 10% 15% 20% 25% 30% 35%

24.5%

22.6%

32.6%

12.3%

4.4%

3.6%

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CMBS Loan Maturity Timeline

Nearly $559 billion (91%) of outstanding CMBS

real estate loans will mature within the next 6 years.

Source: TREPP LLC, Market Snapshot, October 24, 2011

Ou

tsta

nd

ing

Loan

Bala

nce

(bil

lion

s)

0

20

40

60

80

100

120

140

2012 2013 2014 2015 2016 2017 2018Office Retail MultifamilyLodging industrial Other

14

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

$50 billion

$100 billion

$150 billion

$200 billion

$250 billion

CMBS New Issuance

In the first three quarters of 2011, there was $26.7 billion of new CMBS issuance — more than double the 2010 total.

Source: TREPP LLC, Market Snapshot, October 24, 2011

2011

15

The Spectre of Long-Term Unemployment

There are 1.0 million additional “discouraged workers”

who have given up on looking for employment.

Long-term unemployment (6 months+) has grown by almost

400% — from 1.3 million people in 2007 to

6.2 million people in 2011.

In August 2011, there are 4.7 workers for every available job

in the U.S.; before the Great Recession (December 2007) there were 1.5.

Source: U.S. Bureau of Labor Statistics, September 2011

16

The Spectre of Long-Term Distressed Housing

About 16.2 million borrowers–or nearly 28% of all homeowners with a mortgage–have homes which are

“underwater.”(Nevada, Arizona, Florida, Michigan, California)

The U.S. has 10 million vacant single family homes and an additional 18 million single family homes are now

rented.

Sources: Zillow Inc., October 24, 2011; CoreLogic, October 24, 2011; Fannie Mae, January 25, 2011