CEDAR INCOME FUND, LTD.
                          44 South Bayles Avenue, #304
                         Port Washington, New York 11050

                                            Contact:   Brenda J. Walker
                                                       Vice President/Treasurer
                                                       (516) 767-6492
FOR IMMEDIATE RELEASE:

              CEDAR INCOME FUND ANNOUNCES SALE OF ILLINOIS PROPERTY
                       AND INTENTION TO REINVEST PROCEEDS

Port Washington, New York - July 2, 2001 - Cedar Income Fund, Ltd. (NASDAQ)
today announced that it had completed the sale of Corporate Center East in
Bloomington, Illinois. Management has advised that this property, like the Salt
Lake office/warehouse facility sold in May of this year, does not fit the
Company's future primary portfolio focus on retail properties.

The Board of Directors of the Company has also decided to retain and reinvest
the net proceeds of the sale of Corporate Center East and of the Salt Lake
property in certain qualifying retail properties, including, without limitation,
three supermarket-anchored shopping centers in eastern Pennsylvania and southern
New Jersey, as previously announced. In this regard, the Board and management
expect to elect to defer any gain for Federal income tax purposes with respect
to such sales pursuant to the tax-free exchange provisions of Section 1031 of
the Internal Revenue Code. Accordingly, the Directors do not presently
contemplate distribution of any capital gain dividend for the year nor any
ordinary dividend except to the extent required to meet the distribution
requirements of continued REIT status under the Internal Revenue Code (generally
90% of certain otherwise taxable income, if any). Such determination as to
required distributions, if any, will be made in December of this year.

Cedar Income Fund, Ltd. is a real estate investment trust administered by Cedar
Bay Realty Advisors, Inc., Port Washington, New York. Shares of Cedar Income
Fund, Ltd. are traded on the NASDAQ (Small Cap) Market under the symbol "CEDR".