BINGHAM FARMS, Mich., Oct. 29 /PRNewswire/ -- Malan Realty Investors, Inc.
(NYSE: MAL), a self-administered real estate investment trust (REIT), today
announced total funds from operations (FFO) increased 19 percent in the third
quarter of 1999 over the third quarter of 1998 to $2.5 million from
$2.1 million.  Total FFO on a diluted basis (assuming conversion of
convertible debt securities and inclusion of other common stock equivalents)
grew to $4.2 million from $4.1 million for the quarter.
    For the quarter ended September 30, 1999, FFO was 48 cents per basic share
vs. 41 cents per share for the quarter ended September 30, 1998, an increase
of 17 percent.  FFO on a diluted basis grew 10 percent to 45 cents per share
in the third quarter of 1999 from 41 cents per share for the third quarter of
1999.  Total revenues, consisting primarily of rent and recoveries from
tenants and excluding a nonrecurring loss on the sale of a property, were
$10.4 million in the third quarter of 1999 vs. $10.2 million in the third
quarter of 1998.
    For the nine months ended September 30, 1999, FFO was $7.7 million or
$1.48 per basic share vs. $5.5 million or $1.28 per basic share for the nine
months ended September 30, 1998.  FFO on a diluted basis was $12.8 million or
$1.36 per share for the first nine months of 1999 vs. $11.3 million or $1.24
per share for the first nine months of 1998.  Total revenues (excluding
nonrecurring gains and losses on sales of properties of $1.6 million in 1999)
rose 14 percent to $32.5 million for the first three quarters of 1999 from
$28.6 million in the first three quarters of 1998.
    "Malan continues to benefit from the acquisitions of last year and
redevelopment activities that have diversified our portfolio," said President
and Chief Executive Officer Anthony S. Gramer.  "Revenues resulting from the
redevelopements of two Cinemark theaters in suburban Chicago, as well as Stage
and Staples stores in Lincoln, Illinois, contributed to the improved results
for both the quarter and nine months ended September 30, 1999."
    Malan announced that subsequent to the end of the third quarter, it had
resumed the repurchase and retirement of its 9-1/2% Convertible Subordinated
Debentures due July 2004.  "The recent repurchases of Debentures at a
substantial discount to par value have helped to further strengthen our
balance sheet," Gramer said.  With the repurchase of $2.2 million aggregate
principal of debentures since September 30, 1999, approximately $42.7 million
aggregate principal of debentures remain outstanding.
    "As part of our planning for 2000 and beyond, we are closely analyzing our
strategy for continuing to improve upon the returns from our portfolio and
thereby enhance shareholder value," Gramer said.  "Malan throughout its
history has adapted to changing real estate market conditions by adjusting our
development and acquisition strategies as needed.  We believe in a prudent
strategy emphasizing diversification of our retail tenant base, expansion and
redevelopment of our core portfolio, selective acquisitions and new
developments and disposition of non-core properties.
    "Our portfolio continues to perform solidly, with an occupancy level of 96
percent at September 30, 1999," said Gramer.  "These activities have enhanced
the value of our portfolio, and we believe this should be recognized in our
market value as well."
    Statements in this news release regarding future revenues or expenses may
be considered forward looking within the meaning of the Securities Exchange
Act of 1934.  Such statements are subject to important factors that could
cause results to differ materially from those in the forward looking
statements, including the factors as detailed in the company's Annual Report
on Form 10-K for the year ended December 31, 1998.
    Malan Realty Investors, Inc. owns, acquires, redevelops and manages
properties that are leased primarily to national and regional retail
companies.  The company owns a portfolio of 65 properties located in 10 states
that contains an aggregate of approximately 6.1 million square feet of GLA.
The company currently has 5.2 million common shares outstanding.
    News releases for Malan Realty Investors are available through Company
News On-Call by fax at 800-758-5804, ext. 114165, or
http://www.prnewswire.com.


                MALAN REALTY INVESTORS, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                   (in thousands, except per share amounts)
                                 (Unaudited)

                            Three Months Sept. 30,    Nine Months Sept. 30,
                              1999          1998         1999         1998
    Revenues
     Minimum rent           $7,619        $7,456      $23,074       $20,443
     Percentage and
      overage rents            305            20        1,005           626
     Recoveries from
      tenants                2,434         2,615        8,154         7,264
     Interest and other
      income                    91           120          250           244
     Gain(loss) on sale of
      real estate             (126)            -        1,625             -
        Total Revenues      10,323        10,211       34,108        28,577

    Expenses
    Property operating and
     maintenance               660           822        2,559         2,139
    Other operating expenses   430           448        1,273         1,191
    Real estate taxes        1,948         2,012        6,265         5,877
    General and
     administrative            488           565        1,501         1,357
    Depreciation and
     amortization            1,626         1,469        4,748         4,115
    Loss on impairment
     of real estate              -           431            -           431
        Total Operating
          Expenses           5,152         5,747       16,346        15,110

    Operating Income         5,171         4,464       17,762        13,467
    Interest Expense         4,407         4,244       13,222        12,545

    Net Income before
     Extraordinary Item        764           220        4,540           922

    Extraordinary Item:
     Loss on extinguishment
      of debt                    -          (156)        (459)         (156)

    Net Income                $764           $64       $4,081          $766

    Earnings per share before
     extraordinary item:
       Basic                 $0.15         $0.04        $0.88         $0.21
       Diluted               $0.15         $0.04        $0.88         $0.21

    Extraordinary item:
       Basic                     -        ($0.03)      ($0.09)      ($0.03)
       Diluted                   -        ($0.03)      ($0.09)      ($0.03)

    Earnings per share:
    Basic                    $0.15         $0.01        $0.79         $0.18
    Diluted                  $0.15         $0.01        $0.79         $0.18

    FFO Adjustments:
    Depreciation and Amortization:
    Depreciation of
     buildings and
     improvements           $1,534        $1,411       $4,511        $3,940
    Amortization of tenant
     allowances
    and improvements            51            28          127            85
    Amortization of
     leasing costs              40            29          106            85
    (Gain)loss on sale
     of real estate            126             -       (1,625)            -
    Loss on impairment
     of real estate              -           431            -           431
    Loss on extinguishment
     of debt                     -           156          459           156

    Funds From Operations,
     Basic                   2,515         2,119        7,659         5,463

    Interest expense on
     convertible securities  1,641         1,854        4,922         5,635
    Amortization of deferred
     financing costs on
     convertible securities     71            78          214           244

    Funds From Operations,
     Diluted                $4,227        $4,051      $12,795       $11,342

    Funds From Operations
     Per Share:
       Basic                 $0.48         $0.41        $1.48         $1.28
       Diluted               $0.45         $0.41        $1.36         $1.24

    Weighted average
     shares outstanding:
      Basic                  5,171         5,154        5,170         4,284
      Diluted                5,182         5,186        5,181         4,316
      Diluted, assuming
        conversion of
        convertible
        securities           9,413         9,951        9,412         9,141

 SOURCE  Malan Realty Investors, Inc.