April 2011 Hedge Fund Index Market Recovery Every six months, we update the New York City

y hedge fund index. The index tracks 24 Class A and trophy buildings in Midtown Manhattan which have a high concentration of boutique hedge fund, investment management, and related financial service tenants. In our latest edition, we added 650 Madison Avenue to the index. As the market recovery continues, pricing among the top tier buildings has increased substantially. The high asking rent is above $100 per sq. ft. in all but two of these signature properties.
$220 $200 $180 $160 $140
Asking Rent Rent
$155

$210 $195

$155 $125 $115 $96 $90 $73 $63 $110 $85 $85 $135
$125

$145 $135 $120 $105 $90 $80

$74

$140

$145 $120 $105 $80

$60

$120 $100 $80 $60 $40 $20

$125

$125 $110 $110 $110 $115

$130

$77 $65 $49 $45

$85

$80 $60

$82

1330 Avenue of the Americas

65 East 55th Street

623 Fifth Avenue

640 Fifth Avenue

712 Fifth Avenue

745 Fifth Avenue

767 Fifth Avenue

510 Madison Avenue

520 Madison Avenue

540 Madison Avenue

590 Madison Avenue

650 Madison Avenue

660 Madison Avenue

Low Asking Rent

High Asking Rent

Low Ask = Sublease

667 Madison Avenue

888 Seventh Avenue

Hedge Fund Index

320 Park Avenue

350 Park Avenue

375 Park Avenue

390 Park Avenue

280 Park Avenue

450 Park Avenue

$0

152 West 57th Street

9 West 57th Street

40 West 57th Street

$0

April 2011 Hedge Fund Index - Low Asking Rent The "low asking rent shown in grey averages $81.50 per sq. ft. This is a significant increase of 27% from September 2010, where the low average was just $64.00 per sq. ft. We have highlighted that the low rent in seven of the buildings is for sublease space, which is often discounted due to factors such as shorter remaining term length, condition of the space itself, encumbrances, lack of landlord privity, and general risk often associated with sublandlord credit. Interestingly, as the market improves, the sublease opportunities in six of the buildings do not represent the low asking rent. These options are often highly improved units of space, with furniture and technology in place. Typically in a strong market, these plug and play sublease units, particularly those on higher floors, will not be significantly discounted from direct space pricing within a building. We expect that the trend of quality subleases being priced more competitively with direct space will continue in 2011. Hedge Fund Index - High Asking Rent The "high asking rent shown in red increased in nearly every building on the survey, and now averages $130 per sq. ft. representing a 22% increase from six months ago. Most notably, the high asking rent exceeds $100 per sq. ft. in all but two of the buildings with such available space. 9 West 57th Street remains the highestpriced building in New York, with a peak asking rent of $210 per sq. ft., followed by 767 Fifth Avenue at $195 per sq. ft. Lessening amounts of sublease space, decreasing vacancy rates, and overall lack of tower floor space are primary drivers for the substantial increase in rents for premier space over the past six months. However, the collective vacancy rate for the index of buildings is 14.5% which is relatively high compared to the Midtown trophy market vacancy rate of 9.1%. Large blocks of available space within several of the index buildings, such as 280 Park Avenue, 510 Madison Avenue and 9 West 57th Street, contribute to the higher vacancy. Tower floor units are significantly scarcer, with just 4% availability for units on the 25th floor or higher. As we approach mid-year, many landlords are looking optimistically at the market and looking for ways to maximize value in their available blocks of space. Tenants are increasingly mindful that they need to have multiple options to increase leverage in negotiations. Activity at the high end buildings continues to increase, as evidenced by these notable recent deals: SAC Capitals 66,000 sq. ft. relocation to 510 Madison Avenue Renewal and expansion of KKR for 144,000 sq. ft. at 9 West 57th Street Apollos 104,000 sq. ft. renewal and expansion deal at 9 West 57th Street Kelso and Companys renewal and expansion at 320 Park Avenue for 41,000 sq. ft. Renewal and expansion of George Weiss at 320 Park Avenue for 49,000 sq. ft.

April 2011 Comparison of AUM to Rental Changes Looking historically at the increase in hedge fund assets under management (AUM) compared to Midtowns trophy building asking rents, the two variables were closely correlated from 2003 to 2007. During that five-year period, AUM increased from $820 billion to $1.9 trillion, or 127%. Asking rents in the trophy subset increased 82% to over $120 per sq. ft. As the market declined in late 2008 to 2009, asking rents trailed AUM. Landlords were slower to respond the economic downturn in late 2008, and in 2009 when redemptions quelled and AUM levels rose, asking rents fell to their low point of $73 per sq. ft. In 2010, as AUM surpassed the high levels of 2007, asking rents again moved modestly. As we enter mid year 2011, many trophy buildings have seen a spike in rents to react to the positive shift in the hedge fund sector.

2,500 2,000
$95.57 $120.22

AUM has recovered faster than trophy rents

$140 $120

Assets Under Management ($BIL)

$111.36

1,500
$73.68 $76.14

$65.91

1,000

$73.75

$79.74

$80 $60 $40 $20

500 0
20 04 20 06 20 07

Source: Hedge Funds Research, Inc./Jones Lang LaSalle

20 03

20 05

20 10

20 08

20 09

Asking Rent PSF

$100

AprilApril 2011 2011

Newly Available Sublease Spaces Building Photo

Building and Address Ownership Floor / RSF Asking Rent Term Sublandlord Comments

623 Fifth Avenue Between 49th and 50th Streets Cohen Brothers Realty Entire 19-21 14,486 rsf each $78.00/rsf 5-10 years Direct Availability Floors 20 and 21 are former Satellite floors; 19th floor is former Prince Ridge floor. All are built trading installations in good condition. Some furniture available. Internal stair.

623 Fifth Avenue Between 49th and 50th Streets Cohen Brothers Realty Part 16 4,125 rsf $75.00/rsf Through April 2013 Atalaya Capital Management Built with 5 offices, conference room, boardroom, reception and open area for trading. Furniture and phones available.

767 Fifth Avenue Between 58th and 59th Streets Boston Properties Part 24 19,987 rsf $120.00/rsf Through March 2017 Direct Availability Former Lightyear Capital space. Second generation installation built with 20 perimeter offices, 3 team rooms, boardroom and open area. Some furniture may be available.

Floorplan

AprilApril 2011 2011

Newly Available Sublease Spaces Building Photo

Building and Address Ownership Floor / RSF Asking Rent Term Sublandlord Comments

1177 Avenue of the Americas Between 45th and 46th Streets Silverstein Properties, Inc. Part 12 4,960 rsf $48.00/rsf Through April 2017 Bank Hapoalim Built with 4 offices, conference room, pantry and IT room. Back up generator capacity. Above standard ceiling heights.

1325 Avenue of the Americas Between 53rd and 54th Streets Paramount Group Part 26 4,518 rsf $55.00/rsf Through April 2015 Burnham Securities Built with 7 perimeter offices, conference room, pantry and open area. Furniture available.

1633 Broadway Between 50th and 51st Streets Paramount Group Part 27 6,915 rsf $48.00/rsf Through July 2015 Liquid Capital High end trading installation with 46 trading positions, 2 executive offices, conference room, pantry and IT room with supplemental cooling.

Floorplan

AprilApril 2011 2011

Newly Available Sublease Spaces Building Photo

Building and Address Ownership Floor / RSF

485 Lexington Avenue Between 46th and 47th Streets SL Green Realty Corp. Entire 28 14,078 rsf

500 Park Avenue S/W/C East 59th Street Morgan Stanley PPF Part 4 12,025 rsf

230 Park Avenue Between 45th and 46th Streets Monday Properties Entire 31 22,463 rsf Entire 32 22,382 rsf Part 33 4,500 rsf Entire 34 18,830 rsf $68.00/rsf Through April 2020 HSH Nordbank High end recent installation. 31st and 32nd floors are built with perimeter offices and open area. 34th floor is conference center. Furniture available.

Asking Rent Term Sublandlord Comments

$58.00/rsf Through May 2017 Imperial Capital Built with 18 offices, 3 conference rooms, boardroom, large open trading room with 27 positions. Furniture available.

$90.00/rsf Through June 2018 Caxton High end installation built with 12 offices, 5 conference rooms and open area. Fully furnished and wired. Double door glass entry. Park Avenue frontage.

Floorplan

AprilApril 2011 2011

Newly Available Sublease Spaces Building Photo

Building and Address Ownership Floor / RSF Asking Rent Term Sublandlord Comments

540 Madison Avenue S/W/C East 55th Street Boston Properties Part 32 3,950 rsf $85.00/rsf Through September 2012 Madison Tyler Above standard installation with 4 offices, conference room, open area with 4-6 trading positions and pantry. Central Park views. Furniture available.

Floorplan

April 2011
Recently Completed Transactions Financial Service Firms Type
New

Tenant
SAC Capital

Address
510 Madison Avenue 320 Park Avenue 9 West 57th Street 320 Park Avenue 1 Bryant Park 345 Park Avenue 777 Third Avenue 1330 Avenue of the Americas 280 Park Avenue East 777 Third Avenue 600 Lexington Avenue 1330 Avenue of the Americas 90 Park Avenue 660 Madison Avenue 600 Lexington Avenue 461 Fifth Avenue 7 Times Square

Square Feet
66,000 41,071 31,500 30,722 15,000 14,755 13,055 10,400 8,650 7,383 6,767 5,875 5,500 4,531 4,144 4,051 3,921

Renewal / Expansion Kelso & Company New Renewal New New New New New New New New New New New New Renewal Lightyear Capital / Sycamore Ventures Welsh Carson Anderson & Stowe QFR Capital Management Ladder Capital Hudson Bay Capital Artisan Partners Unicom Capital Management Ivory Capital Falcon Investments Andor Capital Managment Welch Capital Partners EBX International Boodell & Company Key Principal Partners, LLC Kacela Capital

For further information, please contact: Cynthia Wasserberger at 212.812.5816 or cynthia.wasserberger@am.jll.com