[GYRODYNE LETTERHEAD]





Dear Shareholders:

Since we prepared the accompanying 2005 Annual Report and the enclosed letter to
shareholders, certain important events have occurred which we would like to draw
to your attention.

As noted in a press release we issued earlier this month, on November 2, 2005
Stony Brook University (the "University") exercised the authority granted under
the Eminent Domain Procedural Law (EDPL) to condemn 245 acres of our Flowerfield
property. The University served us with a Notice of Advance Payment, which
included the University's valuation of the acreage at $26.3 million.

We rejected that offer as grossly undervaluing the property. Pursuant to the
EDPL, we will be pursuing a higher valuation in the New York State Court of
Claims. We are organizing an intense and proactive effort to be compensated for
the fair market value of the property and we are confident that we will be able
to make a credible case in the Court of Claims that the advance payment
represents only a small portion of the property's value.

For further information regarding the University's condemnation, we direct your
attention to the press releases issued regarding this matter which can be found
on the Company's website at www.Gyrodyne.com.

The Board of Directors recently received the final report of our investment
bankers, Coady Diemar Partners, regarding strategic alternatives for the future
direction of the Company. The Board and management have been evaluating the
report and will make a presentation at our December 9, 2005 shareholder meeting
regarding the future direction of the Company and the alternative strategies it
is considering to maximize and expedite the realization of shareholder value. We
encourage you to attend the meeting.

                                         Very truly yours

                                         /s/ Stephen V. Maroney

                                         Stephen V. Maroney
                                         President & Chief Executive Officer