DESERT CAPITAL REIT, INC. ANNOUNCES FIRST QUARTER 2005 RESULTS

• Net income of $0.27 per share, up 170% from 4Q04
• Annualized return on equity of 10.6%
• New loan fundings of $9,600,000
• Total loans of $22,600,000 at end of 1Q05, up 31% from December 31, 2004
• Paid monthly dividends of $0.075 per share

LAS VEGAS (May 19, 2005)— Desert Capital REIT, Inc., a real estate investment trust focused on the business of investing in loans to owners and developers of real estate properties with a portfolio of mortgage loans consisting of acquisition and development, construction, and commercial property loans, today announced financial results for the period ended March 31, 2005. Desert Capital REIT, Inc., (DCR) reported net income for the quarter ended March 31, 2005, of $697,976, or $0.27 per common share. Return on equity, on an annualized basis, was 10.6%.

Todd B. Parriott, CEO and Chairman of the Board of Directors of Desert Capital REIT, Inc., said, “We are pleased with our financial performance in the first quarter. And with the ongoing acquisition and management transition of Consolidated Mortgage, one of the largest private trust deed firms in the United States with over $350,000,000 in currently brokered loans, our financial position is being further strengthened.”

“The recently announced increase in dividend returns on our $10 shares of common stock from 9 percent to 12 percent, is also a definitive moment for Desert Capital in that we are now offering one of the highest yields in the industry. The decision by our Board of Directors to increase the dividend shows great faith in our ability to grow our loan portfolio and to continue in exceeding shareholder expectations,” added Mr. Parriott.

Total revenues for the quarter ended March 31, 2005, were $1,340,000, an increase of 90.1% from the previous quarter. Interest income for the first quarter was $593,000, an increase of 50.6% from the previous quarter. The balance in the loan portfolio increased from $17,000,000 at the beginning of the quarter to $22,600,000 by quarter end.

Portfolio Activity
During the first quarter, DCR funded all or a portion of 74 loans totaling $9,600,000. Of the new loans, 35 were Acquisition and Development loans totaling $6,100,000, and 39 were Construction loans totaling $3,500,000.

At March 31, 2005, DCR's loan portfolio balance was $22,600,000, with a weighted average current interest pay rate of 12.64%.

DCR's loan and investment portfolio continues to perform beyond expectations and there have been no defaults to date. DCR continues to seek loans and investments that will generate superior risk adjusted returns with a long- term objective of capital preservation and earnings stability in varying interest rate and credit cycles.

Dividend
As previously disclosed, on January 14, February 15, and March 15, DCR paid a dividend of $0.075 per share for shareholders of record on December 31, January 31, and February 28.

About Desert Capital REIT, Inc.
Desert Capital REIT, Inc. is a Las Vegas, Nevada-based real estate investment trust that invests in loans to owners and developers of real estate properties. Formed in December 2003, Desert Capital’s portfolio of mortgage loans consists of acquisition and development, construction, commercial property and residential loans. For more information, please call (800) 419-2855 or visit www.desertcapitalreit.com.

Statements included herein that state the company's or management's intentions, hopes, beliefs, expectations or predictions of the future are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 which by their nature, involve known and unknown risks and uncertainties. The company’s actual results, performance or achievements could differ materially from those expressed or implied by such statements.

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