1077241--3/10/2006--T_REIT

related topics

{investment, property, distribution}

{interest, director, officer}

{loan, real, estate}

{tax, income, asset}

{debt, indebtedness, cash}

{loss, insurance, financial}

{stock, price, share}

{personnel, key, retain}

{financial, litigation, operation}

{cost, regulation, environmental}

If any of the parties to our current or future sale agreements default thereunder, or if these sales do not otherwise close, our liquidating distributions may be delayed or reduced. Decreases in property values may reduce the amount that we receive upon a sale of our assets. If we are unable to maintain the occupancy rates of currently leased space and lease currently available space, if tenants default under their leases or other obligations to us during the liquidation process or if our cash flow during the liquidation is otherwise less than we expect, our liquidating distributions may be delayed or reduced. If we are not able to sell our remaining properties in a timely manner, we may experience severe liquidity problems, may not be able to meet the demands of our creditors, and ultimately become subject to bankruptcy proceedings. If our liquidation costs or unpaid liabilities are greater than we expect, our liquidating distributions may be delayed or reduced. Pursuing our plan of liquidation may cause us to fail to qualify as a REIT, which would dramatically lower the amount of our liquidating distributions. Pursuing our plan of liquidation may cause us to be subject to federal income tax, which would reduce the amount of our liquidating distributions. The sale of our assets may cause us to be subject to a 100% excise tax on prohibited transactions, which would reduce the amount of our liquidating distributions. Our entity value may be adversely affected by adoption of our plan of liquidation. There can be no assurance that our plan of liquidation will result in greater returns to you on your investment within a reasonable period of time, than you would receive through other alternatives reasonably available to us. We have terminated our regular monthly distributions and future liquidating distributions will be determined at the sole discretion of our board of directors. Distributions by us, including liquidating distributions, may include a return of capital. Our board of directors may amend our plan of liquidation. We have the authority to sell our assets under terms less favorable that those assumed for the purpose of estimating our net liquidation value range. Our plan of liquidation may lead to shareholder litigation which could result in substantial costs and distract our management. Our officers and directors and our Advisor have conflicts of interest that differ from our shareholders as a result of the liquidation. Distributing interests in a liquidating trust may cause you to recognize gain prior to the receipt of cash. We do not have an executed advisory agreement, and we could lose the services of our Advisor, which may increase operating expenses, and delay or reduce our liquidating distributions. If our Advisor is unable to retain our key executives and sufficient staff members to complete our plan of liquidation in a reasonably expeditious manner, our liquidating distributions might be delayed or reduced. You may not receive any profits resulting from the sale of one or more of our properties, or receive such profits in a timely manner, because we may provide financing to the purchaser of such property. If we are unable to realize the value of a promissory note taken as part of any purchase price, our liquidating distributions might be reduced. Our plan of liquidation has caused our accounting basis to change, which could require us to write-down our assets. We may be unable to sell jointly held properties or our interests in limited liability companies at our expected value. Shareholders could be liable to the extent of liquidating distributions received if contingent reserves are insufficient to satisfy our liabilities. We may have underestimated the amount of prepayment fees or defeasance charges on our mortgages. Our Advisor is entitled to a share of the distributions of the assets of the operating partnership upon its liquidation. Other Risks of Our Business The pending SEC investigation of our Advisor could result in regulatory actions against us which could negatively impact our ability to pay distributions. Erroneous disclosure in the prior performance tables in our public offerings could result in lawsuits or other actions against us which could have a material adverse effect upon our business and results of operations. We expect to incur increasingly significant costs in connection with Sarbanes-Oxley compliance and we may become subject to liability for any failure to comply. We are currently involved in litigation, which could reduce the amount of our liquidation distributions. Due to the risks involved in the ownership of real estate, there is no guarantee of any return on our shareholders investments and our shareholders may lose some or all of their investments. Our properties face significant competition. We depend upon our tenants to pay rent, and their inability to pay rent may substantially reduce our revenues and cash available for distribution to our shareholders. Lack of diversification and illiquidity of real estate may make it difficult for us to sell underperforming properties or recover our investment in one or more properties. Lack of geographic diversity may expose us to regional economic downturns that could adversely impact our operations or our ability to recover our investment in one or more properties. Due to the limited number of properties in our portfolio, we are dependent upon those tenants that generate significant rental income, which may have a negative impact on our financial condition if these tenants are unable to meet their rental obligations. Losses for which we either could not or did not obtain insurance will adversely affect our earnings and we may be unable to comply with insurance requirements contained in mortgage or other agreements due to high insurance costs. Our co-ownership arrangements with affiliated entities may not reflect solely our shareholders best interests and may subject these investments to increased risks. There is currently no public market for our common stock. Therefore, it will likely be difficult for you to sell your shares and, if you are able to sell your shares, you will likely do so at a substantial discount from the price you paid. Our success will be dependent on the performance of our Advisor as well as key employees of our Advisor. Our use of borrowings to partially fund improvements on properties could result in foreclosures and unexpected debt service expenses upon refinancing, both of which could have an adverse impact on our operations and cash flow, and restrictive covenants in our loan documents may restrict our operating or acquisition activities. The pending SEC investigation of our Advisor could result in defaults or alleged defaults under our loan documents or limit our ability to obtain debt financing in the future. If we purchased assets at a time when the commercial real estate market was experiencing substantial influxes of capital investment and competition for properties, the real estate we purchased may not have appreciated or may have decreased in value. Our board of directors may alter our investment policies at any time without shareholder approval. Our past performance is not a predictor of our future results. The conflicts of interest of our Advisor s officers and managers mean we will not be managed solely in the best interests of our shareholders. The absence of arm s length bargaining may mean that our agreements are not as favorable to our shareholders as these agreements otherwise would have been. Risks Associated With Being a REIT If we fail to qualify as a REIT, our shareholders could be adversely affected. We may not be able to meet, or we may need to incur borrowings that would otherwise not be incurred to meet REIT minimum distribution requirements.

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1077241--3/10/2006--T_REIT_INC