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DENVER-Locally based AmeriVest Properties Inc., a REIT that invests only in small and medium-sized office buildings, reports that its funds from operations for the first quarter of 2003 increased 65% to $1.78 million, compared with $1.08 million during the same period last year.The FFO per diluted share was 16 cents for both periods. Net income increased 4% to $404,964 from $390,962 in the first quarter of 2002, but declined on a diluted per share basis from to 4 cents from 6 cents per share.

“Our first quarter results reflect an increase in revenue of 88%, an increase in FFO of 65% and an increase in net income of 4% from the comparable period last year,” says William Atkins, chairman and CEO of the small REIT, which has about a $75 million market cap. “We are pleased with our performance and that we were able to maintain our diluted per share FFO on par with last year even though our outstanding diluted common shares increased more than 63%,” he adds.

These results include only 54 days of operations from the Southwest Gas building in Phoenix, which was purchased in February. But it includes a full quarter of operating results from the three acquisitions made with the proceeds of its 2002 public offering of common stock.

“We are very comfortable with the performance of these properties and look forward to their increasing contribution to our financial results during the remainder of 2003,” says Atkins.

Revenues for the first quarter of 2003 increased 88% to $6.8 million from $3.63 million reflecting additional revenues from the acquisition of three office properties in late 2002 (Parkway Centre II, Centerra and Chateau Plaza) and one office property in early 2003 (Southwest Gas).

First quarter results included approximately $100,000 in operating expense reimbursements for 2002. The weighted-average number of common shares outstanding during the quarter, assuming full dilution, was 11.2 million, an increase of 63% from the first quarter of 2002, primarily due to a common stock offering completed last June.

In addition to property operating expenses, which increased due to the additional properties acquired since March 2002, general and administrative expenses also increased 138% from the first quarter of 2002.

“Our G&A expenses increased primarily due to the consolidation of the company’s former outside advisor,” says Atkins. “In addition, the quarter included more than $200,000 in legal, accounting, investor relations, shareholder services and travel expenses.”

The company’s portfolio includes 27 office buildings with 1.564 million sf in Colorado, Texas, Arizona and Indiana.

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