THE CURRENT MULTIFAMILY MARKET

HISTORICAL CATALYSTS
We anticipate extensive problems within the multifamily market primarily due to the easy credit and equity environment originating in 2003, and the current recessionary factors. Deleveraging those conditions with the current valuations and credit environment will cause delinquencies and foreclosures to grow exponentially over the next 2 to 5 years.

THE CURRENT MARKET
Currently, close to $19 billion multifamily assets are under distress and 64% of multifamily loans maturing 2009-2018 will not qualify for refinancing. On average, $41 billion apartment loans mature each year until 2018.

The current decline in both rental rates and NOI is projected to continue until 2012.

Investors will continue to face limited refinancing or sale options due to limited cash flow and current valuations. The pain is expected to continue long after the end of the recession due to aggressive prices paid in 2005-2008.

We believe that there will be considerably fewer transactions in 2009 as buyers and sellers adjust to the new capital environment and the economic downturn.

OUR POSITION
Beginning as early as the second quarter of this year, professionals such as trustees and receivers will be overwhelmed with dramatic increase in loans which are going into default. We believe the existing professionals will not have the capacity to manage all the delinquencies; and we seek to use our extensive experience to assist in closing that market gap.