20 Years of Success. High Road Union Jobs Solid Fund Performance. quality assets strong performance union jobs

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1 20 Years of Success quality assets strong performance union jobs AFL-CIO BUILDING INVESTMENT TRUST SEMI-ANNUAL REPORT 2008 High Road Union Jobs Solid Fund Performance AFL-CIO BUILDING INVESTMENT TRUST SEMI-ANNUAL REPORT 2009

2 THE BIT AT A GLANCE NET ASSET VALUE $2,974 $2,078 ONE YEAR GROSS RETURN 8.57% (24.49)% 3-YEAR ROLLING GROSS RETURN 14.63% (2.82)% ONE YEAR NET RETURN 7.54% (25.22)% NUMBER OF PARTICIPANTS NUMBER OF PROPERTIES OCCUPANCY, MULTIFAMILY 93% 95.4% OCCUPANCY, COMMERCIAL 93% 89.5% BIT RETURN SUMMARY 18% Quarter 1 Year 16% 16% 12% 14% 8% 12% 4% 10% 0% 8% 6% Gross 4% Gross Net 2% Net NPI 0% NFI-ODCEQuarter -7.67% -7.90% -9.03% 0.15% -0.09% 0.56% % % % 8.57% 7.54% 9.21% 3 Years 5 Years 10 Years -1.87% -2.82% -4.06% 14.63% 13.50% 14.97% 4.67% 3.65% 4.36% 12.21% 11.11% 14.73% 6.28% 5.23% 6.85% 10.35% 9.26% 12.23% Since Inception 7.35% 6.25% 6.16% 9.25% 8.13% 8.67% 1 Year 3 Years 5 Years 10 Years Since Inception PORTFOLIO DIVERSIFICATION PORTFOLIO DIVERSIFICATION Net asset value, excluding cash Net asset value, excluding cash Property Type Type 0.6% 3.5% 30.6% 17.1% 27.2% 18.1% 28.7% 23.0% 27.5% 23.7% Multifamily Retail Hotel Office Industrial Regional Property Property Size Size 39.5% 28.1% < < $20 MM 45.2% > > $50 MM 49.3% MM-$50 MM 22.6% 15.3% 13.7% 14.5% 28.4% 19.3% South East 37.1% Midwest West 40.3% 20.0% 26.7%

3 STATEMENTS OF NET ASSETS (UNAUDITED) ASSETS June 30, 2009 Real estate investments, at estimated market value: Direct equity Investments $ 1,271,181,439 Joint venture equity investments 767,025,769 Mortgage loans receivable 163,584,769 Real estate & mortgage backed securities - Total real estate investments 2,201,791,977 Cash 128,278,008 Accrued interest receivable 7,130,908 Other receivable 22,977,548 Total assets 2,360,178,441 LIABILITIES Line of credit 80,000,000 Notes payable 186,427,165 Accounts payable and accrued expenses 7,663,808 Minority interest 8,334,279 Total liabilities 282,425,252 Net assets $ 2,077,753,189 Number of units outstanding 587, Value per unit outstanding $ 3, Kinsey Robinson, President, United Union of Roofers, Waterproofers & Allied Workers (left), visits BIT s Ballard Park project in Seattle. Total development cost of the 268-unit multifamily Class A urban apartment project is $86.7 million with completion scheduled for mid 2010.

4 STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (UNAUDITED) For the six month period ended June 30, 2009 Investment income Income from mortgage loans receivable $ 9,862,632 Income from direct equity investments in real estate 35,557,951 Income from joint venture investments in real estate 27,362,379 Income from real estate & mortgage backed securities - Income from short-term investments 224,282 Other 241,618 Total investment income 73,248,862 Expenses Trustee and advisor fees 10,738,295 Interest and other operating expenses 852,588 Total expenses Net investment income 11,590,883 61,657,979 Realized and unrealized gain on real estate investments Net gain (loss) realized from real estate transactions 4,257,819 Net gain (loss) realized from securities - Change in unrealized gain on real estate investments (463,316,340) Change in unrealized gain on securities - Net realized and unrealized gain on investments (459,058,521) Net increase in net assets resulting from operations (397,400,542) Net increase in net assets resulting from participant transactions Proceeds from sale of units 5,485,010 Redemption of units (82,356,518) Net increase in net assets resulting from participant transactions (76,871,508) Total increase in net assets Net assets, beginning of period Net assets, end of period (474,272,050) 2,552,025,239 $ 2,077,753,189

5 PORTFOLIO MANAGER S COMMENTARY For the second quarter of 2009, the AFL-CIO Building Investment Trust ( BIT ) reported a gross and net return of -7.67% and -7.90%, respectively. The gross return was comprised of an income return of 1.78% and an appreciation return of -9.45%. It should be noted that both the income and depreciation figures were impacted by approximately 35 basis points primarily due to refinancing of a multifamily asset in the second quarter, which required the reclassification of returns from appreciation to income when refinancing proceeds were distributed. Gross and net returns for the one-year period ended June 30, 2009, were % and %, respectively. The BIT returns are indicative of market conditions and compare favorably to the gross returns for the NCREIF Open End Fund Index ( NFI-ODCE ) of -9.03% and % for the quarter and one-year periods ended June 30, The BIT portfolio remains modestly leveraged at 35% and the BIT s cash position is 6.2% of total net assets. The BIT portfolio remains well diversified across all major property sectors, regions, and industries.the commercial portfolio (office, industrial, and retail) remains well leased at 90%, and occupancy levels stood above national averages for all commercial property sectors.

6 Occupancy for the BIT multifamily portfolio, at 95%, exceeds the national average of 93%. The 90 properties in the BIT portfolio also produced a gross income return of 5.61% for the one-year period ended June 30, The BIT sold three properties during the first six months of 2009, including Albrecht Drive and Lakeview Distribution, two industrial properties in suburban Chicago markets, and Century Park, an office building in San Diego. Additionally, DuPage Distribution, another industrial property in suburban Chicago, was sold in early July. These four properties generated $80 million in total disposition proceeds. Two additional assets are under contract for sale with closings expected during the third quarter. All assets sold or scheduled to be sold were targeted for disposition in the BIT s 2009 Strategic Plan. The BIT made no new investment commitments during the first two quarters of 2009.

7 MARKET OUTLOOK The BIT will continued to be affected by forces impacting the commercial real estate markets including the high cost of debt combined with the lack of a viable securitization vehicle. We believe these conditions will continue through the remainder of 2009 and will keep upward pressures on debt and equity returns while also adversely impacting asset values. While supply remains manageable in most major U.S. markets, demand fundamentals are deteriorating across all property sectors, as individuals and corporations adjust to the weakening economy. Torto Wheaton reports that vacancy rates rose substantially during the second quarter across all major property sectors. National office vacancy levels increased from 14.7% to 15.5%, while industrial vacancies rose from 12.2% to 13.0% and multifamily vacancy rates increased from 6.9% to 7.3%. The BIT will continue to focus on retaining existing tenants and leasing vacant space, while carefully controlling operating and capital expenditures. The BIT has modest near-term property refinancing risk with only one third-party loan totaling $23 million maturing in It will take some time for the U.S. and global economies to recover and for the capital markets to stabilize. When commercial real estate values do stabilize, we believe significant investment opportunities will likely present themselves for wellpositioned, long-term institutional investors like the BIT. Sources: Torto Wheaton Research, REIS, Real Capital Analytics July 2009.

8 AFL-CIO BUILDING INVESTMENT TRUST PNC Bank, National Association Trustee 249 Fifth Avenue, 1 PNC Plaza Pittsburgh, PA (412) PNC Realty Investors, Inc. Investment Advisor 1601 K Street, Suite 1100 Washington, DC (202) AFL-CIO Investment Trust Corporation Marketing, Investor Relations, Labor Relations 1425 K Street, NW, Suite 900 Washington, DC (202) IMPORTANT INVESTOR NOTICE Materials, representations and opinions presented herein are those of PNC Bank, National Association ( PNC Bank ), and are of a general nature. They do not constitute the provision by PNC Bank of investment, legal, tax or accounting advice to any person or entity, or a recommendation to participate in the AFL-CIO Building Investment Trust (the BIT ). Opinions expressed herein are subject to change without notice. Information and figures, upon which the materials, representations and opinions may be based, may be obtained from independent sources deemed reliable, but have not been independently verified by PNC Bank, and their accuracy and completeness cannot be guaranteed. Past performance is no guarantee of future performance. The information is not intended to be a comprehensive description of any investment product or capability. Neither the information in this report nor any opinion expressed herein constitute an offer to buy or sell, nor a recommendation to buy or sell, any security or financial instrument or investment. Investors should consider BIT s investment objectives, risks and expenses before investing therein. Investors should consult their own advisors and investment professionals to evaluate the merits and risks of investment. Any case, ruling, law or regulation discussed should be independently reviewed in its entirety before it is relied on in any particular situation. PNC Bank is a subsidiary of The PNC Financial Services Group, Inc. ( PNC ). PNC provides investment and wealth management, fiduciary services, and FDIC-insured banking products and services and lending and borrowing of funds through its subsidiaries PNC Bank and National City Bank, Members FDIC, and provides certain fiduciary and agency services through PNC Delaware Trust Company. Investments and interests in the BIT are not FDIC-insured, are not guaranteed by PNC Bank, any of its affiliates, or any Federal Government agency, and may lose value The PNC Financial Services Group, Inc. All rights reserved.