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Falcon Completes Lease Renewal and
Re-finance of Federal Express Facility

Falcon Real Estate has successfully completed a 10 year lease renewal with the Federal Express Corporation for a 118,000 square foot distribution building located in Los Angeles, California. The property is situated near the Los Angeles International Airport and has been occupied by Federal Express since 1997 when the facility was constructed for their use. The starting annual base rent for the new lease is $11.40 per square foot. This equates to a rent increase of more than 12% over the most recent rent paid by the tenant. The new lease includes a base rent increase of over 10.5% at the mid-point of the lease term.

In conjunction with the 10-year lease renewal, Falcon also successfully negotiated and closed on a $14.2 million mortgage loan re-finance of the property with Allstate Insurance. The new loan has a term of 11 years and a fixed interest rate of 5.77%. Proceeds from the new mortgage loan were used to payoff the existing loan totaling about $6.8 million. The owner of this property will use the excess loan proceeds of almost $6.7 million to acquire additional commercial real estate.

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Announcements
July 2007