EXHIBIT 99.1
Contact: Susan B. Railey FOR IMMEDIATE RELEASE
(301) 468-3120
Sharon Bramell
(301) 231-0351
AIM 85 REPORTS FIRST QUARTER NET EARNINGS
OF 12 CENTS PER UNIT
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ROCKVILLE, MD, May 6, 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 March 31, 2003 of approximately $1.5 million (12
cents per unit) compared to approximately $2.6 million (21 cents per unit) for
the three months ended March 31, 2002. Net earnings decreased compared to the
corresponding period in 2002 primarily due to decreases in gains on mortgage
dispositions and mortgage investment income.
Gains on mortgage dispositions decreased for the three months ended March
31, 2003, as compared to the corresponding period in 2002. During the first
three months of 2003, AIM 85 recognized gains of approximately $453,000 from the
prepayment of one mortgage and the assignment of two mortgages. This compares to
gains recognized of approximately $1.2 million from the prepayment of one
mortgage and the assignment of three mortgages during the first three months of
2002. Mortgage investment income decreased for the first quarter of 2003 as
compared to the first quarter of 2002, primarily due to a reduction in the
mortgage base. The mortgage base has decreased approximately 19% since April
2002 due to ten mortgage dispositions with an aggregate principal balance of
approximately $14.8 million.
As of March 31, 2003, AIM 85 had invested in 26 insured mortgages and one
debenture, described below, with an aggregate amortized cost of approximately
$62.6 million, an aggregate face value of approximately $63.8 million and an
aggregate fair value of approximately $64.8 million. A distribution of 7.5 cents
per unit was declared in April 2003, payable on August 1, 2003, related to
proceeds received in March 2003 from the prepayment of the mortgage on
Stonebridge Apartments.
In February 2003, HUD issued a 6.375% debenture in exchange for the
mortgage on Baypoint Shoreline Apartments. The mortgage was owned jointly by AIM
85 and AIM 84. AIM 85 is entitled to receive 50%, or approximately $906,000, of
the face value of the debenture when redeemed. As of May 1, 2003, AIM 85 has not
received approval from HUD for the assignment of five mortgages, with an
aggregate face value of approximately $6.8 million, which have been put to HUD
under the Section 221 program. 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 from HUD.
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
(Unaudited)
For the three months ended
March 31,
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2003 2002
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Income:
Mortgage investment income $ 1,321,225 $ 1,620,471
Interest and other income 24,024 106,204
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1,345,249 1,726,675
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Expenses:
Asset management fee to related parties 163,451 189,781
General and administrative 107,091 98,974
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270,542 288,755
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Net earnings before gains on
Mortgage dispositions 1,074,707 1,437,920
Gains on mortgage dispositions 452,826 1,169,159
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Net earnings $ 1,527,533 $ 2,607,079
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Net earnings allocated to:
Limited partners - 96.1% $ 1,467,959 $ 2,505,403
General Partner - 3.9% 59,574 101,676
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$ 1,527,533 $ 2,607,079
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Net earnings per unit of limited
partnership interest - basic $ 0.12 $ 0.21
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Limited partnership units outstanding - basic 12,079,514 12,079,514
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Balance Sheet Data: March 31, December 31,
2003 2002
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Investment in insured mortgages $ 62,825,057 $ 66,323,565
Total assets 70,364,408 78,237,534