CEO/President 2014 Letter to Shareholders

April 2015

Dear Fellow Shareholders:


To state the obvious, 2014 was as transformative a year as one could be for our Company and its shareholders. We indicated in our 2013 annual letter that our central focus would be to improve shareholder value by way of closing the gap between underlying net asset value and our share price. The easy remedies were not for us. Issuing shares to increase our float we rejected because of its dilutive nature. Refocusing acquisition activity from value investing to spread investing was not for us; too much risk. In our search for a solution we commenced a process either to merge our Company with another or sell the Company to a third party. To make a long story short, we did not receive any proposals that management and the Board of Trustees felt reflected our underlying value so we recommended a different path.

The path chosen was the recommendation by management and the Board of Trustees to shareholders to implement a plan of liquidation of the Company. Approved by shareholder vote in August, management, the Board and shareholders collectively decided that we would manage our own sale of the Company through the sale of its underlying assets and the distribution of proceeds to shareholders. A rather unique solution, as I am unaware of any election similar to ours in recent years by any other solvent real estate investment trust. In management’s view, our shareholders pay us to maximize value not to take the easier path of either doing nothing stuck with a share price which reflects a substantial discount to value or selling the Company at a price which we believe is also not reflective of that value.

What have we achieved to date? If one takes into consideration asset sales currently under binding agreement, the table set forth below demonstrates exceptional progress. At the end of 2013, the Company had 82 non‐Concord assets which will be reduced to 24 with the closing of the sale of the Vintage portfolio and the 44 Monroe apartment property, both of which we are expected to close by the end of the second quarter. Our Concord assets have been reduced from 15 loan assets and 17 bonds to 7 loan assets and 9 bonds, again assuming closing of the MSREF sale prior to the end of the second quarter. Sales proceeds from the closed transactions have been approximately $267 million, as compared to a net asset value range of $236 million to $252 million as of December 31, 2013. Perhaps, most importantly total shareholder return in 2014 was 58%, making Winthrop reportedly the best performing North American REIT last year. Cash generated from sales to date has permitted the Company to fully satisfy the liquidation distribution preference required to be paid to our preferred shareholders as well as making a $2.25 distribution per common share in January. That distribution and subsequent distributions which may be made later this year have occurred significantly in advance of what we anticipated when we commenced this process.

  December 31, 2013 Expected as of May 31, 20151
Non-Concord Assets
Loan Assets 15 6
Operating Assets and Assets in Joint Ventures 67 18
Concord & Concord CDO Assets
Bond Assets 17 9
Loan Assets 15 7
1 Assumes closing of Vintage sale, 44 Monroe sale and MSREF sale

The process of liquidation is continuing apace as we are currently marketing for sale our Cerritos office property, our One East Erie office property and our Jacksonville warehouse. I am often asked as to whether I would reconsider the adoption of our plan of liquidation in view of the current high velocity commercial real estate market. Simply put - no, no way, nein, etc. Our NAV range at the end of 2013 was $13.80 to $15.83 per common share whereas our December 31, 2014 liquidation valuation, which is not strictly an apples to apples comparison, was $18.58 per common share inclusive of the $2.25 distribution. Value realized. Separately, we still review daily all notable reported real estate transactions throughout the United States and we have yet to see one in the past 16 months that we found tempting. We continue to hold two views. First, if we are to "get", let us do so while the "getting" is good. Second, with management's value investment focus, we believe our shareholders are the best managers of their capital in this investment environment.

Finally, it is time to acknowledge once again, the hard work of our investment, asset management and accounting divisions. John Alba, Jay Cramer and John Garilli have all had an important role in the complex, multi-faceted transactions in which the Company is involved and we are grateful for their talent and commitment. Their efforts and those of their 40 or so colleagues with whom they work are greatly appreciated by us. We also want to thank our independent Trustees for their tireless devotion and expertise which they consistently bring to the business and affairs of our Company. All of us, together with our Board of Trustees, hope to see you at our annual Shareholders meeting on Thursday, May 28, 2015 at 11:00am in New York.


Carolyn B. Tiffany
Michael L. Ashner
Chairman of the Board and
Chief Executive Officer