Exhibit 99.1

EXHIBIT 99.1

NEWS RELEASE

FOR IMMEDIATE RELEASE

Contact:

Income Opportunity Realty Investors, Inc.

Investors Relations

(800) 400-6407

investor.relations@primeasset.com

Income Opportunity Realty Investors, Inc. Reports Quarterly Results

DALLAS (August 14, 2006) - Income Opportunity Realty Investors, Inc. (AMEX: IOT), a Dallas-based real estate investment company, today reported net income of $659,000 or $0.16 per share for the six months ended June 30, 2006, compared to $833,000 and $0.20 per share for the same period in 2005.

Key items for the six months ended June 30, 2006, compared to the same period in 2005 included:

Rental income for the three and six months ended June 30, 2006 were $1.9 million and $3.6 million as compared to $1.6 million and $3.1 million in the corresponding periods in 2005. The increase is primarily due to rental increases and the purchase of Falcon Point Apartments in Indianapolis, Indiana.

·	Property operating expenses for the three and six months ended June 30, 2006 were $1.0 million and $1.8 million as compared to $825,000 and $1.6 million for the corresponding periods in 2005.

Interest income for the three and six months ended June 30, 2006 was $844,000 and $2.0 million compared to $984,000 and $2.0 million for the corresponding periods in 2005. Increases were due to interest earned from additional notes receivable obtained from affiliates of IORI. These increases were offset by the cancellation of certain notes.

Interest expense for the three and six months ended June 30, 2006 was $1.1 million and $2.1 million compared to $562,000 and $1.5 million for the corresponding periods in 2005. The increase was primarily due to the additional debt incurred by IORI during 2005 and 2006 due to refinancings and the acquisition of Falcon Point apartments. The increase was also due to increased interest rates for IORI’s variable interest rate debt.

·	Depreciation expense for the three and six months ended June 30, 2006 was $190,000 and $360,000 compared to $173,000 and $350,000 for the corresponding periods in 2005. The increase was due principally to the acquisition of Falcon Point.

Advisory fees to affiliate for the three and six months ended June 30, 2006 were $243,000 and $417,000 compared to $170,000 and $337,000 for the corresponding periods in 2005. The increase was due primarily to a net increase in gross assets which is the basis of the advisory fee and a fee for refinancing certain mortgage obligations.

·	The net income fee to affiliates for the three and six months ended June 30, 2006 was $5,000 and $55,000 as compared to $55,000 and $67,000 in the corresponding periods in 2005. The net income fee is based on 7½% of IORI’s net income.

·	General and administrative expenses for the three and six months ended June 30, 2006 were $132,000 and $282,000 as compared to $199,000 and $341,000 in the corresponding periods in 2005.

Income Opportunity Realty Investors, Inc., a Dallas-based real estate investment company, holds a diverse portfolio of real estate properties located in Texas, including office buildings, apartments, and undeveloped land. For more information, go to IORI’s website at www.incomeopp-realty.com.

INCOME OPPORTUNITY REALTY INVESTORS, INC.

CONSOLIDATED BALANCE SHEETS

(dollars in thousands)

	June 30, 2006			December 31, 2005
	(Unaudited)

Assets
Real estate held for investment	$	62,992		$	35,083
Less—accumulated depreciation		(4,670	)		(4,311	)
		58,322			30,772

Related party receivable (including accrued interest of $2,444 and $2,391 in 2006 and 2005, respectively)		26,941			63,230
Investment in real estate partnerships		628			547
Cash and cash equivalents		766			201
Due from affiliates		308			1,853
Other assets		3,438			2,738
	$	90,403		$	99,341

Liabilities and Stockholders’ Equity

Liabilities:
Notes payable (including accrued interest of $176 and $228 for 2006 and 2005, respectively)	$	42,854		$	52,817
Due to affiliates		542			—
Other liabilities		1,126			1,344
		44,522			54,161

Commitments and contingencies

Minority interest		555			513

Stockholders’ equity:
Common Stock, $.01 par value; authorized, 100,000,000 shares; issued and outstanding 4,168,035 shares at June 30, 2006 and December 31, 2005		42			42
Additional paid-in capital		61,955			61,955
Accumulated deficit		(16,671	)		(17,330	)
		45,326			44,667
	$	90,403		$	99,341

INCOME OPPORTUNITY REALTY INVESTORS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars per thousand, except share data)

(Unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2006			2005						2005

Property Revenue
Rents and other property revenues	$	1,923		$	1,613		$	3,620		$	3,142

Operating expenses
Property operations		1,032			825			1,836			1,646
Depreciation		190			173			360			350
General and administrative		132			199			282			341
Advisory fees		243			170			417			337
Total operating expenses		1,597			1,367			2,895			2,674

Operating income		326			246			725			468

Other income (expense):
Interest income		844			984			1,998			1,958
Mortgage and loan interest		(1,152	)		(562	)		(2,048	)		(1,498	)
Net income fee		(5	)		(55	)		(55	)		(67	)
Total other income (expense)		(313	)		367			(105	)		393

Income before equity in earnings of investees and minority interest		13			613			620			861

Equity in earnings (loss) of investees		81			(19	)		81			(28	)

Minority interest		(29	)					(42	)

Net income	$	65		$	594		$	659		$	833

Earnings per share:
Net earnings from continuing operations	$	0.02		$	0.14		$	0.16		$	0.20


Weighted average common shares used in computing earnings per share		4,168,035			4,168,035			4,168,035			4,168,035

Earnings per share reflect a 3-for-1 forward split of the stock in the form of a 200% stock dividend declared in May 2005.