1314152--3/16/2009--EXCELSIOR_LASALLE_PROPERTY_FUND

related topics

{investment, property, distribution}

{loan, real, estate}

{interest, director, officer}

{operation, natural, condition}

{tax, income, asset}

{regulation, change, law}

{stock, price, share}

{loss, insurance, financial}

{acquisition, growth, future}

{cost, contract, operation}

{personnel, key, retain}

{provision, law, control}

{capital, credit, financial}

Our student-oriented apartment communities are susceptible to certain risks, including: (i) seasonality in rents; (ii) annual re-leasing that is highly dependent on marketing and university admission policies; (iii) competition for tenants from other housing operated by educational institutions or other off-campus properties; and (iv) negative publicity. The current global financial crisis may cause us to lose tenants and may impair our ability to borrow money to purchase properties or to refinance existing mortgage loans. The Fund is subject to the risks of commercial real estate ownership that could reduce the value of its properties. The success of the Fund will be dependent on the availability of, and the degree of competition for, attractive investments. The lack of availability of attractive investments could materially impair the financial performance of the Fund. The past performance of the Manager and the Advisor or any fund connected to either is not a predictor of future results of the Fund, and the Fund may not achieve positive financial results. If the Fund is unable to obtain leverage on favorable terms, its ability to make new investments, its operating costs and its ability to make dividend payments may be adversely affected. The Fund s use of leverage could impair its financial performance and result in the loss of some or all of its assets. If the Manager or Advisor were to lose key personnel or the Fund were to lose the services of the Manager or the Advisor, the Fund s ability to run its business could be adversely affected. The Fund incurs significant costs in connection with Exchange Act compliance and it may become subject to liability or sanctions for any failure to comply, which could materially impact results of operations and financial condition of the Fund. The Fund may not achieve its return objectives, which may adversely affect the value of our Common Stock. The Fund may suffer declines in rental revenue and/or occupancy at certain of its current and future retail properties related to co-tenancy provisions contained in certain tenant s leases, which would have a negative impact on the value of our Common Stock. If significant tenants were to default on their lease obligations to the Fund, its results of operations and ability to pay dividends to stockholders may be adversely affected. The costs of compliance with environmental laws and other governmental laws and regulations may adversely affect the Fund s results of operations and financial condition and its ability to pay dividends to stockholders. The Fund s properties may contain or develop harmful mold, which could lead to liability for adverse health effects and costs of remediation of the problem. If the Fund is unable to raise additional capital to support its growth through the sale of Shares, its financial results may suffer. Future terrorist attacks may result in financial losses for the Fund and limit its ability to obtain terrorism insurance. Insurance on the Fund s properties may not adequately cover all losses to its properties, which could reduce stockholder returns if a material uninsured loss occurs. Due to limitations on the ability of the Fund to repurchase stockholders Shares and restrictions on their transfer, an investment in the Shares will be illiquid. The Fund s investments may be illiquid, which may limit the Fund s ability to repurchase Shares. If the Fund is not able to appropriately diversify its investments, its financial results would be disproportionately affected by a downturn in the particular geographic region or property sector in which its investments are concentrated. The Fund may not have unilateral control over some of its investments and may be unable to take actions to protect its interests in these investments, which may result in losses with respect to these investments and expose the Fund to liability. A portion of the Advisor s and Manager s fees is based on the Fund s ability to generate cash flow from operations, which may result in the Advisor and the Manager having incentives that conflict with those of the Fund s stockholders. Because a portion of the fees paid to the Manager and the Advisor is based on the Fund s NAV, the Manager and the Advisor may have an incentive to sell Shares at a time when the capital from those sales cannot be effectively employed, which could harm the Fund s financial performance and decrease the amount of dividends paid to stockholders. Stockholders will have limited recourse against the Board, the Manager and the Advisor. If the Fund fails to qualify as a venture capital operating company under ERISA, stockholders subject to ERISA and the related excise tax provisions of the Internal Revenue Code may be subject to adverse financial and legal consequences if they engage in specified prohibited transactions. The Fund may not be able to qualify for exemption from registration under the Investment Company Act, which could limit the Fund s ability to use leverage and could materially impair the Fund s financial performance. Our Charter does not permit ownership of over 9.9% of the Fund s Common Stock by any individual or entity, and attempts to acquire Shares in excess of the 9.9% limit would be void without the prior approval of our board of directors. There are no assurances of the Fund s ability to pay dividends in the future. A stockholder who decides to participate in the dividend reinvestment plan will be subject to taxes on those dividends that are reinvested. If the Fund does not maintain its qualification as a REIT, the Fund will be subject to tax as a regular corporation and face a substantial tax liability. The tax treatment of dividends may cause investments in non-REIT corporations to be relatively more desirable. Complying with REIT requirements may cause the Fund to forego otherwise attractive opportunities. Complying with REIT requirements may force the Fund to liquidate or restructure otherwise attractive investments. Complying with REIT requirements may force the Fund to borrow to make distributions to stockholders.

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1314152--3/16/2009--EXCELSIOR_LASALLE_PROPERTY_FUND_INC