EXHIBIT 99.2 Contact: Susan B. Railey FOR IMMEDIATE RELEASE (301) 468-3120 Sharon Bramell (301) 468-3130 AIM 85 REPORTS FOURTH QUARTER NET EARNINGS OF 14 CENTS PER UNIT 2002 Earnings of 57 Cents per Unit ------------------------------------ ROCKVILLE, MD, March 25, 2003--(AMEX/AII) -- American Insured Mortgage Investors-Series 85, L.P. (AIM 85), a liquidating partnership that holds investments in government insured multifamily mortgages, reported net earnings for the three months ended December 31, 2002 of approximately $1.8 million (14 cents per unit) compared to approximately $2.2 million (18 cents per unit) for the three months ended December 31, 2001. AIM 85 reported net earnings for the year ended December 31, 2002 of approximately $7.1 million (57 cents per unit) compared to approximately $9.0 million (71 cents per unit) for the year ended December 31, 2001. Net earnings decreased for the three and twelve months ended December 31, 2002 as compared to the same periods in 2001 primarily due to a decrease in mortgage investment income. Mortgage investment income decreased primarily due to a reduction in the mortgage base. The mortgage base decreased as a result of 11 mortgage dispositions with an aggregate principal balance of approximately $18 million, representing an approximate 20% decrease in the aggregate principal balance of the total mortgage portfolio since December 2001. As of December 31, 2002, AIM 85 had invested in 29 fully federally insured mortgages with an aggregate amortized cost of approximately $64.9 million, a face value of approximately $66.6 million and a fair value of approximately $67.8 million. In January 2003, AIM 85 declared a distribution of four cents per unit related to the receipt of proceeds in December 2002 from the prepayment of the mortgage on Walnut Hills Apartments. Also in January 2003, the Partnership declared a distribution of 12 cents per unit related to the receipt of 90% of the proceeds from the assignment of the defaulted mortgage on Westbrook Apartments. Both amounts are payable in May 2003. As of December 31, 2002, AIM 85 held an interest in one 7.5% debenture. In January 2003, the 7.5% debenture was redeemed. A distribution of six cents per unit was declared in February 2003 and will be paid in May 2003. As of March 1, 2003, AIM 85 has not received approval from HUD for the assignment of three mortgages, with an aggregate face value of approximately $4.5 million, which have been put to HUD under the Section 221 program. On March 24, 2003, the mortgage on Town Park Apartments was put to HUD. AIM 85 will continue to accrue interest on these mortgages until the debentures are transferred to the mortgagee and AIM 85 begins receiving the debenture interest. As the Partnership continues to liquidate its mortgage investments and investors receive distributions of return of capital and taxable gains, investors should expect a reduction in earnings and distributions due to the decreasing mortgage base. 2 AMERICAN INSURED MORTGAGE INVESTORS - SERIES 85, L.P. STATEMENTS OF INCOME For the three months ended For the years ended December 31, December 31, 2002 2001 2002 2001 ------------ ------------ ------------ ------------ Income: Mortgage investment income $ 1,412,035 $ 1,830,117 $ 6,168,254 $ 7,983,600 Interest and other income 45,365 140,582 274,342 541,979 ------------ ------------ ------------ ------------ 1,457,400 1,970,699 6,442,596 8,525,579 ------------ ------------ ------------ ------------ Expenses: Asset management fee to related parties 173,565 224,973 744,733 959,934 General and administrative 90,304 92,496 411,226 382,296 ------------ ------------ ------------ ------------ 263,869 317,469 1,155,959 1,342,230 ------------ ------------ ------------ ------------ Earnings before gains (losses) on mortgage dispositions 1,193,531 1,653,230 5,286,637 7,183,349 Mortgage dispositions Gains 594,983 580,711 1,859,749 1,785,376 Losses (8,498) - (8,498) - ------------ ------------ ------------ ------------ Net earnings $ 1,780,016 $ 2,233,941 $ 7,137,888 $ 8,968,725 ============ ============ ============ ============ Net earnings per unit of limited partnership interest - basic $ 0.14 $ 0.18 $ 0.57 $ 0.71 ============ ============ ============ ============ Limited partnership units outstanding as of December 31, 12,079,514 12,079,514 12,079,514 12,079,514 ========== ========== ========== ========== Balance Sheet Data: As of December 31, 2002 2001 ------------ ------------ Investment in insured mortgages $ 66,323,565 $ 82,924,257 Total assets $ 78,237,534 $ 98,069,967