Clarity Moving Forward

 As we rapidly approach the end of January and seek to find some form of clarity on valuations moving forward, we continue to be faced with tight credit markets and deteriorating property fundamentals. While we are encouraged by the strong level of investor interest in a number of our property offerings and the fact that two of our deals have gone “hard” over the last two weeks, as well as the amount of equity on the sidelines, risk aversion continues to be the primary focus of many investors. Assets with any significant level of risk suffer from investors requiring disproportionately higher risk premiums similar to high yield corporate bonds. The highest quality properties with long term investment grade cash flow and stabilized properties below $25 million will likely drive the sales market in the early half of 2009 as investors seek safe yields and pursue properties that can be financed as lenders have less exposure in this price range and less equity is required from investors.