Fresno County Employees’ Retirement Association Real Estate Search Criteria February 1, 2006 SEATTLE 999 Third Avenue Suite 3650 Seattle, Washington telephone facsimile LOS ANGELES 2321 Rosecrans Avenue Suite 2250 El Segundo, California telephone facsimile Jeffrey MacLean President

WURTS & ASSOCIATES PAGE 2 F CERA’s Real Estate Allocation  FCERA’s existing real estate allocation is made up of all private real estate  As of 9/30/05, core private real estate is underweighted relative to other styles  Wurts & Associates recommends allocating 60% of FCERA’s real estate allocation in core private real estate TA Realty JER Heitman JMB Sentinel Data as of 9/30/05 TA Realty JER Heitman JMB Sentinel As of 9/30/05 Recommended Market Value: $ million

WURTS & ASSOCIATES PAGE 3 T ypes of Real Estate Investments Risk Return Opportunistic – Total Return (20% or higher) Value Added – Total Return (12% - 16%) Publicly-Traded REIT – Total Return (9%-11%) Core – Total Return (7% - 9%)  Real estate investment portfolios can be categorized in four different styles which varies in leverage usage and return objectives:  Use of Leverage:  Core Private - below 50%  Value Added - 50%-60%  Opportunistic - 60%-80%

WURTS & ASSOCIATES PAGE 4 S earch Criteria for Core Private Real Estate  Firm stability - Firm should be experienced in real estate investing. A minimum of $500 million in core fund assets and $1 billion in total firm real estate assets under management.  Performance - 5 year minimum track record. Performance should be competitive when compared to the NCREIF Property Index.  Key Personnel - Real estate teams should be sufficiently deep and experienced.  Review of Portfolio Diversification - Core managers should have exposure to and sufficient diversification in key property types (Office, Industrial, Retail and Multifamily Housing).  Review of Geographic Diversification - Core managers should have exposure to and sufficient diversification geographically within their portfolio.  Review of Liquidity - Open ended funds should have the ability for clients to redeem shares on a quarterly basis at minimum.  Review of Leverage - Core managers should not use excessive leverage.  Review of Fees - Core managers should have fees below 1.25% to be viewed as competitive.