Richard D Smith briefs Commercial REITs (with non or underperforming assets) on how to create new sources of sustainable value with Hidden Asset Value Solutions (HAVS) a proprietary SMITH-TRG service. Presentation is a collateral piece for reading, not presenting. http://www.SMITH-TRG.com

1. Copyright 2011 SMITH-TRG, All rights reserved.
SMITH-TRG Insight
Actionable Strategies for Proactive Commercial Real Estate Value Creation
SMITH-TRG

2. Copyright 2011 SMITH-TRG, All rights reserved.
A Owners/Investors Briefing Presentation
This is a collateral piece provided to Commercial Real Estate
and Retail client personnel for reading, not presenting.
Presentation excludes SMITH-TRG and client
proprietary or confidential information.
Vision. Insight. Innovation. Strategy. Solution. Value Creation. SMITH-TRG

3. contents
Copyright 2011 SMITH-TRG, All rights reserved.
 Market Environment
 Actionable Strategies –
Hidden Asset Value Solutions (HAVS)
 Why Act NOW?
Vision. Insight. Innovation. Strategy. Solution. Value Creation. SMITH-TRG

4. Market Environment…
Copyright 2011 SMITH-TRG, All rights reserved.
Many suburbs and smaller
cities are dotted with buildings
that are no longer generating
enough cash to pay their
mortgages.
Source: Reis
Vision. Insight. Innovation. Strategy. Solution. Value Creation. SMITH-TRG

5. Copyright 2011 SMITH-TRG, All rights reserved.
Plainfield, New Jersey
219,000-square-foot strip mall whose Kmart
closed and boosted vacancy rate above 50%.
Center also lost a Pathmark grocery store, Ruby
Tuesday, and J.P. Morgan Chase bank branch.
Source: city officials
SMITH-TRG

6. Copyright 2011 SMITH-TRG, All rights reserved.
Westminster, Colorado
1.2-million-square-foot 34 year old mall, once
home to a Macy's, Trail Dust Steak House and
Mervyn's, sales-tax generation plummeted in
2010 to $1.5 million from $8.5 million in 2000
Source: city officials
SMITH-TRG

7. Copyright 2011 SMITH-TRG, All rights reserved.
Vacancy rates of country’s
four billion square feet
of office space still
near a record 18%
… about 250 empty
Empire State Buildings.
SMITH-TRG

8. Copyright 2011 SMITH-TRG, All rights reserved.
Even as the economy picks
up steam, many of nation's
malls and shopping centers
are suffering a hangover due
to massive building boom
and changing consumer
shopping habits.
SMITH-TRG

9. Outlook is especially bad for
Copyright 2011 SMITH-TRG, All rights reserved.
strip malls & neighborhood
shopping centers.
11.1% vacancy rates
expected 4Q-2011…
up from 10.9% and
highest since 1990.
Source: Reis
SMITH-TRG

10. Copyright 2011 SMITH-TRG, All rights reserved.
Malls and strip centers were built for growth
that never came. One billion square feet of
retail space was added in 54 largest U.S.
markets since start of 2000
Source: CoStar Research
SMITH-TRG

11. Copyright 2011 SMITH-TRG, All rights reserved.
Retail demand and supply index gap remains.
Chart Source: MIT Center for Real Estate
SMITH-TRG

12. Copyright 2011 SMITH-TRG, All rights reserved.
Retailing ‘ONLINE’ surged to 12% of total
sales during 2010 holidays.
SMITH-TRG

13. Copyright 2011 SMITH-TRG, All rights reserved.
Collectively -- such problems are driving up
delinquency rates on commercial mortgage
backed securities (CMBS) to record 9.34%
... less than 1% in 2007.
Source: Reis
SMITH-TRG

14. Actionable strategies . . .
Copyright 2011 SMITH-TRG, All rights reserved.
HAVS
‘Hidden-Asset Value Solutions’
(HAVS a proprietary service offering of SMITH-TRG)
Vision. Insight. Innovation. Strategy. Solution. Value Creation. SMITH-TRG

15. Copyright 2011 SMITH-TRG, All rights reserved.
HAVS enables CRE holders/owners to
create new sources of sustainable value
from non or underperforming assets
SMITH-TRG

16. • Office Buildings
• Shopping Malls (Mega or Regional)
Copyright 2011 SMITH-TRG, All rights reserved.
• Strip Malls (Regional or Community)
• City Center Developments
HAVS •
•
Hotels/Resorts/Golf Courses
Sport Stadiums (Pro & Collegiate Venues)
qualified • Entertainment Complexes
• Big Box Retailers
candidate properties • Retail Chains (National/Regional)
• Undeveloped Land
• Mass Transit Systems
• Parking Lots (Covered Structures or Open)
SMITH-TRG

17. Copyright 2011 SMITH-TRG, All rights reserved.
assets
qualify?
Will your
SMITH-TRG

18. Copyright 2011 SMITH-TRG, All rights reserved.
Of 1,000+ commercial properties surveyed –
99.8% classified as HAVS eligible
SMITH-TRG

19. Copyright 2011 SMITH-TRG, All rights reserved.
New Value ‘HAVS’ Opportunity
 monthly recurring revenue
 income drops to bottom line
 potential upside - $5 dollars
per square foot, per month
SMITH-TRG

20. Copyright 2011 SMITH-TRG, All rights reserved.
Results will vary by asset type, size & location
SMITH-TRG

21. Why Act NOW?
Copyright 2011 SMITH-TRG, All rights reserved.
Pay Now
or
Pay Later, the
cost of not pursuing
proactive strategies
Vision. Insight. Innovation. Strategy. Solution. Value Creation. SMITH-TRG

22. Copyright 2011 SMITH-TRG, All rights reserved.
Sustaining asset value is more complex than ever.
Source Fragile Recovery Chart: JP Morgan Chase
SMITH-TRG

23. Copyright 2011 SMITH-TRG, All rights reserved.
Contact SMITH-TRG today and schedule your CRE Owners/Investors Briefing.
Vision. Insight. Innovation. Strategy. Solution. Value Creation. SMITH-TRG