CRIIMI MAE COMPLETES MERGER CONVERTING COMPANY TO SELF-MANAGED REIT.

ROCKVILLE, Md.--(BUSINESS WIRE)--July 5, 1995--(NYSE:CMM) -- CRIIMI MAE Inc., the largest multifamily mortgage REIT, has completed the merger that converted the company into a self-managed REIT and a fully-integrated mortgage company.

Through the merger, CRIIMI MAE acquired the mortgage businesses of CRI, Inc., the private real estate investment firm that, through an affiliate, had served as the adviser to CRIIMI MAE and managed its mortgage investments. CRIIMI MAE acquired CRI's loan origination, advisory services and mortgage servicing businesses in the merger. CRIIMI MAE is adding these new business lines to its core business of investing in government insured multifamily mortgages and, to a lesser degree, investments backed by uninsured mortgages on multifamily housing and other commercial properties.

Commenting on the merger, chairman William B. Dockser said, "This is an historic occasion for CRIIMI MAE. The company is now a fully-integrated mortgage company -- better able than before to deal with the challenges of rising or falling interest rates, and also better equipped than before to profit from the opportunities that exist in the mortgage and capital markets."

Mr. Dockser said, "The aim is for our new lines of business -- particularly mortgage servicing -- to grow over time, so that each makes up an increasing portion of CRIIMI MAE's tax basis income and -- together -- they add balance and stability to our total earnings in varied interest rate environments."

He explained that each of CRIIMI MAE's lines of business will tend to perform differently in different interest rate environments. If short-term interest rates rise, our mortgage servicing business will likely perform better. "If short-term interest rates fall, our mortgage origination business and the spread on our interest-sensitive investments will likely improve over time.

"Taken together, the desired effect will be to stabilize our overall earnings -- whether interest rates are rising or falling. The returns from these lines of business will not completely offset each other during 1995. But the mix will steadily reduce the volatility of CRIIMI MAE's earnings."

CRIIMI MAE's new mortgage servicing portfolio totals more than 170 loans with principal balances of more than $800 million.

Mr. Dockser said that in addition to impacting CRIIMI MAE s operations, the merger will help to strengthen the company's ability to participate in the capital markets. There, many institutional investors will only consider investing in the shares of companies that are self-managed and self-administered. "We believe our new self-administered status will enhance CRIIMI MAE's appeal to investors and help us to obtain greater access to capital," Mr. Dockser said, adding, "This will enable CRIIMI MAE to take advantage of the many opportunities in the market for mortgages backed by multifamily housing and other commercial properties -- today and as that market evolves."

The current state of the multifamily and commercial mortgage market is "quite promising," he said. "There is considerable securitization activity in the public securities markets among Wall Street investment firms and institutions such as Fannie Mae and Freddie Mac. There is also substantial activity among traditional portfolio lenders, such as banks and insurance companies."

Looking forward, Mr. Dockser said there is a move toward reducing the Federal government's role in multifamily housing, and expanding the role for the private sector. He said, "This shift represents real opportunity for CRIIMI MAE -- particularly for the well-capitalized, fully-integrated mortgage company that CRIIMI MAE has become."

CRIIMI MAE is the largest multifamily mortgage REIT. Total consolidated assets at March 31, 1995 were approximately $925 million.

Assets include FHA-insured multifamily mortgages and GNMA-guaranteed multifamily project securities. Assets also include a majority of the shares of CRI Liquidating REIT, Inc. and the general partnership interests in four American Insured Mortgage funds -- all of which hold insured multifamily mortgage investments similar to CRIIMI MAE s holdings. Assets also include higher yielding subordinated securities backed by pools of uninsured mortgages on multifamily housing and other commercial properties.

CONTACT: James Pastore, 202/546-6451

or

Susan Railey, 301/468-3120