Income Opportunity Realty Investors, Inc. Reports 2006 First Quarter Results

Business Wire, May 15, 2006

DALLAS -- Income Opportunity Realty Investors, Inc. (AMEX:IOT), a Dallas-based real estate investment company, today reported net income of $594,000 or $0.14 per share for the three months ended March 31, 2006, compared to $293,000 and $0.07 per share for the same period in 2005.

Key items for the three months ended March 31, 2006, compared to the same period in 2005 included:

--Rents were $1.7 million in 2006 and $1.5 million in 2005. The increase is due to a combination of increased occupancy and rental increases.

--Operating expenses were $804,000 in 2006 and $821,000 in 2005.

--Interest income was $1.2 million in 2006 and $1 million in 2005. The increase is due to additional interest earned from additional notes receivable.

--Interest expense was $896,000 million in 2006 and $871,000 in 2005. The increase was primarily due to the additional debt incurred during 2005.

--Depreciation expense was $170,000 in 2006 and $177,000 in 2005. The decrease was due to the sale of properties in 2005 as well as fully depreciated tenant improvements in 2005.

--The advisory fee to affiliate was $174,000 in 2006 and $166,000 in 2005 due, primarily, to a net increase in gross assets, which is the basis of the advisory fee. The net income fee was $50,000 in 2006 as compared to $24,000 in 2005 and is based on 7 1/2% of the Company's net income.

--General and administrative expense was $150,000 in 2006 and $142,000 in 2005.

Income Opportunity Realty Investors, Inc., a Dallas-based real estate investment company, holds a diverse portfolio of real estate properties located in Texas, including office buildings, apartments, and undeveloped land. For more information, go to IORI's website at www.incomeopp-realty.com.

INCOME OPPORTUNITY REALTY INVESTORS, INC.
                 CONSOLIDATED STATEMENTS OF OPERATIONS


                                               For the Three Months
                                                  Ended March 31,
                                             -------------------------
                                                2006         2005
                                             ------------ ------------
                                              (unaudited)
                                              (amounts in thousands,
                                                 except per share)
Property revenue
   Rents and other property revenues              $1,697       $1,529

Operating expenses
     Property operations                             804          821
     Depreciation                                    170          177
     General and administrative                      150          142
     Advisory fee                                    174          166
                                             ------------ ------------
Total operating expenses                           1,298        1,306
                                             ------------ ------------

Operating income                                     399          223

Other income (expense):
     Interest income                               1,154          974
     Mortgage and loan interest                     (896)        (871)
     Net income fee                                  (50)         (24)
                                             ------------ ------------
Total other income (expense)                         208           79
                                             ------------ ------------

Income before equity in earnings of
 investees and minority interests                    607          302

Equity in earnings (loss) of investees                --           (9)
Minority interest                                    (13)          --
                                             ------------ ------------

Net income                                          $594         $293
                                             ============ ============

Earnings per share:
   Net earnings from continuing operations         $0.14        $0.07
                                             ============ ============

Weighted average common shares used in
 computing earnings per share                  4,168,035    4,168,035

Earnings per share reflect a 3-for-1 forward split of the stock in the
form of a 200% stock dividend declared in May 2005.


               INCOME OPPORTUNITY REALTY INVESTORS, INC.
                      CONSOLIDATED BALANCE SHEETS
                              (unaudited)


                                              March 31,   December 31,
                                                2006         2005
                                            ------------ -------------
                                              (dollars in thousands)
                  Assets
Real estate held for investment                 $38,870       $35,083
Less--accumulated depreciation                   (4,481)       (4,311)
                                            ------------ -------------
                                                 34,389        30,772

Related party receivable (including accrued
 interest of $2,763 and $2,390 in 2006 and
 2005, respectively)                             63,603        63,230
Investment in real estate partnerships              547           547
Cash and cash equivalents                           167           201
Due from affiliates                                 160         1,853
Other assets                                      3,404         2,738
                                            ------------ -------------
                                               $102,270       $99,341
                                            ============ =============

   Liabilities and Stockholders' Equity

Liabilities:
Notes payable (including accrued interest
 of $172 in 2006 and $229 in 2005)              $53,954       $52,817
Due to affiliates                                 1,538            --
Other liabilities                                   991         1,344
                                            ------------ -------------
                                                 56,483        54,161

Commitments and contingencies

Minority interest                                   526           513

Stockholders' equity:
Common Stock, $.01 par value; authorized,
 100,000,000 shares; issued and outstanding
 4,168,035 at March 31, 2006 and December
 31, 2005                                            42            42
Additional paid-in capital                       61,955        61,955
Accumulated deficit                             (16,736)      (17,330)
                                            ------------ -------------
                                                 45,261        44,667
                                            ------------ -------------

                                               $102,270       $99,341
                                            ============ =============