1. Florida REALTORS ® Commercial Real Estate Lending Study Market Enhancement Group, Inc. July 2012

2. 2 Survey Objectives To assess the commercial real estate lending market in Florida with a special emphasis on: Full-time employed commercial real estate professionals The impact of credit availability The effect of commercial real estate appraisals Challenges confronting commercial real estate professionals Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

3. 3 Methodology Telephone interview methodology. The interviewing achieved a completion rate of 79.1% of all commercial real estate professionals who were contacted. Respondents were “not” limited to those who belong to the Florida REALTORS®. 300 surveys completed in May and June 2012. Results are statistically projectable at two standard deviations (a 95% confidence level). Overall data is subject to a maximum sampling error of +/- 5.8%. Survey respondents were selected on a random probability basis from a list provided by MEG. Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

4. 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 800.549.9327

5. 5 Survey Respondents Survey respondents were divided equally between full-time commercial real estate professionals as follows: Commercial real estate brokers50% Commercial real estate non-brokers50% Survey respondents by area of specialty were: Sales58% Leasing29% Management13% Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

6. 6 Survey Respondents Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

7. 7 Survey Respondents: Area of Specialty Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

8. 8 Area of Specialty Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

9. 9 Key Conclusions Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

10. 10 Key Conclusions 77% of survey respondents have completed one or more sales transactions in 2012, this figure was higher for non-brokers than for brokers. Those completing one or more sales transactions in 2012 was higher for those in sales and leasing as opposed to those in management. Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

11. 11 Key Conclusions When asked about major obstacles for commercial real estate this year, the average respondent mentioned 3.9 different obstacles on an “unaided” basis. The obstacles for commercial real estate mentioned most often were: Lack of available financing78% Low, inconsistent appraisals66% Economic Conditions58% Inventory41% Inconsistent financing standards37% Declining prices36% Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

12. 12 Key Conclusions 86% of commercial real estate professionals have failed to complete one or more transactions in the past one year due to a lack of financing. The most frequently mentioned reasons for having failed to complete one or more transactions in the past one year due to a lack of financing were: Lender backed out69% Low appraisal56% Declining prices38% Very stringent lending standards15% Internal underwriting standards15% 84% of commercial real estate professionals report that a lack of financing has impacted their clients’ decisions about commercial real estate. Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

13. 13 Key Conclusions Two-thirds of commercial real estate professionals report that lending conditions have tightened significantly over the past year. The groups that currently provide financing for commercial real estate deals are most likely to be: National Banks51% Community/Local Banks48% Regional Banks47% Private Investors42% REIT’s30% Mortgage Brokers/Co’s24% Credit Unions22% Life Insurance Companies21% Owner Financing19% Fannie/Freddie14% Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

14. 14 Key Conclusions When asked about the amount of their last transaction,14% of survey respondents reported that it was a cash transaction. Most transactions that were financed were in the $750K to $4.9M range. Average loan-to-value ratios for commercial deals over the past year were concentrated in the 70% to 75% range. Only a third of any commercial real estate transactions were supported by a SBA loan. When survey respondents were asked about their experience with property appraisals over the past year, most had nothing positive to report and most cases cited they were low, inconsistent, and often out of touch with economic conditions. Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

15. 15 Detailed Findings Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

16. 16 Have Completed a Sale/Transaction This Year Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

17. 17 Have Completed a Sale/Transaction This Year Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

18. 18 Major Obstacles for Commercial Real Estate This Year Market Enhancement Group, Inc. MEG-Research.com 800.549.9327 Multiple, unaided responses. Percentages will not total to 100%.

19. 19 Major Obstacles for Commercial Real Estate This Year Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

20. 20 Have Failed to Complete a Transaction This Year Due to Lack of Financing Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

21. 21 Have Failed to Complete a Transaction This Year Due to Lack of Financing Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

22. 22 Why You Failed to Complete a Transaction This Year Due to Lack of Financing Market Enhancement Group, Inc. MEG-Research.com 800.549.9327 Multiple, unaided responses. Percentages will not total to 100%.

23. 23 Has Lack of Financing Impacted Your Clients’ Decisions Related to Commercial Real Estate? Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

24. 24 Has Lack of Financing Impacted Your Clients’ Decisions Related to Commercial Real Estate? Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

25. 25 How Have Lending Conditions Changed Over This Year Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

26. 26 Which Groups Currently Provide Financing for Commercial Deals Market Enhancement Group, Inc. MEG-Research.com 800.549.9327 National Banks51%Credit Unions22% Community/Local Banks48%Life Insurance Companies21% Regional Banks47%Owner Financing19% Private Investors42%Fannie/Freddie14% REIT's30%Public Cos.7% Mortgage Brokers/Co’s24%Cross border investors2% Mean number mentioned = 3.28

27. 27 Based on your last sales transaction, what was the amount of the loan? (Distribution of Loan categories) Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

28. 28 Based on your last sales transaction, what was the amount of the loan? (Distribution of Loan categories) Market Enhancement Group, Inc. MEG-Research.com 800.549.9327 Cash14% <$50K3% $50K-$99K3% $100K-$249K5% $500K-$749K9% $750K-$999K19% $1M-$1.9M11% $2M-$4.9M22% $5M-$9.9M11% $10M or more3%

29. 29 Average Loan-To-Value (LTV) Ratios for Commercial Deals over the Past Year Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

30. 30 Have Been Involved With Any Commercial Transaction Supported by a Small Business Administration (SBA) Loan Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

31. 31 Your Experience over the Past Year with Commercial Property Appraisals Market Enhancement Group, Inc. MEG-Research.com 800.549.9327 Hearing nothing but complaints about property appraisals 43% Appraisals are coming in all across the board, no consistency 45% Appraisals have been too low.42% All have been very low values39% Appraisers are too conservative39% Not in touch with the real market conditions37% Appraisals have been tough on commercial properties because of their declining sales volume 35% Seem to be more regulated than before33% Multiple, unaided responses. Percentages will not total to 100%.

32. 32 Your Experience over the Past Year with Commercial Property Appraisals Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

33. 33 Suggestions for Practitioners Looking for Commercial Loans Market Enhancement Group, Inc. MEG-Research.com 800.549.9327 Investor loans are very tight38% Banks are a dead end for the most part34% Banks are not making any decisions20% At present it will take more equity in the property to get a loan 22% Credit Unions are the most aggressive for smaller loans 24% Prepare to bring more equity to the table and plan on more stringent reserve requirements 20% Go to the bank that you have a history with20% Multiple, unaided responses. Percentages will not total to 100%.

34. 34 Suggestions for Practitioners Looking for Commercial Loans Market Enhancement Group, Inc. MEG-Research.com 800.549.9327 Develop a relationship with lenders who specialize in your product type. 15% Don't give up. Some lenders just need a little more time. 11% SBA is one of the worst places for loans8% Definitely have a business plan ready and your financials as tight as you can 8% Don't give up, if you are well qualified you can get the money 7% Private investors are the best6% Call all banks possible5% Multiple, unaided responses. Percentages will not total to 100%.

35. 35 Demographics and Experience Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

36. 36 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 and 87% have a BS/BA degree or higher. Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

37. 37 Commercial Real Estate Experience Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

38. 38 Commercial Real Estate Experience Market Enhancement Group, Inc. MEG-Research.com 800.549.9327 Mean Number of Years

39. 39 Survey Respondents: Gender Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

40. 40 Survey Respondents: Age Category Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

41. 41 Survey Respondents: Generation Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

42. 42 Survey Respondents: Education Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

43. 43 Survey Respondents: Ethnic Background Market Enhancement Group, Inc. MEG-Research.com 800.549.9327

44. 44 Definitions The survey breaks some questions down by “generations.” The generations are defined as follows: Gen Y: born 1980 to 1999 (age 32 and younger) Gen X: born 1965 to 1979 (age 33 to 47) Boomers: born 1946 to 1964 (age 48 to 66) Seniors: born pre-1946 (age >66) Newer real estate professionals are defined as: 3 years or less in real estate experience. Seasoned real estate professionals are defined as: >3 years in real estate experience. Market Enhancement Group, Inc. MEG-Research.com 800.549.9327