1. 2005 Outlook for U.S. Construction November 12, 2004 Cliff Brewis Senior Director Editorial McGraw-Hill Construction

2. U.S. Macroeconomic Picture The economy is working through the mid-2004 “soft patch”

3. Status at State Level Recession Flat Expanding

4. Issues Impacting Recovery Pattern of Economic Expansion – Annual GDP 20012002200320042005 +0.8%+1.9%+3.0%+4.3%+3.5% Jobless Recovery –Productivity –Off Shore Employment –Oil/Health Care Cost of Money –Deficit –Inflation International –Iraq/Middle East –China/India Increasing Costs of Material –Tied to China/India –Impacts different Building Sectors

5. U.S. Construction Market Indicators

6. Colorado

7. Major U.S. Construction Sectors By major sector, the construction start pattern has diverged.

8. U.S. Single Family Housing Construction continues to be robust... Single Family Housing Starts 2002 1.304 million units +7% 2003 1.417 million units +9% 2004 1.530 million units +8% 2005 1.425 million units -7%

9. U.S. Single Family Housing

10. Colorado: Single Family

11. U.S. Income Properties -- Stores Store Construction 2002 257 msf - 8% 2003 283 msf +10% 2004 290 msf +3% 2005 300 msf +3% (msf = million of sq. ft.)

12. Colorado: Retail

13. U.S. Income Properties -- Offices Office Construction 2002 157 msf -30% 2003 144 msf -9% 2004 155 msf +8% 2005 170 msf +10%

14. U.S. Income Properties -- Offices

15. Office Building Factors Year 2004 (Jan. - Sept.) Top 10 Metro Areas for Office Building Ranked by square feet of new office starts 1.Wash. DC+16%6.Chicago-19% 2.New York+181%7.Baltimore+36% 3.Atlanta+53%8.Tampa+24% 4.Phoenix -6%9.Las Vegas+140% 5.Dallas+21%10.San Diego+123% Tech-Related Markets : 11.Seattle+113% 25.Boston+19% 66.Austin-40% 72.San Jose-37% 160.San Francisco-92%

16. Colorado: Offices

17. U.S. Income Properties -- Hotels Hotel Construction 2002 40 msf - 25% 2003 45 msf +13% 2004 47 msf +4% 2005 53 msf +13%

18. Colorado: Hotels

19. U.S. Income Properties -- Multifamily Housing Multifamily Housing 2002 402,000 units -3% 2003 444,000 units +10% 2004 435,000 units -2% 2005 445,000 units +2%

20. Colorado: Multi-Family

21. U.S. Institutional Buildings School construction still strong, but slipping. Educational Buildings 2002 254 msf -7% 2003 241 msf -5% 2004 217 msf -10% 2005 223 msf +3%

22. U.S. Institutional Buildings

23. Change in K-12 Student Enrollments, 2003 - 2013 By State, Source: National Center for Education Statistics

24. Colorado: Education

25. U.S. Institutional Buildings Healthcare Facilities 2002 97 msf +6% 2003 91 msf -6% 2004 86 msf -6% 2005 88 msf +2% Healthcare facilities settling back from a robust 2002.

26. Colorado: Medical

27. U.S. Public Works Highways, Bridges 2002 $43.5 billion +1% 2003 $42.5 billion -2% 2004 $40.6 billion -5% 2005 $42.5 billion +5% Highways and bridges now settling back...

28. U.S. Total Construction for 2004/2005 Billions of Dollars 2001 2002 2003 2004 2005_ Total Construction 496.6 503.5 529.8576.6585.4 +5% +1% +5% +9% +2% Single Family Housing 186.9 214.2 242.3 276.6267.6 +6% +15% +13% +14% -3% Income Properties 103.1 94.0 99.5 110.0119.5 -8% -9% +6% +11% +9% Institutional Bldgs. 90.8 90.0 89.9 91.2 97.4 +9% -1% -0- +1% +7% Manufacturing Bldgs. 8.1 5.4 6.4 7.0 8.0 -8% -33% +19% +9% +15% Public Works 83.6 87.9 82.8 85.9 87.4 +7% +5% -6% +4% +2%

29. Colorado

30. Points of Perspective – U.S. Construction Total Construction by Cycle Cyclical Trough (T) = 100, Based on Constant Dollars

31. Questions? Cliff Brewis Senior Director Editorial McGraw-Hill Construction 130 Doolittle Dr Ste 1 San Leandro, CA 94577 510.383.1106 x14 cliff_brewis@mcgraw-hill.com