American Land Lease Announces Third Quarter 2004 Financial Results

American Land Lease Announces Third Quarter 2004 Financial
Results
21% Decrease in Funds From Operations Per Share Over 2003 as Hurricanes Impact
Home Closings in the Quarter 


CLEARWATER, Fla., Nov. 3  /PRNewswire-FirstCall/ -- American Land Lease, Inc.
(NYSE:ANL) today released results for third quarter 2004.

Please refer to the Supplemental Information which the Company also released
today for definitions of measures of performance not determined in accordance
with generally accepted accounting principles ("non-GAAP") and reconciliation
of non-GAAP measures to measures determined in accordance with generally
accepted accounting principles ("GAAP").

  Summary Financial Results

  Third Quarter


* Diluted Earnings Per Share ("Diluted EPS") were $0.23 for the three- month
period ended September 30, 2004 as compared to $0.44 from the same period one
year ago, a decrease of 47.0% on a per share basis.

* Funds from Operations ("FFO"; a non-GAAP financial measure defined in the
Supplemental Information) were $2.6 million, or $0.32 per diluted common share,
for the quarter compared to $3.3 million, or $0.40 per diluted common share
from the same period one year ago, a decrease of 21.0% on a per share basis.

* Unit volume in home sales was 77 new home closings, including 74 new homes
sold on expansion home sites.  This compares with 125 new home closings in
second quarter 2003, including 123 new homes sold on expansion sites.

* "Same Store" results provided a revenue increase of 10.6%, an expense
increase of 9.2% and an increase of 11.3% in Net Operating Income  ("NOI").

* "Same Site" results provided a revenue increase of 3.3%, an expense increase
of 4.8% and an increase of 2.6% in NOI.

Supplemental Information

The full text of this press release and Supplemental Information are available
upon request or through the Company's web site at
http://www.americanlandlease.com/ .

Management Comments

Bob Blatz, President of American Land Lease, commented, "Our results for third
quarter 2004 reflect the significant impact of the three hurricanes on our
ability to close homes under contract.  We expect to close the majority of
these homes in the fourth quarter of this year and in first quarter 2005 -- as
we address the damage and complete the building process that was delayed by the
storm.  We continue to be encouraged by the increase in the average price of
each home sold -- this quarter exceeding $108,000.  Our backlog is up 74% over
the prior year to 175 homes, representing increased sales throughout the year
combined with the deferral of many closings from September due to the
hurricanes.  In the period immediately following the hurricanes we saw a drop-
off in traffic and a corresponding drop in contracts -- so we expect that the
current backlog will enable us to maintain our expected sales levels throughout
fourth quarter and into 2005.  We have already seen increases in traffic
through October and we expect the effects of the hurricanes on our sales
activity to be temporary -- and are projecting a return to normalized sales
levels by first quarter next year.

"Our property operations before depreciation performed well in light of the
challenges for the quarter as operating margins increased 1.9% over the third
quarter of 2003.

"As we have reported in previous press releases, the qualitative improvements
in the homes that are constructed in our communities minimized the damage
suffered through three hurricanes.  The continued growing demand has increased
lead times for our product and we continue to monitor that part of our
business.  The combination of a shortage of building supplies and contractors
for home building has increased the overall cycle time for our home completion
process.  This will have an impact on our inventory levels and home delivery
timeline in 2005. We have had a number of homes that have been identified for
removal in our communities mainly as a result of water damage from the storms. 
We view this as an opportunity to bring new, high-quality homes into our
communities.  The better quality homes are a welcome addition to our
communities as they increase the overall community value."

Dividend Declaration

On October 27, 2004, the Board of Directors declared a regular third quarter
dividend of $0.25 per share, payable on November 24, 2004, to stockholders of
record on November 10, 2004.  The Company continues to suspend its dividend
reinvestment plan until further notice.

The Board of Directors reviews the dividend policy quarterly. The Company's
dividend is set quarterly and is subject to change or elimination at any time. 
The Company's primary financial objective is to maximize long-term,
risk-adjusted returns on investment for stockholders.  While the dividend
policy is considered within the context of this objective, maintenance of past
dividend levels is not a primary investment objective of the Company and the
dividend policy is subject to numerous factors, including the Company's
profitability, capital expenditure plans, obligations related to principal
payments and capitalized interest, and the availability of debt and equity
capital at terms deemed attractive by the Company to finance these
expenditures.  The Company's net operating loss carryforward may be used to
offset all or a portion of its real estate investment trust ("REIT") taxable
income, which may allow the Company to reduce or eliminate its dividends and
still maintain its REIT status.

  Operational Results

  Third Quarter Property Operations


Third quarter revenue from property operations was $7,260,000 as compared to
$6,480,000 in the same period one year ago, a 12.0% increase.  Third quarter
property operating expenses totaled $2,746,000 as compared to $2,571,000 in the
same period one year ago, a 6.8% increase.  The Company realized significant
increases in rental income driven by annual rental rate increases, the
absorption of new home sites as a result of its home sales efforts and the
acquisition of one community during fourth quarter 2003. Property operating
expenses increased in the third quarter 2004 as compared to the same period in
the prior year, driven primarily by increases in utility costs, property taxes,
casualty losses and the acquisition of one community during the fourth quarter
2003, offset by decreases in offsite management costs.  The combination of
increased revenue and expenses resulted in an overall improvement in property
operating margins before depreciation expense from 60.3% in the prior year's
third quarter to 62.2% in the third quarter 2004.

Third Quarter "Same Store" Results

Third quarter "same store" results reflect the results of operations for
properties and golf courses owned for both the third quarter of 2004 and the
same period in the prior year.  The same store properties account for 94% of
the property operating revenues for the third quarter of 2004.  We believe that
same store information provides insight as to the changes in profitability for
properties owned during both reporting periods that could not be obtained from
a review of the consolidated income statement in periods where properties are
acquired.  A reconciliation of "same store" operating results reported below to
total property revenues and property expenses, as determined under GAAP, can be
found in the Supplemental Information, page 28.

  The same store increases are as follows:

                                         3Q04

  Revenue                                10.6%
  Expense                                 9.2%
  Net Operating Income                   11.3%



We derive our increase in property revenue (i) from increases in rental rates
and other charges at our properties and (ii) through the origination of leases
on expansion home sites ("absorption").  "Same site" results reflect the
results of operations excluding those sites leased subsequent to the beginning
of the prior year period.  We believe that "same site" information provides the
ability to understand the changes in profitability without the growth related
to the newly leased sites.  Our presentation of same site results is a non-GAAP
measure and should not be considered in isolation from, and is not intended to
represent an alternative measure to, operating income or cash flow or any other
measure of performance as determined in accordance with GAAP.

We calculate absorption revenues as the rental revenue recognized on sites
leased subsequent to the beginning of the prior year period.  We estimate that
50% of the increase in expenses over the prior year period is attributable to
newly leased sites in our calculation of same site results.  We believe that
the allocation of expenses between same site and absorption is an appropriate
allocation between fixed and variable costs of operating our properties.

Our same site, absorption, same site golf operations and total same store
results for third quarter 2004 are as follows:

                         Same Site    Absorption    Same Site  Same Store
                           Rental                     Golf

  Revenue                   3.3%         7.4%        (0.1%)       10.6%
  Expense                   4.8%         4.8%        (0.4%)        9.2%
  NOI                       2.6%         8.6%         0.1%        11.3%



A reconciliation of same site and same store operating results used in the
above calculations to total property revenues and property expenses, as
determined under GAAP, for the three months ended September 30, 2004 and 2003
can be found in the Supplemental Information, page 28.

Third Quarter Home Sales Operations

Third quarter 2004 new home sales unit volume was 77 closings, a 38.4% decrease
from the 125 closings in the same period in the prior year.  Average selling
price per home was $108,000 as compared to $96,000 in the same period in the
prior year, a 12.5% increase.  The decrease in closings compared to the same
period in the prior year was balanced across the Company's expansion
communities, with increases in seven communities and decreases in nine
communities.  Brokerage profits were down 33.6% as compared with the same
period in the prior year driven by a 9.4% decrease in the number of
transactions.  Selling gross margins, excluding brokerage activities, improved
to 31.2% in the quarter as compared to 27.8% in the same period in the prior
year.  This increase was driven by increased selling prices, increased
manufacturer rebates associated with higher purchasing volumes, and sales of
upgrades to base home models.  The increases in revenue and cost savings were
offset by increases in the cost of homes purchased.  Selling costs as a
percentage of sales revenue increased from 16.8% in the prior year's period to
26.3% in the third quarter of 2004, reflecting additional investments in
personnel and advertising/marketing in support of a higher operating level for
the business and a lower volume of home closings.  The backlog of contracts for
closing stood at 175 home sales, an increase of 74 contracts from the same
period in the prior year.

The Company remains committed to its program of generating revenue growth
through new lease originations in its existing portfolio.  The home sales
business continues to provide the Company with additional earning home sites
that have a greater return on investment than is currently available through
the purchase of occupied communities.

  Summary of home sales activity:

                                             Quarter ended   Quarter ended
                                              September 30,   September 30,
                                                  2004            2003

  New home closings                                77             125
  New home contracts                               69              86
  Home resales                                      3               9
  Brokered home sales                              48              53
  New home contract backlog                       175             101

  Dispositions


On July 30, 2004, the Company closed the sale of its ministorage property in
Arizona for a sales price of $2,050,000 and recorded a gain on the sale of
$23,000.  The Company no longer has an interest in ministorage properties.

Outlook for 2004

The table below summarizes the Company's projected financial outlook for 2004
as of the date of this release and is based on the estimates and assumptions
disclosed in this and previous press releases:

                                       Full Year 2004 Projected

  FFO                                       $1.45 to $1.55
  AFFO                                      $1.32 to $1.40
  Diluted EPS                               $1.03 to $1.24
  Same Store Sales
    Revenue Growth                           5.0% to 9.0%
    Expense Growth                           4.5% to 7.5%
    NOI Growth                               6.0% to 9.5%
  Home Sales Operating Income          $2,000,000 to $3,250,000
  General and Administrative
   Expenses                            $3,200,000 to $3,700,000
  Other Income                           $210,000 to $280,000
  Capital Replacements
   (per site)                                $115 to $135
  Depreciation                         $2,900,000 to $3,200,000



A portion of the Company's earnings is from the sale of new homes on expansion
home sites in its developing communities.  The earnings from the new home sales
are subject to greater volatility than the earnings from rental property
activities.  The Company's earnings estimates would be impacted positively by
increases in the unit volume of new home sales or increases in the gross
margins from new home sales.  Conversely, decreases in the unit volume of new
home sales or decreases in the gross margins from new home sales would
negatively impact the Company's earnings estimates.  Home sales volume is
dependent upon a number of factors, including consumer confidence and consumer
access to financing sources for home purchases and the sale of their current
home.

The Company's projected results for 2004 include increased corporate governance
costs based upon current estimates of the cost of compliance. These costs have
exceeded our original forecasts, as implementation of Section 404 of
Sarbanes-Oxley has required the engagement of additional consultants to enable
the company to meet the initial implementation requirements.  These costs
totaled approximately $0.015 per share in the third quarter.  Non- employee
director compensation continues to be paid in stock and all stock- based
compensation is expensed within the 2004 projections.  The Company's earnings
estimates would be adversely impacted by the increased cost of compliance with
regulations and laws applicable to public companies and financial reporting.

The financial and operating projections provided in this release are the result
of management's consideration of past operating performance, current and
anticipated market conditions and other factors that management considers
relevant from its past experience.

Development Activity

The Company neared completion of its development activity at Savanna Club and
began selling into its "Eagles Retreat" subdivision throughout the third
quarter.  This subdivision represents Phase VII of VIII.  While development
activities were delayed by hurricane activities, sales into the last phase are
projected to begin in mid-2005 with final close out of the phase to happen in
2006.

At Riverside Club, "The Bluffs" closed out home sales, with one home site not
under contract at the end of the quarter.  The next Phase - "The Fairways" --
began pre-selling into that phase as of August 1.  In its current pre-sale
phase, only 48 of the 148 home sites are available to be placed under contract
for a home and future lease.  As that phase sells out, the company will open
another section of the subdivision, which originally was expected in Q105 and
is now projected for late Q205 as a result of a temporary drop in traffic
resulting from the hurricane activity.  The company has already seen a pick-up
in traffic in late October, and expects by first quarter 2005 that traffic will
return to projected levels and sales activity will return to projected levels.

Construction was completed for the subdivisions at the Royal Palm and Brentwood
communities that provide an additional 162 home sites for new homeowners. 
Delays from hurricanes have delayed home completion and no occupancy is
expected in these subdivisions until first quarter 2005. Planning and
permitting a subdivision at an additional community continued during the
quarter.

Financing Activity

During the third quarter of 2004, the Company closed a $9.9 million mortgage on
a property in Florida at an interest rate of 5.96% for a term of 10 years.

American Land Lease, Inc. is a REIT that holds interests in 29 manufactured
home communities with 6,815 operational home sites, 950 developed expansion
sites, 1,219 undeveloped expansion sites and 129 recreational vehicle sites.

Some of the statements in this press release, as well as oral statements made
by the Company's officials to analysts and stockholders in the course of
presentations about the Company and conference calls following quarterly
earnings releases, constitute "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995.  Such statements may
include projections of the Company's cash flow, dividends and anticipated
returns on real estate investments.  Such forward-looking statements involve
known and unknown risks, uncertainties and other factors that may cause actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
the forward-looking statements.  Such factors include: general economic and
business conditions; interest rate changes, financing and refinancing risks;
risks inherent in owning real estate; future development rate of home sites;
competition; the availability of real estate assets at prices which meet the
Company's investment criteria; the Company's ability to reduce expense levels,
implement rent increases, use leverage and other risks set forth in the
Company's Securities and Exchange Commission filings.

Management will hold a teleconference call, Wednesday, November 3, 2004 at 4:00
p.m. Eastern Standard Time to discuss third quarter 2004 results.  You can
participate in the conference call by dialing, toll-free, [phone]
approximately five minutes before the conference call is scheduled to begin and
indicating that you wish to join the American Land Lease third quarter 2004
results conference call.  If you are unable to participate at the scheduled
time, this information will be available for recorded playback from 5:30 p.m.
EST, November 3, 2004 until midnight on November 10, 2004. To access the
replay, dial toll free, [phone] and request information from conference
ID 1921174. 

DATASOURCE: American Land Lease, Inc.



CONTACT:  Robert G. Blatz, President, or Shannon E. Smith, Chief

Financial Officer, both of American Land Lease, Inc., [phone]



Web site:  http://www.americanlandlease.com/ 

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