(1) The average annual change in the Consumer Price Index for all U.S. urban consumers for the five years ended December 31, 2007. Source: U.S. Department of Labor.

(2) The average annual income, appreciation and total returns on the NCREIF Property Index for the five years ended December 31, 2007 is shown above. The NCREIF Property Index is a leading benchmark of institutionally owned private real estate investments. The index is published by the National Council of Real Estate Investment Fiduciaries and is based upon the un-leveraged returns from a diversified portfolio of more than 4,100 income-producing, investment grade real estate assets totaling over $145 billion that are privately owned by institutional and other investors. The market values of the properties in the NCREIF index are determined by appraisals. Source: NCREIF. Although Paladin's prior programs mainly owned investment grade properties, those programs did include certain non-investment grade properties, such as raw land and homebuilding projects, that would not typically be found in the NCREIF Property Index.

(3) The average annual leveraged total return on 26 properties sold by Paladin Realty Partners, LLC. during the five years ended December 31, 2007 (i.e., the prior programs shown on Table IV of the prospectus) calculated by taking the weighted average (weighted by dollar amount raised) of the average annual cash distributions made to investors from operations (for the income return calculation ) and all sources (for the total return calculation) over the life of each investment as a percentage of the total dollar amount raised. The appreciation return is calculated by subtracting operation and the average income yield from the average total return. These properties were not owed by Paladin REIT.

This is for illustrative purposes only and is not indicative of any future investment performance. Past performance is no guarantee of future results.