The following discussion addresses the Company's results of operations for the three and nine month period ended September 30, 2008 compared to the three and nine month period ended September 30, 2007 and the Company's consolidated financial condition as of September 30, 2008. It is presumed that readers have read or have access to Wilshire's 2007 Annual Report on Form 10-K which includes disclosures regarding critical accounting policies as part of Management's Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

This Report on Form 10-Q for the quarter and nine months ended September 30, 2008 contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements included herein other than statements of historical fact are forward-looking statements. Although the Company believes that the underlying assumptions and expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. The Company's business and prospects are subject to a number of risks which could cause actual results to differ materially from those reflected in such forward-looking statements, including uncertainties relating to the closing of the proposed merger described herein, environmental risks relating to the Company's real estate properties, competition, the substantial capital expenditures required to fund the Company's real estate operations, market and economic changes in areas where the Company holds real estate properties, interest rate fluctuations, government regulation, and the ability of the Company to implement its business strategy. For additional information regarding risk factors impacting the Company and its forward-looking statements, see Item 1A of the Company's Annual Report on Form 10-K, as amended for the year ended December 31, 2007.

Effects of Recent Accounting Pronouncements

In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles." SFAS No. 162 identifies the sources of accounting principles and provides entities with a framework for selecting the principles used in preparation of financial statements that are presented in conformity with Generally Accepted Accounting Principles ("GAAP"). The current GAAP hierarchy has been criticized because it is directed to the auditor rather than the entity, it is complex, and it ranks FASB Statements of Financial Accounting Concepts, which are subject to the same level of due process as FASB Statements of Financial Accounting Standards, below industry practices that are widely recognized as generally accepted but that are not subject to due process. The FASB believes the GAAP hierarchy should be directed to entities because it is the entity (not its auditors) that is responsible for selecting accounting principles for financial statements that are presented in conformity with GAAP. The adoption of FASB 162 is not expected to have a material impact on the Company's consolidated financial position

In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133" , which requires additional disclosures about the objectives of the derivative instruments and hedging activities, the method of accounting for such instruments under SFAS No. 133 and its related interpretations, and a tabular disclosure of the effects of such instruments and related hedged items on our consolidated financial position, financial performance and cash flows. SFAS No. 161 is effective beginning January 1, 2009. The Company does not have any derivative instruments or utilize any hedging activities and therefore, SFAS No. 161 is not applicable to the Company at this time.

In December 2007, the FASB issued SFAS No. 141-R, "Business Combinations" ("SFAS 141-R"). SFAS 141-R changes the accounting for acquisitions specifically eliminating the step acquisition model, changing the recognition of contingent consideration from being recognized when it is probable to being recognized at the time of acquisition, disallowing the capitalization of transaction costs and changes when restructurings related to acquisition can be recognized. The standard is effective for fiscal years beginning on or after December 15, 2008 and will only impact the accounting for acquisitions that are made after adoption. The Company believes the adoption of SFAS 141-R will not have an effect on the Company's consolidated financial position or results of operations as there are no current acquisitions being contemplated.

In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51". This statement is effective for fiscal years beginning on or after December 15, 2008, with earlier adoption prohibited. This statement requires the recognition of a noncontrolling interest (minority interest) as equity in the consolidated financial statements and separate from the Company's equity. The amount of net income attributable to the noncontrolling interest will be included in the consolidated net income on the face of the consolidated income statement. It also amends certain of ARB No. 51's consolidation procedures for consistency with the requirements of SFAS 141-R. This statement also includes expanded disclosure requirements regarding the interests of the parent and its noncontrolling interest. The Company believes the adoption of SFAS 160 will not have an effect on the Company's consolidated financial position or results of operations.

Overview

On June 13, 2008, the Company entered into an Agreement and Plan of Merger among the Company, NWJ Apartment Holdings Corp. (the "Parent") and NWJ Acquisition Corp., a wholly-owned subsidiary of the Parent ("Merger Sub"). Both the Parent and Merger Sub are affiliates of NWJ Companies, Inc. ("NWJ"), a privately owned real estate development company based in New York, New York. The merger agreement provides that at the closing of the merger, the Merger Sub will merge with and into the Company, and each outstanding share of the Company's common stock will be converted into the right to receive $3.88 per share in cash, without interest. On September 17, 2008, a special meeting of stockholders was held at which the Company's stockholders approved the proposal to adopt the merger agreement.

The Company has been informed by the Parent that unless there is a significant improvement in the current economic and lending environment in the United States, the Parent will not be able to secure the financing of the Company's residential properties required to close the merger with the Company. If the merger is not consummated by December 13, 2008, as a result of the failure to obtain such financing, either party may terminate the merger agreement without liability to the other, provided that the terminating party has not breached the merger agreement in a manner that caused the merger not to close by December 13, 2008. Under the terms of the merger agreement, the Parent is obligated to use its commercially reasonable best efforts to arrange the financing of the Company's residential properties unless and until the merger agreement is terminated.

Net loss for the three months ended September 30, 2008 was $296,000 or $0.04 per diluted share as compared to a net loss of $206,000 or $0.03 per diluted share for the three month period ended September 30, 2007. For the nine months ended September 30, 2008, the Company recorded a net loss of $1,088,000 or $0.14 per diluted share as compared to a net loss of $577,000 or $0.07 per diluted share during the nine months ended September 30, 2007. Operations are shown as continuing and discontinued, with discontinued operations comprised of the results of operations from the Company's real estate properties held for sale, the gain from real estate properties held for sale that were sold during the period and the wind down of the oil and gas businesses.

In January 2008, the Company closed on the sale of a one bedroom condominium at Jefferson Gardens, New Jersey for gross proceeds of approximately $150,000. After payments of closing costs and providing for taxes, the Company realized a net gain during the nine months ended September 30, 2008 of approximately $61,000 from this sale.

In May 2008, the Company closed on the sale of its Tamarac Office Plaza, Florida, office complex for gross proceeds of $2 million. After payments of closing costs and providing for taxes, the Company realized a net gain during the nine months ended September 30, 2008 of approximately $686,000 from this sale.

During the three and nine months ended September 30, 2007, the Company sold the following real estate assets:

? In January and February 2007, the Company closed on the sale of a one bedroom and a two bedroom condominium unit at Jefferson Gardens for gross proceeds of $144,300 and 195,000, respectively.

? In February 2007, the Company closed on the sale of a parcel of land located in Lake Hopatcong, New Jersey for gross proceeds of $850,000.

· In April 2007, the Company closed on the sale of a one bedroom condominium unit at Jefferson Gardens for gross proceeds of $150,000.

? In July 2007, the Company closed on the sale of a one bedroom condominium unit at Jefferson Gardens for gross proceeds of $150,000.

? In August 2007, the Company closed on the sale of a one bedroom condominium unit at Jefferson Gardens for gross proceeds of $154,500.

After payment of closing costs and providing for taxes, the Company realized net gains from sales of properties of $123,000 and $610,000, respectively, during the three and nine months ended September 30, 2007. A portion of the taxes payable was deferred as a result of an Internal Revenue Service Section 1031 tax deferred exchange for which the Company has identified a replacement property. These gains were included in the statements of operations in discontinued operations - real estate - gain from sales.

The following table presents the increases (decreases) in each major statements of operations category for the three and nine months ended September 30, 2008 as compared to 2007, respectively. The following discussion of "Results of Operations" references these increases (decreases).

  Increase (Decrease) in Consolidated Statements of Income Categories for the
                                    Periods:

                                                For the three months ended September          For the nine months ended September 30,
                                                          30, 2008 vs 2007                                  2008 vs 2007
                                                  Amount ($)            %                        Amount ($)            %

Revenues                                     $             (78,000 )                -3.2 % $              (136,000 )                 -1.9 %
Costs and expenses:
Operating expenses                                          34,000                   2.4 %                  32,000                    0.7 %
Depreciation expense                                       (80,000 )               -22.0 %                (196,000 )                -17.9 %
General and administrative expense                         159,000                  17.8 %                 211,000                    8.0 %
Total costs and expenses                                   113,000                                          47,000
Loss from Operations                                      (191,000 )                                      (183,000 )
Other Income (Loss)
Dividend and interest income                               (57,000 )               -41.6 %                 (54,000 )                -13.3 %
Loss on sale of marketable securities                            -                     -                  (553,000 )               -100.0 %
Other income                                               (48,000 )              -100.0 %                 (51,000 )                -98.1 %
Interest expense                                             4,000                  -0.9 %                  (1,000 )                  0.1 %
Loss before provision for taxes                           (292,000 )                                      (842,000 )
Income tax benefit                                        (205,000 )               117.1 %                (352,000 )                 45.9 %
Loss from continuing operations                            (87,000 )                                      (490,000 )
Discontinued operations - real estate
Loss from operations                                        48,000                  28.6 %                 131,000                  -25.1 %
Gain from sales                                           (123,000 )              -100.0 %                 137,000                   22.5 %
Discontinued operations - oil & gas
Loss from operations                                        72,000                  35.1 %                (289,000 )                -60.7 %
Gain from sale                                                   -                     -                         -                      -
Net loss                                     $             (90,000 )                43.7 % $              (511,000 )                 88.6 %
Basic loss per share:
Loss from continuing operations              $               (0.01 )                20.0 % $                 (0.07 )                 42.9 %
Income from discontinued operations                              -                   0.0 %                       -                      -
Net loss applicable to common shareholders   $               (0.01 )                33.3 % $                 (0.07 )                100.0 %
Diluted loss per share:
Loss from continuing operations              $               (0.01 )                20.0 % $                 (0.07 )                 42.9 %
Income from discontinued operations                              -                   0.0 %                       -                      -
Net loss applicable to common shareholders   $               (0.01 )                33.3 % $                 (0.07 )               100.00 %

Results of Operations

Three Months Ended September 30, 2008 as Compared with Three Months Ended September 30, 2007

Continuing Operations:

Loss from continuing operations amounted to $453,000 during the three months ended September 30, 2008 as compared to a loss from continuing operations of $366,000 during the three months ended September 30, 2007. Results per diluted share from continuing operations amounted to $(0.06) during the three months ended September 30, 2008 as compared to $(0.05) during the three months ended September 30, 2007. The 2008 period included the following charges to expense:
an increase in general and administrative expense of $159,000, which primarily relates to professional fees incurred related to the proposed sale of the Company, as well as an increase in operating expenses of $34,000 partially offset by a decrease in depreciation expense of $80,000 and an increased income tax benefit of 205,000 resulting from an increased operating loss for the period.

Segment Information

Wilshire presently conducts business in the residential and commercial real
estate segments. The following table sets forth comparative data for Wilshire's
real estate segments in continuing operations:

                                      Residential Real Estate                   Commercial Real Estate                                        Totals
                                  Three months                             Three months                               Three months
                                      ended             Increase              ended               Increase                ended              Increase
                                  September 30,                           September 30,          (Decrease)           September 30,         (Decrease)
                                 2008       2007       $        %         2008        2007       $         %         2008       2007        $         %
                                 (In 000's of $)                         (In 000's of $)                             (In 000's of $)

Total revenues                 $   2,004   $ 1,969   $   35      1.8 % $      330    $  443   $  (113 )   (25.5 )% $   2,334   $ 2,412   $   (78 )    (3.2 )%

Operating expenses                 1,279     1,252       27      2.2 %        190       183         7       3.8 %      1,469     1,435        34       2.4 %

Net operating income ("NOI")   $     725   $   717   $    8      1.1 % $      140    $  260   $  (120 )   (46.2 )% $     865   $   977   $  (112 )   (11.5 )%



         Reconciliation of NOI to consolidated           Three months
         loss from continuing operations:                    ended
                                                         September 30,
                                                       2008         2007
         Net operating income                       $      865   $      977
         Depreciation expense                             (284 )       (364 )
         General and administrative expense             (1,051 )       (892 )
         Other income                                       80          185
         Interest expense                                 (443 )       (447 )
         Income tax benefit                                380          175
         Consolidated loss from continuing
         operations                                 $     (453 ) $     (366 )

The above table details the comparative revenues, expenses and net operating income ("NOI") for Wilshire's residential and commercial real estate segments, and reconciles the combined NOI to consolidated loss from continuing operations. NOI is based on operating revenue and expenses directly associated with the operations of the real estate properties, but excludes depreciation and interest expense. Wilshire assesses and measures segment operating results based on NOI, which is a direct measure of each property's contribution to the results of the Company before considering revenues from treasury activities, overhead expenses and other costs that are not directly related to the performance of a property. The Company believes NOI is a more descriptive measure of the Company's performance than consolidated income (loss) from continuing operations. NOI is not a measure of operating results or cash flow as measured by accounting principles generally accepted in the United States of America and is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to cash flows as a measure of liquidity.

Residential Segment

The residential segment is comprised of Sunrise Ridge Apartments and Van Buren Apartments, both in Arizona, Wellington Estates and Summercreek Apartments, both in Texas, and Alpine Village Apartments in New Jersey. During the three month period ended September 30, 2008, NOI increased by $8,000 or 1.1% to $725,000 as compared to $717,000 during the same period in 2007.

Revenues increased $35,000 or 1.8% during the quarter ended September 30, 2008 to $2,004,000, compared to $1,969,000 during the quarter ended September 30, 2007. Operating expenses increased $27,000 or 2.2% to $1,279,000. The increase in revenues was primarily attributable to the Company's Texas and New Jersey apartment complexes, which experienced a slight increase in occupancy during the period. The increase in operating expenses was primarily attributable to the Company's Arizona and Texas apartment complexes.

Commercial Segment

The commercial segment is comprised of Royal Mall Plaza in Mesa, Arizona and Tempe Corporate Center in Tempe, Arizona. Revenues during the quarter ended September 30, 2008, as compared to the quarter ended September 30, 2007, decreased $113,000 or 25.5% to $330,000 and operating expenses increased $7,000 or 3.8% to $190,000. The revenue decrease was primarily attributable to decreased occupancy at both Tempe Corporate Center and Royal Mall (Arizona) resulting in decreased rental revenues in the amounts of $43,000 and $70,000, respectively.

The increase in operating expenses is primarily attributable to increased costs at Royal Mall (Arizona).

Other Operating Expenses

Depreciation expense amounted to $284,000 during the three months ended September 30, 2008, a decrease of $80,000 from $364,000 during the three months ended September 30, 2007. The decrease in depreciation expense relates to the retirement of certain assets during the past year.

General and administrative expense increased $159,000, or 17.8%, to $1,051,000 during the three months ended September 30, 2008 as compared to $892,000 during the same period in 2007. The increase in general and administrative expense is primarily attributable to professional fees incurred related to the proposed sale of the Company.

Other income (loss) decreased from income of $185,000 in the 2007 quarter to $80,000 in the 2008 quarter, a decrease of $105,000. The decrease is primarily relates to declining interest rates and reduced dividend income during the three months ended September 30, 2008 as compared to the same period in 2007.

Interest expense decreased to $443,000 during the three months ended September 30, 2008 as compared to $447,000 during the three months ended September 30, 2007. The decrease primarily relates to the reduction in the Company's mortgage liability and the payoff of the mortgage on the Tamarac Office Plaza which was sold in May 2008.

The benefit for income taxes amounted to $380,000 and $175,000 during the three month period ended September 30, 2008 and 2007, respectively. The change in the benefit for income taxes is related to an increased loss from continuing operations during the 2008 quarter as compared to the 2007 quarter. Discontinued Operations, Net of Taxes:

Real Estate

The after tax loss from discontinued operations for the three months ended September 30, 2008 amounted to $120,000 as compared to an after tax loss of $45,000 during the three months ended September 30, 2007. The loss during the 2008 period reflects the loss from operations of $120,000. The loss during the 2007 period is comprised of a loss from discontinued operations of $168,000 which was partially offset by a gain from the sale of a two condominium units at Jefferson Gardens for gross proceeds of $305,000 that resulted in an after tax gain of $123,000.

The loss from operating properties classified as discontinued operations decreased by $48,000 to a loss of $120,000 during the quarter ended September 30, 2008 as compared to a loss of $168,000 during the same period in 2007.

Oil and Gas

During the quarter ended September 30, 2008, the Company recorded income from the wind down of its former oil and gas business, of $277,000 as compared to income of $205,000 during the same period in 2007. The net income from the wind down of the oil and gas business during the quarter ended September 30, 2008 relates to foreign currency gain during the period and a tax refund in the amount of $85,000. The net income from the wind down of the oil and gas business during the quarter ended September 30, 2007 relates to a foreign currency gain and interest income during the period.

Nine Months Ended September 30, 2008 as Compared with Nine Months Ended September 30, 2007

Continuing Operations:

Loss from continuing operations amounted to $1,632,000 during the nine months ended September 30, 2008 as compared to a loss from continuing operations of $1,142,000 during the nine months ended September 30, 2007. Results per diluted share from continuing operations amounted to $(0.21) during the nine months ended September 30, 2008 as compared to $(0.14) during the nine months ended September 30, 2007. The 2008 period included the following charges to expense:
an increase in general and administrative expense of $211,000, increased operating expenses of $32,000, which was offset by a decrease in depreciation expense of $196,000 and an increase in income tax benefit of $352,000 resulting from an increase in the loss from operations. .

 Segment Information

Wilshire presently conducts business in the residential and commercial real
estate segments. The following table sets forth comparative data for Wilshire's
real estate segments in continuing operations:

                                       Residential Real Estate                      Commercial Real Estate                                           Total
                                 Nine months ended         Increase          Nine months ended         Increase           Nine months ended         Increase
                                   September 30,          (Decrease)           September 30,          (Decrease)            September 30,          (Decrease)
                                  2008        2007        $        %          2008        2007        $         %          2008        2007        $        %
                                  (In 000's of $)                             (In 000's of $)                              (In 000's of $)

Total revenues                 $    5,815    $ 5,797   $    18      0.3 %  $    1,093    $ 1,247   $  (154 )   (12.3 )% $    6,908    $ 7,044   $  (136 )   (1.9 )%

Operating expenses                  3,854      3,824        30      0.8 %         519        517         2       0.4 %       4,373      4,341        32      0.7 %

Net operating income ("NOI")   $    1,961    $ 1,973   $   (12 )   (0.6 )% $      574    $   730   $  (156 )   (21.4 )% $    2,535    $ 2,703   $  (168 )   (6.2 )%



                                                          Nine months
         Reconciliation of NOI to consolidated          ended September
         loss from continuing operations:                     30,
                                                       2008         2007
         Net operating income                       $    2,535   $    2,703
         Depreciation expense                             (902 )     (1,098 )
         General and administrative expense             (2,848 )     (2,637 )
         Other income (loss)                              (200 )        458
         Interest expense                               (1,336 )     (1,335 )
         Income tax benefit                              1,119          767
         Consolidated loss from continuing
         operations                                 $   (1,632 ) $   (1,142 )

The above table details the comparative revenues, expenses and net operating income ("NOI") for Wilshire's residential and commercial real estate segments, and reconciles the combined NOI to consolidated loss from continuing operations. NOI is based on operating revenue and expenses directly associated with the operations of the real estate properties, but excludes depreciation and interest expense. Wilshire assesses and measures segment operating results based on NOI, which is a direct measure of each property's contribution to the results of the Company before considering revenues from treasury activities, overhead expenses and other costs that are not directly related to the performance of a property. The Company believes NOI is a more descriptive measure of the Company's performance than income (loss) from continuing operations. NOI is not a measure of operating results or cash flow as measured by accounting principles generally accepted in the United States of America and is not necessarily indicative of . . .