Please enjoy our December edition of E-News.

Whew! I know, this is not much of a technical description, but it is the best word I could come up with to describe our year. Needless to say, it has been a busy year full of highlights, change, and – yes – a few challenges. Through it all I am extremely pleased with the growth of our company over the last three years. This growth can be attributed to numerous factors, but can be summed up as a lot of hard work by our teams and a number of new relationships in our institutional, corporate and entrepreneurial sectors. We are committed to being the very best service provider the Twin Cities and surrounding region has to offer.

As the holidays arrive, we especially want to thank you for your trust in us! We commit to never taking this for granted, continuing to work to strengthen relationships, providing greater financial results for you and your companies. We wish you and your families the best of holidays.

Warm Regards,
Jeff LaFavre, CCIM, MCR, SIOR

December, 2007

What's going on with the Investment Sales Market?

By Ross Moore, Director of Market & Economic Research – Colliers International

The last 100 days have been unlike any other. Since the onset of the credit crunch in mid August, the investment sales market has gone into near paralysis. What was expected to be a minor blip has turned into a major event. Following August's credit woes, the immediate reaction by many was that things would almost certainly get back to normal post Labor Day, as the Federal Reserve and other central banks intervened and provided the required liquidity.

The central issue remains debt, both the availability and price. Until the credit markets settle down it is highly unlikely the investment sales market will return to anything resembling normal. The following are issues which need addressing.

• If you can't price money, how can you price real estate?
• Treasury yields are going lower, but spreads are increasing at a greater rate keeping borrowing costs high
• What will be the impact of foreign investors? - U.S. real estate priced in USD is starting to look very cheap
• Will the "smart money" lead the market down? - locking in returns and buying back into the market 12 or 18 months from now
• How will REITs react? - many are in a position to acquire but a sinking stock price makes acquisitions more difficult
• How should vacancy be priced? - it used to be a positive but not so anymore
• Will the real estate veterans of the 1980's and early 1990's react differently than the younger generation who haven't seen a down market before?

FEATURED DIVISION

Investment

The experts at Colliers can provide you with intimate knowledge of market conditions, allowing us to identify those projects that can achieve your required return on investment.

Our experience, market knowledge, and proven process provide you with:

• Analysis of market demand, present conditions, and future trends
• In-depth knowledge of national capital market trends that impact the investment climate
• Specialized experts in office, industrial, and multifamily property types
• Appraisal & Consultation services
• Acquisition/Disposition services
• Recommendations on optimum sale timing
• Foreign investor contacts, which provide liquidity even during difficult local economic climates
• Professionally prepared offering package to provide potential buyers with complete property information
• Monitoring of purchaser’s due diligence
• Evaluation of issues regarding appropriate hold periods
• Detailed reporting and documenting on all aspects of marketing, offers received, and closing details

To date, the Colliers Investment Services Group has completed 26 transactions for a total of $187,599,211 in dollar volume.

The team of Mark Kolsrud, CPM, Matthew Klein and Shawn Moore specialize in Industrial, Office and Retail product. The team of James McCaffrey, Gina Dingman and Julie Lux specialize in Multi-family, Land and Office properties.

COMPLETED TRANSACTIONS

Tennant Co. Sells Maple Grove Facility

(Maple Grove, MN) Duane Poppe, CCIM, Josh Huempfner, and Jeff Pearson represented Tennant Company in the sale of its 179,790 SF manufacturing building, located at 11601 93rd Avenue in Maple Grove, valued at $7.38 million to First Industrial. The team, including Ryan Elmer, has retained leasing responsibilities.

Colliers Represents Honeywell in Ind. Sale

(Minneapolis, MN) Duane Poppe, CCIM, Josh Huempfner, and Jeff Pearson represented Honeywell International, Inc in the sale of 114,664 SF industrial building located at 200 Centennial Drive valued at $2.1 million to TLJC, LLC.

Bristol Sells Midway Distribution Center

(Minneapolis, MN) Mark Kolsrud, CPM, Matt Klein, and Shawn Moore, along with Jeff Kahn, Steve Disse, and Jeff Devine from Colliers Bennett & Kahnweiler of Chicago represented Bristol Group in the sale of the 251,732 SF Midway Distribution Center, valued at $14.4 million to Cobalt Capital Partners.

RSM McGladrey Leases Downtown Space

(Minneapolis, MN) Larry Chevalier, SIOR, and Brian Woolsey and Michael T. Mayer, SIOR of Colliers Turley Martin Tucker – Kansas City represented RSM McGladrey Inc. in leasing 132,182 SF of office space located at 800-801 Nicollet Mall, to United Properties.

Strandware Sells Eau Claire Facility

(Eau Claire, WI) Joe Turner and David M. Stokes, SIOR represented Strandware in the sale of a 42,300 SF office building located at 1529 Continental Drive valued at $2.2 million to Great Lakes Educational Loan Services.

NEW ASSIGNMENTS

Grand Oak Business Park

Colliers has been retained by Chicago-based BPG Properties Ltd. to lease its Grand Oak Business Park in Eagan. The office leasing team of Mark Stevens, Pete Dufour, CCIM and Anna Engstrom have assumed the leasing assignment.

A recent acquisition for BPG from Interstate Partners, the 10-building campus comprises 530,000 square feet of office space, ranging from data/tech to Class A, and 12,000 square feet of retail. More than 90 percent leased, Grand Oak has space available ranging from 1,000 to 19,000 square feet. On-site retail includes Time Out restaurant and bar, Jimmy John's Gourmet Sandwiches and Caribou Coffee, complementing convenient area restaurants, hotels and shopping centers.

The Pacific

Colliers has been retained by Lupe Development Partners to lease the 52,500-square foot mixed-use office and retail buildings, known as The Pacific, located at 200 and 226 Washington Avenue North in Minneapolis. Colliers’ Office Sales & Leasing team of Brian Woolsey and Larry Chevalier, SIOR, will lease the office spaces, and the team of Christenson and Kelcey McKean will be leasing the retail spaces.

The Pacific is a mixed-use development that highlights the vintage historic environment of the neighborhood, while introducing a vibrant and urban feel. Available lease space includes 28,000 square feet of office, and 14,500 square feet of retail.