Income Opportunity Realty Investors, Inc. Reports First Quarter 2009 Results

Results of operations for the three months ended March 31, 2009 as compared to the same period ended 2008.

Rental and other property revenues increased slightly due to an increase within our commercial property portfolio. Our commercial portfolio experienced an increase in occupancy as compared to prior year.

Property operating expenses decreased by $0.6 million as compared to the same period ended 2008. The decrease is due to property tax adjustments made in 2008 that were not applicable in 2009.

Interest income decreased by $0.3 million as compared to the same period ended 2008. The decrease is due the receipt of cash on the receivables from Unified Housing Foundation, Inc. in the prior period.

Mortgage loan and interest expense decreased by $0.2 million as compared to prior year. The decrease is due to the continued pay down on the mortgage balance and thus effectively reducing the interest expense.

Discontinued operations relate to seven apartment complexes sold in 2008. No apartment complexes were sold or held for sale during the first quarter ended March 31, 2009.

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

INCOME OPPORTUNITY REALTY INVESTORS, INC
STATEMENTS OF OPERATIONS
(unaudited)
                                                                                  For the Three Months Ended March 31,
                                                                                           2009           2008
                                                                                  (dollars in thousands, except share and per share amounts)
Revenues:
            Rental and other property revenues                                    $        387          $ 324
Expenses:
            Property operating expenses                                                    205            775
            Depreciation and amortization                                                  60             63
            General and administrative                                                     49             246
            Advisory fee to affiliate                                                      225            227
            Total operating expenses                                                       539            1,311
            Operating loss                                                                 (152      )    (987      )
Other income (expense):
            Interest income                                                                434            699
            Other income (expense)                                                         (5        )    -
            Mortgage and loan interest                                                     (727      )    (882      )
            Total other expenses                                                           (298      )    (183      )
            Loss before gain on land sales, non-controlling interest, and taxes            (450      )    (1,170    )
            Loss from continuing operations before tax                                     (450      )    (1,170    )
            Income tax benefit                                                             82             7,397
            Net income (loss) from continuing operations                                   (368      )    6,227
            Discontinued operations:
            Loss from discontinued operations                                              -              (8,232    )
            Gain on sale of real estate from discontinued operations                       -              29,367
            Income tax benefit (expense) from discontinued operations                      -              (7,397    )
            Net income (loss)                                                              (368      )    19,965
            Preferred dividend requirement                                                 -              -
            Net income (loss) applicable to common shares                         $        (368      )  $ 19,965
            Earnings per share - basic
            Income (loss) from continuing operations                              $        (0.09     )  $ 1.49
            Discontinued operations                                                        -              3.30
            Net income (loss) applicable to common shares                         $        (0.09     )  $ 4.79
            Earnings per share - diluted
            Income (loss) from continuing operations                              $        (0.09     )  $ 1.49
            Discontinued operations                                                        -              3.30
            Net income (loss) applicable to common shares                         $        (0.09     )  $ 4.79
            Weighted average common share used in computing earnings per share             4,168,214      4,162,774
            Weighted average common share used in computing diluted earnings per           4,168,214      4,162,774
            share

INCOME OPPORTUNITY REALTY INVESTORS, INC.
BALANCE SHEETS
(unaudited)
                                                                                           March 31,            December 31,
                                                                                                    2009                 2008
                                                                                           (dollars in thousands, except share and par value amounts)
                                                     Assets
Real estate, at cost                                                                       $        39,255      $        39,255
                   Less accumulated depreciation                                                    (2,372   )           (2,313   )
                                                     Total real estate                              36,883               36,942
Notes and interest receivable                                                                       39,566               41,432
                   Less allowance for doubtful accounts                                             (1,826   )           (1,826   )
                                                     Total notes and interest receivable            37,740               39,606
Cash and cash equivalents                                                                           2                    52
Investments in unconsolidated subsidiaries and investees                                            74                   74
Affiliate receivable                                                                                35,523               38,203
Other assets                                                                                        3,182                676
                                                     Total assets                          $        113,404     $        115,553
                                                     Liabilities and Shareholders' Equity
Liabilities:
                   Notes and interest payable                                              $        42,251      $        42,319
                   Accounts payable and other liabilities                                           747                  2,460
                                                                                                    42,998               44,779
Commitments and contingencies:
Shareholders' equity:
                   Common Stock, $.01 par value, authorized 10,000,000 shares; issued               42                   42
                   4,173,675 and 4,168,214 outstanding shares in 2009 and 2008
                   Treasury stock at cost                                                           (39      )           (39      )
                   Paid-in capital                                                                  61,955               61,955
                   Retained earnings                                                                8,448                8,816
                                                     Total shareholders' equity                     70,406               70,774
                                                     Total liabilities and equity          $        113,404     $        115,553

SOURCE: Income Opportunity Realty Investors, Inc.

Income Opportunity Realty Investors, Inc. 
Investor Relations, 800-400-6407 
investor.relations@primeasset.com