Great Lakes REIT Reports $0.17 EPS and $0.48 FFO Per Common Share for First Quarter 2003

Business Wire, April 15, 2003

Business Editors

OAK BROOK, Ill.--(BUSINESS WIRE)--April 15, 2003

Great Lakes REIT (NYSE:GL):

Great Lakes REIT First Quarter Highlights

-- Net Income of $2.7 million, or $0.17 per common share

-- Funds From Operations (FFO) of $7.9 million, or $0.48 per

common share

-- EBITDA of $13.5 million

-- Cash provided by operating activities of $5.3 million

-- Occupancy at April 1, 2003 was 80.9 %.

-- Monthly cash dividend of $0.135 per common share paid in

February, March and April 2003.

Great Lakes REIT (NYSE:GL), a real estate investment trust which holds a portfolio of Midwestern office and medical office properties, today announced first quarter 2003 net income of $2.7 million, or $0.17 per common share, and funds from operations (FFO) of $7.9 million, or $0.48 per common share. This compares to net income of $4.3 million, or $0.26 per common share, and FFO of $9.0 million or $0.55 per common share, for the first quarter of 2002. FFO represents a non-GAAP (generally accepted accounting principles) financial measure. A table reconciling FFO to the GAAP measure the Company believes to be most directly comparable, net income applicable to common shares, is included with the consolidated financial statements included in this release.

"Our operating results continue to be affected by declining occupancies in our markets and portfolio. While we expect that the leasing environment in our markets will continue to be challenging during 2003, we are pleased to have signed new leases covering 117,000 square feet in the first quarter of 2003," commented Dick May, Great Lakes REIT's Chairman and CEO. "We are pleased with this increase in leasing activity. However, we have not changed our expectations for 2003 and anticipate signing new leases covering an average of 30,000 square feet per month for the balance of 2003."

Based on current market conditions, the Company expects EPS in the range of $0.65 to $0.90 per common share and 2003 FFO per common share in the range of $1.70 to $1.90. This guidance assumes continued softness in the economy and office markets. The lower end of the range assumes the Company makes no acquisitions in 2003. The high end of the range assumes the Company acquires $50 million of new properties.

Portfolio Performance

Total revenues increased by 10% to $26.7 million in the first quarter of 2003 from $24.4 million in last year's first quarter. Revenues increased primarily due to the acquisition of the eight medical office properties on October 1, 2002. EBITDA decreased to $13.5 million in the first quarter of 2003 as compared to $13.8 million for the first quarter of 2002. Cash provided by operating activities for the quarter decreased to $5.3 million for the first quarter of 2003 as compared to $7.1 million for the first quarter of 2002. Same store sales decreased 12% (cash basis) for the three months ended March 31, 2003, as compared to the first quarter of 2002 primarily as a result of the decline in occupancy quarter over quarter.

EBITDA, a non-GAAP financial measure, represents net income before allocation to minority interests plus interest expense, federal income tax expense (if any) and depreciation and amortization expense. A table reconciling EBITDA to the GAAP measure the Company believes to be directly comparable, cash provided by operating activities, is included with the consolidated financial statements included in this release.

Balance Sheet, Market Value and Liquidity

EBITDA coverage of interest expense was 3.0 times for the quarter ended March 31, 2003 and EBITDA coverage of interest plus preferred dividends was 2.5 times for the same period. Cash provided by operating activities (before interest expense) coverage of interest expense was 2.2 times for the quarter ended March 31, 2003. Cash provided by operating activities (before interest expense) coverage of interest expense plus preferred dividends was 1.8 times for the quarter ended March 31, 2003. The Company provided these cash provided by operating activities (before interest expense) coverage ratios because the Company believes that such ratios are the most directly comparable GAAP ratios to the EBITDA ratios described above.

The Company has provided EBITDA and the related non-GAAP coverage ratios as supplemental disclosure with respect to liquidity because the Company believes such disclosure provides useful information regarding the Company's ability to service or incur debt. Included with the reconciliation of EBITDA to the GAAP measure the Company believes to be directly comparable, cash provided by operating activities, included with the consolidated financial statements included in this release are the coverage calculations for EBITDA coverage of interest expense, EBITDA coverage of interest plus preferred dividends, cash provided by operating activities (before interest expense) coverage of interest expense and cash provided by operating activities (before interest expense) coverage of interest expense plus preferred dividends.

The Company had $319.2 million of total debt outstanding at March 31, 2003. The interest rate on approximately 93% of this debt was fixed at an average interest rate of 5.76%. At March 31, 2003, Great Lakes REIT had $50 million available for future borrowings under two secured lines of credit that the Company utilizes for acquisitions, development activities, capital improvements, tenant improvements, leasing costs and working capital needs.