AmREIT Announces Mid-Year Update; REIT Purchases $55 Million of Irreplaceable Corners.

HOUSTON -- AmREIT (AMEX:AMY)

--Plaza in the Park Kroger Shopping Center - #1 Kroger in the State of Texas;

--Cinco Ranch Kroger Shopping Center - Top 10 Kroger in the Houston Area;

--The Courtyard at Post Oak - Premier Corner in the Heart of Uptown Houston.

AmREIT (AMEX:AMY), a Houston-based real estate investment trust, announced today a mid-year status update on the Company's acquisitions and dispositions strategy for 2004. AmREIT had previously articulated its plan to focus on the acquisition of significant "irreplaceable corners" -- premier retail frontage properties in high-traffic, highly populated areas, and its plan to dispose of non-core assets during 2004.

"As we stated in our 2003 annual report, we plan to double AmREIT's portfolio of high-profile retail corners in the next 12 to 18 months. Through the first six months of this year we will have already accomplished 65 percent of that goal," said Kerr Taylor, AmREIT's president and chief executive officer. "We also stated that we intend to divest non-core assets that no longer meet our irreplaceable corner standard and replace them with properties that do, bringing more value to our portfolio. We are in the process of identifying these assets, and estimate that we will dispose of approximately $15 to $20 million of non-core properties over the next twelve months. I'm very proud of our outstanding team of professionals and the excellent results they are producing."

Acquisitions

On June 15, 2004, AmREIT acquired The Courtyard at Post Oak, consisting of a 4,013 square-foot, free standing building occupied by Verizon Wireless (NYSE:VZ) and a 9,584 square-foot, multi-tenant shopping center occupied by Ninfa's Restaurant and Dessert Gallery. The property is located at the northwest intersection of Post Oak and San Felipe in Houston, Texas in the heart of the Uptown Houston area, the most significant retail corridor in the Greater Houston area. The property was acquired in an all cash purchase. The weighted average remaining lease term for the project is 5.2 years. The combined annual revenue contribution is approximately $429,000.

On July 1, 2004, AmREIT acquired Plaza in the Park, a 129,955 square-foot Kroger (NYSE:KR) anchored shopping center located on approximately 14.3 acres. The property is located at the southwest corner of Buffalo Speedway and Westpark in Houston, Texas. Plaza in the Park's Kroger is undergoing a 13,120 square-foot expansion, and when completed, will be the number one Kroger grocery store in both sales volume and size within the state. Additionally, Kroger is the number one grocer in the Houston marketplace, and enjoys over 26 percent of the total market share. The property was acquired for cash and the assumption of long term fixed rate debt. The weighted average remaining lease term for the project is 9.2 years. The Kroger lease is for 20 years, containing approximately 71,000 square feet, expiring in August 2017. The shopping center is 96.7 percent occupied. The combined annual revenue contribution is approximately $3.17 million.

On July 1, 2004, AmREIT acquired Cinco Ranch -- Kroger, a 97,297 square-foot Kroger anchored shopping center located on approximately 12.8 acres of land. The property is located at the northeast corner of Mason Road and Westheimer Parkway in Katy, Texas. The shopping center is positioned in the heart of the affluent Cinco Ranch master planned community, and was named one of the top 10 Kroger grocery stores in Texas. The property was acquired for cash and the assumption of long term fixed-rate debt. The weighted average remaining lease term for the project is 14 years. The Kroger lease is for 20 years, containing approximately 63,000 square-feet, expiring in June 2023. The shopping center is 100 percent occupied. The combined annual revenue contribution is approximately $1.40 million.

"The acquisition of these three high-profile retail corners at attractive yields demonstrates AmREIT's ability to identify and acquire high quality properties," said Tenel Tayar, AmREIT's Vice President of Acquisitions. "With the recent commencement of the $170 million common share offering, our ability to acquire these high caliber locations has strengthened. By being true to our goal of investing in irreplaceable corners, we are building a foundation that will provide long term value and stability to our shareholders."

Dispositions

On June 21, 2004, the Company sold its Wherehouse Entertainment project located in Wichita, Kansas. The Company will record an impairment charge to earnings of approximately $1.13 million in the second quarter to reflect the loss incurred upon sale of the property, following the bankruptcy of its sole tenant. After a thorough remarketing during the quarter, the Company could not replace the previously existing value and determined to sell the asset and redeploy the remaining value into more productive investments.

One June 22, 2004, the Company entered into a contract to sell its Blockbuster Video project located in Oklahoma City, Oklahoma. This disposition is consistent with the Company's goal to sell non-core assets. The Company will realize a gain of approximately $89,000 from this sale during the third quarter.

On June 10, 2004, the Company sold its bankruptcy claim for its Just for Feet project in Tucson, Arizona and its Just for Feet project in Baton Rouge, Louisiana for $935,000. The Company still owns both properties, has listed the Arizona property for sale and is evaluating redeveloping or selling the Louisiana property.

The impairment charge taken on the Wherehouse Entertainment property and the gain on the Blockbuster Video property are non-cash, non-operational charges/gains and, as such, AmREIT will add/subtract these items back to Funds From Operations (FFO) in calculating AmREIT's Adjusted FFO.

Operational Highlights

--AmREIT has fully subscribed its $40 million class C common share offering through its securities subsidiary, AmREIT Securities Company.

--AmREIT has commenced a $170 million class D common share offering. The security bears a yield of 6.5 percent per annum, and after a seven-year holding period, may be converted into the company's publicly traded class A common shares at a 7.7 percent premium on invested capital.

--AmREIT has fully subscribed a $15 million retail partnership offering on behalf of its affiliated fund, AmREIT Monthly Income & Growth Fund, Ltd, the fourth actively managed retail partnership sponsored by the Company.

--AmREIT has been awarded a significant 400,000 square foot development contract for a major lifestyle center in McAllen, Texas. AmREIT Realty Investment Corporation, AmREIT's full service real estate operating and development subsidiary, will oversee the third party project for a fee to be earned during 2004 and 2005.

About AmREIT

AmREIT, a self-managed real estate investment firm, has been acquiring, developing, and managing high quality commercial retail real estate to generate monthly income and growth opportunities for investors for more than 19 years. A rapidly growing publicly traded company, AmREIT is known for its ownership of "irreplaceable corners" -- premier retail frontage properties in high-traffic, highly populated areas. AmREIT also creates retail limited partnerships, offered to accredited investors through the financial planning community. These retail partnerships create value through actively acquiring and developing high quality free standing and shopping center properties, leased to trusted names such as Starbucks, Walgreen's, and Washington Mutual, to create the potential for increasing income and capital appreciation by selling the properties within a defined time horizon.

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.

This press release does not constitute an offer to sell, or the solicitation of an offer to buy any public or private securities from the Company. The purchase of any securities may only be made pursuant to a prospectus or Private Offering Memorandum. A copy of any available prospectus or Private Offering Memorandum and the related subscription documents are available to qualified potential investors on request.

For more information, contact Jennifer Tweeton, Vollmer Public Relations, at [phone], or Chad Braun, AmREIT, [phone]. AmREIT is online at www.amreit.com.