Strategy

Titan Development (Titan) is the premier real estate operating company in the major market areas in New Mexico, and along the Texas/New Mexico/Mexico borders. It focuses on those markets that benefit from the North American Free Trade Agreement, and that have strong growth and manufacturing fundamentals. These markets are among the fastest growing metropolitan statistical areas in the country with the largest percentage increases in job, population and retail sales growth. They also offer some of the lowest cost of business and cost of living environments. More than 73% of all trade between the United States and Mexico passes through crossings in these markets. They are responsible for approximately 55% of all border manufacturing, totaling 632 manufacturing plants and 367,485 employees.

Titan is a private real estate operating company which was initially formed by the consolidation and acquisition of twenty seven high quality investment properties located in El Paso and McAllen, Texas, and Santa Teresa, New Mexico. Additional acquisitions and developments are pending in these same markets and in San Antonio, Laredo and Albuquerque.

The aggregate worth of Titan’s holdings is approximately $135,000,000. On an annual basis, Titan expects to acquire additional property through build-to-suits and purchases totaling between $70,000,000. and $100,000,000. Near-term strategic acquisitions and developments that are under contract total approximately one million square feet of space, with a value exceeding $37,000,000. Total invested capital at the end of 2006 is expected to be 250 million.

Titan Development’s management team has a great depth of experience in the acquisition and development of industrial buildings, master-planned business parks and residential communities. The senior executives of the operating company are experienced in the development, management and marketing of investment real estate, and have long-standing relationships throughout New Mexico and along the border of Texas and in Mexico.

The initial investments owned by the company are industrial and office buildings and industrial land, located in the McAllen/Reynosa and Brownsville submarkets of the lower Rio Grande Valley, San Antonio, College Station, Texas, El Paso/Juarez submarkets of El Paso, Texas and Santa Teresa and Albuquerque, New Mexico. Additional investments will be made in these markets, as well as Laredo and northeastern Mexico. The majority of new capital will be invested in buildings that are to be developed yielding a below market cost basis and above market returns. These buildings will be developed on current land inventory or on acquired sites. New capital will be sourced from existing shareholders, institutional investors and/or high net worth individuals from the region. Development partnerships with institutional investors will be pursued in certain circumstances with the goal of producing additional growth opportunities with a minimum investment of company capital. The company differentiates itself by a focus on those markets where it has land control, strong local business relationships and dominant marketing resources.

The operating strategy is focused on maintaining strong cash flow, managing lease expirations and credit risk, controlling costs and following a conservative development philosophy.

The growth strategy leverages existing land holdings into other targeted markets and the sale of selected assets where it will provide accretive returns to the company.