AmREIT Reports Second Quarter Results

HOUSTON--(Business Wire)--
AmREIT (AMEX:AMY), a Houston-based real estate development and
advisory company that has elected to be taxed as a real estate
investment trust, today announced financial results for the second
quarter and six months ended June 30, 2008.

Second Quarter Highlights:

Corporate

-- Funds from Operations available to class A common shareholders
(FFO) for the second quarter 2008 were a loss of $244,000, or
($0.04) per share and modified FFO for the second quarter 2008
were at the top end of guidance at $682,000, or $0.12 per
share, after adding back the $926,000, net of taxes, non-cash
impairment charge primarily incurred with a joint venture in
the company's real estate and development operations. This
compares with second quarter 2007 FFO and Modified FFO of
$380,000, or $0.06 per share;

-- Net loss available to Class A common shareholders for the
second quarter 2008 was $3.1 million, or ($0.54) per share,
compared with a net loss of $1.6 million, or ($0.25) per
share, for the same period in 2007;

-- Operating revenues for the second quarter 2008 were $12.8
million compared with $10.8 million for the same period in
2007 due to same property NOI growth and an increase in
year-over-year real estate transactional activity. Revenues
from the property portfolio and asset management fees totaled
$8.6 million, increasing by 8.9% from $7.9 million for the
same period in the prior year;

-- Total distributions paid to all classes of shareholders
exceeded Modified FFO by $36,000 for the second quarter 2008.
This compares with total distributions paid to all classes of
common shareholders exceeding Modified FFO for all classes of
common shareholders by $388,000 for the same period in 2007;

-- The Board of Trust Managers declared a quarterly dividend of
$0.1242 per class A common share for the second quarter 2008,
which was paid in three monthly installments;

-- Funds from Operations available to class A common shareholders
(FFO) for the six months ended June 30, 2008 were $494,000, or
$0.08 per share, and Modified FFO for the same period were
$1.4 million after adding back the $926,000 non-cash
impairment charge, or $0.24 per share. This compares with FFO
and Modified FFO for the same period during 2007 of $638,000,
or $0.10 per share;

-- Net loss available to Class A common shareholders for the six
months ended June 30, 2008 was $4.6 million, or ($0.77) per
share, compared with a net loss of $3.3 million, or ($0.52)
per share, for the same period in 2007;

-- Operating revenues for the six months ended June 30, 2008 were
$24.2 million compared with $21.4 million for the same period
in 2008 due to same property NOI growth and an increase in
year-over-year real estate transactional activity. Revenues
from the property portfolio and asset management fees totaled
$16.5 million, increasing by 9.3% from $15.1 million for the
same period in the prior year;

-- Modified FFO exceeded total distributions paid to all classes
of shareholders by $71,000 for the six months ended June 30,
2008. This compares with total distributions paid to all
classes of common shareholders exceeding Modified FFO for all
classes of common shareholders by $890,000 for the same period
in 2007;

-- FFO and Modified FFO estimates for the third quarter 2008 are
$0.05 to $0.11 per class A share, and management reiterates
its annual FFO guidance of $0.61 to $0.69 and Modified FFO
guidance of $0.85 to $0.89, per class A common share. Modified
FFO will adjust traditional FFO for non-cash charges,
restructuring charges and the monetization of value created in
our advisory funds and properties;

Portfolio

-- Portfolio occupancy as of June 30, 2008 is 97.1%, a decrease
of 1.0% compared with June 30, 2007 occupancy of 98.1% and a
decrease of 1.0% compared with December 31, 2007 occupancy of
98.1%. Subsequent to quarter end, based on leasing activity at
Uptown Plaza - Dallas and other properties, occupancy is back
to approximately 98%;

-- New leasing rates as compared with the expiring leasing rates
remain strong, with average increase in leasing rates on
expiring space of 13.9% during the quarter;

Asset Advisory

-- Equity under management increased from $164 million as of
March 31, 2008 to $168 million as of June 30, 2008; and

-- Based on the slower than anticipated capital raise on
REITPlus, management has decreased the capital raising
expectations to $40 million for 2008.

Commenting on the financial results for the quarter, Chad C.
Braun, AmREIT's Chief Financial Officer, noted, "The continued
strength of our Irreplaceable Corners portfolio helped us reach the
top end of our Modified FFO guidance for the second quarter.
Occupancy, leasing spreads and same-property NOI growth from the
portfolio exceeded our expectations for the quarter and demonstrated
the value of Irreplaceable locations in strong, growing markets. The
securities business struggled to raise capital in a challenging
environment, which had a dilutive impact on our results. We will
continue to focus on accelerating its capital raising in order to take
advantage of new opportunities generated by our real estate
transactions team."

H. Kerr Taylor, Chairman and Chief Executive Officer of AmREIT,
added, "Our growth plans for 2008 remain centered on improving Net
Asset Value, reaching our Modified FFO targets and improving the
dependability of revenue through our platform. The Irreplaceable
Corners portfolio continued to make an excellent case for
consideration among the best in the shopping center industry with
strong operating metrics, dense infill locations with value
enhancement opportunities and top ranked job growth in our markets. We
are confident these growth drivers will continue to improve NAV.
Unfortunately, we experienced some volatility in the quarter within
the securities business. We understand the impact this is having on
our overall growth, and we will continue to assess ways to alleviate
that volatility."

Portfolio of Irreplaceable Corners

As of June 30, 2008, AmREIT owned 51 properties, with
approximately 95.9% of its rental income coming from properties
located in the major Texas metropolitan markets of Houston, Dallas,
San Antonio/Austin. These three markets are ranked in the top 7 in the
U.S. for job and population growth.

The portfolio generated $8.2 million in total revenue during the
second quarter of 2008, up 7.9% compared with $7.6 million generated
for the same period in 2007. The increase in revenue is primarily due
to the increased leasing spreads on lease renewals and increased CAM
recoveries based on increased portfolio costs. This was somewhat
offset by a $142,000 impairment related to our 584 Germantown Parkway
property that sold on July 11, 2008 (which is part of the $926,000,
net of taxes, total impairment). After expenses and allocation of
dividends paid on the Company's non-traded shares, the segment
reported a net loss of $2.1 million, or ($0.36) per class A common
share and FFO totaling approximately $561,000, or $0.10 per Class A
common share, for the quarter.

Real Estate Development and Operations

AmREIT's real estate development and operating business generated
$3.7 million in revenue during the second quarter, a 164.3% increase
compared to the $1.4 million in revenue for the same period in 2007.
The increase in revenue is due to an increase in transactional revenue
- primarily acquisition fees related to projects acquired by our
advisory funds. During the quarter, our advisory funds, acquired the
tract of land adjacent to the Borders site at Gessner and Westheimer
in Houston Texas and REITPlus continued to fund into Shadow Creek
Ranch, which was initially purchased in February 2008.

These revenues were offset due to the $784,000 (net of taxes)
non-cash impairment charge as a result of three single tenant land
tracts owned in a joint venture development opportunity with a
developer in the Midwest (which is part of the total $926,000, net of
taxes, impairment). We are in the process of winding down this joint
venture which includes these three land tracts as well as three income
producing assets as well.

Expenses excluding impairment associated with this line of
business for the second quarter were approximately $3.7 million
(including direct construction costs of $2.2 million), resulting in a
net loss and loss to FFO of $823,000 or ($0.14) per class A common
share. This business is transactional in nature, and the timing of
these transactional revenue sources from quarter to quarter is
difficult to predict and is highly dependent on our ability to raise
capital in our asset advisory business, however, the majority of the
expenses and personnel costs associated with this business are
recurring throughout the year.

Asset Advisory Business

As of June 30, 2008, AmREIT had a combined $168 million in equity
capital under management in its five actively managed income and
growth funds. For the quarter, this group generated total revenues of
$832,000, including $424,000 related to securities commissions earned
on sales of shares of REITPlus, Inc.

For the quarter, operating expenses associated with this line of
business were approximately $822,000, including $334,000 in securities
commission expense. The asset advisory group generated a net loss of
$139,000, or ($0.02) per class A common share and FFO of approximately
$18,000, or $0.00 per Class A common share, for the quarter.

AmREIT updates earnings guidance on a quarterly basis and will
update its annual guidance as well as give guidance for the upcoming
quarter.

Conference Call

AmREIT will hold its quarterly conference call to discuss second
quarter 2008 results on Wednesday, August 6, 2008, at 10:00 a.m.
Central Time (11:00 a.m. Eastern Time). Interested parties are
encouraged to access the live webcast by visiting the shareholder
relations page of AmREIT's website at www.amreit.com. Securities
analysts and other related parties can participate in the conference
call by dialing 303-262-2138 at least five minutes prior to the
scheduled start time. A replay of the call will be available through
August 13, 2008, by dialing 303-590-3000 and entering the passcode
11117154#.

Supplemental Financial Information

Further details regarding AmREIT's results of operations,
properties, and tenants can be accessed at the Company's web site at
www.amreit.com.

About AmREIT

(AMEX:AMY), is a full service real estate company dedicated to
providing the highest standard of service and value to its clients,
partners and investors. For 24 years, AmREIT has delivered on its
vision to become the Irreplaceable Corners(TM) company through
investments, acquisitions, value add developments and management of
high quality retail and mixed-use properties. AmREIT has more than 1.4
million square feet in various stages of development, re-development
or in the pipeline for its advisory funds. AmREIT is headquartered in
Houston, Texas and has an office in Dallas, Texas. To learn more,
please visit our website at www.amreit.com.

In addition to historical information, this press release contains
forward-looking statements under the federal securities law. These
statements are based on current expectations, estimates and
projections about the industry and markets in which AmREIT operates,
management's beliefs and assumptions made by management. Past
performance is not indicative of future returns. Forward-looking
statements are not guarantees of future performance and involve
certain risks and uncertainties, which are difficult to predict.

For more information, call Chad Braun, Chief Financial Officer of
AmREIT, at (713) 850-1400. AmREIT is online at TUwww.amreit.comUT.

(Tables to Follow)

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Operating Results
(in thousands, except share and per share data)
(unaudited)

Three Months Six Months Ended
Ended
June 30, June 30,
Revenues: 2008 2007 2008 2007
-------- -------- -------- --------
Rental income from operating
leases $ 8,142 $ 7,504 $ 15,628 $ 14,396
Earned income from direct
financing leases 60 61 120 120
Real estate fee income 115 160 285 854
Real estate fee income -
related party 1,311 349 2,743 1,062
Construction revenues 698 695 1,130 792
Construction revenues -
related party 1,650 219 2,554 1,095
Securities commission income -
related party 424 1,484 949 2,477
Asset management fee income -
related party 377 312 753 596
-------- -------- -------- --------
Total revenues 12,777 10,784 24,162 21,392

Expenses:
General and administrative 2,288 1,818 4.706 3,976
Property expense 2,456 2,006 4,425 3,731
Construction expense 2,221 868 3,342 1,729
Legal and professional 432 470 876 763
Real estate commissions 5 26 42 447
Securities commissions 355 1,245 840 2,074
Depreciation and amortization 2,606 1,925 4,505 3,834
-------- -------- -------- --------
Total expenses 10,363 8,358 18,736 16,554

Operating income 2,414 2,426 5,426 4,838

Other income (expense):
Interest and other income -
related party 229 250 503 500
Loss from merchant development
funds and other affiliates (178) (15) (321) (27)
Federal income tax benefit for
taxable REIT subsidiary 176 224 252 374
Interest expense (2,371) (2,086) (4,802) (4,176)
Minority interest in income of
consolidated joint ventures - - - -
-------- -------- -------- --------

Income (loss) before discontinued
operations 270 799 1,058 1,509

Income from discontinued operations (891) 302 (682) 595
Gain on sale of real estate
acquired for resale - - - -
-------- -------- -------- --------

Net income (loss) (621) 1,101 376 2,104

Distributions paid to Class B, C
and D shareholders (2,504) (2,711) (5,002) (5,416)
-------- -------- -------- --------
Net loss available to class A
shareholders $(3,125) $(1,610) $(4,626) $(3,312)
*T

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(in thousands, except share and per share data)

Three Months Six Months Ended
Ended
June 30, June 30,
2008 2007 2008 2007
-------- -------- -------- --------
Reconciliation of Net Income
before discontinued operations to
Funds From Operations ("FFO"):
Income before discontinued
operations $ 270 $ 799 $ 1,058 $ 1,509
Income (loss) from
discontinued operations (891) 302 (682) 595
Depreciation - from
operations 2,618 1,928 4,531 3,836
Depreciation - from
discontinued operations 35 43 67 78
Adjustments for non-
consolidated affiliates 228 19 522 36
Gain on sale of real estate
held for investment - - - -
Class B, C and D
distributions (2,504) (2,711) (5,002) (5,416)
-------- -------- -------- --------
FFO available to Class A shares $ (244) $ 380 $ 494 $ 638
*T

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Basic and Diluted Per
Class A Share Data:
Loss before
discontinued
operations $ (0.39) $ (0.30) $ (0.66) $ (0.61)
Income from
discontinued
operations $ (0.15) $ 0.05 $ (0.11) $ 0.09
----------- ----------- ----------- -----------
Net loss $ (0.54) $ (0.25) $ (0.77) $ (0.52)
FFO $ (0.04) $ 0.06 $ 0.08 $ 0.10
Distributions per
Class A share $ 0.12 $ 0.12 $ 0.24 $ 0.24
Distributions per
Class C and D
share $ 0.34 $ 0.34 $ 0.68 $ 0.68

Share Data:
Weighted average Class
A common shares used
to compute net income
per share, basic and
diluted 5,775,021 6,411,026 5,995,297 6,365,896
*T

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Market Capitalization Table

Common Shares Outstanding (06/30/08) Number of Price Market
Shares Equity
---------------------------------------- ---------- ------ -----------
Class A, net of treasury shares 5,405,236 $ 7.15 38,647,437
Class C (priced at par value) 4,149,094 $10.00 41,490,940
Class D (priced at par value) 11,036,168 $10.00 110,361,680
---------- -----------
Total 20,590,498 190,500,057
*T

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Balance Sheet Highlights
(in thousands)
(Unaudited)
June 30, December
31,
2008 2007
----------- --------
Real estate investments before accumulated
depreciation $272,218 $281,713
Real estate held for investment, net 254,849 266,087
Net investment in direct financing leases 2,063 2,058
Real estate held for resale, net 32,871 22,438
Total assets 335,515 343,757
Notes payable 175,556 168,560
Total liabilities 197,045 193,145
Minority interest 1,220 1,179
Total shareholders' equity 137,250 149,433
*T

Non-GAAP Financial Disclosure

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 the operating
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 calculates its
FFO in accordance with this definition. Management 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.

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:

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Projected 2008 Historical
Range
---------------
High Low 12/31/07
------- ------- ----------
Net (loss) available to Class A shareholders($0.56) ($0.64) $(1.01)
Depreciation and amortization 1.25 1.25 1.24
Adjustment for non-consolidated affiliates - - 0.07
Less gain on sale of real estate (0.00) (0.00) (0.00)
------- ------- ----------
FFO available to Class A shareholders $0.69 $0.61 $0.30
Modified FFO available to Class A
shareholders $0.89 $0.85 $0.45
*T

AmREIT
Chad C. Braun, 713-850-1400
cbraun@amreit.com

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