ASR Investments Corp. announces agreements for acquisition of apartment units and conversion to self-administered and self-managed REIT.

TUCSON, Ariz.--(BUSINESS WIRE)--Nov. 19, 1996--ASR Investments Corp. (AMEX:ASR), an apartment REIT, announced that it has entered into an agreement to acquire up to 13 apartment communities and one office building as well as a related property management operation for a combination of cash, ASR stock and limited partnership units in an Operating Partnership formed by ASR to complete the acquisition.

The apartment communities contain a total of 2,260 units and the office building totals 73,000 square feet. The agreement values the acquired assets at $80.27 million with approximately $49.3 million to be paid by the assumption or refinancing of existing loans, $1.6 million in cash and the remaining equity of approximately $29.4 million in ASR stock and limited partnership units in the Operating Partnership.

ASR also announced that it has agreed to acquire Pima Mortgage LP, its advisor, and Pima Realty Advisors Inc., which manages all of ASR's properties, for approximately 262,000 shares of ASR common stock and thereby becomes a self-administered and self-managed REIT. The number of shares was based on the average closing price of the stock for the last 10 days of $20.04.

Jon A. Grove, Frank S. Parise Jr., and Joseph C. Chan, the owners of Pima Mortgage and Realty, will enter into employment agreements with ASR and will continue as president, executive vice president, and executive vice president and chief financial officer respectively.

ASR will be the general partner of the Operating Partnership formed to complete the property acquisition. Each limited partnership unit to be issued will be convertible into one share of ASR common stock beginning approximately one year after the closing date and will receive profit allocations and distributions equal to the dividend per share on ASR's common stock (currently $2.00 per share).

ASR will also offer to exchange shares of its common stock for existing partnership interests rather than the limited partnership units in the Operating Partnership.

The property acquisitions would result in the issuance of up to 1,623,000 shares of ASR's common stock or limited partnership units convertible into shares of its common stock using current debt balances, with the actual amount determined by dividing the equity of the acquired properties at the closing date by $18.10, the average price of ASR common stock during the five month period preceding finalization of the terms of the acquisition.

Of the apartment communities subject to the agreement, six (937 units) are located in Houston, five (989 units) in Dallas and two (334 units) in Pullman, Wash. The office building is located in Seattle. The apartment communities were built between 1983 and 1986 with the exception of one community built in 1972, and are all garden apartments.

The property management operation is being acquired for approximately 70,300 shares from Don W. Winton, the general partner of each of the partnerships. Winton will enter into an employment agreement with ASR under which he will become an executive officer and will be appointed to the board of directors.

ASR currently owns 4,480 units in 25 communities, including 1,441 units in six communities owned through joint ventures, and has approximately 3,147,000 outstanding shares of common stock.

Consummation of the acquisition of the apartments, office building and related property management operation will be subject to approval of partners in the 14 partnerships. The issuance of ASR common stock in connection with such acquisition and the acquisition of Pima Mortgage and Pima Realty is subject to approval by the stockholders of ASR. Closing of the transactions is anticipated to be in early 1997.

The ASR stock and limited partnership units to be issued in the transactions will not be registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

CONTACT: ASR Investments Corp., Tucson

Joseph C. Chan, 520/748-2111

FAX [phone]