<html xmlns:v="urn:schemas-microsoft-com:vml" xmlns:o="urn:schemas-microsoft-com:office:office" xmlns:w="urn:schemas-microsoft-com:office:word" xmlns:st1="urn:schemas-microsoft-com:office:smarttags" xmlns="http://www.w3.org/TR/REC-html40">
<head>
<meta http-equiv=Content-Type content="text/html; charset=us-ascii">
<meta name=Generator content="Microsoft Word 11 (filtered medium)">
<!--[if !mso]>
<style>
v\:* {behavior:url(#default#VML);}
o\:* {behavior:url(#default#VML);}
w\:* {behavior:url(#default#VML);}
.shape {behavior:url(#default#VML);}
</style>
<![endif]--><o:SmartTagType
namespaceuri="urn:schemas-microsoft-com:office:smarttags" name="place"/>
<o:SmartTagType namespaceuri="urn:schemas-microsoft-com:office:smarttags"
name="PlaceName"/>
<o:SmartTagType namespaceuri="urn:schemas-microsoft-com:office:smarttags"
name="PlaceType"/>
<o:SmartTagType namespaceuri="urn:schemas-microsoft-com:office:smarttags"
name="country-region"/>
<!--[if !mso]>
<style>
st1\:*{behavior:url(#default#ieooui) }
</style>
<![endif]-->
<style>
<!--
/* Font Definitions */
@font-face
{font-family:Courier;
panose-1:2 7 4 9 2 2 5 2 4 4;}
/* Style Definitions */
p.MsoNormal, li.MsoNormal, div.MsoNormal
{margin:0in;
margin-bottom:.0001pt;
font-size:12.0pt;
font-family:"Times New Roman";}
a:link, span.MsoHyperlink
{color:blue;
text-decoration:underline;}
a:visited, span.MsoHyperlinkFollowed
{color:purple;
text-decoration:underline;}
span.EmailStyle17
{mso-style-type:personal-compose;
font-family:Courier;
color:windowtext;
font-weight:normal;
font-style:normal;
text-decoration:none none;}
@page Section1
{size:8.5in 11.0in;
margin:1.0in 1.25in 1.0in 1.25in;}
div.Section1
{page:Section1;}
-->
</style>
<!--[if gte mso 9]><xml>
<o:shapedefaults v:ext="edit" spidmax="1027" />
</xml><![endif]--><!--[if gte mso 9]><xml>
<o:shapelayout v:ext="edit">
<o:idmap v:ext="edit" data="1" />
</o:shapelayout></xml><![endif]-->
</head>
<body lang=EN-US link=blue vlink=purple>
<div class=Section1>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'>Dear <b><span style='font-weight:bold'>MIT</span></b>/CRE Alums: <o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'>We are pleased to let our alums know about an exciting new development
for the real estate industry in which the Center is playing a central role, as
part of our industry-relevant research program. The <st1:place w:st="on"><st1:PlaceName
w:st="on">MIT</st1:PlaceName> <st1:PlaceType w:st="on">Center</st1:PlaceType></st1:place>
for Real Estate will be publishing with monthly updates a <b><i><u><span
style='font-weight:bold;font-style:italic'>new</span></u></i></b>
transactions-based commercial property price index that the Center has
developed in cooperation with Real Capital Analytics, Inc. (RCA). The new
RCA-based index has been sponsored by Real Estate Analytics LLC (REAL) for the
purpose of supporting <b><i><u><span style='font-weight:bold;font-style:italic'>derivatives
trading of commercial investment property</span></u></i></b>, such as index
return swaps and futures. The RCA-based index is now available on the
Center’s web site, at:<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'><a href="http://web.mit.edu/cre/research/credl/rca.html">http://web.mit.edu/cre/research/credl/rca.html</a><o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'>A white paper describing the new index is downloadable from the above
web site. And the press release is available at:<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'><a href="http://web.mit.edu/cre/news/061220-rca-index-launch.html">http://web.mit.edu/cre/news/061220-rca-index-launch.html</a><o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'>The new suite of 29 indexes include monthly, quarterly, and annual
frequencies, with coverage at the national, regional, and some MSA levels, for
the four major commercial property sectors of apartments, office, industrial,
and retail. <o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'>The RCA-based indexes are the first regularly produced commercial
property indexes based on repeat sales of the same properties, the same basic
index construction method as the Case-Shiller/S&P housing indexes that
underlie the new Chicago Mercantile Exchange housing futures contracts. Such
econometrically rigorous index construction methods are necessary to track the
same-property price changes that are of the type actually faced by property
investors.<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'><o:p> </o:p></span></font></p>
<p class=MsoNormal><b><font size=3 face="Times New Roman"><span
style='font-size:12.0pt;font-weight:bold'>The End of the Commercial Real Estate
Bull Market: Early Evidence…<o:p></o:p></span></font></b></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'>The latest index results provide solid evidence of the magnitude of the
2003-2005 commercial investment property bull market in the <st1:place w:st="on"><st1:country-region
w:st="on">United States</st1:country-region></st1:place> and indicate that for
the broad market the "boom" period ended early this year. From a
bottom in February 2002 to a plateau in February 2006, the national aggregate
index rose 66 percent. Since then, the flagship monthly index has shown no
cumulative gain, the longest period of no net gain since the 2001-2002
recession. The bull market was truly impressive, with no negative month from
August 2003 through September 2005.<font color=blue><span style='color:blue'> </span></font>(See
chart below.)<o:p></o:p></span></font></p>
<p class=MsoNormal><!--[if gte vml 1]><o:wrapblock><v:shapetype id="_x0000_t75"
coordsize="21600,21600" o:spt="75" o:preferrelative="t" path="m@4@5l@4@11@9@11@9@5xe"
filled="f" stroked="f">
<v:stroke joinstyle="miter" />
<v:formulas>
<v:f eqn="if lineDrawn pixelLineWidth 0" />
<v:f eqn="sum @0 1 0" />
<v:f eqn="sum 0 0 @1" />
<v:f eqn="prod @2 1 2" />
<v:f eqn="prod @3 21600 pixelWidth" />
<v:f eqn="prod @3 21600 pixelHeight" />
<v:f eqn="sum @0 0 1" />
<v:f eqn="prod @6 1 2" />
<v:f eqn="prod @7 21600 pixelWidth" />
<v:f eqn="sum @8 21600 0" />
<v:f eqn="prod @7 21600 pixelHeight" />
<v:f eqn="sum @10 21600 0" />
</v:formulas>
<v:path o:extrusionok="f" gradientshapeok="t" o:connecttype="rect" />
<o:lock v:ext="edit" aspectratio="t" />
</v:shapetype><v:shape id="_x0000_s1026" type="#_x0000_t75" style='position:absolute;
margin-left:0;margin-top:2pt;width:369pt;height:293.65pt;z-index:1;
mso-position-horizontal:center;mso-position-horizontal-relative:margin'
o:bordertopcolor="this" o:borderleftcolor="this" o:borderbottomcolor="this"
o:borderrightcolor="this" o:allowincell="f" o:allowoverlap="f" stroked="t"
strokeweight=".5pt">
<v:imagedata src="cid:image001.emz@01C72433.4B3C17F0" o:title="" />
<w:wrap type="topAndBottom" anchorx="margin"/>
</v:shape><![endif]--><![if !vml]><img width=494 height=393
src="cid:image002.gif@01C72433.4B3C17F0" v:shapes="_x0000_s1026"><![endif]><!--[if gte vml 1]></o:wrapblock><![endif]--><br
style='mso-ignore:vglayout' clear=ALL>
<font size=3 color=blue face="Times New Roman"><o:p></o:p></font></p>
<p class=MsoNormal><font size=3 color=blue face="Times New Roman"><span
style='font-size:12.0pt;color:blue'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'>Have a happy holiday season and a prosperous 2007! <o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'><o:p> </o:p></span></font></p>
</div>
</body>
</html>