Wellsford Real Properties, Inc. Reports Year End 2006 Results

  
    
  
  
    
      Wellsford Real Properties, Inc. (AMEX:WRP) announced today that its net 
      assets in liquidation at December 31, 2006 aggregated $57,595,561, or 
      $8.67 per share, based upon 6,646,378 common shares outstanding, 
      compared to $56,569,414, or $8.74 per share, at December 31, 2005 based 
      upon 6,471,179 common shares outstanding.
    
    
      At December 31, 2006, WRP had total assets of $108,477,483, which was 
      comprised primarily of real estate assets under development of 
      $41,159,400, investments in Reis, Inc. (“Reis”) 
      of $20,000,000, cash of $39,050,333, restricted cash of $2,936,978 and 
      deferred merger costs of $2,677,764. Total liabilities and minority 
      interests of $50,881,922 at December 31, 2006 was comprised of the 
      reserve for estimated costs during the period of liquidation of 
      $18,301,885, mortgage notes and construction loans payable of 
      $20,129,461, the reserve for option cancellations of $2,633,408 and 
      construction payables, other accruals and liabilities and minority 
      interests aggregating $9,817,168.
    
    
      During the year ended December 31, 2006, net assets in liquidation 
      increased $1,026,147. This increase is primarily attributable to (1) 
      operating income of $1,767,467, which primarily represents interest 
      income earned from cash and cash equivalents, (2) amounts recognized 
      from real estate assets under development of $1,551,640, which resulted 
      from the net effect of sales of condominiums and homes and value 
      adjustments to the development projects, (3) cash proceeds of $1,008,035 
      from the exercise of stock options by an officer in November 2006 and 
      (4) a decrease in the option cancellation reserve of $925,943 which 
      primarily reflects the changes in the market price of WRP’s 
      common stock between March 31, 2006 and December 31, 2006, offset by a 
      $4,226,938 provision upon the adoption by the board of directors of 
      modifications in the terms of WRP’s stock 
      option plans during the first quarter of 2006. The provision resulted 
      from the modification to allow for cash payments that would be made to 
      option holders, at their election, as consideration for the cancellation 
      of their options in the amount of fair value of WRP common stock in 
      excess of the adjusted exercise prices of outstanding options as of 
      March 31, 2006.
    
    
      WRP announced in November 2005 that its stockholders had ratified the 
      Plan of Liquidation (the “Plan”) 
      at the annual meeting held on November 17, 2005. After the approval of 
      the Plan by the stockholders, WRP completed the sale of its largest 
      asset, the three residential rental phases of its Palomino Park project 
      for $176,000,000. On December 14, 2005, WRP made an initial liquidating 
      distribution of $14.00 per share, aggregating approximately $90,597,000, 
      to its stockholders.
    
    
      For all periods preceding stockholder approval of the Plan on November 
      17, 2005, WRP’s financial statements are 
      presented on the going concern basis of accounting. As required by 
      generally accepted accounting principles, WRP adopted the liquidation 
      basis of accounting as of the close of business on November 17, 2005. 
      Under the liquidation basis of accounting, assets are stated at their 
      estimated net realizable value and liabilities are stated at their 
      estimated settlement amounts, which estimates will be periodically 
      reviewed and adjusted as appropriate. If the Merger with Reis (as 
      described below) is consummated, then WRP will change from the 
      liquidation basis of accounting to the going concern basis of accounting 
      upon the effective termination of the Plan.
    
    
      WRP reported revenues of $13,218,359 and net income of $3,018,292, or 
      $0.47 per basic and diluted share, during the period January 1, 2005 to 
      November 17, 2005.
    
    
      Remaining Activities, Assets and Investments
    
    
      At December 31, 2006, WRP’s remaining 
      activities, assets and investments were comprised primarily of the 
      following:
    
    
      
        The 259 unit Gold Peak condominium development in Highlands Ranch, 
        Colorado is the remaining phase from WRP’s 
        Palomino Park development. Sales commenced in January 2006 and 108 
        Gold Peak units were sold by December 31, 2006. At December 31, 2006 
        an additional 31 units were under contract.
      
      
        The Orchards is a single family home development in East Lyme, 
        Connecticut, upon which WRP commenced building 101 single family homes 
        on 139 acres. An additional 60 homes could be built on a contiguous 85 
        acre parcel of land also owned by WRP. Sales commenced in June 2006 
        and five homes were sold by December 31, 2006. At December 31, 2006, 
        an additional three East Lyme homes were under contract.
      
      
        A 75% ownership interest in a joint venture that owns two land parcels 
        aggregating approximately 300 acres in Claverack, New York. One land 
        parcel is subdivided into seven single family home lots on 
        approximately 65 acres. One house and one lot were sold to a purchaser 
        during the year ended December 31, 2006. The remaining 235 acres, 
        known as The Stewardship, was originally subdivided into six single 
        family home lots. WRP recently obtained conditional subdivision 
        approval to increase the number of developable residential lots to 48. 
        WRP intends to obtain construction financing, complete the required 
        infrastructure, construct two model homes and sell lots and homes to 
        individual buyers.
      
      
        Ownership interests aggregating 23% in Reis, a provider of commercial 
        real estate market information to investors, lenders and other 
        professionals in the debt and equity capital markets.
      
      
        A 10% interest in Clairborne Fordham, a company which currently owns 
        and is selling the remaining two unsold residential units of a 
        50-story, 277 unit, luxury condominium apartment project in Chicago, 
        Illinois.
      
    
    
      Merger with Reis
    
    
      On October 11, 2006 WRP announced that it had entered into a definitive 
      merger agreement to acquire Reis (the “Merger”). 
      The Merger was approved by the independent members of WRP’s 
      board of directors on that date. Reis stockholders, excluding Wellsford 
      Capital, a wholly-owned subsidiary of WRP, will receive, in the 
      aggregate, approximately $34,579,414 in cash and 4,237,673 shares of 
      newly issued common stock of WRP which, for purposes of the Merger, has 
      been established at $8.16 per share, resulting in an implied equity 
      value for Reis of approximately $90,000,000.
    
    
      The rules of the American Stock Exchange (the “AMEX”) 
      require WRP’s stockholders to approve the 
      issuance of shares of common stock of WRP to Reis stockholders, since 
      such an issuance would be greater than 20% of the WRP common shares 
      currently outstanding. The transaction, which is also subject to the 
      approval of Reis’s stockholders, regulatory 
      approvals and other customary closing conditions, is expected to close 
      in the second quarter of 2007. WRP filed a registration statement on 
      Form S-4 with the Securities and Exchange Commission on December 28, 
      2006 and, as amended, on March 9, 2007.
    
    
      If the Merger is consummated, WRP will terminate its previously adopted 
      Plan, but will continue with its residential development and sales 
      activities related to its real estate assets over a period of years.
    
    
      The cash portion of the purchase price is to be funded by a loan 
      extended to Reis by a financial institution aggregating $27,000,000 (of 
      which $25,000,000 may be used to pay the cash portion of the Merger 
      consideration and the payment of related Merger costs and the remaining 
      $2,000,000 may be utilized for Reis’s working 
      capital needs) and WRP’s cash on hand. On the 
      consummation of the Merger, WRP will have approximately 10,700,000 
      shares of common stock outstanding and will change its corporate name to 
      Reis, Inc. Following the consummation of the Merger, current Reis 
      stockholders will own approximately 38% of WRP. If the merger is 
      consummated, WRP estimates that $1.15 of the $14.00 per share 
      liquidating distribution in 2005 will be recharacterized as taxable 
      dividend income.
    
    
      There can be no assurance that Reis’s 
      stockholders will vote to approve the Merger and adopt the Merger 
      agreement or that WRP’s stockholders will 
      vote to issue shares of WRP’s common stock in 
      connection with the Merger. Furthermore, there can be no assurance 
      following a vote in favor of the Merger and such issuance of WRP’s 
      common stock that the Merger will be consummated.
    
    
      This press release, together with other statements and information 
      publicly disseminated by WRP, contains certain forward-looking 
      statements within the meaning of Section 27A of the Securities Act of 
      1933, as amended, and Section 21E of the Securities Exchange Act of 
      1934, as amended. These forward-looking statements relate to WRP’s 
      outlook or expectations for earnings, revenues, expenses, asset quality 
      or other future financial or business performance, strategies or 
      expectations, or the impact of legal, regulatory or supervisory matters 
      on WRP’s business operations or performance. 
      Specifically, forward-looking statements may include:
    
    -- statements relating to the benefits of the merger with Reis;

-- statements relating to future business prospects, revenue, income
   and cash flows of WRP individually;

-- statements relating to revenues of the resulting company after the
   merger with Reis; and

-- statements preceded by, followed by or that include the words
   "estimate," "plan," "project," "intend," "expect," "anticipate,"
   "believe," "seek," "target" or similar expressions.
    
      These statements reflect WRP’s management’s 
      judgment based on currently available information and involve a number 
      of risks and uncertainties that could cause actual results to differ 
      materially from those in the forward-looking statements. With respect to 
      these forward-looking statements, WRP’s 
      management has made assumptions regarding, among other things, the 
      determination of estimated net realizable value for its assets and the 
      determination of estimated settlement amounts for its liabilities and 
      general economic conditions.
    
    
      Future performance cannot be ensured. Actual results may differ 
      materially from those in the forward-looking statements. Some factors 
      that could cause WRP’s actual results to 
      differ include:
    
    -- expected benefits from the merger with Reis may not be fully
   realized or at all;

-- revenues following the merger with Reis may be lower than expected;

-- the possibility of litigation arising as a result of terminating
   the Plan;

-- adverse changes in the real estate industry and the markets in
   which the post-merger company will operate;

-- the inability to retain and increase the number of customers of the
   post-merger company;

-- competition;

-- difficulties in protecting the security, confidentiality, integrity
   and reliability of the data of the post-merger company;

-- legal and regulatory issues;

-- changes in accounting policies or practices; and

-- the risk factors listed under "Item 1A.  Risk Factors" of WRP's
   annual report on Form 10-K for the year ended  December 31, 2006 as
   filed with the Securities and Exchange Commission ("SEC") on
   March 29, 2007 and under "Risk Factors" in WRP's registration
   statement on Form S-4 as initially filed on December 28, 2006 and,
   as amended, on March 9, 2007.
    
      You are cautioned not to place undue reliance on any forward-looking 
      statements, which speak only as of the date of this press release. 
      Except as required by law, WRP undertakes no obligation to publicly 
      update or release any revisions to these forward-looking statements to 
      reflect any events or circumstances after the date of this press release 
      or to reflect the occurrence of unanticipated events.