CRIIMI MAE Reports First Quarter 2005 Net Income

CRIIMI MAE Reports First Quarter 2005 Net Income 


ROCKVILLE, Md., May 5  /PRNewswire-FirstCall/ -- CRIIMI MAE Inc. (NYSE:CMM)
today reported net income to common shareholders of $828,000 or $0.05 per
diluted common share in the first quarter of 2005 compared to net income to
common shareholders of $2.5 million or $0.16 per diluted common share for the
same period in 2004.

                      FIRST QUARTER 2005 HIGHLIGHTS

  -- Book value and adjusted book value (described below) were $22.38 and
     $16.94, respectively, per diluted common share at March 31, 2005

  -- Generated $12.4 million of cash during the first quarter from the
     retained CMBS portfolio and non-core assets

  -- Total liquidity at March 31, 2005 approximated $53 million

  -- Loans in Special Servicing decreased by 9% to $751 million as of
     March 31, 2005 compared to $821 million as of December 31, 2004

  -- Recognized net other charges of $3.0 million for the quarter




Mark Jarrell, President and Chief Operating Officer, said: "Our retained CMBS
portfolio continues to generate significant cash flow and the balance of loans
in special servicing continues to decline.  We are pleased that
specially-serviced hotel loans, which represent the largest percentage of loans
in special servicing, has decreased over the last several quarters as the
economy and the lodging sector continue to improve.  This quarter, we decreased
our overall expected loss estimate related to our CMBS by $9 million to $619
million as of March 31, 2005, primarily as a result of changes in the amount
and timing of resolutions and dispositions of certain specially- serviced
assets.  A change in the timing of anticipated cash flows for certain of the
Company's CMBS resulted in this quarter's $3.5 million impairment charge."

  FINANCIAL RESULTS

  Net Income


For the three months ended March 31, 2005, net income to common shareholders
was $828,000 or $0.05 per diluted common share compared to $2.5 million, or
$0.16 per diluted common share for the first quarter of 2004. Results for the
first quarter of 2005 included net interest margin of $9.5 million, total
operating expenses of $6.5 million and net other charges of $3.0 million,
including $3.5 million of impairment on certain of the Company's subordinated
commercial mortgage-backed securities ("CMBS").

Net Interest Margin for the Three Months Ended March 31, 2005

CRIIMI MAE's net interest margin decreased to $9.5 million for the three months
ended March 31, 2005 compared to $10.9 million for the corresponding period in
2004 primarily due to the higher cost of financing the $260 million of
non-recourse match-funded debt issued in June 2004 as part of the Company's
refinancing of a significant amount of its recourse debt.

During the first quarter of 2005, the Company's average total debt balance was
$622 million compared to $727 million for the first quarter of 2004.  The
weighted average effective interest rate on the Company's total average debt
outstanding during the first quarter was 8.5% compared to 7.4% for the same
period in 2004.

Total Operating Expenses

Operating expenses during the three months ended March 31, 2005 included the
incurrence of certain non-routine costs as follows:

  Corporate G&A:
   During the three months ended March 31, 2005, corporate general and
   administrative expenses of $2.8 million included legal fees of $475,000
   incurred in connection with the Board of Directors' review of strategic
   alternatives.

  Depreciation and Amortization:
   Depreciation and amortization expense of $601,000 included $503,000
   related to the write-off of certain deferred costs.

  Servicing G&A:
   Servicing general and administrative expenses of $2.1 million included
   $235,000 related to non-routine special servicing costs.


  Other Items


Results for the first quarter of 2005 also included reductions in aggregate
impairment charges, net losses on insured mortgage security dispositions and
extinguishment of debt as compared to the first quarter of 2004.  This
quarter's $3.5 million of impairment charges on CMBS was calculated as the
difference between the fair value and amortized cost of certain of the
Company's CMBS as of March 31, 2005 and resulted primarily from a change in the
timing of anticipated cash flows for these CMBS.  For the first quarter of
2004, impairment charges totaled $3.6 million, including a $3.1 million write
down on two of the Company's non-core assets and $518,000 on one of the
Company's CMBS.  Net losses on insured mortgage security dispositions were
$77,000 in the first quarter of 2005 compared to losses of $626,000 in the
first quarter of 2004, due to fewer prepayments in 2005.  The Company incurred
no losses on extinguishment of debt this quarter compared to a net loss on
extinguishment of debt of $707,000 associated with the refinancing of one of
the Company's insured mortgage portfolios in the first quarter of 2004.

  LIQUIDITY AND SHAREHOLDERS' EQUITY

  Increased Liquidity


As of March 31, 2005, total liquidity approximated $52.7 million, including
cash and cash equivalents of approximately $48.6 million and $4.1 million in
liquid securities, compared to total liquidity of $45.1 million at December 31,
2004.

CRIIMI MAE's retained CMBS portfolio, along with its other assets, continued to
generate significant cash in the first quarter of 2005.  Sources of cash
included $11.4 million from the retained CMBS portfolio and $1.0 million from
its non-core assets.  Cash outflows during the first quarter of 2005 included
interest payments on the Company's debt (excluding match-funded debt) of
approximately $500,000, $2.8 million of corporate general and administrative
expenses, $200,000 in interest rate swap payments, $434,000 of maintenance fee
expense and $1.5 million for payment of preferred dividends.

Unlike most other REITs, CRIIMI MAE is currently able to distribute or retain
its net cash flows as a result of its tax net operating loss (NOL)
carryforwards.  As a result of the Company's election to be taxed as a trader
in 2000, the Company has accumulated unused NOLs of approximately $291.4
million as of March 31, 2005.  Any accumulated and unused net operating losses,
subject to certain limitations, generally may be carried forward for up to 20
years to offset taxable income until fully utilized.

As discussed in the Company's quarterly and annual reports filed with the
Securities and Exchange Commission, the Company's future use of NOLs for tax
purposes could be substantially limited in the event of an "ownership change"
as defined under Section 382 of the Internal Revenue Code.

The Company expects any dividends paid in 2005 to be taxable to the recipients
to the extent of the Company's taxable income for the year.  The determination
of the taxability of a dividend distribution is based on the current year's
earnings and profits (before application of the dividends paid deduction and
NOL carryforwards), which approximates the Company's taxable income.  The
Company expects to offset taxable income, if any, by first applying the
dividends paid deductions related to distributions on its stock and then by
utilizing its prior year NOL carryforwards in 2005.

Shareholders' Equity

As of March 31, 2005, shareholders' equity was approximately $412.5 million or
$22.38 per diluted common share as compared to $428.1 million or $23.49 per
diluted common share at December 31, 2004.  The diluted book value per common
share is based on total shareholders' equity less the liquidation value of the
Company's then outstanding preferred stock.  The net decrease in total
shareholders' equity was primarily attributable to a reduction in the value of
CMBS due principally to an increase in Treasury rates as of quarter end.

Shareholders' equity as of March 31, 2005 includes, among other things, the
excess of the carrying amount of the Company's CMBS rated AAA and the senior
interest in its BBB- rated CMBS over the related non-recourse debt. The Company
does not actually own these assets but is required by GAAP to include them on
its balance sheet.  After removing the net impact of the CMBS pledged to secure
non-recourse debt and the related non-recourse debt, the adjusted book value
was $16.94 per diluted common share and $17.27 per diluted common share as of
March 31, 2005 and December 31, 2004, respectively.  The net decrease in
adjusted book value is primarily attributable to a reduction in the value of
the retained CMBS portfolio due principally to an increase in Treasury rates as
of quarter end.  The Company believes adjusted book value per diluted common
share provides a more meaningful measure of book value because the Company
receives no cash flows from the CMBS pledged to secure non-recourse debt that
are reflected on its consolidated balance sheet and used to calculate its book
value in accordance with GAAP.  All cash flows related to the CMBS pledged to
secure non-recourse debt are used to service the related non-recourse debt. 
The reconciliation of this non-GAAP financial measure to shareholders' equity
is presented in the tables that follow.

CRIIMI MAE had 15,584,734 and 15,546,667 common shares outstanding as of March
31, 2005 and December 31, 2004, respectively.  As of May 2, 2005, the Company
has 15,587,827 common shares outstanding.

EXISTING OPERATIONS

As of March 31, 2005, specially serviced mortgage loans totaled $751.1 million,
or 5.9% of the aggregate $12.7 billion of mortgage loans underlying the
Company's CMBS.  Hotel property mortgage loans (including the Shilo Inn loans
with an aggregate principal balance of $134.7 million) accounted for $316.1
million, or 42% of the special servicing portfolio at quarter end, down from
$375.7 million, or 46% of the special servicing portfolio at year end.

The Company decreased its overall expected loss estimate related to its CMBS
from $628 million at December 31, 2004 to $619 million at March 31, 2005,
including cumulative actual losses of approximately $274 million realized from
1999 through March 31, 2005.  These cumulative expected losses of $619 million
are anticipated to occur through the life of the Company's CMBS.

FIRST QUARTER CONFERENCE CALL

CRIIMI MAE will hold a conference call to discuss its first quarter 2005
results on Friday, May 6, 2005 at 11:00 a.m. ET.  To access the conference
call, please dial in to the following: Teleconference # 1-800-798-2884 (North
America), 1-617-614-6207 (International).  Please refer to passcode 82160904.
To access the call by audio webcast, go to CRIIMI MAE's web site at
http://www.criimimaeinc.com/ and click on the link on the home page.

THE COMPANY

CRIIMI MAE Inc. is a commercial mortgage company structured as a REIT. CRIIMI
MAE owns and manages a significant portfolio of commercial mortgage- related
assets.  Historically, CRIIMI MAE's primary focus was acquiring high- yielding,
non-investment grade commercial mortgage-backed securities (subordinated CMBS).

For further information about the conference call or the Company, see the
Company's Web site: http://www.criimimaeinc.com/.  Shareholders and securities
brokers should contact Susan Railey at 301-255-4740, e-mail , and news media
should contact James Pastore, Pastore Communications Group LLC, at
202-546-6451, e-mail .

Note: Forward-looking statements or statements that contain the words
"believe," "anticipate," "expect," "contemplate," "may," "will" and similar
projections contained in this release involve a variety of risks and
uncertainties.  These risks and uncertainties include whether the Company will
be able to maximize the value of its existing assets (by maximizing recoveries
on loans in special servicing or otherwise) or achieve or realize upon its
other goals or strategic alternatives, minimize the risk associated with its
assets, return loans to performing status or otherwise successfully resolve
defaulted loans, or complete other investment strategies, improve financial
performance, support liquidity, effectively hedge its interest rate exposure;
the trend in interest rates (including LIBOR) and the impact on the Company's
asset values and borrowing costs; the trends in the commercial real estate and
CMBS markets; competitive pressures; the trend and effect of defaulted loans,
future losses and impact of the reimbursement of master servicer advances on
the timing and amount of the Company's equity and cash flows and its need for
liquidity; general economic conditions; restrictive covenants and other
restrictions under the operative documents evidencing the Company's outstanding
secured and other obligations (including a repurchase agreement); the
possibility that the Company's trader election may be challenged and that the
Company will, therefore, not be able to mark-to-market its securities, or that
it will be limited in its ability to recognize certain losses, resulting in an
increase in shareholder distribution requirements with the possibility that the
Company may not be able to make such distributions or maintain REIT status; as
well as the risks and uncertainties that are set forth from time to time in the
Company's publicly filed reports, including its Annual Report on Form 10-K for
the most recent year and Quarterly Report on Form 10-Q for the most recent
quarter.  Such statements are subject to these risks and uncertainties, which
could cause actual results to differ materially from those anticipated.  CRIIMI
MAE assumes no obligation to update or supplement forward-looking statements
that become untrue because of subsequent events.

  CRIIMI MAE INC.
  CONSOLIDATED STATEMENTS OF INCOME

                                       For the three months ended March 31,
                                           2005                    2004

  Interest income:
    CMBS:
      CMBS pledged to secure
       recourse debt                 $   2,802,474           $   15,759,941
      CMBS                               7,022,202                      -
      CMBS pledged to secure non-
       recourse debt                    12,456,236                6,531,503
    Insured mortgage securities            338,985                2,018,105
        Total interest income           22,619,897               24,309,549

  Interest expense:
    Recourse debt                        1,733,006                4,832,550
    Non-recourse debt                   11,420,721                8,513,142
    Other                                    4,587                   42,448
        Total interest expense          13,158,314               13,388,140

        Net interest margin              9,461,583               10,921,409

  Fee/other income:
    Servicing revenue                    1,970,871                3,007,816
    Other income                           365,237                  741,890
        Total fee/other income           2,336,108                3,749,706

  Operating expenses:
    General and administrative
     expenses                            2,816,096                2,711,153
    Equity compensation expense            287,600                  144,464
    Depreciation and amortization          601,022                  116,413
    Servicing general and
     administrative expenses             2,101,365                1,925,370
    Servicing amortization,
     depreciation, and impairment
     expenses                              213,027                  227,727
    Income tax expense                         -                      3,016
    BREF maintenance fee                   434,000                  434,000
        Total operating expenses         6,453,110                5,562,143

  Other:
    Net losses on insured mortgage
     security dispositions                 (77,223)                (625,813)
    Net loss on extinguishment of debt         -                   (707,116)
    Impairment of REO asset                    -                 (2,608,740)
    Impairment of CMBS                  (3,484,905)                (518,215)
    Impairment of mezzanine loan               -                   (526,865)
    Net gains on derivatives               489,466                  318,160
    Net income (expenses) from lease
     termination and recapitalization       37,605                 (242,840)
        Total other                     (3,035,057)              (4,911,429)

  Net income before dividends paid on
   preferred shares                      2,309,524                4,197,543
  Dividends paid on preferred shares    (1,481,708)              (1,726,560)
  Net income to common shareholders  $     827,816           $    2,470,983


    Earnings per common share:
        Basic                        $        0.05           $         0.16
        Diluted                      $        0.05           $         0.16

    Shares used in computing basic
     earnings per share                 15,516,287               15,385,906
    Shares used in computing diluted
     earnings per share                 15,946,310               15,642,742



                               CRIIMI MAE INC.

                                         As of                   As of
  Balance Sheet Data                 March 31, 2005        December 31, 2004

  Retained CMBS Portfolio, at fair
   value                             $ 327,248,575            $ 334,903,970

  CMBS pledged to secure non-recourse
   debt, at fair value                 614,882,976              625,752,451

  Insured mortgage securities, at
   fair value                           14,966,999               37,783,332

  Cash and cash equivalents             48,571,925               41,073,516

  TOTAL ASSETS                       1,033,162,032            1,069,939,392

  Total recourse debt                   73,681,667               73,681,667

  Total non-recourse debt (match-
   funded and other non-recourse
   debt)                               534,640,687              556,323,307

  TOTAL DEBT                           608,322,354              630,004,974

  SHAREHOLDERS' EQUITY                 412,462,970              428,057,560



                                               For the three months ended
  Significant Sources and Uses of Cash            March 31,     March 31,
  (in millions)                                    2005          2004

  Sources and Uses of Cash Related
   to Other Activities (1):
    Cash received from Retained CMBS Portfolio  $   11.4       $   9.5
    Cash from non-core assets (2)                    1.0           3.3
    Cash used to service debt, excluding
     match-funded debt:
       Principal payments                            -            (1.3)
       Interest payments                            (0.5)         (3.2)
    Cash used to make interest rate swap
     payments                                       (0.2)         (0.8)
    General and administrative expenses (3)         (2.8)         (2.7)
    BREF maintenance fee (3)                        (0.4)         (0.4)
    Cash used to pay preferred dividends            (1.5)         (1.7)

  Sources and Uses of Cash Related
   to Equity/Other Transactions:
    Cash used to purchase option on interest
     rate swap                                      (0.3)           -
    Cash from issuance of Series B Preferred
     Stock                                           -            14.9
    Cash received/ used to exercise clean-up
     calls related to non-recourse debt              -            (1.1)

  (1) The amounts in this summary table do not include cash received on our
      CMBS pledged to secure non-recourse debt and the associated non-
      recourse debt payments. CMSLP's cash is not used to service our debt
      or pay dividends and is therefore excluded from this summary table.
      CMSLP retains its cash to fund its operations.

  (2) Includes cash received primarily from our interests in the insured
      mortgage securities, mezzanine loans and AIM Limited Partnerships.
      The amount for the three months ended March 31, 2004 includes proceeds
      aggregating $1.8 million from the liquidation of three AIM Limited
      Partnerships.

  (3) The general and administrative expenses and BREF maintenance fee are
      the amounts as reflected in our consolidated income statement. General
      and administrative expenses for the three months ended March 31, 2005
      include certain costs associated with the Board's review of strategic
      alternatives, including legal costs of approximately $475,000.



                RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

                                CRIIMI MAE INC.
          COMPUTATION OF ADJUSTED BOOK VALUE PER DILUTED COMMON SHARE

                                     As of                   As of
                                 March 31, 2005         December 31, 2004
                             Amount   Book Value     Amount     Book Value
                              (in     per Diluted     (in       per Diluted
                           thousands) Common Share  thousands)  Common Share

  Total shareholders'
   equity in conformity
   with GAAP              $  412,463               $  428,058
      Less:  Liquidation
       value of preferred
       stock                 (54,475)                 (54,475)
  Shareholders' equity
   attributable to common
   shareholders              357,988   $  22.38       373,583      $23.49
      Less:  CMBS pledged
       to secure non-
       recourse debt        (614,883)    (38.44)     (625,752)     (39.34)
      Add:  Non-recourse
       debt secured by
       pledge of CMBS        527,905      33.00       526,839       33.12
  Adjusted shareholders'
   equity attributable to
   common shareholders    $  271,010   $  16.94    $  274,670    $  17.27


                                     As of                     As of
                                 March 31, 2005          December 31, 2004
  Shares used in computing
   book value per diluted
   common share                     15,995,766                15,906,650


DATASOURCE: CRIIMI MAE



CONTACT:  For shareholders and securities brokers: Susan B. Railey of

CRIIMI MAE Inc., [phone]; or for news media: James T. Pastore,

[phone], for CRIIMI MAE Inc.



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

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