70,000 Rosemont O Hare. * MB Financial purchased6111 N. River Road with plans to occupy 150,000 RSF and lease the balance.

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1 During the Third Quarter 2003, lease activity levels were stronger than they have been all year, and perhaps as strong as activity has been since mid Activity has been bolstered by a number of significant large transactions. During the quarter seven (7) transactions totaling more than 50,000 square feet were completed. While these large transactions provide a strong cumulative total, the depth of activity is perhaps the most optimistic market trend. Large transactions will happen and can give the suburban market overall or an individual submarket a significant boost. It is the smaller transactions that will signify a market turnaround and help to sustain market activity over a prolonged period of time. Top Transactions Name of Tenant Size/RSF City Market MB Financial* 260,000 Rosemont O Hare Argent 160,000 Rolling Meadows Northwest Mid America 132,000 Downers Grove East-West Savings Ameriquest 130,000 Rolling Meadows Northwest Life Fitness 75,000 Schiller Park O Hare State Farm 75,000 Downers Grove East-West Advocate Healthcare 70,000 Rosemont O Hare * MB Financial purchased6111 N. River Road with plans to occupy 150,000 RSF and lease the balance. Big Push for bread and butter Transactions In an effort to drive activity and sustain vacancies, the REITS in general have become very aggressive. By some accounts, the aggressiveness in leasing parallels the aggressive acquisition cycle this group followed in the late 1990s. Typically landlords will be aggressive with large users. In the absence of a sustained level of large user transactions, however, the REITs also have set their sights on the smaller users, even those below 10,000 square feet. In offering a variety of concession packages and special broker incentives they are pulling out the stops to build occupancy and shore up cash flow. In spite of these aggressive efforts, Third Quarter net absorption was negative 593,935 square feet, erasing the strong second quarter activity levels when absorption was positive for the quarter at more than 519,000 square feet. Year-to-date absorption, following this up and down cycle, is negative 540,124 square feet. Absorption of space was greatest in the North Market, both in the third quarter and the year to date, at 207,666 square feet and 388,539 square feet, respectively. The Northwest Market recorded the most significant negative absorption at 483,131 square feet. It was the only market where absorption for the quarter was negative for both Class A and Class B buildings.

2 Class A absorption was a negative 632,747 square feet as both the Northwest and East-West Oak Brook Markets had significant levels of negative Class A absorption. The Class B market was only nominally negative at almost 1,700 square feet. The Third Quarter absorption pushed Class A availability rates higher. The Class A availability rate, including sublease space, totaled 23.5 percent, an increase from 22.8 percent last quarter. Third Quarter Overall Availability rates in 2002 and 2001 were 21.1 and 17.7 percent, respectively. Class B availability decreased one half of a percentage point, to 23.3 percent from 23.8 percent last quarter. Even with this decrease, the Class B rates are still higher than the Third Quarter rates in 2002 and 2001, which were 21.6 and 19.8 percent, respectively. Decreased availabilities in the Class B and Class C markets could not overcome the substantial increase in Class A availabilities. As a result, the overall rate edged up nominally, from 22.4 percent last quarter to a Third Quarter 2003 rate of 22.5 percent. These represent increase from the same period in 2003 and 2001 when the rates were 20.4 and 18.3 percent, respectively. Large Blocks of Space Still Plentiful In spite of the surge in activity levels, large blocks of contiguous space remain plentiful. In the overall suburban market a tenant requiring 100,000 square feet of space or more could negotiate with 26 Class A and 13 Class B buildings for a total of 39 suburban options. For requirements of 50,000 to 99,999 square feet, the options are even more plentiful: 97 total buildings, of which 57 represented Class A buildings and 40 represented Class B options. When it comes to users in the 25,000 to 49,999 square foot range, there are over 200 buildings to satisfy such requirements, 127 are Class A buildings and 82 are Class B buildings. On a submarket-by submarket basis, the Northwest market has the greatest percentage of available blocks of Class A space, with approximately one third of the large blocks of space in each of the 100,000 square feet plus and 50,000 square feet to 99,999 square feet blocks. In the smaller block size, the markets are evenly distributed between the North, Northwest and East-West/Oak Brook areas. Less Sublease Space, Same Impact As it has for several years, the sublease market is having a substantial impact of the suburban office market. The inventory of available sublease space totals more than 4.3 million square feet of space. It is not surprising that the vast majority of the sublease space, more than 2.9 million square feet or roughly 75 percent, is in Class A office buildings. On the positive side, this represents an inventory decrease of as more than 25 percent from approximately two years ago when the market peaked at more than six million square feet. With this level of inventory, the overall availability rate is increased four percentage points. There is, however, another perspective, or two, to the sublease story. The reduction in the inventory of sublease space has not come about solely through the absorption of the space by corporate users. Rather, through lease expirations, much of the space has simply been added to the inventory of direct available space space controlled by building ownership.

3 The other factor, which is as significant as a lack of true absorption of sublease space, is that sublease space is in direct competition with direct space. When deeply discounted, as it is likely to be, it can create a problematic situation for building owners, but a great opportunity for tenants. Top Sublease Offerings Name of Tenant Size/RSF City Market Zurich 300,000 Schaumburg Northwest Motorola 170,000 Elk Grove Village Northwest Midas 100,000 Itasca Northwest Fort James 125,000 Deerfield North Cingular 100,000 Schaumburg Northwest Cahners 100,000 Des Plaines O Hare Lucent 87,000 Naperville East-West Kinder Morgan 55,281 Lombard East-West Xerox 51,758 Schaumburg Northwest Rental Rates and Concession Packages Concession packages offered to attract tenants to buildings likely will get worse, until employment gets better for a sustained period of time. The recent employment figures were positive steps in that direction, but sustained job creation is the single greatest need for demand. The overall package offered by landlords to tenants will be reduced, with the greatest reductions coming from rental rates. Tenant improvement allowances and brokerage commissions have been maximized about as much as possible. Instead, building owners will have to discount rents. The compression in rents likely will be most significant in the Class B market, where reductions to date have been the least. For the most part, the Class B market has been holding firm. This may be due in large part to the narrower margins on which these owners operate. While there likely is some room for reductions, some Class B building owners will be increasingly challenged and even may be forced to give properties back to the lenders. Asking Rents Market Class A Class B East-West $22.00-$25.00 $22.00-$24.00 O Hare $28.50 $23.00 North $24.75 $22.00 Northwest $27.00 $23.00 Individual Market Summaries O Hare Market Leasing activity levels in the O Hare market were greater in the third quarter than has been seen in a number of years. Activity was strong in Class A office buildings across all size ranges, from 1,000 square foot satellite office leases corporate headquarters leases exceeding 108,000 square feet (the Cole Taylor Bank lease at Pointe O Hare).

4 As noted in the defining the market section of the newsletter, Third Quarter also saw the completion of the disposition of the 250,000-square-foot Comdisco office building to MB Financial. Other notable transactions during the quarter included several leases at Balmoral (Xerox, 75,000 square feet; Advocate Healthcare Systems, 70,000 square feet; and World Kitchen, 35,000 square feet). The Class B market rid itself of a five-year old vacancy, the 208,098 square-foot facility formerly occupied by Sandoz. Abbott Laboratories leased the space. With the exception of that lease, and a handful of others, the Class B market continues to struggle. This is due in large part to the lack of any substantial difference between Class A and Class B rental rates. Until there is a substantial difference, the Class A market will continue to have the edge. With these activities, overall net absorption of space totaled 13,628 square feet. While this is the second consecutive quarter of positive absorption, activity during the third quarter was substantially lower than Second Quarter when absorption totaled more than 86,800 square feet. Class A absorption during the third quarter was 11,056 square feet. Class B absorption for the quarter was 6,797 square feet. The impact of the sublease market continues to be lessened in the O Hare market as the inventory of sublease space decreased to 413,437 square feet, from 593,604 square feet last quarter and 895,450 square feet one year ago. Since the same period last year, the inventory of sublease space has fallen by well over half. Further, where the supply of sublease space previously represented 30 percent of all available space in the market, that figure now equals less than 15 percent. While some of the decline in sublease space is attributable to leasing, some of it simply represents a burning off of term. With the positive absorption and the continued reduction in the inventory of sublease space, the overall availability rate decreased to 25.1 percent, from 26.8 percent last quarter. This can be attributed in great part to the reduction of sublease space. The decline was greatest in the Class B market where the rate fell to 22.2 percent from 27.8 percent last quarter. The Class A availability rate increased to 25.4 percent, from 25.0 percent last quarter. Key Transaction, Third Quarter 2003 Following is a description of some of a key transaction that played and will play a significant role in the O Hare office market. Following the high-tech meltdown, and the resultant troubles faced by technology-oriented companies, virtually every market was faced with looming vacancies as companies moved through the consolidation process. In the O Hare market, the financial and operational problems of Comdisco threatened to substantially impact the market with the addition to the inventory of the 250,000 square foot office building it owned and occupied within the Riverway complex. In O Hare, the smallest of the suburban markets, the availability of 250,000 square feet threatened to single-handedly increase the vacancy/availability rate by 1.5 percentage points. During the quarter, however, with the potential acquisition of the property by Duke a squashed deal, a user stepped to the negotiating table. In September, MB Financial completed the acquisition of 6111 N.

5 River Road and announced it would use more than 60 percent of the space (150,000 square feet) for its own purposes. As a result, rather than adding 250,000 square feet to the inventory, approximately 100,000 square feet will be added. While this still represents a substantial amount of space, it is much more palatable for this market, the smallest of the suburban markets. Northwest Market The Northwest market has matured and evolved substantially since Once seen as a market defined largely by technology-oriented tenants such as Motorola and AT&T, market diversification has been a positive change in the market. This change translates to considerable depth and diversity to the market extending to the ancillary services areas. Schaumburg, for example, is as well recognized for its base of financial services tenants as its technology firms. Activity levels have responded to this diversification with increased leasing and deal flow. According to estimates there may be 1.5 million square feet of prospective leasing activity in the marketplace. The majority of this activity would result in strong deal velocity through the end of 2003 and into The Northwest market in general, and Rolling Meadows specifically, benefited tremendously by the completion of two leases totaling nearly 300,000 square feet in the Class A market. With this activity, available space in Rolling Meadows, often viewed as an alternative market to Schaumburg and Itasca, has tightened considerably. With two alternatives gone, tenants will be forced to consider these other options. In spite of those two transactions, overall absorption in the Northwest market totaled negative 483,131 square feet for the quarter. This represents the third consecutive quarter absorption was negative, pushing year-to-date absorption to negative 563,869 square feet. The sublease market adds a certain air of caution to conditions in the Northwest. Certain of the activity taking place in the sublease market, meaning a zero net effect on absorption. Further, the presence of numerous high profile sublease options including the Zurich space totaling 300,000 square feet at Windy Point adds plenty of alternatives for those requiring space. The inventory of sublease space in this market totals 1,337,038 square feet. This represents the largest inventory of any of the suburban markets. It also is a substantial increase (almost 275,000 square feet) from last quarter. Moreover, the Class A sublease inventory totals more than 1,000,000 square feet, the greatest amount of sublease space ever in the Northwest market. While the North Market has more Class A sublease inventory, the impact is more devastating to the Northwest market. Nearly 40 percent of all Class A space available is for sublease. This makes the Class A availability rate skyrocket to 26.3 percent. Without sublease space that rate would be 18.8 percent. Factoring in all of these market conditions, the availability rate in the Northwest market totals 22.9 percent, including sublease space. The Class A availability is 27.5 percent, the Class B rate is 20.0

6 percent and the Class C rate is 15.0 percent. The Overall, Class A and Class B rates one year ago were, 19.4 percent, 20.6 percent, and 19.1 percent, respectively. Key Transaction, Third Quarter 2003 Following is a description of some of a key transaction that played and will play a significant role in the Northwest suburban office market. Building marketing efforts always are looking for opportunities to establish momentum, particularly as the third quarter turns to the fourth quarter. In the Northwest market, two separate but related transactions in Rolling Meadows may give the Northwest market the surge in momentum that is needed to close out 2003 on a positive note, to build momentum for Regardless of what the future holds, though, it represents a strong rebound from 2002 and Argent and Ameriquest leased 160,000 square feet and 130,000 square feet, respectively in Class A office buildings. Perhaps more important to the marketplace particularly the Class A market, of the 290,000 square feet leased, well over 200,000 square feet represents absorption. Argent is new and Ameriquest had subleased 75,000 square feet of space in the building. East-West Market Lisle /Naperville West As diversified a market as it is, the fortunes of the East West Corridor market, continue to be closely linked to technology firms. Since 2000, the direction of this market closely is linked to the contractions that have occurred in this industry. With activity levels down and vacancy rates up, the uncertainty of this marketplace is the result of the questions that surround technology powerhouses and big space users such as Lucent Technologies and Tellabs. Each of these companies already has significant amounts of space on the market. The bigger question, though, is the phantom space the space that they occupy and may not use but haven t determined how it will be handled. As previously noted, certain of the REITs and substantial property owners in the market have been and will continue to pursue an aggressive strategy for leasing, for virtually all sizes of space users. Whether offering added broker incentives or tenant concessions in terms of free rent and other options, these owners are pulling out the stops to initiate and complete lease transactions. In today s marketplace when cash flow is king, a handful of small transactions are as good as gold. Absorption activity in the East-West Lisle/Naperville market totaled 95,949 square feet for the quarter, an increase from second quarter when absorption was 58,651 square feet, and a substantial improvement from first quarter when absorption was negative 181,594 square feet. Absorption was greatest in the Class A market. During the quarter absorption was positive for the third consecutive quarter at almost 98,000 square feet. Year-to-date absorption in the Class A market is 257,433 square feet. The Class B market is a direct contrast to the A market. Though absorption was only nominally negative at almost 8,000 square feet, for the year-to-date absorption is negative 293,810 square feet.

7 Based on this absorption, the Overall East-West Lisle/ Naperville availability rate decreased to 25.1 percent from 25.9 percent last quarter. In 2002 and 2001 the overall rates were 18.9 and 19.1 percent, respectively. The Class A rate stands at 24.9 percent, a full percentage point decrease from 25.9 percent last quarter. Still, those rates were substantially lower during the same period in 2002 and 2001 at 20.9 and 16.6 percent, respectively. The sublease market has had a significant impact on availability in the East-West/Lisle market. The inventory of sublease space totals almost 582,300 square feet. The figure is a sizeable decrease from last quarter when the total was 762,885 square feet. This level of sublease space adds 4.2 percent to the direct availability rate. Oak Brook East In certain respects, the general Oak Brook East market parallels the general Schaumburg market: it is a well diversified area located with adjacencies to a major thoroughfare, a dominant retail trade area and sought after executive residential communities. Activity in the third quarter came on strong. Leasing was dominated by activity in the Class A market, as exemplified by Mid America Bank s 132,000-square-foot lease at Corridors III in Downers Grove, Homeland Security s 125,000-square-foot lease at Oak Brook Terrace Corporate Center III in Oakbrook Terrace and State Farm s 75,000-square-foot lease at Executive Towers West in Downers Grove. The activity that is taking place is spread across a diverse cross section of business types technology, financial services, etc. As is the case in various other markets, tenants are leveraging market conditions and ownership s objective of maintaining strong occupancy levels (and good tenants) to enter into lease renegotiations well ahead of the expiration date. The most logical candidates for early renewals and lease renegotiations are credit-worthy tenants in the 20-50,000-square-foot range with 12 to 24 months of term remaining on their lease. During the quarter the amount of sublease space remained relatively constant at just under one million square feet. This amount of sublease space is a reduction of more than 25 percent from one year ago. At the same time, though, demonstrating the impact of sublease space on the market, nearly 20 percent of all available space can be found on the sublease market. Absorption of space for the quarter was negative 4,090 square feet, the result of negative absorption totaling more than 113,000 square feet in the Class A market. Year-to-date, absorption of space totals negative 215,565 square feet. Only the Northwest market had greater levels of negative absorption. For the year, all building classes have recorded negative absorption. But both the Class B and Class C markets had successive quarters of positive absorption. The overall Oak Brook East market area availability rate increased by almost two percentage points, to a Third Quarter rate of 23.3 percent, from 21.6 percent. One year ago, at the end of Third Quarter 2002, the overall Oak Brook East rate was 20.2 percent. Given the significant level of negative absorption, the Class A market had an increase of 3.7 percentage points, from 21.0 percent last quarter to a Third Quarter rate of 24.7 percent. During the same period in 2002 the rate was 19.8 percent.

8 The Class B rate decreased, to 24.9 percent from 26.1 percent. One year ago the availability rate for the Class B market was 24.5 percent. North Market The North market is the second largest market in the suburbs, and one of the most sought after for corporate headquarters. This is the proverbial good news and bad news scenario. It is great to have a large number of corporate headquarters locations in a market. In addition to the space that these companies occupy, they tend to spur activity from complementary and support companies. The downside of this can be when companies take advantage of market conditions to complete build-to-suit headquarter transactions and in the process leave space behind. One of the greatest challenges facing building owners in the North market is a general lack of depth to activity. As a result, market statistics show the Northern suburbs as having the second greatest level of absorption activity and some of the lowest availability rates are shallow victories. Thus, where other markets potentially are gaining momentum with strong velocity in the Second and Third Quarters, activity in the North market may in fact be peaking for the near term. One of the most significant challenges of the North market, like the Northwest market, is the level of sublease space that is available. For much of the last two years sublease availability has topped one million square feet in the North market. This inventory remained virtually unchanged in the Third Quarter at 1,002,854 square feet. As has been stated in other markets, sublease availability has the greatest impact on Class A space in the North Suburban market where the total is 767,068 square feet. This represents more than 75 percent of sublease availability and almost one third of all space available in the Class A market. Other statistics are more positive for the North market. For the fourth consecutive quarter absorption of space was positive and totaled almost 208,000 square feet. Year-to-date, absorption totaled almost 389,000 square feet. Both of these numbers represent suburban market highs. Absorption of Class A space, for the quarter and the year was 222,722 square feet and 362,317 square feet, respectively. Because of negative absorption during Third Quarter, the Class B market also had negative year-to-date absorption -- negative 76,711 for the quarter and negative 33,287 for the year. The overall availability rate in the North market is 21.0, the lowest of all markets. Without sublease space the availability rate is 17.3 percent. The Class A availability rate is 20.8 percent and the Class B rate is 22.2 percent. In spite of some of the positive activities in the market, all of the availability rates represent increases from one year ago, Third Quarter 2002, when the Overall, Class A and Class B availability rates were 20.0 percent, 19.3 percent and 21.5 percent, respectively. Key Transaction, Third Quarter 2003 Following is a description of a key transaction that played and will play a significant role in the North suburban office markets. Over the course of the last several quarters the North market has seen a number of corporate headquarters transactions. The third quarter was no different as Takada completed a 130,000 square foot build-to-suit transaction in Lincolnshire.

9 For the overall image of the North Market a strong corporate headquarters market because of its proximity to sought after executive housing the transaction was positive. The overall impact, and the ripple effect it creates, is more disconcerting to building owners. With this transaction, Takada will relocate its offices from leased space into newly constructed space. In the long-term, this will create negative absorption, and an increase in vacancy/availability rate when that space is added back to the inventory. Further, given the lack of depth in the market today, it is yet another obstacle for the market to overcome.