ASR Investments Corp. Reports Higher 1997 Second Quarter Earnings.

TUCSON, Ariz.--(BUSINESS WIRE)--Aug. 13, 1997--ASR Investments Corp. (AMEX:ASR), an apartment REIT, reported net income of $5,227,000 ($1.11 per share) and $10,174,000 ($2.58 per share) for the quarter and six months ended June 30, 1997 compared with $3,326,000 ($1.05 per share) and $5,666,000 ($1.80 per share) for the same periods in 1996.

The 1997 net income amounts have been reduced by acquisition-related expenses of $6,215,000. Cash provided by operations was $19,919,000 ($5.06 per share) for the six months ended June 30, 1997 compared with $7,568,000 ($2.40 per share) for the same period in 1996.

Income from the company's apartment communities (after related interest expense and before depreciation) was $1,475,000 and $2,371,000 for the quarter and six months ended June 30, 1997 compared with $871,000 and $1,817,000 for the same periods in 1996. The increase was primarily due to acquisitions made during the second quarter of 1997.

The income for the second quarter of 1997 included only a partial quarter's operating results of the new communities acquired. The full quarterly results of these new communities will be reflected in the third quarter of 1997.

Income from mortgage assets (after related interest expense) was $11,562,000 and $17,213,000 for the quarter and six months ended June 30, 1997 compared with $3,760,000 and $6,432,000 for the same periods in 1996. The company sold all of its mortgage assets in the second quarter of 1997 for $14,065,000 and recorded a total gain of $11,311,000.

The company plans to use a majority of the proceeds to acquire several apartment communities that are under evaluation. As a result of the sale, net income in future periods will be significantly reduced by higher depreciation expense from the additional apartment communities and the absence of income from mortgage assets.

As the company completed the transition to be an apartment REIT in June 1997, it began to report funds from operations (FFO) information. FFO for the first six months of 1997, modified to exclude the income from mortgage asset redemptions and sales as well as certain acquisition-related expenses and expenses that are not recurring, were $2,489,000 (60 cents per share).

On a pro forma basis, assuming the 1997 acquisitions were completed as of the beginning of the year, FFO, as modified, would be $4,286,000 (77 cents per share). Comparison of the company's FFO with other REITs, however, is still difficult because 1997 is a year of transition.

The company expects its FFO to increase as the properties acquired during the second quarter achieve stabilized operations and as it completes the construction of Finisterra Apartments in September and acquires additional apartment communities using the proceeds from the sale of the mortgage assets. The company plans to maintain its current dividend and expects that its FFO will support the dividend level.

ASR Investments Corp. is a self-administered and self-managed REIT that owns and operates apartment communities. It owns 36 apartment communities containing 6,347 units and one office building located in Phoenix and Tucson, Ariz., Dallas and Houston, Seattle and Pullman, Wash. and Albuquerque, N.M.

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1993, as amended, and Section 21E of the Securities Act of 1934, as amended.

The company's actual results could differ materially from those set forth in the forward-looking statements as a result of, among other things, the risk factors set forth in the company's filings with the Securities and Exchange Commission, changes in general economic conditions and changes in the assumptions used in making such forward-looking statements. -0-

                         ASR Investments Corp.
                            Financial Table

Quarter:                             June 30,         June 30,
                                       1997             1996

Total income:                      $19,348,000       $7,529,000
Net income:                         $5,227,000       $3,326,000
SHR earns:
 Net income:                             $1.11            $1.05
Average shares outstanding           4,708,000        3,154,000
Cash provided by operations        $13,675,000       $4,445,000
 Per share                               $2.90            $1.41


Six Months:                          June 30,         June 30,
                                       1997             1996

Total income:                      $28,907,000      $13,958,000
Net income:                        $10,174,000       $5,666,000
SHR earns:
 Net income:                             $2.58            $1.80
Average shares outstanding           3,938,000        3,154,000
Cash provided by operations        $19,919,000       $7,568,000
 Per share                               $5.06            $2.40

CONTACT: ASR Investments Corp., Tucson

Joseph C. Chan, 520/748-2111

Fax: [phone]