Metro Phoenix Market Overview

Fourth Quarter 2008

LAN

D

Who We Are A

DV

ISO

• Founded in 1987 in Scottsdale, Arizona

• Exclusive focus on land brokerage and its relative product types• Investment land, platted and finished lots, commercial/industrial

Organization

Core

ORS O

RGA

Investment land, platted and finished lots, commercial/industrial and master planned land

• Current regional office locations: Scottsdale, Tucson, Northern Arizona, Denver, Austin, Dallas, Houston and Orlando

Competencies

Market AN

IZATIO

• Future target market expansion includes: Sacramento, Inland Empire, San Antonio, Atlanta, Raleigh Durham and Jacksonville

• Grown to 70 employees: 38 agents 9 information/GIS

Coverage

ON• Grown to 70 employees: 38 agents, 9 information/GIS

specialists and 23 support specialists including marketing, escrow, and financial operations

Cl d $5 3 billi i l d t ti

Personnel

• Closed over $5.3 billion in land transactions• Currently have over $3.8 billion in exclusive listings• Unparalleled database containing nearly 300,000 property

ownersEstablished relationships ith the largest and most respected

Performance• Established relationships with the largest and most respected

real estate investment and development companies in the country

LAN

D

Where We Are and Where We’re Going A

DV

ISOORS O

RGAA

NIZA

TIOON

PopulationPopulationEmployment

P it A ti itPermit ActivityResale

New Home PricingInventoryInventory

Regional Growth

Population

LAN

D

Projected Population Growth 2000 - 2030 A

DV

ISOTOP 10 MOST POPULATED STATES IN 2030 ORS O

RGA

RANK STATE 2000 POPULATION

2030 POPULATION

1 California 33,871,648 46,444,8612 Texas 20,851,820 33,317,744 A

NIZA

TIO

2 Texas 20,851,820 33,317,744 3 Florida 15,982,378 28,685,769 4 New York 18,976,457 19,477,429 5 Illinois 12,419,293 13,432,892 6 Pennsylvania 12 281 054 12 768 184

FASTEST GROWING STATES

ON6 Pennsylvania 12,281,054 12,768,184

7 North Carolina 8,049,313 12,227,739 8 Georgia 8,186,453 12,017,838 9 Ohio 11,353,140 11,550,528

STATE % GROWTH

Nevada 114%Arizona 109%Florida 80%

10 Arizona 5,130,632 10,712,397 28 Nevada 1,998,257 4,282,102

Florida 80%Texas 60%Utah 56%

United States 29%

Source: U.S. Census Bureau

LAN

D

Annual Population Growth Distribution 2000 - 2008 A

DV

ISO

Balance of State18.8%

ORS O

RGA

Tucson MSA15.3%

AN

IZATIOO

N

Phoenix-Mesa MSAMSA

65.9%

Source: Arizona Department of Commerce, 2008

Phoenix-Mesa MSA Tucson MSA Balance of State

LAN

D

Metro Phoenix Projected Population Growth5.00%6,000,000 A

DV

ISO

3 2%

4.0%4 00%

4.50%

5,000,000 ORS O

RGA

144 020152,745

168,240109,017

66,987 51,752 59,687139,751

179,609

3 9% 3.2% 3.2%

4.0%4.1%

4.3% 2.7% 1.6% 1.2% 1.4%3.2%

3.50%

4.00%

4,000,000

AN

IZATIO

127,044108,568

110,952144,0203.9%

2.50%

3.00%

3,000,000

ON

1.50%

2.00%

2,000,000

78,9

20

87,4

88

98,4

40

42,4

60

95,2

05

63,4

45

72,4

62

39,4

49

91,2

01

50,8

88

90,6

39

70,2

48 0.50%

1.00%

1,000,000

Source: Arizona Department of Commerce, 2008

3,37

3,48

3,59

3,74

3,89

4,06

4,17

4,23

4,29

4,35

4,49

4,67

0.00%02001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Employment

LAN

D

Arizona’s Top 50 Largest Employers 1 - 25 A

DV

ISO

Wal-Mart Stores Inc. 31,785

Banner Health 22,152

JPMorgan Chase & Co. 9,200

McDonald's Corp. 9,050

ORS O

RGA

Apollo Group Inc. 14,783

Wells Fargo & Co. 14,000Honeywell International 12 700

Freeport-McMoRan Copper & Gold Inc. 8,066

American Express Co. 7,500

AN

IZATIO

Honeywell International Inc. 12,700

Raytheon Co. 11,695

Kroger Co. 11,281

Target Corp. 7,373

Pinnacle West Capital Corp. 7,200

Bank of America Corp. 7,000 ON

Home Depot Inc. 11,000

Bashas' Supermarkets 10,753

Safeway Inc. 10,073

Scottsdale Healthcare 6,700

Walgreen Co. 6,663

Catholic Healthcare West 6,191Safeway Inc. 10,073

US Airways 10,021

Intel Corp. 10,000

Catholic Healthcare West 6,191

Circle K 5,375

CVS Caremark Corp. 5,170

Source: Arizona Republic, 2008

Carondelet Health Network 4,917

LAN

D

Arizona’s Top 50 Largest Employers 26 - 50 A

DV

ISO

IBM Corp. 3,600

Starbucks Corp. 3,450

Salt River Project 4,889

Marriott International 4,588 ORS O

RGA

Cox Communications Inc. 3,416

University Medical Center 3,226

Dillard's Inc. 3,200

United Parcel Service 4,582

Albertsons Inc. 4,500

The Boeing Co. 4,500 AN

IZATIO

Dillard s Inc. 3,200

John C. Lincoln Health Network 3,135

Costco Wholesale 3,119

TMC H lthC 3 038

The Boeing Co. 4,500

Mayo Foundation 4,241

Qwest Communications Inc. 4,241

St d H t l & R t 4 181

ONTMC HealthCare 3,038

General Dynamics C4 Systems. 3,000

Gannett Co., Inc. 2,933

Starwood Hotels & Resorts 4,181

Southwest Airlines Co. 4,120

FedEx Corp. 3,910

USAA 2,930

Freescale Semiconductor Inc. 2,900

Abrazo Health Care 2,862

Lowe's Companies Inc. 3,900

Sun Health Corp. 3,837

Source: Arizona Republic, 2008

,

LAN

D

Metro Phoenix Annual Employment A

DV

ISOYear Employment Change % Change ORS O

RGA

2000 1,582,2002001 1,566,500 -15,700 -1.0%

2002 1 587 200 20 700 1 3% AN

IZATIO

2002 1,587,200 20,700 1.3%

2003 1,626,400 39,200 2.4%2004 1,714,500 88,100 5.1% O

N2005 1,829,600 115,100 6.2%2006 1,881,900 52,300 2.7%2007 1 928 000 46 100 2 3%2007 1,928,000 46,100 2.3%2008 1,841,200 -54,800 -4.7%

Source: Arizona Department of Commerce, 2008 (Total Nonfarm Employment)

Permit Activity

LAN

D Past 12 Months through December 31, 2008

Top 10 Builder Market ShareBUILDER PERMITSPULTE HOMES 2521

AD

VISO

STANDARD PACIFIC

PULTE HOMES 2521D R HORTON COMBINED 2026SHEA HOMES 781TAYLOR MORRISON 696CENTEX HOMES 423MERITAGE HOMES 406

ORS O

RGARICHMOND AMERICAN,

2 90%

LENNAR HOMES, 2.80%

STANDARD PACIFIC HOMES, 2.60%

K HOVNANIAN, 2.50% MERITAGE HOMES 406RICHMOND AMERICAN 369LENNAR HOMES 348STANDARD PACIFIC HOMES 330K HOVNANIAN 318

AN

IZATIOPULTE HOMES, 20.00%

MERITAGE HOMES, 3.20%

2.90%

ON

CENTEX HOMES, 3.40%

D R HORTON COMBINED, 16.10%

TAYLOR MORRISON, 5.50%

Source: RL Brown

SHEA HOMES, 6.20%

LAN

D

Top 11-20 Builder Market SharePast 12 Months through December 31, 2008 BUILDER PERMITS

KB HOME 279 AD

VISO

KB HOME 279BEAZER HOMES 236WOODSIDE HOMES 189MARACAY HOMES 188ENGLE HOMES 169WILLIAM LYON HOMES 158

ORS O

RGAKB HOME, 2.20%

ROBSON COMMUNITIES, 1.00%

T.W. LEWIS COMPANY, 0.90%

ASHTON WOODS HOMES 156BLANDFORD HOMES 155ROBSON COMMUNITIES 127T.W. LEWIS COMPANY 113

AN

IZATIO

BLANDFORD HOMES, 1.20%

ONBEAZER HOMES, 1.90%ASHTON WOODS HOMES,

1.20%

WILLIAM LYON HOMES, 1.30%

Source: RL Brown

WOODSIDE HOMES, 1.50%MARACAY HOMES,

1.50%

ENGLE HOMES, 1.30%

LAN

D

Permit History: Historical and Projected as of Dec 2008 A

DV

ISO

6

0.8

1

60,000

70,000

ORS O

RGA28

557

,360 60

,92 6

0.4

0.6

50,000

,

AN

IZATIO

3 3 ,210 36

,562

38,4

4834

,232 37

,170 40,0

0247

, 2

38,7

5372

38,0

00

38.0%

37.7%

0

0.2

30,000

40,000

ON

3 3 3321

,449

21,1

1523

,052

23,7

5818

,424

336

30 19,4

49 23,2

15 28,2

2428

,583

29,5

13 32, 3

31,1

20,0

0027

,600

-59.6%

81.8%

-0.4

-0.2

20,000

12,9

8312

,743

13,8

3 115

,312

,135

11,3

04 14,3

3

12,5

8211

,000 -12.6%

-0.8

-0.6

0

10,000

80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12

Source: RL Brown Housing Reports, Housing Market Forecast 2009-2012

19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20 20 20 20

LAN

D 70 000

Metro Phoenix Building Permit Trends as of Dec 2008 A

DV

ISO60,000

70,000

2008 Population:4 239 449

ORS O

RGA

50,000

4,239,449

OVERPRODUCTION

UNDERPRODUCTION

AN

IZATIO30,000

40,000 1994 Population:2,488,125

ON

20,000

0

10,000

Source: RL Brown, Housing Forecast (Compiled By: Land Advisors)

01994 1996 1998 2000 2002 2004 2006 2008

Projected

LAN

D

Phoenix MSA Population and Permits as of Dec 2008 A

DV

ISO

Permits4,500,000

5,000,000

60,000

70,000

ORS O

RGAts

Po

3,500,000

4,000,000

50,000

AN

IZATIO

Perm

it pulation

2,500,000

3,000,000

30,000

40,000

ON

1 000 000

1,500,000

2,000,000

20,000

,

0

500,000

1,000,000

0

10,000

Source: U.S. Census Bureau & RL Brown Housing Reports

00

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2005: 12,188

Metro Phoenix Single Family Residential Permits as of Dec 2008

2005: 8 1542005: 12,1882006: 7,4502007: 6,4722008: 2,628 (-59.4%)

2005: 8,1542006: 6,4242007: 4,5242008: 1,222 (-72.9%)

2005: 16,2242006: 11,1432007: 10 255

2005: 9,7492006: 9 2882007: 10,255

2008: 2,900 (-71.7%)2006: 9,2882007: 8,7822008: 3,135 (-64.3%)

2005: 17,2452006: 9,7522007: 6,3432008: 2,697 (-57.5%)

Source: RL Brown (Compiled By: Land Advisors)

LAN

D

Permits vs. MLS ListingsJanuary 2003 through November 2008 A

DV

ISO

6,000

7,000

50 000

60,000

ORS O

RGA4 000

5,00040,000

50,000

AN

IZATIO

3,000

4,000

20 000

30,000

ON

1,000

2,000

10,000

20,000

00

Jan-

03M

ar-0

3M

ay-0

3Ju

l-03

Sep-

03N

ov-0

3Ja

n-04

Mar

-04

May

-04

Jul-0

4Se

p-04

Nov

-04

Jan-

05M

ar-0

5M

ay-0

5Ju

l-05

Sep-

05N

ov-0

5Ja

n-06

Mar

-06

May

-06

Jul-0

6Se

p-06

Nov

-06

Jan-

07M

ar-0

7M

ay-0

7Ju

l-07

Sep-

07N

ov-0

7Ja

n-08

Mar

-08

May

-08

Jul-0

8Se

p-08

Nov

-08

Source: MLS / RL Brown (compiled by Land Advisors)

Total Listings Permits

Resale

LAN

D MLS Listing, Sales & Days on Market Figures

January 2003 December 2008

MLS Resale Figures

3 AD

VISO

January 2003 – December 2008

140

16060,000 52,0

03

ORS O

RGA M

arke

t

100

120

40,000

50,000

AN

IZATIO

vera

ge D

ays o

n

60

8030,000

Equilibrium at 35,000

ONA

v

20

40

10,000

20,000

00

Jan-

03M

ar-0

3M

ay-0

3Ju

l-03

Sep-

03N

ov-0

3Ja

n-04

Mar

-04

May

-04

Jul-0

4Se

p-04

Nov

-04

Jan-

05M

ar-0

5M

ay-0

5Ju

l-05

Sep-

05N

ov-0

5Ja

n-06

Mar

-06

May

-06

Jul-0

6Se

p-06

Nov

-06

Jan-

07M

ar-0

7M

ay-0

7Ju

l-07

Sep-

07N

ov-0

7Ja

n-08

Mar

-08

May

-08

Jul-0

8Se

p-08

Nov

-08

Dec-

08

Source: MLS (compiled by Land Advisors)

M M M M M M

Total Listings Total Sales DOM

LAN

D Monthly foreclosures since the surge began 18 months ago:

Month by Month Foreclosures A

DV

ISO

4,013

4,378

4,587

Aug-08

Sep-08

Oct-08

ORS O

RGA2,969

3,402

3,717

4,104

Apr-08

May-08

Jun-08

Jul-08

200833,836 thru Oct. ‘08 A

NIZA

TIO1,617

2,052

2,249

2,365

Dec-07

Jan-08

Feb-08

Mar-08

ON

806

1,093

936

1,344

Aug-07

Sep-07

Oct-07

Nov-07

553

475

579

676

Apr-07

May-07

Jun-07

Jul-07

Source: Arizona Republic 11.30.08, The Information Market

- 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000

LAN

D

Equity Levels by State A

DV

ISO

0% 10% 20% 30% 40% 50% 60%

Nevada

Michigan

ORS O

RGA

g

Arizona

Florida

Georgia AN

IZATIO

g

California

Ohio

Arkansas ON

Iowa

Colorado

New … Neg EquityTexas

Tennessee

Nebraska

Neg EquityNear Neg Equity

Source: First American CoreLogic, Sept 2008

Virginia

New Home Pricing

LAN

D

New Home Sales Price Activity 3Q 2008 A

DV

ISO

Median Income & Sales Price

$864,758

$900,000

$1,000,000

ORS O

RGA

$ ,

$600,000

$700,000

$800,000

SALES PRICEINCOME A

NIZA

TIO$443,543$400,000

$500,000

$600,000

ON

$242,097

$323,874

$227,980$200,000

$300,000

$59,100 $69,400 $59,200 $60,100 $62,200

$0

$100,000

PHOENIX-MESA-SCOTTSDALE AZ

SAN DIEGO-CARLSBAD-SAN

RIVERSIDE-SAN BERNARDINO-

LAS VEGAS-PARADISE NV

DALLAS-FORT WORTH-ARLINGTON

Source: Hanley Wood Market Intelligence

SCOTTSDALE, AZ CARLSBAD-SAN MARCO, CA

BERNARDINO-ONTARIO, CA

PARADISE, NV WORTH-ARLINGTON, TX

LAN

D

Median New Home Sale PriceHistorical and Projected for Phoenix MSA A

DV

ISO

22%

40%$350,000

ORS O

RGA79

5

$306

,355

97 62 ,636

29%-21%

3%5%

5%5%

20%

30%

$250,000

$300,000

AN

IZATIO

0 0 240

$195

,000

$251

, 7

$242

,09

$214

,397

$220

,828

$231

,869

$243

,46

$255

4% 2% 5% 3% 4% 2%8%

13%

-11% 3%

0%

10%

$150 000

$200,000

ON

03,9

50

05,8

50

09,3

00

07,5

00

08,8

00

112,

500

$124

,475

$127

,600

$130

,750

$136

,130

$139

,070

$146

,710

$150

,770

$156

,56 0

$159

,990

$173

, $

2% 3% -2% 1% 3%11% 3% 2% 4% 2%

-10%

0%

$100,000

$150,000

$10

$10

$1 $10

$1 $ 1

-30%

-20%

$0

$50,000

Source: ASU Dept. of Realty Studies, US Bureau of Economic Analysis, Land Advisors Organization projection

LAN

D

Average Annual Change in Home Pricing 1995 - 2008 A

DV

ISO

$275 000

$300,000

$325,000Resale HomesNew Homes O

RS ORG

A

$214,397$225,000

$250,000

$275,000

AN

IZATIO

$162,000

$150,000

$175,000

$200,000

ON

$75,000

$100,000

$125,000

$0

$25,000

$50,000

NOTE PRICING TREND LINE EXCLUDES 2004 through 2006

Source: Hanley Wood/ASU Research Center

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Inventory

LAN

D

Total Vacant Lots: 62,400 as of Dec 2008 A

DV

ISO4,112 vacant lots8,308 vacant lots

ORS O

RGA19 340 t l t A

NIZA

TIO

14,812 vacant lots19,340 vacant lots

ON

7,174 vacant lots

8,633 vacant lots

LAN

D

Total Vacant Lots (Net of Active Adult, Attached <30 total lots, >100’): 42,700 lots A

DV

ISO778 vacant lots5,812 vacant lots

ORS O

RGA14 866 t l t A

NIZA

TIO

8,511 vacant lots14,866 vacant lots

ON

5,582 vacant lots

7,232 vacant lots

LAN

D

Vacant Lot Market Share by Owner A

DV

ISOORS O

RGA

Investors9,60023%Public/Top 10/

Start-up Builders AN

IZATIO

Private Builders/Banks/

17,15040%

ONDevelopers

15,90037%

LAN

D 1 604

Vacant Lots by Submarket: 42,700 A

DV

ISO

1,604

1,2302,978 423

355

ORS O

RGA

5,8266,789

AN

IZATIO

2,251 4,916 2,957

638

ON761

2,4052,416

2,313

3,118

1,801Public Top 10/Start-up Builders

Private Builders//Banks/DevelopersInvestors

LAN

D

Comparable Price/Finished Front Foot A

DV

ISO$650 ORS O

RGA$250 $475

$450$400

AN

IZATIO

$250

$550 $740

$400

ON

$418

$375

$350

$100

$350

$400

$250$400

$350$195

LAN

D

Active Subdivisions A

DV

ISOORS O

RGAA

NIZA

TIOON

685 active subdivisions685 active subdivisions685 active subdivisions685 active subdivisions56,800 vacant lots56,800 vacant lots25,438 1225,438 12--month closingsmonth closings

LAN

D

Proposed Subdivisions A

DV

ISOORS O

RGAA

NIZA

TIOON

Over 265,000 PreOver 265,000 Pre--Final Final Platted Lots In Process Platted Lots In Process

Regional Growth

LAN

D

Historical Transactions2004 2005 2006 2007 Thru 3Q08 A

DV

ISO

ApartmentTransactions 389 464 332 218 56 Price Per Unit 57,480 67,830 83,930 83,573 85,943

Total Number of Units 37,800 72,153 51,442 41,585 5,805Sales Volume 2 1B 4 9B 4 3B 3 4B 498 9M

ORS O

RGA

Sales Volume 2.1B 4.9B 4.3B 3.4B 498.9M

RetailTransactions 205 220 206 116 43Price Per SF 140 147 137 143 190

8 0 3 9 6 69

AN

IZATIO

Total SF 7.8M 10.3M 9.6M 5.7M 1.69M Sales Volume 1.1B 1.5B 1.3B 825M 320.6M

OfficeTransactions 342 338 291 227 91 O

NPrice Per SF 115 157 174 197 211Total Number of Units/SF 13.2M 16.1M 16.0M 11.8M 3M

Sales Volume 1.5B 2.5B 2.8B 2.3B 640.8M

Industrial

h

IndustrialTransactions 306 314 309 357 136 Price Per SF 52 69 81 91 75

Total SF 19.7M 16.9M 16.5M 19.0M 10.2M Sales Volume 1.0B 1.1B 1.3B 1.7B 768.5M

Sour

ce: K

amm

rath

TotalsTransactions 1,242 1,336 1,138 918 326Sales Volume 5.8B 10.1B 9.8B 8.3B 2.2B

LAN

D

Metro Phoenix Market Share4Q2008 A

DV

ISOORS O

RGA

Rentable Area Vacancy Rate

Net Absorption Sq Ft

Sq Ft Per Capita

Additional Sq Ft Needed by 2020

Industrial 264.9M 12.5% 833,623 66 119.2M AN

IZATIO

Retail 143.7M 7.5% 232,798 36 64.6M

Office 72.4M 19.1% 548,334 18 32.6M ON,

216.4M

In 12 years, we will need an additional 16,561 acres of land to meet the need if we grow by 33%.

Source: CBRE

LAN

D

Land Transactions2004 2005 2006 2007 2008 (as of 12/08) A

DV

ISO

( )COMMERCIAL

Transactions 358 608 465 595 77

Sales Volume 911.4M 1.96B 1.64B 2.2B 397.2M ORS O

RGA

Acres 3,757 7,506 5,523 5,887 1,231

INDUSTRIAL

Transactions 164 167 160 196 40 AN

IZATIO

Sales Volume 374.6M 614.9M 687M 734M 206.2M

Acres 5,438 6.163 5,029 5,370 1,143

ONRESIDENTIAL

Transactions 1,223 1,369 799 618 209

Sales Volume 4.2B 7.7B 4.6B 2.4B 765.5M

Acres 188 944 218 809 85 053 48 660 5 348Acres 188,944 218,809 85,053 48,660 5,348

TOTALS

Transactions 1,745 2,144 1,424 1,409 326

Source: CoStar Comps

Sales Volume 5.5B 10.3B 6.9B 5.4B 1.4B

Acres 198,139 232,477 95,605 59,971 15,660

Thank You480.483.8100

www.landadvisors.com