1077241--3/14/2008--T_REIT_LIQUIDATING

related topics

{investment, property, distribution}

{interest, director, officer}

{loan, real, estate}

{debt, indebtedness, cash}

{tax, income, asset}

{loss, insurance, financial}

If we are unable to find buyers for our remaining asset at our expected sales prices, our liquidating distributions may be delayed or reduced. If any party to our future sale agreement with respect to our remaining asset defaults thereunder, or if the sale does not otherwise close, our liquidating distributions may be delayed or reduced. Decreases in property value may reduce the amount that we receive upon the sale of our remaining asset. If our advisor or its affiliate is unable to maintain the occupancy rates of currently leased space or lease currently available space, if tenants default under their leases or other obligations 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 asset in a timely manner, we may experience severe liquidity problems, may not be able to meet our obligations to our creditors and, ultimately, may 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. There can be no assurance that the plan of liquidation will result in greater returns to our beneficiaries on their investment within a reasonable period of time, than our beneficiaries 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 Trustee. Our Trustee may amend the plan of liquidation without further beneficiary approval. We have the authority to sell our remaining asset under terms less favorable than those assumed for the purpose of estimating our net liquidation value range. The plan of liquidation may lead to litigation which could result in substantial costs and distract our Trustee. Our advisor has conflicts of interest that differ from our beneficiaries interests as a result of the liquidation. 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 key executives and employees sufficient to complete the plan of liquidation in a reasonably expeditious manner, our liquidating distributions might be delayed or reduced. Our beneficiaries may not receive any profits resulting from the sale of our remaining asset, or receive such profits in a timely manner, because we may provide financing to the purchaser of our remaining asset. Beneficiaries could be liable to the extent of liquidating distributions received from us if contingent reserves are insufficient to satisfy our liabilities. We may have underestimated the amount of prepayment fees or defeasance charges on our mortgages. Other Risks of Our Business 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 beneficiaries investments and our beneficiaries may lose some or all of their investments. If our unconsolidated property is unable to generate sufficient funds to pay its expenses, liabilities or distributions, our liquidating distributions to our beneficiaries may be reduced and/or delayed. Our unconsolidated property faces significant competition. We depend upon tenants of our unconsolidated property to pay rent, and their inability to pay rent may substantially reduce our revenues and cash available for distribution to our beneficiaries. Due to our ownership of only an unconsolidated property interest in the Congress Center property, we are dependent upon those tenants that generate significant rental income at the Congress Center property, which may have a negative impact on our financial condition if these tenants are unable to meet their rental obligations to us. Lack of diversification and illiquidity of real estate may make it difficult for us to sell an underperforming property or recover our investment in a property. 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 our unconsolidated property. 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. There is currently no public market for our units of beneficial interest and the units of beneficial interest may not be transferred except by operation of law or upon the death of a beneficiary. We may not have sufficient cash flow to cover our required debt service payments which 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. Additionally, restrictive covenants in our loan documents may restrict our disposition activities. The conflicts of interest of our advisor s executives with us mean we may not be managed by our advisor solely in the best interests of our beneficiaries.

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1077241--3/14/2008--T_REIT_LIQUIDATING_TRUST