Market News

Suite 265-21320 Gordon WayRichmond, British ColumbiaCanada V6W 1J8p. 604.288.9770f. 604.288.9771

www.treegroup.ca

As we venture into 2009 I’m sure everyone would agree that the second half of

2008 was a time to forget. Positive news in the business world was all but

impossible to ﬁnd. But despite all the grim economic news, we are fortunate to bein a part of the world that is somewhat shielded from these factors. Indeed British

Columbia continues to be a hotbed for immigration: According to the Canadian

Mortgage and Housing Corporation over 50,000 people continue to

migrate/immigrate to British Columbia each year and will continue to do so for the

next 20 years. Over 34,000 of these 50,000 will come to the Lower Mainland of

B.C. And of course, they will all need homes! With over 20% of new multi-family

projects being shelved in 2009, it will put terriﬁc pressure on the already historicallylow number of completed and unsold multi-unit homes in the GVRD. This combined

with mortgage rates at 50 year lows bodes well for those projects moving forward.

Continued on next page

InvestorNewsletter

Issue No.2, February 2009 – Headwaters Update

Over the past several months themarketing initiative for the Headwaters

project has been in full swing. In October,

2008 we contracted the renowned team

at WOW Branding to begin the excitingprocess of branding and marketing theHeadwaters project. One of their most

exciting developments is the introduction

of the new project name, “Headwaters

Club,” and the new lifestyle opportunities

component. This includes a redesign of the

Business Amenity Center to reﬂect this

new “Lifestyle” model – with a media room,

internet café lounge, a demonstration

kitchen, and oce space and boardrooms.

In addition to these exciting changes, we have moved forward with the interiordesign component of the entire project, which includes the Presentation Center

and Display Suite.

Other marketing initiatives are also in place: An internet strategy, along with a

website, is close to completion and Product Renderings, Floor Plans, Site Plan, a

3-D Model, Project Brochure along with signage are in production. Roadside

marketing signs will be installed, which will direct people to the website for early

bird registration, and a print and radio media campaign is planned for Spring 2009.

Part of the initial phase of marketing was the production of a Headwaters Club

Headwaters Club

SURREY, B.C.

Happy New Year!

This is the second issue of ourTreegroup Investor Newsletter,

and we hope it helps answer many

of the questions that we arehearing these days. In October,2008 we updated everyone onthe status of the Headwatersproject and our re-focus on the

marketing program and pre-salesof the project. In this issue we will

provide the latest updates on

Headwaters Club in South Surrey,

Aspen Meadows in Windermere,

and other exciting projects.

In an effort to keep everyone up to

date on the latest developments,we will be making the newsletteravailable online in the near future.Please take the time to look overour website at www.treegroup.caafter February 14 and feel free todrop us a line with any questionsor comments.

RRSP Season is upon us!

Treegroup currently has a verylimited number of RRSP eligibleshares available in one of our

upcoming projects. Contact us for

more information.

Continued from ﬁrst page

marketing video presentation which we have presented to lending institutions. ThisDVD is available through our oces and will be online at Treegroup.ca in February,2009. Please contact the Treegroup oce to get your personal investor password

to access this section of the Treegroup website. The 1st stage of the Headwaters

Club website is available for viewing at www.Headwatersclub.ca.

On the sales side, we mentioned

in the last newsletter that we

were in the process of obtaining

a retail space in the South

Surrey area to be used for our

sales and marketing center. In

December we secured a primeretail space near Wal-Mart and

Best Buy at 24th and 160thStreet in South Surrey, whichwill be the home of our new

sales and marketing center, and

will house the display suite for

Headwaters Club. We expectbuild-out of the center to be

completed by May 2009.

Finally, with the changes experienced in the ﬁnancial markets over the past six

months we felt it would be prudent to investigate phasing of the project. Late in

October, 2008 we began modiﬁcation of the design to incorporate 2 phases for theproject. The ﬁrst phase of construction would incorporate Building 1, which has 62

units along with the amenity center. The second phase of construction would include

the remainder of the project’s 86 units in Building 2. These minor phasing changeswill allow us to access a greater number of lending institutions for project ﬁnancingand minimize the risk to our investors.In December 2008 we met with the Canadian Mortgage and Housing Corporation(CMHC) and discussed construction ﬁnancing options for the project. Although theywere very impressed with this innovative project, they were unable to proceed due

to restrictions imposed in Ottawa. We have since met with several other more

traditional institutions and are very close to securing ﬁnancing for the ﬁrst phase ofthe project.Construction on site has been suspended until Spring. Osite road works are all but

complete, and paving, curb and gutter work will proceed once the weather improves.

We hope to proceed with onsite excavation and roadworks in Early Summer 2009.In the meantime, our marketing program will move forward and the pre-sale of unitswill be our primary focus.

Ponderosa Golf &Pincushion Ridge Community

Located in beautiful Peachland,

B.C. in the sunny Okanagan Valley,the Ponderosa Golf Course is soon

to be transformed into a stunning400 Acre community with a Greg

Norman designed 7,100 yardChampionship golf course. InDecember, 2008 Treegroupreceived fourth and final reading

from the District of Peachland for

the Pincushion Area Sector Planchanges that pave the way fordevelopment of the 2,000+ unit

resort. In November Greg Norman

and his team walked the existing

and future course layout and madefinal design changes to the planned

Championship Course. Stay tuned

for more exciting news.