Business Services Industry

Income Opportunity Realty Investors, Inc. Reports Quarterly Results

Business Wire, Nov 14, 2006

DALLAS -- Income Opportunity Realty Investors, Inc. (AMEX:IOT), a Dallas-based real estate investment company, today reported a net loss of $(229,000) or $(0.06) per share for the three months ended September 30, 2006 compared to net income of $280,000 or $0.07 per share for the same period in 2005. For the nine months ended September 30, 2006, net income was $430,000 or $0.10 per share compared to $1.113 million or $0.27 per share for the same period in 2005. Compared to the same period in 2005, the Company's financial results for the third quarter 2006 swung to a loss due principally to a combination of higher interest expense and lower interest income.

Key items for the nine months ended September 30, 2006, compared to the same period in 2005 included:

* Rents and other property revenues for the three and nine months ended September 30, 2006 were $2.0 million and $5.6 million as compared to $1.7 million and $4.8 million in the corresponding periods in 2005. The increase is primarily due to rental increases and the March 2006 purchase of the Falcon Point apartment community in Indianapolis, Indiana.

* Property operations expense for the three and nine months ended September 30, 2006 was $1.2 million and $3.0 million as compared to $870,000 and $2.5 million for the corresponding periods in 2005. The increase is primarily due to operating expenses from the Falcon Point Apartments.

* Interest income for the three and nine months ended September 30, 2006 was $707,000 and $2.7 million compared to $979,000 and $2.9 million for the corresponding periods in 2005. Decreases were due to the overall reduction in notes receivable held by the Company.

* Interest expense for the three and nine months ended September 30, 2006 was $1.3 million and $3.3 million compared to $989,000 and $2.5 million for the corresponding periods in 2005. The increase was primarily due to the additional debt incurred by IORI during 2005 and 2006 due to new loans, refinancings and the acquisition of Falcon Point. The increase was also due to increased interest rates for IORI's variable interest rate debt.

* Advisory fees for the three and nine months ended September 30, 2006 were $261,000 and $678,000 compared to $165,000 and $502,000 for the corresponding periods in 2005. The increase was due to a net increase in gross assets which is the basis of the advisory fee. The increase was also due to fees for refinancing certain mortgage obligations. These increases were offset by interest paid by the advisor to IORI under a cash management agreement between the advisor and IORI.

* General and administrative expenses for the three and nine months ended September 30, 2006 were $109,000 and $391,000 as compared to $132,000 and $473,000 in the corresponding periods 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.