A MEASURE OF INDUSTRIAL STRENGTH

Despite the industrial sector's reputation for stability, the industrial vacancy rate increased for several major markets during the past year. Nationally, vacancies jumped from 9.1% to 10.1% between the second quarter of 2002 and the second quarter of 2003, reports Cushman & Wakefield. Meanwhile, Ontario, Calif., was one of few markets to show an improvement.

HEALTHY RETURNS FOR REAL ESTATE

Real estate remained a safe haven from the volatility of the stock market during the first quarter. The National Council of Real Estate Investment Fiduciaries (NCREIF) Property Index, which tracks private real estate investment, has averaged a 7.14% return over the last year, compared with the S&P 500's negative 24.76% return.

Total Return Analysis of Major Indexes as of March 31, 2003
1Q 2003 3Q 2002 1Q 2002 1Year
NCREIF Property Index 1.88% 1.79% 1.51% 7.14%
S&P 500 Index -3.13% -17.29% 0.29% -24.76%
Lehman Government Bond Index 1.07% 6.66% -0.63% 13.41%
T-Bills (90 day) 0.30% 0.43% 0.44% 1.57%
Source: NCREIF


WHEN WILL THE HOTEL MARKET PERK UP?

Don't expect a turnaround in the lodging sector this year, warns PricewaterhouseCoopers and Smith Travel Research. The good news is that after three years of RevPAR erosion, researchers predict that the embattled sector will finally see some improvement in revenues in 2004.

Occupancy Avg Daily Rate** RevPAR**
2000 63.4% 3.4% 6.2%
2001 59.7% -3.5% -6.6%
2002 59.2% 0.8% -2.4%
2003* 59.1% 1.3% -0.4%
2004* 60.7% 3.9% 4.5%
*forecast
**percentage change from prior year
Source: PricewaterhouseCoopers LLP, Smith Travel Research


REBOUND IN DOWNTOWN MANHATTAN

Downtown Manhattan's office vacancy rate has dropped nearly 1% over the past year. Ken Krasnow, senior managing director and head of Cushman & Wakefield's New York office, cites significant leasing activity as the reason for the decline. Going forward, says Krasnow, the submarket's performance is closely linked to job growth.

Manhattan Office Market: At A Glance
Manhattan 2Q 2003 2Q 2002
Vacancy 12.5% 11.3%
Rent Per Sq. Ft. $41.12 $44.46

Downtown 2Q 2003 2Q 2002
Vacancy 12.6% 13.4%
Rent Per Sq. Ft. $36.36 $40.15

Midtown South 2Q 2003 2Q 2002
Vacancy 14.5% 13.3%
Rent Per Sq. Ft. $31.09 $35.72

Midtown 2Q 2003 2Q 2002
Vacancy 12.0% 9.9%
Rent Per Sq. Ft. $46.56 $50.15
Source: Cushman & Wakefield


ECHO BOOMERANG?

Apartment owners take note: Nearly half of college students graduating in 2003 say they will return home to live after graduation — one-quarter of them for more than a year. Of 1,015 college students surveyed in 2003, 25% said they would live with Mom and Dad for one to six months, while 24% said they would live at home for more than a year.

How Long Do You Plan to Live at Home With Your Parents After College Graduation?
0 Months 38%
1 to 6 Months 25%
7 Months to a Year 12%
More Than a Year 24%
Source: MonsterTRAK