27 October 2006

Challenges of Investing in Real Estate Today…

And the Advantages of Co-Investing with Specialist Operators

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MCPL2058-a-180406

Founded in 1991 as capital markets affiliate of Security Capital Group (“spun out” in 2001)

Boutique real estate investment bank – focus on private equity and M&A advisory

Global distribution

60 employees

200+ real estate operator relationships

450+ real estate investor relationships

$40.9 billion in 171 transactions since 19913

MCP OVERVIEW

1 MCP headquarters.2 Placement capabilities in Asia / Australia through Macquarie Bank.3 As of October 1, 2006.

LondonBanking/Placement

New YorkPlacement

Chicago 1

Banking/PlacementSydney 2

Placement

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MCPL2058-a-180406

0

100

200

300

400

500

600

700

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

Asia Europe North America Middle East Australia

(in millions)

Sources: U.S. Census Bureau International Data Base, Little Green Data Book 2004, OECD, MCP, Goldman Sachs: Report on Alternative Investing.1 Represents household and non-profit institution saving rates as a percentage of disposable household income (5-year average from 1999-2003).2 Represents the simple average of Norway, Sweden, Denmark and Finland.

Retirement Age Population (65+ years of age)

Savings / RE Investment

Actual Forecast

DEMOGRAPHIC SHIFT TO YIELD

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MCPL2058-a-180406

INCREASED TRANSACTION VOLUME

€216

€148

€61

€83€95 €96

€156

€89€85€77

€0

€50

€100

€150

€200

€250

€300

2001 2002 2003 2004 2005

US Volume Europe Volume

Note: US transaction volume converted into Euro with exchange rate as of August 13, 2006, $1 = €0.7977Sources: Real Capital Analytics, Jones Lang LaSalle. Reflects total volume of direct property transactions in the four core sectors.

(€ billions)

Direct investment in U.S. real estate was 3.5x higher in 2005 versus 2001

5-Year CAGR = 37%

5-Year CAGR = 19%

Direct investment in European real estate was 2.0x higher in 2005 versus 2001

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MCPL2058-a-180406

CHALLENGES FOR REAL ESTATE INVESTORS

Investor Issues

Limited access to product

Inefficient staffing model

Outperformance is increasingly difficult

Alignment of interest

Benefits of Partnering with Specialist

Operators

Efficient use of staff

Take advantage of local market expertise

Team up with specialists

Co-investment enhances alignment of

interests

Difficult to obtain local market expertise

Gain access to extensive transaction pipelines

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MCPL2058-a-180406

Partner

(2 offerings)

(3 offerings)

(6 offerings)

(2 offerings)

(2 offerings)

Total

Real Estate Sector Multifamily Industrial Senior Housing Self Storage Condo

Year 2000 2001 2002/3/5 2003/4 2004/5

Number of Properties 11 80 74 2 74 3

Asset Locations U.S.

(8 markets)

U.S.

(27 markets)

U.S. & U.K.

(22 markets)

Europe

(6 markets)

U.S.

(1 market)

Investor Equity ($ M) $681 $1401 $362 $194 $36 $800

Total Capitalization ($ M) $239 $593 $1,481 $577 $182 $3,072

(U.S. $ in millions)

INVESTOR CASE STUDY – INTERNATIONAL INVESTOR

1 Investor has realized a capital event on this investment. 2 Includes 3 development assets.

Investor has deployed approximately $800 M of equity in the U.S. and Europe through five operating partner relationships

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MCPL2058-a-180406

ConclusionsInvest with specialist operators

Real estate is a good diversifier

Invest in partnership with specialist operators with a strong track record in a given sector

Invest in well established JV / fund structures advised by internationally recognised legal and tax advisors

Focus on best market practice in corporate governance, reporting / transparency and fees

Check what leading (and more experienced) institutional investors are doing