THE WATCH LIST NEWSLETTER 1

A WEEKLY NEWSLETTER FOCUSING ON CHANGING MARKET CONDITIONS, COMMERCIAL REAL ESTATE, MORTGAGES AND CORPORATIONS PUBLISHED BY COSTAR NEWS

IN THIS WEEK'S ISSUE:

What Is Real Estate? The Answer Could Be Costly. ......................................................................................................................... 1 What MuniMae's Move Tells Us About Risks of Rising Interest Rates .............................................................................................. 3 Increasing REO Sales Driving CMBS Delinquency Rates Lower ...................................................................................................... 5 Industrial Indicators Generally Positive at Midyear ............................................................................................................................ 7 Store Opening Train Starting to Roll? Openings Seen Reaching New High...................................................................................... 8 Blackstone and iStar Invest in Landmark Apartments Funding Purchase of 8 Properties ................................................................. 8 Ellington Looking To Take Single-Family Portfolio Public ................................................................................................................. 9 Emerging Catalysts Could Spur Bank Consolidation ....................................................................................................................... 10 Facility Closures & Downsizings: Regal Undertakes Plant Restructuring. Tootie Pie Locked Out .................................................. 10 Global CRE Investment Markets Continue To Rally ........................................................................................................................ 11 Cushman & Wakefield and Cassidy Turley Win Big Property Management Assignments .............................................................. 12 Value Place To Develop Nine New Denver Area Extended Stay Hotels ......................................................................................... 12

What Is Real Estate? The Answer Could Be Costly. IRS and Congress Exploring That Question; The Answer Could Affect Billions of Dollars of REIT Assets

Under pressure to reconsider some tax loopholes, the IRS -- and Congress -- have both launched recent attempts to define - or literally, re-define -- what exactly constitutes real estate assets for purposes of of qualifying as a real estate investment trust (REIT) under the tax code. The results of those efforts could affirm or undo a host of tax advantages for existing REITS and block the efforts of several companies seeking to reorganize as REITs. In the past few weeks, CoStar has reported that the Internal Revenue Service has informed a handful of potential REITS (Iron Mountain Inc., Equinix Inc. Lamar Advertising Co. and CBS Outdoor Americas) that the Treasury agency has formed a new internal working group to study the current legal standards it uses to define "real estate" for purposes of firms qualifying as a REIT, and what changes or refinements, if any, should be made to those legal standards. The IRS review appears to be prompted by an increase in the number of firms seeking to take advantage of the significant tax benefits afforded REITs outside the traditional owner-operators of income-producing properties. The list of candidates for REIT conversion or REIT initial public offerings has been expanding in recent years and eight and companies have converted or spun-off non-traditional real estate assets into a REIT since 2010. Their properties billboards, landfills, casinos, document storage facilities and solar energy infrastructure. Niche REITs often have differentiated risks that may be less familiar to investors that concentrate in the traditional commercial property sectors -- office, industrial, multifamily, retail, and health care.

MARK HESCHMEYER, EDITOR WWW.COSTAR.COM JULY 15, 2013

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The latest to be informed of that re-examination is Penn National Gaming Inc. which is seeking to spin off its casino operations into a stand-alone REIT called Gaming and Leisure Properties Inc. Gaming and Leisure Properties expects to generate its revenues in the property business primarily by leasing gaming facilities to gaming operators in ―triple-net‖ lease arrangements, a business model common to a number of publicly-traded REITs in other industries. Its portfolio will consist of 19 gaming and related facilities. ―While GLPI [Gaming and Leisure Properties] has no reason to believe that its ―private letter‖ ruling will be adversely affected by the IRS internal working group,... GLPI cannot predict how changes in the tax laws might affect its investors or GLPI,‖ the company warned potential shareholders in a recent securities filing. Even companies that have already converted to REITs are worried. Power REIT, which was formed through a reorganization and reverse merger of the Pittsburgh & West Virginia Railroad in December 2011 to invest in transportation and energy infrastructure assets such as railroads and solar farms, noted the latest IRS efforts could impact its plans to raise additional money from the sale of common shares. ―Power REIT must meet income and asset tests to qualify as a REIT. If an investment that was originally believed to be a real asset is later deemed not to have been a real asset at the time of investment, our status as a REIT may be jeopardized or we may be precluded from investing according to our current business plan, either of which would have a material adverse effect on our business, financial condition and results of operations,‖ the company said in its stock offering filing. Power REIT's wholly owned subsidiary, Pittsburgh & West Virginia Railroad, received a revenue ruling in the 1960s qualifying passive railroad property, including bridges, tunnels and railroad track as ―real assets‖. Since the railroad revenue ruling in the 1960s, the company noted that the IRS has issued numerous other private

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letter rulings defining certain assets, including cell towers, data centers, electric and gas transmission and distribution assets, qualify as real assets for tax purposes and can be held by REITs. "Although these private letter rulings may only be relied upon by the taxpayer to whom they were issued, we believe these rulings provide insight into the current thinking of the IRs with respect to infrastructure assets,‖ the company said. David Burton, a partner in the tax practice at Akin Gump Strauss Hauer & Feld LLP, writing on the law firm’s blog last month said other solar REITs may be unlikely to win favorable IRS rulings. ―In early 2013, many in the solar industry appeared to be thinking that the IRS’s blessing of a solar REIT would be provided within weeks. It is now the middle of 2013, and it appears the thinking from a few months ago was at best irrational exuberance,‖ Burton said. ―The IRS working group appears to have at least two origins,‖ Burton said. ―First, certain members of Congress... were concerned about the loss of revenue from public corporations converting from C-corporation status, with two layers of tax, to REIT status with effectively a single layer of tax.‖ ―Second, I suspect that the IRS had trouble articulating why ground-mounted solar did not constitute 'real estate' for REIT purposes in light of rulings it had issued about assets such as electric transmission systems and data storage centers. This challenge may have made the IRS question the accommodating rulings it had issued in recent years,‖ he added. ―I believe the IRS working group will take at least six months to complete its review. In that time, any REIT eligibility rulings will be relatively plain vanilla,‖ Burton said. ―At the end of the review, I suspect the IRS will decide not to back-track on its prior positions regarding assets like transmission, cell towers and data storage centers, but it will decline to further expand the definition of real estate for REIT purposes.‖ ―Therefore, new asset classes like solar and warehouse storage for physical documents may not receive favorable rulings,‖ he said. ―Nonetheless, after the dust settles, I suspect the IRS may have a favorable view of roof-mounted solar systems that only provide power to the building on which they are mounted.‖ The renewed interest in the definition of real estate for REITs also stems from strong interest in tax reform among members of Congress. In May a group of U.S. Representatives and Senators prepared a report for the U.S. House Committee On Ways And Means on suggestions for reform current tax laws. That report included a number of suggestions for changing the laws relating to REITs, including: updating and modifying REIT income and asset tests, including allowing more investment in debt securities of publicly offered REITs; making permanent mineral royalty income provisions, and reinstating permanently certain timber provisions. As of this writing, neither the IRS nor Congress has changed the rules on what constitutes real estate for REIT purposes. In fact, the IRS has been very consistent in its application of the law in recent conversion ruling requests, according to Surabhi Sheth, real estate research leader for Deloitte Services LP. While certain asset classes in recent ruling requests may be considered non-traditional, those assets have met the historical REIT standards. The standards themselves have not changed. That said a company electing REIT status or considering a REIT conversion may find itself having to reclassify assets, Sheth said.

What MuniMae's Move Tells Us About Risks of Rising Interest Rates Rising Rates Mean Debt Investors Face Higher Borrowing Costs, but Gradual Rise Not Expected To

Derail the Recovery

In one of the first tangible signs of the impact that the risks from rising interest rates may pose for debt investors, Municipal Mortgage & Equity (MuniMae) decided to sell its entire fixed rate performing multifamily bond portfolio to Merrill Lynch Portfolio Management Inc.

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In the transaction, MuniMae received $79 million in cash. The effective price for the $849 million portfolio was equal to fair value at June 30 and 101% of par value. In addition, the sale eliminated $799 million of debt and preferred equity obligations. "We have disclosed for some time that we were concerned about rising interest rates, and this transaction greatly reduces our exposure to rising rates,‖ said Michael Falcone, MuniMae's CEO. ―For a variety of reasons, the buyer is currently better able than we are to own and manage these assets in both a rising and a volatile interest rate environment.‖ As part of the deal, Baltimore-based MuniMae is hanging on to about $147 million of nonperforming bonds and bond-related investment. ―We have retained the participating and defaulted bonds because we believe that with these bonds the benefits of our intensive asset management will more than offset the risks associated with rising rates,‖ Falcone said. Of the $79 million in cash proceeds, $16 million will be pledged as additional collateral against the company’s new and existing borrowings with Merrill Lynch. MuniMae may use the remaining sale proceeds of $63 million to invest in real estate related investments, including within its asset management business, to seek to purchase the company’s subordinated debt at discounted prices and to repurchase some of the company’s outstanding common shares. ―We believe there are attractive opportunities to redeploy the capital we have generated, such as buying back more of our outstanding debt, reinvesting in our real estate asset management business or purchasing shares under an expanded share buyback plan,‖ he added.

RISING INTEREST RATES POSE SIGNIFICANT RISK

For MuniMae and many other owners of fixed-income assets, rising interest rates are a significant business risk. MuniMae owns and manage tax-exempt bonds, a substantial majority of which are backed by affordable multifamily rental properties. It also manages tax credit equity funds for third party investors which invest in similar affordable multifamily rental properties.

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MuniMae borrows money on a short-term floating rate basis to finance its bonds, which are primarily long term and fixed rate. This differential or spread is how it earns its money. A future rise in short-term rates would increase its borrowing rate, while its income would remain unchanged. For 2011 and 2012, MuniMae generated about $11.5 million in net operating cash. ―A 200 basis point increase in floating rates would have caused our debt expense to increase by $11.2 million, therefore eliminating virtually all of our positive net operating cash flows,‖ Falcone said. In addition, because its bonds are fixed rate, a rise in long-term rates would decrease the value of its bonds, and thus cause its common equity to decline, while also increasing the risk in collateral costs, which would restrict its liquidity. ―A similar rise in long-term rates could have caused our net worth of $95 million at March 31, 2013, to decline substantially and possibly entirely,‖ he said. Falcone has said in the past that the company did not have the financial means to hedge the risks posed by rising interest rates. Interest rates for 30-year fixed-rate mortgages have risen about 0.5 percentage points in the past several weeks. The 30-year fixed mortgage rate on Zillow Mortgage Marketplace was 4.41% as of this writing, up 24 basis points from 4.17 percent at this time a week ago. The last time rates exceeded 4.4% was July 26, 2011. The recent upturn in interest rates has sparked fears among some investors that the economic and housing recoveries would be choked off in the early stages before they are able to produce sustained growth. But Frank Nothaft, Freddie Mac's chief economist, believes current strong demand is strong enough to withstand rising interest rates, at least for a while. ―While rising interest rates will reduce housing demand, rates would have to increase considerably more before the reduction in demand for home purchases would be substantial," noted Nothaft. "Nothing in the recent trends suggests that we need to fear a major slowdown. A gradual rise in interest rates will not derail the recovery, and are an indication that the overall economic situation is improving."

Increasing REO Sales Driving CMBS Delinquency Rates Lower More Large REO Sales on the Way

As special servicers continued to ramp up sales of their real estate owned (REO) properties, U.S. CMBS delinquencies fell to their lowest level in more than three years, according to the latest index results from Fitch Ratings. CMBS late-pays declined 19 basis points (bps) in June to 7.18% from 7.37% a month earlier, the lowest level since March 2010. Fitch said the decline was largely fueled by the sale of $622 million (in stated loan balance) of REO assets across 34 Fitch-rated transactions (mostly from 2005-2007 vintages). This compares with just $262 million in May. In June, CMBS special servicers resolved $1.2 billion in delinquent loans, more than offsetting newly delinquent loans of $709 million for the month. Additionally, Fitch-rated new issuance volume of $5 billion kept ahead of $2.1 billion in portfolio runoff, causing an increase in the index denominator. One loan accounted for more than a quarter of the newly delinquent loan volume. The $186.5 million loan for the Park Hyatt (formerly the Four Seasons) Aviara Resort (WBCMT 2007-C30), backed by a 329-room luxury resort hotel in Carlsbad, CA. The loan was modified back in February 2011 but returned to special servicing in April for

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imminent default. In June, the loan fell more than 60-days behind in payments for a second time. The Park Hyatt Aviara loan sent the hotel late-pay rate up 65 bps month-over-month. Meanwhile, rates for the other major property types all posted declines. Most notably, the industrial rate fell by over one percentage point thanks to two large dispositions: the $78 million Hughes Airport Center Portfolio (GSMS 2006-GG6) and the $48 million Cold Storage Industrial (LB-UBS 2007-C1). The multifamily rate pushed 32 bps lower, helped by a roughly $3 billion net increase in its denominator from new Freddie Mac issuance. In addition, office and retail saw their late-pay rates fall-each by close to 20 bps-as resolutions outpaced new additions by more than two-to-one. The June balance sheet clean-up included the sale of two REO loans: the Silver City Galleria (JPMCC 2005-LDP4) and Continental Towers (COBALT 2006-C1). Both assets were sold at significant losses. The Silver City Galleria mall, a 714,898-square-foot regional mall in Taunton, MA, sold last week for $22.1 million, representing a loss of approximately 91%. At issuance in 2005, the property was appraised at $200 million and was encumbered by a $138 million dollar first mortgage. Anchor tenants include JC Penney, Dicks Sporting Goods and Best Buy; non-collateral anchor tenants include Sears and Macy’s. The mall's original borrowers, a partnership between General Growth Properties and the Teachers Retirements System of the State of IL, turned over the keys to the lender in December 2011. Another notable REO sale involved a loan for Continental Towers in suburban Chicago, which was sold at the end of May 2013 for a reported 78% loss. The original $115 million loan was backed by three 12-story office buildings totaling 900,000 square feet in Rolling Meadows, IL. In addition, several other large REO assets are poised to be sold in the coming months, which is expected to drive the CMBS delinquency rate even lower, including a portfolio of REO assets that ORIX Capital Markets, as special servicer, has placed for sale. Other expected upcoming sales include the $124 million The Shops at Dos Lagos (JPMCC 2008-C2) and the $115 million Gwinnett Place (MLMT 2007-C1). In addition, a disposition of the $133 million Duke Cleveland East Suburban Portfolio (LB-UBS 2007-C2) is also expected to be reported within the next month. Based on their stated loan balances, the sale of those four assets would lower the delinquency rate another 17 bps to almost 7%.

OTHER LARGE CMBS-RELATED REO SALES FROM Q2

(Source: CoStar COMPs) 3500 Lenox Road NE - One Alliance Center Atlanta, GA 553,017 SF Class A Office Building; Built in 2001 Buyer: Highwoods Properties Seller: ORIX Capital Markets Sale Price: $140,100,000 10777 Westheimer Road - One Westchase Center Houston, TX 466,137 SF Class A Office Building; Renovated in 2004, Built in 1982 Buyer: Investcorp International Inc. Seller: LNR Property Corp. Sale Price: $83,600,000 2001 York Road - 2001 York Center Oak Brook Oak Brook, IL 184,017 SF Class A Office Building; Built in 1999 Buyer: Pembroke Hobson LLC

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Seller: CWCapital Asset Management Sale Price: $34,000,000 55 Park Place NE Atlanta, GA 557,629 SF Class A Office Building; Built in 1983 Buyer: Georgia State University Foundation Inc. Seller: C-III Asset Management Sale Price: $33,500,000 9550 Ash St. - Villa Medici Apartments and Townhomes Overland Park, KS 166 Unit, 148,100 SF Buyer: Cocke Finkelstein Inc. Seller: US Bank NA Series 2006-C23 Sale Price: $19,000,000

Industrial Indicators Generally Positive at Midyear By: Shaw Lupton, Senior Real Estate Economist Leading industrial indicators paint a generally positive view for the near term. While leaving much to be desired, they affirm PPR’s view that U.S. industrial real estate will continue to make gradual gains in 2013. There is good news in the areas of consumption, production, freight movement, and housing starts, but the economy still has a way to go before it is running on all cylinders in terms of business confidence, trade, and homebuilding (see Exhibit 1). Goods consumption continues its ascent to ever-greater heights, hitting a new record that is, in real terms, 12.1% above its 2005–07 average. Household releveraging and the release of pent-up demand for durable goods have helped fuel rising consumption despite weak income growth. The continued shift to online purchasing has put a strain on retail demand but is generating more industrial demand—last year alone Amazon.com grew its North American distribution presence by about 8.5 million square feet. The ISM Purchasing Managers’ Index, at 50.7, reflects weak near-term business expectations despite positive indicators across much of the rest of the board. Likely culprits include sluggish income growth and slowing U.S. exports, and slowing economic growth and heightened geopolitical uncertainty globally. This is a discouraging trend, since businesses ultimately sign leases! Industrial production has risen to 1.1% above its 2004–07 average. While we do not see manufacturing as a major jobs driver due to continuously rising productivity, the industrial market will still benefit from increased manufacturing output. Port traffic at LA/Long Beach (about 36% of U.S. port traffic, per Zepol data) was up by 1.3% year-over-year, yet it remains 3.1% below its pre-recessionary average. Importantly for warehouse demand, containerized imports

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were up by 5.3% in the past year. Imports through the ports of LA/Long Beach support absorption in modern logistics space on the West Coast and in major rail-linked distribution hubs like Chicago and Dallas. The rise in truck tonnage, which is highly reflective of the overall health of local economies across the country, coincides with a continued firming of small-bay warehouse demand. Truck tonnage in the U.S. is up by 3.8% year-over-year and about 8.3% above its pre-recessionary average. Housing starts—a key ingredient missing from the early innings of the economic recovery—have made major strides in the past 12 months, rising by 13.1% to reach an annualized rate of about 900,000. Small-bay industrial owners are likely to benefit most from this trend. However, don’t get too excited—housing starts are still 51% below their 2005–07 average. PPR will continue to monitor these leading industrial indicators closely for signals that may affect its near-term forecast views.

Store Opening Train Starting to Roll? Openings Seen Reaching New High RBC Capital Markets Reports Toys, Men’s Apparel, Crafts and Pawn Shops Leading the Way

Demand from retailers, as evidenced by planned store openings, continues to grow while plans for new supply, either among regional malls or community centers, remains subdued with little uptick in planned deliveries in sight, according to analysis by RBC Capital Markets. Retailers in the financial services firm's database are planning to open 83,749 stores over the next 24 months, and another 42,757 stores are planned to open over the next 12 months. Both of those levels are five-year highs and represent year-to-date increases of 2.1% and 2.8% respectively, according to RBC, which based its outlook more than 50 meetings with retailers and retail landlords at recent retail and real estate conventions. National tenants, especially franchises, continue to scoop up vacancy among spaces of 5,000 square feet and smaller. At the same time, large box users are struggling to find sufficient space to satisfy planned store openings, RBC noted. The trend toward smaller footprints among retailers continues, athough the trend among retailers downsizing existing stores appears to have moderated. There also appears to be very little retailer distress on the horizon, suggesting that recent increases in occupancies and rents will likely continue, the firm noted In other highlights from its report on retailers, RBC noted: New store expansion levels were little changed on a retailer-by-retailer basis with Subway, Dollar General, Five Guys Famous Burgers and Fries and Family Dollar still each looking to open more than 1,000 stores in the next 24 months. The list of retailers with the highest percentage of planned store openings is also little changed with 12 retailers looking to double the number of stores in the next 24 months. From a sector standpoint, toys, men’s apparel, crafts and pawn shops head the list of retailers looking to expand, while surplus goods, office supplies, eye care and dry cleaners are projecting the lowest growth rates.

Blackstone and iStar Invest in Landmark Apartments Funding Purchase of

8 Properties Money Being Deployed To Multifamily Properties in the Sunbelt

Richmond-based Landmark Apartment Trust of America Inc. agreed to issue up to 21.9 million shares of Series D Preferred Stock to affiliates of iStar Financial Inc. and Blackstone Real Estate Special Situations Advisors LLC to raise $219 million.

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The company intends to use proceeds from the stock sale to redeem existing Series A and B preferred stock and buy more multifamily properties. ―With this transaction we are able to lower our cost of capital and continue to fund additional acquisitions and redevelopment activities,‖ stated Joseph Lubeck, executive chairman of Landmark Apartment Trust of America. The REIT did not waste any time putting the money to use. It just acquired eight multifamily properties in four separate transactions for a combined purchase price of $169.3 million. Collectively, the properties contain 2,252 units and average 95% occupied. ―These strategic acquisitions directly align with our focus of purchasing apartment communities in quality locations throughout the Sunbelt region at advantageous pricing and significant discount to replacement cost,‖ adds Stanley J. Olander, CEO of Landmark. Landmark Apartment Trust is one of the biggest owners and operaters of multifamily property in the U.S., owning more than 13,000 apartment units, and providing management services for an additional 13,000 units owned by affiliates, throughout the Southern United States. The trust's recent acquisitions include:

FLORIDA

Landmark at Courtyards on the River at 8412 Rio Bravo Court in Tampa. Built in 1972, 296 units.

Landmark at Fountain Oaks at 6870 103rd St. in Jacksonville. Built in 1987, 160 units.

NORTH CAROLINA

Landmark at Monaco Gardens at 9201 Glenwater Drive in Charlotte. Built in 1991, 276 units.

Landmark at Stanford Reserve at 1207 Kelston Place in Charlotte. Built in 1986, 310 units.

Landmark at Grand Terraces at 6000 Regal Estates Lane in Charlotte. Built in 2001, 240 units.

Landmark at Caveness Farms at 1760 Pasture Walk Drive in Wake Forest. Built in 1997, 288 units.

Landmark at Lexington on the Green at 4803 New Hope Road in Raleigh. Built in 1973, 384 units.

TEXAS

Landmark at Barton Creek at 1781 Spyglass Drive in Austin. Built in 1980, 298 units.

Ellington Looking To Take Single-Family Portfolio Public Ellington Housing Inc., which acquires, owns, leases and manages single-family and multifamily residential real estate assets, has filed paperwork for an initial public offering. The would-be REIT is managed by an affiliate of Ellington Management Group in Old Greenwich, CT. Ellington began acquiring residential properties in selected markets beginning in November 2011 intending to manage them as rental properties. Its portfolio is relatively small compared to other recent IPO filings by firms acquiring single-family rentals. As of June 15, its portfolio consisted of 707 single-family renatal (SFR) properties with an aggregate cost basis of $72.9 million. It also owns $15.6 million of multifamily loans. Ellington is continuing to acquire homes in each of its current target markets other than Phoenix/Tucson, Arizona, where it has not purchased a home since April 2012. The company also invests in multifamily properties and late last month, acquired a multifamily property valued at $4.1 million through a deed-in-lieu-of-foreclosure agreement on one of its loans.

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Emerging Catalysts Could Spur Bank Consolidation Fitch Ratings Sees Increase in Merger and Acquisition Activity in U.S. Banking Sector Down the Road

Market catalysts are beginning to emerge that could prompt an increase in merger and acquisition activity in the U.S. banking sector, according to Fitch Ratings. However, near-term M&A activity is likely to remain muted, according to the ratings agency. The emerging factors that could spur increased bank consolidation downt the road include higher stock values for healthy institutions, more banks looking to grow their loan portfolios via acquisition, interest in mitigating potential interest rate risk, the perception that sufficient scale is required to manage higher regulatory and compliance costs, and what Fitch calls 'fatigue' among the management and boards of potential sellers. In Fitch’s opinion, increased cost structures, growing economies of scale that benefit larger institutions, a desire for growth, and intense competition for new loans have spawned an environment that is expected to lead to increased M&A among banks. Consolidation activity to this point has been delayed for several reasons, including a shifting and growing regulatory focus and compliance efforts that led to increased costs and in some cases held up the consummation of deals. Banks with high cost structures, elevated efficiency ratios and lower capital ratios than peers are likely targets of consolidation. Also, banks based in faster-growing geographic markets, having a presence in asset classes that performed well through the credit crisis, and relatively lower stock market valuations are also considered to be attractive targets for acquisition. Fitch said it believes consolidators in future M&A activity will be efficiently run banks with strong earnings performance and capital-generation ability, institutions with sound regulatory processes and procedures, and those with high stock market valuation. More acquisitions will take out some capacity from the industry, which Fitch views positively, since it believes the banking industry is currently plagued by overcapacity, with too many banks chasing too few lending opportunities.

Facility Closures & Downsizings: Regal Undertakes Plant Restructuring.

Tootie Pie Locked Out Regal Beloit Corp. informed employees at its Springfield, MO, facility of the company’s decision to cease operations at the manufacturing facility, which employs approximately 330 employees. The company will transfer the manufacturing of motors and components from Springfield to other Regal facilities in the US and Mexico over the next 18 months. Tootie Pie Co. filed a Chapter 11 Bankruptcy Petition in Texas seeking to re-organize. The company has been locked out by the landlord from two of its Gourmet Café locations: 190 Stacy Road, Suite 1408, Allen, TX; and 6959 Lebanon Road, Suite 100, Frisco, TX. The company is currently investigating the possibility of attempting to re-enter and continue operation at these two locations.

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Company Address City State Closure or Layoff

No. of Layoffs Impact Date

Berkeley HeartLab 960 Atlantic Ave. Alameda CA Closure 32 7/31/2013

Xerox Business Services 401 34th St. Bakersfield CA Layoff 150 7/19/2013

Ceradyne Inc 3169 Red Hill Ave. Costa Mesa CA Closure 90 7/31/2013

Palomar Health 2185 Citracado Pkwy Escondido CA Layoff 32 7/26/2013

Viatran Express Inc. 10891 Almond Ave. Fontana CA Closure 87 8/3/2013

Impax Laboratories Inc. 31153 San Antonio St. Hayward CA Layoff 132 8/4/2013

Pacifica Hotel Co. 13534 Bali Way Marina Del Rey CA Closure 79 7/31/2013

Symantec Corp. 350 Ellis St. Mountain View CA Layoff 62 7/18/2013

Trion Worlds Inc. 1200 Bridge Pkwy Redwood City CA Layoff 68 7/16/2013

Goodby Silverstein & Partners 720 California St. San Francisco CA Layoff 51 7/15/2013

John Deere Water 700 Rancheros Drive San Marcos CA Closure 78 7/23/2013

Chevron 6001 & 6101 Bollinger Canyon Road San Ramon CA Layoff 394 8/1/2013

Norms Restaurants 1601 Lincoln Blvd. Santa Monica CA Closure 62 7/17/2013

Netapp Inc. 495 E. Java Drive Sunnyvale CA Layoff 235 7/16/2013

Sysco Los Angeles Inc 20701 E. Currier Road Walnut CA Layoff 200 7/15/2013

OneWest Bank 2900 Esperanza Crossing Austin TX Layoff 725 8/31/2013

Diebold Inc. 1221 S. Beltline Road, Suite 700 Coppell TX Closure 52 7/31/2013

Bank of America 1201 Main St. Dallas TX Layoff 87 9/30/2013

Galt Medical Corp. 2220 Merritt Drive Garland TX Closure 139 9/30/2013

Cameron International Corp. 26535 FM 2978 Magnolia TX Closure 88 7/15/2013

AT&T 5407 Andrews Highway Midland TX Closure 101 8/5/2013

Select Specialty Hospital

4214 Andrews Highway, 3rd Floor Midland TX Closure 112 7/31/2013

Endura Products Inc. 1124 Bennett Clark Road Nacogdoches TX Closure 55 8/15/2013

Bank of America 2375 Glenville Drive Richardson TX Layoff 324 9/30/2013

Ryder Logistics 700 Henrietta Creek Road Roanoke TX Closure 60 8/4/2013

Ruth's Chris Steak House 1170 E. Commerce St. San Antonio TX Closure 86 7/28/2013

Southern Foods Group 1148 Faulkner Lane Waco TX Closure 150 8/12/2013

Sterling Administrative Services

1101 Wooden Acres, Suite 120 Waco TX Closure 94 8/2/2013

Global CRE Investment Markets Continue To Rally Global commercial real estate markets continued to rally in 2013 with transaction volumes in the first half up 11% on the first half of last year, according to Jones Lang LaSalle Capital Markets Research, which spans 60 countries and more than 130 cities worldwide. Direct commercial real estate investment volumes in Q2 2013 reached $114 billion globally, up 4% on Q2 2012 and up 9% on Q1 2013. Continued strong growth in Q2 2013 has kept global volumes above $100 billion for five consecutive quarters, evidencing increasing investor confidence in commercial real estate, despite volatility in equity and bond markets. ―Over the past two to three years, we have predicted that more capital would be allocated to direct investment in core property assets; this is now materializing. Institutional, private equity and high net worth individual investors

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are now consistently bidding on opportunities around the world,‖ said Arthur de Haast, Lead Director, International Capital Group at Jones Lang LaSalle. ―In addition to this, investors are starting to diversify their portfolios, both in terms of risk and geography, looking for more value-added and secondary opportunities; a trend we expect to continue over the short to medium term.‖ David Green-Morgan, Global Capital Markets Research Director at Jones Lang LaSalle said, ―The volatility we have seen in equity and bond markets over the last quarter has further added to the attraction of commercial property as an asset class. So far, the rising cost of global real estate debt has had little effect on transaction volumes with most deals funded on modest loan to value ratios. Unless there is a substantial rise in the cost of debt, it is only likely to have a marginal impact on transactional volumes for the remainder of 2013.‖ The Americas saw a 39% rise in transaction volumes in Q2 compared to Q1 2013, reaching $52 billion (up 11% year-on-year). The first half of the year totaled $90 billion, equating to a 9% increase over the same time last year. The U.S. market alone grew by 19% year on year in Q2 2013. Jones Lang LaSalle’s forecasts for the remainder of 2013 remain at between $450 billion to $500 billion. With global volumes up 11% on this time last year and the second half of the year traditionally busier than the first, the global investment market is on track to surpass last year’s volumes.

Cushman & Wakefield and Cassidy Turley Win Big Property Management

Assignments In separate deals last week, landlords selected Cushman & Wakefield and Cassidy Turley to two super-sized property management assignments. The Port Authority of New York and New Jersey selected Cushman & Wakefield as its site-wide property manager for the new World Trade Center site in Lower Manhattan. C&W will be responsible for managing and operating all of the site’s common areas including the site’s public plazas and other key operational facilities. The facilities include the River Water Pump House, which takes in water from the Hudson River, as well as the site’s Central Chiller Plant, which is one of the largest in New York City, and will provide air conditioning to the site’s retail and transportation concourses. Separately, USAA Real Estate Co. hired Cassidy Turley to manage more than 2 million square feet of warehouse-distribution space in Indianapolis. While Cassidy Turley leasing and property management teams represent USAA properties in Louisville and Washington, DC, this portfolio marks Cassidy Turley’s first partnership with the institutional investment firm in the Indianapolis region. The agreement covers two existing and one under-construction properties in Plainfield, NJ.

Value Place To Develop Nine New Denver Area Extended Stay Hotels Atlanta, Boston, Cleveland, Miami and SE Florida Next Up for Expanding Hotel Chain

Continuing a trend of rapid expansion across the U.S., Value Place plans to develop nine new extended stay corporate properties in the Denver area, with construction to start in early 2014. Value Place plans to invest more than $63 million to build nine hotels, including about $13 million for land acquisition. The Wichita-based hotelier is working with Denver-based broker Steve Markey of David, Hicks & Lampert to explore possible sites and talk with landowners, brokers and commercial real estate firms. Typically, Value Place hotels are built near highways, freeways or major intersections.

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―While many other hotel companies have stopped building new hotels, we are doing exactly the opposite,‖ says Value Place president of real estate development David Redfern. ―We don’t go into a market and reflag an older hotel, or upgrade and rebrand it. We build every Value Place from the ground up, to very exacting standards. Each Value Place offers clean, safe and comfortable accommodations for business travelers and others who need temporary lodging.‖ Founded by extended stay entrepreneur Jack DeBoer, 184 Value Place hotels are operating in 32 states, including four in Colorado. Value Place also plans to acquire land and build corporate-owned hotels in other metro markets over the next three years, including Atlanta, Boston, Cleveland, Miami and southeast Florida.