AVATAR REPORTS FIRST QUARTER RESULTS OF OPERATIONS

Source: Avatar Holdings, Inc.

May 19, 1999
Avatar Holdings Inc. has reported a net loss of $597,000 on revenues of $30,413,000 for the quarter ended March 31, 1999, compared to a net loss of $5,075,000 on revenues of $24,485,000 for the quarter ended March 31, 1998.

Net loss before extraordinary item was $597,000 for the first quarter of 1999 and $2,767,000 for the first quarter of 1998. The extraordinary item for 1998 was a loss of $2,308,000 on the early extinguishment of debt relative to the redemption of the 8% and 9% Senior Debentures due 2000.

Improved results for the first quarter of 1999 compared to 1998 are primarily attributable to an increase in real estate operating results, principally due to an increase in pre-tax profit contribution from homebuilding operations. For the quarter ended March 31, 1999 pre-tax profit contribution was $2,156,000 compared to $525,000 for the quarter ended March 31, 1998.

Avatar also recently reported the sale on April 15, 1999 by two of its operating subsidiaries of their water and wastewater utilities assets in the counties of Brevard, Collier, Hillsborough, Lee, Osceola, Polk and Sarasota, Florida. The sale, at a cash sale price of approximately $208,619,000, subject to certain adjustments, results in available pre-tax cash proceeds of approximately $139,249,000 after payment of indebtedness, certain other liabilities and expenses and redemption of preferred stock of a utilities subsidiary.

On May 5, 1999, Avatar reported the signing of a contract for the sale by certain subsidiaries of substantially all real estate assets located in Cape Coral, Florida. The sale price of approximately $45 million, subject to certain adjustments, will result in available cash proceeds of approximately $37 million after payment of related indebtedness and expenses. The sale is expected to close by June 30, 1999. Avatar retains a 692-acre site in northeast Cape Coral for potential future development as an active adult community.

As of May 12, 1999, a subsidiary of Avatar entered into a contract for the sale of its vacation ownership operations. Closing of the sale is expected to occur during the third quarter of 1999. Pre-tax cash proceeds are expected to approximate $3.5 million after payment of related indebtedness and expenses.

Development and construction of Avatar's 3,300-acre active adult community at its central Florida property of Poinciana has proceeded according to schedule. Pre-construction sale of homes is expected to commence in the fourth quarter of 1999, and grand opening of the community is planned for early 2000.

Avatar Holdings Inc. is primarily engaged in real estate operations in Florida and Arizona. Its principal real estate operations are conducted at Poinciana in central Florida near Orlando, Harbor Islands on Florida's east coast and at Rio Rico, south of Tucson, AZ. Avatar's common shares trade on The Nasdaq Stock Market under the symbol AVTR. The 7% Notes trade on The Nasdaq SmallCap Market under the symbol AVTRG.