Arizona Land Income Corporation Declares Special Dividend

  
    
  
  
    
      Arizona Land Income Corporation (AMEX: AZL) today declared a special 
      dividend of $0.05 per share on its common stock. This dividend will be 
      paid on January 15, 2008 to shareholders of record as of December 31, 
      2007.
    
    
      In addition, AZL announced that it will pay state and federal corporate 
      income tax on its net long-term capital gain income for 2007. AZL 
      estimates that the amount of the corporate income tax payable will be 
      approximately $.6 million relating to 2007 net capital gain income of 
      approximately $1.3 million. Consistent with applicable requirements 
      under state and federal law, each of AZL’s 
      shareholders of record as of December 31, 2007 will be allocated a pro 
      rata portion of AZL’s net capital gain, and 
      would include the allocated amount in calculating 2007 taxable income. 
      Each of AZL’s shareholders of record as of 
      December 31, 2007 will also be allocated a refundable federal income tax 
      credit equal to a pro rata portion of the federal corporate income tax 
      paid by AZL. Additional information regarding the amount of net capital 
      gain and refundable income tax credit allocated to AZL shareholders is 
      expected to be distributed no later than February 29, 2008.
    
    
      Information Concerning Federal Income Tax 
      Consequences of the Allocation
    
    
      The Internal Revenue Code includes a provision for real estate 
      investment trusts such as AZL that requires AZL to allocate its 
      undistributed long-term capital gain income to its shareholders of 
      record as of the last day of its fiscal year. AZL is required to provide 
      such shareholders with a written notice of the allocation within 60 days 
      of the close of its taxable year. The shareholders of AZL would include 
      in their income as long-term capital gain the amount designated by AZL 
      in such notice and will also receive a credit for the federal corporate 
      income taxes paid by AZL relating to the allocated income. AZL must pay 
      corporate tax on the undistributed long-term capital gain income by 
      January 30, 2008.
    
    
      AZL will report the amount of the allocated undistributed capital gain 
      to its shareholders on Form 2439. Form 2439 – 
      Notice To Shareholder of Undistributed Long-Term Capital Gains – 
      is similar to a Form 1099 and reflects the amount of income the 
      shareholders must report on their federal income tax returns, as well as 
      the amount of tax paid by AZL with respect to such income. An individual’s 
      allocable share of the tax paid by AZL, as shown on the Form 2439, 
      generally will exceed the amount of tax such individual will be required 
      to pay with respect to its allocable share of AZL’s 
      undistributed long-term capital gain. Should the amount of tax paid by 
      AZL as shown on the Form 2439 exceed the amount of tax a shareholder is 
      required to pay with respect to its allocable share of the undistributed 
      long-term capital gain, that shareholder may use such excess amount as a 
      credit toward other federal tax obligations. If the shareholder has no 
      other federal tax obligations, the shareholder may apply for a refund of 
      such excess amount.
    
    
      The undistributed long-term capital gain income also may be subject to 
      state income tax.
    
    
      Each shareholder of AZL should consult its own tax adviser concerning 
      the tax consequences arising from AZL’s 
      payment of corporate income tax and the related allocations of capital 
      gain income and refundable tax credit.
    
    
      About Pacific Office Properties Trust, 
      Inc.
    
    
      AZL has entered into a Master Formation and Contribution Agreement with 
      The Shidler Group (the “Master Agreement”) 
      governing transactions whereby AZL will acquire the West Coast office 
      portfolio of The Shidler Group, and reincorporate in Maryland under the 
      name Pacific Office Properties Trust, Inc. (“Pacific 
      Office Properties Trust”). Pacific Office 
      Properties Trust will be a real estate investment trust which will 
      acquire, own, and operate office properties in the western U.S., 
      focusing initially on the four high-growth markets of Honolulu, San 
      Diego, Los Angeles, and Phoenix.
    
    
      Pacific Office Properties Trust will focus on acquiring, with 
      institutional co-investors, “value-added” 
      office buildings whose potential can be maximized through improvements, 
      repositioning, and superior leasing and management. Pacific Office 
      Properties Trust will continue The Shidler Group’s 
      highly successful institutional joint-venture operations, which focus on 
      acquiring opportunistic and value-added commercial real estate in 
      partnership with institutional co-investors.
    
    
      About Arizona Land Income Corporation
    
    
      Arizona Land Income Corporation is a real estate investment trust 
      headquartered in Phoenix, Arizona. It is externally advised by ALI 
      Advisors, Inc. and currently has a portfolio of real estate and other 
      assets aggregating approximately $4.2 million.
    
    
      About The Shidler Group
    
    
      The Shidler Group is a private long-term investor in commercial real 
      estate. Over the past 30 years, through its private and public 
      affiliates, it has acquired, owned and managed more than 2,000 
      properties containing over 150 million square feet of leasable area. 
      Currently, The Shidler Group, through its affiliates, owns and manages 
      commercial properties in Honolulu, Los Angeles, San Diego and Phoenix, 
      and maintains offices in Honolulu, San Diego, Phoenix and New York. The 
      Shidler Group has founded three publicly traded real estate investment 
      trusts – Corporate Office Properties Trust 
      (NYSE: OFC), First Industrial Realty Trust (NYSE: FR), and Tri Net 
      Corporate Realty Trust (formerly, NYSE: TRI, now part of iStar Financial 
      (NYSE: SFI)). The Shidler Group also founded Primus Guaranty, Ltd. 
      (NYSE: PRS), a Bermuda-based holding company whose primary subsidiary, 
      Primus Financial Products, is a AAA/Aaa rated provider of credit default 
      protection.
    
    
      Credit Suisse Securities (USA) LLC is acting as financial advisor to The 
      Shidler Group, and Peacock, Hislop, Staley, & Given, Inc. is acting as 
      financial advisor to AZL. Barack Ferrazzano Kirschbaum & Nagelberg LLP 
      is serving as legal advisor to The Shidler Group, and Squire, Sanders & 
      Dempsey L.L.P. is serving as legal advisor to AZL.
    
    
      Additional Information and Where to Find 
      It
    
    
      This press release does not constitute a solicitation for votes for the 
      transaction contemplated in the Master Agreement. In connection with the 
      proposed transaction, AZL has filed a proxy statement regarding the 
      proposed transaction with the Securities and Exchange Commission. 
      Shareholders are able to obtain a free copy of the definitive proxy 
      statement and other documents filed by AZL with the SEC at the SEC's 
      website at www.sec.gov. The definitive 
      proxy statement and other relevant documents are also available, free of 
      charge, from AZL by directing a request to Ms. Deanna Barela at (602) 
      952-6821 or [e-mail]. 
      Shareholders are urged to read the proxy statement and other relevant 
      material before making any voting decisions with respect to the 
      transaction.
    
    
      AZL and its respective directors and executive officers may be deemed to 
      be participants in the solicitation of proxies from the shareholders of 
      AZL in connection with the transaction. Information about AZL and its 
      directors and executive officers, and their ownership of AZL common 
      stock, is set forth in the definitive proxy statement which was filed 
      with the SEC on December 13, 2007.
    
    
      Certain Information About Forward-Looking 
      Statements
    
    
      Statements contained in this release except for historical information 
      are forward-looking statements that are based on current expectations 
      and involve risks and uncertainties. Without limiting the generality of 
      the foregoing, words such as “may,” 
      “will,” “expect,” 
      “believe,” “anticipate,” 
      “intend,” “could,” 
      “estimate,” or “continue,” 
      or the negative or other variations thereof or comparable terminology, 
      are intended to identify forward-looking statements. The risks and 
      uncertainties inherent in such statements may cause actual future events 
      or results to differ materially and adversely from those described in 
      the forward-looking statements. Specifically, there can be no assurance 
      that the parties will complete a strategic transaction on favorable 
      terms or at all. Important factors that may cause a difference between 
      projected and actual results for AZL are discussed in AZL’s 
      filings from time to time with the SEC, including but not limited to AZL’s 
      annual reports on Form 10-KSB, subsequent quarterly filings on Form 
      10-QSB and current reports on Form 8-K as well as the definitive proxy 
      statement which was filed with the SEC on December 13, 2007. AZL and The 
      Shidler Group disclaim any obligation to revise or update any 
      forward-looking statements that may be made from time to time by any of 
      them or on their behalf.