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Phoenix Retail Market ©2010 COSTAR GROUP, INC. THE COSTAR RETAIL REPORT A FIRST QUARTER 2010 – PHOENIX Table of Contents Table of Contents ...

The CoStar
Retail Report

FIRST QUARTER 2010

Phoenix Retail Market

FIRST QUARTER 2010 – PHOENIX

Phoenix Retail Market

Table of Contents

Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A

Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B

Terms & Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C

Market Highlights & Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

CoStar Markets & Submarkets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Inventory & Development Analysis
Select Top Deliveries
Select Top Under Construction Properties

Figures at a Glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Figures at a Glance by Building Type & Market
Figures at a Glance by Building Type & Submarket
Historical Figures at a Glance
Leasing Activity Analysis
Select Top Lease Transactions

Sales Activity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Sales Activity Analysis
Select Top Sales Transactions
Select Same Building Sales
Select Land Sales

Analysis of Individual CoStar Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Airport Area Market
Downtown Phoenix Market
East Valley Market
Maricopa County Market
North Phoenix Market
North Scottsdale Market
Northwest Phoenix Market
Pinal County Market
Scottsdale Market
South Mountain Market
West Phoenix Market

©2010 COSTAR GROUP, INC. THE COSTAR RETAIL REPORT A

PHOENIX – FIRST QUARTER 2010

Phoenix Retail Market

Methodology

The CoStar Retail Report calculates Retail statistics using CoStar Group's base of existing, under
construction and under renovation Retail buildings in each given metropolitan area. All Retail building
types are included, including Community Center, Freestanding Retail, Neighborhood Center, Power
Center, Regional Mall, Specialty Center and Unanchored Strip Center, in both single-tenant and multi-
tenant buildings, including owner-occupied buildings. CoStar Group's national database includes
approximately 69.1 billion square feet of coverage in 2.8 million properties. All rental rates reported in
the CoStar Retail Report are calculated using Triple Net (NNN) rental rates.

For information on subscribing to CoStar’s other products and services, please contact us at
1-877-7COSTAR, or visit our web site at www.costar.com

© Copyright 2010 CoStar Group, Inc. All Rights Reserved. Although CoStar makes efforts to ensure the accuracy and reliability of the
information contained herein, CoStar makes no guarantee, representation or warranty regarding the quality, accuracy, timeliness or
completeness of the information. The publication is provided ‘as is’ and CoStar expressly disclaims any guarantees, representations or
warranties of any kind, including those of MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

CoStar Group, Inc.
2 Bethesda Metro Center • Bethesda, MD USA 20814 • (800) 204-5960 • www.costar.com • NASDAQ: CSGP

B THE COSTAR RETAIL REPORT ©2010 COSTAR GROUP, INC.

FIRST QUARTER 2010 – PHOENIX

Phoenix Retail Market

Terms & Definitions

Anchor Tenant: A large national or regional retailer that serves as action between an owner/landlord and tenant, the broker that
a primary draw for a shopping center; a store strategically located represents the interests of the owner/landlord is referred to as the
in a retail property in order to enhance, bring attention to, or Landlord Rep.
increase traffic at the property. Sometimes called a “destination” Leased Space: All the space that has a financial lease obligation.
tenant, usually these tenants lease at least 25,000 SF. It includes all leased space, regardless of whether the space is
Availability Rate: The ratio of available space to total rentable currently occupied by a tenant. Leased space also includes space
space, calculated by dividing the total available square feet by the being offered for sublease.
total rentable square feet. Leasing Activity: The volume of square footage that is commit-
Available Space: The total amount of space that is currently ted to and signed under a lease obligation for a specific building
being marketed as available for lease in a given time period. It or market in a given period of time. It includes direct leases,
includes any space that is available, regardless of whether the subleases and renewals of existing leases. It also includes any
space is vacant, occupied, available for sublease, or available at pre-leasing activity in planned, under construction, or under
a future date. renovation buildings.
Buyer: The individual, group, company, or entity that has pur- Lifestyle Center: An upscale, specialty retail, main street concept
chased a commercial real estate asset. shopping center. An open center, usually without anchors, about
Cap Rate: Short for capitalization rate. The Cap Rate is a calcula- 300,000 SF GLA or larger, located near affluent neighborhoods,
tion that reflects the relationship between one year’s net operating includes upscale retail, trendy restaurants and entertainment
income and the current market value of a particular property. retail. Nicely landscaped with convenient parking located close
The Cap Rate is calculated by dividing the annual net operating to the stores.
income by the sales price (or asking sales price). Mall: The combined retail center types of Lifestyle Center,
Community Center: A shopping center development that has a Regional Mall and Super Regional Mall.
total square footage between 100,000 – 350,000 SF. Generally Market: Geographic boundaries that serve to delineate core areas
will have 2-3 large anchored tenants, but not department store that are competitive with each other and constitute a generally
anchors. Community Center typically offers a wider range of accepted primary competitive set of areas. Markets are building-
apparel and other soft goods than the Neighborhood Center. type specific, and are non-overlapping contiguous geographic
Among the more common anchors are supermarkets and super designations having a cumulative sum that matches the boundar-
drugstores. Community Center tenants sometime contain retail- ies of the entire Region (See also: Region). Markets can be further
ers selling such items as apparel, home improvement/furnishings, subdivided into Submarkets. (See also: Submarkets)
toys, electronics or sporting goods. The center is usually config- Multi-Tenant: Buildings that house more than one tenant at a
ured as a strip, in a straight line, or an “L” or “U” shape. given time. Usually, multi-tenant buildings were designed and
Construction Starts: Buildings that began construction during a built to accommodate many different floor plans and designs for
specific period of time. (See also: Deliveries) different tenant needs. (See also: Tenancy).
Deliveries: Buildings that complete construction during a specified Neighborhood Center: Provides for the sales of convenience
period of time. In order for space to be considered delivered, a goods (food, drugs, etc.) and personal services (laundry, dry
certificate of occupancy must have been issued for the property. cleaning, etc.) for day-to-day living needs of the immediate neigh-
Delivery Date: The date a building completes construction and borhood with a supermarket being the principal tenant. In theory,
receives a certificate of occupancy. the typical GLA is 50,000 square feet. In practice, the GLA may
Developer: The company, entity or individual that transforms raw range from 30,000 to 100,000 square feet.
land to improved property by use of labor, capital and entrepre- Net Absorption: The net change in occupied space over a given
neurial efforts. period of time. Unless otherwise noted Net Absorption includes
Direct Space: Space that is being offered for lease directly from direct and sublease space.
the landlord or owner of a building, as opposed to space being New Space: Sometimes called first generation space, refers to
offered in a building by another tenant (or broker of a tenant) space that has never been occupied and/or leased by a tenant.
trying to sublet a space that has already been leased. Occupied Space: Space that is physically occupied by a tenant.
Existing Inventory: The square footage of buildings that have It does not include leased space that is not currently occupied
received a certificate of occupancy and are able to be occupied by a tenant.
by tenants. It does not include space in buildings that are either Outlet Center: Usually located in a rural or occasionally in a tour-
planned, under construction or under renovation. ist location, an Outlet Center consists of manufacturer’s outlet
Freestanding Retail: Single tenant building with a retail tenant. stores selling their own brands at a discount. 50,000 – 500,000
Examples include video stores, fast food restaurant, etc. SF. An Outlet Center does not have to be anchored. A strip con-
Full Service Rental Rate: Rental rates that include all operating figuration is most common, although some are enclosed malls
expenses such as utilities, electricity, janitorial services, taxes and and others can be arranged in a village cluster.
insurance. Owner: The company, entity, or individual that holds title on a
General Retail: Typically are single tenant freestanding general- given building or property.
purpose commercial buildings with parking. Many single retail Planned/Proposed: The status of a building that has been
buildings fall into this use code, especially when they don’t meet announced for future development but not yet started
any of the more detailed use code descriptions. construction.
Growth in Inventory: The change in size of the existing square Power Center: The center typically consists of several freestand-
footage in a given area over a given period of time, generally due ing (unconnected) anchors and only a minimum amount of small
to the construction of new buildings. specialty tenants. 250,000 – 600,000 SF. A Power Center is dom-
Landlord Rep: (Landlord Representative) In a typical lease trans- inated by several large anchors, including discount department
stores, off-price stores, warehouse clubs, or "category killers," i.e.,

©2010 COSTAR GROUP, INC. THE COSTAR RETAIL REPORT C

PHOENIX – FIRST QUARTER 2010

Phoenix Retail Market

stores that offer tremendous selection in a particular merchandise a straight line, or have an "L" or "U" shape.
category at low prices. Sublease Space: Space that has been leased by a tenant and is
Preleased Space: The amount of space in a building that has been being offered for lease back to the market by the tenant with
leased prior to its construction completion date, or certificate of the lease obligation. Sublease space is sometimes referred to as
occupancy date. sublet space.
Price/SF: Calculated by dividing the price of a building (either Submarkets: Specific geographic boundaries that serve to delin-
sales price or asking sales price) by the Rentable Building Area eate a core group of buildings that are competitive with each
(RBA). other and constitute a generally accepted primary competitive
Quoted Rental Rate: The asking rate per square foot for a par- set, or peer group. Submarkets are building type specific (office,
ticular building or unit of space by a broker or property owner. industrial, retail, etc.), with distinct boundaries dependent on
Quoted rental rates may differ from the actual rates paid by different factors relevant to each building type. Submarkets are
tenants following the negotiation of all terms and conditions in non-overlapping, contiguous geographic designations having a
a specific lease. cumulative sum that matches the boundaries of the Market they
RBA: Abbreviation for Rentable Building Area. (See also: are located within (See also: Market).
Rentable Building Area) Super Regional Mall: Similar to a regional mall, but because of its
Region: Core areas containing a large population nucleus, that larger size, a super regional mall has more anchors, a deeper selec-
together with adjacent communities have a high degree of eco- tion of merchandise, and draws from a larger population base.
nomic and social integration. Regions are further divided into As with regional malls, the typical configuration is as an enclosed
market areas, called Markets. (See also: Markets) mall, frequently with multiple levels (See also: Regional Mall).
Regional Mall: Provides shopping goods, general merchandise, Tenancy: A term used to indicate whether or not a building is
apparel, and furniture, and home furnishings in full depth and occupied by multiple tenants (See also: Multi-tenant) or a single
variety. It is built around the full-line department store with a tenant. (See also: Single-tenant)
minimum GLA of 100,000 square feet, as the major drawing Tenant Rep: Tenant Rep stands for Tenant Representative. In a
power. For even greater comparative shopping, two, three, or typical lease transaction between an owner/landlord and tenant,
more department stores may be included. In theory a regional the broker that represents the interests of the tenant is referred to
center has a GLA of 400,000 square feet, and may range from as a Tenant Rep.
300,000 to more than 1,000,000 square feet. Regional centers in Theme/Festival Center: These centers typically employ a unify-
excess of 750,000 square feet GLA with three or more depart- ing theme that is carried out by the individual shops in their
ment stores are considered Super Regional. (See also: Super architectural design and, to an extent, in their merchandise.
Regional Mall). Sometimes the biggest appeal of these centers is to tourists; they
Relet Space: Sometimes called second generation or direct space, can be anchored by restaurants and entertainment facilities. These
refers to existing space that has previously been occupied by centers, generally located in urban areas, tend to be adapted from
another tenant. older, sometimes historic, buildings, and can be part of mixed-use
Rentable Building Area: (RBA) The total square footage of a projects. 80,000 – 250,000 SF.
building that can be occupied by, or assigned to a tenant for the Under Construction: The status of a building that is in the process
purpose of determining a tenant’s rental obligation. Generally of being developed, assembled, built or constructed. A building is
RBA includes a percentage of common areas including all hall- considered to be under construction after it has begun construc-
ways, main lobbies, bathrooms, and telephone closets. tion and until it receives a certificate of occupancy.
Rental Rates: The annual costs of occupancy for a particular Vacancy Rate: A measurement expressed as a percentage of the
space quoted on a per square foot basis. total amount of physically vacant space divided by the total
Sales Price: The total dollar amount paid for a particular property amount of existing inventory. Under construction space generally
at a particular point in time. is not included in vacancy calculations.
Sales Volume: The sum of sales prices for a given group of build- Vacant Space: Space that is not currently occupied by a tenant,
ings in a given time period. regardless of any lease obligation that may be on the space.
Seller: The individual, group, company, or entity that sells a par- Vacant space could be space that is either available or not avail-
ticular commercial real estate asset. able. For example, sublease space that is currently being paid for
SF: Abbreviation for Square Feet. by a tenant but not occupied by that tenant, would be considered
Shopping Center: The combined retail center types of Community vacant space. Likewise, space that has been leased but not yet
Center, Neighborhood Center and Strip Center. occupied because of finish work being done, would also be con-
Single-Tenant: Buildings that are occupied, or intended to be sidered vacant space.
occupied by a single tenant. (See also: Build-to-suit and Tenancy) Weighted Average Rental Rate: Rental rates that are calculated by
Specialty Center: The combined retail center types of Airport factoring in, or weighting, the square footage associated with each
Retail, Outlet Center and Theme/Festival Center. particular rental rate. This has the effect of causing rental rates
Sports & Entertainment: A facility suited for recreational activi- on larger spaces to affect the average more than that of smaller
ties, including: Amusement Facility, Aquatic Facility/Swimming spaces. The weighted average rental rate is calculated by taking
Pool, Bowling Alley, Casino/Gaming Facility, Equestrian Center/ the ratio of the square footage associated with the rental rate on
Stable, Fitness, Court and Spa Facility, Golf Related, Racetrack, each individual available space to the square footage associated
Skating Rink, Ski Resort, Sports Arena/Stadium, and Theatre/ with rental rates on all available spaces, multiplying the rental rate
Performing Art Facility. by that ratio, and then adding together all the resulting numbers.
Strip Center: A strip center is an attached row of stores or service Unless specifically specified otherwise, rental rate averages include
outlets managed as a coherent retail entity, with on-site parking both Direct and Sublet available spaces.
usually located in front of the stores. Open canopies may con- Year Built: The year in which a building completed construction
nect the storefronts, but a strip center does not have enclosed and was issued a certificate of occupancy.
walkways linking the stores. A strip center may be configured in YTD: Abbreviation for Year-to-Date. Describes statistics that are
cumulative from the beginning of a calendar year through what-
ever time period is being studied.

D THE COSTAR RETAIL REPORT ©2010 COSTAR GROUP, INC.

FIRST QUARTER 2010 – PHOENIX

Phoenix Retail Market

OVERVIEW

Phoenix’s Vacancy Increases to 12.4%
Net Absorption Negative (681,990) SF in the Quarter

T he Phoenix retail market experienced a slight decline in second quarter 2009, there were 721,556 square feet of vacant
market conditions in the first quarter 2010. The vacancy sublease space. Currently, there are 558,859 square feet vacant
rate went from 12.0% in the previous quarter to 12.4% in the market.
in the current quarter. Net absorption was negative (681,990)
square feet, and vacant sublease space decreased by (211,291) Largest Lease Signings
square feet. Quoted rental rates decreased from fourth quarter The largest lease signings occurring in 2010 included:
2009 levels, ending at $17.13 per square foot per year. A total of
five retail buildings with 130,471 square feet of retail space were the 59,000-square-foot-lease signed by Hobby Lobby at 4095
delivered to the market in the quarter, with 464,924 square feet S Gilbert Rd; the 32,500-square-foot-deal signed by Ultimate
still under construction at the end of the quarter. Electronics at Gateway Pavilions; and the 30,000-square-foot-
lease signed by Ross at 2020-2040 N 75th Ave.
Net Absorption
Retail net absorption was largely negative in Phoenix first Rental Rates
Average quoted asking rental rates in the Phoenix retail
quarter 2010, with negative (681,990) square feet absorbed in
the quarter. In fourth quarter 2009, net absorption was negative market are down over previous quarter levels, and down from
(631,623) square feet, while in third quarter 2009, absorption their levels four quarters ago. Quoted rents ended the first quar-
came in at negative (200,122) square feet. In second quarter ter 2010 at $17.13 per square foot per year. That compares to
2009, negative (1,066,521) square feet was absorbed in the $17.54 per square foot in the fourth quarter 2009, and $18.28
market. per square foot at the end of the second quarter 2009. This rep-
resents a 2.3% decrease in rental rates in the current quarter, and
Vacancy a 6.71% decrease from four quarters ago.
Phoenix’s retail vacancy rate increased in the first quarter
Inventory & Construction
2010, ending the quarter at 12.4%. Over the past four quarters, During the first quarter 2010, five buildings totaling
the market has seen an overall increase in the vacancy rate, with
the rate going from 11.2% in the second quarter 2009, to 11.5% 130,471 square feet were completed in the Phoenix retail market.
at the end of the third quarter 2009, 12.0% at the end of the Over the past four quarters, a total of 1,532,414 square feet of
fourth quarter 2009, to 12.4% in the current quarter. retail space has been built in Phoenix. In addition to the current
quarter, 15 buildings with 379,123 square feet were completed in
The amount of vacant sublease space in the Phoenix market fourth quarter 2009, 21 buildings totaling 520,388 square feet
has trended down over the past four quarters. At the end of the completed in third quarter 2009, and 502,432 square feet in 22
buildings completed in second quarter 2009.

Vacancy Rates by Building Type 2006-2010

Power Center Specialty Center General Retail Shopping Center Mall Total Market

17%

15%

13%

11%

9%

7%

5%

3%
2006 1q 2006 2q 2006 3q 2006 4q 2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q 2010 1q

Source: CoStar Property®

Absorption©2010 COSTAR GROUP, INC. & Deliveries U.S.THE COSTAR RETAIL REPORT Vacancy Comparison 1

Past 7 Quarters Past 7 Quarters

PHOENIX – FIRST QUARTER 2010

Phoenix Retail Market

OVERVIEW

There were 464,924 square feet of retail space under con- quarter 2009, negative (71,239) square feet was absorbed in
struction at the end of the first quarter 2010. the third quarter 2009, and negative (433,918) square feet was
absorbed in the second quarter 2009.
Some of the notable 2010 deliveries include: The Boulevard
- Bldg J, a 59,669-square-foot facility that delivered in first quarter Power Centers
2010 and is now 0% occupied, and 4517 E Main St, a 30,000- The Power Center average vacancy rate was 11.5% in
square-foot building that delivered in first quarter 2010 and is
now 0% occupied. the first quarter 2010. With positive 46,516 square feet of net
absorption and no new deliveries, the vacancy rate went from
Total retail inventory in the Phoenix market area amounted 11.7% at the end of last quarter to 11.5% at the end of the first
to 197,972,896 square feet in 8,649 buildings and 1,804 centers quarter.
as of the end of the first quarter 2010.
In the fourth quarter 2009, Power Centers absorbed nega-
Shopping Center tive (27,325) square feet, delivered no new space, and the vacancy
rate went from 11.6% to 11.7% over the course of the quarter.
The Shopping Center market in Phoenix currently consists Rental rates started the quarter at $24.36 per square foot and
ended the quarter at $24.88 per square foot.
of 1,703 projects with 99,573,552 square feet of retail space in
A year ago, in first quarter 2009, the vacancy rate was
3,246 buildings. In this report the Shopping Center market is 11.6%. Over the past four quarters, Power Centers have
absorbed a cumulative 28,409 square feet of space and delivered
comprised of all Community Center, Neighborhood Center, and a cumulative 2,976 square feet of space. Vacant sublease space
has gone from 60,163 square feet to 11,443 square feet over that
Strip Centers. time period, and rental rates have gone from $21.85 to $24.85.

006-2010 After absorbing negative (668,635) square feet and deliver- At the end of the first quarter 2010, there was no space
under construction in the Phoenix market. The total stock of
ing 74,219 square feet in the current quarter, the Shopping Center Power Center space in Phoenix currently sits at 23,830,587
square feet in 53 centers comprised of 429 buildings.
General Rseetacitlor sawShotphpeingvCaecnatenrcy ratMe agllo fromTota1l4M.a1r%ket at the end of the
General Retail Properties
fourth quarter 2009 to 14.9% this quarter. The General Retail sector of the market, which includes

Over the past four quarters, the Shopping Center vacancy all freestanding retail buildings, except those contained within a
center, reported a vacancy rate of 9.0% at the end of first quarter
rate has gone from 13.1% at the end of the second quarter 2009, 2010. There was a total of 4,509,879 square feet vacant at that
time. The General Retail sector in Phoenix currently has average
to 13.4% at the end of the third quarter 2009, to 14.1% at the rental rates of $16.38 per square foot per year. There are 166,853
square feet of space under construction in this sector, with 56,252
end of the fourth quarter 2009, and finally to 14.9% at the end square feet having been completed in the first quarter. In all,
there are a total of 4,701 buildings with 49,950,107 square feet
of the current quarter. of General Retail space in Phoenix.

Rental rates ended the first quarter 2010 at $16.00 per Specialty Centers
There are currently 16 Specialty Centers in the Phoenix mar-
square foot, down from the $16.45 they were at the end of fourth
ket, making up 1,594,510 square feet of retail space. In this report
quarter 2009. Rental rates have trended down over the past year, the Specialty Center market is comprised of Outlet Center, Airport
Retail and Theme/Festival Centers.
going from $18.50 per square foot a year ago to their current
Specialty Centers in the Phoenix market have experienced
levels. positive 1,172 square feet of net absorption in 2010. The vacancy
rate currently stands at 9.0%, and rental rates average $19.14 per
Net absorption in the Shopping Center sector has totaled square foot.

negative (1,703,539) square feet over the past four quarters. In Malls
7 4q 2008 1qad2d0i0t8io2qn t2o00t8h3eq ne20g0a8t4iqve2(06069 81q,632050)9 2sqqu2a0r0e9 3feqet2a00b9s4oqrb2e0d10t1hqis quar- Malls recorded net absorption of negative (93,504) square

ter, negative (529,747) square feet was absorbed in the fourth feet in the first quarter 2010. This net absorption number, com-
bined with no new space that was built in the quarter, caused the
U.S. Vacancy Comparison vacancy rate to go from 10.2% a quarter ago to 10.6% at the

Past 7 Quarters

Average Rental Rate Vacancy Rate

$20 14.0%Price in Dollars per Unit Vacancy Rate Percentage

$20 12.0%
$19
$19 10.0%
$18 8.0%

$18 6.0%
$17 4.0%
$17
$16 2.0%

$16 0.0%
2008 2008 2009 2009 2009 2009 2010
3q 4q 1q 2q 3q 4q 1q

Source: CoStar Property•

2 THE COSTAR RETAIL REPORT ©2010 COSTAR GROUP, INC.

7%

5%

Phoenix Retail Market3% 2006 2q 2006 3q FIRST QUARTER 2010 – PHOENIX 20
2006 1q 2006 4q 2007 1q 2007 2q 2007 3q 2007 4q

OVERVIEW Source: CoStar Property®

end of the first quarter 2010. Rental rates went from $25.35 Absorption & Deliveries
per square foot to $23.97 per square foot during that time. In
this report the Mall market is comprised of 32 Lifestyle Center, Past 7 Quarters
Regional Mall and Super Regional Malls.
Net Absorption Deliveries
Sales Activity 3.5 3.26
Tallying retail building sales of 15,000 square feet or larger,
3.0
Phoenix retail sales figures rose during the fourth quarter 2009 in
terms of dollar volume compared to the third quarter of 2009. 2.5 2.14
2.0
In the fourth quarter, 26 retail transactions closed with
a total volume of $157,447,287. The 26 buildings totaled Millions SF 1.5 1.24
1,385,247 square feet and the average price per square foot
equated to $113.66 per square foot. That compares to eight 1.0 0.79 0.50 0.52 0.38
transactions totaling $65,201,688 in the third quarter 2009. The 0.13
total square footage in the third quarter was 740,807 square feet 0.5
for an average price per square foot of $88.01.
0.0
Total retail center sales activity in 2009 was down compared
to 2008. In the twelve months of 2009, the market saw 50 retail (0.5) (0.20)
sales transactions with a total volume of $319,173,506. The price (1.0)
per square foot averaged $119.23. In the same twelve months of (1.5) (0.63) (0.68)
2008, the market posted 61 transactions with a total volume of
$645,147,442. The price per square foot averaged $147.05. (0.94) (1.16) (1.07)

Cap rates have been higher in 2009, averaging 8.29% com- 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q 2010 1q
pared to the same period in 2008 when they averaged 7.02%.
Source: CoStar Property•
One of the largest transactions that has occurred within the
last four quarters in the Phoenix market is the sale of Village Fair
North in Phoenix. This 241,989-square-foot retail center sold for
$20,600,000, or $85.13 per square foot. The property sold on
11/24/2009.

Reports compiled by: Adam Jarrett, CoStar Property® Research Manager;
Tom Summers, CoStar COMPS® Research Manager.

©2010 COSTAR GROUP, INC. THE COSTAR RETAIL REPORT 3

PHOENIX – FIRST QUARTER 2010

Phoenix Retail Market

MARKETS

CoStar Markets & Submarkets

In analyzing metropolitan areas in the U.S., CoStar has developed geographic designations to help group properties together, called
Regions, Markets and Submarkets. Regions are the equivalent of metropolitan areas, or areas containing a large population nucleus,
that together with adjacent communities have a high degree of economic and social integration. Regions are then divided into
Markets, which are core areas within a metropolitan area that are known to be competitive with each other in terms of attracting
and keeping tenants. Markets are then further subdivided into smaller units called Submarkets, which serve to delineate a core group
of buildings that are competitive with each other and constitute a generally accepted competitive set, or peer group.

Markets Submarkets South Phoenix Ret
Airport Area Ret Airport Area Ret
Downtown Phoenix Ret Downtown Phoenix Ret Gilbert Ret Queen Creek Ret Red Mountain/Mesa Ret
East Valley Ret Chandler Ret Williams Gateway/Mesa Ret
Tempe Ret
Maricopa County Ret W Outlying Maricopa Ret Glendale Ret N Phoenix/I-17 Corr Ret Sun City Ret
North Phoenix Ret East Phoenix Ret Fountain Hills Ret North Scottsdale Ret Surprise/North Peoria Ret
North Scottsdale Ret Carefree Ret Ctrl Peoria/Arrowhead Ret Deer Valley Ret
Northwest Phoenix Ret Anthem Ret South Scottsdale Ret
Scottsdale Ret Central Scottsdale Ret Laveen Ret South Mountain Ret North Buckeye Ret
South Mountain Ret Ahwatukee Foothills Ret Loop 101/I-10 Ret
West Phoenix Ret Goodyear Ret Tolleson Ret N Goodyear/Litchfield Ret
South Buckeye Ret Outlying Pinal County Ret West Phoenix/Maryvale Ret
Pinal County Ret Apache Junction Ret

4 THE COSTAR RETAIL REPORT ©2010 COSTAR GROUP, INC.

FIRST QUARTER 2010 – PHOENIX

Phoenix Retail Market

INVENTORY & DEVELOPMENT

Historical Deliveries 1982 - 2010

12.0 Deliveries Average Delivered SF

10.0 9.9 9.7
8.0 8.9
6.0
4.0 8.3
2.0
Millions of SF 0.0 6.9 6.4 6.8 6.8
6.3 5.9 4.3 4.7 5.0 5.1 5.9
5.6
4.4 4.9

3.4 3.8 3.6
3.0

2.2 2.3 2.1 2.2
1.7 0.4

0.7

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

Source: CoStar Property® * Future deliveries based on current under construction buildings.

Construction Activity Markets Ranked by Under Construction Square Footage

Under Construction Inventory Average Bldg Size

Market # Bldgs Total GLA Preleased SF Preleased % All Existing U/C
West Phoenix Ret 6 40.9%
250,051 102,280 22,518 41,675

Downtown Phoenix Ret 4 148,183 127,995 86.4% 12,034 37,046

East Valley Ret 4 48,258 15,979 33.1% 26,775 12,064

North Scottsdale Ret 2 18,432 14,832 80.5% 29,332 9,216

Pinal County Ret 0 0 0 0.0% 16,952 0

North Phoenix Ret 0 0 0 0.0% 18,931 0

Maricopa County Ret 0 0 0 0.0% 9,736 0

Northwest Phoenix Ret 0 0 0 0.0% 25,285 0

Scottsdale Ret 0 0 0 0.0% 24,161 0

South Mountain Ret 0 0 0 0.0% 25,305 0

All Other 0 0 0 0.0% 12,063 0

Totals 16 464,924 261,086 56.2% 22,890 29,058

Source: CoStar Property®

Recent Deliveries Future Deliveries

Leased & Un-Leased SF in Deliveries Since 2006 Preleased & Un-Leased SF in Properties Scheduled to Deliver

12.0 Leased Un-Leased Preleased Un-Leased
300

10.0 250

8.0 200 T
Millions of SF
Thousands of SF
6.0 150

4.0 100

2.0 50

0.0 2007 2008 2009 2010 0 2010 3q 2010 4q 2011 2q
2006 2010 2q

Source: CoStar Property® Source: CoStar Property®

©2010 COSTAR GROUP, INC. THE COSTAR RETAIL REPORT 5

PHOENIX – FIRST QUARTER 2010

Phoenix Retail Market

INVENTORY & DEVELOPMENT

Historical Construction Starts & Deliveries

Square Footage Per Quarter Starting and Completing Construction

4.5 Construction Starts Deliveries
4.0 3.84

3.5 3.25 3.26

Millions of SF 3.0 2.74

2.5 2.37 2.17 1.99

2.0 1.841.88 1.62

1.5 1.34 1.00 1.24 0.79
1.0 0.45 0.32
0.5 0.68 0.50 0.52
2009 1q 0.13 0.28
0.44 0.38
0.10
0.0 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 2q 2009 3q 0.090.13
2007 1q 2009 4q 2010 1q

Source: CoStar Property®

Recent Deliveries by Project Size of Year-to-Date Development

Building Size # Bldgs GLA SF Leased % Leased Avg Rate Single-Tenant Multi-Tenant

< 50,000 SF 4 70,802 14,550 20.6% $19.15 0 70,802

50,000 SF - 99,999 SF 1 59,669 0 0.0% $22.00 0 59,669

100,000 SF - 249,999 SF 0 0 0 0.0% $0.00 00

250,000 SF - 499,999 SF 0 0 0 0.0% $0.00 00

>= 500,000 SF 0 0 0 0.0% $0.00 00

Source: CoStar Property®

Recent Development by Tenancy Existing Inventory Comparison

Based on GLA Developed for Single & Multi Tenant Use Based on Total GLA

2010 Deliveries Currently Under Construction Shopping Center

0% 6% General Retail
100% 94%
Power Center
Multi Single Multi Single
Source: CoStar Property® Mall

Specialty Center
Millions of Square0Feet 20 40 60 80 100 120

Source: CoStar Property®

6 THE COSTAR RETAIL REPORT ©2010 COSTAR GROUP, INC.

FIRST QUARTER 2010 – PHOENIX

Phoenix Retail Market

INVENTORY & DEVELOPMENT

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PHOENIX – FIRST QUARTER 2010

Phoenix Retail Market

INVENTORY & DEVELOPMENT

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8

FIRST QUARTER 2010 – PHOENIX

Phoenix Retail Market

FIGURES AT A GLANCE

General Retail Market Statistics First Quarter 2010

Existing Inventory Vacancy YTD Net YTD Under Quoted
Total SF Absorption Deliveries
Market # Blds Total GLA Direct SF 207,227 Vac % Const SF Rates
Airport Area Ret 207,227 13.9% 22 0
271 1,495,699 11.1% (8,526) 0 0 $9.83
9.0% 116,428 30,000
Downtown Phoenix Ret 363 3,132,187 347,634 347,634 2.9% 0 148,183 $19.16
8.5% (900) 0
East Valley Ret 1,239 15,610,159 1,319,278 1,407,320 6.9% (87,577) 0 3,838 $14.37
6.7% 22,032 0
Maricopa County Ret 38 276,994 8,120 8,120 62.7% (44,641) 0 0 $16.54
12.0% (28,093) 0
North Phoenix Ret 1,162 10,515,673 893,211 896,811 5.6% 34,645 0 0 $16.13
8.9% 26,252
North Scottsdale Ret 264 4,095,673 281,837 283,740 9.0% 2,025 56,252 14,832 $22.92
27,046
Northwest Phoenix Ret 351 4,362,769 292,822 292,822 32,461 0 $20.05

Pinal County Ret 13 48,927 28,655 30,655 0 $0.00

Scottsdale Ret 452 4,650,283 508,502 556,265 0 $18.45

South Mountain Ret 94 1,041,985 58,252 58,252 0 $17.07

West Phoenix Ret 454 4,719,758 350,220 421,033 0 $15.43
Totals 4,701 49,950,107 4,295,758 4,509,879
166,853 $16.38

Source: CoStar Property®

Mall Market Statistics First Quarter 2010

Existing Inventory Vacancy YTD Net YTD Under Quoted
Total SF Absorption Deliveries
Market # Ctrs Total GLA Direct SF 0 Vac % Const SF Rates
Airport Area Ret 0 0 0.0% 0 0
00 0 639,951 0.0% 0 0 0 $0.00
0 7.6% 34,895 0
Downtown Phoenix Ret 0 0 638,765 826,191 0.0% 0 0 0 $0.00
0 86,810 (89,349) 0
East Valley Ret 10 8,386,540 76,543 23.8% (14,863) 0 0 $27.05
826,191 0 2.6% (16,841) 0
Maricopa County Ret 0 0 73,221 198,113 5.6% 0 0 0 $0.00
76,543 29,421 0.0% 798 0
North Phoenix Ret 5 3,469,816 0 588,985 5.7% (7,500) 0 0 $21.75
2,446,014 4.4% (644) 0
North Scottsdale Ret 5 3,291,182 198,113 (93,504) 0 3,600 $27.56
29,421 24.8%
Northwest Phoenix Ret 3 1,372,711 10.6% 0 $20.70
588,985
Pinal County Ret 00 2,431,239 0 $0.00

Scottsdale Ret 5 3,455,030 0 $38.27

South Mountain Ret 1 675,300 0 $26.00

West Phoenix Ret 3 2,373,561 0 $9.39
Totals 32 23,024,140
3,600 $23.97

Source: CoStar Property®

Power Center Market Statistics First Quarter 2010

Existing Inventory Vacancy YTD Net YTD Under Quoted
Total SF Absorption Deliveries
Market # Ctrs Total GLA Direct SF 240,329 Vac % Const SF Rates
Airport Area Ret 240,329 0 20.3% (11,190) 0
3 1,182,072 1,038,940 0.0% 0 0 0 $16.07
0 11.5% 0
Downtown Phoenix Ret 0 00 55,602 0.0% (32,996) 0 0 $0.00
206,477 2.8% 0 0
East Valley Ret 17 8,999,299 1,029,932 285,253 9.7% 0 0 $26.99
0 6.6% 18,383 0
Maricopa County Ret 0 00 438,937 0.0% 68,790 0 0 $0.00
48,924 22.9% (2,876) 0
North Phoenix Ret 5 2,009,265 55,602 422,835 7.1% 0 0 $30.14
2,737,297 16.2% 0 0
North Scottsdale Ret 5 2,119,292 205,591 11.5% (6,981) 0 0 $22.00

Northwest Phoenix Ret 10 4,309,378 283,704 0 0 $28.13
13,386
Pinal County Ret 0 00 46,516 0 $0.00

Scottsdale Ret 4 1,914,834 438,937 0 $22.13
South Mountain Ret
West Phoenix Ret 2 687,153 48,924 0 $27.44
Totals
7 2,609,294 422,835 0 $30.06

53 23,830,587 2,725,854 0 $24.85

Source: CoStar Property®

©2010 COSTAR GROUP, INC. THE COSTAR RETAIL REPORT 9

PHOENIX – FIRST QUARTER 2010

Phoenix Retail Market

FIGURES AT A GLANCE

Shopping Center Market Statistics First Quarter 2010

Existing Inventory Vacancy YTD Net YTD Under Quoted
Total SF Absorption Deliveries
Market # Ctrs Total GLA Direct SF 165,906 Vac % Const SF Rates
Airport Area Ret 163,406 11.6% (7,596) 0
48 1,431,002 9.8% 1,566 0 0 $16.56
15.9% (252,202) 14,550
Downtown Phoenix Ret 55 1,916,855 184,077 187,703 0.0% 0 0 $16.75
16.6% 0 59,669
East Valley Ret 579 36,676,645 5,699,539 5,822,146 14.9% (154,792) 0 44,420 $14.80
15.1% 0
Maricopa County Ret 3 122,163 0 0 20.4% (22,857) 0 0 $0.00
12.4% (44,187) 0
North Phoenix Ret 419 20,693,295 3,384,122 3,437,401 10.0% 0 0 $13.81
12.9% (1,928) 0
North Scottsdale Ret 105 6,567,988 975,235 976,435 14.9% (52,122) 74,219 0 $20.72
(16,752)
Northwest Phoenix Ret 124 8,676,335 1,288,127 1,309,109 (117,765) 0 $19.98
(668,635)
Pinal County Ret 4 307,066 62,740 62,740 0 $15.71

Scottsdale Ret 143 7,443,896 863,937 922,008 0 $18.61

South Mountain Ret 54 4,149,560 410,851 413,651 0 $18.36

West Phoenix Ret 169 11,588,747 1,452,565 1,498,132 250,051 $16.98
Totals 1,703 99,573,552 14,484,599 14,795,231
294,471 $16.00

Source: CoStar Property®

Specialty Center Market Statistics First Quarter 2010

Existing Inventory Vacancy YTD Net YTD Under Quoted
Total SF Absorption Deliveries
Market # Ctrs Total GLA Direct SF 3,637 Vac % Const SF Rates
Airport Area Ret 3,637 21.8% 0 0
1 16,720 26.6% (10,588) 0 0 $16.00
7.5% 20,930 0
Downtown Phoenix Ret 1 161,660 35,184 43,072 0.0% 0 0 $0.00
0.0% 0 0
East Valley Ret 6 557,476 42,005 42,005 0.0% 0 0 0 $16.07
3.5% 0 0
Maricopa County Ret 0 000 0.0% 0 0 0 $0.00
16.7% 0 0
North Phoenix Ret 0 0 0 0 0.0% (5,000) 0 0 $0.00
5.6% 0 0
North Scottsdale Ret 0 000 9.0% (4,170) 0 0 $0.00
1,172
Northwest Phoenix Ret 5 495,678 17,230 17,230 0 $24.02

Pinal County Ret 0 000 0 $0.00

Scottsdale Ret 2 149,671 25,037 25,037 0 $20.00

South Mountain Ret 0 000 0 $0.00

West Phoenix Ret 1 213,305 11,855 11,855 0 $20.00
Totals 16 1,594,510 134,948 142,836
0 $19.14

Source: CoStar Property®

Total Retail Market Statistics First Quarter 2010

Existing Inventory Vacancy YTD Net YTD Under Quoted
Total SF Absorption Deliveries
Market # Blds Total GLA Direct SF 617,099 Vac % Const SF Rates
Airport Area Ret 614,599 578,409 15.0% (18,764) 0
342 4,125,493 8,950,362 11.1% (17,548) 0 0 $13.14
8,120 12.7% (112,945) 44,550
Downtown Phoenix Ret 433 5,210,702 566,895 5,216,005 2.0% 0 148,183 $18.20
1,553,462 14.2% (900) 59,669
East Valley Ret 2,623 70,230,119 8,729,519 1,980,957 9.7% (313,335) 0 48,258 $15.69
93,395 10.3% 0
Maricopa County Ret 41 399,157 8,120 2,140,360 26.2% 53,102 0 0 $16.54
550,248 12.2% (108,545) 0
North Phoenix Ret 1,938 36,688,049 5,159,126 2,942,840 8.4% 0 0 $15.06
13.7% (30,021) 26,252
North Scottsdale Ret 548 16,074,135 1,535,884 24,631,257 12.4% (28,660) 130,471 18,432 $21.41
(22,227)
Northwest Phoenix Ret 760 19,216,871 1,958,426 (82,147) 0 $20.87
(681,990)
Pinal County Ret 21 355,993 91,395 0 $15.71

Scottsdale Ret 729 17,613,714 2,034,526 0 $20.78
South Mountain Ret 259 6,553,998 547,448
West Phoenix Ret 955 0 $19.84
Totals 8,649 21,504,665 2,826,460
197,972,896 24,072,398 250,051 $17.34

464,924 $17.13

Source: CoStar Property®

10 THE COSTAR RETAIL REPORT ©2010 COSTAR GROUP, INC.

FIRST QUARTER 2010 – PHOENIX

Phoenix Retail Market

FIGURES AT A GLANCE

General Retail Submarket Statistics First Quarter 2010

Existing Inventory Vacancy YTD Net YTD Under Quoted
Total SF Absorption Deliveries Const SF Rates
Market # Blds Total GLA Direct SF Vac %
2.4% 2,025 0
Ahwatukee Foothills Ret 56 555,080 13,452 13,452 3,159 0 0 $26.77
1,284 0
Airport Area Ret 158 946,380 97,023 97,023 10.3% (4,440) 0 0 $13.20
(1,737) 0
Anthem Ret 43 675,201 14,813 14,813 2.2% (87,970) 0 0 $17.42
88,124 0
Apache Junction Ret 1 4,440 4,440 4,440 100.0% (34,870) 0 0 $0.00
0
Carefree Ret 40 228,877 11,883 11,883 5.2% 0 0 0 $25.50
(8,526) 0
Central Scottsdale Ret 300 2,841,980 314,042 314,042 11.1% (20,858) 0 0 $21.05
1,363 0
Chandler Ret 223 3,525,733 212,523 231,905 6.6% 11,372 0 0 $11.23
9,453 0
Ctrl Peoria/Arrowhead Ret 138 2,059,917 170,928 170,928 8.3% 40,207 0 0 $19.24
0
Deer Valley Ret 51 353,228 27,367 27,367 7.7% 0 26,252 0 $23.90
(2,853) 0
Downtown Phoenix Ret 363 3,132,187 347,634 347,634 11.1% 0 148,183 $19.16
0 0
East Phoenix Ret 344 3,126,763 375,519 375,519 12.0% (57,157) 0 0 $15.62
0
Fountain Hills Ret 37 262,088 6,925 6,925 2.6% 0 30,000 0 $11.31
22,406 0
Gilbert Ret 218 3,093,868 231,153 231,153 7.5% (23,653) 0 0 $23.19
34,459 0
Glendale Ret 333 2,410,457 202,793 206,393 8.6% (7,631) 0 0 $15.57
0
Goodyear Ret 68 650,083 38,415 38,415 5.9% 0 0 0 $15.42
0 0
Laveen Ret 7 61,501 17,632 17,632 28.7% (3,137) 0 0 $14.00
122,615 0
Loop 101/I-10 Ret 37 664,831 62,695 65,546 9.9% (19,015) 0 0 $22.50
(11,055) 0
N Goodyear/Litchfield Ret 38 340,658 45,480 45,480 13.4% (8,474) 56,252 0 $24.06
(6,119)
N Phoenix/I-17 Corr Ret 380 4,154,484 285,499 285,499 6.9% (900) 0 $17.06
(4,189)
North Buckeye Ret 1 11,000 0 0 0.0% (1,422) 0 $0.00
32,461
North Scottsdale Ret 187 3,604,708 263,029 264,932 7.3% 14,832 $23.96

Outlying Pinal County Ret 12 44,487 24,215 26,215 58.9% 0 $0.00

Queen Creek Ret 21 182,288 22,096 22,096 12.1% 0 $13.94

Red Mountain/Mesa Ret 587 6,505,088 744,129 748,035 11.5% 0 $13.57

South Buckeye Ret 18 109,061 3,165 3,165 2.9% 0 $0.00

South Mountain Ret 31 425,404 27,168 27,168 6.4% 0 $13.94

South Phoenix Ret 113 549,319 110,204 110,204 20.1% 0 $6.94

South Scottsdale Ret 152 1,808,303 194,460 242,223 13.4% 0 $15.37

Sun City Ret 105 823,969 29,400 29,400 3.6% 0 $16.50

Surprise/North Peoria Ret 119 1,274,423 79,714 79,714 6.3% 0 $24.11

Tempe Ret 159 1,889,857 97,733 162,487 8.6% 3,838 $14.51

Tolleson Ret 97 644,737 28,438 28,438 4.4% 0 $12.28

W Outlying Maricopa Ret 38 276,994 8,120 8,120 2.9% 0 $16.54

West Phoenix/Maryvale Ret 195 2,299,388 172,027 239,989 10.4% 0 $13.68

Williams Gateway/Mesa Re 31 413,325 11,644 11,644 2.8% 0 $11.75
Totals 4,701 49,950,107 4,295,758 4,509,879 9.0% 166,853 $16.38

Source: CoStar Property®

©2010 COSTAR GROUP, INC. THE COSTAR RETAIL REPORT 11

PHOENIX – FIRST QUARTER 2010

Phoenix Retail Market
FIGURES AT A GLANCE

Mall Submarket Statistics First Quarter 2010

Existing Inventory Vacancy YTD Net YTD Under Quoted
Total SF Absorption Deliveries Const SF Rates
Market # Ctrs Total GLA Direct SF Vac %
29,421 4.4% (7,500) 0
Ahwatukee Foothills Ret 1 675,300 29,421 0 0 0 $26.00
0 0
Airport Area Ret 0 0 0 0 0.0% 0 0 0 $0.00
0 0
Anthem Ret 0 0 0 0 0.0% 0 0 $0.00
798 0
Apache Junction Ret 0 0 0 0 0.0% 1,331 0 0 $0.00
(16,841) 0
Carefree Ret 0 0 0 0 0.0% 0 0 $0.00
0 0
Central Scottsdale Ret 5 3,455,030 198,113 198,113 5.7% 0 0 0 $38.27
0 0
Chandler Ret 3 1,618,048 64,806 64,806 4.0% 0 0 0 $18.57
462 0
Ctrl Peoria/Arrowhead Ret 2 1,353,514 57,346 57,346 4.2% 0 0 0 $22.00
(10,000) 0
Deer Valley Ret 1 19,197 19,197 19,197 100.0% 0 0 0 $19.00
0 0
Downtown Phoenix Ret 0 0 0 0 0.0% 0 0 0 $0.00
(89,349) 0
East Phoenix Ret 0 0 0 0 0.0% 0 0 0 $0.00
(14,863) 0
Fountain Hills Ret 0 0 0 0 0.0% 0 0 0 $0.00
0 0
Gilbert Ret 1 1,802,061 206,162 207,348 11.5% (5,945) 0 0 $32.69
0 0
Glendale Ret 2 679,610 137,977 137,977 20.3% 0 0 0 $40.00
0 0
Goodyear Ret 1 1,102,895 370,832 370,832 33.6% 0 0 0 $0.00
0 0
Laveen Ret 0 0 0 0 0.0% 0 0 0 $0.00
39,047 0
Loop 101/I-10 Ret 0 0 0 0 0.0% 0 0 0 $0.00
0 0
N Goodyear/Litchfield Ret 0 0 0 0 0.0% 9,356 0 0 $0.00
0
N Phoenix/I-17 Corr Ret 3 2,790,206 688,214 688,214 24.7% (93,504) 0 $12.70

North Buckeye Ret 0 0 0 0 0.0% 0 $0.00

North Scottsdale Ret 5 3,291,182 73,221 86,810 2.6% 3,600 $27.56

Outlying Pinal County Ret 0 0 0 0 0.0% 0 $0.00

Queen Creek Ret 0 0 0 0 0.0% 0 $0.00

Red Mountain/Mesa Ret 4 2,627,662 319,279 319,279 12.2% 0 $30.09

South Buckeye Ret 0 0 0 0 0.0% 0 $0.00

South Mountain Ret 0 0 0 0 0.0% 0 $0.00

South Phoenix Ret 0 0 0 0 0.0% 0 $0.00

South Scottsdale Ret 0 0 0 0 0.0% 0 $0.00

Sun City Ret 0 0 0 0 0.0% 0 $0.00

Surprise/North Peoria Ret 0 0 0 0 0.0% 0 $0.00

Tempe Ret 2 2,338,769 48,518 48,518 2.1% 0 $24.67

Tolleson Ret 0 0 0 0 0.0% 0 $0.00

W Outlying Maricopa Ret 0 0 0 0 0.0% 0 $0.00

West Phoenix/Maryvale Ret 2 1,270,666 218,153 218,153 17.2% 0 $9.39

Williams Gateway/Mesa Re 0 0 0 0 0.0% 0 $0.00
Totals 32 23,024,140 2,431,239 2,446,014 10.6% 3,600 $23.97

Source: CoStar Property®

12 THE COSTAR RETAIL REPORT ©2010 COSTAR GROUP, INC.

FIRST QUARTER 2010 – PHOENIX

Phoenix Retail Market
FIGURES AT A GLANCE

Power Center Submarket Statistics First Quarter 2010

Existing Inventory Vacancy YTD Net YTD Under Quoted
Absorption Deliveries Const SF Rates
Market # Ctrs Total GLA Direct SF Total SF Vac %
0.0% 0 0
Ahwatukee Foothills Ret 0 000 (11,190) 0 0 $0.00
0
Airport Area Ret 3 1,182,072 240,329 240,329 20.3% 0 0 0 $16.07
0 0
Anthem Ret 1 55,834 10,347 10,347 18.5% 1,400 0 0 $25.00
(6,981) 0
Apache Junction Ret 0 0 0 0 0.0% (50,014) 0 0 $0.00
(2,924) 0
Carefree Ret 1 319,713 9,395 9,395 2.9% (1,190) 0 0 $28.13
0 0
Central Scottsdale Ret 4 1,914,834 438,937 438,937 22.9% 14,072 0 0 $22.13
0 0
Chandler Ret 7 2,220,250 236,214 237,266 10.7% (12,760) 0 0 $17.15
4,311 0
Ctrl Peoria/Arrowhead Ret 5 1,770,069 156,842 158,391 8.9% 0 0 0 $27.64
0 0
Deer Valley Ret 1 777,284 72,787 72,787 9.4% (10,269) 0 0 $27.61
108 0
Downtown Phoenix Ret 0 0 0 0 0.0% 0 0 0 $0.00
0 0
East Phoenix Ret 1 422,146 33,595 33,595 8.0% 67,390 0 0 $32.37
0 0
Fountain Hills Ret 0 0 0 0 0.0% (18,221) 0 0 $0.00
36,700 0
Gilbert Ret 2 1,741,581 253,639 253,639 14.6% 26,747 0 0 $30.00
0 0
Glendale Ret 2 944,253 17,457 17,457 1.8% 0 0 0 $23.52
0 0
Goodyear Ret 0 0 0 0 0.0% 0 0 0 $0.00
1,238 0
Laveen Ret 1 273,097 40,000 40,000 14.6% 0 0 0 $28.50
(3,200) 0
Loop 101/I-10 Ret 1 537,058 58,346 58,346 10.9% 0 0 0 $0.00
0 0
N Goodyear/Litchfield Ret 2 710,398 159,216 159,216 22.4% 11,299 0 0 $0.00
46,516
N Phoenix/I-17 Corr Ret 2 642,866 4,550 4,550 0.7% 0 $25.86

North Buckeye Ret 0 0 0 0 0.0% 0 $0.00

North Scottsdale Ret 4 1,799,579 196,196 197,082 11.0% 0 $21.58

Outlying Pinal County Ret 0 0 0 0 0.0% 0 $0.00

Queen Creek Ret 2 1,280,461 108,066 110,266 8.6% 0 $32.32

Red Mountain/Mesa Ret 5 3,150,122 423,901 429,657 13.6% 0 $29.52

South Buckeye Ret 2 850,484 67,052 67,052 7.9% 0 $30.06

South Mountain Ret 1 414,056 8,924 8,924 2.2% 0 $22.71

South Phoenix Ret 0 0 0 0 0.0% 0 $0.00

South Scottsdale Ret 0 0 0 0 0.0% 0 $0.00

Sun City Ret 0 0 0 0 0.0% 0 $0.00

Surprise/North Peoria Ret 3 1,706,191 43,728 43,728 2.6% 0 $32.12

Tempe Ret 0 0 0 0 0.0% 0 $0.00

Tolleson Ret 2 511,354 138,221 138,221 27.0% 0 $0.00

W Outlying Maricopa Ret 0 0 0 0 0.0% 0 $0.00

West Phoenix/Maryvale Ret 0 0 0 0 0.0% 0 $0.00

Williams Gateway/Mesa Re 1 606,885 8,112 8,112 1.3% 0 $38.00
Totals 53 23,830,587 2,725,854 2,737,297 11.5% 0 $24.85

Source: CoStar Property®

©2010 COSTAR GROUP, INC. THE COSTAR RETAIL REPORT 13

PHOENIX – FIRST QUARTER 2010

Phoenix Retail Market

FIGURES AT A GLANCE

Shopping Center Submarket Statistics First Quarter 2010

Existing Inventory Vacancy YTD Net YTD Under Quoted
Absorption Deliveries Const SF Rates
Market # Ctrs Total GLA Direct SF Total SF Vac %
8.6% (32,625) 0
Ahwatukee Foothills Ret 31 2,110,388 181,651 181,651 (7,596) 0 0 $19.09
(222) 0
Airport Area Ret 26 731,371 131,649 134,149 18.3% 6,571 0 0 $16.51
0
Anthem Ret 16 1,341,253 126,022 126,022 9.4% (15,550) 0 0 $20.60
(30,280) 0
Apache Junction Ret 2 203,141 5,900 5,900 2.9% (75,677) 0 0 $26.00
13,053 0
Carefree Ret 25 925,529 176,055 176,055 19.0% (57,852) 0 0 $22.42
0
Central Scottsdale Ret 107 5,894,095 567,222 616,976 10.5% 1,566 0 0 $22.20
(56,895) 0
Chandler Ret 133 10,390,876 1,308,560 1,333,560 12.8% 0 15,845 $15.45
2,611 0
Ctrl Peoria/Arrowhead Ret 58 4,335,166 731,971 751,198 17.3% (70,729) 0 0 $17.87
0
Deer Valley Ret 9 581,945 151,848 151,848 26.1% (2,537) 0 0 $21.86
(36,578) 0
Downtown Phoenix Ret 55 1,916,855 184,077 187,703 9.8% 12,164 0 0 $16.75
0
East Phoenix Ret 115 4,736,091 748,506 766,393 16.2% 922 0 0 $15.63
8,269 0
Fountain Hills Ret 17 354,749 38,914 38,914 11.0% (27,727) 14,550 0 $18.52
0
Gilbert Ret 92 5,844,326 925,806 925,806 15.8% 0 0 0 $17.26
(9,918) 0
Glendale Ret 119 6,015,498 881,363 904,855 15.0% (8,499) 0 0 $12.15
6,000 59,669
Goodyear Ret 34 2,028,567 397,623 397,623 19.6% (79,461) 0 250,051 $20.51
0
Laveen Ret 9 1,204,263 130,696 130,696 10.9% 0 0 0 $19.13
3,709 0
Loop 101/I-10 Ret 19 1,252,647 110,887 110,887 8.9% 0 0 $19.21
0 0
N Goodyear/Litchfield Ret 29 2,863,470 374,384 374,384 13.1% (21,842) 74,219 0 $20.25
(67,633)
N Phoenix/I-17 Corr Ret 141 7,933,678 1,216,612 1,226,612 15.5% 0 $12.60
834
North Buckeye Ret 1 60,000 0 0 0.0% (30,755) 0 $0.00

North Scottsdale Ret 63 5,287,710 760,266 761,466 14.4% (4,274) 0 $20.55
0
Outlying Pinal County Ret 2 103,925 56,840 56,840 54.7% 0 $14.13
(86,104)
Queen Creek Ret 8 226,246 14,495 14,495 6.4% (1,580) 0 $20.75

Red Mountain/Mesa Ret 257 15,359,902 2,731,398 2,829,005 18.4% (668,635) 28,575 $13.27

South Buckeye Ret 7 316,640 92,097 92,097 29.1% 0 $18.46

South Mountain Ret 14 834,909 98,504 101,304 12.1% 0 $14.93

South Phoenix Ret 22 699,631 31,757 31,757 4.5% 0 $16.66

South Scottsdale Ret 36 1,549,801 296,715 305,032 19.7% 0 $13.10

Sun City Ret 44 2,008,028 537,641 539,541 26.9% 0 $16.02

Surprise/North Peoria Ret 41 2,417,971 278,286 280,041 11.6% 0 $22.52

Tempe Ret 67 3,678,370 533,150 533,150 14.5% 0 $14.38

Tolleson Ret 23 1,220,420 58,519 58,519 4.8% 0 $19.33

W Outlying Maricopa Ret 3 122,163 0 0 0.0% 0 $0.00

West Phoenix/Maryvale Ret 56 3,847,003 419,055 464,622 12.1% 0 $11.23

Williams Gateway/Mesa Re 22 1,176,925 186,130 186,130 15.8% 0 $17.02
Totals 1,703 99,573,552 14,484,599 14,795,231 14.9% 294,471 $16.00

Source: CoStar Property®

14 THE COSTAR RETAIL REPORT ©2010 COSTAR GROUP, INC.

FIRST QUARTER 2010 – PHOENIX

Phoenix Retail Market

FIGURES AT A GLANCE

Specialty Center Submarket Statistics First Quarter 2010

Existing Inventory Vacancy YTD Net YTD Under Quoted
Total SF Absorption Deliveries Const SF Rates
Market # Ctrs Total GLA Direct SF Vac %
0.0% 0 0
Ahwatukee Foothills Ret 0 000 0 0 0 $0.00
21.8% 0 0
Airport Area Ret 1 16,720 3,637 3,637 0.0% 0 0 0 $16.00
0.0% 0 0
Anthem Ret 1 324,000 0 0 0.0% (5,000) 0 0 $0.00
0 0
Apache Junction Ret 0 000 16.7% 0 0 0 $0.00
10.1% 0 0
Carefree Ret 0 000 (10,588) 0 0 $0.00
8.6% 0 0
Central Scottsdale Ret 2 149,671 25,037 25,037 21.4% 0 0 0 $20.00
26.6% 18,719 0
Chandler Ret 1 11,844 1,200 1,200 0 0 0 $20.00
0.0% 0 0
Ctrl Peoria/Arrowhead Ret 3 152,855 13,200 13,200 0.0% 0 0 0 $24.03
7.3% 0 0
Deer Valley Ret 1 18,823 4,030 4,030 0.0% (4,170) 0 0 $24.00
0.0% 0 0
Downtown Phoenix Ret 1 161,660 35,184 43,072 0.0% 0 0 0 $0.00
0.0% 0 0
East Phoenix Ret 0 000 5.6% 0 0 0 $0.00
0.0% 0 0
Fountain Hills Ret 0 000 0.0% 2,211 0 0 $0.00
0.0% 0 0
Gilbert Ret 2 272,925 19,856 19,856 0.0% 0 0 0 $14.69
0.0% 0 0
Glendale Ret 0 000 7.2% 0 0 0 $0.00
0.0% 0 0
Goodyear Ret 0 000 0.0% 0 0 0 $0.00
0.0% 0 0
Laveen Ret 0 000 0.0% 0 0 0 $0.00
0.0% 0 0
Loop 101/I-10 Ret 0 000 0.0% 0 0 0 $0.00
8.6% 0 0
N Goodyear/Litchfield Ret 1 213,305 11,855 11,855 0.0% 1,172 0 0 $20.00
0.0%
N Phoenix/I-17 Corr Ret 0 000 0.0% 0 $0.00
0.0%
North Buckeye Ret 0 000 9.0% 0 $0.00

North Scottsdale Ret 0 000 0 $0.00

Outlying Pinal County Ret 0 000 0 $0.00

Queen Creek Ret 0 000 0 $0.00

Red Mountain/Mesa Ret 2 177,611 12,738 12,738 0 $17.56

South Buckeye Ret 0 000 0 $0.00

South Mountain Ret 0 000 0 $0.00

South Phoenix Ret 0 000 0 $0.00

South Scottsdale Ret 0 000 0 $0.00

Sun City Ret 0 000 0 $0.00

Surprise/North Peoria Ret 0 000 0 $0.00

Tempe Ret 1 95,096 8,211 8,211 0 $32.00

Tolleson Ret 0 000 0 $0.00

W Outlying Maricopa Ret 0 000 0 $0.00

West Phoenix/Maryvale Ret 0 000 0 $0.00

Williams Gateway/Mesa Re 0 0 0 0 0 $0.00
Totals 16 1,594,510 134,948 142,836 0 $19.14

Source: CoStar Property®

©2010 COSTAR GROUP, INC. THE COSTAR RETAIL REPORT 15

PHOENIX – FIRST QUARTER 2010

Phoenix Retail Market

FIGURES AT A GLANCE

Total Retail Submarket Statistics First Quarter 2010

Existing Inventory Vacancy YTD Net YTD Under Quoted
Total SF Absorption Deliveries Const SF Rates
Market # Blds Total GLA Direct SF Vac %
6.7% (38,100) 0
Ahwatukee Foothills Ret 150 3,340,768 224,524 224,524 (15,627) 0 0 $20.75
0
Airport Area Ret 202 2,876,543 472,638 475,138 16.5% 1,062 0 0 $15.18
2,131 0
Anthem Ret 104 2,396,288 151,182 151,182 6.3% (15,887) 0 0 $20.36
(129,433) 0
Apache Junction Ret 7 207,581 10,340 10,340 5.0% (36,236) 0 0 $26.00
(41,582) 0
Carefree Ret 98 1,474,119 197,333 197,333 13.4% (59,042) 0 0 $22.97
(17,548) 0
Central Scottsdale Ret 526 14,255,610 1,543,351 1,593,105 11.2% (63,681) 0 0 $23.33
3,974 0
Chandler Ret 551 17,766,751 1,823,303 1,868,737 10.5% (52,936) 0 15,845 $14.89
11,227 0
Ctrl Peoria/Arrowhead Ret 354 9,671,521 1,130,287 1,151,063 11.9% (6,371) 0 0 $19.70
12,164 0
Deer Valley Ret 80 1,750,477 275,229 275,229 15.7% (12,200) 26,252 0 $22.16
4,207 0
Downtown Phoenix Ret 433 5,210,702 566,895 578,409 11.1% (174,233) 0 148,183 $18.20
0
East Phoenix Ret 512 8,285,000 1,157,620 1,175,507 14.2% 0 0 0 $16.22
65,015 0
Fountain Hills Ret 56 616,837 45,839 45,839 7.4% (32,152) 44,550 0 $16.21
22,238 0
Gilbert Ret 462 12,754,761 1,636,616 1,637,802 12.8% (54,126) 0 0 $18.13
26,747 0
Glendale Ret 601 10,049,818 1,239,590 1,266,682 12.6% 0 0 $15.77
3,709 59,669
Goodyear Ret 171 3,781,545 806,870 806,870 21.3% (3,137) 0 250,051 $19.46
100,773 0
Laveen Ret 48 1,538,861 188,328 188,328 12.2% (86,648) 0 0 $20.68
(8,983) 0
Loop 101/I-10 Ret 97 2,454,536 231,928 234,779 9.6% 0 0 $19.78
(182) 0
N Goodyear/Litchfield Ret 156 4,127,831 590,935 590,935 14.3% (13,593) 130,471 0 $20.64

N Phoenix/I-17 Corr Ret 651 15,521,234 2,194,875 2,204,875 14.2% (900) 0 $13.35
(80,937)
North Buckeye Ret 2 71,000 0 0 0.0% 0 $0.00
8,297
North Scottsdale Ret 394 13,983,179 1,292,712 1,310,290 9.4% (681,990) 18,432 $21.54

Outlying Pinal County Ret 14 148,412 81,055 83,055 56.0% 0 $14.13

Queen Creek Ret 46 1,688,995 144,657 146,857 8.7% 0 $25.25

Red Mountain/Mesa Ret 1,212 27,820,385 4,231,445 4,338,714 15.6% 28,575 $14.91

South Buckeye Ret 57 1,276,185 162,314 162,314 12.7% 0 $25.35

South Mountain Ret 61 1,674,369 134,596 137,396 8.2% 0 $15.61

South Phoenix Ret 140 1,248,950 141,961 141,961 11.4% 0 $9.64

South Scottsdale Ret 203 3,358,104 491,175 547,255 16.3% 0 $13.72

Sun City Ret 174 2,831,997 567,041 568,941 20.1% 0 $16.02

Surprise/North Peoria Ret 222 5,398,585 401,728 403,483 7.5% 0 $23.35

Tempe Ret 281 8,002,092 687,612 752,366 9.4% 3,838 $15.09

Tolleson Ret 166 2,376,511 225,178 225,178 9.5% 0 $16.95

W Outlying Maricopa Ret 41 399,157 8,120 8,120 2.0% 0 $16.54

West Phoenix/Maryvale Ret 306 7,417,057 809,235 922,764 12.4% 0 $11.71

Williams Gateway/Mesa Re 71 2,197,135 205,886 205,886 9.4% 0 $17.65
Totals 8,649 197,972,896 24,072,398 24,631,257 12.4% 464,924 $17.13

Source: CoStar Property®

16 THE COSTAR RETAIL REPORT ©2010 COSTAR GROUP, INC.

FIRST QUARTER 2010 – PHOENIX

Phoenix Retail Market

FIGURES AT A GLANCE

General Retail Market Statistics First Quarter 2010

Existing Inventory Vacancy Net Deliveries UC Inventory Quoted

Period # Blds Total GLA Direct SF Total SF Vac % Absorption # Blds Total GLA # Blds Total GLA Rates

2010 1q 4,701 49,950,107 4,295,758 4,509,879 9.0% 32,461 3 56,252 6 166,853 $16.38
2009 4q 4,699 49,899,847 4,248,915 4,492,080 9.0% (112,465) 6 34,805 5 129,552 $16.66
2009 3q 4,693 49,865,042 4,139,031 4,344,810 8.7% (377,962) 6 39,592 9 $16.99
2009 2q 4,687 49,825,450 3,725,920 3,927,256 7.9% (313,887) 7 159,046 13 91,057 $18.56
2009 1q 4,680 49,666,404 3,346,260 3,454,323 7.0% (158,166) 8 64,951 14 104,397 $18.68
2008 4q 4,673 49,611,409 3,133,147 3,241,162 6.5% (174,082) 22 268,187 16 225,943 $19.29
2008 3q 4,651 49,343,222 2,752,129 2,798,893 5.7% 113,404 25 350,344 32 172,997 $20.09
2008 2q 4,627 48,995,878 2,454,600 2,564,953 5.2% (413,670) 22 212,119 49 380,138 $21.50
2008 1q 4,606 48,785,803 1,850,006 1,941,208 4.0% 16 173,605 54 665,531 $20.99
2007 4q 4,594 48,626,960 1,684,089 1,732,467 3.6% (49,898) 15 111,194 46 713,496 $21.09
2007 3q 4,581 48,663,384 1,700,206 1,751,664 3.6% (17,227) 13 114,997 38 515,820 $21.15
2007 2q 4,569 48,656,187 1,755,778 1,807,544 3.7% 63,077 18 227,571 28 419,192 $20.58
2007 1q 4,551 48,428,616 1,611,725 1,722,435 3.6% 142,462 45 839,190 35 250,543 $20.89
2006 4q 4,509 47,891,623 1,943,623 2,044,501 4.3% 859,059 24 271,135 66 389,279 $20.50
2006 3q 4,486 47,628,759 1,485,633 1,585,392 3.3% (196,245) 10 252,162 73 1,096,711 $20.24
2006 2q 4,477 47,389,261 1,413,928 1,513,385 3.2% 167,491 19 261,691 43 1,230,649 $21.42
418,708 915,295

Source: CoStar Property®

Mall Market Statistics First Quarter 2010

Existing Inventory Vacancy Net Deliveries UC Inventory Quoted

Period # Ctrs Total GLA Direct SF Total SF Vac % Absorption # Blds Total GLA # Blds Total GLA Rates

2010 1q 32 23,024,140 2,431,239 2,446,014 10.6% (93,504) 0 0 1 3,600 $23.97
2009 4q 32 23,024,140 2,338,357 2,352,510 10.2% 39,075 1 170,000 1 3,600 $25.35
2009 3q 32 22,854,140 2,213,527 2,221,585 204,755 1 154,000 2 173,600 $24.70
2009 2q 32 22,700,140 2,264,282 2,272,340 9.7% (251,040) 4 3 327,600 $25.22
2009 1q 30 22,666,230 1,973,061 1,987,390 10.0% (89,364) 1 33,910 7 361,510 $26.84
2008 4q 30 22,546,230 1,670,323 1,778,026 (178,113) 0 120,000 7 311,510 $27.54
2008 3q 30 22,546,230 1,532,267 1,599,913 8.8% 803,956 32 4 138,313 $24.71
2008 2q 30 21,339,582 1,129,694 1,197,221 7.9% 195,057 3 0 36 1,344,961 $26.14
2008 1q 29 21,175,896 1,163,332 1,228,592 7.1% (221,217) 2 1,206,648 38 1,388,647 $25.64
2007 4q 28 21,152,457 5.6% 314,693 11 9 1,105,438 $27.22
2007 3q 28 20,599,131 983,936 983,936 5.8% 817,859 3 163,686 15 1,626,765 $27.27
2007 2q 28 19,648,822 740,989 745,303 4.7% 101,501 0 23,439 18 2,577,074 $33.52
2007 1q 28 19,648,822 596,324 612,853 3.6% 379,807 6 17 2,561,174 $32.34
2006 4q 28 19,341,910 704,777 714,354 3.1% 750,903 5 553,326 12 1,552,286 $28.95
2006 3q 27 19,039,860 784,049 787,249 3.6% 115,590 10 950,309 16 1,799,836 $29.31
2006 2q 26 18,949,795 1,236,102 1,236,102 4.1% 405,619 13 26 1,889,901 $30.26
1,251,991 1,261,627 6.5% 0
6.7% 306,912
302,050

90,065
571,959

Source: CoStar Property®

Power Center Market Statistics First Quarter 2010

Existing Inventory Vacancy Net Deliveries UC Inventory Quoted

Period # Ctrs Total GLA Direct SF Total SF Vac % Absorption # Blds Total GLA # Blds Total GLA Rates

2010 1q 53 23,830,587 2,725,854 2,737,297 11.5% 46,516 0 0 0 0 $24.85
2009 4q 53 23,830,587 2,651,133 2,783,813 11.7% (27,325) 0 0 0 0 $24.88
2009 3q 53 23,830,587 2,596,369 2,756,488 11.6% 45,224 0 0 0 0 $24.36
2009 2q 53 23,830,587 2,641,223 2,801,712 11.8% (36,006) 1 2,976 0 0 $21.12
2009 1q 53 23,827,611 2,702,567 2,762,730 11.6% (222,331) 4 132,100 1 2,976 $21.85
2008 4q 53 23,695,511 2,168,675 2,408,299 10.2% (546,514) 6 73,378 5 135,076 $23.67
2008 3q 53 23,622,133 1,734,176 1,788,407 301,045 11 556,373 11 208,454 $24.31
2008 2q 52 23,065,760 1,504,594 1,533,079 7.6% 665,625 4 725,821 20 751,527 $25.14
2008 1q 51 22,339,939 1,468,590 1,472,883 6.6% 969,117 9 1,231,851 23 1,472,348 $25.79
2007 4q 50 21,108,088 1,208,749 1,210,149 6.6% 673,632 10 747,542 24 2,514,354 $26.75
2007 3q 48 20,360,546 1,104,763 1,136,239 5.7% 586,378 10 464,863 33 3,089,890 $29.45
2007 2q 47 19,895,683 1,200,878 1,257,754 5.6% 1,312,559 29 1,623,410 37 2,933,140 $29.71
2007 1q 45 18,272,273 6.3% 668,138 16 747,554 63 4,092,230 $28.71
2006 4q 44 17,524,719 890,027 946,903 5.2% 892,659 19 914,263 58 3,478,206 $27.60
2006 3q 43 16,610,456 866,087 867,487 5.0% (20,601) 1 4,245 69 3,913,012 $27.25
2006 2q 43 16,606,211 844,483 845,883 5.1% 42,464 4 175,796 38 2,630,586 $27.13
821,037 821,037 4.9%

Source: CoStar Property®

©2010 COSTAR GROUP, INC. THE COSTAR RETAIL REPORT 17

PHOENIX – FIRST QUARTER 2010

Phoenix Retail Market

FIGURES AT A GLANCE

Shopping Center Market Statistics First Quarter 2010

Existing Inventory Vacancy Net Deliveries UC Inventory Quoted

Period # Ctrs Total GLA Direct SF Total SF Vac % Absorption # Blds Total GLA # Blds Total GLA Rates

2010 1q 1,703 99,573,552 14,484,599 14,795,231 14.9% (668,635) 2 74,219 9 294,471 $16.00
2009 4q 1,703 99,499,333 13,680,113 14,052,377 14.1% (529,747) 8 174,318 11 368,690 $16.45
2009 3q 1,700 99,325,015 12,989,559 13,348,312 13.4% 14 326,796 18 514,433 $17.05
2009 2q 1,695 98,998,219 12,598,604 12,950,277 13.1% (71,239) 10 306,500 25 582,828 $17.48
2009 1q 1,692 98,691,719 11,792,445 12,209,859 12.4% (433,918) 23 472,135 30 798,726 $18.50
2008 4q 1,684 98,219,584 10,739,610 11,064,942 11.3% (672,782) 27 896,153 49 1,235,545 $18.90
2008 3q 1,678 97,323,431 10,155,731 10.4% 39 1,150,105 71 1,913,168 $18.77
2008 2q 1,663 96,173,326 9,816,036 10.3% (13,058) 36 522,865 87 2,702,976 $18.82
2008 1q 1,651 95,650,461 9,664,329 9,900,480 894,854 47 1,310,409 100 2,519,092 $18.85
2007 4q 1,633 94,340,052 8,606,519 8,852,197 9.3% (525,418) 35 755,286 112 2,702,460 $19.27
2007 3q 1,626 93,584,766 7,918,100 8,118,297 8.6% 576,509 30 333,479 122 3,185,244 $19.02
2007 2q 1,607 93,251,287 7,078,734 7,269,654 7.8% (93,357) 40 523,801 112 2,582,802 $18.83
2007 1q 1,591 92,727,486 7,183,259 7,522,022 8.1% 585,847 81 1,359,478 124 2,331,017 $18.23
2006 4q 1,577 91,368,008 7,256,503 7,559,747 8.2% 561,526 41 809,284 156 2,676,250 $17.81
2006 3q 1,561 90,558,724 6,677,839 6,954,391 7.6% 754,122 23 401,463 171 2,924,315 $17.52
2006 2q 1,550 90,157,261 6,511,365 6,780,452 7.5% 635,345 32 721,325 136 2,454,332 $16.95
6,899,944 7,186,739 8.0% 807,750
1,029,960

Source: CoStar Property®

Specialty Center Market Statistics First Quarter 2010

Existing Inventory Vacancy Net Deliveries UC Inventory Quoted

Period # Ctrs Total GLA Direct SF Total SF Vac % Absorption # Blds Total GLA # Blds Total GLA Rates

2010 1q 16 1,594,510 134,948 142,836 9.0% 1,172 00 0 0 $19.14
2009 4q 16 1,594,510 136,120 144,008 9.0% (1,161) 00 0 0 $18.86
2009 3q 16 1,594,510 142,847 142,847 9.0% 00 0 0 $20.33
2009 2q 16 1,594,510 141,947 141,947 8.9% (900) 00 0 0 $20.37
2009 1q 16 1,594,510 110,277 110,277 6.9% (31,670) 00 0 0 $23.43
2008 4q 16 1,594,510 5.9% (15,421) 00 0 0 $24.10
2008 3q 16 1,594,510 94,856 94,856 4.2% (27,525) 00 0 0 $24.06
2008 2q 16 1,594,510 67,331 67,331 5.7% 23,325 00 0 0 $24.31
2008 1q 16 1,594,510 87,810 90,656 4.8% (14,702) 00 0 0 $25.48
2007 4q 16 1,594,510 73,108 75,954 4.6% 00 0 0 $25.26
2007 3q 16 1,594,510 70,147 72,993 4.3% (2,961) 2 13,200 0 0 $24.56
2007 2q 16 1,581,310 68,912 68,912 3.8% (4,081) 00 2 13,200 $24.01
2007 1q 16 1,581,310 59,614 59,614 3.8% 3,902 00 2 13,200 $23.83
2006 4q 16 1,581,310 59,794 59,794 7.1% 00 0 0 $24.74
2006 3q 16 1,581,310 111,947 111,947 7.7% 180 00 0 0 $25.14
2006 2q 16 1,581,310 122,463 122,463 7.8% 52,153 1 7,527 0 0 $24.66
120,184 123,387 10,516

924
(18,009)

Source: CoStar Property®

Total Retail Market Statistics First Quarter 2010

Existing Inventory Vacancy Net Deliveries UC Inventory Quoted

Period # Blds Total GLA Direct SF Total SF Vac % Absorption # Blds Total GLA # Blds Total GLA Rates

2010 1q 8,649 197,972,896 24,072,398 24,631,257 12.4% (681,990) 5 130,471 16 464,924 $17.13
2009 4q 8,645 197,848,417 23,054,638 23,824,788 12.0% (631,623) 15 379,123 17 501,842 $17.54
2009 3q 8,630 197,469,294 22,081,333 22,814,042 11.6% (200,122) 21 520,388 29 779,090 $17.98
2009 2q 8,609 196,948,906 21,371,976 22,093,532 11.2% (1,066,521) 22 502,432 41 1,014,825 $18.28
2009 1q 8,587 196,446,474 19,924,610 20,524,579 10.4% (1,158,064) 36 789,186 52 1,389,155 $19.22
2008 4q 8,552 195,667,244 17,806,611 18,587,285 (939,292) 55 1,237,718 77 1,855,128 $19.73
2008 3q 8,497 194,429,526 15,901,939 16,410,275 9.5% 2,136,584 107 3,263,470 118 2,640,073 $19.68
2008 2q 8,391 191,169,056 14,841,027 15,286,389 8.4% 65 1,624,491 192 5,464,995 $19.94
2008 1q 8,327 189,546,609 13,161,555 13,570,834 8.0% (93,108) 74 2,739,304 215 6,093,583 $19.94
2007 4q 8,257 186,822,067 11,865,021 12,117,842 7.2% 1,271,550 71 2,167,348 191 6,838,072 $20.39
2007 3q 8,188 184,802,337 10,693,604 10,971,772 6.5% 58 1,876,848 208 8,321,091 $20.33
2007 2q 8,131 183,033,289 10,795,853 11,259,787 5.9% 873,660 87 2,374,782 197 8,356,759 $20.29
2007 1q 8,044 180,658,507 10,522,826 11,003,233 6.2% 2,057,063 148 3,253,134 241 9,386,900 $19.81
2006 4q 7,899 177,707,570 10,383,545 10,765,575 6.1% 2,118,228 89 2,296,732 292 8,803,453 $19.31
2006 3q 7,811 175,419,109 10,200,046 10,570,292 6.1% 2,713,279 44 747,935 329 9,867,812 $19.00
2006 2q 7,768 174,683,838 10,507,084 10,906,175 6.0% 2,093,178 69 1,738,298 243 7,890,114 $18.42
6.2% 1,071,154
1,878,742

Source: CoStar Property®

18 THE COSTAR RETAIL REPORT ©2010 COSTAR GROUP, INC.

FIRST QUARTER 2010 – PHOENIX

Phoenix Retail Market

LEASING ACTIVITY

Historical Rental Rates

Based on NNN Rental Rates

Power Center Specialty Center General Retail Shopping Center Mall Total Market

Dollars/SF/Year $33.00
$31.00
$29.00
$27.00
$25.00
$23.00
$21.00
$19.00
$17.00
$15.00

2006 1q 2006 2q 2006 3q 2006 4q 2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q 2010 1q

Source: CoStar Property®

Vacancy by Available Space Type Vacancy by Building Type

Percent of All Vacant Space in Direct vs. Sublet Percent of All Vacant Space by Building Type

2% Shopping Center

General Retail

Power Center

Mall

98% Specialty Center

Direct Sublet 0% 10% 20% 30% 40% 50% 60% 70%
Source: CoStar Property®
Source: CoStar Property®

GLA By Building Type Future Space Available

Ratio of Total GLA by Building Type Space Scheduled to be Available for Occupancy*

Shopping Center 0.3 0.23

0.2

General Retail

0.2

Power Center Millions

0.1

Mall 0.05 0.05
0.1
0.03

Specialty Center 0.00 0.00
0.0 2011 3q
Millions of Square0Feet 20 40 60 80 100 120
Source: CoStar Property® 2010 2q 2010 3q 2010 4q 2011 1q 2011 2q

* Includes Under Construction Spaces Source: CoStar Property®

©2010 COSTAR GROUP, INC. THE COSTAR RETAIL REPORT 19

PHOENIX – FIRST QUARTER 2010

Phoenix Retail Market

LEASING ACTIVITY

Select Top Retail Leases Based on Leased Square Footage For Deals Signed in 2010

Building Submarket SF Qtr Tenant Name Tenant Rep Company Landlord Rep Company

1 4095 S Gilbert Rd Gilbert Ret 59,000 1st Hobby Lobby Velocity Retail Group LLC Vestar Development Company

2 Gateway Pavilions Loop 101/I-10 Ret 32,500 1st Ultimate Electronics Direct Deal Phoenix Commercial Advisors

3 2020-2040 N 75th Ave WestPhoenix/MaryvaleRet 30,000 1st Ross SRS Real Estate Partners Red Mountain Retail Group

4 16083 N 75th Ave Ctrl Peoria/Arrowhead Ret 28,955 1st National Youth Soccer Direct Deal Cutler Commercial

5 Rancho Encanto Plaza N Phoenix/I-17 Corr Ret 20,610 1st Leon Furniture Direct Deal Weingarten Realty Investors

6 CityScape Downtown Phoenix Ret 18,140 1st Lucky Strike N/A RED Realty Advisors

7 Westside Plaza WestPhoenix/MaryvaleRet 18,000 1st Life Skills Center Rein & Grossoehme Rein & Grossoehme

8 CityScape Downtown Phoenix Ret 17,055 1st Stand Up Live N/A RED Realty Advisors

9 15450 N Tatum Blvd North Scottsdale Ret 16,796 1st Walgreens Direct Deal Stewart Florence

10 Warner Plaza Chandler Ret 13,000 1st Carpet Broker Direct Deal Michael A. Pollack Real Estate

11 Santan Gateway North - Shops A* Gilbert Ret 12,184 1st Party America N/A N/A

12 Desert Palms Power Center Airport Area Ret 12,150 1st DC Dental Direct Deal Cassidy Turley BRE Commercial

13 CityScape Downtown Phoenix Ret 10,240 1st Urban Outfitters N/A RED Realty Advisors

14 Arrowhead Plaza Ctrl Peoria/Arrowhead Ret 8,500 1st Tuesday Morning N/A Cowen Commercial LLC

15 The Village at Hayden - Bldg C Central Scottsdale Ret 8,450 1st Restaurant & Cocktail Lounge Direct Deal De Rito Partners, Inc.

16 2036 E Thomas Rd Airport Area Ret 8,214 1st Steven’s Shoes N/A Direct Deal

17 The Shops at Surprise - Bldg C Surprise/North Peoria Ret 8,000 1st Party Planet Desert Development Property Group Desert Development Property Group

18 7001 N Scottsdale Rd Central Scottsdale Ret 6,280 1st Seville Restaurant LLC NAI Horizon Cassidy Turley BRE Commercial

19 The Shops at Park Central - Bldg 2 Downtown Phoenix Ret 6,000 1st Corelink Data Centers N/A Park Central Mall LLC

20 1503 E Bethany Home Rd East Phoenix Ret 5,500 1st Zipps Sports Grill NAI Horizon Red Mountain Retail Group

21 6145 N 35th Ave* N Phoenix/I-17 Corr Ret 5,300 1st Denny’s N/A N/A

22 3961 E Chandler Blvd Ahwatukee Foothills Ret 5,132 1st Mad Chef Gastro Pub Direct Deal ZELL Commercial Real Estate Service

23 2041 N Arizona Ave Gilbert Ret 5,120 1st Perkins Family Restaurant N/A CRS Realty Services

24 7470 W Bell Rd Ctrl Peoria/Arrowhead Ret 4,945 1st Teaching Stuff N/A Weingarten Realty Investors

25 Crossroads Towne Center - Phase I Gilbert Ret 4,838 1st The Clothing Company NAI Horizon Colliers International

26 Phoenix Ranch Market Glendale Ret 4,576 1st Rent-A-Center West De Rito Partners, Inc. ZELL Commercial Real Estate Service

27 Paradise Valley Mall North Scottsdale Ret 4,544 1st Feng Shui Gardens Direct Deal Westcor Partners

28 1925 W Camelback Rd Downtown Phoenix Ret 4,400 1st Spooner Phoenix Physical Therapy Direct Deal De Rito Partners, Inc.

29 Tierra Del Sol East Phoenix Ret 4,373 1st Peppers Sports Grill Direct Deal Rein & Grossoehme

30 Chevy Square Plaza Ctrl Peoria/Arrowhead Ret 4,350 1st Sky Box Bar & Grill Direct Deal Case, Huff & Associates, Inc.

31 Paradise Valley Mall* North Scottsdale Ret 4,012 1st Vogue Direct Deal Westcor Partners

32 1501 W Mountain View Rd* N Phoenix/I-17 Corr Ret 3,760 1st Country Market Unique Real Estate Unique Real Estate

33 7337 E Shea Blvd Central Scottsdale Ret 3,500 1st Fascinations De Rito Partners, Inc. Rein & Grossoehme

34 350 E Southern Ave Red Mountain/Mesa Ret 3,500 1st Tio Rico Auto Loans Direct Deal Commercial Properties, Inc.

35 Bell Towne Centre East Phoenix Ret 3,446 1st Vitamin Shoppe Western Retail Advisors LLC Colliers International

36 Arrowhead Towne Center Ctrl Peoria/Arrowhead Ret 3,425 1st The Clothing Company NAI Horizon Westcor Partners

37 Lakeview Village at Morrison Ranch Gilbert Ret 3,400 1st Dance Republic Direct Deal Phoenix Commercial Advisors

38 Lake Pleasant Pavilion - Pad 3 Ctrl Peoria/Arrowhead Ret 3,400 1st Barro’s Pizza N/A Strategic Retail Group

39 Filiberto’s Downtown Phoenix Ret 3,312 1st Filiberto’s Direct Deal Oxford Realty Advisors

40 Power Road Plaza Red Mountain/Mesa Ret 3,225 1st Banner MediSun, Inc. N/A NAI Horizon

Source: CoStar Property®

* Renewal

20 THE COSTAR RETAIL REPORT ©2010 COSTAR GROUP, INC.

FIRST QUARTER 2010 – PHOENIX

Phoenix Retail Market

SALES ACTIVITY

The Optimist Sales Index Average of Two Highest Price/SF's and Two Lowest Cap Rates

Cap Rate Price/SF

10.0% $600
9.0%
8.0% $500
7.0%
Cap Rate Percentage 6.0% $400
5.0%
4.0% Dollars/SF$300
3.0% Price/SF
2.0% $200
1.0%
0.0% $100

$0

2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q

Source: CoStar COMPS®

Sales Volume & Price Sales Analysis by Building Size

Based on Retail Building Sales of 15,000 SF and Larger Based on Retail Building Sales From Jan. 2009 - Dec. 2009

Sales Volume Price/SF Bldg Size # RBA $ Volume Price/SF Cap Rate

$700 $350

Millions of Sales Volume Dollars $600 $300 < 25,000 SF 235 1,880,705 $ 35,941,919 $ 19.11 8.33%

$500 $250

$400 $200 25K-99K SF 20 883,062 $ 105,999,787 $ 120.04 9.48%

$300 $150

$200 $100 100K-249K SF 7 1,051,026 $ 118,524,031 $ 112.77 -

$100 $50

$0 $0

2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 >250K SF 1 342,464 $ 20,000,000 $ 58.40 -
1q 3q 1q 3q 1q 3q 1q 3q 1q 3q

Source: CoStar COMPS® Source: CoStar COMPS®

U.S. Price/SF Comparison U.S. Cap Rate Comparison

Based on Retail Building Sales of 15,000 SF and Larger Based on Retail Building Sales of 15,000 SF and Larger

Phoenix US 11.0% Phoenix US

$330

$280 10.0%

Cap Rate Percentage 9.0%

Dollars per SF $230 8.0%

$180 7.0%

$130 6.0%

5.0%

$80 4.0%

$30 2005 2006 2006 2007 2007 2008 2008 2009 2009 3.0% 2005 2006 2006 2007 2007 2008 2008 2009 2009
3q 1q 3q 1q 3q 1q 3q 1q 3q 3q 1q 3q 1q 3q 1q 3q 1q 3q
2005 2005
1q 1q

Source: CoStar COMPS® Source: CoStar COMPS®

©2010 COSTAR GROUP, INC. THE COSTAR RETAIL REPORT 21

PHOENIX – FIRST QUARTER 2010 Phoenix Retail Market

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�� THE COSTAR RETAIL REPORT ©2010 COSTAR GROUP, INC.

22

FIRST QUARTER 2010 – PHOENIX

Phoenix Retail Market

SALES ACTIVITY

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Select Land Sales Based on Commercially Zoned Land Sales Occurring From Jan. 2009 - March 2010

NE Cactus Rd & 48th St, Phoenix SW Sarival Ave & Peoria Ave, Waddell NE Waddell Rd & Cotton Ln, Surprise

Sale Price: $4,150,000 Sale Price: $4,109,236 Sale Price: $2,887,000
Acres: 3.94 Acres: 21.40 Acres: 2.16
Price/SF: $24.20 Price/SF: $4.41 Price/SF: $30.70
Closing Date: 07/10/2009 Closing Date: 02/25/2009 Closing Date: 12/09/2009
Zoning: PAD Zoning: PAD Zoning: PAD, Surprise
Intended Use: Hold for Investment Intended Use: Department Store Intended Use: Drug Store
Buyer: JAL Enterprises, Inc. Buyer: Wal-Mart Realty Buyer: Walgreen Arizona Drug Co.
Seller: Haugland Properties Seller: DTD-Devco 7 LLC Seller: Interra Development Partners

SW Central Ave & Highland Ave, Phoenix NW Scottsdale Rd & Paradise Ln, Scottsdale NE Bullard & I-10, Goodyear

Sale Price: $2,860,000 Sale Price: $2,850,000 Sale Price: $2,317,400
Acres: 3.41 Acres: 3.30
Price/SF: $19.26 Price/SF: 0.39 Acres: $16.12
Closing Date: 12/28/2009 Closing Date: 01/08/2010
Zoning: C-2/R-3/R-5 Zoning: $168.55 Price/SF: C-2
Intended Use: Hold for Development Intended Use: Hospitality
Buyer: Sunbelt Holdings Buyer: 11/03/2009 Closing Date: Drury Hotels Company LLC
Seller: Douglas E Smith Seller: SunCor Development Company
PCD, Phoenix Zoning:

Bank Intended Use:

UMB Financial Corporation Buyer:

Trammell Crow Arizona Development, Inc. Seller:

Source: CoStar COMPS® THE COSTAR RETAIL REPORT 23
©2010 COSTAR GROUP, INC.

PHOENIX – FIRST QUARTER 2010

Phoenix Retail Market

AIRPORT AREA MARKET

MARKET HIGHLIGHTS – CLASS “A, B & C”

Deliveries, Absorption & Vacancy Historical Analysis, All Classes

0.040 Delivered SF Absorption SF Vacancy 16.0%
2007 3q 2007 4q 2008 3q 2008 4q 2009 3q 2009 4q
0.020 14.0%

0.000 12.0%

Millions SF (0.020) 10.0% Percent Vacant

(0.040) 8.0%

(0.060) 6.0%

(0.080) 4.0%

(0.100) 2.0%

(0.120) 0.0%

2007 1q 2007 2q 2008 1q 2008 2q 2009 1q 2009 2q 2010 1q

Source: CoStar Property®

Vacant Space Quoted Rental Rates

Historical Analysis, All Classes Historical Analysis, All Classes

0.70 Direct SF Sublet SF $14.40
$14.20
0.60 $14.00
$13.80
0.50 Dollars/SF/Year $13.60
$13.40
Millions SF 0.40 $13.20
$13.00
0.30 $12.80
$12.60
0.20

0.10

0.00 2009 2q 2009 3q 2009 4q 2010 1q 2009 1q 2009 2q 2009 3q 2009 4q 2010 1q
2009 1q

Source: CoStar Property® Source: CoStar Property®

Existing Inventory Vacancy Net Delivered Inventory UC Inventory Quoted
Absorption Rates
Period # Bldgs Total RBA Vacant SF Vacancy % # Bldgs Total RBA # Bldgs Total RBA $13.14
2010 1q (18,764) $13.51
2009 4q 342 4,125,493 617,099 15.0% (51,732) 00 00 $13.45
2009 3q (69,585) $14.17
2009 2q 342 4,125,493 598,335 14.5% (49,052) 00 00 $13.41
2009 1q $13.57
2008 4q 342 4,125,493 546,603 13.2% 2,581 00 00 $13.82
2008 3q (22,872) $14.52
2008 2q 342 4,125,493 477,018 11.6% (44,651) 00 00 $14.05
2008 1q (38,950) $13.81
2007 4q 342 4,125,493 427,966 10.4% 00 00 $17.29
2007 3q (7,374) $16.33
2007 2q 342 4,125,493 430,547 10.4% (102,012) 00 00 $17.03
2007 1q $17.96
2006 4q 342 4,125,493 407,675 9.9% 31,174 00 00 $18.90
2006 3q (9,392) $18.69
2006 2q 342 4,125,493 363,024 8.8% 6,222 4 21,003 00
(19,678)
338 4,104,490 303,071 7.4% (44,544) 00 4 21,003
57,972
338 4,104,490 295,697 7.2% 00 4 21,003

338 4,104,490 193,685 4.7% 3 22,900 00

335 4,081,590 201,959 4.9% 00 3 22,900

335 4,081,590 192,567 4.7% 2 11,948 3 22,900

334 4,158,642 275,841 6.6% 2 80,783 3 20,480

332 4,077,859 175,380 4.3% 00 4 92,731

332 4,077,859 130,836 3.2% 00 2 80,783

Source: CoStar Property®

24 THE COSTAR RETAIL REPORT ©2010 COSTAR GROUP, INC.

FIRST QUARTER 2010 – PHOENIX

Phoenix Retail Market

DOWNTOWN PHOENIX MARKET

MARKET HIGHLIGHTS – CLASS “A, B & C”

Deliveries, Absorption & Vacancy Historical Analysis, All Classes

0.060 Delivered SF Absorption SF Vacancy 12.0%
0.040 2007 3q 2007 4q 2008 3q 2008 4q 2009 3q 2009 4q
0.020 10.0%
0.000
Millions SF (0.020) 8.0% Percent Vacant
(0.040)
(0.060) 6.0%
(0.080)
(0.100) 4.0%
(0.120)
2.0%

0.0%

2007 1q 2007 2q 2008 1q 2008 2q 2009 1q 2009 2q 2010 1q

Source: CoStar Property®

Vacant Space Quoted Rental Rates

Historical Analysis, All Classes Historical Analysis, All Classes

0.70 Direct SF Sublet SF $20.00

0.60 $19.50

0.50 Dollars/SF/Year $19.00

Millions SF 0.40 $18.50

0.30

$18.00

0.20

0.10 $17.50

0.00 $17.00

2009 1q 2009 2q 2009 3q 2009 4q 2010 1q 2009 1q 2009 2q 2009 3q 2009 4q 2010 1q

Source: CoStar Property® Source: CoStar Property®

Existing Inventory Vacancy Net Delivered Inventory UC Inventory Quoted
Absorption Rates
Period # Bldgs Total RBA Vacant SF Vacancy % # Bldgs Total RBA # Bldgs Total RBA $18.20
2010 1q (17,548) $19.85
2009 4q 433 5,210,702 578,409 11.1% 21,584 00 4 148,183 $18.84
2009 3q (25,714) $19.46
2009 2q 433 5,210,702 560,861 10.8% (58,588) 00 1 69,462 $18.29
2009 1q (46,255) $18.33
2008 4q 433 5,210,702 582,445 11.2% (47,178) 00 00 $18.76
2008 3q 37,474 $19.42
2008 2q 433 5,210,702 556,731 10.7% (96,986) 1 9,872 00 $18.80
2008 1q (5,853) $19.05
2007 4q 432 5,200,830 488,271 9.4% (41,998) 00 1 9,872 $19.34
2007 3q 33,609 $18.26
2007 2q 432 5,200,830 442,016 8.5% (41,831) 00 1 9,872 $17.05
2007 1q 18,424 $14.56
2006 4q 432 5,200,830 394,838 7.6% 44,315 2 33,684 00 $15.09
2006 3q (5,484) $13.53
2006 2q 430 5,167,146 398,628 7.7% 37,026 00 2 33,684

430 5,167,146 301,642 5.8% 1 9,193 1 13,834

431 5,166,617 295,260 5.7% 00 1 9,193

431 5,166,617 253,262 4.9% 00 1 9,193

431 5,166,617 286,871 5.6% 2 12,835 00

429 5,153,782 232,205 4.5% 2 18,954 2 12,835

427 5,134,828 231,675 4.5% 00 4 31,789

427 5,134,828 275,990 5.4% 00 2 18,954

428 5,147,492 283,170 5.5% 1 3,200 00

Source: CoStar Property®

©2010 COSTAR GROUP, INC. THE COSTAR RETAIL REPORT 25

PHOENIX – FIRST QUARTER 2010

Phoenix Retail Market

EAST VALLEY MARKET

MARKET HIGHLIGHTS – CLASS “A, B & C”

Deliveries, Absorption & Vacancy Historical Analysis, All Classes

2.000 Delivered SF Absorption SF Vacancy 14.0%

Millions SF 1.500 12.0% Percent Vacant
1.000 10.0%
0.500 8.0%
0.000 6.0%
(0.500) 4.0%
2.0%

(1.000) 0.0%

2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q 2010 1q

Source: CoStar Property®

Vacant Space Quoted Rental Rates

Historical Analysis, All Classes Historical Analysis, All Classes

10.00 Direct SF Sublet SF $25.00
9.00
8.00 $20.00
7.00
Millions SF 6.00 Dollars/SF/Year $15.00
5.00
4.00 $10.00
3.00
2.00 $5.00
1.00
0.00 $0.00

2009 1q 2009 2q 2009 3q 2009 4q 2010 1q 2009 1q 2009 2q 2009 3q 2009 4q 2010 1q

Source: CoStar Property® Source: CoStar Property®

Existing Inventory Vacancy Net Delivered Inventory UC Inventory Quoted
Absorption Rates
Period # Bldgs Total RBA Vacant SF Vacancy % # Bldgs Total RBA # Bldgs Total RBA $15.69
2010 1q (112,945) $16.19
2009 4q 2,623 70,230,119 8,950,362 12.7% (684,561) 2 44,550 4 48,258 $16.80
2009 3q $17.60
2009 2q 2,621 70,185,569 8,792,867 12.5% (55,403) 7 73,870 6 92,808 $19.15
2009 1q (443,802) $18.92
2008 4q 2,614 70,111,699 8,034,436 11.5% (307,252) 12 263,294 11 134,265 $18.80
2008 3q (227,712) $19.19
2008 2q 2,602 69,848,405 7,715,739 11.0% 818,692 5 92,633 21 376,309 $19.22
2008 1q 157,749 $19.72
2007 4q 2,597 69,755,772 7,179,304 10.3% 478,076 13 425,959 23 448,668 $19.55
2007 3q 828,457 $19.15
2007 2q 2,584 69,329,813 6,446,093 9.3% 1,508,275 27 624,731 30 830,633 $18.55
2007 1q 689,841 $18.18
2006 4q 2,557 68,705,082 5,593,650 8.1% 663,436 24 659,986 53 1,240,734 $17.54
2006 3q 641,563 $16.79
2006 2q 2,533 68,045,096 5,752,356 8.5% 588,183 12 585,708 61 1,723,469
987,979
2,522 67,461,432 5,326,441 7.9% 30 1,377,437 50 1,825,184

2,493 66,087,833 4,430,918 6.7% 31 877,772 56 2,488,839

2,463 65,212,336 4,383,878 6.7% 34 1,403,478 76 3,284,284

2,429 63,808,858 4,488,675 7.0% 43 1,094,030 81 3,684,107

2,386 62,714,828 4,084,486 6.5% 50 781,956 103 4,306,969

2,337 62,138,237 4,171,331 6.7% 35 878,098 114 3,550,535

2,303 61,268,410 3,943,067 6.4% 27 310,826 131 4,114,244

2,276 60,957,584 4,220,424 6.9% 19 873,141 103 2,824,876

Source: CoStar Property®

26 THE COSTAR RETAIL REPORT ©2010 COSTAR GROUP, INC.

FIRST QUARTER 2010 – PHOENIX

Phoenix Retail Market

MARICOPA COUNTY MARKET

MARKET HIGHLIGHTS – CLASS “A, B & C”

Deliveries, Absorption & Vacancy Historical Analysis, All Classes

0.010 Delivered SF Absorption SF Vacancy 2.5%
0.008 2007 3q 2007 4q 2008 3q 2008 4q 2009 3q 2009 4q
0.006 2.0%
0.004
Millions SF 0.002 1.5% Percent Vacant
0.000
(0.002) 1.0%
(0.004)
(0.006) 0.5%
(0.008)
(0.010) 0.0%

2007 1q 2007 2q 2008 1q 2008 2q 2009 1q 2009 2q 2010 1q

Source: CoStar Property®

Vacant Space Quoted Rental Rates

Historical Analysis, All Classes Historical Analysis, All Classes

0.01 Direct SF Sublet SF $18.00
0.01 $16.00
Millions SF 0.01 Dollars/SF/Year $14.00
0.01 $12.00
0.01 $10.00
0.00
0.00 $8.00
0.00 $6.00
0.00 $4.00
0.00 $2.00
$0.00

2009 1q 2009 2q 2009 3q 2009 4q 2010 1q 2009 1q 2009 2q 2009 3q 2009 4q 2010 1q

Source: CoStar Property® Source: CoStar Property®

Existing Inventory Vacancy Net Delivered Inventory UC Inventory Quoted
Absorption Rates
Period # Bldgs Total RBA Vacant SF Vacancy % # Bldgs Total RBA # Bldgs Total RBA $16.54
2010 1q (900) $16.54
2009 4q 41 399,157 8,120 2.0% 500 00 00 $16.54
2009 3q (7,720) $10.80
2009 2q 41 399,157 7,220 1.8% 00 00 $10.80
2009 1q 0 $10.80
2008 4q 41 399,157 7,720 1.9% 0 00 00 $10.80
2008 3q 0 $10.80
2008 2q 41 399,157 0 0.0% 0 00 00 $10.80
2008 1q 9,014 $10.80
2007 4q 41 399,157 0 0.0% 2,000 00 00 $10.80
2007 3q 500 $10.80
2007 2q 41 399,157 0 0.0% 0 00 00 $10.80
2007 1q (500) $0.00
2006 4q 41 399,157 0 0.0% 6,000 00 00 $0.00
2006 3q 0 $0.00
2006 2q 41 399,157 0 0.0% 0 1 9,014 00
0
40 390,143 0 0.0% 00 1 9,014

40 390,143 2,000 0.5% 00 1 9,014

40 390,143 2,500 0.6% 00 00

40 390,143 2,500 0.6% 00 00

40 390,143 2,000 0.5% 1 8,000 00

39 382,143 0 0.0% 00 1 8,000

39 382,143 0 0.0% 00 1 8,000

39 382,143 0 0.0% 00 00

Source: CoStar Property®

©2010 COSTAR GROUP, INC. THE COSTAR RETAIL REPORT 27

PHOENIX – FIRST QUARTER 2010

Phoenix Retail Market

NORTH PHOENIX MARKET

MARKET HIGHLIGHTS – CLASS “A, B & C”

Deliveries, Absorption & Vacancy Historical Analysis, All Classes

0.400 Delivered SF Absorption SF Vacancy 16.0%
2007 3q 2007 4q 2008 3q 2008 4q 2009 3q 2009 4q
0.300 14.0%

0.200 12.0%

Millions SF 0.100 10.0% Percent Vacant

0.000 8.0%

(0.100) 6.0%

(0.200) 4.0%

(0.300) 2.0%

(0.400) 0.0%

2007 1q 2007 2q 2008 1q 2008 2q 2009 1q 2009 2q 2010 1q

Source: CoStar Property®

Vacant Space Quoted Rental Rates

Historical Analysis, All Classes Historical Analysis, All Classes

6.00 Direct SF Sublet SF $16.20
$16.00
5.00 $15.80
$15.60
Millions SF 4.00 Dollars/SF/Year $15.40
$15.20
3.00 $15.00
$14.80
2.00 $14.60
$14.40
1.00

0.00 2009 2q 2009 3q 2009 4q 2010 1q 2009 1q 2009 2q 2009 3q 2009 4q 2010 1q
2009 1q
Source: CoStar Property®
Source: CoStar Property®

Existing Inventory Vacancy Net Delivered Inventory UC Inventory Quoted
Absorption Rates
Period # Bldgs Total RBA Vacant SF Vacancy % # Bldgs Total RBA # Bldgs Total RBA $15.06
2010 1q (313,335) $15.25
2009 4q 1,938 36,688,049 5,216,005 14.2% (53,405) 1 59,669 00 $15.56
2009 3q $15.68
2009 2q 1,937 36,628,380 4,843,001 13.2% (179,697) 2 29,000 1 59,669 $16.07
2009 1q (246,817) $16.65
2008 4q 1,935 36,599,380 4,760,596 13.0% (129,074) 1 5,200 3 88,669 $16.78
2008 3q (101,020) $17.06
2008 2q 1,934 36,594,180 4,575,699 12.5% (157,513) 2 19,890 4 93,869 $17.22
2008 1q (291,094) $18.35
2007 4q 1,932 36,574,290 4,308,992 11.8% 3 16,464 4 84,759 $18.43
2007 3q 20,596 $18.84
2007 2q 1,929 36,557,826 4,163,454 11.4% (225,879) 6 104,515 6 96,023 $18.19
2007 1q $16.88
2006 4q 1,923 36,453,311 3,957,919 10.9% 21,511 6 56,066 11 195,468 $16.90
2006 3q 318,073 $16.13
2006 2q 1,917 36,397,245 3,744,340 10.3% 6 92,020 16 249,534
1,023
1,911 36,305,225 3,361,226 9.3% 736,994 11 181,118 22 341,554
206,116
1,900 36,124,107 3,200,704 8.9% 215,700 5 332,360 26 458,649

1,895 35,791,747 2,642,465 7.4% 4 64,391 26 742,494

1,892 35,835,156 2,707,385 7.6% 4 45,539 14 582,574

1,888 35,789,617 2,979,919 8.3% 15 353,002 16 517,039

1,873 35,436,615 2,627,940 7.4% 6 355,550 22 662,831

1,867 35,081,065 3,009,384 8.6% 3 173,020 25 982,376

1,864 34,908,045 3,042,480 8.7% 12 147,304 16 1,030,973

Source: CoStar Property®

28 THE COSTAR RETAIL REPORT ©2010 COSTAR GROUP, INC.

FIRST QUARTER 2010 – PHOENIX

Phoenix Retail Market

NORTH SCOTTSDALE MARKET

MARKET HIGHLIGHTS – CLASS “A, B & C”

Deliveries, Absorption & Vacancy Historical Analysis, All Classes

0.500 Delivered SF Absorption SF Vacancy 12.0%
2007 3q 2007 4q 2008 3q 2008 4q 2009 3q 2009 4q
0.400 10.0%

0.300

Millions SF 0.200 8.0% Percent Vacant

0.100 6.0%

0.000 4.0%

(0.100)

(0.200) 2.0%

(0.300) 0.0%

2007 1q 2007 2q 2008 1q 2008 2q 2009 1q 2009 2q 2010 1q

Source: CoStar Property®

Vacant Space Quoted Rental Rates

Historical Analysis, All Classes Historical Analysis, All Classes

1.80 Direct SF Sublet SF $24.00
1.60 $23.50
Millions SF 1.40 Dollars/SF/Year $23.00
1.20 $22.50
1.00 $22.00
0.80 $21.50
0.60 $21.00
0.40 $20.50
0.20 $20.00
0.00

2009 1q 2009 2q 2009 3q 2009 4q 2010 1q 2009 1q 2009 2q 2009 3q 2009 4q 2010 1q

Source: CoStar Property® Source: CoStar Property®

Existing Inventory Vacancy Net Delivered Inventory UC Inventory Quoted
Absorption Rates
Period # Bldgs Total RBA Vacant SF Vacancy % # Bldgs Total RBA # Bldgs Total RBA $21.41
2010 1q 53,102 $22.17
2009 4q 548 16,074,135 1,553,462 9.7% (2,319) 00 2 18,432 $23.20
2009 3q 133,844 $23.38
2009 2q 548 16,074,135 1,606,564 10.0% (266,427) 00 1 3,600 $23.72
2009 1q (69,010) $25.32
2008 4q 548 16,074,135 1,604,245 10.0% (110,867) 1 154,000 1 3,600 $24.90
2008 3q (65,785) $24.59
2008 2q 547 15,920,135 1,584,089 10.0% (11,819) 2 14,713 2 157,600 $24.98
2008 1q (66,680) $25.15
2007 4q 545 15,905,422 1,302,949 8.2% (26,394) 3 41,891 4 172,313 $24.21
2007 3q 230,498 $24.90
2007 2q 542 15,863,531 1,192,048 7.5% 41,359 3 25,894 7 214,204 $24.12
2007 1q 388,371 $23.73
2006 4q 539 15,837,637 1,055,287 6.7% (1,943) 4 74,978 9 86,098 $23.77
2006 3q 122,395 $23.18
2006 2q 536 15,765,659 917,524 5.8% (47,064) 4 33,862 12 140,576

532 15,731,797 871,843 5.5% 3 41,707 13 148,544

529 15,690,090 763,456 4.9% 5 92,983 10 96,412

524 15,597,107 644,079 4.1% 1 9,733 11 159,882

523 15,587,374 864,844 5.5% 3 27,148 9 128,807

520 15,560,226 879,055 5.6% 13 388,100 11 148,155

507 15,172,126 879,326 5.8% 5 85,656 20 444,939

502 15,086,470 791,727 5.2% 2 81,555 24 527,095

500 15,004,915 832,567 5.5% 11 195,182 12 380,304

Source: CoStar Property®

©2010 COSTAR GROUP, INC. THE COSTAR RETAIL REPORT 29

PHOENIX – FIRST QUARTER 2010

Phoenix Retail Market

NORTHWEST PHOENIX MARKET

MARKET HIGHLIGHTS – CLASS “A, B & C”

Deliveries, Absorption & Vacancy Historical Analysis, All Classes

1.000 Delivered SF Absorption SF Vacancy 12.0%

0.800 10.0%

Millions SF 0.600 8.0% Percent Vacant

0.400 6.0%
0.200 4.0%

0.000 2.0%

(0.200) 0.0%

2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q 2010 1q

Source: CoStar Property®

Vacant Space Quoted Rental Rates

Historical Analysis, All Classes Historical Analysis, All Classes

2.05 Direct SF Sublet SF $24.50
$24.00
2.00 $23.50
$23.00
1.95 $22.50
$22.00
1.90 Dollars/SF/Year $21.50
$21.00
Millions SF 1.85 $20.50
$20.00
1.80 $19.50
$19.00
1.75

1.70

1.65

1.60

1.55

1.50 2009 2q 2009 3q 2009 4q 2010 1q 2009 1q 2009 2q 2009 3q 2009 4q 2010 1q
2009 1q

Source: CoStar Property® Source: CoStar Property®

Existing Inventory Vacancy Net Delivered Inventory UC Inventory Quoted
Absorption Rates
Period # Bldgs Total RBA Vacant SF Vacancy % # Bldgs Total RBA # Bldgs Total RBA $20.87
2010 1q (108,545) $20.93
2009 4q 760 19,216,871 1,980,957 10.3% (76,129) 00 00 $21.66
2009 3q 59,146 $22.88
2009 2q 760 19,216,871 1,872,412 9.7% (8,946) 1 4,821 00 $23.98
2009 1q 22,953 $24.50
2008 4q 759 19,212,050 1,791,462 9.3% (3,985) 00 1 4,821 $23.95
2008 3q 243,227 $25.54
2008 2q 759 19,212,050 1,850,608 9.6% 229,168 4 72,097 1 4,821 $26.46
2008 1q 41,866 $26.21
2007 4q 755 19,139,953 1,769,565 9.2% 55,245 8 211,393 4 72,097 $25.56
2007 3q 122,196 $25.57
2007 2q 747 18,928,560 1,581,125 8.4% 917,946 4 175,496 12 283,490 $25.99
2007 1q 508,418 $25.61
2006 4q 743 18,753,064 1,401,644 7.5% 260,710 17 395,082 14 439,789 $26.25
2006 3q 125,012 $24.35
2006 2q 726 18,357,982 1,249,789 6.8% 78,924 24 662,475 26 803,113

702 17,695,507 816,482 4.6% 9 91,612 48 1,259,351

693 17,603,895 766,736 4.4% 14 213,610 42 858,995

679 17,390,285 608,371 3.5% 7 96,122 37 847,259

672 17,294,163 634,445 3.7% 12 860,527 38 875,033

660 16,433,636 691,864 4.2% 18 510,371 39 1,269,393

642 15,923,265 689,911 4.3% 15 349,544 39 1,563,626

627 15,573,721 601,077 3.9% 3 30,857 46 1,783,729

624 15,542,864 695,232 4.5% 14 195,837 37 1,648,194

Source: CoStar Property®

30 THE COSTAR RETAIL REPORT ©2010 COSTAR GROUP, INC.

FIRST QUARTER 2010 – PHOENIX

Phoenix Retail Market

PINAL COUNTY MARKET

MARKET HIGHLIGHTS – CLASS “A, B & C”

Deliveries, Absorption & Vacancy Historical Analysis, All Classes

0.200 Delivered SF Absorption SF Vacancy 30.0%

Millions SF 0.150 25.0% Percent Vacant
0.100 20.0%
0.050 15.0%
0.000 10.0%
5.0%

(0.050) 0.0%

2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q 2010 1q

Source: CoStar Property®

Vacant Space Quoted Rental Rates

Historical Analysis, All Classes Historical Analysis, All Classes

0.10 Direct SF Sublet SF $20.00
0.09 $18.00
Millions SF 0.08 Dollars/SF/Year $16.00
0.07 $14.00
0.06 $12.00
0.05 $10.00
0.04
0.03 $8.00
0.02 $6.00
0.01 $4.00
0.00 $2.00
$0.00

2009 1q 2009 2q 2009 3q 2009 4q 2010 1q 2009 1q 2009 2q 2009 3q 2009 4q 2010 1q

Source: CoStar Property® Source: CoStar Property®

Existing Inventory Vacancy Net Delivered Inventory UC Inventory Quoted
Absorption Rates
Period # Bldgs Total RBA Vacant SF Vacancy % # Bldgs Total RBA # Bldgs Total RBA $15.71
2010 1q (30,021) $18.90
2009 4q 21 355,993 93,395 26.2% 1,403 00 00 $16.74
2009 3q (1,200) $16.89
2009 2q 21 355,993 63,374 17.8% (510) 00 00 $17.04
2009 1q (8,460) $20.25
2008 4q 21 355,993 64,777 18.2% 4,567 00 00 $20.25
2008 3q $22.34
2008 2q 21 355,993 63,577 17.9% 139,962 00 00 $22.16
2008 1q 12,193 $22.16
2007 4q 21 355,993 63,067 17.7% (4,985) 00 00 $22.16
2007 3q 44,000 $22.16
2007 2q 21 355,993 54,607 15.3% 0 1 5,104 00 $0.00
2007 1q (3,099) $0.00
2006 4q 20 350,889 54,070 15.4% 0 4 156,027 1 5,104 $0.00
2006 3q 0 $0.00
2006 2q 16 194,862 38,005 19.5% 0 2 40,114 5 161,131
0
14 154,748 10,084 6.5% 00 6 196,141

14 154,748 5,099 3.3% 1 44,000 6 196,141

13 110,748 5,099 4.6% 00 7 240,141

13 110,748 5,099 4.6% 1 2,000 2 81,000

12 108,748 0 0.0% 00 1 2,000

12 108,748 0 0.0% 00 1 2,000

12 108,748 0 0.0% 00 00

12 108,748 0 0.0% 00 00

Source: CoStar Property®

©2010 COSTAR GROUP, INC. THE COSTAR RETAIL REPORT 31

PHOENIX – FIRST QUARTER 2010

Phoenix Retail Market

SCOTTSDALE MARKET

MARKET HIGHLIGHTS – CLASS “A, B & C”

Deliveries, Absorption & Vacancy Historical Analysis, All Classes

0.300 Delivered SF Absorption SF Vacancy 14.0%
2007 3q 2007 4q 2008 3q 2008 4q 2009 3q 2009 4q
0.200 12.0%

0.100 10.0%

Millions SF 0.000 Percent Vacant

8.0%

(0.100)

6.0%

(0.200)

(0.300) 4.0%

(0.400) 2.0%

(0.500) 0.0%

2007 1q 2007 2q 2008 1q 2008 2q 2009 1q 2009 2q 2010 1q

Source: CoStar Property®

Vacant Space Quoted Rental Rates

Historical Analysis, All Classes Historical Analysis, All Classes

2.50 Direct SF Sublet SF $21.00
$20.50
2.00 $20.00
$19.50
Millions SF 1.50 Dollars/SF/Year $19.00
$18.50
1.00 $18.00
$17.50
0.50 $17.00
$16.50
0.00
2009 1q 2009 2q 2009 3q 2009 4q 2010 1q 2009 1q 2009 2q 2009 3q 2009 4q 2010 1q

Source: CoStar Property® Source: CoStar Property®

Existing Inventory Vacancy Net Delivered Inventory UC Inventory Quoted
Absorption Rates
Period # Bldgs Total RBA Vacant SF Vacancy % # Bldgs Total RBA # Bldgs Total RBA $20.78
2010 1q (28,660) $20.66
2009 4q 729 17,613,714 2,140,360 12.2% 124,146 00 00 $20.01
2009 3q (44,473) $18.00
2009 2q 730 17,619,706 2,117,692 12.0% (188,643) 1 170,000 00 $18.33
2009 1q (393,704) $20.44
2008 4q 729 17,449,706 2,071,838 11.9% (326,670) 00 1 170,000 $21.37
2008 3q (69,190) $21.54
2008 2q 729 17,449,706 2,027,365 11.6% (153,717) 00 1 170,000 $21.27
2008 1q $21.55
2007 4q 729 17,449,706 1,838,722 10.5% 9,215 1 2,552 1 170,000 $21.63
2007 3q (13,225) $21.53
2007 2q 729 17,457,110 1,452,422 8.3% (68,388) 1 8,000 1 2,552 $21.39
2007 1q 18,487 $20.54
2006 4q 728 17,449,110 1,117,752 6.4% 241,826 2 17,899 2 10,552 $20.90
2006 3q 59,122 $21.38
2006 2q 726 17,431,211 1,030,663 5.9% (97,291) 3 57,097 3 25,899
63,236
723 17,374,114 819,849 4.7% 00 5 73,102

724 17,376,374 831,324 4.8% 1 2,928 4 65,102

724 17,518,789 960,514 5.5% 00 2 21,928

724 17,518,789 892,126 5.1% 8 98,984 1 19,000

716 17,419,805 811,629 4.7% 2 214,223 9 117,984

715 17,213,414 847,064 4.9% 1 7,936 11 332,207

714 17,205,478 898,250 5.2% 1 4,311 8 297,846

713 17,201,167 796,648 4.6% 4 48,351 8 274,274

Source: CoStar Property®

32 THE COSTAR RETAIL REPORT ©2010 COSTAR GROUP, INC.

FIRST QUARTER 2010 – PHOENIX

Phoenix Retail Market

SOUTH MOUNTAIN MARKET

MARKET HIGHLIGHTS – CLASS “A, B & C”

Deliveries, Absorption & Vacancy Historical Analysis, All Classes

0.350 Delivered SF Absorption SF Vacancy 10.0%
2007 3q 2007 4q 2008 3q 2008 4q 2009 3q 2009 4q 9.0%
0.300 8.0%
7.0%
0.250 6.0%
5.0%
Millions SF 0.200 4.0% Percent Vacant
3.0%
0.150 2.0%
1.0%
0.100 0.0%

0.050

0.000

(0.050)

2007 1q 2007 2q 2008 1q 2008 2q 2009 1q 2009 2q 2010 1q

Source: CoStar Property®

Vacant Space Quoted Rental Rates

Historical Analysis, All Classes Historical Analysis, All Classes

0.58 Direct SF Sublet SF $22.00
0.57
0.56 $21.50
0.55
0.54 $21.00
0.53
Millions SF 0.52 Dollars/SF/Year $20.50
0.51
0.50 $20.00

$19.50

$19.00

$18.50

2009 1q 2009 2q 2009 3q 2009 4q 2010 1q 2009 1q 2009 2q 2009 3q 2009 4q 2010 1q

Source: CoStar Property® Source: CoStar Property®

Existing Inventory Vacancy Net Delivered Inventory UC Inventory Quoted
Absorption Rates
Period # Bldgs Total RBA Vacant SF Vacancy % # Bldgs Total RBA # Bldgs Total RBA $19.84
2010 1q (22,227) $20.11
2009 4q 259 6,553,998 550,248 8.4% 37,135 00 00 $20.87
2009 3q (12,958) $20.79
2009 2q 259 6,553,998 528,021 8.1% 27,601 00 00 $21.82
2009 1q (6,282) $22.97
2008 4q 259 6,553,998 565,156 8.6% 33,921 1 7,575 00 $22.76
2008 3q 195,561 $22.70
2008 2q 258 6,546,423 544,623 8.3% 11,373 00 1 7,575 $22.99
2008 1q 206,147 $23.93
2007 4q 258 6,546,423 572,224 8.7% 265,628 00 00 $23.71
2007 3q 46,401 $23.24
2007 2q 258 6,546,423 565,942 8.6% (10,608) 7 224,985 00 $22.96
2007 1q 190,141 $21.93
2006 4q 251 6,321,438 374,878 5.9% (8,119) 10 180,446 7 224,985 $21.37
2006 3q 121,492 $20.99
2006 2q 241 6,140,992 389,993 6.4% 80,718 3 15,500 17 405,431

238 6,125,492 385,866 6.3% 6 329,842 17 337,931

232 5,795,650 262,171 4.5% 4 306,072 15 439,682

228 5,489,578 221,727 4.0% 1 15,004 18 741,254

227 5,474,574 253,124 4.6% 4 28,252 16 741,391

223 5,446,322 214,264 3.9% 4 213,309 18 752,058

219 5,233,013 191,096 3.7% 1 13,454 11 323,663

218 5,219,559 169,523 3.2% 3 102,026 10 318,807

215 5,117,533 188,989 3.7% 1 56,747 8 192,520

Source: CoStar Property®

©2010 COSTAR GROUP, INC. THE COSTAR RETAIL REPORT 33

PHOENIX – FIRST QUARTER 2010

Phoenix Retail Market

WEST PHOENIX MARKET

MARKET HIGHLIGHTS – CLASS “A, B & C”

Deliveries, Absorption & Vacancy Historical Analysis, All Classes

2.000 Delivered SF Absorption SF Vacancy 16.0%
2007 3q 2007 4q 2008 3q 2008 4q 2009 3q 2009 4q
14.0%

1.500 12.0%

Millions SF 1.000 10.0% Percent Vacant

8.0%

0.500 6.0%

0.000 4.0%

2.0%

(0.500) 0.0%

2007 1q 2007 2q 2008 1q 2008 2q 2009 1q 2009 2q 2010 1q

Source: CoStar Property®

Vacant Space Quoted Rental Rates

Historical Analysis, All Classes Historical Analysis, All Classes

3.00 Direct SF Sublet SF $25.00

2.90 $20.00

2.80

Millions SF 2.70 Dollars/SF/Year $15.00

2.60

2.50 $10.00

2.40 $5.00

2.30

2.20 $0.00
2009 1q
2009 2q 2009 3q 2009 4q 2010 1q 2009 1q 2009 2q 2009 3q 2009 4q 2010 1q

Source: CoStar Property® Source: CoStar Property®

Existing Inventory Vacancy Net Delivered Inventory UC Inventory Quoted
Absorption Rates
Period # Bldgs Total RBA Vacant SF Vacancy % # Bldgs Total RBA # Bldgs Total RBA $17.34
2010 1q (82,147) $18.14
2009 4q 955 21,504,665 2,942,840 13.7% 51,755 2 26,252 6 250,051 $19.52
2009 3q $20.28
2009 2q 953 21,478,413 2,834,441 13.2% 3,638 4 101,432 8 276,303 $21.50
2009 1q 168,663 $22.66
2008 4q 949 21,376,981 2,784,764 13.0% (223,561) 6 90,319 12 377,735 $22.37
2008 3q (137,476) $22.17
2008 2q 943 21,286,662 2,698,083 12.7% 1,038,807 8 293,227 11 204,651 $20.45
2008 1q $20.20
2007 4q 935 20,993,435 2,573,519 12.3% 79,961 8 90,927 15 431,446 $20.40
2007 3q 598,542 $19.92
2007 2q 927 20,902,508 2,259,031 10.8% 6 68,993 20 418,354 $19.57
2007 1q 89,338 $20.13
2006 4q 921 20,833,515 2,052,562 9.9% 131,787 38 1,689,302 21 437,343 $19.46
2006 3q 197,952 $20.29
2006 2q 883 19,144,213 1,402,067 7.3% 689,418 6 107,698 50 1,922,158
380,214
877 19,036,515 1,374,330 7.2% 14 708,395 48 1,867,925
55,275
863 18,328,120 1,264,477 6.9% 404,251 10 297,623 26 2,195,042

853 18,030,497 1,056,192 5.9% 8 265,220 30 2,274,656

845 17,765,277 922,759 5.2% 10 205,467 33 2,221,947

835 17,559,810 915,244 5.2% 41 753,271 39 2,237,567

794 16,806,539 851,391 5.1% 24 525,711 66 1,863,383

770 16,280,828 705,894 4.3% 5 45,340 78 1,724,030

765 16,235,488 715,829 4.4% 7 218,536 57 1,458,190

Source: CoStar Property®

34 THE COSTAR RETAIL REPORT ©2010 COSTAR GROUP, INC.

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