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March 25, 2008

RE: "STATE OF THE UNITS" REPORT

Dear Member-Partners,

The past 14 months have been extraordinarily busy here at League, and I'm happy to report that they have also been extraordinarily productive.

Since January 2007, League has initiated new acquisitions representing 17 separate properties. Perhaps more impressive, League's membership has grown to nearly 850 - up from 612 just five months ago.

To date, Member-Partners have invested nearly $100 million in equity into six different assets: five stand-alone projects - Londondale LP, Cygnet LP, CityZen LP, Market Square LP, Tyee Plaza LP, and the 23 properties that are in the IGW REIT pool.

Progress reports on many of these projects - ones where significant improvements or events have taken place - are outlined in the accompanying pages.

In January, we conducted our first Member Satisfaction Survey. The comments and suggestions were positive and instructive. Of the 306 members who took part, 242 allowed us to publish their comments. They can be reviewed by downloading them from "Updates" page of League's website. (www.league.ca/updates.html)

Forthright feedback from members has always been vital to League's success; we just wish we had more of it, more often. This is why we are adding links to the bottom of all staff emails - including my own - where you can provide comments, suggestions or criticism. We hope this will prompt responses that will spark new investment opportunities and services.

Nothing is worse than filling out a survey, requesting some service, or suggesting some change, only to end up feeling that no one is listening and that nothing will be done. I want to assure you that we at League are indeed listening. And as quickly as we can, we will act on anything that is important to you.

Here's what we've done so far:

• Updated Offering Memorandum - We have filed an updated Offering Memorandum for the IGW REIT with the BC Securities Commission. This refreshed version includes the latest management-prepared financial statements, information about every property in the REIT pool, and clarifications that were revealed during French translation.
• Hired new staff - To help manage the growth of League's operations, we've hired new staff members. The biographies of our 21 team-members are now published on the "Contact Us" page of League's website (www.league.ca/contactus.html) and in the new online edition of The Blue Book of Real Estate Syndication.
• Upgraded Systems - To provide greater accounting transparency and timeliness, we have invested $100,000 of League profits (not your investments) in state-of-the-art real estate management and accounting software systems.
• New Services to Members - So far $140,000 has gone into re-coding our membership administration system. New services such as on-line access to member accounts as well as archived investment statements, and complete distribution payment histories are forthcoming. More features and services are planned for the near future.
• More Opportunities - To ensure that all member-partners have equal access to all League investment opportunities, the "accredited membership" restriction is being removed* for every Limited Partnership syndication. Offering Memorandums will be produced for all future Limited Partnership syndications (time permitting). Furthermore, they will be made RRSP eligible, making them an ideal growth vehicle for registered funds. *Ontario and Quebec securities regulations still apply.
• A Chart of Probabilities - So that members can more easily determine the timing and anticipated return on their investment, we have introduced an innovative new chart. It plots the probability of a certain return on investment being achieved within any specific range of time. (An example of this chart can be seen in the Fort. St. John introduction page at this link: www.league.ca/summaries/ft_st_john_intro.pdf). The chart will allow members to allocate their funds more confidently, and with a greater understanding of the external considerations League takes into account when offering new investment opportunities.
  

About that U.S. Sub-Prime Melt-Down

Everywhere you look, "experts" are pontificating about the U.S. sub-prime debacle and how it is affecting the economy. However, hardly anything has been said that is useful to individual investors and their families. Here, I will do my best to describe what effect, if any, the U.S. situation may have on League's operations and your investments.

To begin with, mortgage capital has become harder to acquire. This applies to League as well as everyone else. Mortgage lenders have much smaller lending budgets this year. As a result, they are processing applications more slowly, requiring more security than previously, and they are much more selective about the properties they choose to lend on. While they are still responding favourably to applications that are backed by stable assets with strong leases, overall they have reduced their loans on less-solid properties.

This shift in bank lending practices has had a trickle-down effect on the rest of the credit market. Reduced credit availability from the banks has led to more applications for mortgages from private lenders. Consequently, private mortgage lenders (who typically provide 2nd mortgages and development financing) are starting to tighten up their own lending guidelines.

Publicly-traded REITs have been particularly hard hit. Their acquisition and portfolio management strategies were not designed for the present conditions and their capital cost had been seriously affected - as have their short-term return expectations. This of course, has driven down their unit price.

The positive leverage that existed until the spring of 2007 has all but disappeared, and there is very little room for profit left in the public REIT vehicles for purchase of commercial properties listed since last fall.

The Upside for League

With the large public REIT players out of the buying market for the time being (possibly the next six months), thus driving down demand for property, League will begin to enjoy the benefit of a buyer's market. This means more time to negotiate better pricing, and more time to close on acquisitions. Moreover, because our IGW REIT is a private one, it is not subject to the vicissitudes of the publicly traded market.

So far, besides financing applications taking longer to process, League has not experienced any difficulty acquiring mortgage financing. But if things should change, our first option will be to reduce our debt-to-equity ratio by raising a slightly higher proportion of equity and rely less on debt financing.

For the moment, we expect little or no market-driven increase in the value of our properties. This means that for the next year or so we will have to rely mainly on physical and managerial improvements to generate appreciation in their value.

Happily, our strategy has never relied solely on property appreciation from general demand. Rather, we have chosen properties that we could immediately improve to create the increased value we sought.

That said, a little help from a rising market never hurts either!

Moving Right Along

Going forward, our plan is to focus on larger and more attractive properties, to improve property management performance, and to improve the overall credit worthiness of all our properties.

Our strategy for acquisitions and portfolio mix is entering a new phase. We will, of course, continue to find and acquire projects with the potential for added-value for the IGW REIT pool - that is, after all, how we earn our share of the profit. But the more capital-intensive re-development projects will at first be syndicated as single-property Limited Partnerships. Once they are stabilized and producing reliable cash flows, they will be transferred into the IGW REIT LP. This practice will ensure that the REIT pool's cash flow will not be diluted by these projects.

For members more interested in growth than income, this strategy will provide opportunities for larger capital gains in shorter terms, but little or no cash flow. For those seeking stable monthly income - as well as tax-efficiency - the REIT remains the better choice.

Portfolio Mix

Currently, 60% of the properties in the REIT are undergoing renovation. While this was planned and budgeted for, we believe it is prudent to reassess the mix in light of present economic conditions.

As you will learn from the details in the accompanying project update, we are beginning to restructure the IGW REIT pool to achieve better borrowing capability by increasing the number of stabilized assets in the pool. The better the quality of our assets, the greater the number of lenders to compete for our mortgages, and the better the rates and terms we can secure.

This will mean shifting the mix of assets in the pool by selling off some of the smaller properties, and looking for one or two larger properties that will produce as much cash flow as the ones they are replacing, but are less costly and time-consuming to manage.

We will continue to acquire projects to be added to the IGW REIT pool, of course. But the more capital-intensive properties will now first be offered outside the REIT LP as single-project Limited Partnerships.

Keeping You Informed

You may recall that in my various communications, I have stated that the business of real estate can be a slow and tedious process. Lots of little things can go sideways. That is to be expected. And yes, some of our projects have indeed experienced temporary delays, labour shortages, cost overruns, and more vacancies than we expected.

Through it all, however, the value of all League properties has continued to grow and distribution payments have either increased or been maintained. To date, no one has lost money, and distributions have never been cut or suspended. We have every reason to feel confident that events like these will continue to happen, and that we will manage them appropriately.

Audits for all ten pools are simultaneously underway and keeping our staff and our auditors quite busy. Tax slips are also being prepared and will be mailed before the March 31st deadline. Everyone is working overtime to get these out to you on time.

The next unit re-valuation for the IGW REIT is scheduled for May 1st. Some of the increases described below will be reflected in higher unit values at that time. If you wish to make a new or additional investment, please complete and return this Notice of Interest form, and offering documents will be sent to you immediately.

Once again, I want to thank you for joining League in Member-Partnership. We count your continued trust and friendship as our greatest asset.

Regards,

Emanuel.

Emanuel F. Arruda
Chairman & Co-Founder
League Assets Corp.

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PROPERTY UPDATES

Single Property Limited Partnerships

Londondale Shopping Centre: Despite going from way ahead of schedule to behind schedule, this Edmonton investment - League's first syndicated offering - is shaping up to become a big success.

Members will recall that this LP syndication started with a 10% distribution rate and quickly rose to its current rate of 12%. We had hoped that by now it would have reached 14%; but delays, labour shortages, and the bankruptcy of its grocery store tenant slowed its progress. Even so, not a single monthly distribution was missed, and we continue working to enhance the value of the property.

Construction of a free-standing restaurant (Capital Pizza) has been underway for three months. When completed this summer, the building will provide a significant exterior improvement to the whole complex.

After reviewing the possibility of doctors offices and other medical uses, it became apparent that it would not be economical to build new space for these types of tenants. We are currently negotiating with a large national anchor tenant and expect to have the paperwork completed by the summer. Upon acceptance from this new anchor, we will complete its leasehold improvements, list the property for sale, and pay out the Member-Partners.

Cygnet Apartments: The value of this small project in Port Alberni, BC, has increased substantially. This may be a good time to sell and allow Member-Partners to cash out and put the capital to work in another League investment. We have listed the property for sale to see if it attracts any worthwhile offers in the next two months.

CityZen - Collwood City-Centre Development: The approval process for this massive $1-Billion city-centre complex in the Victoria suburb of Colwood, BC, continues behind the scenes as we approach the culmination of public hearings and final reading by council for the required re-zoning. All the documents for negotiating leases and to present to financing institutions to obtain construction capital are being readied as we anxiously await Colwood council's approval.

This project has seen many more delays than expected, but we have encountered no significant setbacks. The final public hearing and the rezoning meeting are expected in the next few weeks. Once approved, we will register the zoning covenants on the titles. At that point, all Member-Partners subscribed to this property will realize their early subscription bonuses and new unit certificates will be issued.

We look forward to the next stage of this exciting project: actual construction. We can hardly wait to see the buildings take shape!

Properties in the IGW REIT pool

Tiffany and Arbutus Industrial Park: These two small projects - the first in Greater Victoria, the other in Parksville, BC - have increased in value sufficiently that we intend to sell them and use the proceeds to acquire one larger property. This will allow us to reduce managerial expenses.

Tyee Plaza: Construction is ahead of schedule for the new Shoppers Drug Mart in this shopping mall in Campbell River, BC. We have signed new leases with most of the tenants that we had to shuffle around to fill in where were the old Shoppers Drug Mart was located. The tenants have noted increased traffic and sales volume due their newly renovated store interiors and improved exposure to walk-by traffic.

Fort Saskatchewan Industrial Park: Property values in this fast-growing Alberta community have increased dramatically recently-and thus, so has the value of this League investment.

The area immediately surrounding and including our site has been designated as the next industrial subdivision to be developed in Fort Saskatchewan. New refineries are being built nearby to handle the oil being piped down from the Oil Sands to the north, and the new industrial zone will accommodate supporting industries and businesses.

The re-zoning process continues, and we anticipate approval for our subdivision within the next three months. Once approved, we will proceed with pre-leasing and pre-sales programs, and then begin installing services and starting road construction.

We are working with the city for permissions to develop the property as an eco-industrial park, a first for Fort Saskatchewan. While they like the concept, there remain some hurdles.

Rosewood Apartments: Seventy suites in this Hamilton, Ontario, apartment building have been refurbished to date and the renovation program continues. Better-quality tenants are beginning to move in, and at higher rents. Thus, rental income is beginning to increase.

Adjacent to our property is the Centre Mall with $100,000,000 of improvements now underway. With this, and the completion of a new highway connection nearby, we hope to see an additional increase in the value of the property beyond what we are adding by our improvements.

Durham Shopping Centres: We purchased these four single-storey retail properties in the Oshawa and Whitby areas of Ontario with the intention of improving them and getting higher rents. But our project manager, Jim Wallace, suggested that due to the buildings' sturdy construction, it might be possible to build condos above the retail shops.

Engineers have since confirmed that the structures will indeed support residential units built on top. We have applied for rezoning, and expect approvals will be forthcoming in the next four to six months for two of the properties.

Essentially, this amounts to getting free land because we didn't pay the seller anything for the potential extra space. This is a pleasant surprise, one discovered by our experienced on-site manager.

Kensington: Giant Tiger is about to begin construction of an addition to this Edmonton shopping centre and become our new anchor tenant. It plans to open on or before November 23rd this year-just in time for Christmas. Upon completion of the new space, the cash flow from this property will increase by $300,000 per year.

With the new anchor tenant open, additional traffic will be drawn to the shops of the other tenants, and we will be justified in increasing their rental rates. In addition to Giant Tiger, we have leased some 4,000 square feet to higher quality tenants paying higher rents.

Market Square: Giant Tiger has just opened its new store in this Fort Saskatchewan, Alberta, shopping plaza. When its rent payments commence in July, the annual revenue from this investment will increase by $275,000.

Stettler Mall: We are currently negotiating with Dollarama, a national dollar store retailer, to lease 10,000 square feet in this Stettler, Alberta, shopping mall. Along with Peavey Mart and The Brick, it will add a third anchor tenant to the project. The Dollarama lease will add $90,000 income per year.

We are currently negotiating with Dollarama, a national dollar store retailer, to lease 10,000 square feet in this Stettler, Alberta, shopping mall. Along with Peavey Mart and The Brick, it will add a third anchor tenant to the project. The Dollarama lease will add $90,000 income per year.

# # #

Profitable results from sound real estate investments take time. But as you can see from these progress reports, the hard work we have put into these properties is beginning to pay off. We look forward to bringing you more news in the next quarter.

As always, if you have questions about any of these projects, feel free to send an e-mail to Adam at: adam@league.ca.

P.S. Please take a moment to fill out our new survey, and let us know how we're performing:

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"I made this letter longer than usual because I lack the time to make it short."
- Blaise Pascale -
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