INVESCO Real Estate INVESCO Core Real Estate–U.S.A. · 2006-07-28 · -9-INVESCO Core Real Estate-U.S.A. PORTFOLIO SUMMARY •43 investments •Size range from $6.6 million to $115

INVESCO Real Estate

INVESCO Core Real Estate–U.S.A.

Dallas • San Francisco • Orange County • New York • AtlantaLondon • Paris • Munich • Prague • Madrid • Hong Kong

Statements contained in this Presentation that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of the Manager partner of the Fund. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. Additionally, this Presentation contains “forward-looking statements.” Actual events, diversification expectations or results or the actual performance of the Fund may differ materially from those reflected or contemplated in such forward-looking statements.

August 2, 2006

Fresno County Employees’Retirement Association

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INVESCO Overview Section 1

Investment Process Section 2

INVESCO Core Real Estate–U.S.A. (“ICRE”) Section 3

Performance Section 4

Property Sector Summary Section 5

Portfolio Activity Section 6

Appendix - Terms- Strategy Process- 2005 Transactions- Investment Process

Table of Contents

CONFIDENTIALITY NOTICE: All material presented is compiled from sources believed to be reliable and current, but accuracy cannotbe guaranteed. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments there are associated inherent risks. Please obtain and review all financial material carefully before investing. This publication may contain confidential and proprietary information of INVESCO Institutional and/or AMVESCAP. Circulation, disclosure, or dissemination of all or any part of this material to any unauthorized persons is prohibited. Unauthorized reproduction or distribution of all or any part of this material is prohibited.

SECTION 1: INVESCO Overview

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As of June 30, 2006 in US$bn

San Francisco

OrangeCounty Dallas

New York

Atlanta

London

Madrid

Prague

Munich

Hong Kong

INVESCO Real Estate

U.S. Direct Real Estate Investments— $10.8 BN Under Management— Since 1983

Real Estate Securities Management— $8.0 BN Under Management— Since 1988

European Direct Real Estate Investments— $8.4 BN Under Management— Since 1996

Paris

$27.2 Billion Under Management191 Employees Worldwide

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INVESCO’s Direct Real Estate U.S. Lines of Business

* As of 6/30/06

Open-end Core Fund Open8 Public Pension Plans $1.3 Billion to Date3 Private Trusts3 Taft-Hartley2 Corporate Pension Plans2 Foundation/Endowment

Separate Accounts Open12 Public Pension Plans $6.3 Billion Core2 Corporate Pension Plans $1.5 Billion Value-Added2 High Net Worth Groups2 Foreign Investors 1 Endowment

Closed-end Value-Added Fund Closed6 Foundations and Endowments $569 Million5 Public Pension Plans4 Corporate Pension Plans4 High Net Worth Groups2 Foreign Investors1 Taft-Hartley

SECTION 2: Investment Process

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INVESCO Core Real Estate-U.S.A.

Core real estate strategyDiversified portfolio of institutional quality properties30% maximum leverage

PORTFOLIO STRATEGY

Exceed NCREIF over 3 and 5 year rolling basis

Objective:

Property TypeAllocation

Market (MSA)Allocation

PropertySpecific

Selection

Execution of Property Business Plan

Long-term property type strategic ranges

Overweight-industrialand multi-familyEqual weight-retailUnderweight-office

INVESCO Qualified Market Rankings

On the Ground Real Estate Expertise and Market Coverage

SECTION 3: INVESCO Core Real Estate–U.S.A. (“ICRE”)

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INVESCO Core Real Estate-U.S.A.PORTFOLIO SUMMARY

•43 investments•Size range from $6.6 million to $115 million

•Portfolio Occupancy = 93%•Cash =2.3% of NAV

•Debt to total fund assets = 25%2

•Weighted average interest rate is 5.7%

Gross Asset Value $1,336,920,000

Leverage & Liabilities 364,510,0001

Net Asset Value $972,410,000

1 $249,618,000 – market value of permanent debt$ 79,000,000 – short-term line of credit$ 35,892,000 – other liabilities

2 19% without line of credit

06/30/06

Source: INVESCO Real Estate Accounting, internal, unauditedresults as of 06/30/06

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Core Fund Portfolio Diversification

Property Type MixINVESCO Target RangeTarget*

* Target diversification may change based on changing market conditions.

AS OF JUNE 30, 2006

36%

15%19%

30%32%

11%

22%

35%

0%

10%

20%

30%

40%

50%

West South Midwest East

INVESCO Core Real Estate-U.S.A. @ 6/30/06NCREIF @ 6/30/06

NCREIF Region Mix

23%24%26%27%

38%

23%21%18%

0%

10%

20%

30%

40%

50%

Industrial Multi-Family Retail Office


Source: NCREIF Index as of 6/30/06

This analysis represents the Core Fund portfolio as of 6/30/06 using gross property value. Regional allocation versus NCREIF allocation is shown for informational purposed only and does not reflect an specific regional allocation decision. Information is taken from sources believed to be reliable, but accuracy cannot be guaranteed.

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ICRE – 2006 Q3 Update

Current Net Asset ValueJune 30, 2006 $ 972,410,000 18July 1, 2006 Capital Call 131,235,000 5

$1,103,645,000 23Investor Commitments

Signed $ 253,400,000 6 (new)In Documentation 165,000,000 8

$ 418,400,000 14

Fully Invested NAV 1 $1,522,045,000 37Gross Potential Fund Size 1, 2 $2,144,824,000

Net Asset Value Investors

1 At Current Valuations2 Fully Invested With Available Debt Capacity

STATUS OF ICRE AS OF JUNE 30, 2006

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$2.5 billion

$1.75 billion

$1.34 billion

0250500750

1,0001,2501,5001,7502,0002,2502,500

Core Fund Portfolio Year End 2006* Year End 2007*

INVE

SCO

Fun

d Si

ze (G

ross

Val

ue)

$ M

illion

s

Fund Business Plan

FundInvestment

Strategy

* Source: INVESCO Real Estate projections. Information is taken from sources believed to be reliable, but accuracy can not be guaranteed. All values are approximate and asset growth is estimated.

50Invest-ments

ProjectedFund

Growth

Portfolio Design– Maintain overweight to apartment and industrial– Maintain neutral weight to retail– Maintain underweight to office– Neutral weighting relative to NCREIF regions

Asset Size– Target investments in $25-100 million range

Performance– Total return to exceed NCREIF Property Index (NPI) over 3 and 5 year rolling basis– INVESCO expects to generate excess return through strategic property sector

weightings, market selection and specific property selection

(as of 06/30/06)

65Invest-ments

43Invest-ments

SECTION 4: Performance

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INVESCO Core Real Estate-U.S.A. PERFORMANCE AS OF JUNE 30, 2006

ICRE 1Year Rolling – Gross 6.87% 16.38% 24.09%

ICRE 1 Year Rolling – Net 6.16% 16.38% 23.28%

NCREIF NPI 6.43% 11.69% 18.68%

ICRE AnnualizedSince Inception (4Q04-2Q06) – Gross 7.40% 14.59% 22.79%

ICRE AnnualizedSince Inception (4Q04-2Q06) – Net 6.69% 14.59% 22.00%

NCREIF NPI 6.71% 11.66% 18.92%

Income AppreciationTotal

Return

Investment Level Returns (Leveraged)

This chart reflects the actual fund performance of the INVESCO Core Real Estate-U.S.A., LLC as of 6/30/06. The fund inception date is 9/30/04. The returns are leveraged total returns, calculated at an investment level following the Modified Dietz methodology. The net of fee returns are based on the actual fees charged to current fund investors. Future investor’s fees could differ based on the size of their investment. The highest potential fee would be 1.1% of NAV assuming a minimum investment of $5 million. Please see fund documents for more detailed information on fund fees. The NCREIF Property Index (NPI) is shown for illustrative purposes only and is not directly comparable to fund returns as it is reported on an unleveraged, property level basis.

An investor should only invest in the Fund as part of an overall investment strategy and should not construe that the performance of earlier investments by INVESCO as providing any assurances regarding the future performance of the fund. There can be no assurance that the Fund will meet its investment objective.

Investment funds are speculative and involve a high degree of risk. Real property investments are subject to varying degrees of risk including market, leasing and environmental risks; an investor could lose all or a substantial amount of its investment; there is no secondary market nor is one expected to develop for investments in the Fund; there are certain restrictions on transferring interests in the Fund; the Fund is expected to be leveraged; the Fund's performance may be volatile; and the Fund includes management fees and expenses that will reduce returns. Please review the Risk Factor section of the Private Placement Memorandum for a complete discussion.

SECTION 5: Property Sector Summary

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Sector Outlook: Overweight Relative to NCREIF

INVESCO Core Real Estate – U.S.A.

Demand tends to recover early in economic cycle

Additional improvement in industrial utilization expected

Dollar depreciation and globalizationwill help trade

Attractive supply dynamics

14 Investments – 6,035,679* sq ft – 93% Occupied

Excellent mix of bulk distribution and office/warehouseproduct in major national and regional distribution markets

Functional attributes appropriate for the particular market

Solid line-up of regional and national tenants

Industrial Core Fund Portfolio

INDUSTRIAL PORTFOLIO

INVESCO Target RangeTarget*

27%

18%

0%

10%

20%

30%

40%

50%



Baltimore, MD

Hayward, CA* Includes non-consolidated joint venture–ICRE’s 50% share in the VIP Holdings I Portfolio. Square footage included in the total industrial portfolio represents the Fund’s proportionate share in this investment. Data as of 6/30/06.

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Sector Outlook: Overweight Relative to NCREIF


Multi-Family Core Fund Portfolio

MULTI-FAMILY PORTFOLIO

11 Investments – 7,143* units – 94% Occupied

Excellent locations near major employment centers

Good mix of “A” and “B+” product with competitive attributes and amenities and no major deferred maintenance or capital issues

Good current income with opportunity for significant effective rent growth as market concessions decline

Recovering job markets will increase demand

Rising interest rates will increase demand capture

Favorable long-term demographics

Austin, TX

26%

21%

0%

10%

20%

30%

40%

50%




Upland, CA* Includes non-consolidated joint venture–ICRE’s 25% share in the Milestone Apartment Portfolio. Number of units included in the total units represents the Fund’s proportionate share in this investment. Data as of 6/30/06.

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Sector Outlook: Neutral Weight Relative to NCREIF


Retail Core Fund Portfolio

RETAIL PORTFOLIO


24% 23%

0%

10%

20%

30%

40%

50%



10 Investments – 1,292,290 sq ft – 97% Occupied

Neighborhood shopping centers with dominant grocers: Publix, Super Stop & Shop, Harris Teeter, Kroger and Safeway

“A” location power centers with strong national credit tenants including Bed Bath & Beyond, Borders Books and TJ Maxx

Chicago, IL

Expect continued stable income-oriented returns

Limited appreciation potential

Capital market demand will increasevalue of current holdings

Attractive supply dynamics

San Francisco, CA

Data as of 6/30/06.

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Boca Raton, FL

Sector Outlook: Underweight Relative to NCREIF


Office Core Fund Portfolio

OFFICE PORTFOLIO

Low market occupancies suggest delayed rent recovery

Slow recovery in demand due to modest initialjob growth and excess space

Most volatile product type

7 Investments – 1,267,439 sq ft – 87% Occupied

Mid-size suburban and urban buildings in “A” locations

All in major employment centers well positioned to capture jobs as the economy improves

Good mix of strong national and regional tenants


23%

38%

0%

10%

20%

30%

40%

50%



Boston, MA

Data as of 6/30/06.

SECTION 6: Portfolio Activity

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Property LocationProperty

TypeClosing Quarter Equity Debt

10 Year Unleveraged

IRR*

Closed Transactions55 Cambridge Pkwy. Boston, MA Office 1Q06 115,045,595$ 62,030,032$ 53,551,074$ 8.66%VIP Holdings II - Remington Lake Chicago, IL Industrial 1Q06 5,980,688$ 2,724,203$ 3,256,485$ 8.90%Broadstone Foothills Upland, CA Apartment 1Q06 33,055,000$ 33,055,000$ 7.46%The Beacon San Francisco, CA Retail / Parking 1Q06 64,518,462$ 64,518,462$ 8.90%Lenox Distribution Lenexa, KS Industrial 1Q06 9,190,000$ 9,190,000$ 7.95%Oakesdale Commerce Center Seattle, WA Industrial 1Q06 37,381,522$ 37,381,522$ 7.37%

Total 1Q06 (Weighted Avg.) 265,171,267$ 208,899,219$ 56,807,559$ 8.37%

VIP Holdings I - A** Chicago, IL Industrial 2Q06 22,061,931$ 22,061,931$ 8.44%VIP Holdings I - B (1st Portion)** Chicago, IL Industrial 2Q06 9,400,000$ 9,400,000$ 7.41%Patuxent & Larkin Jessup, MD Industrial 2Q06 30,026,619$ 30,026,619$ 8.30%VIP Holdings II - W.Chicago West Chicago, IL Industrial 2Q06 8,593,561$ 3,876,183$ 4,717,378$ 8.72%VIP Holdings II - Mourek-Elmhurs Elmhurst, IL Industrial 2Q06 12,746,787$ 5,774,403$ 6,972,384$ 8.89%VIP Holdings II - Mokena Xing Mokena, IL Industrial 2Q06 11,584,688$ 5,209,688$ 6,375,000$ 8.97%Milestone Apartment Portfolio** Various Apartment 2Q06 70,425,000$ 70,425,000$ 9.34%

Total 2Q06 (Weighted Avg.) 164,838,586$ 146,773,824$ 18,064,762$ 8.83%

Total (Weighted Avg.) 430,009,853$ # 355,673,043$ 74,872,321$ 8.54%

Pending Transactions*VIP Holdings I - B (2nd Portion)** Chicago, IL Industrial 2Q06 8,400,000$ 8,400,000$ 7.41%Docks Corner - Land South Brunswick, NJ Industrial 2Q06 9,425,000$ 9,425,000$ 9.29%Folcroft Business Center Folcroft, PA Industrial 2Q06 8,305,349$ 8,305,349$ 7.29%

Total (Weighted Avg.) 26,130,349$ 26,130,349$ -$ 8.05%

TOTAL 2006 (Weighted Avg.) 456,140,202$ 381,803,392$ 74,336,810$ 8.52%

* Projected**Non-Consolidated Joint Venture - equity only is carried on books

Property LocationProperty

TypeClosing Quarter Previous Carry Value

Percentage Gained

Closed SalesLegacy Dunes Kissimmee, FL Apt 2Q06 75,000,000$ 61,000,000$ 23%

Gross Sales Price

Gross Acquisition Price

ICRE Closed & Pending TransactionsSTATUS AS OF JUNE 30, 2006

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Acquisition (Closed 6/13/06)

Off-market transaction

Favorable basis ($54,000/unit) relative to new construction ($90,000/unit +)

Experienced operating partner

Favorable fundamentals in all markets

Buying at market-cycle trough rents

Strong “same store” occupancy history

Multiple options for incremental revenue creation via unit upgrades, additional amenities, etc.

Portfolio allows for numerous exit strategies

ICRE Acquisition – Milestone Apartment Portfolio

ICRE Co-Investment with other INVESCO clients

ICRE has a 25% share in the portfolio

$70.4 MM initial investment - $75 MM total commitment

Income-oriented value-added strategy

93% portfolio occupancy

6.38% unleveraged going in cap rate

9.34% projected 10-year IRR (unleveraged)

10 METROPOLITAN CITIES IN 6 STATES

Dallas

HoustonSan Antonio

Austin

Nashville

Atlanta

Jacksonville

Tampa

Phoenix

Salt Lake City

2

319

1523

4

3

3

3

Dallas

HoustonSan Antonio

Austin

Nashville

Atlanta

Jacksonville

Tampa

Phoenix

Salt Lake City

2

319

1523

4

3

3

3

Salt Lake City, UT

Source: INVESCO Real Estate (as of 6/30/06)

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Acquisition (Various Closing Dates)

•VIP Holdings I– 50/50 JV– Recap of existing portfolio

•VIP Holdings II– 75/25 ICRE/VIP Acquisition JV– Five properties to-date– Additional acquisitions will

be made

ICRE Acquisition – VIP Industrial Portfolios

VIP Holdings I (Existing Properties)• 2.4 MM SF – 46 properties• 96% occupied• 55% LTV• $164.5 MM – gross• $38.9 MM – net, ICRE equity• 6.86% going-in unleveraged cap• 8.44% unleveraged IRR

VIP Holdings II (Acquisition JV)• 4 Properties acquired to-date totaling

602,000 square feet• 75/25 ICRE/VIP• 55% LTV

CHICAGO, IL

In-fill multi-tenant industrial strategy in key national industrial market

Joint Venture(s) with experienced Chicago industrial firm

Product allows potential for strong rent growth from stable tenant base

Formulation of two Joint Ventures:


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ICRE Acquisition – Patuxent & Larkin IndustrialJESSUP (BALTIMORE/WASHINGTON), MD


$30 MM Total Investment

62% occupied

8.30% projected IRR (unleveraged)-10 year

6.86% stabilized cap rate

Patuxent

Larkin

Three highly functional multi-tenant distribution buildings totaling 429,100 square feet in an “A”location in the Baltimore/Washington Corridor industrial market

Strong market fundamentals (93% occupancy in the submarket), combined with the functionality and location of the product should allow rapid lease up from the initial 62% occupancy

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ICRE Acquisition – The Beacon Retail & Parking

$64.5 MM Total Investment

82% occupied


6.31% stabilized cap rate

SAN FRANCISCO, CA

Class-A grocery-anchored community shopping center plus structured parking in downtown San Francisco

84,776 SF of retail – anchors include Safeway and Borders, which represent 68% of the GLA

951 contiguous structured parking spaces

Excellent visibility and located across from AT&T Park (Giants), as well as access to public transit and freeways

Submarket has significant residential and commercial growth

The Beacon


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Dominant Class-A Office Building located directly on the Charles River

Excellent Location with Outstanding Views of Boston, Amenities and Access including Public Transit.

Solid Credit Rent Roll with In-place Rents Below Market

Functional Design with 275,968 square feet and Structured Parking

ICRE Acquisition – 55 Cambridge Parkway

$115.0 MM Total Investment

$62.0 MM Equity Investment

$53.6 MM Assumed Debt

94% Leased


9.87% projected IRR (leveraged)-10 year

6.29% going-in cap rate (unleveraged)

CAMBRIDGE (BOSTON), MA



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ICRE Quarterly Property Portfolio SummaryAS OF JUNE 30, 2006

1 Majority controlled joint venture

2 Non-consolidated joint venture represents ICRE’s 50% share in the portfolio investment. Square footage and market value represent the Fund’s proportionate share.

3 Non-consolidated joint venture represents ICRE’s 25% share in the portfolio investment. Number of units and market value represent the Fund’s proportionate share.

Asset City/State Sq. Ft. Leased Market Value

Value % of

Portfolio Value/SF

25 & 27 Otis Westborough, MA 214,175 90.7% 15,000,000 1.1% $70.04400& 625 Pierce Franklin Township, NJ 277,949 72.1% 17,800,000 1.4% $64.04Arjons San Diego, CA 244,400 100.0% 25,595,399 2.0% $104.73Garland Gateway Garland, TX 223,569 100.0% 8,400,000 0.6% $37.57Gateway Business Park Coppell, TX 150,099 100.0% 8,900,000 0.7% $59.29Hayward Industrial Hayward, CA 691,026 97.3% 47,403,591 3.6% $68.60Irving Warehouse Irving, TX 210,000 100.0% 8,350,000 0.6% $39.76Lackman Lenexa, KS 421,991 100.0% 20,500,000 1.6% $48.58Auburn Warehouse Auburn, WA 896,827 100.0% 54,111,513 4.1% $60.34VIP Holdings II1 Chicago, IL 602,403 95.7% 44,225,542 3.4% $73.42Crossroads Industrial Lenexa, KS 175,014 65.7% 9,145,779 0.7% $52.26Oakesdale Commerce Ctr Renton, WA 314,699 92.7% 36,637,788 2.8% $116.42Patuxent & Larkin Industrial Jessup, MD 429,100 61.6% 28,930,886 2.2% $67.42

Wholly & Majority Owned Industrial Portfolio 4,851,252 92.0% $325,000,498 24.9% $66.99VIP Holdings2 Chicago, IL 1,184,427 95.4% 31,611,527 2.4% $66.16

Total Industrial Portfolio 6,035,679 92.6% 356,612,025 27.3% $66.72

300 Crown Colony Quincy, MA 116,652 96.2% 18,649,779 1.4% $159.88Boca Corporate Boca Raton, FL 89,503 95.2% 21,000,000 1.6% $234.63Highland Bank Bloomington, MN 54,769 88.3% 8,046,205 0.6% $146.91Pacific Corporate Bellevue, WA 84,037 82.2% 18,425,000 1.4% $219.25Somerset Court Waltham, MA 67,743 96.2% 9,345,563 0.7% $137.96Meadows Office Complex Rutherford, NJ 578,767 80.3% 106,800,000 8.2% $184.5355 Cambridge Parkway Cambridge, MA 275,968 93.5% 113,495,686 8.7% $411.26

Office Portfolio 1,267,439 87.0% $295,762,233 22.7% $233.35

Broadway at Surf Chicago, IL 134,223 100.0% 33,910,809 2.6% $252.65Carriagetown Marketplace Amesbury, MA 96,540 98.8% 21,512,021 1.6% $222.83Chandler Pavilion Chandler, AZ 163,551 100.0% 24,000,000 1.8% $146.74Matthews Township Matthews, NC 128,651 100.0% 21,100,000 1.6% $164.01Ramblewood Coral Springs, Fl 143,236 88.7% 26,135,975 2.0% $182.47Windward Commons Alpharetta, GA 117,234 98.8% 21,800,000 1.7% $185.95Summit Heights Fontana, CA 197,391 97.7% 31,842,154 2.4% $161.32Cityline at Tenley Washington, DC 86,270 100.0% 45,946,185 3.5% $532.59Ridgehaven Shopping Center Minnetonka, MN 140,418 100.0% 29,305,311 2.2% $208.70The Beacon San Francisco, CA 63,822,264 4.9%

The Beacon Retail San Francisco, CA 84,776 81.6% 42,877,538 3.3% $505.77The Beacon Garage (units) San Francisco, CA 951 20,944,726 1.6% $22,024

Retail Portfolio 1,292,290 97.0% $319,374,719 24.5% $247.14

Asset City/State# UnitsSq. Ft. Leased Market Value

Value % of

PortfolioValue/Unit Value/SF

Autumn Woods Carrboro, NC 236 95.3% 20,548,485 1.6% $87,070Boca Colony Boca Raton, FL 180 99.4% 22,000,000 1.7% $122,222Charleston @ Blue Ash Blue Ash, OH 242 98.4% 21,875,468 1.7% $90,394Cross Creek Grapevine, TX 392 100.0% 29,897,654 2.3% $76,270Seneca Village Hillsboro, OR 264 98.0% 27,700,000 2.1% $104,924Waterhouse Place Beaverton, OR 279 92.8% 23,907,267 1.8% $85,689GrandeVille at the Commons South Kingstown, RI 234 96.0% 46,095,925 3.5% $196,991Village Place1 West Palm Beach, FL 202 93.1% 18,109,474 1.4% $89,651Vinings at Palm Bay1 Palm Bay, FL 320 96.6% 19,893,035 1.5% $62,166Broadstone Foothills Upland, CA 128 87.5% 33,035,160 2.5% $258,087

2,477 96.3% $263,062,468 20.2% $106,202Milestone Apt Portfolio3 Various Southern States 4,666 93.4% 70,548,250 5.4% $54,250

Total Apartment Portfolio 7,143 94.4% $333,610,718 25.6% $58,952

Wholly & Majority Owned Portfolio 9,828,477 93.0% $1,203,199,918

Total Portfolio 14,730,702 93.3% $1,305,359,695

Wholly & Majority Owned Apartment Portfolio

Appendix

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INVESCO Core Real Estate–U.S.A., LLC

Core Real Estate (Multi-Family, Retail, Industrial, Office)

Major metropolitan areas within the United States

Maximum of 30% loan-to-value

A Delaware limited liability company; open-ended with quarterly liquidity

Public Pension Funds, Corporate Pension Funds, Jointly Trusteed Benefit Plans, Foundations, Endowments, Banks, Insurance Companies, Charitable Trusts, High Net Worth Individuals and Foreign Investors

$5,000,000

For investors whose subscription is:Greater than $25 million – 0.9% of NAV$15 million to $25 million – 1.0% of NAV$0 million to $15 million – 1.1% of NAV

InvestmentStrategy:

GeographicFocus:

Leverage:

Structure:

EligibleInvestors:

MinimumInvestment:

InvestmentManagement

Fee:*

* Please see PPM for a more complete description of fees.

TERMS

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Integrated Strategy Process – A Team Approach

Property Type Investment Strategies

Locational & Physical Criteria

Regional Team Members - Acquisitions- Market Research- Property Research- Asset Management

Recommend Addition/Deletions to Qualified Market List

Rate Markets & Recommend Market/Property Combinations ForTarget Markets

Investment Strategy Committee

Investment Committee

SouthRegional Team

WestRegional Team

OfficeSpecialists

RetailSpecialists

EastRegional Team

MidwestRegional Team

IndustrialSpecialists

ApartmentsSpecialists

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ICRE 2005 Transactions

Closed Transactions Equity Debt

10 Year Unleveraged

IRR*

8 Transactions Totaled (Weighted Avg.) 371,509,642$ 278,855,290$ 92,654,352$ 8.22%

Gross Acquisition Price

Closed Sale Previous Carry ValuePercentage

Gained1 Transaction 44,500,000$ 26,000,000$ 71%

Gross Sales Price

* Projected

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INVESCO Core Real Estate-U.S.A.

Core real estate strategyDiversified portfolio of institutional quality properties30% maximum leverage

PORTFOLIO STRATEGY

Exceed NCREIF over 3 and 5 year rolling basis

Objective:

Property TypeAllocation


PropertySpecific

Selection

Execution of Property Business Plan

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INVESCO Core Real Estate-U.S.A.PORTFOLIO STRATEGY

Property TypeAllocation Step 1

Source: NCREIF, INVESCO Real Estate (4/06). This chart is intended for illustrative purposes only. It compares the returns of the four real estate sectors that are the primary focus of INVESCO Real Estate’s investment strategy. Data is shown on a rolling five year basis going back over twenty years to capture several real estate market cycles. All data is provided by NCREIF. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate, or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing.

38%

23%20%19%

0%

10%

20%

30%

40%

50%


NCREIF @ 3/31/06INVESCO Target RangeTarget *

Long-term property type strategic rangesOverweight-industrialand multi-familyEqual weight-retailUnderweight-office

Tactical Targets–based on current market cycle

* Target diversification may change based on changing market conditions.

9.4%Office11.4%Industrial11.7%NPI12.4%Apartments16.3%Retail01-1Q069.1%Office11.2%Industrial11.4%NPI12.2%Apartments16.0%Retail00-058.1%Office9.9%NPI10.0%Industrial10.6%Apartments13.5%Retail99-048.1%Office9.3%NPI10.0%Industrial10.3%Apartments10.9%Retail98-03

Worse Performing SectorBest Performing Sector

10.1%Retail10.7%NPI10.8%Office11.4%Apartments11.5%Industrial97-029.1%Retail12.2%NPI12.2%Apartments13.3%Industrial13.9%Office96-018.7%Retail12.7%Apartments12.8%NPI14.2%Industrial15.4%Office95-007.9%Retail11.8%NPI12.4%Apartments13.9%Industrial14.0%Office94-997.2%Retail10.8%NPI12.3%Office12.5%Apartments13.0%Industrial93-985.6%Retail7.4%Office7.8%NPI9.6%Industrial11.4%Apartments92-972.2%Office3.4%Retail4.1%NPI5.4%Industrial9.1%Apartments91-96

-2.7%Office0.9%NPI2.0%Industrial2.1%Retail6.4%Apartments90-95-4.3%Office-0.1%NPI0.0%Industrial2.5%Retail5.3%Apartments89-94-4.2%Office0.2%NPI0.2%Industrial3.7%Retail4.7%Apartments88-93-2.3%Office1.8%NPI2.3%Industrial5.0%Apartments5.6%Retail87-920.1%Office4.3%NPI5.2%Industrial6.0%Apartments8.6%Retail86-913.7%Office7.2%NPI7.8%Apartments7.8%Industrial11.6%Retail85-905.8%Office8.9%Apartments9.0%NPI9.9%Industrial13.3%Retail84-897.4%Office9.8%Apartments10.2%NPI10.8%Industrial14.2%Retail83-888.7%Office10.9%NPI11.4%Industrial11.4%Apartments14.0%Retail82-879.9%Office11.2%NPI11.4%Industrial12.9%Retail13.2%Apartments81-86

12.6%Retail12.8%Office12.8%NPI13.1%Industrial14.6%Apartments80-8512.3%Retail13.9%Industrial14.2%NPI16.0%Apartments16.1%Office79-8411.2%Retail15.0%Industrial15.5%NPI17.5%Office19.6%Apartments78-8310.6%Retail15.3%Industrial16.1%NPI19.2%Apartments19.3%Office77-82

9.4%Office11.4%Industrial11.7%NPI12.4%Apartments16.3%Retail01-1Q069.1%Office11.2%Industrial11.4%NPI12.2%Apartments16.0%Retail00-058.1%Office9.9%NPI10.0%Industrial10.6%Apartments13.5%Retail99-048.1%Office9.3%NPI10.0%Industrial10.3%Apartments10.9%Retail98-03

Worse Performing SectorBest Performing Sector

10.1%Retail10.7%NPI10.8%Office11.4%Apartments11.5%Industrial97-029.1%Retail12.2%NPI12.2%Apartments13.3%Industrial13.9%Office96-018.7%Retail12.7%Apartments12.8%NPI14.2%Industrial15.4%Office95-007.9%Retail11.8%NPI12.4%Apartments13.9%Industrial14.0%Office94-997.2%Retail10.8%NPI12.3%Office12.5%Apartments13.0%Industrial93-985.6%Retail7.4%Office7.8%NPI9.6%Industrial11.4%Apartments92-972.2%Office3.4%Retail4.1%NPI5.4%Industrial9.1%Apartments91-96

-2.7%Office0.9%NPI2.0%Industrial2.1%Retail6.4%Apartments90-95-4.3%Office-0.1%NPI0.0%Industrial2.5%Retail5.3%Apartments89-94-4.2%Office0.2%NPI0.2%Industrial3.7%Retail4.7%Apartments88-93-2.3%Office1.8%NPI2.3%Industrial5.0%Apartments5.6%Retail87-920.1%Office4.3%NPI5.2%Industrial6.0%Apartments8.6%Retail86-913.7%Office7.2%NPI7.8%Apartments7.8%Industrial11.6%Retail85-905.8%Office8.9%Apartments9.0%NPI9.9%Industrial13.3%Retail84-897.4%Office9.8%Apartments10.2%NPI10.8%Industrial14.2%Retail83-888.7%Office10.9%NPI11.4%Industrial11.4%Apartments14.0%Retail82-879.9%Office11.2%NPI11.4%Industrial12.9%Retail13.2%Apartments81-86

12.6%Retail12.8%Office12.8%NPI13.1%Industrial14.6%Apartments80-8512.3%Retail13.9%Industrial14.2%NPI16.0%Apartments16.1%Office79-8411.2%Retail15.0%Industrial15.5%NPI17.5%Office19.6%Apartments78-8310.6%Retail15.3%Industrial16.1%NPI19.2%Apartments19.3%Office77-82

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INVESCO Qualified Market Rankings

Step 2

Industrial Tier Ratings

Multi-Family Tier Ratings

Retail Qualified Markets*

Office Tier Ratings

San Francisco

Source: INVESCO Real Estate Research

* Beginning Spring ‘05, Retail Markets are no longer being ranked/rated. This is a list of Qualified Markets.

Philadelphia

Fort LauderdaleTampa

San Diego

RaleighPhoenix

Minneapolis

Los Angeles

Atlanta

Washington DC

Charlotte

Chicago

Denver

No. New Jersey

Seattle

HoustonAustin

Boston

Miami

New York

Orange County

OaklandSan Jose

West Palm Beach

Dallas

San Francisco

No. New JerseySan

Francisco

Miami

Philadelphia

Fort Lauderdale

San Diego

Portland

Phoenix

Minneapolis

Los Angeles

Atlanta

Washington DC

Kansas City

Chicago

Baltimore

Ft. Worth

Denver

No. New Jersey

Seattle

Houston

Boston

Orange County Riverside

OaklandSan Jose

Dallas

New York

Miami

Philadelphia


San Diego

Orlando

Raleigh

Sacramento

Portland

Phoenix

Minneapolis

Los Angeles

Atlanta

Washington DC

Kansas City

Charlotte

Chicago

Baltimore

Ft. Worth

DenverNo. New Jersey

Seattle

Houston Jacksonville

New York

Orange County

OaklandSan Jose

Hartford

West Palm Beach

Dallas

San Antonio

Riverside

Boston

Austin

Riverside

Philadelphia


San Diego

Orlando

Portland

Phoenix

Minneapolis

Los Angeles Atlanta

Washington DCCharlotte

Chicago

Baltimore

Dallas/Ft. Worth

Denver

Seattle

HoustonAustin

New York

Orange County

Oakland

San Jose

West Palm Beach

Raleigh

Sacramento

Jacksonville

Miami

Boston

Tier 3

Tier 1Tier 4

Market Outlook

Curre

ntMa

rket C

ondit

ions

Wea

k

Weak Strong

Stro

ng Tier 2 Tier 3

Tier 1Tier 4

Wea

kSt

ron

g Tier 2

-35-


PropertySpecific

Selection

On the Ground Real Estate Expertise

and Market Coverage

Step 3

Qualified Markets

WA MT

WYIDOR

NV UT

N.CA

CO

AZ NM

S.CA

SanFrancisco

OrangeCounty

ND

SD

IA

MN

KS

NE

MO

WIMI

IL IN OH

KY

ME

NYVT

NHMA

RIPA

DED.C.

WV VANC

SC

New York

Atlanta

OK AR

LATX

TN

GAALMS

Dallas

Data as of 07/01/06

Acquisitions: Market Research:Steve Eckstein Nick BussBrad TakalaPaul Nelson(Value-Added) Underwriting:

Whitney FarleyAsset Management: Dan Kubiak

Bill Brown Jed MelsonDave Laner Mike Mauren

Darin Turner

Midwest

Acquisitions: Market Research:Steve Eckstein Sara RutledgeMike TyrePaul Nelson (Value-Added)Paul PesztChris Cole

Asset Management: Underwriting:Duncan Walker Whitney FarleyKevin Johnson Dan KubiakTom Hurst Mike Mauren

Darin Turner

WestAcquisitions: Market Research:John Blaylock Nick BussChris SchmidtBrad TakalaPaul Nelson (Value-Added)

Asset Management: Underwriting:David Bass John KiernanKen Kaminski Dan KubiakCain Kirk Mike MaurenDave Laner Jed Melson

Cheryl RuffDarin Turner

East

Acquisitions: Market Research:Steve Eckstein Mike SobolikChris SchmidtPaul Nelson (Value-Added)

Asset Management: Underwriting:Bill Brown Mike MaurenTerrell Boiko Whitney FarleySteve Harrell Dan KubiakCain Kirk Cheryl RuffSally Kittles Darin Turner

South

Personnel listed are employed by INVESCO Real Estate and provide these areas of coverage on behalf of all real estate clients.

MDNJ

FL

CT

-36-


Execution of PropertyBusiness Plan

Step 4Portfolio Portfolio

ManagementManagement

ResearchResearchAsset Asset

ManagementManagement

Acquisitions/Acquisitions/DispositionsDispositions

INVESCO Real Estate INVESCO Core Real Estate–U.S.A. · 2006-07-28 · -9-INVESCO Core Real Estate-U.S.A. PORTFOLIO SUMMARY •43 investments •Size range from $6.6 million to $115

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