Highlights of this letter:
- IGW REIT to undergo its first complete portfolio reappraisal
- Time running out for the 8.5% and 9.25% Income Priority Units
- Property improvements continue
- Accountability and performance
- "Future-proofing" your Capital
Tuesday, April 14, 2009
Dear Member-Partners of IGW REIT,
It's property re-appraisal and unit re-valuation time again!
For the first time–and on an annual basis from now on–all properties in the IGW REIT portfolio will be re-valued and the Pricing Net Asset Value determined by third-party appraisers. As with our previous quarterly re-valuations, any change will be reflected in the value of the IGW REIT units on May 1, 2009. The annual distribution is currently 10.05 cents per unit. Although this amount is also recalculated quarterly, to date the amount paid per unit has not varied from its initial value.
However, the unit value of the IGW REIT's new Income Priority Units (IPUnits), will not be affected–neither will their cash distributions. Whether you own one-year or two-year IPUnits, their value will remain the same, and your cash distribution will remain at either 8.5% or 9.25% per annum respectively.
As I mentioned in an earlier announcement, the IPUnits may not always be available at the current rates. Ever mindful of the prevailing interest rate and market conditions, it may not be feasible to continue offering IPUnits at these fixed rates–one-year @ 8.5%, two-year @ 9.25%–much longer. Accordingly, we encourage you to consider whether the time is right to invest a portion of your capital in the current series.
Property improvements continue
As you will recall from my February 01 "State of the Units" report, our asset development teams have created significant new value in many of the properties since their acquisition. This resulted in the REIT's unit value increasing commensurately and now stands at $1.117.
We are confident that the improvements made to some of our properties since our last revaluation will help offset potential decreases in other properties due to local market conditions. That said, we are not prepared to sit and wait.
Right now our development teams are working extremely hard on improvements to Rosewood Suites, Market Square Mall, and Kensington Shopping Centre in order to generate increased value of those properties–if possible, in time for the May 1 revaluation deadline. Regardless, our asset development team continuously work to generate additional value through the ongoing improvements made to the properties, and at future quarterly revaluations of the IGW REIT pool, the result of their work will be in your unit value.
Accountability and Performance
To our knowledge, League's is the only private syndicator to use a third party to determine and certify the pricing net asset value of its holdings. We're proud to provide extra levels of transparency and accountability, especially in times like these.
As of our February 1 revaluation, the IGW REIT has surpassed our total return target of 15%. The annual return for the preceding 12 months was 14.04%. The return since February 1, 2007 is 15.74%, which includes the cash distributions plus an 11.7% increase in the unit value since inception. We consider this a formidable accomplishment, especially when compared to the huge losses incurred by those whose stock market investments have tumbled recently.
Of course: past results are not an indicator of future performance. But it is at times like these that League's compensation structure stands apart from the rest. That is because our success-and remuneration-is inextricably tied to yours. Our outlook is always long-term, and we are constantly motivated to create value-no matter where the market is heading.
We are proud of the success we've achieved to date by following the first tenet of Our Credo:
"We believe in the primacy of the Golden Rule and will adhere to it in all our pursuits. In all our intentions and activities we will espouse this tenet: we will do for others, as we would have them do for us."
With this in mind, we continue to create and offer investments that fulfill your individual needs for capital appreciation, regular cash flow, or both.
The most recent example of this are the new Income Priority Units.
"Future-proofing" your investment
For those who may be fearful of fluctuations in their monthly cash flow, League has created a new investment vehicle: Income Priority Units. The IPUnit value remains static, so you'll get 100% of your capital back upon maturity, and the monthly distributions are fixed as well. So you know exactly what you're getting each month, and what you'll get back when the term is up.
If you like the idea of placing a portion of your investment capital in a fixed-term investment and receiving a tax-efficient monthly distribution-backed by brick and mortar real estate assets-you're not alone. Since the introduction of the new IPUnits-less than 30 days ago-your fellow Member-Partners have invested more than $1.5 million in them.
In summary . . .
If your sights are set on an investment targeted for superior performance over the long term, and not overly concerned about the possibility of quarterly variances in unit-price or distribution amount, the traditional IGW REIT Unit was designed with you in mind. We believe that, despite the recent economic downturn, market values of real estate will eventually rebound and continue doing what they've always done: increase and produce wealth for its owners.
Please remember this: we have never relied on the market to do the work for us. Our acquisition policy has always been to purchase properties we believe to be under-valued or have unrealized upside potential, and then set our development teams in motion to create additional value through structural improvements, adding new tenants or changing the tenant mix, and even repurposing a property so that it is always functioning at its highest and best use.
However, if you feel more comfortable with a fixed term, fixed rate, fixed value investment, the Income Priority Units were designed with investors like you in mind. Given the present environment of low interest rates and stock market volatility, the IPUnits certainly present an attractive investment option.
Whichever investment you prefer, here are some points to consider:
If you invest in either the REIT Units or IPUnits before the April 30, the first distribution payment will be deposited into your account on or before the May 21, and distributions will continue being deposited monthly until you redeem or the investment matures.
If you invest in traditional IGW REIT units and participate in the Distribution Re-Investment Program (DRIP), you have another distinct advantage: the units automatically purchased with distribution funds will be at a 3% discount. (Go to www.league.ca/pdf/DRIP_Program_Info.pdf to learn more.)
But perhaps most important of all, when you invest with League, you know that we never speculate with your capital by relying solely on what the real estate market will do. Instead, we are always hard at work creating new value by our efforts-because it is in our best interest as well as yours. That's how we're different.
To purchase IGW REIT units at the current price ($1.117), or the Income Priority Units at the one-year rate of 8.5% or two-year rate of 9.25% (while they're still available), please submit your Notice of Interest and we will send you subscription documents without delay.
As always, we hope you will continue to invite your friends and family members to join League. Rest assured they will be treated with the utmost care and respect.
If you have questions or require assistance, send an e-mail to your Member Services Manager or call 1-877-772-8836. He or she will take excellent care of you.
If there is anything else you need, just ask.
Best regards,
Emanuel.
Emanuel F. Arruda, Founding Partner
League Assets Corp.
Learn, Earn, Live, Give.™
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"Deeds, not words, build a business' reputation."
- E. A. -
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