UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-6249

WINTHROP REALTY TRUST

(Exact name of Registrant as specified in its certificate of incorporation)

Ohio		34-6513657
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)
7 Bulfinch Place, Suite 500, Boston, Massachusetts		02114
(Address of principal executive offices)		(Zip Code)

(617) 570-4614
(Registrant’s telephone number, including area code)

Title of Each Class		Name of Exchange on Which Registered
Common shares, $1.00 par value		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer þ		Non-accelerated filer o		Smaller reporting company o
				(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes o No þ

As of March 1, 2011, there were 27,088,347 Common Shares outstanding.

At June 30, 2010, the aggregate market value of the Common Shares held by non-affiliates was $229,464,877.

Portions of the registrant’s definitive Proxy Statement for the Annual Meeting of Shareholders, which is expected to be filed with the Securities and Exchange Commission within 120 days after the Registrant’s fiscal year ended December 31, 2010, are incorporated by reference into Part III hereof.

 

 

WINTHROP REALTY TRUST
CROSS REFERENCE SHEET PURSUANT TO ITEM G,
GENERAL INSTRUCTIONS TO FORM 10-K

Item of Form 10-K		Page
PART I
1. Business			4
1A. Risk Factors			12
1B. Unresolved Staff Comments			21
2. Properties			22
3. Legal Proceedings			33
4. Reserved			33
PART II
5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities			34
6. Selected Financial Data			37
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations			38
7A. Quantitative and Qualitative Disclosures about Market Risk			54
8. Financial Statements and Supplementary Data			55
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			104
9A. Controls and Procedures			104
9B. Other Information			104
PART III
10. Directors, Executive Officers and Corporate Governance			105
11. Executive Compensation			105
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			105
13. Certain Relationships and Related Transactions and Director Independence			105
14. Principal Accountant Fees and Services			105
PART IV
15. Exhibits and Financial Statement Schedules			106
(a) Financial Statements and Financial Statement Schedule
(b) Exhibits
Signatures			107
Schedule III — Real Estate and Accumulated Depreciation			108
Exhibit Index			110
Exhibit 10.19
Exhibit 10.20
Exhibit 21
Exhibit 23.1
Exhibit 23.2
Exhibit 24
Exhibit 31
Exhibit 32
Exhibit 99.1

CAUTIONARY STATEMENTS CONCERNING FORWARD-LOOKING STATEMENTS

Any statements included in this prospectus, including any statements in the document that are incorporated by reference herein that are not strictly historical are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements contained or incorporated by reference herein should not be relied upon as predictions of future events. Certain such forward-looking statements can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “pro forma,” “estimates” or “anticipates” or the negative thereof or other variations thereof or comparable terminology, or by discussions of strategy, plans, intentions or anticipated or projected events, results or conditions. Such forward-looking statements are dependent on assumptions, data or methods that may be incorrect or imprecise and they may be incapable of being realized. Such forward-looking statements include statements with respect to:

•

the declaration or payment of distributions by us;

•

the ownership, management and operation of properties;

•

potential acquisitions or dispositions of our properties, assets or other businesses;

•

our policies regarding investments, acquisitions, dispositions, financings and other matters;

•

our qualification as a real estate investment trust under the Internal Revenue Code of 1986, as amended, which we refer to as the Code;

•

the real estate industry and real estate markets in general;

•

the availability of debt and equity financing;

•

interest rates;

•

general economic conditions;

•

supply of real estate investment opportunities and demand;

•

trends affecting us or our assets;

•

the effect of acquisitions or dispositions on capitalization and financial flexibility;

•

the anticipated performance of our assets and of acquired properties and businesses, including, without limitation, statements regarding anticipated revenues, cash flows, funds from operations, earnings before interest, depreciation and amortization, property net operating income, operating or profit margins and sensitivity to economic downturns or anticipated growth or improvements in any of the foregoing; and

•

our ability, and that of our assets and acquired properties and businesses to grow.

You are cautioned that, while forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance and they involve known and unknown risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of various factors. The information contained or incorporated by reference in this report and any amendment hereof, including, without limitation, the information set forth in “ITEM 1A- Risk Factors” below or in any risk factors in documents that are incorporated by reference in this report, identifies important factors that could cause such differences. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements that may reflect any future events or circumstances.

SHARE SPLIT

In November 2008 Winthrop Realty Trust effected a 1-for-5 reverse stock split, which we refer to as the Reverse Split, of its Common Shares of Beneficial Interest, which we refer to as Common Shares, pursuant to which each of five shares of its Common Shares issued and outstanding as of the close of the market on November 28, 2008 were automatically combined into one Common Share, subject to the elimination of fractional shares. All Common Share and per Common Share data included in this Annual Report on Form 10-K and the accompanying Consolidated Financial Statements and Notes thereto have been adjusted to reflect this Reverse Split.

PART I

ITEM 1. BUSINESS

General

Winthrop Realty Trust is a real estate investment trust formed under the laws of the State of Ohio. We conduct our business through our wholly owned operating partnership, WRT Realty L.P., a Delaware limited partnership, which we refer to as the Operating Partnership. All references to the “Trust”, “we”, “us”, “our”, “WRT” or the “Company” refer to Winthrop Realty Trust and its consolidated subsidiaries, including the Operating Partnership.

We are engaged in the business of owning real property and real estate related assets which we categorize into three reportable segments: (i) the ownership of investment properties, including properties in joint ventures consolidated or accounted for on a equity method basis, which we refer to as operating properties; (ii) the origination and acquisition of senior loans, mezzanine loans and debt securities secured directly or indirectly by commercial and multi-family real property, which loans we refer to as loan assets; and (iii) the ownership of equity and debt securities in other real estate investment trusts (REITs), which we refer to as REIT securities.

At December 31, 2010 we held (i) interests in operating properties totaling $373,142,000 and containing approximately 8.5 million square feet of rentable space, (ii) loan assets totaling $134,269,000, (iii) REIT securities with a market value of $33,032,000 and (iv) cash and cash equivalents of $45,257,000.

Our executive offices are located at 7 Bulfinch Place, Suite 500, Boston, Massachusetts 02114 and Two Jericho Plaza, Jericho, NY 11753. Our telephone number is (617) 570-4614 and our web site is located at http://www.winthropreit.com. The information contained on our web site does not constitute part of this Annual Report on Form 10-K. On our web site you can obtain, free of charge, a copy of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act of 1934, as amended, as soon as reasonably practicable after we file such material electronically with, or furnish it to, the Securities and Exchange Commission, which we refer to as the SEC.

History

We began operations in 1961 under the name First Union Real Estate Equity and Mortgage Investments. Effective December 31, 2003, FUR Investors LLC acquired 32% of our then outstanding Common Shares and FUR Advisors LLC, which we refer to as FUR Advisors or our Advisor, was retained as our external advisor, our Board of Trustees was substantially reconstituted and Michael Ashner was appointed Chief Executive Officer and he entered into an exclusivity agreement with the Trust. Since January 1, 2004, we have been externally managed by FUR Advisors. Both FUR Advisors and FUR Investors LLC are separate entities controlled by Mr. Ashner, owned by our current executive officers and senior management, including Mr. Ashner, and members of senior management of AREA Property Partners, formerly known as Apollo Real Estate Advisors Inc., a New York based real estate investment fund.

Commencing January 1, 2004, we began to seek out more opportunistic investments across the real estate spectrum, whether they be operating properties, loan assets or REIT securities. On January 1, 2005 we elected to form the Operating Partnership and contributed all of our assets to the Operating Partnership in exchange for 100% of the ownership interests in the Operating Partnership. Our Operating Partnership structure, commonly referred to as an umbrella partnership real estate investment trust, provides us with additional flexibility when acquiring properties as it enables us to acquire properties for cash and/or by issuing to sellers, as a form of consideration, limited partnership interests in our operating partnership thereby enabling us to structure transactions which may defer tax gains for a seller while preserving our available cash for other purposes.

Management

Under the terms of the Advisory Agreement between FUR Advisors and us, FUR Advisors administers our affairs including seeking, servicing and managing our investments. For providing these and other services, FUR Advisors receives a base management fee and is entitled to an incentive fee after common shareholders have received a return of a specified amount which is based on a fixed price for Common Shares outstanding at December 31, 2003 plus the issuance price for Common Shares issued thereafter together with a cumulative 7% annual return thereon. See “Employees” below for a description of the fees payable to FUR Advisors.

Pursuant to our bylaws, our executive officers are permitted to acquire or dispose of an investment with an aggregate value of $10,000,000 or less without the consent of our Board of Trustees. However, if such transaction is with (i) our Advisor (and any successor advisor), Michael Ashner, or any of their respective affiliates; (ii) certain stated entities which are, or were, affiliated with us; (iii) a beneficial owner of more than 4.9% of our outstanding Common Shares, either directly or upon the conversion of any of our Series B-1 Cumulative Convertible Redeemable Preferred Shares of Beneficial Interest, which we refer to as our Series B-1 Preferred Shares, or Series C Cumulative Convertible Redeemable Preferred Shares of Beneficial Interest, which we refer to as our Series C Preferred Shares; or (iv) a beneficial owner of more than 4.9% of any other entity in which we hold a 10% or greater interest, then regardless of the amount of the transaction, such transaction must be approved by a majority of our independent trustees, acting in their capacity as members of our Conflicts Committee.

Investment, Operating and Capital Strategy

We are engaged in the business of owning and managing real property and real estate related assets. Our business objective is to maximize long term shareholder value through a total return value approach to real estate investing. As a result of our emphasis on total return, while we seek to achieve a stable, predictable dividend for our shareholders, we do not select or manage our investments for short-term dividend growth, but rather towards achieving overall superior total return. We believe this approach will ultimately result in long term increased share value.

We are a diversified REIT and as such we are able to invest in transactions which a dedicated REIT with narrow investment parameters would be unable to consider resulting in a broad range of investment opportunities. These opportunities include different investment types, sectors, and geographic areas all at varying levels in the capital stack. As such, from time to time the types of real estate investments we will acquire may vary. In addition, because of our size we are able to make investments in transactions that are smaller and would generally be disregarded by larger real estate investors. In this regard, as opportunities present themselves and as market conditions dictate, we will focus our investment activity in one or more of our three business segments (i) operating properties; (ii) loan assets; and (iii) REIT securities, and aggressively pursue such opportunities. That is, subject to economic and credit market conditions, we will seek to:

•

acquire operating properties of specific property types and locations that we believe:

	•		are undervalued,
	•		present an opportunity to outperform the marketplace while providing recurring current or potentially recurring cash flow, or
	•		can provide superior returns through an infusion of capital and/or improved management;

•		acquire portfolios or interests in portfolios at properties within characteristics similar to the above;
•		acquire loan assets using the same criteria for operating properties, as well as consideration of loan assets that may present an opportunity for us to acquire through foreclosure an equity interest in the underlying real estate collateral;
•		acquire securities issued by other REITs we believe are undervalued; and
•		divest investments as they mature in value to the point where we may be unlikely to achieve better than market returns in order to redeploy capital to what we believe to be higher yielding opportunities. Consistent with our total return approach to investing, it is not possible to predict when we will exit any particular investment.

We acquire assets through direct ownership as well as through strategic alliances and ventures. Our primary sources of income are rental income and tenant recoveries from leases of our operating properties, interest income and discount accretion from our loan assets, and interest and dividend income and appreciation from our investments in REIT securities.

Based on market conditions in 2010, we focused our investment activity in our loan asset segment. We seek to enter into ventures with third parties who have a presence, experience and expertise in specific geographic areas and/or specific asset types. Further, with respect to ventures that we manage we seek to enhance our total return with asset management and other fees, and promoted economic interests and appreciation. We currently expect that our focus on loan assets will continue in 2011. Currently, we expect to concentrate our investment activities in assets that we believe are higher quality office, retail and multi-family properties along with high-end hospitality assets as we expect these will be the first to recover. We generally do not pursue those investments in which there is a significant component of raw land, development risk, specialty real estate or condominiums, unless the condominium project can be converted to a conventional multi-family property.

To enhance our total return, we utilize leverage. We seek to limit risk associated with utilization of leverage by seeking to make our investments through discrete single purpose entities in which we do not guaranty, other than customary environmental and recourse carve-out guarantees, the debt of our single purpose subsidiaries, thereby limiting the risk of loss to that particular investment or joint venture.

As a REIT, we are dependent primarily on external equity and debt financing to fund the growth of our business because of the distribution requirements for a REIT which significantly limits our ability to re-invest cash flow and capital proceeds. We have historically used public equity markets, joint venture equity, and secured financing as our primary sources of capital including raising capital through public offerings as we did in September 2010. We expect to continue to fund our investments through one or a combination of: cash reserves, borrowings under our credit facility, redeployment of capital from timely asset sales, property loans, the issuance of debt or equity securities and the formation of joint ventures. Finally, we maintain a stock purchase and dividend reinvestment plan which enables our existing shareholders to reinvest their dividends as well as purchase additional shares at a discounted price.

Assets

Loan Assets

The following table sets forth certain information relating to our loans receivable, carried at historical cost, and loan securities carried at fair value. All information presented is as of December 31, 2010. Dollars are stated in thousands.

		Loan						Stated Interest		Carrying								Maturity				Senior
Name		Position		Asset Type		Location		Rate (1)		Amount (2)				Par Value				Date (3)				Debt (4)
Loans Receivable
Beverly Hilton (10)		B Note		Hotel		Beverly Hills, CA		Libor + 1.74%		$	7,899			$	10,000				08/09/11			$	166,000
Metropolitan Tower		B Note		Office		New York, NY		Libor + 1.51%			10,312				15,000				11/01/11				81,559
Westwood *		Whole loan		Office		Phoeniz, AZ		11.00%			3,500				3,500				04/30/12				—
Siete Square		B Participation		Office		Phoeniz, AZ		10.37%			2,488				2,500	(5)			06/09/12				3,000
Moffett Towers *		B Note		Office		Sunnyvale, CA		Libor + 6.48%			21,752				21,603				07/31/12				108,786
160 Spear		B Note		Office		San Francisco, CA		9.75%			6,674				15,000	(5)			06/09/13				35,000
160 Spear		Mezzanine		Office		San Francisco, CA		15.00%			3,029				3,000				06/09/13				50,000
Legacy Orchard *		Secured		Corporate Loan		n/a		15.00%			9,750				9,750	(5)			10/31/14				—
San Marbeya *		Whole loan		Multi-Fam		Tempe, AZ		5.88%			26,966				30,930				01/01/15				—
Rockwell *		Mezzanine		Industrial		Shirley, NY		12.00%			255				1,496				05/01/16				17,045
500-512 7th Ave *		B Note		Office		New York, NY		7.19%			9,954				11,638				07/11/16				253,673
180 N. Michigan (6)		Mezzanine		Office		Chicago, IL		8.50%			1,862				1,862				12/31/16				18,080
Wellington Tower		Mezzanine		Mixed use		New York, NY		6.79%			2,456				3,501				07/11/17				22,500
CDH CDO LLC *		Unsecured		n/a		n/a		12.00%			3,498				3,498				12/30/15				—
										$	110,395
Loan Securities
WBCMT 2007 WHL8		CMBS		Hotel		Various		Libor + 1.75%		$	45				1,130				06/09/12				1,470,264
Metropolitan Tower*		Rake Bonds		Office		New York, NY		(7)			6,668				8,748				11/01/11				72,812
West Olive		Rake Bonds		Office		Burbank, CA		(8)			4,606				6,364				02/28/13				15,666
Concord CDO-1 *		CDO Bonds		Various		Various		Libor + 1.20%			662				662	(5)			12/25/46				288,025
										$	11,981
Loans in Equity Investment (9)
Riverside Plaza*		B Note		Retail		Riverside, CA		12.00%		$	7,883				7,800				12/01/12				54,400

Loan Asset Acquisitions

500-512 Seventh Avenue — New York, New York — B Note — On July 9, 2010 we acquired for $19,825,000 a $23,499,000 performing B note in a first mortgage loan which is subordinate to a $253,673,000 A note in the mortgage loan. The A note and B note are collateralized by a 1,188,000 square foot office building located at 500-512 Seventh Avenue New York, New York. The B note bears interest at 7.19% and has a scheduled maturity date of July 11, 2016. In August, 2010 we sold a participation in the B note as described in the “Loan Asset Modifications” section below.

San Marbeya Apartments — Tempe, Arizona — First Mortgage Loan - On July 23, 2010 we acquired for $26,990,000 a $31,106,000 performing first mortgage loan. The loan is collateralized by a 276 unit apartment complex referred to as San Marbeya Apartments located in Tempe, Arizona. The loan bears interest at a blended rate of 5.88% and has a scheduled maturity date of January 1, 2015. In January 2011 we sold a senior participation in this first mortgage loan as described in the “Loan Asset Modifications” section below.

Rockwell — Shirley, New York — Mezzanine Loan — On August 31, 2010 we acquired from Concord Debt Holdings, LLC, which we refer to as Concord, for $235,000 a $1,497,000 performing mezzanine loan. The loan is collateralized by a 129,660 square foot industrial/warehouse complex in Shirley, New York. The loan bears interest at 12% and has a scheduled maturity date of May 1, 2016.

Legacy Orchard —Corporate Loan - On October 22, 2010 we acquired for $9,750,000 an existing $39,000,000 performing loan made to a private real estate equity fund and then modified the loan to provide for: (i) an interest rate of 15% on the $9,750,000 investment amount; (ii) collateral in the form of a $3,000,000 million letter of credit, a first mortgage on land and a security interest in other assets; (iii) a scheduled maturity date of October 31, 2014 and, (iv) subject to the satisfaction of certain conditions by the borrower a discounted payoff option after one year of $9,750,000.

Westwood Business Park — Phoenix, Arizona — Whole Loan — On October 29, 2010 we acquired for $4,100,000, a first mortgage loan secured by an interest in four class B office buildings, containing 91,100 square feet of office space in Phoenix, Arizona. Upon acquisition of the loan, the borrower made a principal payment of $600,000 and the loan was restructured to reduce the then outstanding principal to $3,500,000 and to provide for a future funding component which allows the borrower to draw up to $400,000 to fund 50% of the tenant improvement and leasing commission costs on new leases. The loan bears interest at 11% and has a scheduled maturity date of October 31, 2011.

Moffett Towers — Sunnyvale, California — B Note - On October 29, 2010 we acquired at par a $21,428,000 senior participation in a B note secured by a first mortgage lien on a 951,000 square foot, recently constructed class A office complex located in Sunnyvale, California. The loan bears interest at Libor plus 6.48% (with a Libor floor of 1.5%) and has a scheduled maturity date of January 31, 2012.

Metropolitan Tower — New York, New York — Rake Bonds — On December 30, 2010, pursuant to a purchase option, we acquired from Concord Debt Funding Trust, which we refer to as CDFT, for $5,250,000 two rake bonds with an aggregate face amount of approximately $8,748,000, a weighted average interest rate of Libor plus 1.30% which have a scheduled maturity date of November 1, 2011. The rake bonds are secured by the 260,000 square feet of office space constituting the office portion of Metropolitan Tower located in New York, New York. On December 30, 2010 in connection with the acquisition of the Metropolitan Tower rake bonds CDFT borrowed $3,498,000 from us in the form of an unsecured loan. The loan bears interest at 12% and has a scheduled maturity date of December 30, 2015.

Loan Asset Modifications

Siete Square — Phoenix, Arizona — B Note Participation — On February 5, 2010, we restructured our loan into a $3,000,000 Sub-Participation A interest which bears interest at 8% and a $4,219,000 Sub-Participation B interest. We sold the Sub-Participation A interest at par to Concord Real Estate CDO-1, Ltd., which was refer to as CDO-1, on the same date.

500-512 Seventh Avenue — New York, New York — B Note Participation — On August 4, 2010, we restructured our loan and sold a 50% pari passu participation interest in the B note for a purchase price of $9,859,000 which represented one-half of our cost basis in the B note.

San Marbeya Apartments, Tempe, Arizona-First Mortgage Loan — On January 14, 2011, we restructured our loan into a $15,150,000 senior participation, which bears interest at 4.85%, and a $15,744,000 junior participation, which bears interest at 6.4%. We concurrently sold the senior participation to CDO-1 at par.

Loan Asset Acquisitions and Conversions to Operating Properties

Crossroads II at Meridian, Englewood Colorado- On June 11, 2010 we acquired for $8,100,000 a $10,031,000 non-performing first mortgage loan collateralized by an 118,000 square foot, class A office building located at 9780 Mount Pyramid Court, Englewood Colorado, known as Crossroads II at Meridian. On November 17, 2010 we foreclosed on the first mortgage loan and acquired the property.

Deer Valley Medical Center, Deer Valley, Arizona — On June 28, 2010 we acquired for $10,257,000 a $20,491,000 non-performing first mortgage loan collateralized by an 86,000 square foot, class A medical office building known as the Deer Valley Professional Center. On August 6, 2010 we foreclosed on the first mortgage loan and acquired the property.

Newbury Apartments — Meriden, Connecticut — On September 2, 2010 we acquired from Concord for $550,000 a non-performing mezzanine loan with a face amount of $3,500,000, which was collateralized by a 180 unit multi-family apartment complex located in Meriden, Connecticut. The loan was subordinate to a non-performing first mortgage loan with a principal balance of approximately $23,875,000. On October 29, 2010 we foreclosed on the equity interest in the property owner resulting in our becoming the indirect owner of the property subject to the first mortgage loan.

In February 2011 we reached an agreement with the first mortgage lender to repay all past due interest and fees of approximately $853,000, to fund escrows of approximately $83,000, to prepay March’s debt service inclusive of escrows of approximately $150,000 and to pay a modification fee of approximately $119,000 (0.5% of the loan balance). In exchange the lender waived all defaulted interest, modified the payments to interest only and extended the maturity date to February 1, 2014.

Loan Asset Acquired and Repaid During the Year

Driver Building — San Diego, California — On May 14, 2010 we acquired at par a non-performing $6,540,000 first mortgage loan. On August 27, 2010 we received full repayment on the outstanding principal, stated and defaulted interest as well as late fees.

1701 E. Woodfield Road — Schaumburg, Illinois — On July 1, 2010 we acquired for $8,200,000 a $10,408,000 performing first mortgage loan collateralized by a 174,400 square foot office building located at 1701 E. Woodfield Road, Schaumburg, Illinois, a suburb of Chicago. The property is owned in a joint venture with Marc Realty. Simultaneously with the acquisition of this loan, the venture made a principal payment on the loan of $3,200,000 (both Marc Realty and us contributed 50% each) and the loan was modified to reduce the balance to $5,000,000, increase the interest rate to 8% per annum and extend its maturity to July 1, 2011. The joint venture subsequently repaid the outstanding principal and interest on September 28, 2010 from the proceeds of a new first mortgage loan.

Scripps Center, Costa Mesa, California — Rake Bonds - On July 16, 2010 we acquired from Concord for $1,200,000 two rake bonds with an aggregate face amount of $2,273,000. The bonds were repaid at face on December 1, 2010.

Loan Asset Acquisitions and Other Loan Asset Transaction Activity through our Equity Investments

Riverside Shopping Center, Riverside, California — On June 28, 2010 we formed a 50%-50% joint venture entity which acquired at par a 12% $15,600,000 B participation in a performing $70,000,000 first mortgage loan. The first mortgage loan is collateralized by a 405,000 square foot retail center located in Riverside, California.

Peter Cooper Village/Stuyvesant Town Investments, New York, New York — On August 6, 2010 we formed a joint venture, PSW NYC LLC, which we refer to as PSW NYC, in which we held a 22.5% interest, to acquire 100% of the $300,000,000 face amount of certain mezzanine loans indirectly collateralized by an 11,227 unit apartment complex in New York City for a purchase price of $45,000,000, with the intention of foreclosing on the collateral. As a result of an action brought by the first mortgage lender PSW NYC was prohibited from foreclosing. To settle the matter with the first mortgage lender, PSW NYC agreed to sell to the first mortgage lender the mezzanine loans for the original cost ($45,000,000) paid by PSW NYC.

Concord, CDH CDO and Lex-Win Concord LLC — On August 26, 2010, we, together with our two joint venture partners in Concord, restructured the investment such that each partner now holds a one-third interest in Concord and in a newly formed entity, CDH CDO LLC, which we refer to as CDH CDO. As part of the restructuring, Concord transferred to CDH CDO for $10,635,000 the equity interest in CDFT, the sole equity owner of CDO-1. The purchase price was funded by a capital contribution from one of our joint venture partners which contribution is entitled to a priority return of 10% per annum. Also during 2010 and the first quarter of 2011, Concord satisfied its obligations under its Credit Suisse repurchase agreement and one if its RBS repurchase agreements. As a result, Concord’s sole remaining obligations are with its KeyBank credit facility and its RBS repurchase agreement with respect to its interest in the Sofitel hotel in New York, New York. Although Concord remains in violation of certain debt covenants under both of these remaining obligations, Concord’s debt is non-recourse to us and Concord’s lenders’ sole recourse with respect to defaults is limited to the value of Concord’s assets.

In January 2010, CDFT submitted for cancellation certain bonds issued by CDO-1 and held by CDFT. The trustee for CDO-1 refused to cancel such bonds and CDO-1 brought an action in the Delaware Court of Chancery seeking declaratory relief that such bonds should be cancelled and no longer remained outstanding. Pending the court’s decision, the trustee escrowed all payments on account of the bonds and distributions payable to CDFT from CDO-1’s assets. In addition, the trustee also escrowed any principal payments that could otherwise have been used for reinvestment by CDO-1 in additional or replacement assets. In May 2010 the Delaware Court of Chancery issued a ruling that the bonds submitted for cancellation should be deemed no longer outstanding effective January 2010. The trustee appealed the ruling and on March 4, 2011, the Delaware Supreme Court affirmed the Delaware Court of Chancery’s ruling that the bonds submitted for cancellation should be deemed no longer outstanding effective January 2010. As a result, we expect the trustee to release the funds held in escrow thereby enabling CDO-1 to make all current and past due payments on its remaining bonds as well as to pay distributions to CDFT, which distributions will be used by CDFT to repay the loan of $3,498,000 made by us on December 30, 2010 and the purchase price owed by CDFT to us on account of its purchase of CDO-1 bonds originally purchased by us and which CDFT had an option to acquire. In addition, we expect that the trustee will release the approximately $33,497,000 in principal payments received and held in the CDO-1 reinvestment account which may be used by CDO-1 to acquire new assets for the benefit of CDO-1’s noteholders and CDFT. Furthermore, assuming CDO-1 continues to satisfy its financial tests set forth in its indenture, we expect that CDO-1 will continue to make distributions to CDFT, which in turn will make distributions to its equity holders including us.

Operating Properties

In addition to the loans that were converted to operating properties through foreclosure previously discussed, we made the following acquisitions in 2010:

Operating Property Acquisitions

Crossroads I at Meridian — Englewood, Colorado — On December 22, 2010 we acquired for $8,700,000 an 118,000 square foot, class A office building located at 9800 Mount Pyramid Court, Englewood, Colorado known as Crossroads I at Meridian, which is adjacent to the Crossroads II property we acquired through foreclosure in November 2010.

Land Acquisitions

Kroger Properties — During the first quarter of 2010 we exercised our option to acquire the land underlying six of the properties held in land estates which were scheduled to expire on October 31, 2010 and were leased to the Kroger Company. The acquisition of the six land parcels was consummated on November 1, 2010 at an aggregate purchase price of approximately $4,209,000.

Plantation Florida — On November 22, 2010 we exercised our option and acquired the land underlying the Plantation, Florida property leased to BellSouth Telecommunication, Inc. for a purchase price of $4,000,000.

Andover, Massachusetts —On December 20, 2010 we exercised our option and acquired the land underlying the Andover, Massachusetts property leased to PAETEC Communications, Inc. for a purchase price of $1,200,000.

REIT Securities

At December 31, 2010 our investments in REIT securities consisted of the following (in thousands):

		Cost				Fair Value
REIT Preferred Shares		$	15,757			$	28,547
REIT Common Shares			3,590				4,485
		$	19,347			$	33,032

Revolving Line of Credit

For information on our Revolving Line of Credit, see ITEM 8 — Financial Statements and Supplementary Data, Note 10.

Employees

As of December 31, 2010, we had no employees. Our affairs are administered by our Advisor, pursuant to the terms of the Advisory Agreement, which includes providing asset management services and coordinating with our shareholder transfer agent and property managers. Under the Advisory Agreement, during 2009 we paid our Advisor a quarterly base management fee equal to 1.5% of (i) the issuance price of our outstanding equity securities plus (ii) 0.25% of any equity contribution by an unaffiliated third party to a venture managed by us. For purposes of the calculation, the 15,754,495 Common Shares outstanding at January 1, 2009 were valued at $11.00 and with respect to the 1,496,000 Series B-1 Preferred Shares outstanding after giving effect to the repurchases of Series B-1 Preferred Shares during the fourth quarter of 2008 and the first quarter of 2009 were valued at $25.00 per Series B-1 Preferred Share. Any additional future conversions, redemptions or repurchases of the Series B-1 Preferred Shares do not reduce the base equity for purposes of the base management fee calculation.

Effective January 1, 2010, the Advisory Agreement was amended so that the determination of the issuance price of Common Shares reverted back to the pre 2009 definition such that the fee is to be calculated on the actual issuance price of Common Shares instead of a fixed price for Common Shares issued prior to January 1, 2009. This change will result in an increase, without giving effect to any additional shares issuances, to the annual advisory fee payable to FUR Advisors of approximately $2,100,000 over what would have been paid without the amendment, which increase was phased in with 54% of the increase being paid during 2010. The full impact of the increase will be recognized in 2011.

Pursuant to the terms of the Advisory Agreement, in addition to receiving a base management fee, FUR Advisors is entitled to receive an incentive fee for administering the Trust. FUR Advisors, or its affiliate, is also entitled to receive property and construction management fees at commercially reasonable rates, as determined by our independent Trustees. The incentive fee which is equal to 20% of any amounts available for distribution in excess of a threshold amount (as defined) is only payable at such time, if at all, (i) when holders of our Common Shares receive aggregate distributions above a threshold amount or (ii) upon termination of the Advisory Agreement, if the net value of our assets exceeds the threshold amount based on then current market values and appraisals. That is, the incentive fee is not payable annually but only at such time, if at all, as shareholders have received a return of invested capital (based on initial share issuance price) plus a 7% annual return thereon (the threshold amount) or, if the Advisory Agreement is terminated, if the assets of the Trust exceed the threshold amount. At December 31, 2010 the threshold amount was approximately $468,193,000, which was equivalent to $16.58 per diluted Common Share.

Competition

We have competition with respect to our acquisition of operating properties and our acquisition and origination of loan assets with many other companies, including other REITs, insurance companies, commercial banks, private investment funds, hedge funds, specialty finance companies and other investors. Some competitors may have a lower cost of funds and access to funding sources that are not available to us. In addition, some of our competitors may have higher risk tolerances or make different risk assessments, which could allow them to consider a wider variety of investments. We cannot assure you that the competitive pressures we face will not have a material adverse effect on our business, financial condition and results of operations.

We will continue to capitalize on the acquisition and investment opportunities that our Advisor brings to us as a result of its acquisition experience as well as our partners in ventures. We derive significant benefit from our present advisor structure, where our Advisor’s experienced management team provides us with resources at substantially less cost than if such persons were directly employed by us. Through its broad experience, our Advisor’s senior management team has established a network of contacts and relationships, including relationships with operators, financing sources, investment bankers, commercial real estate brokers, potential tenants and other key industry participants.

Environmental Regulations

Our operations and properties are subject to various federal, state and local laws and regulations concerning the protection of the environment including air and water quality, hazardous or toxic substances and health and safety. These are discussed further under ITEM 1A — Risk Factors.

Segment Data

Business segment data may be found under ITEM 8 — Financial Statements Note 20 and Supplementary Data.

Additional Information

The following materials are available free of charge through our website at www.winthropreit.com as soon as reasonably practicable after they are electronically filed with or furnished to the SEC under the Securities Exchange Act of 1934, as amended:

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our Annual Reports on Form 10-K and all amendments thereto;

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our quarterly reports on Form 10-Q and all amendments thereto;

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our current reports on Form 8-K and all amendments thereto;

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other SEC filings;

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organizational documents;

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Audit Committee Charter;

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Compensation Committee Charter;

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Conflicts Committee Charter;

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Nominating and Corporate Governance Committee Charter;

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Code of Business Conduct and Ethics; and

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Corporate Governance Guidelines.

We will provide a copy of the foregoing materials without charge to anyone who makes a written request to our Investor Relations Department, c/o FUR Advisors, LLC, 7 Bulfinch Place, Suite 500, P.O. Box 9507, Boston, Massachusetts 02114.

We also intend to promptly disclose on our website any amendments that we make to, or waivers for our Trustees or executive officers that we grant from, the Code of Business Conduct and Ethics.

New York Stock Exchange Certification

As required by applicable New York Stock Exchange listing rules, on June 14, 2010, following our 2010 Annual Meeting of Shareholders, our Chairman and Chief Executive Officer submitted to the New York Stock Exchange a certification that he was not aware of any violation by us of New York Stock Exchange corporate governance listing standards.

ITEM 1A — RISK FACTORS

We, our assets and the entities in which we invest are subject to a number of risks customary for REITs, property owners, loan originators and holders and equity investors as well as a number of risks involved in our investment, operating, and capital strategy policy that not all REITs may have. Material factors that may adversely affect our business operations and financial conditions are summarized below.

Risks incidental to real estate investments.

As a REIT our investments are limited to direct ownership and operation of operating properties, loan assets secured, directly or indirectly, by operating assets, and investments in other REITs. Accordingly, an investment in us depends upon our financial performance and the value of our operating properties held from time to time as well as those securing our loan assets, and those held by the REITs in which we invest, which operating properties are subject to the risks normally associated with the ownership, operation and disposal of real estate properties and real estate related assets, including:

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adverse changes in general and local economic conditions which affect the demand for real estate assets;

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competition from other properties;

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increases in interest rates;

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reduced availability of financing;

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the cyclical nature of the real estate industry and possible oversupply of, or reduced demand for, properties in the markets in which our investments are located;

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the attractiveness of our properties to tenants and purchasers;

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how well we manage our properties;

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changes in market rental rates and our ability to rent space on favorable terms;

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the financial condition of our tenants and borrowers including their becoming insolvent and bankrupt;

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the need to periodically renovate, repair and re-lease space and the costs thereof;

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increases in maintenance, insurance and operating costs;

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civil unrest, armed conflict or acts of terrorism against the United States; and

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earthquakes floods and other natural disasters or acts of God that may result in uninsured losses.

In addition, changes to applicable federal, state and local regulations, zoning and tax laws and potential liability under environmental and other laws affect real estate values. Further, throughout the period that we own real property, regardless of whether or not a property is producing any income, we must make significant expenditures, including those for property taxes, maintenance, insurance and related charges and debt service. The risks associated with real estate investments may adversely affect our operating results and financial position, and therefore the funds available for distribution to you as dividends.

We may change our investment and operational policies.

We may change our investment and operating strategy either voluntarily or as result of changing economic conditions, including our policies with respect to investments, acquisitions, growth, operations, indebtedness, capitalization and distributions at any time which could result in our making investments that are different from, and possibly riskier than, our current investments. A change in our investment strategy may increase our exposure to interest rate risk, default risk and real estate market fluctuations, all of which could adversely affect our financial condition, results of operations, share price and our ability to make distributions.

We may not be able to invest our cash reserves in suitable investments.

As of December 31, 2010, we had approximately $45,257,000 of cash and cash equivalents available for investment. Our ability to increase entity value is dependent upon our ability to grow our asset base by investing these funds, as well as additional funds which we may raise or borrow, in real estate related assets that will ultimately generate more favorable returns.

We may not be able to obtain capital to make investments.

As a REIT, we are dependent primarily on external financing to fund the growth of our business because one of the requirements for a REIT is that it distribute at least 90% of its annual REIT taxable income, subject to certain adjustments, to its shareholders. Accordingly, to the extent we are unable to obtain debt or equity financing it will likely have a material adverse affect on our financial condition and results of operations, our stock price and our ability to pay dividends to our shareholders.

We are subject to significant competition and we may not compete successfully.

We have significant competition with respect to our acquisition of operating properties and our acquisition and origination of loan assets with many other companies, including other REITs, insurance companies, commercial banks, private investment funds, hedge funds, specialty finance companies and other investors some of which may have a lower cost of funds and access to funding sources that are not available to us. In addition, many of our competitors have greater resources than we do and for this and other reasons, we may not be able to compete successfully for particular investments.

Investing through ventures presents additional risks.

Our investments in ventures present additional risks such as our having objectives that differ from those of our partners or in the investments we make, becoming involved in disputes concerning operations, or possibly competing with those persons for investments unrelated to our venture. In addition, where we do not control the venture, we rely on the internal controls and financial reporting controls of our partners and, as such, their failure to comply with applicable standards may adversely affect us.

Investing in private companies involves specific risks.

We have held and may acquire additional ownership interests in private companies not subject to the reporting requirements of the SEC. Investments in private businesses involve a higher degree of business and financial risk, which can result in substantial losses and accordingly should be considered speculative. There is generally no publicly available information about these private companies, and we will rely significantly on the due diligence of our Advisor to obtain information in connection with our investment decisions.

Our due diligence may not reveal all of the liabilities associated with a proposed investment and may not reveal other weaknesses.

There can be no assurance that due diligence by our Advisor in connection with a new investment will uncover all relevant facts which could adversely affect the value of the investment and the success of the investment.

We face risks associated with property acquisitions.

We acquire properties and portfolios of properties, including large portfolios that would increase our size and potentially alter our capital structure. Although we enter into these acquisitions with the belief that they will enhance our future financial performance, the success of such transactions is subject to a number of factors, including the risk that:

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we may not be able to obtain financing for acquisitions on favorable terms;

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acquired properties may fail to perform as expected;

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the actual costs of repositioning or redeveloping acquired properties may be higher than our estimates;

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acquired properties may be located in new markets where we may have limited knowledge and understanding of the local economy, an absence of business relationships in the area or unfamiliarity with local governmental and permitting procedures; and

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we may not be able to efficiently integrate acquired properties, particularly portfolios of properties, into our organization and manage new properties in a way that allows us to realize cost savings and synergies.

In the future we may acquire properties or portfolios of properties through tax deferred contribution transactions in exchange for partnership interests in our Operating Partnership. This acquisition structure has the effect, among other factors, of reducing the amount of tax depreciation we can deduct over the tax life of the acquired properties, and typically requires that we agree to protect the contributors’ ability to defer recognition of taxable gain through restrictions on our ability to dispose of the acquired properties and/or the allocation of partnership debt to the contributors to maintain their tax bases. These restrictions on dispositions could limit our ability to sell an asset during a specified time, or on terms, that would be favorable absent such restrictions.

Acquired properties may subject us to known and unknown liabilities.

Properties that we acquire may be subject to known and unknown liabilities for which we would have no recourse, or only limited recourse, to the former owners of such properties. As a result, if a liability were asserted against us based upon ownership of an acquired property, we might be required to pay significant sums to settle it, which could adversely affect our financial results and cash flow. Unknown liabilities relating to acquired properties could include:

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liabilities for clean-up of pre-existing disclosed or undisclosed environmental contamination;

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claims by tenants, vendors or other persons arising on account of actions or omissions of the former owners of the properties; and

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liabilities incurred in the ordinary course of business.

Failure to renew expiring leases could adversely affect our financial condition.

We are subject to the risk that, upon expiration, leases may not be renewed, the space may not be relet or the terms of renewal or reletting, including the cost of any required renovations, may be less favorable than the prior or current lease terms. This risk is substantial with respect to our net leased properties as single tenants lease 100% of each property. Thirteen of our properties, containing an aggregate of approximately 2,560,000 square feet of space are net leased to six different tenants. Leases accounting for approximately 5% of the aggregate annualized base rents from our operating properties for 2010, representing approximately 5% of the net rentable square feet at the properties, are scheduled to expire in 2011. The lease at our Churchill, Pennsylvania property which accounted for approximately $3,100,000 in annual rental revenue in 2010, expired December 31, 2010. Other leases grant tenants early termination rights upon payment of a termination penalty. Lease expirations will require us to locate new tenants and negotiate replacement leases with them. The costs for tenant improvements, tenant concessions and leasing commissions with respect to new leases are traditionally greater than costs relating to renewal leases. If we are unable to promptly relet or renew leases for all or a substantial portion of the space subject to expiring leases, or if the rental rates upon such renewal or reletting are significantly lower than expected, our revenue and net income could be adversely affected.

We are subject to risks associated with the financial condition of our and our borrower’s tenants.

Our tenants or tenants at properties securing our loan assets may experience a downturn in their business resulting in their inability to make rental payments when due. In addition, a tenant may seek the protection of bankruptcy, insolvency or similar laws, which could result in the rejection and termination of such tenant’s lease and cause a reduction in our cash flow. If this were to occur at a net lease property, the entire property would become vacant.

We cannot evict a tenant solely because of its filing for bankruptcy. A bankruptcy court, however, may authorize a tenant to reject and terminate its lease. In such a case, our claim against the tenant for past due rent and unpaid future rent would be subject to a statutory cap that might be substantially less than the remaining rent owed under the lease. In any event, it is unlikely that a bankrupt tenant will pay the entire amount it owes us under a lease. The loss of rental payments from tenants could adversely affect our financial condition and results of operations.

Similarly, if a tenant at a property securing a loan asset fails to meet its rental obligations, the borrower may have insufficient funds to satisfy the debt service resulting in a default on our loan asset. Additionally, the loss of a tenant at a property securing a loan asset could negatively impact the value of the property and, therefore, our collateral.

The loss of a major tenant could adversely affect our financial condition.

We are and expect that we will continue to be subject to a degree of tenant concentration at certain of our operating properties and the properties securing our loan assets. As indicated above, we are subject to risks associated with the financial condition of our tenants and tenants at properties securing our loan assets. In the event that a tenant occupying a significant portion of one or more of our properties or whose rental income represents a significant portion of the rental revenue at such property or properties were to experience financial weakness, default on its lease, elect not to renew its lease or file bankruptcy it would negatively impact our financial condition and results of operations. Similarly, if a tenant occupying a significant portion of one or more of the properties securing our loan assets or whose rental income represents a significant portion of the rental revenue at such property or properties experiences financial weakness defaults on its lease, elects not to renew its lease or files for bankruptcy, it would negatively impact our financial condition and results of operations.

We may experience increased operating costs, which might reduce our profitability.

Our properties are subject to increases in operating expenses such as for cleaning, electricity, heating, ventilation and air conditioning, administrative costs and other costs associated with security, landscaping and repairs and maintenance of our properties. In general, under our leases with tenants, we pass through all or a portion of these costs to them. There can be no assurance that tenants will actually bear the full burden of these higher costs, or that such increased costs will not lead them, or other prospective tenants, to seek office space elsewhere. If operating expenses increase, the availability of other comparable office space in the geographic markets of our properties might limit our ability to increase rents; if operating expenses increase without a corresponding increase in revenues, our profitability could diminish and limit our ability to make distributions to shareholders.

We leverage our portfolio, which may adversely affect our financial condition and results of operations.

We seek to leverage our portfolio through borrowings. Our return on investments and cash available for distribution to holders of our Series B-1 and Series C Preferred Shares and Common Shares may be reduced to the extent that changes in market conditions make new borrowings or refinancing of existing debt difficult or even impossible or cause the cost of our financings to increase relative to the income that can be derived from the assets. Our debt service payments reduce the cash available for distributions to holders of Series B-1 and Series C Preferred Shares and Common Shares. We may not be able to meet our debt service obligations and, to the extent that we cannot, we risk the loss of some or all of our assets to foreclosure or forced sale to satisfy our debt obligations. A decrease in the value of the assets may lead to a requirement that we repay certain existing or future credit facilities. We may not have the funds available, or the ability to obtain replacement financing, to satisfy such repayments.

Interest rate fluctuations may reduce our investment return.

Certain of our loan obligations and loan assets have floating interest rates. In such cases, an increase in interest rates would increase our loan obligations while a decrease in interest rates would decrease the interest received on our loan assets. Where possible we seek to mitigate these risks by acquiring interest rate cap agreements, rate collars and other similar protections. To the extent we have not mitigated these risks or our actions are ineffective, a fluctuation in interest rates could negatively impact our cash flow due to an increase in loan obligations or a decrease in interest received on our loan assets.

We engage in hedging transactions that may limit gains or result in losses.

We have and may continue to use hedging instruments in our risk management strategy to limit the effects of changes in interest rates on our operations. A hedge may not be effective in eliminating all of the risks inherent in any particular position. Further, we have and could in the future recognize losses on a hedge position which adversely effects our financial condition and results of operations. In addition, we run the risk of default by a counterparty to a hedging arrangement.

We may be unable to refinance our existing debt or preferred share financings or obtain favorable refinancing terms.

We are subject to the normal risks associated with debt and preferred share financings, including the risk that our cash flow will be insufficient to meet required payments of principal and interest on debt and distributions and redemption payments to holders of preferred shares and the risk that indebtedness on our properties, or unsecured indebtedness, will not be able to be renewed, repaid or refinanced when due, or that the terms of any renewal or refinancing will not be as favorable as the terms of such indebtedness. These risks are exacerbated by the current tightened lending requirements for real estate related assets and in some cases the inability to refinance real estate indebtedness. If we were unable to refinance indebtedness or preferred share financings on acceptable terms, or at all, we might be forced to dispose of one or more of our investments on disadvantageous terms, which might result in losses to us, which could have a material adverse affect on us and our ability to pay distributions to our holders of Preferred Shares and Common Shares. Furthermore, if a property is mortgaged or a loan pledged to secure payment of indebtedness and we are unable to meet the debt payments, the lender could foreclose upon the property or the loan, appoint a receiver or obtain an assignment of rents and leases or pursue other remedies, all with a consequent loss of revenues and asset value to us. Foreclosures could also create taxable income without accompanying cash proceeds, thereby hindering our ability to meet the REIT distribution requirements.

The loans we invest in are subject to delinquency and loss.

Our loan assets are directly or indirectly secured by income producing property. The ability of a borrower to make payments on the loan underlying these securities is dependent primarily upon the successful operation of the property rather than upon the existence of independent income or assets of the borrower since the underlying loans are generally non-recourse in nature. These loans are subject to risks of delinquency and foreclosure as well as risk associated with the capital markets. If a borrower were to default on a loan, it is possible that we would not recover the full value of the loan.

We may be unable to foreclose on the collateral securing our loan assets on a timely basis.

In certain states foreclosing on a property can be a lengthy and costly process. In addition, a borrower can file for bankruptcy or raise defenses that could delay our ability to realize on our collateral on a timely basis. In such instances, the increased costs and time required to realize on our collateral would likely result in a reduced return on the investment.

The subordinate loan assets we invest are subject to risks relating to the structure and terms of the transactions, and there may not be sufficient funds or assets to satisfy our subordinate notes, which may result in losses to us.

We invest in loan assets that are subordinate in payment and collateral to more senior loans. If a borrower defaults or declares bankruptcy, after the more senior obligations are satisfied, there may not be sufficient funds or assets remaining to satisfy our subordinate notes. Because each transaction is privately negotiated, subordinate loan assets can vary in their structural characteristics and lender rights, including our rights to control the default or bankruptcy process. The subordinate loan assets that we invest in may not give us the right to demand foreclosure as a subordinate debtholder. Furthermore, the presence of intercreditor agreements, co-lender agreements and participation agreements may limit our ability to amend the loan documents, assign the loans, accept prepayments, exercise remedies and control decisions made in bankruptcy proceedings relating to borrowers. Bankruptcy and borrower litigation can significantly increase the time needed for us to acquire possession of underlying collateral in the event of a default, during which time the collateral may decline in value. In addition, there are significant costs and delays associated with the foreclosure process.

The widening of credit spreads could have a negative impact on the value of our loan asset and REIT debt securities.

The fair value of our loan assets is dependent upon the yield demanded on these assets by the market based on the underlying credit as well as general economic conditions. Although many of our directly held loan assets were purchased at significant discounts, a further deterioration of the real estate markets or a large supply of these loan assets available for sale combined with reduced demand will generally cause the market to require a higher yield on these loan assets, resulting in a higher, or “wider,” spread over the benchmark rate of such loan assets. Under these conditions, the value of the loan assets in our portfolio would decline.

Our investments in REIT debt securities are also subject to changes in credit spreads as their value is dependent upon the yield demanded on these securities by the market based on the underlying credit. Excessive supply of these securities combined with reduced demand will generally cause the market to require a higher yield on these real estate securities, resulting in the use of a higher, or “wider,” spread over the benchmark rate to value such securities. Under such conditions, the value of our REIT debt securities portfolio would tend to decline. Such changes in the market value of our portfolio may adversely affect our financial condition and results of operations.

The deterioration of the credit markets has had an adverse impact on the ability of borrowers to obtain replacement financing.

The deterioration of credit markets has made it extremely difficult for borrowers to obtain mortgage financing. The inability of borrowers to obtain replacement financing has led and will likely continue to lead to more loan defaults thereby resulting in expensive and time consuming foreclosure actions and/or negotiated extensions to existing loans beyond their current expirations on terms which may not be as favorable to us as the existing loans.

A prolonged economic slowdown, a lengthy or severe recession or continued instability in the credit markets could harm our operations and viability.

A prolonged economic slowdown, a lengthy or severe recession or the continued instability in the credit market has and will affect our operations and viability in a number of ways including:

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Depressing prices for our investments, operating properties and loan assets;

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Decreasing interest income received or increases in interest expenses paid;

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Reducing the number of potential purchasers for our assets;

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Increasing risk of default on loan assets;

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Limiting the ability to obtain new or replacement financing; and

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Limiting the ability to sell additional debt or equity securities.

Many of our investments are illiquid, and we may not be able to adjust our portfolio in response to changes in economic and other conditions, which may result in losses to us.

Many of our investments are relatively illiquid and, therefore, our ability to sell or purchase assets in response to a change in economic or other conditions may be limited. The requirements of the Code that we hold assets for a set period of time or risk losing status as a REIT also may limit our ability to sell investments. These considerations could make it difficult for us to dispose of assets, even if a disposition were in the best interest of our shareholders. As a result, our ability to adjust our portfolio in response to changes in economic and other conditions may be relatively limited, which may result in losses and lost opportunities.

Our investments in REIT securities are subject to specific risks relating to the particular REIT issuer of the securities and to the general risks of investing in REITs.

Our investments in REIT securities involve special risks. These risks include many, if not all, of the foregoing risks which apply to an investment in us, including: (i) risks generally incident to interests in real estate assets; (ii) risks associated with the failure to maintain REIT qualification; (iii) risks that may be presented by the type and use of a particular property; and (iv) risks that the issuer of the security may reduce or eliminate expected dividend payments.

Some of our potential losses may not be covered by insurance.

We use our discretion in determining amounts, coverage limits and deductibility provisions of insurance, with a view to maintaining appropriate insurance coverage on our investments at a reasonable cost and on suitable terms. This may result in insurance coverage that, in the event of a substantial loss, would not be sufficient to pay the full current market value or current replacement cost of the lost investment and also may result in certain losses being totally uninsured. Inflation, changes in building codes, zoning or other land use ordinances, environmental considerations, lender imposed restrictions or other factors might not make it feasible to use insurance proceeds to replace the building after such building has been damaged or destroyed. Under such circumstances, the insurance proceeds, if any, received by us might not be adequate to restore our economic position with respect to such property. With respect to our net leased properties, under the lease agreements for such properties, the tenant is required to adequately insure the property, but should a loss occur their failure or inability to have adequate coverage might adversely affect our economic position with respect to such property.

We have significant distribution obligations to holders of our Series B-1 and Series C Preferred Shares.

The provisions of our Series B-1 and Series C Preferred Shares currently require us to make quarterly distributions presently aggregating approximately $405,000 or $1,619,000 annually before any distributions may be made on our Common Shares.

Covenants in our debt instruments could adversely affect our financial condition and our ability to make future investments.

Debt instruments under which we are an obligor contain customary covenants such as those that limit our ability, without the prior consent of the lender, to further encumber, directly or indirectly, the applicable property. Our credit facility contains, and other loans that we may obtain in the future may contain, customary restrictions, requirements and other limitations on our ability to incur indebtedness. These restrictions can include, among other things, a limitation on our ability to incur debt based upon the level of our ratio of total debt to total assets, our ratio of secured debt to total assets, our ratio of EBITDA to interest expense and fixed charges, and a requirement for us to maintain a certain level of unencumbered assets to unsecured debt. Our ability to borrow under our credit facility with KeyBank National Association is subject to compliance with certain other covenants including the absence of factors both within and outside of our control. If we fail to comply with our covenants, it would cause a default under the applicable debt instrument, and we may then be required to repay such debt with funds from other sources which may not be available to us, or be available only on unattractive terms. Further, a default under a debt instrument could limit our ability to obtain additional equity or debt financing in the future, either of which would adversely affect our financial condition and results of operations.

Covenants in our Preferred Shares limit our ability to issue additional preferred shares.

Our Series B-1 Preferred Shares restrict our ability to issue shares senior or pari passu in priority the Series B-1 Preferred Shares without the consent of two-thirds in interest of our Series B-1 Preferred Shares. Similarly, our Series C Preferred Shares restrict our ability to issue shares senior or, subject to limited issuance rights, pari passu in priority the Series C Preferred Shares without the consent of two-thirds in interest of our Series C Preferred Shares. Accordingly, our ability to raise capital through the issuance of additional preferred shares is significantly restricted until the Series B-1 and Series C Preferred Shares are redeemed.

Future issuances and sales of equity or debt interests may affect the market price of our Common Shares and the amount of dividends payable to our shareholders.

The actual issuance of additional common or preferred shares or the sale of debt securities by us may decrease the market price of our Common Shares. In paying dividends on our Common Shares we endeavor to have our dividends track recurring cash flow from operations. Accordingly, as we issue additional Common Shares, the per share dividend will likely decrease until such time as we deploy the proceeds from such issuance of Common Shares in investments which increase our recurring cash flow.

Our focus on total return investing may impact our ability to maintain our dividend rate.

Our focus on a total return value approach to investing may result in our inability to maintain the current dividend rate as we do not necessarily seek assets that provide recurring or potentially recurring cash flow but seek to invest in assets that we believe will provide us with a superior risk-adjusted total return which encompasses both current return and capital appreciation. Accordingly, the true value of an investment may not be realized until such investment is liquidated.

If we issue preferred equity or debt we may be exposed to additional restrictive covenants and limitations on our operating flexibility, which could adversely affect our ability to pay dividends.

If we decide to issue preferred equity or debt in the future, it is likely that they will be governed by an indenture or other instrument containing covenants that may restrict our operating flexibility which could have an adverse effect on the market price of our Common Shares or our ability to pay dividends.

We may fail to remain qualified as a REIT, which would reduce the cash available for distribution to our shareholders.

Qualification as a REIT for federal income tax purposes is governed by highly technical and complex provisions of the Code for which there are only limited judicial or administrative interpretations. Our qualification as a REIT also depends on various facts and circumstances that are not entirely within our control. In addition, legislation, new regulations, administrative interpretations or court decisions might change the tax laws with respect to the requirements for qualification as a REIT or the federal income tax consequences of qualification as a REIT. Although we currently intend to operate in a manner designed to allow us to continue to qualify as a REIT, future economic, market, legal, tax or other considerations might cause us to elect to revoke the REIT election. In that event, we and our shareholders would no longer be entitled to the federal income tax benefits applicable to a REIT.

If, with respect to any taxable year, we were to fail to maintain our qualification as a REIT or elect to revoke our REIT election, we would not be able to deduct distributions to our shareholders in computing our taxable income and would have to pay federal corporate income tax (including any applicable alternative minimum tax) on our taxable income. If we had to pay federal income tax, the amount of money available to distribute to our shareholders would be reduced for the year or years involved. In addition, we would be disqualified from treatment as a REIT for the four taxable years following the year during which qualification was lost and thus our cash available for distribution to our shareholders would be reduced in each of those years, unless we were entitled to relief under relevant statutory or regulatory provisions.

In order to maintain our status as a REIT, we may be forced to borrow funds or sell assets during unfavorable market conditions.

As a REIT, we must distribute at least 90% of our annual REIT taxable income, subject to certain adjustments, to our shareholders. To the extent that we satisfy the REIT distribution requirement but distribute less than 100% of our taxable income, we will be subject to federal and, where applicable, state corporate income tax on our undistributed taxable income. In addition, if we fail to distribute at least 90% of our annual REIT taxable income, subject to certain adjustments, we will be subject to a 4% nondeductible excise tax.

From time to time, we may have taxable income greater than our cash available for distribution to our shareholders (for example, due to substantial non-deductible cash outlays, such as capital expenditures or principal payments on debt). If we did not have other sources of funds available in these situations, we could be required to borrow funds, sell investments at disadvantageous prices or find alternative sources of funds to make distributions sufficient to enable us to pay out enough of our taxable income to satisfy the REIT distribution requirement and to avoid income and excise taxes in a particular year. Additionally, we could elect to pay a portion of our required dividend in Common Shares. Each of these alternatives could increase our operating costs and diminish our rate of growth.

Factors that may cause us to lose our New York Stock Exchange listing.

We might lose our listing on the New York Stock Exchange depending on a number of factors, including failure to qualify as a REIT, or our not meeting the New York Stock Exchange’s requirements, including those relating to the number of shareholders, the price of our Common Shares and the amount and composition of our assets.

Ownership limitations in our bylaws may adversely affect the market price of our Common Shares.

Our bylaws contain an ownership limitation that is designed to prohibit any transfer of Common Shares or Preferred Shares that would result in our being “closely-held” within the meaning of Section 856(h) of the Code. This ownership limitation, which may be waived by our Board of Trustees, generally prohibits any single shareholder, or any group of affiliated shareholders, from beneficially or constructively owning more than 9.8% of our outstanding Common Shares. Our Board of Trustees has waived this ownership limitation in the past where there is believed to be a benefit derived by the Company from granting such waiver and the party obtaining the waiver provides assurances that the issuance of the waiver will not result in the Company becoming, or likely becoming, “closely held.” Unless the Board of Trustees waives the restrictions or approves a bylaw amendment, Common Shares owned by a person or group of persons in excess of 9.8% of our outstanding Common Shares are not entitled to any voting rights, are not considered outstanding for quorum or voting purposes, and are not entitled to dividends, interest or any other distributions with respect to the Common Shares. The ownership limit may have the effect of inhibiting or impeding a change of control or a tender offer for our Common Shares.

We must manage our investments in a manner that allows us to rely on an exemption from registration under The Investment Company Act in order to avoid the consequences of regulation under that Act.

We intend to operate our business so that we are exempt from registration as an investment company under the Investment Company Act of 1940, as amended. Therefore, the assets that we may invest in, or acquire, are limited by the provisions of the Investment Company Act and the rules and regulations promulgated thereunder. If we are required to make investments in order to be exempt from registration, such investments may not represent an optimum use of our capital when compared to other available investments.

Compliance with the Americans with Disabilities Act and fire, safety and other regulations may require us to make unanticipated expenditures that adversely affect our financial condition and results of operations.

All of our properties are required to comply with the Americans with Disabilities Act, which we refer to as the ADA. The ADA has separate compliance requirements for “public accommodations” and “commercial facilities,” but generally requires that buildings be made accessible to people with disabilities. Although we believe that our properties are in compliance with the ADA, it is possible that we may have to incur additional expenditures which, if substantial, could adversely affect our financial condition and results of operations.

In addition, we are required to operate our properties in compliance with fire and safety regulations, building codes and other land use regulations, as they may be adopted by local, state and federal governmental agencies and bodies and become applicable to our properties. We may be required to make substantial capital expenditures to comply with those requirements and these expenditures could have an adverse affect on our financial condition and results of operations.

We may incur costs to comply with environmental laws.

The obligation to pay for the cost of complying with existing environmental laws, ordinances and regulations, as well as the cost of complying with future legislation, may increase our operating costs. Under various federal, state and local environmental laws, ordinances and regulations, a current or previous owner or operator of real property may be liable for the costs of removal or remediation of hazardous or toxic substances on or under the property. Environmental laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances and whether or not such substances originated from the property. In addition, the presence of hazardous or toxic substances, or the failure to remediate such property properly, may adversely affect our ability to borrow by using such property as collateral. We maintain insurance related to potential environmental issues on our properties which are not net leased which may not be adequate to cover all possible contingencies.

Ability of our Advisor and other third parties directly affects our financial condition.

Other than for severe economic conditions or natural forces which may be unanticipated or uncontrollable, the ultimate value of our assets and the results of our operations will depend on the ability of our Advisor and other third parties we retain to operate and manage our assets in a manner sufficient to maintain or increase revenues and control our operating and other expenses in order to generate sufficient cash flows to pay amounts due on our indebtedness and to pay dividends to our shareholders.

We are dependent on our Advisor and the loss of our Advisor’s key personnel could harm our operations and adversely affect the value of our shares.

We have no paid employees. Our officers are employees of our Advisor. We have no separate facilities and are completely reliant on our Advisor who has significant discretion as to the implementation of our investment and operating strategies. We are subject to the risk that our Advisor will terminate its Advisory Agreement and that no suitable replacement will be found. Furthermore, we are dependent on the efforts, diligence, skill, network of business contacts and close supervision of all aspects of our business by our Advisor and, in particular, Michael Ashner, Chairman of our Board of Trustees and our chief executive officer, Carolyn Tiffany, our president, as well as our other executive officers. While we believe that we could find replacements for these key personnel, the loss of their services could have a negative impact on our operations and the market price of our shares.

The incentive fee payable to our Advisor may be substantial.

Pursuant to the terms of the Advisory Agreement, our Advisor is entitled to receive an incentive fee equal to 20% of any amounts available for distribution in excess of a threshold amount. The incentive fee is only payable at such time, if at all, (i) when holders of our Common Shares receive aggregate distributions above a threshold amount or (ii) upon termination of the Advisory Agreement, if the value of our assets exceed the threshold amount based on then current market values and appraisals. That is, the incentive fee is not payable annually but only at such time, if at all, as shareholders have received the threshold amount or, if the Advisory Agreement is terminated, the assets of the Trust exceed the threshold amount. At December 31, 2010, the threshold amount was approximately $468,193,000, which was equivalent to $16.58 for each of our Common Shares on a fully diluted basis. At such time as shareholders’ equity exceeds the threshold amount, we will record a liability in our financial statements equal to approximately 20% of the difference between shareholders’ equity and the threshold amount in accordance with generally accepted accounting principles.

Termination of the Advisory Agreement may be costly or not in our best interest.

Termination of the Advisory Agreement either by us or our Advisor may be costly. Upon termination of the Advisory Agreement, our Advisor would be entitled to a termination fee equal to the incentive fee based on an appraised valuation of our assets assuming we were then liquidated. The amount payable on termination of the Advisory Agreement could be substantial which may have a negative effect on the price of our Common Shares. Further, affiliates of our Advisor hold approximately 12.3% of our outstanding Common Shares and serve as our executive officers. Accordingly, if we were inclined to terminate the Advisory Agreement, the ownership position of our Advisor in our Common Shares could result in other adverse effects to us and the price of our Common Shares.

ITEM 1B — UNRESOLVED STAFF COMMENTS

None.

ITEM 2 — PROPERTIES

The following tables set forth certain information relating to operating properties in which we have an ownership interest. All information presented is as of December 31, 2010, except as noted. Dollars are stated in thousands.

Table of Operating Office, Retail and Industrial Properties

CONSOLIDATED PROPERTIES

																				Major				($000’s)						($000’s)				Debt
Description and		Year				Trust’s				Rentable				(**)				Major Tenants		Tenants’				Cost Less				Ownership		Debt				Maturity
Location		Acquired				Ownership				Square Feet				% Leased				(Lease /Options Exp)		Sq. Feet.				Depreciation				of Land		Balance				& Int Rate
Retail
Atlanta, GA																		The Kroger Co.
			2004				100	%			61,000				100	%		(2016/2026)			61,000			$	3,928			Ground Lease			(1	)			(1	)
Denton, TX																		Fitness Evolution
			2004				100	%			46,000				63	%		(2012)			29,000				2,250			Fee			(1	)			(1	)
Greensboro, NC																		The Kroger Co.
			2004				100	%			47,000				100	%		(2017/2037)			47,000				3,219			Ground Lease			(1	)			(1	)
Lousiville, KY																		The Kroger Co.
			2004				100	%			47,000				100	%		(2015/2040)			47,000				2,681			Fee			(1	)			(1	)
Memphis, TN																		The Kroger Co.
			2004				100	%			47,000				100	%		(2015/2040)			47,000				1,281			Fee			(1	)			(1	)
Seabrook TX																		The Kroger Co.
			2004				100	%			53,000				100	%		(2015/2040)			53,000				1,798			Fee			(1	)			(1	)
St. Louis, MO (2)			2004				100	%			46,000				0	%		Vacant			46,000				1,487			Fee			(1	)			(1	)
Subtotal Retail											347,000														16,644						19,002	(1)

(Continued on next page)

CONSOLIDATED PROPERTIES (Continued)

																				Major				($000’s)						($000’s)
Description and		Year				Trust’s				Rentable				(**)				Major Tenants		Tenants’				Cost Less				Ownership		Debt				Debt Maturity
Location		Acquired				Ownership				Square Feet				% Leased				(Lease /Options Exp)		Sq. Feet.				Depreciation				of Land		Balance				& Int Rate
Office
Amherst, NY (3)																		Ingram Micro Systems																	10/2013
			2005				100	%			200,000				100	%		(2013/2023)			200,000			$	17,083			Fee		$	16,117				5.65	%
Andover, MA																		PAETEC Comm.																	03/2011
			2005				100	%			93,000				100	%		(2022/2037)			93,000				7,448			Fee			6,135				6.60	%
Chicago, IL																		The Gettys Group																	03/2016
(One East Erie / Marc Realty)			2005				80	%			126,000				87	%		(2012/2016)			13,000				21,794			Fee			20,828				5.75	%
																		River North Surgery
																		(2015/ n/a)			15,000
Chicago, IL																		Bally Total Fitness																	04/2012
(River City / Marc Realty )			2007				60	%			253,000				72	%		(2013/2021)			55,000				14,854			Fee			9,100				6.00	%
																		MCI d/b/a Verizon
																		(2019/2023)			37,000
Houston, TX																		Spectra Energy																	04/2016
			2004				8	%			614,000				100	%		(2018/2028)			614,000				60,042			Fee			60,351				6.34	%
Indianapolis, IN																		No Tenants																	04/2015
(Circle Tower)			1974				100	%			111,000				84	%		Over 10%			—				4,732			Fee			4,245				5.82	%
Lisle, IL																		United Healthcare																	06/2016
			2006				100	%			169,000				52	%		(2014/ n/a)			41,000				18,709			Fee			16,972				6.26	%
Lisle, IL																		T Systems, Inc.																	06/2016
			2006				100	%			67,000				85	%		(2011)			35,000				8,166			Fee			6,932				6.26	%
																		ABM Janitorial
																		(2012/2014)			11,000
																		Zenith Insurance
																		(2011)			10,000
Lisle, IL																		Ryerson																	03/2017
(Marc Realty)			2006				60	%			54,000				100	%		(2018/2028)			54,000				3,674			Fee			5,600				5.55	%
Orlando, FL																		Siemens Real Estate, Inc.																	07/2017
			2004				100	%			256,000				100	%		(2017/2042)			256,000				14,643			Ground Lease			38,657				6.40	%
Plantation, FL																		BellSouth
			2004				100	%			133,000				100	%		(2020/2035)			133,000				11,567			Fee			(1	)			(1	)
South Burlington, VT																		Fairpoint Comm.																	03/2011
			2005				100	%			56,000				100	%		(2014/2029)			56,000				3,021			Ground Lease			2,629				6.60	%
Phoenix, AZ (Deer Valley Professional Center)			2010				96.5	%			82,000				61	%		United Healthcare (2017/2027)			42,000				8,126			Fee			—				n/a
Englewood, CO																		RGN-Denver LLC
(Crossroads I)			2010				100.0	%			118,000				55	%		(2015/2025)			17,000				7,427			Fee			—				n/a
Englewood, CO																		Catholic Health Initiatives
(Crossroads II)			2010				100.0	%			118,000				58	%		(2011)			30,000				7,938			Fee			—				n/a
Subtotal — Office											2,450,000														209,224						187,566

(Continued on next page)

CONSOLIDATED PROPERTIES (Continued)

										Units /										Major				($000’s)						($000’s)
Description and		Year				Trust’s				Rentable				(**)				Major Tenants		Tenants’				Cost Less				Ownership		Debt				Debt Maturity
Location		Acquired				Ownership				Square Feet				% Leased				(Lease /Options Exp)		Sq. Feet.				Depreciation				of Land		Balance				& Int Rate
Other
Residential
Meriden, CT																																			02/2012
(Newbury Apts)			2010				100	%		180 Units					92	%		n/a			n/a				25,115			Fee		$	23,875				5.83	%
Warehouse
Jacksonville, FL																		Football Fanatics
			2004				100	%			587,000				100	%		(2015/2024)			558,000				10,818			Fee			(1	)			(1	)
Mixed Use
Churchill, PA (4)			2004				100	%			1,008,000				100	%		Viacom, Inc. (2010)			1,008,000				10,466			Ground Lease			(1	)			(1	)
Subtotal — Other											1,595,000														46,399						23,875
Total Consolidated Properties											4,392,000													$	272,267					$	230,443

EQUITY INVESTMENTS

																								($000’s)
																				Major				Equity						($000’s)
Description and		Year				Trust’s				Rentable				(**)				Major Tenants		Tenants’				Investment				Ownership		Debt				Debt Maturity
Location		Acquired				Ownership				Square Feet				% Leased				(Lease /Options Exp)		Sq. Feet.				Balance				of Land		Balance (1)				& Int Rate
Marc Realty Portfolio — Equity Investments
8 South Michigan,																																			08/2011
Chicago, IL			2005				50	%			174,000				94	%		No tenants over 10%			—			$	7,087			Ground Lease		$	3,886				6.87	%
11 East Adams,																		IL School of Health																	08/2011
Chicago, IL			2005				49	%			161,000				78	%		(2015/2020)			28,700				3,223			Fee			9,999			Libor + 2		%
29 East Madison,																		Computer Systems Institute																	05/2013
Chicago, IL			2005				50	%			235,000				90	%		(2020/2030)			25,000				7,720			Fee			11,130				5.20	%
30 North Michigan,																																			08/2014
Chicago, IL			2005				50	%			221,000				91	%		No tenants over 10%			—				12,080			Fee			13,097				5.99	%
223 West Jackson, Chicago, IL																																			06/2012
(Brooks Building)			2005				50	%			168,000				59	%		No tenants over 10%			—				7,452			Fee			7,794				6.92	%
4415 West Harrison, Hillside, IL																		North American Medical Mgmt																	12/2015
(High Point)			2005				50	%			192,000				67	%		(2015/2020)			20,400				6,275			Fee			4,610				5.62	%
2000-60 Algonquin, Shaumburg, IL																																			02/2013
(Salt Creek)			2005				50	%			101,000				70	%		No tenants over 10%			—				2,344			Fee			(2	)		Libor + 2.75		%
1701 E. Woodfield,																																			09/2015
Shaumburg, IL			2005				50	%			175,000				87	%		No tenants over 10%			—				4,221			Fee			5,755			Libor + 3		% (3)
2720 River Rd,																																			10/2012
Des Plains, IL			2005				50	%			108,000				92	%		No tenants over 10%			—				4,123			Fee			2,581				6.095	%
3701 Algonquin,																		ISACA																	02/2013
Rolling Meadows IL			2005				50	%			193,000				82	%		(2018/2024)			29,600				2,931			Fee			10,373			Libor + 2.75		%
																		Relational Funding
																		(2013/ n/a)			27,400
2205-55 Enterprise,																		Consumer Portfolio																	02/2013
Westchester, IL			2005				50	%			130,000				94	%		(2014/2019)			18,900				3,018			Fee			(2	)		Libor + 2.75		%
900-910 Skokie, Northbrook, IL																		MIT Financial Group																	02/2011	(4)
(Ridgebrook)			2005				50	%			119,000				78	%		(2016/ n/a)			12,600				1,676			Fee			5,405			Libor + 2		%
Subtotal — Marc Realty Portfolio											1,977,000														62,150						86,236