Capital Automotive REIT to Be Acquired

MCLEAN, Va., Sept. 6 -- Capital Automotive REIT , the nation's leading specialty finance company for automotive retail real estate, today announced the signing of a definitive merger agreement to be acquired by clients advised by DRA Advisors LLC.

Under the terms of the agreement, holders of the Company's common shares will receive $38.75 per share payable in cash upon the closing of the merger and will thereafter cease to be shareholders of the Company. The per share purchase price represents a 9.0% premium over the Company's closing share price on September 2, 2005 and an 8.6% premium over the prior ten trading day average share price. The total transaction value is approximately $3.4 billion, including the assumption of Company indebtedness and preferred shares. The Company will continue to pay regular quarterly dividends on the Company's common shares and operating partnership units up to the closing of the transaction. There will be no pro rated dividend for the quarter in which the closing occurs. If the closing occurs prior to February 7, 2006, which is the Company's previously scheduled record date for the fourth quarter of 2005, the public shareholders will not receive the dividend for the fourth quarter of 2005. If the closing occurs on or after February 7, 2006, the public shareholders will receive the dividend for the fourth quarter of 2005.

The Company's Series A and Series B Cumulative Redeemable Preferred Shares will remain issued and outstanding after the closing as preferred shares of the Company as the surviving REIT. The Company will continue to pay the required quarterly dividends on the preferred shares. The acquiror has indicated that it may delist all of the Company's preferred shares from the Nasdaq National Market following the closing of the transaction and does not plan to seek to list the preferred shares on another trading market. Therefore, it cannot be assured that an active trading market for the preferred shares will continue to exist after the closing of the transaction.

The closing of the transaction, which is currently expected to occur in late 2005 or early 2006, is subject to the approval of the Company's common shareholders and other customary closing conditions. The transaction is not subject to any financing conditions.

Holders of common limited partnership interests in Capital Automotive L.P., the Company's operating partnership, will be given the choice of either receiving $38.75 per unit in cash or continuing their interest in the operating partnership indirectly through a membership interest in an affiliate of DRA.

Thomas D. Eckert, the Company's President and Chief Executive Officer, stated, "The Capital Automotive Board of Trustees has unanimously approved this transaction and will recommend its approval to our shareholders. We strongly believe that this transaction provides substantial value to our shareholders and is in their best interests. We are confident that our tenants will also be well-served by our ability to pursue our business strategy as a private company and by the resources and experience that DRA possesses."

Brian Summers, Managing Director of DRA, added, "We and our investors are enthusiastic about partnering with the Capital Automotive team to grow this dynamic specialty retail segment. Our collective energy will be focused on continuing to build tenant relationships by providing the same responsive service that is a hallmark of the Company."

Wachovia Securities acted as the Company's financial advisor in connection with the proposed transaction, and Latham & Watkins LLP acted as legal counsel to the Company. Blank Rome LLP acted as legal counsel to DRA.

Shareholder approval will be solicited by the Company by means of a proxy statement, which will be mailed to the Company's shareholders upon the completion of the required Securities and Exchange Commission filing and review process.

About Capital Automotive

Capital Automotive, headquartered in McLean, Virginia, is a self-administered, self-managed real estate investment trust. The Company's primary strategy is to acquire 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 website at http://www.capitalautomotive.com/ .

About DRA Advisors LLC

DRA Advisors LLC, founded in 1986, is a New York-based registered investment advisor specializing in real estate investment management services for institutional and private investors, including pension funds, university endowments, foundations and insurance companies. Additional information about DRA can be found on its website at http://www.draadvisors.com/ .

Additional Information about the Merger and Where to Find It

In connection with the proposed merger, the Company will file relevant materials with the Securities and Exchange Commission, including a proxy statement. SHAREHOLDERS OF THE COMPANY ARE URGED TO READ THESE MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER AND RELATED ITEMS. The proxy statement and other relevant materials (when they become available) and any other documents filed by the Company with the Securities and Exchange Commission may be obtained free of charge at the Securities and Exchange Commission's website at http://www.sec.gov/. Shareholders are urged to read the proxy statement and other relevant materials when they become available before making any voting or investment decision with respect to the proposed merger.

The executive officers and trustees of the Company have interests in the proposed merger, some of which may differ from, or may be in addition to, those of the Company's shareholders generally. In addition, the Company and its executive officers and trustees may be deemed to be participating in the solicitation of proxies from the security holders of the Company in connection with the proposed merger. Information about the executive officers and trustees of the Company, their relationship with the Company and their beneficial ownership of Company securities is set forth in the proxy statement for the Company's 2005 Annual Meeting of Shareholders, which was filed with the Securities and Exchange Commission on April 1, 2005. Shareholders may obtain additional information regarding the direct and indirect interests of the Company and its executive officers and trustees in the proposed merger by reading the proxy statement regarding the merger when it becomes available.

This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful under the securities laws of any such jurisdiction.