8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)
March 13, 2007

Commission File Number
0-28378

AmREIT

(Exact name of registrant as specified in its charter)

TEXAS	76-0410050
(State or other jurisdiction of Incorporation or organization)	(IRS Employer Identification No.)
8 Greenway Plaza, Suite 1000, Houston, Texas 77046	713-850-1400
(Address of principal executive offices)	(Registrant’s telephone number)
[N/A]
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction  A.2.):

o Written communications pursuant to Rule 425 under the Securities Act  (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act  (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (7 CFR 240.13e-4(c))

TABLE OF CONTENTS

Item 2.02.  Results of Operations and Financial Condition

          On March 13, 2007, the Company issued a press release announcing its financial results for the fourth quarter and year ended December 31, 2006.  A copy of the press release issued by the Company is attached hereto as Exhibit 99.1.  Attached as Exhibit 99.2 is the Supplemental Financial Information which accompanies this press release.

          The Company’s press release announcing its financial results for its fourth quarter and year ended December 31, 2006, contains non-GAAP financial measures.  Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with United States generally accepted accounting principles, or GAAP.  Pursuant to the requirements of Regulation G, the Company has provided quantitative reconciliations within the press release of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

          The press release attached to this Form 8-K as Exhibit 99.1 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities of that section.           

Item 9.01.  Financial Statement and Exhibits

Exhibits.	The following exhibits are furnished as part of this current report on Form 8-K:
99.1	Press release dated March 13, 2007
99.2	Supplemental Financial Information

1

 SIGNATURE

          Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	AmREIT
	By:	/s/ Chad C. Braun
		Chad C. Braun,
		Chief Financial Officer
Dated:  March 13, 2007

2

EX-99.1

Exhibit 99.1

AmREIT Reports Fourth Quarter and Year End Results and Announces Guidance for 2007

          HOUSTON, March 13 /PRNewswire-FirstCall/ -- AmREIT (Amex: AMY), a Houston-based real estate development and operating company that has elected to be taxed as a real estate investment trust, today announced financial results for the fourth quarter and twelve months ended December 31, 2006 as well as setting 2007 annual guidance.

          Fourth Quarter and Year-to-Date Financial Highlights:

*	Funds from Operations available to class A common shareholders (FFO) for the fourth quarter 2006 were $3.1 million, or $0.50 per share, compared with fourth quarter 2005 FFO of $1.7 million, or $0.27 per share;
*	Net income available to Class A common shareholders (Net Income) for the fourth quarter 2006 was $948,000, or $0.15 per share, compared with net income of $2.1 million, or $0.33 per share, for the same period in 2005;
*	Operating revenues for the fourth quarter 2006 increased 64.2% to $20.7 million compared with $12.6 million for the same period in 2005;
*	FFO for the twelve months 2006 were $4.7 million, or $0.75 per class A share, which is at the upper mid-point of our annual guidance of $0.71 to $0.77 per share. This compares with twelve months 2005 FFO of $3.6 million, or $0.70 per share;
*	Net loss for the twelve months 2006 was $3.9 million, or ($0.62) per class A share, compared with net income of $881,000, or $0.17 per share for the same period in 2005;
*	Operating revenues for the twelve months 2006 increased 74.6% to $59.3 million compared with $33.9 million for the same period in 2005;
*	The Board of Trust Managers declared a quarterly dividend of $0.1242 per class A common share for the first quarter 2007, which will be paid in three monthly installments;
*	On December 18, 2006 we acquired approximately 998,000 class B common shares for $9.25 per share;
*	Total assets owned by the merchant development funds in the Company’s asset advisory business increased to $281 million at December 31, 2006, compared with $95 million a year ago;
*	Total FFO available to all common shareholders exceeded total dividends paid to all classes of common shareholders by $2.3 million for the fourth quarter 2006 and $900,000 for the same period in 2005;
*	Total FFO available to all common shareholders exceeded total dividends paid to all classes of common shareholders by $1.6 million for the twelve months 2006 and $1.1 million for the same period in 2005; and
*	AmREIT announces 2007 annual FFO estimates of $0.78 to $0.82 per class A share and FFO estimates for the first quarter 2007 of $0.02 to $0.05 per class A share.  A reconciliation of income (loss) to FFO is included in the financial tables accompanying this press release.

          Commenting on the financial results for the quarter, Chad C. Braun, AmREIT’s Chief Financial Officer, noted, “We are very pleased with the execution of our business plan during 2006. We accomplished all of the transactional and operational goals that we set forth for 2006 and finished the year with strong fundamentals in our portfolio, a good pipeline of development opportunities and momentum in our advisory sponsorship business. Our strategy served us well in 2006, and we will continue to work hard in 2007 to accomplish our stated goals and deliver year-over-year returns to investors.”

          Portfolio of Irreplaceable Corners

          As of December 31, 2006, AmREIT owned 49 properties, with approximately 90.4% of its rental income coming from properties located in major Texas metropolitan areas.  The portfolio generated $7.9 million in total revenue during the fourth quarter of 2006, up 5% compared with $7.5 million generated for the same period in 2005. 

          Expenses associated with AmREIT’s portfolio during the fourth quarter were approximately $7.4 million, comprising $1.8 million in property expenses, $2.1 million in depreciation and amortization, $2.0 million in interest expense and $1.5 million in general and administrative expense.  Earnings were further reduced by $1.2 million due to the allocation of dividends from the Company’s non-traded shares on a pro-rata basis based on net income contribution of the segment, resulting in a net loss of $732,000, or ($0.12) per class A common share. FFO contributions from the portfolio totaled approximately $1.4 million, or $0.22 per class A common share, for the quarter.  Overall occupancy as of December 31, 2006, was approximately 96.5%.

          H. Kerr Taylor, Chairman and Chief Executive Officer of AmREIT, added, “Our most important asset is the stability of recurring income generated by our portfolio of Irreplaceable Corners and over $281 million of assets under management. We continued to improve the value of the largest component of this recurring income -- the Irreplaceable Corners -- with another strong quarter of leasing results and improvement in occupancy and operating margins.  The outlook for this portfolio in 2007 is equally as bright as we expect strong same-property NOI growth to provide a solid foundation for year-over-year improvement while the opportunity to expand the size of the portfolio through new institutional relationships could potentially lead to more accelerated growth.” 

          Real Estate Development and Operations

          AmREIT’s real estate development and operating business generated $5.7 million (including discontinued operations and net of construction expense) in total revenue during the fourth quarter, an increase of 90% compared with the $3.0 million generated in the fourth quarter of 2005.  The increase in the real estate development and operating business is due to timing of transactional activities.

          Expenses associated with this line of business for the fourth quarter were approximately $2.6 million, resulting in net income to class A common shares of $3.1 million.  Earnings were further reduced by $1.5 million due to the allocation of dividends from the Company’s non-traded shares on a pro-rata basis based on net income contribution of the segment, resulting in net income of $1.7 million, or $0.27 per class A common share.  FFO contributions from the real estate development and operations business totaled approximately $1.7 million, or $0.27 per class A common share, for the quarter.  This business is transactional in nature, and the timing of these contributions from quarter to quarter is difficult to predict. 

          AmREIT’s pipeline of development and re-development opportunities for third parties and for its asset advisory group includes approximately 623,000 square feet under various stages of development.  Together, this represents over $86 million in active development and re-development projects. Of this, 100,000 square feet is scheduled for completion in 2007. 

          Taylor added, “Consistent with previous years, the fourth quarter was our most active of the year for transactions. We purchased four shopping centers totaling 719,000 square feet and $129 million on behalf of our affiliated funds, established a new relationship with joint venture partner JP Morgan Asset Management and leveraged the deal sourcing capabilities of our new Dallas office. The ability to attract one of the leading institutional real estate investors in the country speaks to the experience and talent of our development and acquisitions team as well as our track record of unlocking value through new and redevelopment opportunities. With another active year planned for 2007 and the possibility of expanding into one or two new markets, we expect our team to further develop the potential of this business in a meaningful way.”

          Asset Advisory Business

          As of December 31, 2006, AmREIT had a combined $121 million in equity capital under management in its five actively managed income and growth funds. For the quarter, this group generated total revenues of $2.6 million, with $2.4 million related to securities operations and securities commissions earned on sales of units in the merchant development funds and $267,000 related to recurring asset management fees and general partner interests. 

          For the quarter, expenses associated with this line of business were approximately $2.6 million, comprising $2.0 million in securities commission expense and $600,000 of general and administrative and other expenses.  The asset advisory group broke even for the quarter, and therefore did not directly contribute to or reduce FFO for the quarter. 

          “As we expected, the short-term cost for building up staffing to facilitate future growth offset the more strategic improvements made in our advisory and sponsorship business during 2006,” Taylor noted. “We were successful in increasing the equity capital under management by $60 million to $121 million in 2006 and expect to exceed that growth in 2007 as we support aggressive plans to expand our fee-driven acquisition and development operations. To further leverage the infrastructure we have in place, we also expect to build on our reputation as a Best of Class Sponsor and significantly expand the size of our funds business. We anticipate the latter part of 2007 to be the inflection point for the growth in advisory and sponsorship as we capitalize on the favorable demand for this product in the market and turn this business into a contributor to the bottom line.”

          Class B Tender Offer

          On October 11, 2006, AmREIT commenced a tender offer to purchase all of its outstanding Class B common shares, which totals approximately 2.1 million shares, at a cash price of $9.25 per share. The Offer ended on December 18, 2006, and resulted in the acquisition of 998,000 tendered shares for a total of $9.2 million.

          The Company funded the tender offer through debt, initially with its credit facility, in order to reduce its cost of capital and provide additional liquidity for the Class B shareholders. The transaction will be accretive for the Company in 2007.

          2007 Estimates and Assumptions

          Our FFO guidance of $0.78 to $0.82 per class A share represents an increase of 4% to 9% compared to our FFO in 2006 of $0.75 per class A share.  Consistent with previous years, earnings and FFO are expected to be uneven quarter by quarter due to the transactional nature of our business. 

          AmREIT will continue to pay dividends to its class A shareholders on a monthly basis.  Our dividend policy calls for us to evaluate dividends based on our annual FFO and our ability to cover our annual dividends with recurring FFO.  We anticipate that our 2007 dividends will remain consistent with those paid in 2006, and that we will be able to cover our recurring dividends with recurring income.

          As we continue to evaluate our strategy to simplify the equity portion of our balance sheet and reduce our overall cost of capital, we may incur certain non-cash charges to earnings as a result of any premiums paid on such recapitalizations.  These transactions have not been contemplated in our guidance or assumptions.  If we proceed with any of these transactions during 2007, we will report FFO as “Modified FFO,” which will add back these one time, non-cash charges to earnings.

          Following are the assumptions underlying our projected 2007 earnings and FFO guidance.

          Portfolio of Irreplaceable Corners

          We expect FFO contribution in 2007 from our portfolio of Irreplaceable Corners to be $0.62 to $0.64 per class A share, contributing approximately 78 percent of total estimated FFO.  This FFO contribution is based on the following estimates and assumptions:

*	Rental and earned income is anticipated to be $24.7 million for the year, net of a vacancy allowance, representing an increase over prior year of approximately 3 percent;
*	Recovery income is estimated to be $7.6 million, with a corresponding property expense of $7.7 million, resulting in $100,000 in leakage due to vacancy and non-reimbursable expenses;
*	The only budgeted property additions for the portfolio are a series of five ground lease properties purchased during the first quarter.  These properties were purchased in February for approximately $9 million and their revenue impact has been factored into the rental number above;
*	Total revenue for this segment is expected to be approximately $32.6 million;
*	Interest expense is estimated to be approximately $8.9 million. Approximately 92 percent of our debt has a fixed interest rate with an average term of approximately 7 years; and
*	The G&A run rate on our portfolio is expected to track approximately $700,000 per quarter during the first half of the year and grow to approximately $975,000 per quarter during the second half of the year due to the way that incentive compensation is measured and earned and the seasonality of certain G&A.

          Asset Advisory and Sponsorship Operations

          We expect FFO contribution in 2007 from our asset advisory operations to be $0.16 to $0.18 per class A share, contributing approximately 22 percent of total estimated FFO.  This FFO contribution is based on the following estimates and assumptions: 

*	Development fees are estimated to be approximately $1.3 million for the year.  We currently have four development projects underway, representing approximately 67% of the forecasted fees.  We are forecasting to secure three additional development projects during 2007, representing approximately 33% of the forecasted fees.  These fees are expected to be earned evenly throughout the year;
*	Our construction management and general contracting business is anticipated to generate $6.1 million in revenue during 2007, primarily related to the above development projects.  This revenue will be offset with approximately $4.8 million in direct, project related expenses;
*	Property management fees are expected to be approximately $900,000 during 2007, with approximately $350,000 during the first half of the year, growing to $550,000 in the second half of the year based on asset growth in our actively management funds;

*	Real estate commissions and acquisition fees are estimated to be approximately $9.2 million during the year.  These commissions and fees are transaction oriented and are difficult to predict in any given quarter.  We do not anticipate any material transactions in the first quarter, resulting in the lion’s share of this revenue to be generated in the second half of the year;
*	These real estate revenues will be offset by approximately $7.6 million in G&A.  The G&A run rate on our real estate operations is approximately $1.3 million per quarter, with the balance being directly attributable with the transactional activity;
*	Recurring asset management fees are expected to be approximately $1.4 million, starting at approximately $300,000 in the first quarter and growing to approximately $440,000 in the fourth quarter as we raise additional capital through our broker dealer network; and
*	Commission income associated with our fund raising activities are expected to be approximately $11.2 million, which is partially offset by third party commission expense of approximately $8.5 million, resulting in net commission income of $2.7 million.  This net commission income is more than offset with approximately $3.6 million in G&A associated with raising the capital.

          AmREIT updates earnings guidance on a quarterly basis and will update its annual guidance as well as give guidance for the upcoming quarter.

          Conference Call

          AmREIT will hold its quarterly conference call to discuss fourth quarter 2006 results Wednesday, March 14, at 10:00 a.m. Central Time (11:00 a.m. Eastern Time). Interested parties are encouraged to access the live webcast by visiting the investor relations page of AmREIT’s website at www.amreit.com.  The dial-in number for the call is 1-877-407-8031. The call will also be available for replay for 60 days by dialing 1-877-660-6853, account number 286, ID number 232013.

          Supplemental Financial Information

          Further details regarding AmREIT’s results of operations, properties, and tenants can be accessed at the Company’s web site at www.amreit.com.

          About AmREIT

          AmREIT (AMEX: AMY) is a growing real estate company that has delivered results to its investors for 22 years.  Our mission is to build a real estate business with complementary operations that reduce our overall sensitivity to changing market cycles -- a company with strong earnings potential from multiple sources. This mission has led AmREIT into three distinct businesses. First, as a real estate development and operating company, it constructs, develops, acquires, disposes of, brokers, leases and manages properties for shareholders as well as for its asset advisory group and third parties. Second, AmREIT has an asset advisory group which raises private capital for and generates fees from merchant development partnership funds. Third, AmREIT owns a portfolio of “Irreplaceable Corners(TM)” -- premier retail properties in high-traffic, highly populated areas -- which are held for long-term value and provide a steady stream of rental income.  As of December 31, 2006, AmREIT has over 600,000 square feet of retail centers in various stages of development or in the pipeline for both our advisory group and for third parties.  As of December 31, 2006, total assets were $328 million and the asset advisory group managed an additional $281 million in total assets. 

          In addition to historical information, this press release contains forward-looking statements under the federal securities law. These statements are based on current expectations, estimates and projections about the industry and markets in which AmREIT operates, management’s beliefs and assumptions made by management. Past performance is not indicative of future returns. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict.

          For more information, call Chad Braun, Chief Financial Officer of AmREIT, at (713) 850-1400. AmREIT is online at www.amreit.com.  

(Tables to Follow)

Operating Results
(in thousands, except share and per share data)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2006			2005			2006			2005
Revenues:
Rental income from operating leases	$	7,413		$	6,959		$	28,158		$	20,484
Earned income from direct financing leases		508			508			2,030			2,030
Real estate fee income		556			133			1,334			485
Real estate fee income - related party		4,409			1,219			6,983			4,588
Construction revenues		1,380			1,636			3,025			2,302
Construction revenues - related party		3,749			1,361			10,435			2,434
Securities commission income - related party		2,382			644			6,554			1,163
Asset management fee income - related party		267			128			823			495
Total revenues		20,664			12,588			59,342			33,981
Expenses:
General and administrative		3,251			2,529			9,489			6,209
Property expense		1,648			2,089			6,851			4,860
Construction expense		4,782			2,784			12,290			4,283
Legal and professional		642			373			1,559			1,593
Real estate commissions		502			68			1,042			266
Securities commissions		2,038			563			5,732			1,012
Depreciation and amortization		2,120			2,061			8,741			6,046
Total expenses		14,983			10,467			45,704			24,269
Operating income		5,681			2,121			13,638			9,712
Other income (expense):
Interest and other income - related party		555			191			1,425			705
Income from merchant development funds and other affiliates		448			(27	)		967			161
Federal income tax (expense) benefit for taxable REIT subsidiary		(1,223	)		99			(870	)		(379	)
Interest expense		(2,150	)		(1,690	)		(8,083	)		(6,412	)
Minority interest in income of consolidated joint ventures		(40	)		(152	)		(150	)		(240	)
Income before discontinued operations		3,271			542			6,927			3,547
Income from discontinued operations		20			2,107			254			3,356
Gain on sale of real estate acquired for resale		370			2,351			382			3,223
Net income		3,661			5,000			7,563			10,126
Distributions paid to Class B, C and D shareholders		(2,713	)		(2,897	)		(11,442	)		(9,245	)
Net income (loss) available to class A shareholders	$	948		$	2,103		$	(3,879	)	$	881

(in thousands, except share and per share data)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2006			2005			2006			2005
Reconciliation of Net Income before discontinued operations to Funds From Operations (“FFO”):
Income before discontinued operations	$	3,271		$	542		$	6,927		$	3,547
Income from discontinued operations		390			4,458			636			6,579
Depreciation - from operations		2,141			2,210			8,766			5,952
Depreciation - from discontinued operations		—			177			16			111
Adjustments for non-consolidated affiliates		21			35			132			100
Gain on sale of real estate held for investment		1			(2,805	)		(285	)		(3,400	)
Class B, C and D distributions		(2,713	)		(2,897	)		(11,442	)		(9,245	)
FFO available to Class A shares	$	3,111		$	1,720		$	4,750		$	3,644
Basic and Diluted Per Class A Share Data:
Income (loss) before discontinued operations	$	0.09		$	(0.36	)	$	(0.72	)	$	(1.09	)
Income from discontinued operations	$	0.06		$	0.69		$	0.10		$	1.26
Net income (loss)	$	0.15		$	0.33		$	(0.62	)	$	0.17
FFO	$	0.50		$	0.27		$	0.75		$	0.70
Distributions per Class A share	$	0.12		$	0.12		$	0.50		$	0.50
Distributions per Class B, C and D share	$	0.52		$	0.52		$	2.08		$	2.08
Share Data:
Weighted average Class A common shares used to compute net income per share, basic and diluted		6,237,500			6,446,377			6,299,879			5,204,914

Market Capitalization Table

Common Shares Outstanding (12/31/06)	Number of Shares		Price		Market Equity
Class A, net of treasury shares		6,257,712	$	8.33		52,126,741
Class B		1,080,180	$	8.33		8,997,899
Class C (priced at par value)		4,145,531	$	10.00		41,455,310
Class D (priced at par value)		11,039,803	$	10.00		110,398,030
Total		22,523,226				212,977,980

Balance Sheet Highlights
(in thousands)

	December 31, 2006		December 31, 2005
Real estate investments before accumulated depreciation	$	312,405	$	290,097
Real estate held for investment, net		261,198		241,301
Net investment in direct financing leases		19,204		19,212
Real estate held for resale, net		2,708		3,569
Total assets		328,419		314,971
Notes payable		144,453		114,687
Total liabilities		158,232		126,510
Minority interest		1,137		1,176
Total shareholders’ equity		169,050		187,285

Non-GAAP Financial Disclosure

          This press release contains certain non-GAAP financial measures that management believes are useful in evaluating an equity REIT’s performance. AmREIT’s definitions and calculations of non-GAAP financial measures may differ from those used by other equity REIT’s, and therefore may not be comparable. The non-GAAP financial measures should not be considered as an alternative to net income as an indication of our operating results, or to net cash provided by operating activities as a measure of our liquidity.    

           AmREIT considers FFO to be an appropriate measure of the operating performance of an equity REIT. The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as net income computed in accordance with generally accepted accounting principles (“GAAP”), excluding gains or losses from sales of property, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. AmREIT calculates its FFO in accordance with this definition. Management considers FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions and excluding depreciation, FFO is a helpful tool that can assist in the comparison of the operating performance of a company’s real estate between periods, or as compared to different companies. FFO is not defined by GAAP and should not be considered as an alternative to net income as an indication of our operating performance or to net cash provided by operating activities as a measure of our liquidity. FFO as disclosed by other REITs may not be comparable to AmREIT’s calculation.    

           Projected FFO is calculated in a method consistent with historical FFO, and AmREIT considers projected FFO to be an appropriate supplemental measure when compared with projected EPS. A reconciliation of the projected FFO to projected EPS per share is provided below:

	Projected 2007 Range						Historical 12/31/06
	High			Low
Net (loss)/income available to Class A shareholders	$	(0.57	)	$	(0.61	)	$	(0.62	)
Depreciation and amortization		1.39			1.39			1.40
Adjustment for non-consolidated affiliates		—			—			0.02
Less gain on sale of real estate		(0.00	)		(0.00	)		(0.05	)
FFO available to Class A shareholders	$	0.82		$	0.78		$	0.75

SOURCE  AmREIT
          -0-                              03/13/2007
          /CONTACT:  Chad Braun, Chief Financial Officer of AmREIT, +1-713-850-1400/
          /Web site:  http://www.amreit.com /
          (AMY)

EX-99.2

Exhibit 99.2

Supplemental Financial Information

December 31, 2006

(Unaudited)

Table of Contents

	Page #
Corporate Profile	1
Consolidated Balance Sheets	2
Consolidated Statements of Operations	3
Consolidated Statements of Operations - Segments	4 - 7
Summary of Operating Results
Funds From Operations	8
Dividends – All Classes of Common Shares	8
Rental Income	9
Real Estate Revenue Allocation	9
Discontinued Operations	10
Interest Expense	10
Summary Balance Sheet Information
Common Share Data	11
Capitalization	11
Net Asset Valuation	11
Debt Information
Outstanding Balances and Terms	12 - 13
Fixed vs. Variable Rate Debt	13
Property & Tenant Information
Property Table	14 - 15
Tenant Diversification	16
Leasing Activity Report	16
Lease Expiration Schedule	17

This Supplemental Financial Information package contains historical information of the Company and is intended to supplement the Company’s Annual Report on Form 10-K for the twelve months ended December 31, 2006.  All financial information in this Supplemental Financial Information package is shown in thousands, except for per share data and share information.

Certain information contained in this Supplemental Financial Information package includes certain forward-looking statements reflecting AmREIT’s expectations in the near term that involve a number of risks and uncertainties; however, many factors may materially affect the actual results, including demand for our properties, changes in rental and occupancy rates, changes in property operating costs, interest rate fluctuations, and changes in local and general economic conditions.  Accordingly, there is no assurance that AmREIT’s expectations will be realized.

Corporate Profile:

AmREIT (AMEX: AMY) is a growing real estate company focused on the development, acquisition, construction, disposition, brokerage, leasing and management of shopping centers in major metropolitan markets throughout the Southwest and Southeast.  The company deploys its broad range of real estate development and operating expertise to grow two distinct businesses within AmRIET.  The first is a 1.0 million square foot portfolio of “Irreplaceable Corners TM” – Premier retail properties in high traffic, densely populated areas.  The second is an advisory and sponsorship business that had a total of $280 million in assets under management as of December 31, 2006.  Founded in 1985, AmREIT is a fully integrated equity real estate investment trust that has been public since 2002.

Corporate Office:

8 Greenway Plaza, Suite 1000

Houston, Texas  77046

(800) 888-4400

(713) 850-0498 (fax)

www.amreit.com

Stock Exchange:

American Stock Exchange – AMY

1

Consolidated Balance Sheets (in thousands):

	December 31 2006			December 31, 2005
	(unaudited)
ASSETS
Real estate investments at cost:
Land	$	122,043		$	112,784
Buildings		140,487			127,094
Tenant improvements		9,296			7,366
		271,826			247,244
Less accumulated depreciation and amortization		(10,628	)		(5,943	)
		261,198			241,301
Real estate held for sale, net		2,708			3,569
Net investment in direct financing leases held for investment		19,204			19,212
Intangible lease cost, net		16,016			17,761
Investment in merchant development funds and other affiliates		2,651			2,311
Net real estate investments		301,777			284,154
Cash and cash equivalents		3,415			5,915
Tenant receivables		4,330			3,132
Accounts receivable, net		1,772			1,807
Accounts receivable - related party		1,665			4,158
Notes receivable - related party		10,104			11,232
Deferred costs		2,045			1,487
Other assets		3,311			3,086
TOTAL ASSETS	$	328,419		$	314,971
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Notes payable	$	144,453		$	114,687
Accounts payable and other liabilities		9,151			8,232
Below market leases, net		3,960			2,940
Security deposits		668			651
TOTAL LIABILITIES		158,232			126,510
Minority interest		1,137			1,176
Shareholders’ equity:
Preferred shares, $.01 par value, 10,000,000 shares authorized, none issued		—			—
Class A Common shares, $.01 par value, 50,000,000 shares authorized, 6,549,950 and 6,479,278 shares issued, respectively		65			65
Class B Common shares, $.01 par value, 3,000,000 shares authorized, 1,080,180 and 2,148,649 shares issued, respectively		11			22
Class C Common shares, $.01 par value, 4,400,000 shares authorized, 4,145,531 and 4,119,923 shares issued, respectively		41			41
Class D Common shares, $.01 par value, 17,000,000 shares authorized, 11,039,803 and 11,035,482 shares issued, respectively		110			110
Capital in excess of par value		194,696			204,331
Accumulated distributions in excess of earnings		(23,749	)		(16,736	)
Cost of treasury shares, 292,238 and 77,741 Class A shares, respectively		(2,124	)		(548	)
TOTAL SHAREHOLDERS’ EQUITY		169,050			187,285
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	328,419		$	314,971

2

Consolidated Statements of Operations:

	Quarter ended December31,						Year Ended December 31,
	2006			2005			2006			2005
Revenues:
Rental income from operating leases	$	7,413		$	6,959		$	28,158		$	20,484
Earned income from direct financing leases		508			508			2,030			2,030
Real estate fee income		556			133			1,334			485
Real estate fee income - related party		4,409			1,219			6,983			4,588
Construction revenues		1,380			1,636			3,025			2,302
Construction revenues - related party		3,749			1,361			10,435			2,434
Securities commission income - related party		2,382			644			6,554			1,163
Asset management fee income - related party		267			128			823			495
Total revenues		20,664			12,588			59,342			33,981
Expenses:
General and administrative		3,251			2,529			9,489			6,209
Property expense		1,648			2,089			6,851			4,860
Construction costs		4,782			2,784			12,290			4,283
Legal and professional		642			373			1,559			1,593
Real estate commissions		502			68			1,042			266
Securities commissions		2,038			563			5,732			1,012
Depreciation and amortization		2,120			2,061			8,741			6,046
Total expenses		14,983			10,467			45,704			24,269
Operating income		5,681			2,121			13,638			9,712
Other income (expense):
Interest and other income		555			191			1,425			705
Income from merchant development funds and other affiliates		448			(27	)		967			161
Federal income tax (expense) benefit for taxable REIT subsidiary		(1,223	)		99			(870	)		(379	)
Interest expense		(2,150	)		(1,690	)		(8,083	)		(6,412	)
Minority interest in income of consolidated joint ventures		(40	)		(152	)		(150	)		(240	)
Income before discontinued operations		3,271			542			6,927			(3,547	)
Income from discontinued operations		20			2,107			254			3,356
Gain on sales of real estate acquired for resale		370			2,351			382			3,223
Income from discontinued operations		390			4,458			636			6,579
Net income		3,661			5,000			7,563			10,126
Distributions paid to class B, C and D shareholders		(2,713	)		(2,897	)		(11,442	)		(9,245	)
Net loss available to class A shareholders	$	948		$	2,103		$	(3,879	)	$	881
Net (loss) income per class A common share - basic and diluted
Loss before discontinued operations	$	0.09		$	(0.36	)	$	(0.72	)	$	(1.09	)
Income from discontinued operations		0.06			0.69			0.10			1.26
Net loss	$	0.15		$	0.33		$	(0.62	)	$	0.17
Weighted average class A common shares used to compute net (loss) income per share, basic and diluted		6,238			6,446			6,300			5,205

3

Segmented Statements of Operations:

							Asset Advisory Business
For the year ended December 31, 2006	Portfolio			Real Estate Development & Operations			Securities Operations			Merchant Development Funds		Eliminations		Total
Rental income	$	30,139		$	49		$	—		$	—	$	—	$	30,188
Securities commission income		—			—			6,554			—		—		6,554
Real estate fee income		—			8,317			—			—		—		8,317
Construction revenues		—			13,460			—			—		—		13,460
Other income		—			—			—			823		—		823
Total revenue		30,139			21,826			6,554			823		—		59,342
Securities commissions		—			—			5,732			—		—		5,732
Depreciation and amortization		8,734			7			—			—		—		8,741
Property expense		6,828			—			23			—		—		6,851
Construction costs		—			12,290			—			—		—		12,290
Legal and professional		1,248			1,284			69			—		—		2,601
General and administrative		1,819			5,219			2,284			167		—		9,489
Total expenses		18,629			18,800			8,108			167		—		45,704
Interest expense		(7,519	)		(330	)		(234	)		—		—		(8,083	)
Other income/ (expense)		1,033			(415	)		602			152		—		1,372
Income from discontinued operations		281			355			—			—		—		636
Net income (loss)	$	5,305		$	2,636		$	(1,186	)	$	808	$	—	$	7,563

4

							Asset Advisory Business
For the year ended December 31, 2005	Portfolio			Real Estate Development & Operations			Securities Operations			Merchant Development Funds		Eliminations			Total
Rental income	$	22,514		$	—		$	—		$	—	$	—		$	22,514
Securities commission income		—			—			10,350			—		(9,187	)		1,163
Real estate fee income		—			5,073			—			—		—			5,073
Construction revenues		—			4,736			—			—		—			4,736
Other income		—			—			—			495		—			495
Total revenue		22,514			9,809			10,350			495		(9,187	)		33,981
Securities commissions		—			—			8,076			—		(7,064	)		1,012
Depreciation and amortization		6,046			—			—			—		—			6,046
Property expense		4,803			57			—			—		—			4,860
Construction costs		—			4,283			—			—		—			4,283
Legal and professional		1,214			532			112			1					1,859
General and administrative		1,657			3,597			2,818			260		(2,123	)		6,209
Total expenses		13,720			8,469			11,006			261		(9,187	)		24,269
Interest expense		(5,816	)		(572	)		(24	)		—		—			(6,412	)
Other income/ (expense)		269			(19	)		(59	)		56		—			247
Income from discontinued operations		4,584			1,995			—			—		—			6,579
Net income (loss)	$	7,831		$	2,744		$	(739	)	$	290	$	—		$	10,126

5

							Asset Advisory Business
For the three months ended December 31, 2006	Portfolio			Real Estate Development & Operations			Securities Operations			Merchant Development Funds			Eliminations		Total
Rental income	$	7,888		$	33		$	—		$	—		$	—	$	7,921
Securities commission income		—			—			2,382			—			—		2,382
Real estate fee income		—			4,965			—			—			—		4,965
Construction revenues		—			5,129			—			—			—		5,129
Other income		—			—			—			267			—		267
Total revenue		7,888			10,127			2,382			267			—		20,664
General and administrative		996			1,570			650			35			—		3,251
Property expense		1,740			(95	)		3			—			—		1,648
Construction costs		—			4,782			—			—			—		4,782
Legal and professional		535			94			13			—			—		642
Real estate commissions		—			502			—			—			—		502
Securities commissions		—			—			2,038			—			—		2,038
Depreciation and amortization		2,115			5			—			—			—		2,120
Total expenses		5,386			6,858			2,704			35			—		14,983
Interest expense		(1,977	)		25			(198	)		—			—		(2,150	)
Other income/ (expense)		(23	)		(525	)		476			(189	)		—		(261	)
Income (loss) from discontinued operations		(8	)		399			—			—			—		391
Net income (loss)	$	494		$	3,168		$	(44	)	$	43		$	—	$	3,661

6

							Asset Advisory Business
For the three months ended December 31, 2005	Portfolio			Real Estate Development & Operations			Securities Operations			Merchant Development Funds			Eliminations		Total
Rental income	$	7,468		$	—		$	—		$	—		$	—	$	7,468
Securities commission income		—			—			645			—			—		645
Real estate fee income		—			1,352			—			—			—		1,352
Construction revenues		—			2,997			—			—			—		2,997
Other income		—			—			—			128			—		128
Total revenue		7,468			4,349			645			128			—		12,590
General and administrative		663			1,141			634			92			—		2,530
Property expense		2,083			5			—			—			—		2,088
Construction costs		—			2,784			—			—			—		2,784
Legal and professional		305			41			27			1			—		374
Real estate commissions		—			69			—			—			—		69
Securities commissions		—			—			563			—			—		563
Depreciation and amortization		2,062			—			—			—			—		2,062
Total expenses		5,113			4,040			1,224			93			—		10,470
Interest expense		(1,286	)		(477	)		43			(29	)		—		(1,749	)
Other income/ (expense)		105			2			(18	)		20			—		109
Income (loss) from discontinued operations		2,989			1,470			—			—			—		4,459
Net income (loss)	$	4,163		$	1,304		$	(554	)	$	26		$	—	$	4,939

7

AmREIT
Summary of Operating Results

	Three Months Ended December 31,						Year Ended December 31,
Funds From Operations:	2006			2005			2006			2005
Income – before discontinued operations	$	3,271		$	542		$	6,927		$	3,547
Income – from discontinued operations		390			4,458			636			6,579
Plus depreciation of real estate assets – from operations		2,141			2,210			8,766			5,952
Plus depreciation of real estate assets – from discontinued operations		—			177			16			111
Adjustments for nonconsolidated affiliates		21			35			132			100
Less gain on sale of real estate assets acquired for investment		1			(2,805	)		(285	)		(3,400	)
Less class B, C & D distributions		(2,713	)		(2,897	)		(11,442	)		(9,245	)
Total Funds From Operations available to class A shareholders	$	3,111		$	1,720		$	4,750		$	3,644
Weighted Average Class A Shares Outstanding		6,238			6,446			6,300			5,205
Funds from Operations per Class A Share	$	0.50		$	0.27		$	0.75		$	0.70
Dividends:
Class A Common share dividends per share	$	0.12		$	0.12		$	0.50		$	0.50
Class B Common share dividends per share (1)	$	0.19		$	0.19		$	0.74		$	0.74
Class C Common share dividends per share (2)	$	0.17		$	0.17		$	0.70		$	0.70
Class D Common share dividends per share (3)	$	0.16		$	0.16		$	0.65		$	0.65

(1)	The class B common shares receive a cumulative preferred dividend, fixed at 8%, payable quarterly.  The shares are currently convertible on a one for one basis into our class A common shares, and became callable by the Company beginning in July 2005 on a one for one basis, or $10.18 in cash at the holders option.
(2)	The class C common shares receive a preferred dividend, fixed at 7%, payable monthly.  The shares are convertible into our class A common shares based on 110% of invested capital (i.e. $1,000 in class C common shares will convert into $1,100 in class A common shares) after the seventh anniversary of issuance (beginning in 2010).  After three years and beginning in August 2006, subject to the issuance date of the respective shares, we have the right to force conversion of the shares into class A shares at the 10% conversion premium on a one-for-one basis or to redeem the shares at a cash redemption price of $11.00 per share at the holder’s option.
(3)	The class D common shares receive a fixed 6.5% annual dividend, payable monthly.  The shares are convertible into our class A common shares based on 107.7% of invested capital (i.e. $1,000 in class C common shares will convert into $1,077 in class A common shares) after the seventh anniversary of issuance (beginning in 2011).  The class D common shares became callable by the Company beginning in July 2005, based on the same conversion formula, prorated for the time the shares were outstanding (107.7% of invested capital).

8

	Three Months Ended December 31,				Twelve Months Ended December 31,
	2006		2005		2006		2005
Rental and Earned Income:
Base minimum rent	$	5,032	$	4,698	$	19,712	$	14,825
Earned income from direct financing leases		508		508		2,030		2,030
Straight line rent		432		73		782		319
Over/Under market rent		32		31		82		218
Percentage rent		469		70		760		154
Tenant reimbursements		1,448		2,087		6,105		4,968
Lease termination fees		—		—		717		—
Total Rental and Earned Income	$	7,921	$	7,467	$	30,188	$	22,514

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2006			2005			2006			2005
Real Estate Operating Revenue:
Development and construction management fees
Merchant development funds and affiliates	$	603		$	183		$	970		$	1,243
Unrelated third parties		140			40			170			70
Leasing and brokerage commissions
Merchant development funds and affiliates		3,676			919			5,608			3,145
Unrelated third parties		416			93			1,164			415
Property management fees
Merchant development funds and affiliates		130			117			405			200
Total Real Estate Operating Revenue	$	4,965		$	1,352		$	8,317		$	5,073
Percent attributable to merchant development funds and affiliates		89	%		90	%		84	%		90	%
Percent attributable to unrelated third parties		11	%		10	%		16	%		10	%

9

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2006			2005			2006			2005
Discontinued operations:
Rental revenue and earned income from DFL	$	—		$	256		$	52		$	1,804
Gain on sale of real estate held for investment		(1	)		2,805			285			3,400
Interest and other income		—			—			—			146
Gain on sale of real estate held for resale		370			2,351			382			3,223
Total revenues		369			5,412			719			8,573
Property expense		(3	)		(205	)		(104	)		(382	)
General and administrative		(3	)		(262	)		(17	)		(271	)
Federal income tax expense		(15	)		(166	)		7			(340	)
Legal and professional		17			6			(39	)		(2	)
Depreciation and amortization		1			5			(15	)		(111	)
Minority interest		24			(195	)		92			(597	)
Interest expense		—			(28	)		(7	)		(182	)
Debt prepayment penalty		—			(109	)		—			(109	)
Total expenses		21			(954	)		(83	)		(1,994	)
Income from discontinued operations		390			4,458		$	636		$	6,579
Basic and diluted income from discontinued  operations per class A common share	$	0.06		$	0.69		$	0.10		$	1.26

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2006			2005			2006			2005
Interest Expense:
Interest paid – floating rate	$	125		$	—		$	467		$	579
Interest paid – fixed rate		2,016			1,699			7,595			5,839
Loan cost amortization		67			50			253			221
Out-of-market debt amortization		(58	)		(59	)		(232	)		(227	)
Total Interest Expense	$	2,150		$	1,690		$	8,083		$	6,412

10

AmREIT
Summary Balance Sheet Information

	December 31, 2006			December 31, 2005
Class A Common Share Data:
Closing market price	$	8.33		$	6.90
Dividend yield		6.00	%		7.24	%
90-day average trading volume		16,474			25,095
Total Capitalization:
Debt	$	144,453		$	114,687
Class A common shares at market		52,127			44,171
Class B common shares as converted		8,998			14,826
Class C common shares as converted		45,601			45,319
Class D common shares as converted		118,899			118,852
Total Capitalization	$	370,078		$	337,855
Debt to Total Capitalization		39.0	%		33.9	%

Portfolio Net Asset Value Calculation:

Annual Property NOI			$	22,323,000
Average Property Cap Rate	6.30	%
Property Gross Value				354,339,000
Property Held for Sale				1,905,000
Notes Receivable				10,078,000
Cash, Receivables, Other				15,391,000
Total Asset Value							381,713,000
Notes Payable				(140,213,000	)
Security Deposits				(9,829,000	)
Total Liabilities							(150,042,000	)
Minority Interest (1)							(2,814,000	)
Total Net Asset Value (NAV)							228,857,000
NAV – Non Traded Shares (2)							170,638,000
NAV – class A common shares (2)							58,219,000
NAV – Per Class A common (2)						$	9.30

(1) Includes the portion of the net asset value that is owned by third parties or management, such as management’s ownership interest in AAA CTL.

(2) NAV and NAV per share represent only the portfolio value and other liquid assets.  We have not valued the asset advisory business or any of our general partner back end interests in the above analysis.

11

AmREIT
Debt Information

Description	Amount Outstanding 12-31-2006		Amount Outstanding 12-31-2005		Interest Rate			Annual Debt Service		Maturity Date
Credit Facility (1)	$	11,929	$	—		6.93	%	$	826		11/4/2007
2007 Maturities	$	11,929	$	—
MacArthur Park	$	13,410	$	13,410		6.17	%	$	827		12/1/2008
2008 Maturities	$	13,410	$	13,410
Merger Notes (2)	$	—	$	760		5.47	%	$	43		7/23/2010
2010 Maturities	$	—	$	760
Sugarland IHOP	$	1,155	$	1,196		8.25	%	$	138		3/1/2011
Sugar Land Plaza		2,286		2,313		7.60	%		203		11/1/2011
2011 Maturities	$	3,441	$	3,509
Albuquerque IHOP	$	670	$	692		7.82	%	$	75		4/24/2012
Baton Rouge IHOP		1,107		1,143		7.82	%		124		4/24/2012
Beaverton IHOP		785		811		7.82	%		88		4/16/2012
Charlottesville IHOP		558		576		7.82	%		62		4/24/2012
El Paso #1934 IHOP		673		695		7.82	%		75		4/16/2012
Rochester IHOP		842		870		7.82	%		94		4/16/2012
Shawnee IHOP		665		686		7.82	%		74		4/18/2012
5115 Buffalo Spdwy.		2,731		2,761		7.58	%		241		5/11/2012
Salem IHOP		551		567		7.82	%		61		5/17/2012
Springfield IHOP		915		944		7.82	%		102		6/21/2012
Roanoke IHOP		635		654		7.89	%		71		7/26/2012
Centerville IHOP		1,110		1,145		7.89	%		124		7/26/2012
Memphis #4462 IHOP		1,199		1,237		7.89	%		134		7/19/2012
Alexandria IHOP		640		660		7.89	%		71		7/19/2012
El Paso #1938 IHOP		802		826		7.89	%		89		8/23/2012
La Verne IHOP		668		688		7.89	%		74		8/23/2012
Memphis #4482 IHOP		696		717		7.89	%		77		8/23/2012
Parker IHOP		749		772		7.89	%		83		8/23/2012
2012 Maturities	$	15,996	$	16,444
Cinco Ranch	$	8,298	$	8,430		5.60	%	$	601		7/10/2013
Plaza in the Park		17,538		17,817		5.60	%		1,270		7/10/2013
2013 Maturities	$	25,836	$	26,247

Uptown Park	$	49,000	$	49,000	5.37	%	$	2,631	6/1/2015
2015 Maturities	$	49,000	$	49,000
Southbank - Riverwalk	$	20,000	$	—	5.91	%	$	1,182	6/1/2016
2016 Maturities	$	20,000	$	—
Bakery Square	$	3,967	$	4,211	8.00	%	$	571	2/10/2017
2017 Maturities	$	3,967	$	4,211
Total Maturities (3)	$	143,579	$	113,581

12

(1) Our revolving credit facility is a variable-rate debt instrument, and its outstanding balance fluctuates throughout the year based on our liquidity needs.  Annual Debt Service on this debt instrument assumes that the amount outstanding and the interest rate as of December 31, 2006 remain constant through maturity.

(2) The Merger Notes were paid off during the quarter ended March 31, 2006.

(3) Total maturities above are $874 thousand and $1.1 million less than total debt as reported in our consolidated financial statements as of December 31, 2006 and December 31, 2005, respectively, due to the premium recorded on above-market debt assumed in conjunction with certain of our property acquisitions.

Fixed vs. Variable Rate Debt:

	December 31, 2006		% of Total			December 31, 2005		% of Total
Variable rate	$	11,929		8.3	%	$	—		0.0	%
Fixed rate		132,524		91.7	%		114,687		100.0	%
	$	144,453		100.0	%	$	114,687		100.0	%

13

AmREIT
Property & Tenant Information

Multi-Tenant Shopping Centers	Major Tenants		City		State		Date Acquired		GLA		Annualized Base Rent as of December 31, 2006		% Leased
Uptown Park - Phase I and II		Ann Taylor, McCormick & Schmick’s		Houston		TX		6/1/2005		169,112	$	4,520,617		93	%
Southbank - Riverwalk		Hard Rock Café		San Antonio		TX		9/30/2005		46,673		1,511,552		100	%
MacArthur Park and Pad Sites		Kroger		Irving		TX		12/04 & 12/05		237,381		3,917,651		97	%
Plaza in the Park		Kroger		Houston		TX		7/1/2004		144,062		2,496,892		95	%
Cinco Ranch		Kroger		Houston		TX		7/1/2004		97,297		1,207,722		100	%
Bakery Square		Walgreens & Bank of America		Houston		TX		7/21/2004		34,614		853,738		100	%
Uptown Plaza		CVS/pharmacy		Houston		TX		12/10/2003		28,000		1,236,646		94	%
Woodlands Plaza		FedEx/Kinkos & Rug Gallery		The Woodlands		TX		6/3/1998		20,018		373,317		100	%
Sugarland Plaza		Mattress Giant		Sugarland		TX		7/1/1998		16,750		349,612		100	%
Terrace Shops		Starbucks		Houston		TX		12/15/2003		16,395		436,844		93	%
584 N. Germantown Pkwy. (Baptist Memorial Medical Plaza)		Auto Zone & Baptist Memorial		Memphis		TN		7/23/2002		15,000		194,026		75	%
Courtyard on Post Oak		Verizon Wireless		Houston		TX		6/15/2004		13,597		477,361		100	%
Uptown Plaza - Dallas		Grotto, Century Bank, Pei Wei		Dallas		TX		3/30/2006		38,872		1,622,985		100	%
Multi-Tenant Shopping Centers Total										877,771		19,198,963

Single Tenant (Ground Leases)	City		State		Date Acquired		GLA		Annualized Base Rent as of December 31, 2006		% Leased
CVS Corporation		Houston		TX		1/10/2003		13,824	$	327,167		100	%
Darden Restaurants		Peachtree City		GA		12/18/1998		6,867		79,366		100	%
Carlson Restaurants		Hanover		MD		9/16/2003		6,802		141,674		100	%
Citibank		San Antonio		TX		12/17/2004		4,439		155,000		100	%
Fontana Tract (2)		Dallas		TX		12/11/2006		—		—		—
Washington Mutual		Houston		TX		12/11/1996		3,685		98,160		100	%
Washington Mutual		The Woodlands		TX		9/23/1996		3,685		61,794		100	%
Single Tenant (Ground Leases) Total								39,302		863,161

14

Single Tenant (Fee Simple)	City		State		Date Acquired		GLA		Annualized Base Rent as of December 31, 2006		% Leased
Golden Corral		Houston		TX		7/23/2002		12,000		182,994		100	%
Golden Corral		Humble		TX		7/23/2002		12,000		181,688		100	%
Carlson Restaurants		Houston		TX		7/23/2005		8,500		200,000		100	%
#1483 IHOP Corporation		Sugarland		TX		9/22/1999		4,020		189,146		100	%
#1737 IHOP Corporation		Centerville		UT		7/25/2002		4,020		162,656		100	%
# 4462 IHOP Corporation (5)		Memphis		TN		8/23/2002		4,020		178,898		100	%
#5318 IHOP Corporation		Topeka		KS		9/30/1999		4,020		158,359		100	%
AFC, Inc.		Atlanta		GA		7/23/2002		2,583		119,279		100	%
Advance Auto (1)(2)(3)(4)		Various				Various		21,000		131,421		Note	(1)
Single Tenant (Fee Simple) Total								72,163		1,504,441

Single Tenant (Leasehold)	City		State		Date Acquired		GLA		Annualized Base Rent as of December 31, 2006		% Leased
IHOP Corporation (5)		Various		Various		Various		60,300	$	1,560,215		100	%
Company Total GLA % Leased								1,049,725	$	23,126,780		96.50	%

(1)	Under Development (GLA represents proposed leaseable square footage).
(2)	Held for Sale
(3)	Held in joint venture of which we are the managing 50% owner
(4)	Advance Auto properties are located in MO and IL.  Each of the properties has a proposed GLA of 7,000 square feet.
(5)	IHOP properties are located in NM, LA, OR, VA, TX, CA, TN, CO, VA, NY, OR, KS, UT and MO.  Each of the properties has a GLA of 4,020 square feet.  These properties are held by a consolidated subsidiary, 75.0% of which is owned by AmREIT, 19.6% of which is own by AMREIT Income & Growth Fund, one of our affiliated merchant development funds, and the remainder of which is owned by unaffiliated third parties.
(6)	This property is 100% leased; however, rent does not commence until after December 31, 2006.

15

Top Tenants by revenue concentration for the year ended December 31, 2006:

Tenant	Rental Income		% of Rental Income
Kroger	$	2,710		8.94	%
IHOP Corporation		2,249		7.42	%
CVS/pharmacy		1,046		3.45	%
Landry’s		872		2.88	%
Linens ‘N Things		624		2.06	%
Total	$	7,501		24.75	%

Leasing Activity for the quarter ended December 31, 2006:

					Rent per sq. ft.
	# of leases		Total sq. ft.		New Rent		Old Rent		% Change
New leases		7		19,302		35.43		N/A		N/A
Activity on Existing Leases:
Lease renewals		3		10,445		30.67		25.67		19.48	%
Non-renewals		0		—		N/A		N/A		N/A
Expired/Cancelled leases		3		5,607		N/A		19.61		N/A

16

Lease Expirations by Year:

Expiration Year	Number of Leases Expiring		Square Footage		Percent of Total
2007		15		35,369		3.65	%
2008		22		67,791		7.00	%
2009		32		77,939		8.05	%
2010		32		130,919		13.52	%
2011		52		193,102		19.95	%
2012		7		26,274		2.71	%
2013		6		25,373		2.62	%
2014		7		27,287		2.82	%
2015		1		3,000		0.31	%
2016		10		49,583		5.12	%
2019		1		4,020		0.42	%
2020		4		75,991		7.85	%
2021		4		86,806		8.97	%
2022		1		4,020		0.42	%
2023		1		63,373		6.55	%
2024		3		21,864		2.26	%
2025		6		32,100		3.32	%
2026		4		16,080		1.66	%
2027		3		12,060		1.25	%
2056		1		15,120		1.56	%
Totals		212		968,071		100.00	%

17