CRIIMI MAE Reports Third Quarter GAAP Net Loss of $7.4 Million

CRIIMI MAE Reports Third Quarter GAAP Net Loss of $7.4 Million 


ROCKVILLE, Md., Nov. 12  /PRNewswire-FirstCall/ -- CRIIMI MAE Inc.  today
reported a GAAP net loss of $7.4 million, or $0.49 per diluted share, for the
third quarter of 2003 compared to a net loss of $25.1 million, or $1.80 per
diluted share, for the third quarter of 2002.

                          SIGNIFICANT HIGHLIGHTS

  -- Named a new President in September and an Executive Vice President of
     Asset Management in October

  -- 16% decrease in specially serviced loans during the quarter, including
     two significant hotel loan resolutions

  -- Executed a $200 million secured borrowing facility

  -- Recognized impairment charges of $4.7 million on certain subordinated
     CMBS

  -- Recognized executive contract termination costs of $2.9 million as
     management compensation was realigned

  -- Recognized hedging expense of $1.9 million associated with the
     anticipated CDO transaction




Barry Blattman, Chairman and Chief Executive Officer, stated: "The credit
performance of the mortgage loans underlying CRIIMI MAE's CMBS continues to be
impacted by the lagging weakness in the hotel, retail and certain other
commercial property sectors contributing to the Company's recognition of
impairment during the second and third quarters of this year.  However, a 16%
decrease in the total specially serviced loans since the second quarter of 2003,
despite the continuing weak commercial real estate fundamentals, is a positive
development for CRIIMI MAE.  We are pleased Stephen Abelman, who has extensive
real estate experience, has joined the Company as our new executive vice
president of asset management to help us address the ongoing challenges and
explore opportunities related to the mortgage loans underlying our CMBS."

  FINANCIAL RESULTS

  3rd Quarter Net Loss


Net loss to common shareholders of $7.4 million, or $0.49 per diluted share, for
the three months ended September 30, 2003 included $4.7 million of impairment
charges on certain subordinated commercial mortgage-backed securities ("CMBS"),
contract termination costs of $2.9 million related to the expiration of certain
executive employment contracts, the recognition of $1.9 million of hedging
ineffectiveness expense related to the Company's interest rate swaps and $1.6
million of additional non-cash amortization expense on collateralized mortgage
obligations, as further described below.

The Company slightly increased the overall loss estimate anticipated to occur
over the life of its subordinated CMBS, from $559 million at June 30, 2003 to
$568 million at September 30, 2003.  This revision in estimated losses (which
includes realized losses to date) reflects increased projected losses related to
certain loans currently or anticipated to be in special servicing as a result of
such factors as decreases in estimates of property values and changes in the
timing of resolutions of defaulted loans.  The $4.7 million of impairment
charges was calculated as the difference between the fair value and amortized
cost of the Company's B- and CCC rated bonds in CRIIMI MAE Commercial Mortgage
Trust Series 1998-C1, also known as CBO-2, as of September 30, 2003.  In
November 2003, the B- rated bond in CBO-2 was downgraded to D by Standard &
Poors.

In August 2003, the employment contracts for three of the Company's senior
executive officers, expired and were not renewed.  In connection with these
contract expirations, the Company recognized executive contract termination
costs of $2.9 million during the three months ended September 30, 2003.  These
contracts were put into place in 2001 to ensure management continuity following
CRIIMI MAE's Chapter 11 restructuring and through the Company's January 2003
recapitalization.  The Company's current compensation structure for its senior
executives reflects a realignment of executive compensation based on current
industry norms.

As previously announced, the Company entered into a 10-year interest rate swap
agreement to hedge the variability of the future interest payments on the
Company's anticipated collateralized debt obligation, or CDO, the proceeds of
which will be used towards repayment of the outstanding Bear Stearns debt. With
payment dates beginning in November 2003, the swaps effectively lock-in a base
fixed weighted average interest rate of approximately 4.15% on an aggregate
notional amount of $100 million, which represents a significant portion of the
anticipated CDO proceeds.  As the expected date of the CDO has been changed, the
Company recognized $1.9 million of hedging ineffectiveness expense during the
three months ended September 30, 2003.  As of September 30, 2003, the fair value
of the swaps was an asset of approximately $1.5 million.

Year to Date Net Income

For the nine months ended September 30, 2003, the Company's net loss was $6.7
million, or $0.44 per diluted share, compared to a net loss of $30.8 million, or
$2.26 per diluted share, for the same period in 2002 and included:

  -- $13.7 million of impairment charges related to certain subordinated
     CMBS,

  -- $2.9 million of executive contract termination costs,

  -- $1.9 million of hedging expense,

  -- $2.6 million of additional non-cash amortization expense on
     collateralized mortgage obligations, and

  -- several items related to the January 2003 recapitalization, including
     $7.3 million of gain on extinguishment of debt, $3.1 million of
     recapitalization expenses, and $3.1 million of additional interest
     expense related to the Company's redemption of its Series A and Series
     B Senior Secured Notes.


  Net Interest Margin


CRIIMI MAE's net interest margin decreased to $7.9 million for the three months
ended September 30, 2003 from $8.8 million for the same period last year.  For
the nine months ended September 30, 2003, CRIIMI MAE's net interest margin was
$23.0 million compared to $25.7 million for first nine months of 2002.

Total interest income decreased by $5.9 million and $16.6 million for the three
and nine months ended September 30, 2003, respectively, as compared to the same
periods in 2002.  These decreases were primarily due to the reduction in the
weighted average yield-to-maturity on the Company's subordinated CMBS, which
resulted from increased loss estimates during 2002 and 2003.  In addition,
interest income from insured mortgage securities decreased in 2003 following
significant prepayments of the underlying mortgage loans since September 2002.

Total interest expense decreased by $5.0 million and $13.9 million for the three
and nine months ended September 30, 2003, respectively, primarily due to a lower
average total debt balance and a lower average effective interest rate on the
Company's total debt outstanding during 2003, following its January 2003
recapitalization, compared to the corresponding periods in 2002.  The decrease
for the first nine months of 2003 was partially offset by $3.1 million of
additional interest incurred related to the redemption of its Series A and
Series B Senior Secured Notes and $1.6 million of additional non- cash
amortization expense on collateralized mortgage obligations, as discussed
below.

The decrease in interest expense was partially offset by approximately $1.6
million and $2.6 million of additional discount and deferred fees amortization
expenses on the collateralized mortgage obligations-insured mortgage securities
during the three and nine months ended September 30, 2003, respectively,
compared to approximately $205,000 and $964,000 of additional amortization
expenses during the corresponding periods in 2002, respectively. The increase in
amortization is the result of the underlying mortgages prepaying faster than
originally anticipated and the resulting change in 2003 for the assumed future
prepayment speeds.

During the third quarter of 2003, the average total debt balance was $805
million compared to $964 million in 2002.  The average effective interest rate
on the total debt outstanding during the third quarter of 2003 was 8.6% compared
to 9.3% in 2002.

LIQUIDITY AND SHAREHOLDERS' EQUITY

Since June 30, 2003, total liquidity has increased by 38% to $20.9 million from
$15.2 million.  At September 30, 2003, CRIIMI MAE had cash of $17 million,
including $2.5 million of cash held by the Company's servicing subsidiary,
CRIIMI MAE Services Limited Partnership.  In addition, the Company had
additional liquidity at September 30, 2003 comprised of $3.9 million in
investment grade trading securities.

CRIIMI MAE's subordinated CMBS and other assets continue to generate significant
cash.  During the third quarter of 2003, the Company received cash of $14.6
million from its subordinated CMBS, $872,000 from its investment in the AIM
Limited Partnerships, $576,000 from the insured mortgages after payment of
related debt service, and $1.9 million from its mezzanine loans (including $1.7
million from the payoff of one loan).

During the third quarter of 2003, the Company made interest and principal
payments to Bear Stearns of $3.2 million and $1.3 million, respectively.  The
Company's consolidated statements of income include general and administrative
expenses of $3.0 million, and a quarterly maintenance fee of $434,000, payable
in connection with the January 2003 recapitalization to Brascan Real Estate
Financial Investments LLC, during the third quarter of 2003.  The Company paid
dividends to its preferred shareholders of $1.7 million during the third quarter
of 2003.

Unlike most other REITs, CRIIMI MAE is presently able to distribute or retain
its net cash flows as a result of its net operating loss (NOL) carry forwards. 
On January 1, 2000, as a result of the Company's election to be taxed as a
trader, it recorded a mark-to-market tax loss of approximately $478 million on
its trading assets (the "January 2000 Loss").  Commencing in 2000, approximately
$120 million of such loss is being recognized for tax purposes each year through
2003.  For the nine months ended September 30, 2003, the Company had a taxable
loss of $63.3 million, including the amortization of $89.7 million of the
January 2000 Loss.  As of September 30, 2003, the Company's NOL carry forward
and remaining January 2000 Loss totaled $317.0 million.

As of September 30, 2003, GAAP shareholders' equity totaled $311.9 million or
$16.26 per diluted share compared to $291.7 million or $16.32 per diluted share
at December 31, 2002.  The change in total shareholders' equity is primarily
attributable to the issuance of common stock to Brascan Real Estate Finance Fund
during the January 2003 recapitalization.

CRIIMI MAE had 15,263,006 and 13,945,068 common shares outstanding as of
September 30, 2003 and December 31, 2002, respectively.

OPERATIONS

The decrease in the Company's special servicing portfolio includes the
resolution of two significant hotel borrowing relationships.   During the third
quarter, the total outstanding principal balance of loans and real estate owned
in special servicing decreased by 16% to $980.5 million, or 6.2% of the
aggregate $15.8 billion of mortgage loans underlying the Company's CMBS.  This
compares to $1.2 billion, or 7.1%, at June 30, 2003.

During the third quarter, $314.9 million of mortgage loans were transferred out
of special servicing through negotiated workouts, payoffs, sales or other
strategies, including two significant hotel loans discussed below and mortgage
loans totaling $132.9 million were transferred into special servicing.  Hotel
property mortgage loans accounted for $486.9 million, or 50% of the special
servicing portfolio at September 30, 2003, down from 61% at June 30, 2003.

As of October 31, 2003, total specially serviced loans decreased further to
$969.6 million, or 6.2% of the total mortgage loans underlying the Company's
subordinated CMBS, and included the transfer out of special servicing of $25.4
million of loans and the transfer in of $16.3 million of loans.

Status of certain significant borrowing relationships involving hotel loans in
special servicing during the quarter ended September 30, 2003 includes:

  -- The payoff of one hotel loan, with a scheduled principal balance of
     approximately $128.4 million as of June 30, 2003, secured by 93 limited
     service hotels located in 29 states.

  -- The sale to a third party of one hotel loan, with a scheduled principal
     balance of approximately $80.7 million as of June 30, 2003, secured by
     13 extended stay hotels located throughout the U.S.

  -- Proceeding towards closing on a comprehensive loan modification on 27
     hotel loans with scheduled principal balances totaling $135.3 million.
     The loans are expected to return to performing status in the fourth
     quarter of 2003 but if they are not successfully resolved, CRIIMI MAE's
     annual cash flows could be significantly reduced.

  -- The borrower, for five hotel loans with scheduled principal balances
     totaling $45.1 million, has not been able to perform under the terms of
     a preliminary agreement due to decreased demand in the Orlando
     hospitality market.  The Company expects the properties underlying
     these loans to become real estate owned by the underlying
     securitization trusts.


  RECENT DEVELOPMENTS AND ACHIEVEMENTS



Since the beginning of the third quarter, the Company instituted key changes to
its senior management team.  During September 2003, Mark Jarrell was named
President and Chief Operating Officer.  Mr. Jarrell brings with him more than 15
years of corporate and Wall Street experience in the CMBS sector. In October
2003, Cynthia Azzara, the Company's Chief Financial Officer since 1994, was
promoted to Executive Vice President.

Also in October 2003, CRIIMI MAE announced that Stephen Abelman had been named
Executive Vice President, Asset Management.  Mr. Abelman has over 15 years of
experience in asset management, dispositions, acquisitions and deal structuring.
 He reports directly to the President, Mark Jarrell.

Bear Stearns $200 million Secured Borrowing Facility

In August 2003, CRIIMI MAE executed a $200 million secured borrowing facility,
in the form of a repurchase transaction, with Bear Stearns.  The Company expects
to use this facility to acquire subordinated CMBS and to finance certain other
transactions involving securities.  The securities to be transferred to Bear
Stearns in each transaction under this facility will be subject to the approval
of Bear Stearns.  Borrowings under this facility will be secured by such
securities, will bear interest, payable monthly, at rates determined as to each
transaction ranging from one-month LIBOR plus 0.8% to one-month LIBOR plus 2%. 
No transactions have been made under this facility as of this date.

OUTLOOK

"2003 continues to be a year of change for CMM.  We have now assembled an
industry-leading team that has focused thus far on maximizing the existing
portfolio's performance.  We have had recent successes in reducing the amount of
loans in special servicing and will work toward continued reductions in the
fourth quarter.  This will help enable us to take advantage of the best strategy
for executing a CDO transaction in the near future.  And as we move closer to
2004, we intend to expand our focus to plan for new opportunities with a goal of
growing our income sources beyond our existing CMBS portfolio. The hiring of
Mark Jarrell as President and COO and Stephen Abelman as EVP of Asset
Management, and securing the $200 million borrowing facility for new
acquisitions, were significant steps in that regard," concluded Barry Blattman.

THIRD QUARTER CONFERENCE CALL

CRIIMI MAE will hold a conference call to discuss its third quarter earnings on
November 12, 2003 at 2:00 pm Eastern Time.  The conference call access number is
877-852-7897.  A replay of the call will be available through November 19 at
800-642-1687, conference ID number 3002393.

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 Shareholder Services at 301-816-2300, 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", "may" or similar expressions and projections contained
in this release involve a variety of risks and uncertainties.  These risks and
uncertainties include whether loans in special servicing will continue to
decrease; 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 strategies, minimize the risk
associated with its assets (by enhancing surveillance on underlying properties
or otherwise), return loans to performing status or otherwise successfully
resolve defaulted loans (and avoid potential significant reductions in annual
cash flows), acquire new subordinated CMBS or other mortgage-related assets, or
complete other investment strategies, execute a CDO transaction or other
refinancing and repay all or any portion of the Bear Stearns debt, improve
financial performance, support liquidity, effectively hedge its interest rate
exposure, earn attractive returns or enhance shareholder value; the trends in
the commercial real estate and CMBS markets; competitive pressures; the effect
of future losses and impact of the timing and amount of master servicer advances
made in connection with CMBS on the Company's 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); results of
operations, leverage, financial condition, business prospects and restrictions
on business activities under the operative documents evidencing the Company's
secured and other obligations; the possibility that the Company's trader
election may be challenged on the grounds that the Company is not in fact a
trader in securities or that it is only a trader with respect to certain
securities 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; the likelihood that mark-to-market losses will increase
and decrease due to changes in the fair market value of the Company's trading
assets, as well as the risks and uncertainties that are set forth from time to
time in the Company's SEC reports, including its Annual Report on Form 10-K for
the year ended December 31, 2002 and Quarterly Report on Form 10-Q for the
quarter ended June 30, 2003.  Such statements are subject to these risks and
uncertainties, which could cause actual results to differ materially from those
projected.  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 September 30,
                                             2003                    2002
     Interest income:
      CMBS                              $22,121,471             $25,678,715
      Insured mortgage securities         3,486,162               5,829,458

      Total interest income              25,607,633              31,508,173

     Interest and related expenses:
      Bear Stearns variable rate
       secured debt                       3,550,104                     -
      BREF senior subordinated secured
       notes                              1,261,084                     -
      Exit variable-rate secured
       borrowing                                -                 3,700,424
      Series A senior secured notes             -                 2,889,054
      Series B senior secured notes             -                 3,480,499
      Fixed-rate collateralized bond
       obligations-CMBS                   7,032,898               6,397,966
      Fixed-rate collateralized
       mortgage obligations-
       insured securities                 5,353,098               5,642,316
      Hedging expense                       274,167                 353,085
      Other interest expense                240,179                 245,984

      Total interest expense             17,711,530              22,709,328

     Net interest margin                  7,896,103               8,798,845

      General and administrative
       expenses                          (3,027,061)             (2,782,419)
      Deferred compensation expense         (23,810)                (16,732)
      Depreciation and amortization        (131,472)               (312,388)
      Servicing revenue                   2,425,138               2,976,371
      Servicing general and
       administrative expenses           (2,500,850)             (2,222,008)
      Servicing amortization,
       depreciation and impairment
       expenses                            (293,090)               (508,000)
      Servicing restructuring expenses       (6,301)                    -
      Servicing gain on sale of
       servicing rights                         -                    34,309
      Income tax benefit (expense)          323,704                 481,256
      Equity in earnings from
       investments                           91,006                  98,005
      Other income, net                     292,549                 711,923
      Net losses on mortgage security
       dispositions                        (749,305)               (310,722)
      Impairment on CMBS                 (4,704,878)            (29,884,497)
      BREF maintenance fee                 (434,000)                    -
      Executive contract termination
       costs                             (2,875,699)                    -
      Hedging ineffectiveness            (1,930,198)                    -
      Recapitalization expenses                 -                  (438,889)
      Gain on extinguishment of debt            -                       -
                                        (13,544,267)            (32,173,791)
      Net loss before cumulative effect
       of change in accounting principle (5,648,164)            (23,374,946)

      Cumulative effect of adoption of
       SFAS 142                                 -                       -


      Net loss before dividends paid
       or accrued on preferred shares    (5,648,164)            (23,374,946)

      Dividends paid or accrued on
       preferred shares                  (1,726,560)             (1,726,560)

      Net loss to common shareholders   $(7,374,724)           $(25,101,506)


                 FINANCIAL STATEMENT EARNINGS (LOSS) PER SHARE

     Total basic earnings (loss) per
      share -- before cumulative effect
      of change in accounting principle      $(0.49)                 $(1.80)

     Total basic earnings (loss) per
      share -- after cumulative effect
      of change in accounting principle      $(0.49)                 $(1.80)

     Total diluted earnings (loss) per
      share -- before cumulative effect
      of change in accounting principle      $(0.49)                 $(1.80)

     Total diluted earnings (loss) per
      share -- after cumulative effect
      of change in accounting principle      $(0.49)                 $(1.80)

     Shares used in computing basic
      earnings (loss) per share          15,204,913              13,926,600



                             CRIIMI MAE INC.
                    CONSOLIDATED STATEMENTS OF INCOME

                                                  For the nine months
                                                   ended September 30,
                                                2003                2002
     Interest income:
      CMBS                                  $66,307,216         $76,815,219
      Insured mortgage securities            12,413,163          18,468,181

      Total interest income                  78,720,379          95,283,400

     Interest and related expenses:
      Bear Stearns variable rate
       secured debt                          10,047,040                 -
      BREF senior subordinated secured
       notes                                  3,519,973                 -
      Exit variable-rate secured
       borrowing                                859,106          11,397,375
      Series A senior secured notes           2,130,722           8,781,875
      Series B senior secured notes           2,697,006          10,289,704
      Fixed-rate collateralized bond
       obligations-CMBS                      19,775,900          19,337,866
      Fixed-rate collateralized
       mortgage obligations-
       insured securities                    15,028,861          18,297,034
      Hedging expense                           900,655             749,412
      Other interest expense                    711,556             743,966

      Total interest expense                 55,670,819          69,597,232

     Net interest margin                     23,049,560          25,686,168

      General and administrative
       expenses                              (8,815,893)         (8,588,203)
      Deferred compensation expense             (43,331)            (93,422)
      Depreciation and amortization            (450,296)           (920,928)
      Servicing revenue                       7,314,725           8,233,944
      Servicing general and
       administrative expenses               (6,824,975)         (6,847,992)
      Servicing amortization,
       depreciation and impairment
       expenses                              (1,180,842)         (1,418,810)
      Servicing restructuring expenses         (150,672)           (141,240)
      Servicing gain on sale of
       servicing rights                             -             4,851,907
      Income tax benefit (expense)              509,934            (427,520)
      Equity in earnings from
       investments                              212,341             330,747
      Other income, net                         988,208           2,142,354
      Net losses on mortgage security
       dispositions                            (522,805)           (567,014)
      Impairment on CMBS                    (13,652,756)        (35,035,588)
      BREF maintenance fee                   (1,229,667)                -
      Executive contract termination
       costs                                 (2,875,699)                -
      Hedging ineffectiveness                (1,930,198)                -
      Recapitalization expenses              (3,148,841)           (683,333)
      Gain on extinguishment of debt          7,337,424                 -
                                            (24,463,343)        (39,165,098)
      Net loss before cumulative effect
       of change in accounting principle     (1,413,783)        (13,478,930)

      Cumulative effect of adoption of
       SFAS 142                                     -            (9,766,502)


      Net loss before dividends paid
       or accrued on preferred shares        (1,413,783)        (23,245,432)

      Dividends paid or accrued on
       preferred shares                      (5,279,179)         (7,602,537)

      Net loss to common shareholders       $(6,692,962)       $(30,847,969)



                 FINANCIAL STATEMENT EARNINGS (LOSS) PER SHARE

     Total basic earnings (loss) per
      share -- before cumulative effect
      of change in accounting principle          $(0.44)             $(1.55)

     Total basic earnings (loss) per
      share -- after cumulative effect
      of change in accounting principle          $(0.44)             $(2.26)

     Total diluted earnings (loss) per
      share -- before cumulative effect
      of change in accounting principle          $(0.44)             $(1.55)

     Total diluted earnings (loss) per
      share -- after cumulative effect
      of change in accounting principle          $(0.44)             $(2.26)

     Shares used in computing basic earnings
      (loss) per share                       15,114,173          13,635,656



                               CRIIMI MAE INC.

                                              As of              As of
     Balance Sheet Data                 September 30, 2003   Dec. 31, 2002

     CMBS, at fair value                    $860,319,959      $861,980,472

     Insured mortgage securities, at
      fair value                             168,293,213       275,340,234

     Restricted and unrestricted cash
      (including CMSLP cash)                  16,951,002        37,212,923

     Total assets                          1,107,258,869     1,241,085,243

     Total recourse debt                     328,766,667       375,952,338

     Total non recourse debt
      (match-funded and other debt)          452,898,555       546,039,226

     Shareholders' equity                    311,853,122       291,661,090


DATASOURCE: CRIIMI MAE Inc.



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

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

Pastore Communications Group LLC, [phone], for CRIIMI MAE Inc.



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

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