CHARLOTTE, N.C., Jan. 27 /PRNewswire/ -- Boddie-Noell Properties, Inc.
(Amex: BNP) today announced operating results for the quarter ended December
31, 1998, and fiscal year 1998.

    Overview

    Boddie-Noell Properties, Inc. is a real estate investment trust focused on
owning and operating apartment communities.  During 1998, we continued to
increase our investment in apartments with the acquisition of five apartment
communities containing 980 units.  We also acquired an apartment community
containing 252 units in January 1999.  As a result of these acquisitions, we
now own and operate fifteen apartment communities containing a total of
3,440 apartments.  We also have the right to acquire an additional apartment
community containing 108 units, which is currently under construction.  BNP
Management, Inc., an unconsolidated subsidiary, provides third-party
management services for four apartment communities, containing a total of 891
apartments, and one shopping center.  In addition to our apartment properties,
we own 47 restaurant properties, which are leased on a triple net basis to a
restaurant operator.  We, along with our management subsidiary, operate in the
states of North Carolina and Virginia.

    Results of Operations for 1998

    See Tabular Information Below

    Funds from Operations.   Operating results for the year 1998 were in line
with management's expectations.  As a result of the acquisition of four
apartment communities in December of 1997 and the acquisition of five
apartment communities during 1998, funds from operations for the year
increased by 78.7 percent to $8,584,000 in 1998 from $4,804,000 in 1997.  On a
per share basis, funds from operations decreased 4.0 percent to $1.45 in 1998
from $1.51 in 1997.  The decrease in the per share amount reflects an
86.3 percent increase in the number of weighted shares outstanding in 1998.

    Funds Available for Distribution.   For 1998, funds available for
distribution for the Company's operating partnership increased by 111.0% to
$9,178,000 in 1998 from $4,349,000 in 1997.

    Revenues.  For 1998, revenues increased by 67.0 percent over 1997.  This
increase in total revenue was primarily due to an increase in apartment
revenues.

    Apartment Operations.  Revenues from our apartments increased by 95.8
percent for the year.  The increase in apartment revenues was attributable to
the acquisition of five apartment communities during the year and the
inclusion for the full year of four apartment communities acquired in December
1997.  Average economic occupancy for all apartments was 94.7 percent for 1998
as compared to 95.3 percent in 1997.  Revenue per occupied unit for all
apartments was $737 per month for 1998 as compared to $698 per month in 1997.
    On a "same-store" basis, revenue for apartments owned in both years
decreased by 0.4 percent.  Average economic occupancy for these units
decreased by 0.6 percent to 94.7 percent for 1998 as compared to 95.3 percent
for 1997.  Average revenue per occupied unit was flat at $700 per month in
1998 as compared to $698 per month in 1997

    Restaurant Operations.  For the year, restaurant rental revenues remained
unchanged.  Restaurant sales declined by 0.9 percent to $43,817,000 for the
year. The difference in the trends for rental revenue and sales is the result
of the minimum rent provision of the restaurant lease.  Under the lease,
restaurant rental payments are the greater of minimum rent, $4,500,000 per
year, or 9.875 percent of food sales.  For the year 1998, the rental payment
was the $4,500,000 minimum rent.  For us to begin to receive rent in excess of
the minimum rent, restaurant sales would need to increase by 4.0%.

    Management Operations.  All third-party management activities are
conducted by BNP Management, which currently provides property management
services for four apartment properties and one shopping center. We own a 95
percent economic interest and a 1 percent voting interest in this management
subsidiary and receive significantly all net income of the subsidiary.  Equity
in the income of this subsidiary totaled approximately $115,000 for 1998.

    Expenses.  For the year, expenses were in line with management's
expectations.  Apartment operations expense increased 102.5 percent.  This was
primarily attributable to the increase in the number of apartments and costs
associated with incorporating the newly acquired communities into our
portfolio.  Also contributing to the increase in apartment operations expense
was an increase in costs associated with attracting and retaining residents in
a competitive apartment market, continued emphasis on preventative
maintenance, and increased cost of labor.

    Earnings.  For the year, net income before an extraordinary charge of
$51,000 was $0.63 per share as compared to $0.60 per share in 1997.  The
extraordinary charge in 1998 represented the write-off of certain costs
associated with the repayment of loans.  After extraordinary charges in both
1998 and 1997, net income for 1998 was $0.62 per share versus $0.54 per share
in 1997.  In 1997, there was an extraordinary charge of $183,000 representing
the write-off of certain costs associated with the repayment of loans with
proceeds of the secondary offering.

    Dividends.  During 1998, we paid dividends of $1.24 per share.  Of this
amount, 55.16 percent was considered to be ordinary income and 44.84 percent
was classified as non-taxable return of capital.  The ratio of dividends paid
to funds from operations was 85.5 percent in 1998 as compared to 80.2 percent
in 1997.

    Results of Operations for the Fourth Quarter of 1998

    Funds from operations for the fourth quarter increased by 61.9 percent as
compared to the fourth quarter of 1997.  On a per share basis, funds from
operations for the fourth quarter decreased to $0.38 in 1998 from $0.42 in
1997.  The decrease is primarily attributable to a 75.7 percent increase in
the weighted average number of shares outstanding in the fourth quarter of
1998 compared to the fourth quarter of 1997.
    For the fourth quarter of 1998, funds available for distribution for the
Company's operating partnership increased by 89.2 percent to $2,578,000 from
$1,363,000 in the fourth quarter of 1997.
    Revenues for the fourth quarter increased by 72.5 percent over 1997.  For
the quarter, apartment rental income increased by 101.2 percent over the same
period in 1997.  The increases in total revenues and apartment rental income
are primarily attributable to the acquisition of five apartment communities in
1998 and the inclusion for the full period of the four apartment communities
acquired in December 1997.  For the fourth quarter, average economic occupancy
for all apartments was 94.2 percent in 1998 as compared to 94.7 in 1997.
Revenue per occupied unit for all apartments in the fourth quarter was $736
per month in 1998 as compared to $713 per month in 1997.
    On a "same-store" basis apartment revenue for the fourth quarter of 1998
decreased by 2.0 percent from 1997.  "Same-store" average economic occupancy
for the quarter decreased by 0.8 percent to 93.9 percent in 1998 from 94.7
percent in 1997, while average revenue per occupied unit was $707 per month as
compared to $713 per month in 1997.
    Restaurant rental revenues for the quarter remained unchanged from 1997.
Restaurant sales for the quarter increased by 0.8 percent.  The difference
between sales and restaurant rental revenues was due to the impact of the
restaurant lease's minimum rent provision.  For the fourth quarter of 1998, we
received minimum rent.
    Increases in expenses for apartment operations, depreciation and
amortization, and interest for the fourth quarter were primarily attributable
to the increase in the number of apartments.
    For the fourth quarter, net income was $0.15 per share as compared with
$0.13 in 1997.  In 1997, there was an extraordinary charge of $183,000
representing the write-off of certain costs associated with the repayment of
loans with proceeds of the secondary offering.  Before the extraordinary
charge, net income for the fourth quarter of 1997 was $0.18 per share.
    During the fourth quarter of 1998, we paid a regular quarterly dividend of
$0.31 per share.
    You may request information via e-mail to our investor relations
department at investor.relations@bnproperties.com or via telephone at
(704) 944-0100.

    BODDIE-NOELL PROPERTIES, INC.
    Consolidated Statements of Operations and Funds from Operations
    Dollars in thousands, except per share data

                                 Three months ended     Twelve months ended
                                    December 31             December 31
                                 1998      1997          1998         1997

    Revenues
    Apartment rental income   $  6,638    $ 3,299     $ 21,925    $  11,197
    Restaurant rental income     1,125      1,125        4,500        4,500
    Management fees and other      243        219          715          555
                                 8,006      4,642       27,140       16,252
    Expenses
    Apartment operations         2,265      1,009        7,181        3,546
    Depreciation and
     amortization                1,796        904        5,937        3,266
    Administrative                 314        266        1,333        1,000
    Interest                     2,545      1,803        8,209        6,487
                                 6,920      3,982       22,660       14,299
    Income before minority interest
     and extraordinary item      1,086        660        4,480        1,953
    Minority interest in
     operating partnership         218         39          742           39
    Income before extraordinary
     item                          867        621        3,738        1,913
    Extraordinary item - loss on early
     extinguishment of debt         --        183           51          183
    Net income                 $   867      $ 438      $ 3,686      $ 1,730

    Income before minority interest
     and extraordinary item    $ 1,086      $ 660      $ 4,480      $ 1,953
    Add:
     Depreciation                1,657        763        5,406        2,686
     Amortization of management
      intangible                   102        102          406          380
    Deduct:
     Minority interest in FFO of
      operating partnership       (557)      (112)      (1,708)        (112)
     Non-recurring items excluded from
      FFO measurement               --         --           --         (103)
    Funds from Operations      $ 2,287     $1,413      $ 8,584      $ 4,804

    Per share amounts:
     Income before
      extraordinary item       $  0.15     $ 0.18      $  0.63      $  0.60
     Net income                $  0.15     $ 0.13      $  0.62      $  0.54
     Funds from operations     $  0.38     $ 0.42      $  1.45      $  1.51
     Weighted average shares
      outstanding                5,972      3,399        5,924        3,180

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