Capital Automotive Subsidiary Completes $228 Million Debt Securitization

MCLEAN, Va., March 27 -- Capital Automotive REIT , the nation's leading specialty finance company for automotive retail real estate, announced today that a subsidiary has issued in a private offering $228 million of Triple Net Lease Mortgage Notes, Series 2003-1 ("Notes"). The Notes were issued in two classes and each was rated "Aaa" and "AAA" by Moody's Investors Service, and Standard & Poor's Ratings Services, respectively. The Notes are insured by MBIA Insurance Corporation. CARS Loan Servicer L.L.C., a subsidiary of Capital Automotive, will act as servicer of the Notes on behalf of the noteholders. Credit Suisse First Boston acted as lead manager while Salomon Smith Barney acted as co-manager on the transaction.

The fixed-rate Notes are collateralized by 50 automotive retail properties that are subject to long-term, triple-net leases. The Notes have a weighted average effective interest rate (including deferred fees amortized over the life of the Notes) of approximately 5.8%. The Class A-1 notes totaling $109 million mature on September 25, 2015 and are fully amortizing. The Class A-2 notes totaling $119 million mature on March 25, 2019 and are based upon a 20- year amortization schedule. The loan-to-value on the transaction is approximately 70%. Net proceeds will be used to pay down borrowings on our short-term credit facilities totaling approximately $111 million and to pay off approximately $92 million of short-term variable rate mortgage debt due in April 2003. The remaining net proceeds will be used to fund future acquisitions and for general corporate purposes.

David S. Kay, Senior Vice President and Chief Financial Officer, stated that, "This transaction reflects the high quality of our real estate and credit worthiness of our tenants. We continue to believe in minimizing interest rate risk by match-funding our balance sheet, and this transaction is further evidence of this strategy. The Notes will allow us to term out our short-term debt at historic low interest rate levels. As of the closing date, approximately 91% of our debt will be substantially match-funded with long- term leases."

The Notes have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement.

Capital Automotive, headquartered in McLean, Virginia, is a self- administered, self-managed real estate investment trust that acquires real property and improvements used by operators of multi-site, multi-franchised automotive dealerships and related businesses. Additional information on Capital Automotive is available on the Company's Web site at http://www.capitalautomotive.com/.

Certain matters discussed within this press release are forward-looking statements within the meaning of the federal securities laws. Although the Company believes that the expectations reflected in the forward-looking statements are based upon reasonable assumptions, the Company's future operations will depend on a number of factors that may differ, some materially, from the Company's assumptions. These factors, which could cause the Company's actual results to differ materially from those set forth in the forward-looking statements, include risks that our tenants will not pay rent; risks related to our reliance on a small number of tenants for a significant portion of our revenue; risks of financing, such as our ability to consummate planned and additional financings on terms that are acceptable to us and our ability to meet existing financial covenants; risks that our growth will be limited if we cannot obtain additional capital; risks that planned and additional acquisitions may not be consummated; risks related to the automotive industry, such as the ability of our tenants to compete effectively in the automotive retail industry and the ability of our tenants to perform their lease obligations as a result of changes in any manufacturer's production, supply, vehicle financing, marketing or other practices or changes in the economy generally; risks generally incident to the ownership of real property, including adverse changes in economic conditions, changes in the investment climate for real estate, changes in real estate taxes and other operating expenses, adverse changes in governmental rules and fiscal policies and the relative illiquidity of real estate; environmental and other risks associated with the acquisition and leasing of automotive properties; risks related to our status as a REIT for federal income tax purposes, such as the existence of complex regulations relating to our status as a REIT, the effect of future changes in REIT requirements as a result of new legislation and the adverse consequences of the failure to qualify as a REIT; and those risks detailed from time to time in the Company's SEC reports, including its annual report on Form 10-K and its quarterly reports on Form 10-Q. The Company makes no promise to update any of the forward-looking statements or to publicly release the results if the Company revises any of them.