Name		Position		Asset Type		Location		Stated Interest Rate (1)		Carrying Amount (2)				Par Value				Maturity Date (3)				Senior Debt (4)
Loans Receivable
Rockwell (5)		Mezzanine		Industrial		Shirley, NY		12.00%		$	—			$	1,486				05/01/16			$	16,194
Churchill		Whole loan		Mixed use		Churchill, PA		LIBOR + 3.75%			—				333				08/01/16				—
Poipu Shopping Village		B Note		Retail		Kauai, HI		6.618%			2,769				2,756				01/06/17				27,896
Mentor Building		Whole loan		Retail		Chicago, IL		10.00%			2,511				2,497				09/10/17				—
										$	5,280
Loan Securities
WBCMT 2007 WHL8 (6)		CMBS		Hotel		Various		LIBOR + 1.75%		$	—			$	1,130				12/31/15			$	51,000
										$	—
Loans in Equity Investment
Our loan assets held in equity investments consist of our investments in Concord Debt Holdings LLC, CDH CDO LLC and RE CDO Management LLC.

Loans in Equity Investment

Our loan assets held in equity investments consist of our investments in Concord Debt Holdings LLC, CDH CDO LLC and RE CDO Management LLC.

Loan Asset Repayment/Disposition Activity

Edens Center and Norridge CommonsMentor Building, Chicago, Illinois – loan pay down –On February 5, 2015July 29, 2016 the Norridge, Illinois property,Mentor Retail Building which was one of the two properties that collateralized this loan receivable was sold, and weWinthrop received a principal payment$2,510,000 in full repayment of $15,275,000the loan plus all accrued and unpaid interest due in connection with the sale.interest. The outstanding principal balance onliquidation value of the loan receivable was $225,000 following$2,511,000 at December 31, 2015.

Churchill, Pennsylvania – On October 5, 2016 we entered into a discounted payoff agreement with the repayment. Additional payments onborrower under the Churchill loan. The agreement provided for the loan, were received reducing thewhich had an outstanding principal balance of $333,000 to $97,000 at September 30, 2015. Upon satisfaction of the loan, we were entitled to a participation interest equal to 30% of the value of both of the properties which collateralized the loan in excess of $115,000,000. On October 9, 2015 webe fully satisfied for $100,000. We received $3,100,000$100,000 in full satisfaction of the loan receivable andpursuant to the participation interest.

Concord Debt Holdings –During May 2015 we received a distribution of $20,173,000 from our Concord Debt Holdings LLC venture. The distribution was in connection with the saleterms of the luxury hotel assets owned by the MSREF hotel venture in which Concord Debt Holdings LLC held an interest.

CDH CDO LLC—On June 25, 2015 the venture closed on the sale of four bond assets and one loan asset for gross proceeds of $54,122,000. The proceeds of the sale were utilized to fully satisfy the debt of the venture and the CDO structure was collapsed. All remaining assets of CDH CDO LLC are held free of debt. Additionally, in June 2015 a loan asset held by the venture was repaid at par which was consistent with our liquidation value at December 31, 2014. On July 1, 2015 we received a $6,200,000 distribution from this venture.agreement. The liquidation value of this investmentthe loan receivable was reduced by $15,274,000$0 at December 31, 2015 as a result2015.

Poipu Shopping Village –On November 10, 2016 we received $2,741,000 in full repayment, inclusive of a decreaseall accrued and unpaid interest, on theB-Note collateralized by the Poipu Shopping Village located in the estimated underlying collateralKoloa, Hawaii. The liquidation value of one of the remaining loan assets based on the tenant’s notice of non-renewal.receivable was $2,756,000 at December 31, 2015.

Employees

As of December 31, 20152016 we had no employees. Our day to day affairs are administered by ourthe Advisor pursuant to the terms of an advisory agreement for five years effective January 1, 2013 which we refer to, as the same may be amended from time to time, as the “Advisory Agreement.” Upon expiration of the current term, the Advisory Agreement is automatically renewed for successive one-year periods unless terminated in accordance with the provisions of the Advisory Agreement.

Under the Advisory Agreement, we pay to our Advisor is paid a quarterly base management fee equal to 1.5% of (i)which, at December 31, 2016, equaled $880,000. The base management fee was determined based on the aggregate issuance price of our outstanding equity securities plus (ii) 0.25% of any equity contribution by an unaffiliated third party to a venture managed by us.the Common Shares at August 1, 2016. The Advisory Agreement provides that any dividendsliquidating distributions paid on account of Common SharesUnits that result in a reduction of the threshold amount (as described below) at the date of our liquidation or disposition are deemed a reduction in the aggregate issuance price of the Common Shares, thereby resulting in a reduction of the base management fee. In addition to receiving a base management fee, our Advisor is entitled to receive an incentive fee for administering the Liquidating Trust and, in certain instances, a termination fee upon an early termination of the Advisory Agreement under certain circumstances or the liquidation of disposition of the Trust.circumstances. Further, our Advisor, or its affiliate, is also entitled to receive property management fees and construction management fees at commercially reasonable rates.

The incentive fee is equal to 20% of any amounts available for distribution in excess of the threshold amount and is only payable at such time, if at all, (i) when holders of our Common SharesUnits receive aggregate dividendsdistributions above the threshold amount or (ii) upon termination of the Advisory Agreement if the net value of our assets exceeds the threshold amount based on then current market values and appraisals. That is, the incentive fee is not payable annually but only at such time, if at all, as shareholderswe have received dividendspaid liquidating distributions from and after December 31, 2016 in excess of the threshold amount ($427,686,000271,614,000 on December 31, 20152016 plus an annual return thereon equal to the greater of (x) 4% or (y) the 5 year U.S. Treasury Yield plus 2.5% (such return, the “Growth Factor”) less any dividendsdistributions paid from and after January 1, 2016)2017). The incentive fee will also be payable if the Advisory Agreement is terminated, other than for cause (as defined) by us or with cause by our Advisor, and if on the date of termination the net value of the Liquidating Trust’s assets exceeds the threshold amount. At December 31, 20152016 the threshold

amount required to be distributed before any incentive fee would be payable to FUR Advisors was $427,686,000,$271,614,000, which was equivalent to $11.94$7.58 per Common Share.Unit. At December 31, 2015,2016, based on our estimate of liquidating distributions, it is estimated that the Advisor would be entitled to an incentive fee of $15,305,000 in connection with$8,319,000 upon disposition of all our liquidation.assets. This amount has been accrued and is reflected in our net assets in liquidation at December 31, 2015.2016.

With respect to the termination fee, it is only payable if there is (i) a termination of the Advisory Agreement for any reason other than for cause (as defined) by us or with cause by our Advisor, or (ii) a disposition of all or substantially all of our assets, or (iii) an election by us to orderly liquidate our assets. The termination fee, if payable, is equal to the lesser of (i) the base management fee paid to our Advisor for the prior twelve month period or (ii) either (x) in the case of a termination of the Advisory Agreement, 20% of the positive difference, if any between (A) the appraised net asset value of our assets at the date of termination and (B) the threshold amount less $104,980,000, or (y) in the case of a disposition, or liquidation, 20% of any dividendsliquidating distributions paid on account of our Common SharesUnits at such time as the threshold amount is reduced to $104,980,000, which, based on current estimates, will be achieved at such time as additional liquidating distributions of approximately $9.01$4.65 per Common ShareUnit in excess of the Growth Factor have been paid. For example, if all of our assets were sold and the Trust had been liquidatedproceeds therefrom were distributed to holders of Units at January 1, 2016,2017, the termination fee would only have been payable if additional liquidating distributions of approximately $9.01$4.65 per Common ShareUnit had been paid, and then only until the total termination fee paid would have equaled $9,496,000 (the base management fee for the twelve months prior to the approved plan of liquidation), which amount would be achieved when total additional liquidating distributions paid per Common ShareUnit equaled approximately $10.05.$5.69. At December 31, 20152016 it is estimated that the Advisor will be entitled to a termination fee of $9,496,000 in connection withupon the disposition of our liquidation.remaining assets. This amount has been accrued and is reflected in our net assets in liquidation at December 31, 2015.

In connection with the modifications entered into in February 2013 with respect to the Advisory Agreement, we issued 600,000 restricted Common Shares, which Common Shares were issued under our 2007 Long Term Incentive Plan. In connection with the adoption of the plan of liquidation, the Trust’s compensation committee has authorized amendments to the grant agreements to provide for an early expiration of the forfeiture period and the reissuance of forfeited shares. See Item 8 – Financial Statements and Supplementary Data, Note 20 for additional information on the grants.2016.

Competition

We currently compete with other properties located in markets in which our assets are located both from an operations perspective and with respect to the disposition of our assets. We cannot assure you that the competitive pressures we face will not have a material adverse effect on our business and our net assets in liquidation.

We derive significant benefit from our present advisor structure, where our Advisor’s experienced management team provides us with resources at substantially less cost than if such persons were directly employed by us. Through its broad experience, our Advisor’s senior management team has established a network of contacts and relationships, including relationships with operators, financing sources, investment bankers, commercial real estate brokers, potential tenants and other key industry participants.

Environmental Regulations

Our operations and properties are subject to various federal, state and local laws and regulations concerning the protection of the environment including air and water quality, hazardous or toxic substances and health and safety. These are discussed further under Item 1A – Risk Factors.

Segment Data

As discussed earlier, withWith the adoption of the plan of liquidation we have only one reporting and operating segment subsequent to July 31, 2014. Reportable segment data for the periods prior to August 1, 2014 may be found under Item 8 – Financial Statements and Supplementary Data Note 22.

Additional Information

The following materials are available free of charge through our website at www.winthropreit.com as soon as reasonably practicable after they are electronically filed with or furnished to the SEC under the Securities Exchange Act of 1934, as amended:

We will provide a copy of the foregoing materials without charge to anyone who makes a written request to our Investor Relations Department, c/o FUR Advisors, LLC, 7 Bulfinch Place, Suite 500, P.O. Box 9507, Boston, Massachusetts 02114.

We also intend to promptly disclose on our website any amendments that we make to, or waivers for our Trustees or executive officers that we grant from, the Code of Business Conduct and Ethics.

New York Stock Exchange Certification

As required by applicable New York Stock Exchange listing rules, on July 1, 2015, following our 2015 Annual Meeting of Shareholders, our Chairman and Chief Executive Officer submitted to the New York Stock Exchange a certification that he was not aware of any violation by us of New York Stock Exchange corporate governance listing standards.

ITEM 1A – RISK–RISK FACTORS

We, our assetsIn addition to other information in this annual report on Form10-K, the following risk factors should be carefully reviewed because such factors may have a significant impact on the execution of the Plan of Dissolution and the entities in which we invest are subject to a number of risks customary for REITstiming and owners of real estate and debt instruments secured, directly or indirectly, by real estate. In addition, as a result of the adoption of the plan of liquidation we are subject to additional risks that may affect the ultimate amount of future liquidating distributions, payableif any, to holders of our Common Shares. Material factors that may adversely affect our business operations and, accordingly, the ultimate amount of liquidating distributions payable on our Common Shares are summarized below.

Risks incidental to real estate investments

Our assets consist of direct ownership and operation of operating properties and loan assets secured, directly or indirectly, by operating properties.beneficial unitholders. As a result of the adoption of our plan of liquidation, we will not make any further investments other thanrisk factors set forth below and elsewhere in very limited instances as detailedthis Form10-K, and the risks discussed in our planother filings with the Securities and Exchange Commission, actual results could differ materially from those projected in any forward-looking statements.

We cannot assure you of liquidation. Accordingly, an investmentthe exact amount or timing of any future distribution to our beneficial unitholders.

Our estimate of net assets in us depends uponliquidation at December 31, 2016 was $327,927,000, or $9.00 per Unit. This estimation is based on a number of estimates and assumptions including asset hold periods, expected revenues and expenses and other factors not within our control such as capitalization rates and market conditions. However, the financial performanceliquidation and the value of our current portfolio of operating properties as well as the operating properties securing our loan assets, which operating properties aredissolution process is subject to the risks normally associated with the ownership, operationnumerous uncertainties and disposalmay result in less than anticipated or no remaining capital available for future distribution to our beneficial unitholders. The precise nature, amount and timing of real estate propertiesany future distribution to our beneficiaries will depend on and real estate related assets,could be delayed by a number of factors including:

In addition,unforeseen costs including those relating to any changes to applicable federal, state and local regulations, zoning and tax laws and potential liability under environmental and other laws affect real estate values. Further, throughoutvalues; and

We will continue to incur liabilities and expenses that will reduce the period that we own real property, regardless of whether or not a property is producing any income, we must make significant expenditures, including those for property taxes, maintenance, insurance and related charges and debt service. The risks associated with real estate investments may adversely affect our operating results and financial position, and therefore the fundsamount available for distribution out of the liquidation to our holders of Common Shares.

Risks that May Delay or Reduce Our Liquidating Distributionsbeneficial unitholders.

Our estimate of net assets in liquidation at December 31, 2015 was $516,396,000, or $14.18 per Common Share. This estimation is based on a number of estimates and assumptions including asset hold periods, expected revenuesLiabilities and expenses from operations, such as insurance, legal, accounting and consulting fees and other factors not within our control suchoperating expenses, will continue to be incurred as capitalization rates and market conditions. As a result, one or more of these assumptions may change during our liquidation. For example, if we sell an asset prior to its estimated sale date or a loan asset is satisfied prior to its maturity date,complete the net assets in liquidation could be reduced due to our receipt of less operating cash flow from such assets than initially estimated, however, we would receive sales proceeds sooner than previously expected. As a result, the actual amount of liquidating distributions we pay to holders of Common Shares may be more or less than our current estimate. In addition, there can be no assurance as to the timing, and the amount, of each liquidating distribution to our holders of Common Shares.

If we are unable to find buyers for our assets at our expected sales prices, our liquidating distributions may be delayed or reduced.

In calculating our estimated net assets in liquidation, we assumed that we will be able to find buyers for all of our assets at our estimated liquidation values. We, however, may have overestimated the sales prices that we will be able to obtain for these assets or underestimated the costs associated with such sales. For example, in order to find buyers in a timely manner, we may be required to accept a purchase price below our current estimate. If we are not able to find buyers for these assets in a timely manner or if we have overestimated the sales prices we will receive, our liquidating distributions payable to holders of our Common Shares would be delayed or reduced. Furthermore, our estimated net assets in liquidation is based on current market conditions and asset operations, but real estate market values are constantly changing and fluctuate with changes in interest rates, supply and demand dynamics, occupancy percentages, lease rates, the availability of suitable buyers, the perceived quality and dependability of income flows from tenancies and a number of other factors, both local and national. The net liquidation proceeds from each asset may also be affected by the terms of prepayment or assumption costs associated with debt encumbering each asset. In addition, minority ownership matters, transactional fees and expenses, environmental contamination at our properties or unknown liabilities, if any, may adversely impact the net liquidation proceeds from those assets.

If any of the parties to our future sale agreements default thereunder, or if these sales do not otherwise close, our liquidating distributions may be delayed or reduced.

The consummation of the potential sales for which we will enter into sale agreements will be subject to satisfaction of closing conditions. If any of the transactions contemplated by these future sale agreements do not close because of a buyer default, failure of a closing condition or for any other reason, we will need to locate a new buyer for the assets which we may be unable to do promptly or at prices or on terms that are as favorable as the original sale agreement. We will also incur additional costs involved in negotiating a new sale agreement for this asset. These additional costs are not included in our projections. In the event that we incur these additional costs, our liquidating distributions to our shareholders would be delayed or reduced.

If our transaction costs, liquidation costs or unpaid liabilities are greater than we expect, our liquidating distributions may be delayed or reduced.

Before making the liquidating distributions on our Common Shares, we will need to pay or arrange for the payment of all of our transaction costs in the liquidation, all other costs and all valid claims of our creditors. Our board may also decide to acquire one or more insurance policies covering unknown or contingent claims against us or them, for which we would pay a premium which has not yet been determined. Our board may also decide to establish a reserve fund to pay these contingent claims. The amounts of transaction costs in the liquidation are not yet final, so we have used estimates of these costs in calculating our estimated net assets in liquidation. To the extent that we have underestimated these costs in calculatingexpenses and liabilities exceed our projections or we incur unforeseen additional costs, our actual liquidating distributions may be lower than our estimated netcurrent estimates they will reduce the amount of assets in liquidation. In addition, if the claims of our creditors are greater than we have anticipated or we decideavailable for future distribution to acquire one or more insurance policies covering unknown or contingent claims against us, our liquidating distributions may be delayed or reduced. Further, if a reserve fund is established, payment of liquidating distributions to our holders of Common Shares may be delayed or reduced.beneficiaries.

We may be unablesubject to sell certainfinal examinations by taxing authorities across various jurisdictions, which may impact the amount of taxes that we pay and the ultimate distributions to our assets.beneficiaries.

Certain of our assets are subject to agreements that require the consent of our venture partner or ground lessor for the sale of the underlying asset or our interest in certain ventures. If we are unable to obtain the required consent we may have difficulty in timely selling such asset or, in the case of a venture, may need to acquire our venture partner’s interest through the exercise of our dispute resolution provisions which, in all such cases, may cause us to incur additional expenses and result in a delay in the sale of such assets which could reduce our liquidating distributions.

Our properties may subject us to known and unknown liabilities.

Our existing properties may have known and unknown liabilities for which we would have no recourse, or only limited recourse, to the former owners of such properties. As a result, if a liability were asserted against us based upon ownership of a property, we might be required to pay significant sums to settle it, which could adversely affect our financial results and cash flow. Unknown liabilities relating to our properties could include:

If we are unable to maintain the occupancy rates of currently leased space and lease currently available space, if tenants default under their leases or other obligations to us during the liquidation process or if our cash flow during the liquidation is otherwise less than we expect, our liquidating distributions may be delayed or reduced.

In calculating our estimated net assets in liquidation, we made certain assumptions as to each asset’s occupancy and rental rates, that we would be able to rent certain currently available space and that we would not experience any significant tenant defaults during the liquidation process that were not subsequently cured. Negative trends in one or more of these factors may adversely affect the resale value of the properties, which would reduce our liquidating distributions. To the extent that we receive less rental income than we expect during the liquidation process, our liquidating distributions will be reduced. We may also decide in the event of a tenant default to restructure the lease, which could substantially reduce the rent payable to us under the lease, or make other modifications that are unfavorable to us. This risk is substantial with respect to our net leased properties. As of December 31, 2015, our five single tenant properties, containing an aggregate of approximately 1,071,000 square feet of space are net leased to five different tenants. Gross leases accounting for approximately 2% of the aggregate annual base rent from our operating properties for 2015, representing approximately 2% of the net rentable square feet at the properties, are scheduled to expire in 2016. Other leases grant tenants early termination rights upon payment of a termination penalty.

We are subject to risksThe Liquidating Trust evaluates its probable exposures associated with the financial conditiontax filing positions of our tenantsboth Winthrop and our borrower’s tenants.

Our tenants or tenants at properties securing our loan assets may experience a downturnthe Liquidating Trust. At December 31, 2016, the Liquidating Trust believes it has no such exposures, and accordingly has not accrued any such charges. Significant judgment is required in their business resulting in their inability to make rental payments when due.

Indetermining the event that a tenant occupying a significant portion of one or more of our properties or whose rentalLiquidating Trust’s provision for income represents a significant portion of the rental revenue at such property or properties were to experience financial weakness, default on its lease, elect not to renew its lease or file bankruptcy it would negatively impact our financial conditiontaxes payable, and as a result, our liquidating distributions. Similarly, if a tenant occupying a significant portion of one or more of the properties securing our loan assets or whose rental income represents a significant portion of the rental revenue at such property or properties experiences financial weakness defaults on its lease, elects not to renew its lease or files for bankruptcy, it would negatively impact our net cash flow and the value of such asset and, as a result, our liquidating distributions. Additionally, the loss of a tenant at a property securing a loan asset could negatively impact the value of the property and, therefore, our collateral.

We may experience increased operating costs, which might reduce our estimated net assets in liquidation and the sales prices received for our properties.

Our properties are subject to increases in operating expenses such as for cleaning, electricity, heating, ventilation and air conditioning, administrative costs and other costs associated with security, landscaping and repairs and maintenance of our properties. In general, under our leases with tenants, we pass through all or a portion of these costs to them. There can be no assurance that tenants will actually bear the full burden of these higher costs, or that such increased costs will not lead them, or other prospective tenants, to seek office space elsewhere. If operating expenses increase, the availability of other comparable office space in the geographic markets of our properties might limit our ability to increase rents; if operating expenses increase without a corresponding increase in revenues, our profitability could diminish thereby reducing our estimated net assets in liquidation and limit the amount and likely delay the timing of our liquidating distributions.

We leverage our portfolio, which may adversely affect our financial condition and estimated net assets in liquidation.

We leverage our portfolio through borrowings. WeLiquidating Trust’s determinations may not prove to be able to meet our debt service obligations and, toaccurate. Winthrop and/or the extent that we cannot, we risk the loss of some or all of our assets to foreclosure or forced sale to satisfy our debt obligations.

Interest rate fluctuations may reduce our investment return.

Certain of our loan obligations have floating interest rates. In such cases, an increase in interest rates would increase our loan obligations. Where possible we have sought to mitigate these risks by acquiring interest rate cap agreements, rate collars and other similar protections. To the extent we have not mitigated these risks or our actions are ineffective, a fluctuation in interest rates could negatively impact our cash flow due to an increase in loan obligations.

Our loan assets are subject to delinquency and loss.

Our loan assets are directly or indirectly secured by income producing property. The ability of a borrower to make payments on the loan underlying these securities is dependent primarily upon the successful operation of the property rather than upon the existence of independent income or assets of the borrower since the underlying loans are generally non-recourse in nature. These loans are subject to risks of delinquency and foreclosure as well as risk associated with the capital markets. If a borrower were to default on a loan, it is possible that we would not recover the full value of the loan.

We may be unable to foreclose on the collateral securing our loan assets on a timely basis or our loan assetsLiquidating Trust may be subject to unfavorable treatment infinal examination by taxing authorities; thus, a borrower bankruptcy.

In certain states foreclosing on a property can be a lengthy and costly process. In addition, a borrower can file for bankruptcyfinal determination by the taxing authorities could increase or raise defenses that could delay our ability to realize on our collateral on a timely basis. In such instances, the increased costs and time required to realize on our collateral would likely result in a reduced return or loss on the investment. Further, if a borrower were to file for bankruptcy protection, a plan could be approved over our objection that would extend our loan for a perioddecrease amounts of time at an interest rate that is less than our cost of funds, thereby having a negative impact on our cash flow and reducing our liquidating distributions.

The subordinate nature of our B Notes is subject to risks relating to the structure and terms of the transactions, and there may not be sufficient funds or assets to satisfy the B Notes, which may result in losses to us.

We currently hold B Notes which are subordinate in payment to the more senior A Notes with respect to the loan. If a borrower defaults or declares bankruptcy, the amounts due on the A Notes are required to be satisfied in full prior to our receiving any amounts on account of our B Notes. Accordingly, there may not be sufficient funds remaining to satisfy our B Notes. Furthermore, the co-lender agreements limit our ability to amend the loan documents, assign the loan, accept prepayments, exercise remedies and control decisions made in bankruptcy proceedings relating to the borrower.

Deterioration of the credit markets may have an adverse impact on the ability of borrowers to obtain replacement financing.

A deterioration in the credit markets will make it extremely difficult for borrowers to obtain mortgage financing. The inability of borrowers to obtain replacement financing has, in the past, led and will in the future, likely lead to more loan defaults thereby resulting in expensive and time consuming foreclosure actions and/or negotiated extensions to existing loans beyond their current expirations on terms which may not be as favorable to us as the existing loans.

A prolonged economic slowdown, a lengthy or severe recession or instability in the credit markets could harm our operations and viability.

A prolonged economic slowdown, a lengthy or severe recession or the continued instability in the credit market will affect our operations and viability in a number of ways including:

Some of our potential losses may not be covered by insurance.

We use our discretion in determining amounts, coverage limits and deductibility provisions of insurance, with a view to maintaining appropriate insurance coverage on our investments at a reasonable cost and on suitable terms. This may result in insurance coverage that, in the event of a substantial loss, would not be sufficient to pay the full current market value or current replacement cost of the lost investment and also may result in certain losses being totally uninsured. Inflation, changes in building codes, zoning or other land use ordinances, environmental considerations, lender imposed restrictions or other factors might not make it feasible to use insurance proceeds to replace the building after such building has been damaged or destroyed. Under such circumstances, the insurance proceeds, if any, received by us might not be adequate to restore our economic position with respect to such property. With respect to our net leased properties, under the lease agreements for such properties, the tenant is required to adequately insure the property, but should a loss occur their failure or inability to have adequate coverage might adversely affect our economic position with respect to such property.

Covenants and other provisions in our debt instruments could adversely affect our financial condition and the ultimate amount of liquidating distributions paid to holders of our Common Shares.

Debt instruments under which we are an obligor contain customary covenants such as those that limit our ability, without the prior consent of the lender, to further encumber, directly or indirectly, the applicable property. These restrictions can include, among other things, a limitation on our ability to incur debt based upon the level of our ratio of total debt to total assets, our ratio of secured debt to total assets, our ratio of earnings before interest, taxes, depreciation and amortization (which is commonly referred to as “EBITDA”) to interest expense and fixed charges, and a requirement for us to maintain a certain level of unencumbered assets to unsecured debt.

If we fail to remain qualified as a REIT, our holders of Common Shares would be adversely affected.

Although we expect to remain qualified as a REIT until such time, if at all, as we transfer any remaining assets and liabilities to a liquidating trust, given the changes in the nature of our assets and sources of our income that will result as we sell our assets, and the need to retain certain assets to meet our liabilities, there is no assurance that we will continue to qualify as a REIT through the completion of our liquidation. If we fail to remain qualified as a REIT, we would be taxed as a corporation for federal income tax purposes and could not deduct distributions to our shareholders in computing our taxable income. As a result, we would be liable for federal income taxes at corporate tax rates on our taxable income from operations and asset sales for the taxable year in which our qualification as a REIT terminates and any subsequent years, which could materially reduce the cash available for distribution to our shareholders.

The adoption of the plan of liquidation may cause our Common Shares to no longer be listed on the NYSE.

Although the adoption of the plan of liquidation has not caused our Common Shares to fail to meet the listing requirements of the NYSE, it is possible that as we reduce our overall assets through the distribution of sales proceeds whether to satisfy debt, expenses or to make liquidating distributions to our shareholders, we may fail to satisfy the requirement to cause our Common Shares to remain listed on the NYSE. If this were to occur, the ability to transfer Common Shares would be substantially limited which may reduce the market price for our Common Shares.

Distributing interests to a liquidating trust may cause you to recognize gain.

We do not expect we will have sold all of our assets by August 5, 2016. Our plan of liquidation requires that any remaining assets and liabilities be transferred to a liquidating trust. In that event, holders of Common Shares will be treated for federal income tax purposes as if they received a distribution of their pro rata share of the fair market value of any assets that are transferred to a liquidating trust, and will be subject to federal income tax to the extent that such “deemed” distribution exceeds the remaining tax basis of such holder’s Common Shares. As a result, holders of Common Shares may recognize taxable gain with respect to assets transferred to a liquidating trust prior to the subsequent sale of such assets and the distribution to them of the related net cash proceeds, if any. Such transfer also may have adverse tax consequences for tax-exempt and foreign shareholders.

Holders of Common Shares may not receive any profits resulting from the sale of one or more of our properties, or receive such profits in a timely manner, because we may provide financing to the purchaser of such property.

We may sell our assets either subject to or upon the assumption of any then outstanding mortgage debt or, alternatively, may provide financing to purchasers. We do not have any limitations or restrictions on taking such purchase money obligations. To the extent we receive promissory notes or other property in lieu of cash from sales, such proceeds, other than any interest payable on those proceeds, will not be included in net sale proceeds until and to the extent the promissory notes or other property are actually paid, sold, refinanced or otherwise disposed of. We may receive initial down payments in the year of sale in an amount less than the selling price and subsequent payments may be spread over a number of years. In such event, holders of Common Shares may experience a delay in the distribution of the net proceeds of a sale until such time as the installment payments are received.unitholders, perhaps significantly.

We will not make new investments.

In accordance with applicable tax law and our plan of liquidation, as a result of the implementation of the plan of liquidation, we are not permitted to make any new investments other than those required to satisfy existing contractual obligations and commitments, including any capital call requirements and acquisitions or dispositions pursuant to buy-sell provisions under existing venture documentation, pay for required tenant improvements and capital expenditures at our real estate properties, repurchase our existing Common Shares if we so choose and make protective acquisitions or advances with respect to our existing assets including providing seller financing to purchasers of our assets if we deem it prudent to facilitate the sale of such asset. Accordingly, we will not be able to use our cash to participate in new investments which could generate a greater return to holders of our Common Shares.

We may incur a 100% tax on any prohibited transactions.

Assuming that we remain qualified as a REIT, we will incur a 100% tax on our net income and gain derived from our sale of any property that we are treated as holding primarily for sale to customers in the ordinary course of business. We believe, but cannot assure, that all of our properties are held for investment and that none of the asset sales that we have made and intend to make pursuant to the plan of liquidation should be subject to this tax.

Compliance with the Americans with Disabilities Act and fire, safety and other regulations may require us to make unanticipated expenditures that adversely affect our financial condition and liquidating distributions.

All of our properties are required to comply with the Americans with Disabilities Act, which we refer to as the ADA. The ADA has separate compliance requirements for “public accommodations” and “commercial facilities,” but generally requires that buildings be made accessible to people with disabilities. Although we believe that our properties are in compliance with the ADA, it is possible that we may have to incur additional expenditures which, if substantial, could adversely affect our financial condition and liquidating distributions.

In addition, we are required to operate our properties in compliance with fire and safety regulations, building codes and other land use regulations, as they may be adopted by local, state and federal governmental agencies and bodies and become applicable to our properties. We may be required to make substantial capital expenditures to comply with those requirements and these expenditures could have an adverse effect on our financial condition and liquidating distributions.

We may incur costs to comply with environmental laws.

The obligation to pay for the cost of complying with existing environmental laws, ordinances and regulations, as well as the cost of complying with future legislation, may increase our operating costs. Under various federal, state and local environmental laws, ordinances and regulations, a current or previous owner or operator of real property may be liable for the costs of removal or remediation of hazardous or toxic substances on or under the property. Environmental laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances and whether or not such substances originated from the property. In addition, the presence of hazardous or toxic substances, or the failure to remediate such property properly, may adversely affect our ability to borrow by using such property as collateral. We maintain insurance related to potential environmental issues on our properties which are not net leased which may not be adequate to cover all possible contingencies. In 2011 we were conveyed title to the land underlying our Churchill, Pennsylvania property. Prior to the conveyance of the land, a Phase II environmental study was performed. The study found that there were certain contaminants at the property all of which were within permitted ranges. In addition, given the nature and use of the property currently and in the past, it is possible that additional contamination could occur which could require remediation. We believe that based on applicable law and existing agreements any such remediation costs would be the responsibility of a prior owner or tenant.

Ability of our Advisor and other third parties directly affects our financial condition.

Other than for severe economic conditions or natural forces which may be unanticipated or uncontrollable, the ultimate value of our assets and the results of our operations will depend on the ability of our Advisor and other third parties we retain to operate and manage our assets in a manner sufficient to maintain or increase revenues and control our operating and other expenses in order to generate sufficient cash flows to pay amounts due on our indebtedness and to pay liquidating distributions toon our shareholders.Units.

We are dependent on our Advisor and the loss of our Advisor’s key personnel could harm our operations and adversely affect the value of our Common Shares.Units.

We have no paid employees. Our officersaffairs are employees ofadministered by our Advisor. We have no separate facilities and are completely reliant on our Advisor whowhich has significant discretion as to the implementationtiming of the sales of our plan of liquidation.assets. We are subject to the risk that our Advisor will terminate its Advisory Agreement with us and that no suitable replacement will be found. Furthermore, we are dependent on the efforts, diligence, skill, network of business contacts and close supervision of all aspects of our business by our Advisor and, in particular, Michael Ashner Chairmanand Carolyn Tiffany, two of our Board of Trustees, and our chief executive officer, Carolyn Tiffany, our president, as well as our other former executive officers.officers of Winthrop. While we believe that we could find replacements for these key personnel, the loss of their services could have a negative impact on our operations and the market pricevalue of our shares.Units.

The termination fee and incentive fee payable to our Advisor may be substantial.

Pursuant to the terms of our Advisory Agreement, with our Advisor, our Advisor is entitled to receive an incentive fee and, in certain instances, a termination fee equal to 20% of any amounts available for distribution in excess of a threshold amount. The incentive fee is only payable at such time, if at all, (i) when holders of our Common Shares receive aggregate dividendsliquidating distributions are paid above a threshold amount or (ii) upon termination of our Advisory Agreement if the value of our net assets exceed the threshold amount based on then current market values and appraisals. That is, the incentive fee is not payable annually but only at such time, if at all, as shareholders have receivedthe liquidating distributions paid exceed the threshold amount or, if the Advisory Agreement is terminated, the net assets of the Liquidating Trust exceed the threshold amount. At December 31, 2015,2016, the threshold amount required to be distributed before any incentive fee would be payable to FUR Advisors was approximately $427,686,000$271,614,000 which was equivalent to $11.94$7.58 for each of our Common Shares on a fully diluted basis.Unit. The threshold amount required to be distributed before any termination fee would be payable to FUR Advisors was approximately $322,706,000$166,633,000 which was equivalent to $9.01$4.65 for each of our Common Shares on a fully diluted basis.Unit. In accordance with liquidation accounting, we have recorded a liability in our financial statements equal to the estimated incentive fee and termination fee that would be payable to FUR Advisors based on the estimated cash available to be distributed over the liquidation period. In determining our estimated net assets in liquidation we have taken into account the termination fee and incentive fee.

If we transfer our assets to a liquidating trust, interests in the liquidating trust will not be freely transferable nor will the liquidating trust be required to comply with certain filing requirements of the Securities and Exchange Commission.

Interests in the liquidating trust will not be freely transferable except by will, intestate succession or operation of law. Therefore, the recipients of the interests in the liquidating trust will not have the ability to realize any value from these interests except from distributions made by the liquidating trust, the timing of which will be solely in the discretion of the liquidating trust’s trustees. As compared to the Trust which is required to comply with all of the filing requirements of the Securities and Exchange Commission for publicly traded entities, based on current guidance provide by the Securities and Exchange Commission we anticipate that the liquidating trust will be required to file only annual reports on Form 10-K and current reports on Form 8-K with the Securities and Exchange Commission.

Our property in Times Square is in its early stages ofunder development.

The property located at 701 Seventh Ave in Times Square in which we are invested is in its early stages ofunder development and is uniquely located in Times Square. Thethe construction is not expected to be completed until late 2017. We utilized third party and market data, to the extent available, to project the future operations of the property once completed. The estimates of future operations were used by us to estimate the value of the investment at the projected date of the sale. The estimated value of this investment in our Net Assets in Liquidation is dependent upon significant assumptions, including but not limited to, future retail rents, hotel and signage revenues and operating expenses, all of which involve inherent uncertainty given they are related to estimating future events. The actual proceeds from the disposition of this asset may be significantly more or less than the amount included in net assets in liquidation.

Terrorist attacks and other acts of violence, civilian unrest, or war may affect the markets in which we operate our business and our profitability.

Some of our properties are located in areas that are susceptible to terrorist attacks. In addition, any kind of terrorist activity or violent criminal acts, including terrorist acts against public institutions or buildings or modes of public transportation (including airlines, trains or buses) could have a negative effect on our business and the value of our properties. More generally, any terrorist attack, other act of violence or war, including armed conflicts, could result in increased volatility in, or damage to, the worldwide financial markets and economy including demand for properties and the availability of financing.

ITEM 1B – UNRESOLVED STAFF COMMENTS

None.

ITEM 2 – PROPERTIES

CONSOLIDATED OPERATING PROPERTIES

The following table sets forth a schedule of consolidated operating properties at December 31, 2015.2016. Our portfolio of consolidated properties consists of sevenfive commercial properties consisting of 1,366,000652,000 square feet and threetwo residential apartment complexes consisting of 773580 units.

UNCONSOLIDATED OPERATING PROPERTIES

The following table sets forth a schedule of unconsolidated operating properties at December 31, 2015.2016. These properties consist of fivethree commercial properties consisting of 1,132,000260,000 square feet and one residential apartment complex consisting of 184 units.feet.