Income Opportunity Realty Investors, Inc. Reports First Quarter 2007 Results

Business Wire, May 15, 2007

DALLAS -- Income Opportunity Realty Investors, Inc. (AMEX: IOT), a Dallas-based real estate investment company, today reported net income of $66,000 or $0.02 per share for the three months ended March 31, 2007, compared to $594,000 and $0.14 per share for the same period in 2006.

Key items for the three months ended March 31, 2007, compared to the same period in 2006 included:

* Rental income for the three months ended March 31, 2007 was $2.1 million compared to $1.7 in the corresponding period in 2006. $264,000 of the increase is due to revenue from the Falcon Point Apartments, acquired on March 31, 2006. The balance is due to increased average rents at the various properties.

* Property operating expense for the three months ended March 31, 2007 was $1.1 million compared to $804,000 for the corresponding period in 2006. The increase is primarily due to additional operating expenses incurred by the acquisition of the Falcon Point Apartments.

* Depreciation expense for the three months ended March 31, 2007 was $198,000 compared to $170,000 for the corresponding period in 2006. The increase is due to additional depreciation from the Falcon Point Apartments.

* General and administrative expenses for the three months ended March 31, 2007 was $143,000 compared to $150,000 for the corresponding period in 2006.

* Advisory fees to affiliate for the three months ended March 31, 2007 was $211,000 compared to $194,000 for the corresponding period in 2006. The increase was due to a net increase in gross assets, which is the basis of the advisory fee.

* Interest income for the three months ended March 31, 2007 was $1.1 million compared to $1.2 million for the corresponding period in 2006.

* In May 12, 2006, Encino Executive Plaza Ltd. transferred One Hickory Center and the 202 acres of unimproved real property known as Travelers Land back to IORI in satisfaction of the three notes receivable totaling $36 million. Interest income received by IORI on the Encino Notes for the three months ended March 31, 2006 was $499,000.

* The overall loss of interest income from the above notes was partially offset by interest income from Syntek West, Inc. ("SWI") of $335,000 in 2007 as compared to $20,000 in 2006. The interest paid or received from SWI is based upon the Cash Management Agreement between IORI and SWI whereby interest is paid or received at a rate of prime plus one percent based upon the outstanding intercompany balances throughout the period.

* Interest expense for the three months ended March 31, 2007 was $1.4 million compared to $896,000 for the corresponding period in 2006. The increase was primarily due to the additional debt incurred by IORI during 2006 due to new loans, refinancings and the acquisition of the Falcon Point Apartments. The increase was also due to increased interest rates for IORI's variable interest rate debt.

* The net income fee to affiliates for the three months ended March 31, 2007 was $5,000 as compared to $50,000 for the corresponding period in 2006. The net income fee is based on 71/2% of IORI's net income.

About Income Opportunity Realty Investors, Inc.

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.

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