BIRMINGHAM, Mich., Oct. 31 /PRNewswire/ -- Malan Realty Investors, Inc.
(NYSE: MAL), a self-administered real estate investment trust (REIT), today
announced financial results for the third quarter of 1997.
    For the quarter ended September 30, 1997, funds from operations (FFO) were
$1.9 million or 51 cents per outstanding share vs. $1.9 million or 54 cents
per share for the quarter ended September 30, 1996.  Malan calculates FFO
utilizing net income, excluding gains or losses from sales of property,
adjusted for certain non-cash items, primarily depreciation and amortization
(principally amortization of deferred financing costs included in interest
expense).
    Net income for the third quarter of 1997 was $213,000 or 6 cents per
weighted average share vs. $220,000 or 6 cents per weighted average share in
the year-ago quarter.  Total revenues, consisting primarily of rent and
recoveries from tenants, were $8.8 million for the third quarter of 1997 vs.
$8.9 million in the third quarter of 1996.
    For the first three quarters of 1997, FFO were $5.3 million or $1.48 per
outstanding share vs. $5.3 million or $1.53 per outstanding share for the
three quarters ended September 30, 1996.  Net income for the first nine months
of 1997 was $277,000 or 8 cents per weighted average share vs. $427,000 or
12 cents per weighted average share in the year-ago period.  Total revenues
for the first three quarters of 1997 were $26.2 million vs. $26.5 million in
the first nine months of 1996.
    "We are making progress on several fronts and expect to see activities
accelerate as we enter 1998," said President and Chief Executive Officer
Anthony S. Gramer.  "Although FFO per share has been down slightly this year,
we expect to benefit next year from developments and enhancements to our
existing properties.  In the meantime, we have the financial resources
necessary to fund those projects that will strengthen our portfolio."
    Malan said it expects to close shortly on its agreement with Greenwich
Capital Markets, Inc., a division of National Westminster Bank, Plc., for a
$25 million secured line of credit.  The line of credit has a two-year term,
which may be extended for a period of one year and can be expanded to $50
million for additional acquisitions.  The facility carries an interest rate of
LIBOR plus 150 basis points.  Gramer said funds from the credit line will be
used for construction of two cinema complexes in suburban Chicago, additional
redevelopment projects and other operational requirements.  Malan also will
use the funds to acquire the 41,000 square-foot 12-plex Southwynd Theater in
Lawrence, Kansas, from Hollywood Theaters, Inc.  The $4.2 million transaction
is part of sale-and-leaseback agreement between the two companies.
    Planning is continuing on the redevelopment of Malan's Lawrence, Kansas,
property Kmart will expand its store to 117,000 square feet of GLA from 82,000
square feet as part of a complete remodeling project.  Next month, Malan will
complete the acquisition of an additional 9 acres of land, on which it will
develop 150,000 square feet of new retail space, thus enlarging the shopping
center to 267,000 square feet of retail space.
    Construction has begun on the new 59,000 square-foot 17-plex theater
complex in North Aurora, Illinois.  The theaters, to be operated by Cinemark
USA, are located at South Lincolnway (Lake Street) and Sullivan Road, just
south of Interstate 88.  The opening is planned for May 1998.  Cinemark USA is
the nation's fourth largest operator of movie theaters.
    The Detroit area's first Gateway Country(TM) Store opened in early October
in The Shops at Fairlane Meadows in Dearborn.  The 13,720 square-foot store is
operated by Gateway 2000, a major marketer of personal computers.  The Shops
at Fairlane Meadows, which features Best Buy, Mervyn's, Target and Kids 'R'
Us, is currently 98 percent occupied.
    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, 1996.
    Malan Realty Investors, Inc. owns and operates a portfolio of 52 shopping
centers and free-standing stores, primarily in the Midwest.  The properties
represent approximately 5.7 million square feet of gross leaseable area.
    News releases for Malan Realty Investors are available though 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           Nine Months
                                      September 30,          September 30,
                                    1997       1996       1997        1996
    Revenues
    Minimum rent                  $6,023     $5,929     $17,913     $17,846
    Percentage and overage rents     276        285         900         809
    Recoveries from tenants        2,350      2,459       7,066       7,309
    Interest and other income        138        195         323         524
              Total Revenues       8,787      8,868      26,202      26,488

    Expenses
    Property operating and
      maintenance - recoverable      668        608       2,287       2,184
    Other property expenses          357        402       1,021       1,070
    Real estate taxes              2,043      2,017       5,885       5,952
    General and administrative       389        414       1,217       1,302
    Depreciation and amortization  1,271      1,241       3,798       3,680
        Total Operating Expenses   4,728      4,682      14,208      14,188

    Operating Income               4,059      4,186      11,994      12,300
    Interest Expense               3,846      3,966      11,717      11,873

    Net Income                      $213       $220        $277        $427

    Net Income Per Weighted
      Average Share                $0.06      $0.06       $0.08       $0.12

    FFO Adjustments:
    Depreciation and Amortization:
      Depreciation of buildings
        & improvements            $1,215     $1,195      $3,634      $3,569
      Amortization of tenant
        allow. & improvements         24         12          72          34
      Amortization of leasing costs   24         22          69          34
      Amortization of nonrecurring
        settlement cost
        on hedging contract          109        109         328         328

    "White Paper" FFO              1,585      1,558       4,380       4,392
    Depreciation of furniture,
      equipment and leasehold
      improvements                     8         13          23          44
    Amortization of deferred
      financing costs included
      in interest expense (excluding
      hedge cost amortization
      reported above):
      Mortgages                      209        200         600         605
      Convertible debt                87         88         263         264

    Funds From Operations         $1,889     $1,859      $5,266      $5,305

    Funds From Operations Per
        Outstanding Share          $0.51      $0.54       $1.48       $1.53

    Additional Information:
    Shares Outstanding at end
      of period                    3,734      3,461       3,734       3,461
    Weighted Average Shares
      Outstanding:
        Primary                    3,552      3,460       3,518       3,465
        Fully diluted              8,695      8,654       8,694       8,659
    Convertible debt interest,
      excluding amortization of
      deferred financing costs    $1,920     $2,029      $5,979      $6,088

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