America First Apartment Investors Acquires Property Management Assets.

OMAHA, Neb. -- America First Apartment Investors, Inc. (NASDAQ:APRO) announced today that it has acquired, through a wholly-owned subsidiary of APRO, certain assets from America First Properties Management, LLC ("AFP"). Under the terms of the Asset Purchase Agreement, America First PM Group, Inc. has acquired certain tangible and intangible assets from AFP for cash consideration. The purchase price of $6.75 million plus estimated transaction costs of $160,000 results in total cash consideration of $6.91 million.

With the acquisition, APRO's property management operations will be internally managed, and the Company will cease paying third-party property management fees. According to APRO's president, Jack Cassidy, "This transaction will have a very positive effect on the Company and its investors going forward. By internalizing the property management function thereby eliminating property management fees, we believe we will add from $.07 to $.09 per share to our 2005 funds from operations." The transaction is being accounted for as an asset purchase which includes the termination of pre-existing relationships. As such, the value assigned to the assets acquired which relate to the pre-existing relationship will be expensed on the transaction date with any remaining value being capitalized on the balance sheet. The increase in FFO is expected to be realized after a one-time charge of approximately $5.9 million which will be expensed in the fourth quarter 2004.

According to Mr. Cassidy, "We are gaining a highly competent property management team with direct experience managing our property portfolio. This provides a critical element to our ability to grow and profitably manage our property portfolio." He continued, "This transaction is part of the Company's long-term strategy to increase dividends and shareholder value and is the first step toward becoming an internally managed REIT."

As previously announced, APRO merged with a limited partnership in June thereby expanding its property portfolio from 15 to 29 communities with over 6,000 units. As a result of the merger, APRO's asset base increased from $166.9 million at December 31, 2003 to $295.7 million as of June 30, 2004. Due to this recent expansion of the property portfolio and our continuing business strategy of additional property acquisitions, management determined that the acquisition of an experienced property management team could provide significant cash flow benefits as well as adding important functional capabilities to the REIT.

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 29 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. Reference is hereby made to the filings of America First Apartment Investors, Inc., with the Securities and Exchange Commission, including quarterly reports on Form 10-Q, reports on Form 8-K and its annual report on Form 10-K.