America First Apartment Investors, Inc. Announces 2003 Earnings and 2004 First Quarter Dividend.

Business Editors

OMAHA, Neb.--(BUSINESS WIRE)--Feb. 12, 2004

America First Apartment Investors, Inc. (Nasdaq:APRO) reported that it generated Funds From Operations ("FFO") of $9,362,070 or $1.84 per share for 2003, compared to $5,953,574 or $1.17 per BUC for its predecessor partnership in 2002. APRO also reported net income of $4,360,781 or $.86 per share in 2003 compared to $989,523 or $.19 per BUC in 2002. During 2003, $4,444,259 or $.88 per share of the Company's net income and FFO resulted from the non-recurring gain on the repayment of a subordinate note related to the sale of Jefferson Place Apartments in June 2003. Excluding the Jefferson Place transaction, FFO per share in 2003 declined by $.20 from 2002 to $.97 per share. Such decrease in FFO and net income in 2003 was primarily due to an overall decline in economic occupancy at the Company's apartment properties. The primary difference between APRO's net income and FFO is depreciation expense. A reconciliation of net income to FFO is included at the end of this release.

The Company also reported FFO and net income for the fourth quarter of 2003 of $1,129,851 or $.22 per share compared to FFO of $1,603,928 or $.32 per BUC for the fourth quarter of 2002 and compared to FFO of $ 1,029,092 or $0.20 per share for the third quarter of 2003. The increase from the third quarter to the fourth quarter of 2003 is largely due to interest income earned on the Company's recently acquired portfolio of mortgage-backed securities. Net loss for the fourth quarter of 2003 was $117,742 or $.02 per share compared to net income of $357,498 or $.07 per BUC for the fourth quarter of 2002 and compared to net loss of $213,499 or $.04 per share for the third quarter of 2003.

On February 11, 2004, The Company's board of directors approved the first quarter 2004 dividend of $. 25 per share on its common stock. The dividend will be paid on April 30, 2004 to the Company's shareholders as of March 31, 2004. The Company has paid a quarterly dividend of $.25 per share each quarter since its formation in January 2003.

As previously reported, APRO has entered into a merger agreement with America First Real Estate Investment Partners, L.P. (Nasdaq:AFREZ). The proposed merger, which is subject to approval by both APRO and AFREZ equity holders, will result in the acquisition by APRO of the assets of AFREZ, including 14 multifamily apartment properties, in exchange for APRO common stock and cash.

Jack Cassidy, President and CEO of APRO said "In light of the depressed multifamily markets, the day to day operations of our existing multifamily properties will continue to focus on the retention of existing tenants, marketing our properties to new tenants and aggressively managing operating expenses. Strategically, the Company's primary business will continue to be owning, operating and acquiring multifamily apartment communities. In addition, the Company recently acquired a portfolio of mortgage-backed securities to diversify and improve operating results. Looking ahead, we believe strongly that the Board's decision to merge with America First Real Estate Investment Partners will further the Company's successful growth plan".

America First Apartment Investors, Inc. is an equity real estate investment trust focused on multifamily apartment properties located throughout the United States. Its portfolio currently includes 15 multifamily properties and one commercial property. America First Apartment Investors, Inc. press releases are available on the World Wide Web at www.am1st.com

Information contained in this Press Release contains "forward-looking statements" relating to, without limitation, future performance, plans and objectives of management for future operations and projections of revenue and other financial items, which can be identified by the use of forward-looking terminology such as "may," "will," "should," "expect," "anticipate," "estimate" or "continue" or the negative thereof or other variations thereon or comparable terminology. Several factors with respect to such forward-looking statements, including certain risks and uncertainties, could cause actual results to differ materially from those in such forward-looking statements.

      Attachment to press release regarding Funds from Operations

Funds from operations ("FFO") represents net income computed in
accordance with accounting principles generally accepted in the United
States of America ("GAAP") less extraordinary items, gain or loss on
disposition of real estate assets plus depreciation and amortization
related to real estate, and adjustments for any joint ventures to
reflect FFO on the same basis. This definition of FFO is in accordance
with the National Association of Real Estate Investment Trust's
recommended definition.

The Company's capitalization policy for its real estate capital
improvements has a significant effect on its FFO. Real estate costs
that are accounted for as expenses are a deduction in FFO.
Alternatively, real estate costs that are capitalized are not an
expense that is deducted from FFO, but are depreciated and the related
depreciation expense is added to FFO. The Company's capitalization
policy is to treat most recurring capital improvements, such as
appliances, vinyl flooring and carpet as expenses, and this may cause
the Company's reported FFO to be lower than peer companies that
capitalize recurring improvements of these types.

The Company believes that FFO is helpful in understanding the
Company's operating performance in that FFO excludes depreciation
expense on real estate assets. The Company believes that GAAP
historical cost depreciation of real estate assets is generally not
correlated with changes in the value of those assets, whose value does
not decrease predictably over time, as historical cost depreciation
implies. The Company's calculation of FFO may differ from the
methodology for calculating FFO utilized by other Company's and,
accordingly, may not be comparable to such other real estate
companies. FFO should not be considered as an alternative to net
income or net cash flows from operating activities.

The following sets forth a reconciliation of the Company's net income
as determined in accordance with GAAP and its FFO for the periods set
forth.


                                     For the     For the
                                    Year Ended  Year Ended
                                     Dec. 31,    Dec. 31,
                                       2003        2002
                                    ----------  ----------


Net income                         $4,360,781  $  989,523
Depreciation                        5,001,289   4,964,051
                                    ----------  ----------

Funds From Operations              $9,362,070  $5,953,574
                                    ==========  ==========

Weighted average shares (BUCs)
 outstanding                        5,074,484   5,023,067

                                     For the     For the     For the
                                     Quarter     Quarter     Quarter
                                      Ended       Ended       Ended
                                     Dec. 31,    Sept. 30,   Dec. 31,
                                       2003        2003        2002
                                    ----------  ----------  ----------


Net income                         $ (117,742) $ (213,499) $  357,498
Depreciation                        1,247,593   1,242,591   1,246,430
                                    ----------  ----------  ----------

Funds From Operations              $1,129,851  $1,029,092  $1,603,928
                                    ==========  ==========  ==========
Weighted average shares (BUCs)
 outstanding                        5,074,897   5,074,870   5,023,067