Arizona Land and the Shidler Group to Create West Coast Office REIT

  
    
  
  
    
      Arizona Land Income Corporation (AMEX: AZL), a real estate investment 
      trust, and The Shidler Group, a national real estate investment firm, www.shidler.com, 
      today announced that they have entered into a definitive agreement 
      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”).
    
    
      Pursuant to the agreement, the ownership interests in ten Class A office 
      properties controlled by affiliates of The Shidler Group, located in 
      Honolulu, San Diego and Phoenix, will be contributed to an umbrella 
      partnership (“UPREIT”) 
      to be formed by AZL. Reincorporated as Pacific Office Properties, the 
      Company will be externally managed by an affiliate of The Shidler Group. 
      The transaction has been approved by AZL’s 
      Board of Directors and is subject to approval by AZL’s 
      shareholders. The transaction is expected to close in January 2007.
    
    
      The major benefits of the transaction are as follows:
    
    
      
        Immediately transforms AZL into a West Coast office REIT with a strong 
        core portfolio.
      
      
        Adds Jay H. Shidler, a recognized leader in successfully managing and 
        growing public REITs, as Chairman of the Board and interim Chief 
        Executive Officer.
      
      
        Adds the proven acquisition team and management systems of The Shidler 
        Group.
      
      
        Adds an external advisor management team experienced in the 
        acquisition, redevelopment and management of office properties in the 
        relevant West Coast markets.
      
      
        Provides greater access to the capital markets for debt and equity.
      
    
    
      Under the terms of the agreement, the UPREIT will become the owner of 
      the contributed properties, comprising 2.8 million square feet of office 
      space, in exchange for limited partnership interests in the UPREIT. 
      Although AZL’s common stock will remain 
      outstanding, the UPREIT will issue common and preferred partnership 
      interests, which will be exchangeable in the future for shares of AZL 
      common stock. Prior to the closing of the transaction, it is expected 
      that AZL will declare and pay a special dividend of $1.00 per share of 
      its common stock. The transaction is valued at approximately $570 
      million.
    
    
      Thomas Hislop, CEO and Chairman of AZL, stated, “We 
      are extremely pleased to enter into this important transaction with The 
      Shidler Group. We believe that this transaction is in the best interests 
      of our shareholders, and is superior to the various other strategic 
      opportunities that we have considered over the past several years. The 
      transaction announced today is the culmination of an exhaustive process 
      that our company and its advisors have conducted during the past two 
      years, and the benefits to our shareholders, both immediate and 
      long-term, represent an exciting end product of our search for strategic 
      alternatives. The Shidler Group is a proven performer in terms of public 
      REIT operation and creating growth in shareholder value, and we are 
      delighted at the prospects of becoming associated with them.”
    
    
      Jay Shidler, managing principal of Pacific Office Properties and founder 
      of The Shidler Group, stated, “We are 
      extremely enthusiastic about the opportunity to take our high-quality 
      West Coast office portfolio into the public arena through this 
      collaboration with AZL and Tom Hislop. We intend to do everything that 
      we can to nurture, expand and optimize the value of the company, in an 
      effort to maximize shareholder value for all of the existing and future 
      shareholders in AZL and Pacific Office Properties Trust.”
    
    
      About 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.
    
    
      The Company 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. The Company 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 $7 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 leaseable 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 $15 billion, 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 Perlman & 
      Nagelberg LLP is serving as legal advisor to The Shidler Group, and 
      Bryan Cave LLP 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. In connection with the proposed transaction, AZL expects to 
      file a proxy statement regarding the proposed transaction with the 
      Securities and Exchange Commission. Shareholders are urged to read the 
      proxy statement, because it will contain important information about AZL 
      and the proposed transaction. At the appropriate time, shareholders will 
      be 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 will also be 
      available, free of charge, from AZL by directing such request to Ms. 
      Deanna Barela at [phone] or [e-mail]. 
      Shareholders are urged to read the proxy statement and other relevant 
      material when they become available 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 proxy statement for AZL's Annual Meeting of 
      Shareholders, which was filed with the SEC on November 14, 2005. 
      Additional information regarding the interests of those persons may be 
      obtained by reading the proxy statement when it becomes available.
    
    
      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. 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.
    
  
Arizona Land Income Corporation (AMEX: AZL), a real estate
investment trust, and The Shidler Group, a national real estate
investment firm, www.shidler.com, today announced that they have
entered into a definitive agreement 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").

   Pursuant to the agreement, the ownership interests in ten Class A
office properties controlled by affiliates of The Shidler Group,
located in Honolulu, San Diego and Phoenix, will be contributed to an
umbrella partnership ("UPREIT") to be formed by AZL. Reincorporated as
Pacific Office Properties, the Company will be externally managed by
an affiliate of The Shidler Group. The transaction has been approved
by AZL's Board of Directors and is subject to approval by AZL's
shareholders. The transaction is expected to close in January 2007.

   The major benefits of the transaction are as follows:

   --  Immediately transforms AZL into a West Coast office REIT with
        a strong core portfolio.

   --  Adds Jay H. Shidler, a recognized leader in successfully
        managing and growing public REITs, as Chairman of the Board
        and interim Chief Executive Officer.

   --  Adds the proven acquisition team and management systems of The
        Shidler Group.

   --  Adds an external advisor management team experienced in the
        acquisition, redevelopment and management of office properties
        in the relevant West Coast markets.

   --  Provides greater access to the capital markets for debt and
        equity.

   Under the terms of the agreement, the UPREIT will become the owner
of the contributed properties, comprising 2.8 million square feet of
office space, in exchange for limited partnership interests in the
UPREIT. Although AZL's common stock will remain outstanding, the
UPREIT will issue common and preferred partnership interests, which
will be exchangeable in the future for shares of AZL common stock.
Prior to the closing of the transaction, it is expected that AZL will
declare and pay a special dividend of $1.00 per share of its common
stock. The transaction is valued at approximately $570 million.

   Thomas Hislop, CEO and Chairman of AZL, stated, "We are extremely
pleased to enter into this important transaction with The Shidler
Group. We believe that this transaction is in the best interests of
our shareholders, and is superior to the various other strategic
opportunities that we have considered over the past several years. The
transaction announced today is the culmination of an exhaustive
process that our company and its advisors have conducted during the
past two years, and the benefits to our shareholders, both immediate
and long-term, represent an exciting end product of our search for
strategic alternatives. The Shidler Group is a proven performer in
terms of public REIT operation and creating growth in shareholder
value, and we are delighted at the prospects of becoming associated
with them."

   Jay Shidler, managing principal of Pacific Office Properties and
founder of The Shidler Group, stated, "We are extremely enthusiastic
about the opportunity to take our high-quality West Coast office
portfolio into the public arena through this collaboration with AZL
and Tom Hislop. We intend to do everything that we can to nurture,
expand and optimize the value of the company, in an effort to maximize
shareholder value for all of the existing and future shareholders in
AZL and Pacific Office Properties Trust."

   About 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.

   The Company 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. The Company 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 $7 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 leaseable 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 $15 billion, 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
Perlman & Nagelberg LLP is serving as legal advisor to The Shidler
Group, and Bryan Cave LLP 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. In connection with the proposed transaction, AZL
expects to file a proxy statement regarding the proposed transaction
with the Securities and Exchange Commission. Shareholders are urged to
read the proxy statement, because it will contain important
information about AZL and the proposed transaction. At the appropriate
time, shareholders will be 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 will also be available, free of
charge, from AZL by directing such request to Ms. Deanna Barela at
[phone] or [e-mail]. Shareholders are urged to read the
proxy statement and other relevant material when they become available
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 proxy statement for
AZL's Annual Meeting of Shareholders, which was filed with the SEC on
November 14, 2005. Additional information regarding the interests of
those persons may be obtained by reading the proxy statement when it
becomes available.

   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. 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.