NWJ Cos- 2008 State of the Union Jan. 28, 2008

Thanks. That's how I want to start. Thanks to all of you for growing our company, our assets and our brand value.

We grew assets by almost $100M last year. Now approaching 300M in assets.

More importantly we grew brand recognition - this time last year we were know to residents and prospects as plaza properties, bpg, chesterfield, nwj/cozza , etc etc. In just one year we have launched a branding concept that takes more than 15 different names and narrows them down to our one brand "signature community". This branded was created by the dedication of all our management personnel across the US. We couldn't have done it without you. I need to give special thanks to brain kroker, Christian vanhorn, Heather Jekogian, Michele Antopolous, and Gail Cooperman for there ability to exceed even my overzealous expectations in this rolls out. Brian, Christian, Gail, Heather and Michele. Thank you. Here is a token of our appreciation of what you and your team did last year.

Thanks to everyone in our acquisition group you don't only exceed expectations but they do the impossible. This is what I hear time in and time out when I visit with long time real estate investors and professionals. They don't believe that our model is possible. However we have proven them wrong more than 400 times and with the team that Dave McLain has put together we will continue do prove that there exists a huge inefficiency in the class B apartment ownership market and our company is using that opportunity to grow at a rapid yet profitable pace.
Again thanks for putting in the hard, tedious hours it takes to make our deals work.

In 07 we made some mistakes and hit some roadblocks and if not for the tireless efforts of the Stabilizations team led by Mike greenzang I can't imagine where we would be. His team at Waldo heights led by Lisa moved occupancy from 40% in July to 73% today, and everyone there have done a tremendous job of taking and under budgeted project and turning it into a great success. I can say the same for the park greenwood team, Kyle and Niki, Texas team headed by Chris Ballard and all the other stabilization team members who we ask ever day to turn some of the worst projects into Signature quality Communities. Thanks.

In our business Money is our life blood. Bank financing, equity financing, wall street debt, govmt sponsor loans, etc, you name it and our finance department makes it happen. And at rates significantly below that of our competitors. To give you an idea our company wide cost of capital right now Average 5.75%. We are currently in final stages of buying a publicly traded real estate company. One of the major reasons we can do this is because we are borrowing almost all of the purchase price for an overall cost that is the same as what the company is paying now for $35M fewer dollars. Chuck, Doug, and Steve are the smallest group in our company but they handle a major aspect of our growth and profitability.

Again I want to that everyone for their involvement in our growth last year and their anticipation of next year’s success.

I am big believer in the quote from Lou Holtz -- "If what you did yesterday seems big, you haven't done anything today." - Lou Holtz, Univ. of South Carolina football coach

Now for the statistics. ---
Current statistics-
NWJ/Signature Community is now
$290 M in assets
3,500 apt units nationwide (thru 15 major markets), more than 200 buildings
More than 150 Employees Company wide
20 person acquisition dept (one of the largest in the industry
More than $1M/annually spent on senior management to professionally
Manage the portfolio.
400 separate purchases transactions since 1992.
16 year old company which in the R/E business is a long time.

07 - Progress
We purchased $39M worth of real estate. Although below goals they were significantly above 06 results and we predict very positive trend for 08.

On our existing portfolio Brian and his group again made great strides at systematizes operations of the existing portfolio. The roll out of the "Signature Community" brand has been the biggest change in our company since we started.
We are different now. We are starting to think like retailer

Finance – $10 million in Equity investments was brought in last year and almost $75 million in financing.

Portfolio division - Although we have not closed any substantial portfolios we continues to look at bigger deals and are on the verge of closing our biggest acquisitions yet a 1000 unit portfolio.

"Once you say you're going to settle for second, that's what happens to you in life." - John F. Kennedy

07 - Year of adjustments - at the start of the year the fundamentals were pointing towards an adjustment but nobody slowed down. Apartment buying continued to be strong and some of the biggest real estate transactions ever happened. 8 months later that all came to a screeching halt. Lenders and investors woke up and realized that the debt used to purchase these deals was not structured correctly for the inherent risk. Essentially money was being lent as if there was no risk in doing RE deals, as if the price would always continue to go up. But the bubble burst and now the clean up is beginning.
This is where are model works the best.
08 is going to be the year of analyzing RE deals on income not a sale basis. This is what we have been doing for years.

Short version -
Nwj Companies is a $300M real estate ownership firm that focuses on the acquisitions, redevelopment, recapitalization and long term hold of Class B apartment projects on a national basis. Our assets are managed by a captive management firm and branded under the "Signature Community" name. Our company is currently soliciting new properties in over 18 markets.

08- Economic predictions

This is a tough one. I don't think anyone knows the answer to this. The only thing that can be said with certainty is that its not going to be as good as it was over the past few years. The housing market was a major driver of the economy and that is in bad shape and will remain so for the foreseeable future. A recession is probably in the cards for the US although the severity and length is anyone’s guess.

The one good thing about the state of the economy is that cash flow is now very important and fortunately for us that is big part of our model.

08 initiatives

Asset/unit growth - we are going to purchase $200M (almost 3000 units) in real estate assets this year.
Signature Community is going to become a nationally recognized customer service oriented brand.
Management - we will continue to consolidate our organization to handle more problems at a higher corp. level as opposed to on the front line. Examples are the hire of Ian Fraenkel as Director of Leasing and his initiate to bring a national leasing call center, Kim wares success in national collection policy, insurance shopped at a national level which has already resulted in a more than 40% decrees in our insurance costs.
Company structure - we will continue our commitment to make a unified company of managers, stabilization experts, and finance professionals and acquisitions specialists. As well as set up a structure whether it be a fund or possible REIT structure that will attract more investors to our company.

Financing- We will be financing almost $300 million in debt in 08’

Restate - nwj description with 09 info
By end of 08

Nwj Companies will be a $500M real estate ownership firm that focuses on the acquisitions, redevelopment, recapitalization and long term hold of Class B apartment projects on a national basis. Our assets our managed with customer satisfaction first under "Signature Community". We receive premium rents in our asset class because we offer services and amenities to our customers that are only found in much higher priced luxury buildings. We own substantial portfolios in 20 major US markets and our expanding into an additional 10 in 09.

Thanks you for your time and please remember that.....
The best is yet to come but only you can Make It Happen!

Nick Jekogian
President/CEO
NWJ Companies
January 28, 2008

Podcast of State of the Union
http://signaturecommunity.mypodcast.com/

Let's Make It Happen!

History has not dealt kindly with the aftermath of protracted periods of low risk premiums. -- Alan Greenspan

I think this pretty much summarizes what the real estate industry is in for in 08. It is payback time for all those novice investors who were out doing real estate as a side business and making millions (at least on paper).

Our jobs will be to clean up the mess and make a tidy profit while also making sure not to overestimate ourselves. The fall in the market will likely be deep and could extend for many years. We need to project our deals accordingly.

With the proper balance between aggressive buying and taper projections the coming years should be some of the best for NWJ/Signature.

Let's Make It Happen.

Nickolas W. Jekogian

Prosperous and Rewarding 2008

"The key is not the will to win...everybody has that. It is the will to prepare to win that is important." - Bobby Knight, Texas Tech men's basketball coach

We have spent the past few years creating a great company. We are now in a position to grow quickly through acquisitions while also creating value in the existing portfolio. The market is coming back into alignment with profitability.

In ‘08 we will no longer be forced to look at 5 cap deals and walk away from the deal. The competition, primarily novice investors and condo converters with be sidelined for the foreseeable future. The major players are focused on larger deals now so we have a huge opportunity to advance towards our $1 Billion goal. As long as we stick with our model we will get there.As for our management side the last few years have been a time of restructure and creation. We spent a substantial amount of money and time creating a brand that our residents can feel connected to.

In 2008 we will continue to reinforce that connection. Our management teams are in place and will continue the great work that they have been doing for us in the past while also evolving into the service based company we are aspiring to be.I look forward to a prosperous and rewarding 2008 for the entire NWJ/Signature community.

Nickolas W. Jekogian