Florida REALTORS ® Commercial Real Estate Lending Study Market Enhancement Group, Inc. June 2013

2 Survey Objectives To assess the commercial real estate lending market in Florida with a special emphasis on: The impact of credit availability and lending standards. The ability to and barriers to refinancing. The role of international commercial real estate clients. Trends in net operating income for commercial real estate professionals. The effect of commercial real estate appraisals. The current and potential impact of regulatory changes. Identify differences between commercial real estate professionals who are REALTORS ® and those who are not REALTORS ®. Market Enhancement Group, Inc. MEG-Research.com

3 Methodology Telephone interview methodology. The interviewing achieved a completion rate of 77% of all commercial real estate professionals who were contacted. Respondents were not limited to those who belong to the Florida REALTORS ®. 400 surveys completed in June Results are statistically projectable at two standard deviations (a 95% confidence level). Overall data is subject to a maximum sampling error of +/- 5.0%. Survey respondents were selected on a random probability basis from a list provided by the Florida REALTORS ®. Market Enhancement Group, Inc. MEG-Research.com

4 Methodology An important consideration is that we are measuring perceptions. Perceptions are never wrong; they can, however, be factually incorrect. When respondents make decisions, perceptions are more important than the facts. Most interviews were done on cellular telephones. The cellular telephone is the commercial real estate professional’s main telephone. Market Enhancement Group, Inc. MEG-Research.com

5 Definitions The survey breaks some questions down by “generations.” The generations are defined as follows: Gen Y: born 1980 to 1999 (age 33 and younger) Gen X: born 1965 to 1979 (age 34 to 48) Boomers: born 1946 to 1964 (age 49 to 67) Seniors: born pre-1946 (age >67) Newer commercial real estate professionals are defined as: 3 years or less in commercial real estate experience. Seasoned commercial real estate professionals are defined as: >3 years in commercial real estate experience. Market Enhancement Group, Inc. MEG-Research.com

6 Call Statistics Market Enhancement Group, Inc. MEG-Research.com

7 Survey Respondents Market Enhancement Group, Inc. MEG-Research.com

8 Survey Respondents: Area of Specialty Market Enhancement Group, Inc. MEG-Research.com

9 Macro Conclusions Market Enhancement Group, Inc. MEG-Research.com

10 Macro Conclusions 70% of all survey respondents were REALTORS ®. 75% of commercial real estate professionals completed at least one sales transaction within the past one year. 95% of REALTORS ® completed at least one commercial real estate transaction in the past one year. Whereas only 27% of non-REALTORS ® completed at least one commercial real estate transaction in the past one year. Market Enhancement Group, Inc. MEG-Research.com

11 Macro Conclusions REALTORS ® were also more likely than non-REALTORS ® to have registered increases in net operating income from the fourth quarter of 2007 to the fourth quarter of 2012 than non-REALTORS ®. Experience counts: 74% of seasoned commercial real estate professionals closed at least one commercial real estate transaction in the past one year, as opposed to 68% for newer commercial real estate professionals. Reasons for failing to complete a transaction within the past 12 months: Lack of financing59% Low appraisal41% Market Enhancement Group, Inc. MEG-Research.com

12 Macro Conclusions 45% of survey respondents have had a client fail to complete a refinancing; however, that figure is higher for REALTORS ® than for non-REALTORS ® REALTORS ® 50% Non-REALTORS ® 31% 27% of survey respondents had a sale to international clients and investors. However, international sales are highly concentrated on a geographical basis: Miami-Dade, Broward, or Palm Beach County50% Orange County41% Hillsborough or Pinellas County38% All others13% 81% of all survey respondents believed that the new and proposed U.S. legislative and regulatory initiatives (e.g. Dodd-Frank, lease accounting, Basel III, etc.) will decrease the flow of capital into U.S. real estate. Market Enhancement Group, Inc. MEG-Research.com

13 Detailed Findings Market Enhancement Group, Inc. MEG-Research.com

14 Membership in Florida REALTORS ® Market Enhancement Group, Inc. MEG-Research.com

15 Completed a Sales Transaction during the Past 12 Months Market Enhancement Group, Inc. MEG-Research.com All Respondents Q: Have you completed a commercial real estate sales transaction during the past 12 months?

16 Completed a Sales Transaction during the Past 12 Months Market Enhancement Group, Inc. MEG-Research.com Q: Have you completed a commercial real estate sales transaction during the past 12 months?

17 Completed a Sales Transaction during the Past 12 Months Market Enhancement Group, Inc. MEG-Research.com Q: Have you completed a commercial real estate sales transaction during the past 12 months?

18 Completed a Sales Transaction during the Past 12 Months Market Enhancement Group, Inc. MEG-Research.com Q: Have you completed a commercial real estate sales transaction during the past 12 months?

19 Completed a Sales Transaction during the Past 12 Months Market Enhancement Group, Inc. MEG-Research.com All Respondents Newer = 3 yrs. or less in commercial real estate. Seasoned = > 3 yrs. of experience in commercial real estate.

20 Completed a Sales Transaction during the Past 12 Months Market Enhancement Group, Inc. MEG-Research.com All Respondents: By Generation

21 Average Loan-To-Value (Financing, LTV) Ratios for Commercial Transactions over The Past Year Market Enhancement Group, Inc. MEG-Research.com

22 Value of Your Most Recent Sales Transaction Market Enhancement Group, Inc. MEG-Research.com

23 Property Type for Your Most Recent Sales Transaction Market Enhancement Group, Inc. MEG-Research.com Percentages will not total to 100% due to rounding.

24 How Did the Net Operating Income ($/SF) of Properties You Sold or Leased Change from the 4 th Quarter of 2007 to the 4th Quarter Of 2012 Market Enhancement Group, Inc. MEG-Research.com Percentages will not total to 100% due to rounding.

25 Have you failed to complete a transaction during the past 12 months due to lack of financing? Market Enhancement Group, Inc. MEG-Research.com

26 Have your clients failed to complete a refinancing transaction during the past 12 months? Market Enhancement Group, Inc. MEG-Research.com

27 With properties where refinancing was an issue, if the owners provided an existing or new property lease with net operating income (NOI) at levels similar to the pre-2006 period, did the property still fail to secure refinancing? Market Enhancement Group, Inc. MEG-Research.com

28 If yes, why did the property still fail to secure refinancing? Market Enhancement Group, Inc. MEG-Research.com

29 Have Failed to Complete a Transaction in the Past 12 Months owing to Appraisals Market Enhancement Group, Inc. MEG-Research.com

30 During the past 12 months, did you have sales to international clients/investors? Market Enhancement Group, Inc. MEG-Research.com

31 Had Sales in the Past 12 Months to International Clients/Investors (% per area) Market Enhancement Group, Inc. MEG-Research.com

32 Country Source of International Sales Market Enhancement Group, Inc. MEG-Research.com

33 The Most Relevant Cause for the Lack of Sufficient Bank Capital Available for Commercial Lending Market Enhancement Group, Inc. MEG-Research.com Aided response categories. Percentages will not total to 100% due to rounding.

34 How Lending Conditions Changed Over This Year Market Enhancement Group, Inc. MEG-Research.com

35 Which Groups Currently Provide Financing for Commercial Deals Market Enhancement Group, Inc. MEG-Research.com

36 Do you believe new and proposed U.S. legislative and regulatory initiatives (e.g. Dodd-Frank, lease accounting, Basel III, etc. will): Market Enhancement Group, Inc. MEG-Research.com

37 Select the Most Important Proposed Policy Priority Needed to Improve Commercial Lending Conditions Market Enhancement Group, Inc. MEG-Research.com

38 Demographics and Experience Market Enhancement Group, Inc. MEG-Research.com

39 Demographics and Experience The typical commercial real estate professional has a decade of experience in the business. Only 28% have three or fewer years of experience. Most commercial real estate professionals are male (62%). The average commercial real estate professional is 45 years of age. 60% have a BS/BA degree or higher. Over half (56%) are Caucasian. A quarter (25%) are Hispanic. Market Enhancement Group, Inc. MEG-Research.com

40 County Office is Located In Market Enhancement Group, Inc. MEG-Research.com

41 Respondent Age Market Enhancement Group, Inc. MEG-Research.com

42 Respondent Age Market Enhancement Group, Inc. MEG-Research.com

43 Respondent Age Market Enhancement Group, Inc. MEG-Research.com

44 Education Market Enhancement Group, Inc. MEG-Research.com

45 Commercial Real Estate Experience Market Enhancement Group, Inc. MEG-Research.com

46 Commercial Real Estate Experience Market Enhancement Group, Inc. MEG-Research.com

47 Commercial Real Estate Experience Market Enhancement Group, Inc. MEG-Research.com

48 Commercial Real Estate Experience Market Enhancement Group, Inc. MEG-Research.com

49 Survey Respondents: Gender Market Enhancement Group, Inc. MEG-Research.com

50 Survey Respondents: Ethnic Background Market Enhancement Group, Inc. MEG-Research.com