AmREIT Announces First Quarter Operating Results.

Business Editors

HOUSTON--(BUSINESS WIRE)--May 14, 2003

AmREIT (AMEX:AMY), a Texas-based real estate investment trust, announced that its net income ("EPS") for the first quarter 2003 was $0.002 per class A share, compared to $0.078 per share for the same period in 2002. The first quarter of 2002 included profits from a property transaction that generated EPS of $.101 per share. Funds from operations ("FFO") for the first quarter of 2003 totaled $0.079 per class A share, compared with $0.126 for the same period in 2002. A reconciliation of net income to FFO is included in the financial tables accompanying this press release.

AmREIT and its affiliates closed on approximately $30 million in freestanding credit tenant projects over the past year and own a portfolio of 47 properties leased to 26 different tenants located in 18 states. Chad C. Braun, executive vice president and chief financial officer, commented, "In addition to the acquisition of freestanding credit tenant projects, AmREIT and its affiliates are involved in the development of shopping centers in Houston, San Antonio and Austin, Texas and Raleigh, N.C. The previously announced acquisition of the site located at the intersection of Yorktown and Westheimer in the prestigious Uptown area of Houston has been leased and is expected to generate $0.083 per share in annualized FFO upon completion of development which is expected to occur in the fourth quarter." Mr. Braun further noted that these and other focused real estate acquisitions, as well as acquisitions funded through future equity and debt offerings will support the Company's earnings and growth estimates.

AmREIT considers FFO to be an appropriate measure of 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 further adjusts FFO by adding back non-cash charges to earnings related to the issuance of stock in conjunction with the payment of deferred merger costs, resulting in its adjusted FFO. The Company considers FFO to be a useful measure of its operating performance because adjusted FFO, together with net income and cash flows, provides investors with an additional basis to evaluate the ability of the Company to incur and service debt and to fund capital expenditures and distributions to shareholders. 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.

Management expects EPS for the calendar year 2003 of between $0.240 and $0.260 per share, and adjusted FFO of between $0.530 and $0.560 for the same period. This represents an increase in adjusted FFO of approximately 20% when compared to adjusted FFO of $.423 per share for 2002. Management believes that FFO and adjusted FFO is the most meaningful performance measurement within the REIT industry.

AmREIT is a real estate company dedicated to the ownership, development and acquisition of commercial real estate specializing in general retail, financial services and banking, medical and restaurant sectors, and the sponsorship of quality real estate investment opportunities through the independent financial planning community. AmREIT's focus is to be the highest quality real estate sponsor, creating dependable, increasing, monthly income for investors through the development, management, brokerage and ownership of freestanding credit tenant leased projects and frontage shopping centers located contiguous to major thoroughfares and traffic generators in affluent areas on lease to companies such as Goodyear Tire, Washington Mutual, IHOP, McDonalds, Memorial Herman Hospital, RadioShack, Sprint, Coldwell Banker, Jack in the Box, Guaranty Federal, Bennigan's, Chili's, Texas Children's Hospital and Discount Tire.

In addition to historical statements included in this press release, certain statements are included that state the Company's or management's intentions, hopes, beliefs, expectations or predictions of the future and are considered "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, which by their nature, involve known and unknown risks and uncertainties. The Company's actual results, performance, or achievements could differ materially from those expressed as implied by such statements. Reference is made to the Company's regulatory filings with the Securities and Exchange Commission for information or factors, which may impact the Company's performance.

For further information, contact Chad C. Braun, AmREIT, 8 Greenway Plaza, Suite 824, Houston, TX 77046, 713/850-1400, [e-mail].

            Condensed Consolidated Statement of Operations
                              (Unaudited)

                                                 Three Months Ended
                                                      March 31,
Revenues:                                        2003          2002
                                             ------------- -----------
     Rental income from operating
      leases                                  $ 1,232,740   $ 706,740
     Earned income from direct financing
      leases                                      598,720     191,182
     Service fee and other income                 210,997     480,032
     Management fees                               57,631      91,130
     Income from non-consolidated
      affiliates                                   40,305     282,042
     Interest income                                1,839       1,014
                                             ------------- -----------
                              Total Revenues    2,142,232   1,752,140

Expenses:
     General operating and
      administrative                              774,686     778,982
     Legal and professional                       169,177     194,506
     Interest                                     551,441     253,648
     Depreciation and amortization                222,303     126,848
                                             ------------- -----------
                              Total Expenses    1,717,607   1,353,984

Income before federal income taxes and
 minority interest in net income of
 consolidated joint ventures
                                                  424,625     398,156
Federal income tax benefit (expense) for
 taxable REIT subsidiary                           73,000     (84,000)

Minority interest in net income of
 consolidated joint venture                       (39,788)   (131,845)
                                             ------------- -----------
Net income                                       $457,837    $182,311
                                             ============= ===========
Distributions paid to class B
 shareholders                                    (452,543)          -

Net income available to class A
 shareholders                                     $ 5,294   $ 182,311
                                             ============= ===========

                                                  Three Months Ended
                                                      March 31,
                                                    (unaudited)

Basic Per Share Data:                             2003        2002
                                               ----------- -----------
    Net income                                     $0.002      $0.078

     Weighted average number of class A common
      shares outstanding                        2,768,253   2,351,687

     Weighted average number of class B common
      shares outstanding                        2,448,984           -

Funds From Operations ("FFO"):
     Net income                                  $457,837    $182,311
     Depreciation and amortization                214,245     113,365
     Class B share distributions                 (452,543)          -
                                                 ---------   ---------
FFO available to class A shares                  $219,539    $295,676

Total cash distributions paid                    $759,622    $161,540

Distributions per Class A share                    $0.111      $0.068
Distributions per Class B share                    $0.185           -

                       Balance Sheet Highlights
                              (Unaudited)

                                                  As of March 31,
                                                 2003         2002
                                             ------------ ------------
Total property, net                          $48,520,661  $28,837,053
Net investment in direct financing leases     23,388,264    7,011,537
Total assets                                  75,082,173   38,614,567
Notes payable                                 35,852,721   17,326,725
Total liabilities                             36,651,061   17,997,289
Minority interest                                782,440    5,057,606
Total shareholders' equity                    37,648,672   15,559,672