NEUBERGER BERMAN REAL ESTATE INCOME FUND INC.
                                605 THIRD AVENUE
                               NEW YORK, NY 10158-0180



      NEUBERGER BERMAN REAL ESTATE INCOME FUND COMMENCES SELF TENDER OFFER
                TO REPURCHASE UP TO 943,704 OF ITS COMMON SHARES

      NEW YORK, NY, October 1, 2004 -- Neuberger Berman Real Estate Income Fund
Inc. (NYSE: NRL) commenced today its previously announced self-tender offer for
up to 943,704 shares, or 20%, of its outstanding common stock, at a price of
$20.00 net per share, or a total of approximately $18.8 million if the Fund
purchases the maximum number of shares. The tender offer will expire at 12:00
midnight, New York City time, on October 29, 2004, unless the Fund extends the
tender offer.

      The Fund's Board of Directors has authorized this tender offer as one of
several steps in its plan to defend the Fund and its stockholders against the
unsolicited, partial and coercive tender offer commenced on September 10, 2004
by two trusts controlled by Stewart R. Horejsi. The Board recommends that
stockholders not tender into the Fund's self tender offer or the offer commenced
by the Horejsi trusts. However, if a stockholder requires liquidity and is
inclined to tender into either offer, the Board urges that such stockholder
tender only into the Fund's self-tender.

      The information agent for the tender offer is Georgeson Shareholder
Communications Inc. and the depositary is The Bank of New York. The offer to
purchase and related documents are being mailed to stockholders of record and
will be made available for distribution to beneficial owners of the Fund's
shares. For questions or information, please call the information agent toll
free at 877-255-0133.


Neuberger Berman Management Inc., the Fund's investment manager, is a subsidiary
of Neuberger Berman Inc., an investment advisory company serving individuals,
families, and taxable and non-taxable institutions with a broad range of
investment products, services and strategies. A Lehman Brothers company,
Neuberger Berman engages in wealth management services including private asset
management, tax and financial planning, and personal and institutional trust
services; mutual funds, institutional management and alternative investments;
and professional securities services. For further information about Neuberger
Berman please visit WWW.NB.COM.

Lehman Brothers (ticker symbol NYSE: LEH), an innovator in global finance,
serves the financial needs of corporations, governments and municipalities,
institutional clients, and high-net-worth individuals worldwide. Founded in
1850, Lehman Brothers maintains leadership positions in equity and fixed income
sales, trading and research, investment banking, private equity, asset
management and private client services. The Firm is headquartered in New York,
London, and Tokyo and operates in a network of offices around the world. For



further information about Lehman Brothers' services, products, and recruitment
opportunities, visit our Web site at WWW.LEHMAN.COM


Contact:
Peter Sundman
President
Neuberger Berman Management Inc.
(877) 461-1899

Media Contact:
Kerrie Cohen
Lehman Brothers
(212) 526-4092


FORWARD-LOOKING STATEMENTS

Statements made in this release that look forward in time involve risks and
uncertainties and are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such risks and uncertainties
include, without limitation, the adverse effect from a decline in the securities
markets or a decline in the Fund's performance, a general downturn in the
economy, competition from other funds, changes in government policy or
regulation, inability of the Fund's investment advisor to attract or retain key
employees, inability of the Fund's investment advisor to implement its
investment strategy, inability of the Fund to manage unforeseen costs and other
effects related to legal proceedings or investigations of governmental and
self-regulatory organizations.