NYC's increase in rental rates fuels other markets.

Historically, over the last 25 years, the catalyst that has brought "muscle" to both the Fairfield and Westchester class "A" and "B" office markets have primarily been fueled by large block and mid-sized relocations from Manhattan.

There are three easily identifiable components that will be responsible for imminent backfilling, and future absorption of the presently vacant class "A" and "B" office space within the Westchester and Fairfield Commercial Corridors.

The first and foremost is Manhattan's recent increase in the effectuated rental rates throughout the market with the exception of the downtown environs.

The second, being the decrease in the extended contribution workletter contribution and a reduction of present rental concessions being offered by NYC landlords.

Lastly, there has been a significant increase in both the recasting and renewal of existing "Large Block" to "Mid-Size tenancies" in Manhattan, primarily due to tenant's anticipating the present and immanent escalating rental rates within the Mid-Town and Mid-Town South markets. Both Westchester and Fairfield

Counties have shown minimal volatility in their overall vacancy rate. Most interesting, is that both markets have shown no greater then a 2% fluctuation in its occupancy level of over 3,000 buildings exceeding 25,000 sq. ft., and comprising approximately 120,000,000 million sq. ft., with the exception of the Central White Plains Business District.

Presently, Westchester's overall vacancy rate which comprises approximately 48,000,000 million square feet of office space is at approximately a 12% vacancy rate, with our Central Business District of Downtown White Plains hovering at 14% or so, down from its highest level in the second quarter of 2002 which neared 21%.

At present, Fairfield County, with over 70,000,000 feet of office space reflects close to a 15% vacancy rate, while Stamford's Central Business District is at its two (2) year high of approximately 14% to 14.5% since the 4th quarter of 2003. The greatest constant over the last two years has been reflected in the sublease or second tier space market. Both counties have shown less than a 1% to 1 1/2% movement, with Fairfield presently at approximately 3% to 3.5%, and Westchester at approximately 2%.

While there has been minimal major large block New York City relocations over the last two (2) years, over 200,000 sq. ft. with the exceptions of New York Life Company and the Morgan Stanley relocation, there has been substantial internal growth within our markets, by firms such as Diageo in Stamford, recently taking over 36,000 sq. ft. at 400 Atlantic Street, Starwood's expansion, in White Plains of over 64,000 sq. ft. at 1133 Westchester Avenue, General Motor's move to 1 Pepsi Way in Somers from Purchase for over 44,000 sq. ft., Supresta, an affiliate of Ripplewoods recent signing for 45,000 sq. ft. at 410-444 Saw Mill River Road at the former Ciba Geigy Facility in Ardsley, and Nokia's impending relocation over 102,000 sq. ft. to 102 Corporate Park Drive in White Plains.

Additionally, we have also seen the Manhattan relocation of Triarc at the newly acquired 560,000 sq. ft. 800 Westchester Avenue building, formerly the Atria Headquarters, with additional recent lease signings at the buildings of Regional News Network for 18,000 sq. ft., and Illy Cafe of North America for 14,000 sq. ft, which will definitely have a positive reduction in the first quarter vacancy rate figures in both markets.

At present, there is a great deal of activity in both counties in the incubation stages, or set to close.

As the NYC market continues to show a strong resurgence, and the effectuated rental rates continue to escalate, with the only presently weak sector being the downtown area, my prediction is that Westchester and Fairfield can anticipate one of its greatest absorption periods since the early 80s.

SCOTT H. BENSON

PRESIDENT

BENSON COMMERCIAL REALTY, INC.