Cleveland Investment Report | June 2011

OVERVIEW:

Business Property Specialists Inc. Broker | 23240 Chagrin Blvd., Suite 250 | Cleveland, Ohio | 216 831 3310 | www.naidaus.com

TRANSACTIONS:

February Market SatisticsMonth % Change YTD

S Volume (All) $225.5m NA $268.2m# Properties (All) 14 NA 26S Volume ($5m+) $214.7m NA $227.6# Properties ($5m+) 11 NA 1210-yr Treasury 3.158% 3.5% -

Rolling 18 Month Volume

The sleeping giant has awoken. After nearly three years of erratic activity and sluggish sales volume, Cleveland’s investment market exploded in June. While the blockbuster $4.5 billion retail transaction between Centro Properties and Blackstone had a large impact locally, the region also saw some market transactions as well as the continued influx of distressed sales. In total, over $225 million of investment sales closed during the month. Not only does this figure easily outpace the total volume achieved in 2010, but it breaks a 3 ½ year streak - the last time the monthly sales volume exceeded $200 million was December 2007. And while I certainly don’t think this signifies that the good times are back, hopefully the giant really is awakening, not just rolling over.

Rite Aid portfolio – This two-property STNL portfolio sold for $8.3 million or $290 psf. The properties were located in Euclid and North Canton, with the former being built in 2008 and the latter earlier this year. The seller was the original developer while the buyer was a private investor who used around 50 percent debt. The cap rate was 9.4 percent. 515 Euclid Avenue – Built in 2008, this 542-space garage was sold out of bankruptcy court in the continued wake of the AmTrust failure. The property is strategically located adjacent to the East 4th Street entertainment district and within walking distance to both the new Horseshoe Casino and the Medical Mart. Harbor Group, which owns the neighboring 200 Public Square, was the winning bidder with an offer of $8.15 million.

Sales by Sector

$65

$97

$-

$286

$11,419

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$-

$50

$100

$150

$200

$250

$300

$350

Pric

e P

er U

nit

Pric

e P

er S

F

Office Retail Industrial STNL Apartment

Average Sale Price PSF

Office 4% Retail

86%

Industrial 0%

Apartment 2%

STNL 4%

Other 4%

0

2

4

6

8

10

12

14

$-

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

Feb-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

Sep-10

Oct-10

Nov-10

Dec-10

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Num

ber o

f Dea

ls

Sale

s Vo

lum

e

Volume < $5m Volume > $5m # Deals < $5m # Deals > $5m