IGW REIT VALUE REBOUNDS!

Tuesday, December 01, 2009

Greetings Member-Partners of the IGW REIT,

I am extremely pleased to report that the independent appraisal firm, Colliers International Realty Advisors, affirms (click to download pdf) that as of November 30, 2009, the unit values for the traditional Class A and AA IGW REIT units increased from $0.975 to $0.996 per unit, a rise of 2.15%. The distribution remains unchanged at 7.25 cents per unit per annum.

Having independent appraisers not only verify the value of the assets, but -- more significantly -- the unit values themselves, is what sets League apart as "leaders, not followers". Moreover, this is in-line with the 17th tenet of Our Credo: "We believe that as leaders in the investment community we must operate our business affairs with transparency and in the light of accurate knowledge..."

I am thrilled to be able to give you this news as it ends a most challenging chapter of League's history. Our management is optimistic that this is a sign of better things to come (more on this below).

Also of note, effective today, the current issuance of the IGW REIT's tax-efficient IPUnits are available for purchase in one-year, three-year and five-year terms, with current yields of 6.o%, 7.0% and 8.5% respectively. I trust you will give them due consideration as part of your family's investment portfolio.

Analysis and Review:
The increase in unit value reflects the extraordinary efforts of our development and management teams. In the course of this valuation, many of the IGW REIT's properties experienced increases in value.

This most welcome return to higher unit values is made possible by several factors. First, as mentioned, I would like to single out the efforts of our development and management teams, who worked tirelessly to mitigate and offset the downward pressure on values and conserve cash. It was their efforts that enabled distribution levels to be maintained as long as they were. My heartfelt thanks and congratulations to them.

Secondly, in order to reposition the REIT for future growth, last quarter we made the painful decision to adjust distribution levels. We felt that this short-term pain was well worth the long-term gain. Along with my partner Adam Gant, our executive team and everyone at League, I am particularly gratified that you, our Member-Partners, chose to stand together with us. In banding together during this time, we exemplified all that is best in League and what we affirm in the 12th tenet of our shared Credo:

"We believe that Member-Partnership and friendship with our investors brings incalculable rewards to us all. By inviting new friends to become members with us in League, and in turn partnering with them and reinvesting our capital alongside theirs, our interests are always aligned..."

This indeed is what I like best about League: being surrounded by like-minded friends and partners, all united by the same goals and aspirations. United we stand, indeed!

The final factor, of course, is the gradual improvement in the global economy. The optimism felt by Adam and me is shared by others as well. In a recent article in the Globe and Mail, a senior executive at Cisco Systems, a company well-known for its economic analysis, stated that the worst of the financial crisis was over. Another indicator of a strengthening economy is that after three consecutive quarters of decline, profits for Canadian businesses increased an average of 7.9% in the third quarter of this year. And although tighter credit has become the "new normal," there have been a number of signs that it is easing, which of course is very helpful to League.

We are further heartened by the news that, according to a report released yesterday by Statistics Canada, Canada's economy grew for the first time in four quarters in the July-through-September period, signaling the country's first recession since 1992 has ended.  Gross domestic product also expanded at a 0.4 percent annualized rate in the third quarter.

Even More Good News!
As I mentioned earlier, thanks to the efforts of our leasing and development teams we've been able to sign several new tenants at our properties in British Columbia in the past quarter:

Cineplex Odeon and Wal-Mart have signed on as anchor tenants at our Eagle Landing retail development in Chilliwack (more news at: http://www.marketwire.com/press-release/League-Assets-Corp-1057352.html). In the Duncan Mall in the Cowichan Valley, we've renewed the lease for the Great Canadian Superstore for another five years, while at the Tyee Plaza, in Campbell River, we've attracted a new 2800-square-foot pet store and the popular photo retail store is expanding by an additional 2800 square-feet.

All this leasing activity certainly qualifies as good news! It not only shows up as increased unit values, but serves as another indicator that the Canadian economy is in turnaround mode.

I close this letter with a deep sense of gratitude towards all those who have made this good news possible -- especially you, our fellow Member-Partners. We have come through the recent tough times together and our mettle has been truly tested. It is only because we stand together and live the principles espoused in Our Credo that we continue to make these things possible.

We at League are proud to have you all as faithful friends and valued Member-Partners.

Warmly and sincerely,

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"There is only one success:
to be able to spend your life in your own way."
-- Christopher Morley --
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