The IGW REIT

Capital Growth Potential • Tax Efficient Passive Income • Profit Sharing • RRSP Eligible

DESCRIPTION

The IGW REIT has focused on the acquisition, improvement, refurbishment, holding and operating of well situated mid-sized urban and suburban commercial, industrial and multi-family residential properties across Canada. The portfolio is diversified by property type, tenant mix and geography. Properties are located primarily in our target markets of southern Ontario (including greater Toronto) and the metropolitan areas of greater Calgary, Edmonton, Vancouver, and Victoria.

OPPORTUNITY: TAX-EFFICIENT PASSIVE INCOME, POTENTIAL FOR CAPITAL APPRECIATION, OR BOTH

If there is one thing we’ve come to understand about our Member-Partners, it’s that no two are exactly alike. Even though they may share the same investment goals, their individual circumstances are likely to be quite different. Some investors prefer an investment structured to provide a tax efficient return, while others prefer that their distributions be continually re-invested for maximum growth. The IGW REIT’s investment structure allows all unit-holders to choose a balance between maximum distribution and maximum growth—while increasing the returns for everyone. We’ll explain how this is possible in the REIT’s Investment Overview (available from the Member’s Login Area); but for now, let’s begin with the fundamental attributes of the IGW REIT’s investment structure:

RRSP/RIF/LIRA Eligibility

The IGW REIT Units are 100% eligible as Canadian content for registered portfolios including RRSP, RESP, DPSP, LIRA. (You can view Canada Revenue Agency’s acceptance letter here: www.league.ca/pdf/IGW_RRSP_Registration.pdf.)

Additionally, we anticipate that both types of units will qualify for the IGW REIT which qualifies for the Canada Revenue Agency’s Tax-Free Savings Account (TFSA). The TFSA is a registered savings account that allows taxpayers to grow their wealth inside the account, tax-free. Contributions to the account are not deductible for tax purposes, and withdrawals of contributions and earnings from the account are not taxable. Up to $5,000 per year can be utilized in this way. For more information, visit: http://www.cra-arc.gc.ca/gncy/bdgt/2008/txfr-eng.html. LEAGUE is currently applying for the same eligibility for Income Priority Units

Tax Efficiency

As a result of IGW REIT’s structure and the type of Investments it makes, a significant portion of the distributions it makes during the time you own your units are tax-deferred until you sell them. That portion is considered to be a “return of capital” which is the result of certain deductions such as depreciation taken by the REIT. The return of capital reduces your cost base and when the day comes that you sell some of your units, the portion of the distribution that is considered a “return of capital” is treated as a capital gain, 50% of which is taxable. The remaining 50% of your return of capital is shielded from your regular tax rate—unlike interest-bearing investments such as debentures, bonds, and GICs, which are taxed at the full marginal rate. If your investment is made inside an RRSP, the tax on all of your investment return (i.e. the return on capital and the return of capital) is deferred until you withdraw the funds from your RRSP.

Legal Structure Allows For Continuous Future Growth The IGW REIT is structured such that additional properties can be continually absorbed into the portfolio to create new sources of value appreciation and additional income for the Member-Partners—potentially without requiring additional capital from them. Here’s how it works:

As major improvement projects are completed, properties are re-appraised to reflect their increase in value. Later they may be re-financed or sold to extract the increased equity that has accumulated. This cash may be used to purchase more properties for the pool (as well as to fund distributions and project improvements, etc.). As the IGW REIT grows and we continue re-financing select properties at regular intervals, the investment generates some of the cash needed to acquire additional properties. The end result is that the pool benefits from ever greater levels of diversity, low volatility, and the Member-Partners enjoy monthly income and quarterly unit revaluations.

Transparent Valuation

To ensure that investors receive accurate value for their units, at each acquisition we use bank/lender-approved third-party appraisals to determine fair market value and an independent audit of the REIT’s financial statements is conducted annually. LEAGUE has contracted with Colliers International — a global real estate services firm with 11,000 employees in 293 offices in 61 countries — to provide semi-annual valuation services of all of the assets of the IGW REIT. Their appraisal, in conjunction with the financial statements audited by KPMG, will be used to verify the Net Asset Value (NAV) and determine the Unit Price of the IGW REIT. This will assure current and potential Members-Partners that a specialized, and completely independent party is providing the annual NAV calculation and reviewing all the quarterly unit re-valuations.

FOR MORE INFORMATION

To receive copies of the Investment Overview, Offering Memorandum, and Subscription Agreement call 1 (877) 772-8836 and speak to a Member Services Manager.

*There are risks associated with this investment. You are encouraged to read the offering memorandum and subscription agreement, which are available from our offices. Nothing in this document should be construed to be legal, tax or investment advice.

Note: This web site contains certain statements that may constitute forward-looking information under applicable securities laws. Forward-looking statements may be identified by the use of words like “intend”, “project” or comparable terminology, and by discussions of strategies that involve risks and uncertainties. Our forward-looking statements are based on our current beliefs as well as assumptions made by and information currently available to us, and relate to, among other things, general economic conditions, expectations regarding our ability to raise capital, our business outlook and anticipated financial performance. Neither we nor any other person assume responsibility for the accuracy and completeness of the forward-looking statements. Except as required by law, we assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This document is subject to revision without notice. Statements in this summary concerning future financial performance of the IGW REIT are subject to, among other things, risks, uncertainties and assumptions about the REIT’s business, economic factors and real estate markets generally. They are not guarantees of future performance, and actual events and results may differ materially from those expressed or implied by forward-looking statements included in this summary.

Allocating Your Capital

The chart below shows the features of each type of Unit. Use it to choose the balance of investment that best suits you. Once you’ve decided, just let us know by completing the Notice of Interest form at the end of this summary, and we’ll send you the documents you need to subscribe for units of the IGW REIT.

A REIT pool is a collection of properties comprising a portfolio in which people invest. The advantage of investing in a large group of investment properties is that the risk is spread across a multitude of physical assets; the impact of one property diminishing in value is low if it represents only a small percentage of the portfolio.

As of 2012

Tuesday, March 1, 2011

How LEAGUE's private IGW REIT compares to its public counterparts
Last fall, Exempt Analyst Inc. (EA) produced this report comparing the LEAGUE's private IGW REIT favourably with such major public REITs as RioCan REIT and Calloway REIT. In this report, EA gave IGW REIT's Class AAA and Income Priority Units institutional grade ratings of STA-2 and BBB respectively. These are the highest possible ratings for an investment entity of our size.

This comparison gave us much food for thought. We asked ourselves, "In a David vs. Goliath comparison, how would the distribution yield of LEAGUE's private IGW REIT stack up against the publicly-listed competition?"

We took this question to theglobeandmail.com and compared the distribution yield of our private IGW REIT and the publicly-listed Partners REIT, (which we also manage and which IGW REIT holds a 41.5% stake), against 15 public Canadian REITs holding similar properties.

The table below ranks the results from highest yield to lowest, and is calculated as percentage per unit as of today's value. (Note that two LEAGUE-managed REITs are in the top six).

Yield Data Analysis
So how does the IGW REIT's distribution compare with that of other Canadian retail REITs?

Obviously, when you compare the assets of the IGW REIT ($270 million) to those of the RioCan REIT ($8.4 billion) and the respective unit prices at the time this data was collected – $1.055 (ours) vs. $24.260 (theirs), you'll see the comparison is not exactly "apples to apples". But, all else being equal, when you look at yield – the annual distribution as a percentage of unit price – you will see a much different story.

The yield for the RioCan REIT is 5.80%, compared with the IGW REIT's 7.10%. Thus, if $10,000 were invested in both REITs, the IGW REIT annual yield would be greater by $130 – $710 compared to $580.

Yield vs. Volatility
Another important factor when comparing investments is the price volatility that publicly traded units are subjected to external market forces, specially over the long term. LEAGUE's IGW REIT, being private, is afforded greater protection from such volatility.

The Bloomberg Canadian REIT Index below shows the price fluctuations that occurred in the last three years across the entire public REIT sector.

By contrast, the following table illustrates the actual returns earned to date (March, 2011) based on $100,000 invested in LEAGUE's traditional (Class A, AA, AAA) IGW REIT units in 2005, 2007, and 2009.

** Dip due to 2008 financial turmoil

Even during the worst days of the global economic crisis the performance of the IGW REIT surpassed the TSX Stock Index and the Bloomberg REIT Index, which experienced 29.2% and 52.8% reductions in value respectively (see charts attached). In contrast, the IGW REIT experienced only a 12.6% reduction – and only over a period of three quarters before it began steadily increasing in value again.

In the end, long-term real estate (as opposed to stock) investors may prefer the distribution yield from LEAGUE's private IGW REIT, over the uncertainty that comes with the volatility of publicly traded REITS. The IGW REIT is structured to be a long-term hold, so its limited liquidity and reduced volatility is more attractive to like-minded, long-term investors.

What's more, the distributions from the REIT are remarkably tax efficient because we distribute a large proportion of them as return-of-capital – and this means that at tax time you get to keep more of what you earned.

We hope this comparison report has been of value to you, and invite your questions and comments at any time.

We always stand ready to help.