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Jimmy Maurin Chairman Stirling Properties October 12, 2009

The Current State of the Shopping Center Industry. Jimmy Maurin Chairman Stirling Properties October 12, 2009.

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Jimmy Maurin Chairman Stirling Properties October 12, 2009

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  1. The Current State of the Shopping Center Industry Jimmy Maurin Chairman StirlingProperties October 12, 2009

  2. Consumer spending shifted to essentials...Three reasons: (1) Rising gasoline prices initially (but that has since then reversed), (2) Weakening big ticket purchases (initially housing-related and now motor vehicles as well) and (3) Recession has slashed discretionary spending, such as on restaurants and apparel.

  3. August 2009 Year-Over Year Sales -2.0% Apparel 2 1 0.6 ChainStores 0 Department -1 -2 Stores Luxury Stores -4 -4.3 -6 Discount -7.3 Stores -8 Drug Stores -10 Wholesale -12 -12.3 Clubs -14

  4. The “Spending Worry” • Concern: Consumers intentionally raise their savings rate to some long-term average. • If that saving rate is consistent with 1990-2008 average, then that would be 3.5%--lower than where it is today. • If reversion is to 1970-2008 average, then that would mean 4.7%--about where it is today.

  5. U.S. Announced Store Closings 2001 to August 11, 2009 Annual 2001 4,149 2,892 7,041 2002 3,227 2,723 5,950 4,973 2003 2,972 2,001 6,303 2004 3,750 2,553 4,269 Year 2005 1,879 2,372 4,730 2,749 1,981 2006 4,603 3,081 1,522 2007 6,913 3,272 3,641 2008 176 2,852 2009 0 1000 2000 3000 4000 5000 6000 7000 8000 Number of Establishments 1st Half -Year 2nd Half-Year Source: ICSC Research

  6. 2009 Holiday Forecast • Firstly, inventories were slashed for the 2008 holiday season too and this year’s inventory is on-track to be even lower. • Secondly, the 2001 experience following the prior recession showed that even when inventories were lean, sales could pick up appreciably.

  7. Perceived Financing Risks Facing the Real Estate Industry and the Economy Presentation to the New York Federal Reserve by ICSC September 23, 2009

  8. In 2009, ICSC estimates that maturing debt of $60 billion needs to roll-over with maturing CMBS debt of about $21 billion and another $8 billion in corporate bond refinancing. March 2009 Survey March 2009 Survey

  9. September 2009 82 ICSC Trustees Responding Worry is High More than a quarter think risk is “extremely high,” which could lead to a double-dip recession. 82 ICSC Trustees Responding

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