AmREIT Announces Third Quarter Operating Results.

Business Editors

HOUSTON--(BUSINESS WIRE)--Nov. 13, 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 third quarter 2003 was $0.072 per class A share, compared with a loss of $0.744 per share for the same period in 2002. AmREIT's EPS for the nine months ended Sept. 30, 2003 was $0.150 compared with a loss of $0.568 for the same period in 2002. Funds from operations ("FFO") for the third quarter of 2003 totaled $0.148 per class A share, compared with ($0.648) for the same period in 2002. AmREIT's FFO for the nine months ended Sept. 30, 2003 was $0.380 per class A share compared with ($0.373) for the same period in 2002. Reg G disclosure, including a reconciliation of net income to FFO is included in the financial tables accompanying this press release. Diluted earnings per share information is not disclosed due to the accretive nature of the common class B and class C shares.

During the third quarter, AmREIT purchased a TGI Friday's restaurant in Hanover, Md., and contracted for approximately $22.4 million of single tenant and multi-tenant real estate projects that are anticipated to close during the fourth quarter, subject to completion of due diligence and customary closing conditions. These acquisitions will be funded primarily from proceeds of AmREIT's $44 million class C offering. The first significant contribution to earnings from these acquisitions and developments will take place in the first quarter 2004. These acquisitions, complemented by the public offering of the class C common shares, should continue to fuel the Company's growth.

Management expects EPS loss for the calendar year 2003 of between $0.155 and $0.175 per class A share due to an anticipated non-cash charge to earnings of $0.371 per class A share related to deferred merger costs. Management expects FFO adjusted for certain non-cash deferred merger costs (adjusted FFO), for the calendar year of 2003 of between $0.540 and $0.560 per class A share. This represents an increase in adjusted FFO of over 20% when compared to adjusted FFO of $0.420 per class A 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 acquisition, 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      Nine Months Ended
                            September 30,          September 30,
Revenues:                2003         2002       2003        2002
                      ----------- ----------- ----------- -----------
  Rental income
   from operating
   leases              $1,243,067  $1,007,891  $3,575,964  $2,259,905
  Earned income
   from direct
   financing leases       681,309     594,429   1,950,637   1,222,780
  Service fee
   income                 944,530     725,967   2,004,390   1,465,641
  Management fees          78,302      50,910     188,549     236,316
  Income from
   non-consolidated
   affiliates               7,138           -      92,476     283,509
  Gain on sale of
   real estate
   acquired for
   resale                 237,579     (37,061)    237,579    ( 37,061)
  Interest and
   other income             1,459         542       5,289       2,595
                      ----------- ----------- ----------- -----------
     Total Revenues     3,193,384   2,342,678   8,054,884   5,433,685

Expenses:
  General
   operating and
   administrative         869,675     648,849   2,407,338   1,894,836
  Legal and
   professional           864,535     365,400   1,597,211     694,861
  Interest                598,189     519,665   1,743,535   1,183,345
  Deferred merger
   costs                        -   1,904,370               1,904,370
  Depreciation
   and
   amortization           216,375     226,049     617,946     454,356
                      ----------- ----------- ----------- -----------
     Total Expenses     2,548,774   3,664,333   6,366,030   6,131,768

Income (loss) before
 federal income
 taxes and minority
 interest in income
 of consolidated
 joint ventures           644,610  (1,321,655)  1,688,854    (698,083)

Federal income tax
 expense for
 taxable REIT
 subsidiary               (15,300)    (75,000)          -     (90,000)

Minority interest in
 income of
 consolidated joint
 venture                  (45,841)    (35,339)   (128,790)   (307,284)
                      ----------- ----------- ----------- -----------
Income (loss) from
 continuing
 operations               583,469  (1,431,994)  1,560,064  (1,095,367)

Income from
 discontinued
 operations                75,531      61,966     205,917     168,943
                      ----------- ----------- ----------- -----------
Net income (loss)         659,000  (1,370,028)  1,765,981   ( 926,424)

Distributions paid
 to class B and C
 shareholders            (457,343)   (423,732) (1,349,010)   (423,732)
                      ----------- ----------- ----------- -----------
Net income (loss)
 available to class
 A shareholders          $201,657 $(1,793,760)   $416,971 $(1,350,156)

Reconciliation of Net Income
 (loss) to Funds From
 Operations ("FFO"):
   Net income (loss)     $659,000 $(1,370,028) $1,765,981   $(926,424)
   Depreciation           214,870     231,563     642,245     462,836
   Class B & C
    distributions        (457,343)   (423,732) (1,349,010)   (423,732)
                      ----------- ----------- ----------- -----------
   FFO available to
    class A Shares       $416,527 $(1,562,197) $1,059,216   $(887,320)

Basic Per Share Data:
    Net income (loss)
     available to class
     A shareholders        $0.072     $(0.744)     $0.150     $(0.568)

Income from discontinued
 operations per class A
 share                      0.027       0.026       0.074       0.071

    FFO - Basic             0.148      (0.648)      0.380      (0.373)

    Distributions per
     class A share          0.110       0.107       0.332       0.248

    Distributions per
     class B & C
     share                  0.186       0.215       0.577       0.638

Weighted average number
 of class A common
 shares outstanding     2,805,753   2,412,544   2,788,303   2,376,569

Weighted average number
 of class B common
 shares outstanding     2,399,128   1,972,240   2,316,067     664,638

Weighted average number
 of class C common
 shares outstanding        64,580           -      21,763           -

                       Balance Sheet Highlights
                              (Unaudited)

                                               As of September 30,
                                                2003         2002
                                            ------------ ------------
Real estate held for investment, net        $45,849,893  $49,306,778
Net investment in direct financing leases    22,048,739   22,356,174
Real estate held for sale, net                8,850,670            -
Total assets                                 80,771,842   74,225,487
Notes payable                                38,308,124   33,634,770
Total liabilities                            39,697,066   34,530,636
Minority interest                               821,380      629,845
Total shareholders' equity                   40,253,396   39,065,006

                     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:

                                          Projected 2003
                                               Range       Historical
                                         ----------------- ----------
                                           High     Low     12/31/02
                                         -------- -------- ----------
Net loss available to class A
 shareholders                            ($0.155) ($0.175)  ($ 0.617)
Depreciation and amortization              0.344    0.344      0.249
Plus loss on sale of real estate               -        -      0.019
                                         -------- -------- ----------
 FFO available to class A shareholders     0.189    0.169     (0.349)
Deferred merger costs                      0.371    0.371      0.769
                                         -------- -------- ----------
              Adjusted FFO                $0.560   $0.540     $0.420
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