Q2 STATE OF THE UNITS & PROPERTY UPDATES

Saturday, October 31, 2009

Dear Member-Partners and Friends,

I am pleased to report that there is much good news to relate for the properties in the IGW REIT as well as the individual Limited Partnerships managed by League on your behalf. Despite the challenges rolling through the economy, we have managed to outperform many of our peers.

On June 17th we offered Member-Partners two new options: the IGW Segregated Debt (SegDebt) investments, which consist primarily of mortgages held by U.S. financial institutions on Canadian properties; and the IGW Residential Capital (ResCap) LP, which invests in residential properties across Canada.

The SegDebt sold out in record time and a waiting list is in effect should more of this investment become available. The IGW ResCap LP is about to undergo some exciting developments and I will be informing you about these separately very soon.

On June 30th we offered Member-Partners three new options of our fixed-distribution Income Priority Units (IPUnits). They consist of one-, three- and five-year terms yielding 6.50%, 8.00% and 9.25% respectively. These tax-efficient vehicles continue to outperform traditional fixed-rate products.

We also unveiled during the last quarter two Limited Partnerships that have the potential to become retail showpieces: Eagle Landing Retail Development LP (click here for its Investment Overview) in Chilliwack BC, where we have just announced our first two anchor tenants: Walmart and Cineplex Odeon, with more to come; and Place Trans Canadienne Centre LP (click here for its Investment Overview) in Montreal, our first foray into la belle province.

In September we announced that two senior executives had joined our management team: Brien Biondi, as our President and Chief Operating Officer and Patrick Miniutti, as our Chief Financial Officer. Both bring great experience to League which has already begun to show results. They epitomize the third tenet of Our Credo where we affirm, "We believe that as leaders, we must be right-thinking women and men of inviolable integrity and sound precepts...".

Additionally, we've added new property management personnel by way of our strategic alliance with Gulf Pacific Property Management. We anticipate greater cost and operational efficiencies from the properties already transferred to their care, and look forward to reporting on their progress in future State of the Units reports.

The good news continues, in that after what was called the greatest financial crisis in 60 years, the economy is now in recovery, albeit a slow one. My partner Adam Gant and I are particularly heartened to see a gradual easing of the credit markets, freeing up more capital for our needs.

However, after a long uninterrupted period of paying out high distributions, the rate of the IGW REIT was reduced in response to market conditions. This move also positions us favourably for the future. When we set out on our journey towards Intergenerational Wealth™, we knew we were in it for the long haul. In this spirit, the performance of the REIT over time is far more important than any temporary market movement.

I was heartened that so many of you have that same sense of perspective. As Member-Partner Harmen B. wrote: "You are not about permanent growth, but long-term (intergenerational) responsible returns. In my view, [continue to] aim at that."

Even as I write these words, I look at the newspaper beside me. The headline and story tell of another tragic tale where investors put their trust in a pair of financial planners, only to have their life savings and more taken from them by the time police uncovered the allegedly fraudulent scheme. Investing is not without risk, but I think you'll agree with me that fraud should not be one of them.

Therefore, in the spirit of fifth tenet of Our Credo, which in part affirms "our ethical obligation and lawful duty to protect our interests and the investments we administer," League recently sought out, qualified for, and purchased two new insurance policies that indirectly help to protect you against any internal malfeasance. We are proud to further reassure our Member-Partners that this could never happen here.

We have come through a challenging time -- and most importantly, we have done it together. It affirms the 14th tenet of Our Credo: "We believe that investing together with a group of experts and friends makes our investments all the more stable, secure, and more importantly, enjoyable..."

We are confident that the increase in financing availability mentioned above, as well as the untiring efforts of our leasing and development teams, will lead to more good news for the REIT and LP investments in the months ahead and years to come.

In the following pages, progress reports are presented for each of the properties in the IGW REIT pool, as well as the stand-alone Limited Partnerships. As always, we welcome your comments and questions at feedback@league.ca.

Warmest regards,

Any statements in this report concerning future performance of the IGW REIT or any other entity administered indirectly by League Assets Corp. are subject to, among other things, risks, uncertainties and assumptions about the IGW REIT or other applicable entity, 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 report.

• This property is now being managed by the Gulf Pacific Group. The company's expertise in commercial leasing and accounting is expected to improve this strip mall's performance over the next few years. Eventually, we plan to refinance the property.

• Work is proceeding on paying down mezzanine financing and releasing vacant spaces.
• We are applying for a residential re-development project on this site.
• New leases completed recently include: a produce store, Cupcakes, and two new office tenants.

• The centre is 99% leased.
• Refinancing completed.
• Now under management by Gulf Pacific Property Management.

• While plans and permits remain in place for the construction of 13,000 sq. ft. of commercial/retail space, we are considering selling the freestanding "pad site" after severing it from the rest of the complex. This will reduce leasing and construction risks.
• Now under management by Gulf Pacific Property Management.

• The Centre is fully leased and all improvements are complete. There is an accepted offer in place and the buyer is in the due diligence phase. Proceeds will go toward paying down the REIT's mezzanine financing.
• Now managed by Gulf Pacific Property Management.

• We are actively leasing the building.
• We are dealing with several contractors for a facade upgrade.
• Now managed by Gulf Pacific Property Management.

• Our leasing agents continue to seek new tenants.
• This property is managed by Epic Realty Partners.
• We recently renewed Bingoland's lease for five years.

• Planning has commenced for an additional pad for approximately 6,000 sq. ft. of commercial retail space, but construction will not begin until it is pre-leased.
• Now managed by Gulf Pacific Property Management.

• A lease amendment is being negotiated to reconfigure the Bargain Shop's space so that there will be a new storefront and direct access to the shopping centre's front door. This will allow removal of the mall's enclosed section and the creation of new front-facing storefronts. The plan has been approved by the City and a development permit granted.
• Pre-leasing for the new front-facing units will be required prior to any construction.
• Now managed by Gulf Pacific Property Management.

• 45 Bloor St. and 1561 King St. have been sold.
• 1916 Dundas St. is under contract for sale.
• Now managed by Gulf Pacific Property Management.

• We are awaiting completion of a sewer line extension by the city, before making further improvements to this property.

• Giant Tiger opened on September 26, 2009.
• New 2,500 sq. ft. freestanding commercial retail unit (CRU) is approved for construction, and pre-leasing is underway.
• Re-merchandising and renovations are complete and the centre is now 100% leased.
• Parking lot realignment completed and new landscaping will also be done.

• Suites continue to be upgraded as per our original plan.
• Now managed by Gulf Pacific Property Management.

• Efforts continue to lease the mall's remaining 8,000 sq. ft. of vacant space.
• Roof replacement is complete.
• Now managed by Gulf Pacific Property Management.

• As of September 30th, Wellington Suites was transferred to the IGW Residential Capital LP in consideration for $19,412,000 . For more information please see Part C of this report.

• Leasing activity continues and new tenants are expected in the near future.

• Lease renewals with some tenants have been completed and revenue has increased as a result.
• New leases have been signed for 2 new tenants totalling 2,069 sq. ft.
• Now managed by Gulf Pacific Property Management.

• Now managed by Gulf Pacific Property Management.
• Reviewing opportunity to add new PAD commercial units to replace existing Turbo Gas Bar with higher rent paying tenants.

• As of September 30th, Rosewood Towers was transferred to the IGW Residential Capital LP in consideration for $12,795,000. For more information please see Part C of this report.

• Planned 14,000 sq. ft. expansion is in pre-leasing stage.
• Current centre is 100% leased.
• Now managed by Gulf Pacific Property Management.

• The strata disclosure statement has been filed and we are now ready to sell the units.
• Management has been moved to Brown Bros. a property management company with a local connection. Brown Bros. has started a program to increase service to the tenants and maximize the return on the property.

• Feasibility studies have been completed and we can now lease to commercial occupants.
• Proposals have been made to the new anchor tenants and a construction phasing plan will allow work to begin in the spring of 2010.
• PricewaterhouseCoopers has completed the 2008 audited statements.

• The old WalMart space has been demolished and plans to reconfigure the enclosed mall are in place. The area where the old WalMart was is now in the final stages of completion and tenants are secured.
• The new buildings have been built and the roofs are on. New tenants began occupying their premises in late August.
• Lease negotiations for the smaller spaces are in the final stages.
• Winners had an excellent grand opening.

• The energy retrofit is complete and an application for Boma Go Green designation is underway.
• We have closed the new financing from Concentra Finance.
• Only 8,500 square feet of ground floor space remains vacant. An offer of lease from the federal government is expected.
• A special resolution will be sent out in November with the intention to have the project rolled over into the REIT.

• The purchase has not been completed because subdivision approval has not yet been obtained by the vendors, with whom we are currently engaged in litigation.
• Interest of 15% on the capital invested in this property continues to accrue, pending resolution of the dispute.

• With redevelopment completed, the original commitment to transfer ownership of the plaza to the IGW REIT can proceed. A separate letter is forthcoming to the unit-holders of this LP.

• As of September 30th, Wellington Suites was transferred to the IGW Residential Capital LP
• Our aggressive leasing campaign continues to fill the remaining vacancies.
• The City of Hamilton has approved our condo-conversion proposal. The application was approved on Oct 6th it has 22 day appeal period so on Nov. 6th it will be official and past the appeal time.
• Work has begun on the strata plan required for the condo-conversion and sale of suites.

• As of September 30th, Rosewood Towers was transferred to the IGW Residential Capital LP
• Refinancing complete; pre-sales of condo units has begun.
• Improvements to the common areas continue, and there is a plan for a vertical garden.
• The condo conversion has been approved, and this property has been rolled into the ResCap LP and we will begin selling the units this year, either to investors or to current rental tenants.

• Having been sold to the "IGW Residential Capital Fund", this property can now be converted into a condominium complex. Plans are underway for the sale of suites to investors and homeowners.

Reminders...

The State of the Units Report for the REIT is published quarterly in March, June, September and December on this web page. This includes detailed updates on ongoing activities at each property.

Distribution payments for the REIT begin on the 21st day of the month following the day you invest. You need not wait until the next revaluation to subscribe and begin receiving your distribution payment.

Tax slips are issued for Limited Partnership and REIT unitholders by March 31st each year. Please note that electronic filing is not possible for Limited Partnerships less than one year old.

New unit values for the REIT are announced on the last day of February, May, August and November. Complete portfolio reappraisals take place prior to the May and November revaluations. At the February and August revaluations, only those properties that we expect to have changed in value are selected for reappraisal. To review how the revaluations are performed, click here or review the Frequently Asked Questions section of the current Investment Overview available in the Members Area.