AmREIT Announces Second Quarter Operating Results.

Business Editors/Real Estate Writers

HOUSTON--(BUSINESS WIRE)--Aug. 5, 2003

AmREIT (AMEX:AMY), a Texas-based real estate investment trust announced that its net income available to its class A shareholders ("EPS") for the second quarter 2003 was $0.075 per class A share, compared to $0.110 per share for the same period in 2002. AmREIT's EPS for the six months ended June 30, 2003 was $0.077 compared to $0.188 for the same period in 2002. Funds from operations ("FFO") for the second quarter of 2003 totaled $0.153 per class A share, compared with $0.164 for the same period in 2002. AmREIT's FFO for the six months ended June 30, 2003 was $0.236 compared to $0.295 for the same period in 2002. A reconciliation of net income to FFO is included in the financial tables accompanying this press release.

AmREIT closed on approximately $7.2 million in property acquisitions during the second quarter and owns a portfolio of 50 single-tenant and multi-tenant commercial retail properties, located in 20 states, with an economic occupancy of 98.4% during the second quarter. AmREIT broke ground on its Eckerd development in the Houston galleria/uptown area, has contracted to purchase a TGI Friday's restaurant in Hanover, Maryland and has contracted to purchase a 16,395 square foot multi-tenant shopping center in Houston. The first significant contribution to earnings from these acquisitions/developments will take place in the first quarter 2004.

Management expects EPS for the third quarter of 2003 of between $0.08 and $0.09 and for the calendar year 2003 of between $0.23 and $0.25 per share, and adjusted FFO for the third quarter of 2003 of between $0.16 and $0.17 and for the calendar year of 2003 of between $0.54 and $0.56. This represents an increase in adjusted FFO of over 20% when compared to adjusted FFO of $0.42 per share for 2002. AmREIT updates earnings guidance on a quarterly basis.

AmREIT is an American Stock Exchange listed real estate investment trust operating in two distinct lines of business. The Investment Sponsorship division is a sponsor of high quality real estate investment opportunities to the independent financial planning community. The Company researches, identifies and participates in quality real estate opportunities and works hand in hand with the broker-dealer financial services community to sponsor real estate investment products and services. AmREIT's real estate team focuses on the development, management, brokerage and ownership of freestanding credit-tenant leased and multi-tenant shopping centers located contiguous to major thoroughfares and traffic generators. AmREIT projects have been leased to parent 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 AmREIT's Investor Relations Department at 800-888-4400 or 713-850-1400, or access our Web site at www.amreit.com.

                           Operating Results
                              (Unaudited)

                       Three Months Ended        Six Months Ended
                            June 30,                 June 30,
Revenues:               2003         2002        2003         2002
                    ------------ ----------  ----------- ------------
  Rental income
   from operating
   leases            $ 1,265,235  $ 677,614  $ 2,497,975  $ 1,384,354
  Earned income
   from direct
   financing
   leases                670,608    437,169    1,269,328      628,351
  Service fee
   income                848,863     52,378    1,059,860      531,396
  Management fees
  Income from
   non-                   52,616     94,276      110,247      185,406
   consolidated
   Affiliates             45,033      1,467       85,338      283,509
  Interest and
   other income            1,991    208,303        3,830      210,331
                    ------------ ----------  ----------- ------------
     Total Revenues    2,884,346  1,471,207    5,026,578    3,223,347

Expenses:
  General
   operating and
   administrative        785,090    439,962    1,542,219    1,203,523
  Legal and
   professional          545,942    161,998      732,676      371,925
  Interest               593,905    410,032    1,145,346      663,680
  Depreciation
   and
   amortization          209,404    126,822      431,707      253,670
                    ------------ ----------  ----------- ------------
     Total Expenses    2,134,341  1,138,814    3,851,948    2,492,798

Income before
 federal income
 taxes and minority
 interest in income
 of consolidated
 joint ventures          750,005    332,393    1,174,630      730,549
Federal income tax
 (expense) benefit
 for taxable REIT
 subsidiary              (57,700)    69,000       15,300      (15,000)
Minority interest in
 income of
 consolidated joint
 venture                 (43,161)  (140,100)     (82,949)    (271,945)
                    ------------ ----------  ----------- ------------
Net income               649,144    261,293    1,106,981      443,604

Distributions paid
 to class B
 shareholders           (439,124)         -     (891,667)           -
                    ------------ ----------  ----------- ------------
Net income available
 to class A
 shareholders          $ 210,020  $ 261,293    $ 215,314    $ 443,604

Funds From Operations
 ("FFO"):
  Net  income           $649,144   $261,293   $1,106,981     $443,604
  Depreciation           228,053    126,822      462,689      253,670
  Class B
   distributions        (439,124)         -     (891,667)           -
                    ------------ ----------  ----------- ------------
  FFO available to
   class A Shares       $438,073   $388,115     $678,003     $697,274

Basic Per Share Data:
  Net income available
   to class A
   shareholders          $ 0.075    $ 0.110      $ 0.077      $ 0.188
  FFO - Basic              0.157      0.164        0.244        0.295
  Distributions per
   Class A share           0.111      0.071        0.222        0.140
  Distributions per
   Class B share           0.209          -        0.392            -

 Weighted average number
  of class A common
  shares
  outstanding          2,790,492  2,364,807    2,779,434    2,358,283

 Weighted average
  number of class B
  common shares
  outstanding          2,100,638          -    2,273,849            -



                       Balance Sheet Highlights
                              (Unaudited)

                                                  As of June 30,
                                                2003         2002
                                            ------------ ------------
Total property, net                         $50,033,640  $28,836,524
Net investment in direct financing leases    27,155,700   16,895,057
Total assets                                 80,440,990   48,365,670
Notes payable                                40,996,381   26,429,521
Total liabilities                            42,152,009   27,060,210
Minority interest                               800,570    5,657,132
Total shareholders' equity                   37,488,411   15,651,328

                     Non-GAAP Financial Disclosure
                              (Unaudited)

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 REIT's, 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 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 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 and adjusted 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:

                                    3Q2003 Range        2003 Range
                                  -----------------------------------
                                    Low     High       Low     High
                                  -----------------------------------
Projected net income available to
 class A shareholders             $ 0.080  $ 0.090   $ 0.230  $ 0.250
Projected depreciation and
 amortization                       0.077    0.077     0.310    0.310
                                  -------  -------   -------  -------
          Projected FFO            $0.157   $0.167    $0.540   $0.560