Sixth AnnuAl CASden OffiCe And induStriAl fOreCAStNew PersPectives for southerN califorNia office aNd iNdustrial Markets

thurSdAy, deCember 13, 2007 | 4:30 Pm | fOunderS Club, uSC GAlen Center

univerSity Of SOuthern CAlifOrniA

Marshall school of BusiNess school of Policy, PlaNNiNg, & develoPMeNt

SPOnSOrS:

WelCOme

Raphael Bostic, Associate Director, USC Lusk Center for Real Estate

2007 CASden OffiCe And induStriAl mArket fOreCASt

Delores Conway, Director, USC Casden Real Estate Economics Forecast

PAnel diSCuSSiOn

Michael Gottlieb, Editor, California Real Estate Journal (Moderator)

Chad M. Carpenter, Chief Executive Officer, Equastone Real Estate Investment Advisors

Tim Feemster, Senior Vice President and Director of Global Logistics, Grubb and Ellis Company

William H. Flaherty, Senior Vice President Marketing, Maguire Properties

Diana M. Laing, Chief Financial Officer, Thomas Properties Group

Howard Schwimmer, Managing Partner, Rexford Industrial

Chauncey M. Swalwell, Stroock & Stroock & Lavan LLP

ClOSinG remArkS And ACknOWledGementS

Delores Conway, Director, USC Casden Real Estate Economics Forecast

netWOrkinG reCePtiOn

PrOGrAm

rAPhAel bOStiC

Raphael Bostic is the Associate Director of the USC Lusk Center for Real Estate and an Associate Professor in USC’s School of Policy, Planning, and Development (SPPD). He is also the Direc-tor of the Master in Real Estate Development Program in SPPD. Prior to joining SPPD, Dr. Bostic spent six years on the staff at the Federal Reserve Board of Governors. While at the Fed, he was responsible for studying and advising on fair lending and dis-crimination issues and received a Special Achievement Award in 2000 for his work supporting a Congressional mandate.

Dr. Bostic has done extensive research on housing markets and homeownership, including a recent study on barriers to home-ownership and determinants of gentrification. He also has written extensively on consumer banking issues, with a particular focus on mortgage and small business lending, bank branching patterns, and credit scoring and automated underwriting. He is currently conducting research on the ways in which the Community Rein-vestment Act has influenced the behavior of lenders and credit markets. His work has been published in the Journal of Urban Economics, Real Estate Economics, the Journal of Real Estate Fi-nance and Economics, and the Journal of Banking and Finance.

Dr. Bostic received his B.A. in psychology and economics from Harvard University and his Ph.D. in economics from Stanford University.

miChAel GOttlieb, exeCutive editOr, CAlifOrniA reAl eStAte JOurnAl

Michael Gottlieb is the Editor of the award-winning California Real Estate Journal, the No. 1 news source dedicated to covering the state’s commercial real estate industry. Michael also is Execu-tive Editor for the Daily Journal Corp.’s Daily Commerce Group where he is responsible for overseeing all aspects of 9 local busi-ness publications located throughout California and Nevada. A career journalist, Michael has received a variety of awards while working in various editing and reporting positions for Gannett Corp., Times Mirror Corp. and Tribune Corp. newspapers in New York and California. Immediately prior to joining the California Real Estate Journal in 2001 as Assignment Editor, Michael was City Editor of the Los Angeles Times’ Westside Weekly section. Michael is a graduate of the University of Southern California.

delOreS A. COnWAy

Delores Conway is the director of the Casden Real Estate Eco-nomics Forecast at the USC Lusk Center for Real Estate and Associate Professor in the Marshall School of Business. Dr. Conway is widely respected for her research on the commercial and residential real estate markets in Southern California. She is frequently interviewed by the national news media for her view-points on real estate markets. In 2007, Real Estate Southern CA Magazine listed her as one of the “50 Women of Influence in Real Estate.” Prior to joining USC, Dr. Conway served on the faculty of the University of Chicago - Graduate School of Business.

Much admired for her teaching skills, Dr. Conway is a distin-guished faculty fellow at the USC Center for Excellence in Teach-ing and received USC’s highest teaching honor - the University Associates Award for Teaching Excellence. She is an elected fel-low of the American Statistical Association and was an associate editor for the Journal of the American Statistical Association.

Dr. Conway received her Ph.D. and master’s degree in statistics from Stanford University, and undergraduate degrees in math-ematics, statistics and computer methods from the University of Wisconsin, Madison.

Raphael BosticUSC Lusk Center for Real Estate

DeloRes a. conwayUSC Casden Real EstateEconomics Forecast

Michael GottlieBCalifornia Real Estate Journal

SPeAker biOGrAPhieS

tiM FeeMsteRGrubb and Ellis Company

wiilliaM h. FlaheRtyMaguire Properties

chaD caRpeRnteRequastone Real estate investMent aDvisoRs

ChAd m. CArPenter, CeO,equAStOne reAl eStAte inveStment AdviSerS Mr. Carpenter co-founded Equastone and has been involved with all major investment, acquisition and operating decisions since its inception in 1993. Mr. Carpenter is a Managing Member of Equa-stone Value Fund Manager and Equastone Value Fund II Manager and sits on Equastone’s Acquisition and Disposition Committees. Mr. Carpenter has over 20 years of experience in real estate invest-ing, brokerage and operations.

Prior to Equastone, Mr. Carpenter spent eight years with Business Real Estate Brokerage Company (BRE) and CB Commercial Real Estate Services. Mr. Carpenter is a graduate of the University of Southern California (BA in Economics) and the Harvard University Graduate School of Design “Running a Real Estate Company Pro-gram.” Mr. Carpenter is a licensed real estate broker in California and a member of the National Association of Industrial and Office Properties in San Diego.

Equastone is a real estate investment firm specializing in the oppor-tunistic acquisition and asset management of value-added real es-tate. Equastone manages investment capital on behalf of Equastone Real Estate Funds, private equity funds for high net-worth and in-stitutional investors. Since 1993, Equastone sponsored investments have consistently delivered attractive returns due to its highly selec-tive approach and proven ability to add value. Equastone currently owns 57 office and flex buildings encompassing more than 9 mil-lion square feet throughout the United States.

tim feemSter, SeniOr viCe PreSident, direCtOr Of GlObAl lOGiStiCS, Grubb And elliS

Over 35 years of experience have provided Tim Feemster with a variety of hands on problem solving situations in logistics, distribu-tion, and marketing. He is currently Director of Global Logistics for Grubb and Ellis in Dallas, Texas. Grubb and Ellis is one of the world’s leading commercial real estate services firms, with offices in more than 100 domestic markets.

Before joining Grubb & Ellis Company, Mr. Feemster was a senior manager in three manufacturing companies, a general manager, a consultant, and an executive in two third party logistics providers. He has been exposed to the logistics and supply chain issues facing many industries and involving both refrigerated and dry channels. His experience includes specific assignments in over 35 project start-ups, warehouse layout and design, logistics systems develop-ment, purchasing strategy, business planning, carrier

rationalization, warehouse network analysis, and third party quali-fication and selection.

In addition, Mr. Feemster has been responsible for warehouse op-erations, strategic planning, marketing, site selection, inventory planning and deployment, quality management, and private fleet management both nationally and globally. He holds an M.B.A. with distinction in Marketing and Operations Research from the Univer-sity of Michigan, Ann Arbor, Michigan. He received his Bachelors in Mathematics from DePauw University, Greencastle, Indiana.

WilliAm h. flAherty, SeniOr viCe PreSident Of mArketinG, mAGuire PrOPertieS, inC.

Bill Flaherty is a Senior Vice President at Maguire with responsibil-ity for creating and overseeing marketing strategies and branding initiatives, managing the Maguire Macquarie Office joint venture relationship and participating in analyst and investor presentations and market tours, speaking engagements and industry conferences.

Prior to joining Maguire Properties, Flaherty served as a Partner of Maguire Partners where he directed leasing and marketing at the firm’s 900-acre Solana mixed use campus development in Dallas, Texas. From 1998 - 2002, Flaherty was an SVP at Hillwood, a pri-vate real estate firm owned by Ross Perot, Jr., where he directed the highly successful marketing, sponsorship and sales campaign for the $420 million American Airlines Center, and he oversaw the in-troduction, marketing and development activities for Victory Park, the 72-acre urban, master-planned development adjacent to the Dal-las CBD. In a previous role, Flaherty served as senior vice president at Rosewood Property Company where he directed all marketing and leasing activities for office properties owned by Rosewood and the Caroline Rose Hunt Trust, including The Crescent, a $400 mil-lion mixed use development in Uptown Dallas.

Flaherty is a member of ULI and serves on the Executive Com-mittees of ULI-LA and ULI-OC, NAIOP where he serves on the Executive Committee and as Treasurer for 2007 of NAIOP So-Cal, CoreNet, and the Salesmanship Club of Dallas. He previously served as the public member of the Texas Society of Architects. Flaherty graduated from St. Ambrose University with a B.A. in business administration. He earned his MBA from the University of Portland in Portland, Oregon.

chauncy M. swalwellStroock & Stroock & Lavan

howaRD schwiMMeRRexford Industrial

Diana M. lainGThomas Properties Group

SPeAker

biOGrAPhieS

diAnA m. lAinG, Chief finAnCiAl OffiCer, thOmAS PrOPertieS GrOuP

Diana M. Laing serves as the Chief Financial Officer and corpo-rate Secretary of the Thomas Properties Group, which is a full service real estate operating company. She is responsible for fi-nancial reporting, capital markets transactions and investor rela-tions. Thomas Properties Group acquires, develops and manages commercial real estate throughout the United States for its own portfolio as well as third party and institutional investors.

Prior to becoming a member of the senior management team, Ms. Laing served as Chief Financial Officer of Triple Net Properties, LLC from January 2004 through April 2004. From December 2001 to December 2003, Ms. Laing served as Chief Financial Of-ficer of New Pacific Realty Corporation, and held this position at Firstsource Corp. from July 2000 to May 2001.

Previously, Ms. Laing was Executive Vice President and Chief Financial Officer of Arden Realty, Inc., a publicly-traded REIT, from August 1996 to July 2000. From 1982 to August 1996, she was Chief Financial Officer of Southwest Property Trust, Inc., a publicly-traded multi-family REIT. She is a member of the board of directors and chairman of the audit committee for The Macer-ich Company, and serves on the board of the Big Brothers/Big Sisters of Greater Los Angeles and the Inland Empire. Ms. La-ing holds a bachelor’s degree in accounting from Oklahoma State University and is a certified public accountant in Texas.

hOWArd SChWimmer, CO-fOunder And mAnAGinG PArtner,rexfOrd induStriAl

Howard Schwimmer is a co-founder and managing partner of Rexford Industrial, and also directs the company’s property ac-quisition department. Rexford Industrial, LLC is a leading indus-trial real estate investment firm. Rexford’s expertise and market knowledge cover all industrial real estate asset classes – from warehouse, manufacturing and R&D to flex industrial. Rexford currently operates a portfolio valued at more than $600 million, comprised of more than 4.7 million square feet of industrial real estate. The company invests in every category of industrial prop-erty – core, value-add, repositioning and development.

Mr. Schwimmer has exclusively focused on Southern California industrial real estate for more than 25 years and has extensive expertise in the areas of property acquisition, development, value-add repositioning, management, sales and leasing.

He has a successful track record of acquiring, repositioning, de-veloping, leasing, selling and adding value to more than 24 mil-lion square feet of industrial properties.

For 19 years prior to co-founding Rexford, Mr. Schwimmer was a shareholder, board member, executive vice president and bro-ker of record for a prominent Southern California real estate bro-kerage company. A licensed California real estate broker, Mr. Schwimmer received his Bachelor’s degree from the University of Southern California where he majored in business with an em-phasis in real estate finance and development.

ChAunCey m. SWAlWell, PArtner, StrOOCk & StrOOCk & lAvAn llP Chauncey Swalwell has built an extensive commercial real es-tate practice over the past 17 years, representing both private and institutional investors and lenders. His diverse practice includes counseling his clients on the acquisition, sale, development, leas-ing and financing of hotels, office buildings, regional shopping centers, industrial parks and other projects. Mr. Swalwell has considerable experience representing both lenders and borrow-ers in the negotiation of a wide variety of commercial lending transactions. He also works in the structuring and negotiating of joint venture agreements on behalf of private equity and institu-tional investors. Mr. Swalwell’s practice includes representation of both buyers and sellers in the negotiation of purchase and sale contracts, as well as landlords and tenants in the negotiation of ground, office, retail, industrial and other commercial leases and subleases.

Mr. Swalwell has extensive expertise in the intricacies of Califor-nia’s relatively unique foreclosure framework, including the so-called “one action” and “anti-deficiency” statutes and their effect on the rights and remedies of lenders, borrowers and guarantors. He has been involved in numerous judicial foreclosure, receiver-ship and other real estate-related litigation matters. Mr. Swalwell was admitted to Practice in California in 1990. He earned his J.D. from Loyola Law School in 1990. His B.A. was awarded by UCLA in 1986.

2007 rePOrt ACknOWledGmentS

authors aNd editors:

delOreS A. COnWAy - PriNciPal author aNd editor

Dr. Conway is the primary author and editor of the 2007 Southern California Office and Industrial Market Report. She wishes to acknowledge the contributions of the many authors who assisted in writing specific sections of the report.

J.C. CASillAS - lead author of los aNgeles sectioNs

Mr. Casillas has been with Grubb & Ellis since 1998. He is re-sponsible for the management of the firm’s Los Angeles County research & marketing operations, overseeing extensive data col-lection, verification, tracking and analysis of the Los Angeles County market. As part of the Los Angeles management team, Mr. Casillas works extensively with brokers on business devel-opment projects, client presentations and special research assign-ments.

Mr. Casillas’ market information and analysis are featured every quarter in the Commercial Real Estate update published by the Los Angeles Business Journal. He is recognized by various or-ganizations and universities, including the Los Angeles County Economic Development Corporation (LAEDC) and the San Fer-nando Valley Economic Research Center as the “go-to” person for real estate market information. Mr. Casillas received a Bachelor of Science from USC majoring in Public Policy and Management with a minor in Business.

tyler mOnrOe - MaNagiNg editor aNd research assistaNt

Tyler Monroe joined the Casden Forecast in the Fall of 2007 as a re-search assistant and managing editor to oversee the production of an-nual forecast publications. Before attending USC, Tyler worked as a Project Manager for Cobalt Construction and Pacific Harbor Homes where he was responsible for the construction of affordable multi-family housing projects in Southern California. His responsibilities included contract negotiation, construction team coordination and financial/ budget management. Tyler graduated with honors from the University of California, Berkeley in 2003 with dual Bachelors of Arts degrees in Architecture and Italian Studies. His real estate interests include mixed-income housing, urban infill and mixed-use development.

J.c. casillasGrubb & Ellis Company

2007 rePOrt ACknOWledGmentS

tyleR MonRoeMaster of Real Estate Development/ MBA Candidate

DeloRes a. conwayUSC Casden Real EstateEconomics Forecast

DaviD hoDGinsMaster of Real Estate Development/ MBA Candidate

anDRe KRauseMaster of Real Estate Development Candidate

sPecial toPic coNtriButors aNd aBstracts:

SAndy SChmid

Prior to enrolling in the dual MBA/MRED degree program at USC Sandy worked as a designer at an architecture firm in Boston, MA. He was responsible for leading the production of site analysis, de-sign development, and construction documents for the design of a hotel in Puerto Escondido, Mexico and a sustainable home on Mar-tha’s Vineyard. At the same time, Sandy worked with a partner in the acquisition and management of a multi-family property. In the summer between his first and second years at USC, he supported underwriting and capital placement requests at George Smith Part-ners.

SCOtt ZenGel

Over the past five months, Scott has assisted with over $225 million in commercial property acquisitions for Cohen Asset Management, a private equity real estate fund. In his role at Cohen Asset Manage-ment he evaluated potential acquisition targets, assisted with closing statements, wrote investment memorandums, and performed vari-ous due diligence duties. Prior to beginning his graduate degree, he worked for a commercial real estate appraisal firm and as a manage-ment consultant for Deloitte Consulting, where he focused on cor-porate site selection and strategic process redesign. He is currently Vice President of Special Events and New Initiatives for the Gradu-ate Real Estate Association, Co-Director of Sustainable Develop-ment for Net Impact, and President of the Marshall Outdoor Club. Scott graduated from the University of California, Los Angeles in 2001 with an Economics major and a Specialization in Computing.

“MakiNg greeN BuildiNgs work for office develoPMeNt” (coauthored by Sandy Schmidt and Scott Zengel)

Sustainable office development is growing. Advanced planning methods and construction technology have reduced the cost pre-mium for these high performance developments, also called “green buildings.” Simultaneously, more city and state governments are requiring green construction. While a number of programs offer green certification, the office developer can take advantage of green incentives, capitalize on simple improvements, and incorporate sus-tainable design early in the process to achieve high performance results. The investment community can also benefit from empirical evidence demonstrating that building occupancy rates, rental rates, and even sales prices are all higher for green buildings.

scott ZenGelMaster of Real EstateDevelopment / MBACandidate

sanDy schMiDMaster of Real Estate Development/ MBA Candidate

dAvid hOdGinS

Dave graduated Cum Laude from UCLA in 2002, with a BA in Business-Economics and a Minor in English Literature. He spent the first 3 years of his real estate career as Contracts Manager for Chaffin/Light Associates in Aspen, CO. Dave holds a seat on the USC Sustainability Steering Committee, and is currently planning to take the USC Marshall School’s Popovich Hall through LEED certification. He has recently established a consulting practice to provide sustainability and green building advisory services.

Andre krAuSe

Andre earned a Bachelor of Architecture with honors from the University of Southern California in 1998 and has been working in architecture and design for the last 8 years. In 2005 after fed-eral disaster Hurricane Katrina, Andre volunteered for 5 months to be a part of FEMA’s new Education Team. Andre currently is a project architecture manager for DMJM Design – AECOM where he has worked on large-scale corporate/commercial and higher education projects since 2000. Andre has an interest in combin-ing real estate development and his architecture background to achieve professional goals of leadership and business develop-ment in major urban centers in the U.S. and around the globe.

tOny PArk

Tony received a Bachelors of Science in mechanical engineer-ing, from the University of California, Berkeley and is a LEED accredited professional. Tony worked as an estimator in the com-mercial construction industry from 2003 to 2007. At Swinerton Builders, he was responsible for procuring 300 million dollars of private and public sector work, managing junior estimators and project engineers within the department, and working with devel-opers through the pre-construction stages to validate construction budgets. In addition, Tony helped launch the BIM initiative for Swinerton Builders.

JenniFeR MooReMaster of Real EstateDevelopment Candidate

tony paRKMaster of Real Estate Development Candidate

“cargo voluMe froM the la/loNg Beach Ports shaPes iNdustrial real estate iN the iNlaNd eMPire”(coauthored by Jennifer Moore, Amy Weltmer and Delores Conway)

In 2006, the combined Los Angeles and Long Beach Ports cargo vol-ume was a record 10.5 million twenty-foot equivalent units (TEUs), compared to second place New York’s 3.7 million TEUs. The trade volume through the ports ranks first in the nation and fifth globally and is projected to increase by an average annual rate of 8.5 percent over the next decade. The warehousing, trans-loading, and dis-tribution of these goods require a significant amount of warehouse space in close proximity to the ports.

Because Los Angeles is predominantly built out, the Inland Empire, consisting of San Bernardino and Riverside Counties, has become the ideal location for distribution and logistics warehouses. Located 50 miles inland, the Inland Empire can accommodate warehouse space with its available land parcels, transportation infrastructure, and large blue-collar labor force. Over the past decade, the growth in trade volume has shaped the industrial real estate landscape in the Inland Empire and will continue to shape it as international trade increases.

aMy weltMeRMaster of Real Estate Development Candidate

“BuildiNg iNforMatioN ModeliNg: techNology to iMProve the Bot-toM liNe”(coauthored by David Hodgins, Andre Krause and Tony Park)

Building Information Modeling (BIM) is the practice of using three-dimensional (3D) modeling software tied to databases of detailed information to create, analyze, and coordinate the design and con-struction of buildings. BIM offers many new tools to streamline the delivery of a construction project, allowing for projects to stay on-budget and on-schedule. Early use by architects and builders has advanced so that it is now a tool being used by developers who utilize BIM as a means to reduce construction costs, manage budgets, and shorten construction schedules. So far, BIM has been used most commonly on complex projects such as hospitals, sports arenas, and signature museums that merit the extra expense, but BIM’s applications are rapidly expanding to other product types as well, such as Class A office towers, including the SOM-designed Freedom Tower at the World Trade Center site in Manhattan.

Jennifer mOOre

Jennifer is co-owner of Moore Real Estate Group, a real estate valuation and consulting company located in Rancho Cucamon-ga. She is a real estate broker, and represents clients in land, resi-dential and retail sale transactions, and office and industrial lease transactions. Jennifer specializes in the identification of land ac-quisition opportunities for regional developers, and her projects typically involve land assemblage. She also has experience in the appraisal of commercial real estate. Jennifer graduated Cum Laude with honors from UCLA, majoring in business-economics and a specialization in computing. Upon completion of her de-gree, Jennifer intends to develop commercial and industrial infill properties in the Inland Empire.

Amy Weltmer

For the last six years Amy has worked in the real estate industry for private developers. Her responsibilities have included entitle-ments, financial analysis, marketing, acquisitions, land develop-ment, and asset management across various product types includ-ing office, retail, and residential subdivisions. Her projects have spanned California, Nevada, Arizona, and Texas. Amy graduated Summa Cum Laude from UCLA with a Bachelor of Arts Degree in Economics and a Specialization in Computing.

CASden reAl eStAte eCOnOmiCS fOreCASt

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