1) Commercial real estate values in Chicago have declined 42% since their peak, with $32.6 billion in loans maturing in the next 3 years and $50.3 billion maturing in the next 5 years. 2) Delinquency rates on commercial mortgages and CMBS loans in Chicago have been rising, with over $3 billion in construction and land development loans delinquent as of Q4 2009. 3) The number of problem banks in Illinois has risen to 60 currently, with continued bank failures expected through 2011 as distressed commercial real estate assets weigh on banks.

1. Chicago Distressed
Real Estate Trends
Prepared for:
Presented by: GreenPearl Distressed Real
Matthew Anderson Estate Summit
May 13, 2010

2. Commercial Real Estate Values
Moody’s/REAL CPPI vs. NAREIT Price Index
Index, 12/2005 = 100
150
125
Peak to Current:
-42% (CPPI)
100 -38% (NAREIT)
75
50
25
0
2006 2007 2008 2009 2010
Moody's/REAL NAREIT
Sources: MIT CRE, NAREIT, Foresight Analytics

3. Commercial Mortgage Maturities
Loans Maturing By Year
$ Billions
350
300
250
200
150
100
50
0
1990 1995 2000 2005 2010 2015
Commercial Multifamily
Source: Foresight Analytics

4. Underwater Mortgages
by Maturity Year
$ Billions
350
300
250
200
150
100
50
0
2009 2010 2011 2012 2013 2014
LTV > 100% LTV < 100%
Source: Foresight Analytics

5. Commercial Real Estate Loan Maturities
In Chicago, $ Billions
Next 3 Next 5
Years Years
(2010-2012) (2010-2014)
Commercial Mortgages
Banks $17.1 $30.6
CMBS $5.1 $7.6
Commercial Mtg Total $22.2 $38.2
Construction Loans $10.4 $12.0
CRE Total $32.6 $50.3
Sources: Trepp Loan, Foresight Analytics

6. Commercial Real Estate Delinquencies
Percent of Amount Outstanding
20%
15%
10%
5%
0%
1990 1995 2000 1Q02 2Q03 3Q04 4Q05 1Q07 2Q08 3Q09
Construction Commercial Multifamily
Sources: FDIC, FFIEC, Foresight Analytics

7. Chicago Commercial Mortgage Delinquency Rates
CMBS, by Property Type
30+ Days Past Due
25%
20%
15%
10%
5%
0%
4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10
Office Retail Lodging Industrial Multifamily
Source: Trepp, LLC

8. CRE Distress Summary
Delinquent CRE Loans in Chicago, $ Billions
Source/Type 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10
Banks
Construction & Land 2.1 2.7 3.0 3.2 3.0 2.6
Commercial Mtg 0.9 1.2 1.6 1.6 1.5 1.7
Multifamily Mtg 0.3 0.4 0.5 0.5 0.6 0.7
CMBS
Total 0.4 0.5 0.7 1.0 1.0 1.5
Retail 0.1 0.1 0.2 0.3 0.4 0.5
Office 0.1 0.2 0.3 0.3 0.2 0.4
Lodging 0.1 0.1 0.1 0.2 0.2 0.4
Industrial 0.0 0.0 0.0 0.0 0.0 0.1
Multifamily 0.1 0.1 0.1 0.1 0.1 0.1
Sources: Trepp Loan, Foresight Analytics

9. Recent Foreclosure Activity
Chicago Metro Area
Loan
Amount, Origination
Property Name Property Type City $ Mill. Year
Northern Lights Crossing Retail Gurnee $5.4 2004
4055 West Peterson Avenue Industrial Chicago $3.0 2007
Retail (Ground
Bank One Ground Lease Lease) Orland Park $1.5 2005
Sheraton Four Points - O'Hare
Airport Lodging Schiller Park $22.5 2006
South Suburban Industrial Portfolio Industrial Various $10.2 2006
Embassy Suites - Chicago Lodging Deerfield $13.9 2000
Rolling Meadows Plaza Retail Rolling Meadows $6.9 1999
Carolina & Hawthorne Buildings Industrial West Chicago $1.3 2001
Lakeview Square Shopping Center Retail Naperville $4.6 2004
Hotel Burnham Lodging Chicago $36.0 2007
Source: Trepp Loan

10. Bank Distress
FDIC Problem Institutions vs. Foresight Watch List
800
700 645
590
600
512
500 466
400 371
276
300
200
100 49
15 13 11 14 13 12 12 19 21 20 30 109141
0 77
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10e
Foresight FDIC
Source: FDIC, Foresight Analytics

11. Bank Distress
Closure Hot Spots—Watch List Institution Count by State
Closures –
State 1Q09 2Q09 3Q09 4Q09 1Q10* Current Cycle
Georgia 55 64 63 74 77 38
Florida 55 70 83 85 73 25
Illinois 42 49 51 61 60 31
California 20 29 35 31 27 26
Minnesota 18 25 27 29 26 11
Washington 18 23 27 30 24 9
Michigan 14 21 22 25 21 7
Colorado 4 4 8 13 17 3
Missouri 11 13 17 15 16 8
Kansas 11 12 13 14 14 4
Wisconsin 7 8 16 15 13 1
North
Carolina 2 2 3 11 13 2
South * Partial Quarter
Carolina 3 8 7 14 12 1
Source: FDIC, Foresight Analytics

12. Bank Distress
Bank Failures—Current Cycle and Near-term Forecast
Number of Closed Institutions
60
50
40
30
20
10
0
4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q102Q10*3Q10 4Q10 1Q11
Actual Projected
* Through 04/30/10
Source: FDIC, Foresight Analytics