Dear Shareholder:

You are being asked to consider and vote on the merger (the
"Merger") of American Asset Advisers Realty Corporation (the
"Adviser") with American Asset Advisers Trust, Inc. (the
"Company") and the related transactions to that Merger.  This
Merger will allow the Company to take advantage of the many
rapidly developing trends in our industry by becoming self-
administered and self-managed.

This Merger is described in great detail in the accompanying
Proxy Statement, which I urge you to read thoroughly.

The Company has undergone significant growth since its formation
in August 1993.  With your help and support, we have raised over
$17,000,000 in equity capital. The net proceeds of these
offerings have been used to assemble an attractive portfolio of
high-quality, commercial properties, leased by substantial
tenants.  In the past year, we have added five properties with a
value of over $4 1/2 million and have contracted to purchase an
additional four properties with a value of over $11 million.   We
have added a prudent amount of leverage to the portfolio, thereby
increasing shareholder returns.  The Adviser has also expanded
the depth and quality of its staff to effectively manage the
existing portfolio and enhance returns by developing new
properties.

When the Company was initially formed, we decided to use external
management until the asset base grew to a size that would support
an internal management structure.  With the new and potentially
profitable Management Subsidiary structure that many of our
competitors have adopted, we are now at that point.

This next step in the growth of the Company complements the
recent amendments to the Company's Bylaws and Articles of
Incorporation which were approved at the shareholder's meeting
held on November 12, 1997.  We continue to seek to increase
shareholder value.  By becoming a self-managed REIT with internal
acquisition and turnkey development capabilities, the Company
will position itself for accelerated, high quality growth.  This
growth, within a self-managed structure, will in turn create
attractive circumstances in which we can list the Company's
shares on a national exchange and maintain a liquid market for
the shares.

There are numerous risks associated with this transaction.  For
further discussion of these and other risks, I urge you to review
the summary of risks contained in this brochure and the more
detailed description of risks as contained in the section  "Risk
Factors" in the Proxy Statement.

Your Board of Directors has carefully considered both the risks
and benefits of the Merger and has unanimously recommended that
you vote "YES" to the proposal.

The Real Estate Investment Trust Industry has preformed well over
the past five years, as less expensive capital has become
available.   The companies that have created value for their
shareholders have taken advantage of this by growing their asset
base and growing their earnings base.  I believe that by voting
"YES" to this proposal, you will position the Company to follow
the same path and successfully compete with the larger and more
established REITs.

Should you have any questions or need assistance with the proper
completion and return of the accompanying Ballot, please contact
me personally or my office, toll free at 1-800-888-4400.

In your Company, we have assembled a strong portfolio of
properties.   This Merger will combine this portfolio with the
Adviser's strong management and acquisition team.  The next phase
of growth and the success of our long-term growth plan require
this step.  I look forward to our exciting progress in the coming
years.

Sincerely,

/s/

H. Kerr Taylor
Chairman of the Board of Directors