AmREIT Announces Change in Fourth Quarter Transaction Activity.

Revises 2007 Guidance to Reflect Timing Difference and Issues 2008 Expectations

HOUSTON -- AmREIT (AMEX:AMY), a Houston based real estate investment trust, today announced that its contract to sell the AAA CTL portfolio expected to close in the fourth quarter has been terminated and the Company is pursuing other opportunities with regard to this portfolio. The Company has revised its fourth quarter and full year 2007 guidance to reflect this change. AmREIT also announced that its initial expectations for 2008 (excluding the potential transactions involving the AAA CTL portfolio) reflect $0.85 to $0.90 per share in funds from operations available to our class A common shareholders (FFO).

"For the first time as a public company we will miss our annual projections. This miss is solely related to the buyer of our AAA CTL (IHOP properties) portfolio backing out of the transaction, and we will therefore not be able to realize approximately $4 million in FFO during 2007 from that transaction. AAA CTL is a non-core portfolio of single-tenant IHOP leasehold properties we purchased as an opportunistic investment five years ago. We are currently assessing our strategic opportunities and intend to either take the portfolio back out to sell, refinance the portfolio, or re-syndicate the portfolio after the first of the year," said Kerr Taylor, AmREIT President and CEO.

AAA CTL Notes Transaction

The Company had previously announced in its November 6, 2007 earnings release and third quarter earnings conference call that a majority of its transactional activity had been concentrated in the fourth quarter due to maintaining tight acquisitions discipline during what it perceived to be an over heated marketplace. The AAA CTL Notes transaction had been cited as one that could have a material impact to fourth quarter and 2007 results should it fail to close by year end. The buyer of the portfolio has pulled out and therefore $4 million of profit and back end interest will not be realized in 2007. As a result, the Company now expects to report, for its class A common shareholders, FFO for 2007 of between $0.26 and $0.30 per share after restructuring charges of $900,000 associated with redeeming the class B common shares. Although these anticipated results will produce dividends in excess of anticipated FFO of approximately $1.3 million, during 2005 and 2006 combined, the Company had under-distributed FFO by approximately $2.7 million. The Company also anticipates that its results in 2007 will have no adverse impact on its dividend distributions in 2008.

Mr. Taylor added, "Over the past 5 years, we have grown our platform of what we call Today's and Tomorrow's Irreplaceable Corners from approximately $100 million to approximately $800 million. With our current pipeline, we anticipate reaching $1 billion in total assets by the first half of 2008. As we have discussed all year, with this growth and our focus on only top quality assets, the timing of asset acquisitions has become more problematic. Our focus on owning the best retail and mixed use corners in our markets mean we will keep to our discipline of not acquiring inferior projects. As we look ahead to 2008, we are well-positioned to take advantage of opportunities in the current market."

Significant Fourth Quarter Activity Leading to Growth in 2008

During the fourth quarter, REITPlus, Inc., a $550 million publicly offered non-traded REIT offering that will be advised by a wholly-owned subsidiary of AmREIT, was declared effective by the SEC and received a "No Objection" letter from FINRA, allowing REITPlus to begin offering its common stock through AmREIT's broker dealer network. By advising REITPlus, AmREIT's subsidiary will earn recurring fees such as asset management and property management fees, and transactional fees such as acquisition fees, development fees and sales commissions. AmREIT will also participate in a 15% promoted interest after the REITPlus stockholders receive their invested capital plus a 7% preferred return. Also during the fourth quarter, the Company renewed and expanded its unsecured credit facility, increasing the commitment from $40 million to $70 million. Currently, approximately $18 million is outstanding under the facility. This represents approximately 11% of our total debt outstanding, with the balance being fixed rate mortgage debt with an average term of six years. Additionally, the Company continues to have approximately $200 million in projects in the pipeline for its advised funds.

The Company anticipates closing the class B common share redemption on December 20, 2007. As previously discussed, there will be a restructuring charge associated with this buy back of approximately $900,000 in the fourth quarter. This transaction will allow the Company to completely redeem the class B shares and bring the equity structure down to three classes of shares. The redemption is expected to be accretive to class A shareholders by approximately $0.01 to $0.02 per share on an annual basis.

Initial 2008 Guidance

The Company estimates 2008 FFO, excluding any benefit received from selling the AAA CTL Notes portfolio, will be within a range of $0.85 to $0.90 per share. This guidance is based on the following macro assumptions:

* Raising approximately $130 million in advisory capital through REITPlus;

* Closing on approximately $100 million in projects during the first half of 2008 that are currently identified and under letter of intent;

* Closing on approximately $100 million in additional projects currently in negotiation;

* Closing on approximately $125 million in to-be-identified projects;

* Continuing same-store NOI growth within the portfolio of between 2% and 4%;

* Expanding geographically to open an Atlanta office, staffed with a Southeast leader; and

* Expanding the staffing of the advisory business to include six full territories and a National Sales Manager.

Consistent with past practice, the Company intends to provide more detailed 2008 guidance and assumptions in February 2008.

"While we are disappointed that we did not meet our earnings expectations for the year due to the timing of transactional activity, we are pleased with a number of our accomplishments during 2007 that will position us well for 2008 and are consistent with our goal of creating long-term value for shareholders. Our portfolio has exceeded budget for the year, with average leasing spreads of 14% and overall occupancy of 98%. As we have published in our quarterly financial supplements, we continue to believe that our shares are trading at a significant discount to our portfolio NAV, and will therefore continue to be in the market with our board approved stock buy back plan or similar methods at our disposal to take advantage of the discrepancy between public and private real estate values," concluded Mr. Taylor.

About AmREIT

(AMEX:AMY), headquartered in Houston, is a growing, full service real estate company that has delivered results to its investors for 23 years. AmREIT's mission is to build a real estate business with complementary operations that reduce AmREIT's overall sensitivity to changing market cycles - a company with strong earnings potential from multiple sources. This mission has led AmREIT into two distinct companies: our institutional grade portfolio of Irreplaceable Corners[TM] - premier retail properties in high-traffic, highly populated areas which are held for long-term value and provide a foundation to our growth through a steady stream of rental income; and our advisory/sponsorship business that broadens our access to capital and raises equity for a series of merchant development funds, resulting in recurring income from assets under management. As of September 30, 2007, AmREIT has over 1.3 million square feet in various stages of re-development, development or in the pipeline for both our advisory group and for third parties. AmREIT has offices in Dallas and San Antonio, Texas. Please visit our website at www.amreit.com.

In addition to historical information, this press release contains forward-looking statements under the federal securities law. These statements are based on current expectations, estimates and projections about the industry and markets in which AmREIT operates, management's beliefs and assumptions made by management. Past performance is not indicative of future returns. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict.

For more information, call Chad Braun, Chief Financial Officer of AmREIT, at [phone]. AmREIT is online at www.amreit.com.

Non-GAAP Financial Disclosure

This press release contains certain non-GAAP financial measures that management believes are useful in evaluating an equity REIT's performance. AmREIT's definitions and calculations of non-GAAP financial measures may differ from those used by other equity REITs, and therefore may not be comparable. The non-GAAP financial measures should not be considered as an alternative to net income as an indication of our operating results, or to net cash provided by operating activities as a measure of our liquidity.

AmREIT considers FFO to be an appropriate measure of the operating performance of an equity REIT. The National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as net income computed in accordance with generally accepted accounting principles ("GAAP"), excluding gains or losses from sales of property, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. AmREIT calculates its FFO in accordance with this definition. Management considers FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions and excluding depreciation, FFO is a helpful tool that can assist in the comparison of the operating performance of a company's real estate between periods, or as compared to different companies. FFO is not defined by GAAP and should not be considered as an alternative to net income as an indication of our operating performance or to net cash provided by operating activities as a measure of our liquidity. FFO as disclosed by other REITs may not be comparable to AmREIT's calculation.

Projected FFO is calculated in a method consistent with historical FFO, and AmREIT considers projected FFO to be an appropriate supplemental measure when compared with projected EPS. A reconciliation of the projected FFO to projected EPS per share is provided below:

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