Berkshire Income Realty Announces First Quarter Funds from Operations of $2,793,605

  Berkshire Income Realty Announces First Quarter Funds from Operations of
  $2,793,605

Business Wire

BOSTON -- May 22, 2013

Berkshire Income Realty, Inc. (NYSE MKT: BIR_pa),( NYSE MKT: BIRPRA), (NYSE
MKT: BIR-A), (NYSE MKT: BIR.PR.A) ("Berkshire" or the "Company") reported its
results for the quarter ended March31, 2013. Financial highlights for the
three month period ended March31, 2013 include:

- The Company's Funds From Operations ("FFO") grew approximately 220.5% for
the three months ended March31, 2013 - The Company's FFO, a non-GAAP
financial measure, for the three months ended March31, 2013 was $2,793,605
compared to $871,537 for the comparable three months ended March31, 2012. The
growth in the Company's FFO is due to increases in revenue, including market
rents and utility reimbursements and lower expenses, including lower incentive
advisory fees.

- Same Property Net Operating Income ("Same Property NOI") increased
approximately 8.0% - Same Property NOI, a non-GAAP financial measure,
increased primarily as a result of growth in comparative revenue for
properties acquired or placed in service prior to January 1, 2012 and owned
through March 31, 2013 ("Same Property") . The Same Property Portfolio had
total revenue increases of approximately 4.7% for the three months ended
March31, 2013 as compared to the same period a year ago. Continued growth in
market rents and increases in utility recoveries pursuant to a utility
reimbursement program were the main factors contributing to higher revenue.
Expenses decreased due to maintenance expenses, comprised mainly of lower
landscaping and repairs costs, which were partially offset by increased
property management fees driven by higher revenue.

- A presentation and reconciliation of net income (loss), the most directly
comparable financial measure calculated and presented in accordance with
accounting principles generally accepted in the United States of America
("GAAP"), to FFO and Same Property NOI is set forth on pages 2 and 3 of this
press release. For the three months ended March31, 2013 and 2012, the net
income (loss) was $(3,996,676) and $2,011,956, respectively.

- Development Activities - The Company owns interests in three development
joint ventures. Construction of the 2020 Lawrence project, a mid-rise 231-unit
LEED-gold certified multifamily building, located in downtown Denver,
Colorado, was completed during the quarter ended March 31, 2013 and has been
well received by the Denver rental market. Move-in of residents began in
December 2012 with current physical occupancy approximating 39% and leased
units totaling 52%. The Trilogy NoMa development project, a three-building
multifamily community in downtown Washington, DC., is nearing completion.
Current physical occupancy is approximately 20% and total leased units are
approximately 28%. The Walnut Creek development project, located in Walnut
Creek, California, is nearing the completion of the regulatory and
environmental entitlement processes. Construction activities are anticipated
to begin in late 2013.

- Economic Conditions - During 2013, on a national basis, the multifamily
sector continued to exhibit strong fundamentals and improved performance due
to sustained increases in rents and stable occupancies resulting from
continued favorable apartment unit supply and demand dynamics. Decreased
levels of new units constructed and reduced home ownership rates have driven
demand in the apartment sector which contributed to a 10-year low in the
national vacancy rate. Capital markets improvements have had a favorable
impact on sales of multifamily assets with transaction volumes reaching
five-year highs in the third quarter of 2012. With the continued improvement
in the economy, the Company continues to implement its operating model and to
grow rental rates.

David Quade, President of the Company, comments: "We are continuing to benefit
from growth in market rents in our various rental markets. This has resulted
in strong first quarter operating results. Rental rate increases averaging
4.7% fueled an increase in Same Property NOI of approximately 8%. In addition,
development activities continued to be a focus for the Company with one of two
active construction projects, 2020 Lawrence, located in downtown Denver,
Colorado, completing construction during the current quarter. The project was
completed on schedule and within budget and is currently 52% leased. The other
project, Trilogy NoMa, located in downtown Washington, D.C., is nearing
completion and is approximately 28% leased. Completion of the remaining
construction activities is ahead of schedule and also within budget. Overall
we are pleased with the Company's first quarter operating results as positive
trends in the multifamily apartment sector continue to benefit the Company."

Funds From Operations

The Company has adopted the revised definition of FFO adopted by the Board of
Governors of the National Association of Real Estate Investment Trusts
("NAREIT"). FFO falls within the definition of a "non-GAAP financial measure"
as stated in Item 10(e) of Regulation S-K promulgated by the Securities and
Exchange Commission (the "SEC"). Management considers FFO to be an appropriate
measure of performance of an equity Real Estate Investment Trust ("REIT"). We
calculate FFO by adjusting net income (loss) (computed in accordance with
GAAP, including non-recurring items), for gains (or losses) from sales of
properties, impairments, real estate related depreciation and amortization,
and adjustment for unconsolidated partnerships and ventures. Management
believes that in order to facilitate a clear understanding of the historical
operating results of the Company, FFO should be considered in conjunction with
net income (loss) as presented in the consolidated financial statements
included elsewhere herein. Management considers FFO to be a useful measure for
reviewing the comparative operating and financial performance of the Company
because, by excluding gains and losses related to sales of previously
depreciated operating real estate assets and excluding real estate asset
depreciation and amortization (which can vary among owners of identical assets
in similar condition based on historical cost accounting and useful life
estimates), FFO can help one compare the operating performance of a company's
real estate between periods or as compared to different companies.

The Company's calculation of FFO may not be directly comparable to FFO
reported by other REITs or similar real estate companies that have not adopted
the term in accordance with the current NAREIT definition or that interpret
the current NAREIT definition differently. FFO is not a GAAP financial measure
and should not be considered as an alternative to net income (loss), the most
directly comparable financial measure of our performance calculated and
presented in accordance with GAAP, as an indication of our performance. FFO
does not represent cash generated from operating activities determined in
accordance with GAAP and is not a measure of liquidity or an indicator of our
ability to make cash distributions. We believe that to further understand our
performance; FFO should be compared with our reported net loss and considered
in addition to cash flows in accordance with GAAP, as presented in our
consolidated financial statements.

The following table presents a reconciliation of net income (loss) to FFO for
the three months ended March31, 2013 and 2012:

                                           Three months ended
                                              March 31,
                                              2013             2012
Net income (loss)                             (3,996,676  )       2,011,956
Add:
Depreciation of real property                 5,816,785           6,058,425
Depreciation of real property included        —                   539,841
in results of discontinued operations
Amortization of acquired in-place             5,377               19,968
leases and tenant relationships
Equity in loss of unconsolidated              775,967             —
multifamily entities
Funds from operations of unconsolidated
multifamily entities, net of                  368,701             265,448
impairments
Less:
Funds from operations of noncontrolling       (176,549    )       (311,967   )
interest in properties
Gain on disposition of real estate            —                   (6,589,323 )
assets
Equity in income of unconsolidated            —               (1,122,811 )
multifamily entities
Funds from Operations                         $ 2,793,605     $  871,537 
                                                                             

FFO for the three months ended March31, 2013 increased as compared to the
three-month period ended March31, 2012. The growth in the Company's FFO is
due to increases in revenue, including market rents and utility
reimbursements, and lower expenses, including lower incentive advisory fees
for the three months ended March31, 2013 compared to the same period ended
March31, 2012.

Other Non-GAAP Measures

The Company believes that the use of certain other non-GAAP measures for
comparative presentation between reporting periods allows for more meaningful
comparisons of the periods presented.

Same Property NOI falls within the definition of a "non-GAAP financial
measure" as stated in Item 10(e) of Regulation S-K promulgated by the SEC and
should not be considered as an alternative to net income (loss), the most
directly comparable financial measure of our performance calculated and
presented in accordance with GAAP. The Company believes Same Property NOI is a
measure of operating results that is useful to investors to analyze the
performance of a real estate company because it provides a direct measure of
the operating results of the Company's multifamily apartment communities. The
Company also believes it is a useful measure to facilitate the comparison of
operating performance among competitors. The calculation of Same Property NOI
requires classification of income statement items between operating and
non-operating expenses, where operating items include only those items of
revenue and expense which are directly related to the income producing
activities of the properties. We believe that to achieve a more complete
understanding of the Company's performance, Same Property NOI should be
compared with our reported net income (loss). Management uses Same Property
NOI to evaluate the operating results of properties without reflecting the
effect of capital decisions such as the issuance of mortgage debt and
investments in capital items; in turn, these capital decisions have an impact
on interest expense and depreciation and amortization. The Same Property
portfolio consists of 21 properties acquired or placed in service on or prior
to January 1, 2012 and owned through March31, 2013.

The following table represents the reconciliation of GAAP net income (loss) to
the other non-GAAP measures presented for the three months ended March31,
2013 and 2012:

                                          Three months ended
                                             March 31,
                                             2013             2012
Net income (loss)                            $ (3,996,676 )     $ 2,011,956
Add:
Depreciation                                 6,630,073          6,684,951
Interest, inclusive of amortization of       6,598,445          6,408,480
deferred financing fees
Amortization of acquired in-place            5,377              19,968
leases and tenant relationships
Net income from discontinued                 (40,265      )     (5,654,477   )
operations
Equity in (income) loss of                   775,967           (1,122,811   )
unconsolidated multifamily entities
Net operating income                         9,972,921          8,348,067
Add:
Net operating income related to
properties acquired or placed in             1,944,424         2,683,833    
service after January 1, 2012 and
non-property activities
Same Property net operating income           $ 11,917,345      $ 11,031,900 
                                                                             

The Company

The Company is a Real Estate Investment Trust ("REIT") whose objective is to
acquire, own, operate, develop and rehabilitate multifamily apartment
communities. The Company owns interests in twenty-two multifamily apartment
communities and one multifamily development project, of which six are located
in the Baltimore/Washington, D.C. metropolitan area; four are Houston, Texas;
three are located in Dallas, Texas; three are located in Virginia; and one is
located in each of Austin, Texas; Atlanta, Georgia; Sherwood, Oregon; Tampa,
Florida; Philadelphia, Pennsylvania; Walnut Creek, California; and Denver,
Colorado.

Forward Looking Statements

With the exception of the historical information contained in this release,
the matters described herein may contain forward-looking statements that are
made pursuant to the Safe Harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements, including
statements about apartment rental demand and fundamentals, involve a number of
risks, uncertainties or other factors beyond the Company's control, which may
cause material differences in actual results, performance or other
expectations. These factors include, but are not limited to, changes in
economic conditions generally and the real estate and bond markets
specifically, especially as they may affect rental markets,
legislative/regulatory changes (including changes to laws governing the
taxation of REITs), possible sales of assets, the acquisition restrictions
placed on the Company by an affiliated entity Berkshire Multifamily Value Fund
III, LP, availability of capital, interest rates and interest rate spreads,
changes in accounting principles generally accepted in the United States of
America and policies and guidelines applicable to REITs, those set forth in
Part I, Item 1A - Risk Factors of the Company's Annual Report on Form 10-K for
the fiscal year ended December31, 2012 and other risks and uncertainties as
may be detailed from time to time in the Company's public announcements and
SEC filings. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The
Company assumes no obligation to update such information.

BERKSHIRE INCOME REALTY, INC.
CONSOLIDATED BALANCE SHEETS
                                                               
                                       March 31,          December 31,
                                          2013                 2012
                                                               
ASSETS
Multifamily apartment communities,
net of accumulated depreciation of        $ 398,052,658        $ 402,999,104
$242,455,812 and $235,825,752,
respectively
Cash and cash equivalents                 9,282,546            12,224,361
Cash restricted for tenant security       1,223,501            1,332,178
deposits
Replacement reserve escrow                998,230              986,790
Prepaid expenses and other assets         7,697,006            9,545,966
Investments in unconsolidated             16,308,060           16,873,924
multifamily entities
Acquired in-place leases and tenant
relationships, net of accumulated         —                    5,377
amortization of $0 and $599,702,
respectively
Deferred expenses, net of
accumulated amortization of               3,099,818           3,210,510     
$3,240,468 and $3,096,284,
respectively
Total assets                              $ 436,661,819       $ 447,178,210 
                                                               
LIABILITIES AND DEFICIT
                                                               
Liabilities:
Mortgage notes payable                    $ 477,081,514        $ 478,185,998
Revolving credit facility -               1,627,000            —
affiliate
Note payable - other                      1,250,000            1,250,000
Due to affiliates, net                    2,569,174            3,446,460
Due to affiliate, incentive               7,139,667            6,634,261
advisory fees
Dividend and distributions payable        837,607              1,137,607
Accrued expenses and other                10,797,658           15,081,550
liabilities
Tenant security deposits                  1,528,657           1,475,298     
Total liabilities                         502,831,277         507,211,174   
                                                               
Commitments and contingencies             —                    —
                                                               
Deficit:
Noncontrolling interest in                1,718,839            1,527,431
properties
Noncontrolling interest in                (95,900,145   )      (89,708,267   )
Operating Partnership
Series A 9% Cumulative Redeemable
Preferred Stock, no par value, $25
stated value, 5,000,000 shares            70,210,830           70,210,830
authorized, 2,978,110 shares issued
and outstanding at March 31, 2013
and December 31, 2012, respectively
Class A common stock, $.01 par
value, 5,000,000 shares authorized,
0 shares issued and outstanding at        —                    —
March 31, 2013 and December 31,
2012, respectively
Class B common stock, $.01 par
value, 5,000,000 shares authorized,
1,406,196 shares issued and               14,062               14,062
outstanding at March 31, 2013 and
December 31, 2012, respectively
Excess stock, $.01 par value,
15,000,000 shares authorized, 0
shares issued and outstanding at          —                    —
March 31, 2013 and December 31,
2012, respectively
Accumulated deficit                       (42,213,044   )      (42,077,020   )
Total deficit                             (66,169,458   )      (60,032,964   )
                                                               
Total liabilities and deficit             $ 436,661,819       $ 447,178,210 
                                                                             

BERKSHIRE INCOME REALTY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

                                        Three months ended
                                           March 31,
                                           2013              2012
Revenue:                                                    
Rental                                     $ 18,796,819         $ 17,829,685
Utility reimbursement                      922,532              799,747
Other                                      861,369          784,121      
Total revenue                              20,580,720       19,413,553   
Expenses:
Operating                                  5,000,278            4,698,309
Maintenance                                942,510              1,129,622
Real estate taxes                          1,944,802            1,838,192
General and administrative                 730,090              767,169
Management fees                            1,239,247            1,176,600
Incentive advisory fees                    750,872              1,455,594
Depreciation                               6,630,073            6,684,951
Interest, inclusive of amortization        6,598,445            6,408,480
of deferred financing fees
Amortization of acquired in-place          5,377            19,968       
leases and tenant relationships
Total expenses                             23,841,694       24,178,885   
Loss before equity in income (loss)
of unconsolidated multifamily              (3,260,974   )       (4,765,332   )
entities
Equity in income (loss) of                 (775,967     )    1,122,811    
unconsolidated multifamily entities
Loss from continuing operations            (4,036,941   )    (3,642,521   )
Discontinued operations:
Income (loss) from discontinued            40,265               (934,846     )
operations
Gain on disposition of real estate         —                6,589,323    
assets
Net income from discontinued               40,265           5,654,477    
operations
Net income (loss)                          (3,996,676   )       2,011,956
Net income attributable to
noncontrolling interest in                 (19,532      )       (88,025      )
properties
Net (income) loss attributable to
noncontrolling interest in Operating       5,555,378        (242,792     )
Partnership
Net income attributable to the             1,539,170            1,681,139
Company
Preferred dividend                         (1,675,194   )    (1,675,194   )
Net income (loss) available to             $ (136,024   )    $ 5,945      
common shareholders
Net loss from continuing operations
attributable to the Company per            (0.13        )    (4.02        )
common share, basic and diluted
Net income from discontinued
operations attributable to the             0.03             4.02         
Company per common share, basic and
diluted
Net income (loss) available to
common shareholders per common             (0.10        )    —            
share, basic and diluted
Weighted average number of common
shares outstanding, basic and              1,406,196        1,406,196    
diluted

Contact:

For Berkshire Income Realty, Inc.
Stephen Lyons, 1-617-574-8367
stephen.lyons@bpadv.com
Facsimile: 1-617-574-8312