Real Estate Income Fund Inc. Announces Issuance of Taxable Auction Rate Preferred Stock

Business Wire, July 18, 2005

NEW YORK -- Real Estate Income Fund Inc., which is listed on the New York Stock Exchange under the symbol "RIT," announced today the issuance on July 18, 2005 of an additional 1,200 shares of its Series M Taxable Auction Rate Preferred Stock (liquidation preference $25,000 per share, par value $0.001 per share) (the "Preferred Shares") for an aggregate offering price of $30 million. Excluding fees and expenses borne by the Fund in connection with the Preferred Shares offering and reflected immediately in the Fund's net asset value per share for its common stock, the Fund will invest the proceeds in securities that meet the Fund's current investment objectives and policies.

The Fund previously issued in September 2002, 2,600 shares of Series M Taxable Auction Rate Preferred Stock (liquidation preference $25,000 per share, par value $0.001 per share) with an aggregate offering price of $65 million. With today's issuance, the Fund now has a total of 3,800 shares of Preferred Stock outstanding.

The underwriter for the Preferred Shares offering was Citigroup Global Markets Inc. Copies of the prospectus for the Preferred Shares offering may be obtained from Citigroup Global Markets Inc., 388 Greenwich Street, New York, New York 10013. This announcement is made as a matter of record only. It should not be considered an offer to sell or a solicitation of an offer to buy these securities. The offering was made only pursuant to the prospectus for the Preferred Shares offering.

Real Estate Income Fund Inc. is a non-diversified investment management company advised by Citi Fund Management Inc., an affiliate of Citigroup Inc., and sub-advised by AEW Management and Advisors, L.P., an affiliate of AEW Capital Management, L.P.

For more information about the Fund, please call 1-888-735-6507 or consult the Fund's web site at www.citigroupam.com.