March 1, 2004

San Francisco, CA.

Lynch Investments Announces the Sale of Fontana Portfolio

For Immediate Release:

In January of 2004, Lynch Investments sold its last Fontana property, the 60-unit Juniper Terrace Apartments. This sale represented the last of eleven multifamily properties that Lynch had acquired in the Inland Empire of Southern California since 2001, on behalf of four different investment groups. Over that time, Lynch's acquisitions totaled over 300 apartment units, primarily in the city of Fontana. These eleven properties were purchased for a little more than $15 million and ultimately sold for over $21 million. The average holding period for each property was slightly more than one year.

Lynch had marked the Inland Empire as an acquisition target prior to 2001 on a rationale based on visibly high cap rates in an area that had previously failed to attract significant investor attention. Lynch reasoned that there would be continued upward pressure on relatively low rents, especially when compared with properties in population centers nearer to the Southern California coast. Prior to 2001, this pricing pressure had not yet resulted in dramatically higher selling prices. In addition, stiff barriers to entry in Fontana precluded the introduction of new product. The timing of Lynch's purchases thus allowed Lynch and its investors to participate in property value gains of as much as 50% in a little more than a one year holding period.

Lynch Investments continues to identify and acquire properties that exhibit the potential for compelling returns. The recent purchase of the Hampton Green Apartments in San Antonio, Texas, represents Lynch Investments' third acquisition in San Antonio.

For more information, please contact David Becker at (415) 364-3606 or send an email message to dbecker@lynchinvestments.com.


David Becker
Director of Investor Relations

Lynch Investments, LLC
505 Sansome Street, Suite 1450
San Francisco, CA. 94111

Tel: (415) 364-3606
Fax: (415) 362-9343

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