2011 Year End Message from the Chairman

As we approach the end of what has been nothing less than an eventful year, I wanted to provide ourinvestor partners with a brief message focused on the goals, challenges and opportunities for 2012.

The year of 2011 began with improving economic news and forecasts, only to experience a significant challenge by the summer. We believe that 2012 will be a year of slowly improving economic conditions with continued potential obstacles along the way. Therefore, Parmenter will evaluate and make decisions for our funds based on the assumption that growth will be slow and the capital markets will remain in a state of flux. The leasing activity in our portfolio which has improved over the last several months is reflective of the quality of our assets, strong management and competitive rates. We expect to close on a meaningful amount of that activity as these tenants have pending lease expirations and in a number of cases are looking to expand.

Fund II – One Warren Place is under contract. We expect this to close mid to late January 2012. Two Warren Place will be marketed for sale beginning in January 2012. Our primary focus will be to sell all of the remaining assets during the year 2012. To date, we have returned 120% of our investor partner's capital and we expect to return 190% at the termination of the Fund.

Fund III – Recently you were presented the Operational, Financial and Disposition Strategy for the fund. Our focus is to return all of our investor partner's capital by the end of 2013. We will continue to provide updates as to our progress through our Quarterly Reports.

Fund IV – Fundraising has intensified, we are scheduled to have our second close by year end for approximately $60 million with another close in late January for an additional $50 to $75 million with several large institutions in legal or active due‐diligence. We are seeing the quality acquisition opportunities we expected. We have closed on two transactions where we are projecting conservative returns of ± 20%, have a third under contract and have been awarded two more transactions. These would be expected to close in early 2012. An update on Capital Calls will be forwarded to you shortly.

On behalf of our entire firm, I want to take this opportunity to wish each of you and your families our best wishes during this Holiday Season.

Sincerely,



Darryl W. Parmenter
Chairman and CEO