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Cross-Continent Auto Retailers Agrees to $35 Million Sale

7 January 1998

Cross-Continent Auto Retailers Agrees to $35 Million Sale-Leaseback with Capital Automotive REIT

    AMARILLO, Texas, Jan. 7 -- Cross-Continent Auto Retailers,
Inc. , announced today that it has entered into a sale-leaseback
agreement with Capital Automotive REIT.  Cross-Continent will sell and
leaseback six dealership properties located in three states, for total cash
consideration approximating $35 million.  The six properties are located in
Amarillo, Texas, Denver, Colorado and Las Vegas, Nevada.
    Cross-Continent expects to complete the sale-leaseback in two phases.  The
first phase, which includes four properties located in Amarillo, Texas, is
expected to close upon the completion of Capital Automotive REIT's initial
public offering.  The second phase will close upon the completion of
construction currently in progress at two dealership properties located in
Denver, Colorado and Las Vegas, Nevada.
    Cross-Continent expects to use the proceeds, after the repayment of
existing mortgages, taxes and related expenses, for the continued acquisition
of additional dealerships.
    "The transaction will reduce the need for permanent mortgage financing by
approximately $21 million and will provide the company with approximately
$12 to $13 million of resources for acquiring additional automobile
dealerships that meet our shareholder value based criteria," said Bill
Gilliland, Cross-Continent's Chairman and Chief Executive Officer.
    Cross-Continent will lease the properties from Capital Automotive REIT
pursuant to long-term leases with an initial term of 10 years, along options
to extend the terms.  The company expects the transactions will be finalized
upon the completion of the second phase in May, 1998.
    "The increase in operating expense under the lease agreements is more than
offset by the reduction in interest expense on mortgages repaid, reduced
depreciation expense and the ongoing benefit for use of the net proceeds.  The
transaction adds value for our shareholders," Gilliland said.
    The transaction is subject to manufacturer approval, the successful
completion of Capital Automotive REIT's initial public offering and other
routine conditions.
    Capital Automotive REIT, based in Arlington, Virginia, has been formed to
acquire real property and improvements used by operators of multi-site, multi-
franchised motor vehicle dealerships and motor vehicle related businesses.
Capital Automotive REIT has filed a registration statement on Form S-11 with
the Securities and Exchange Commission.  As of the date of this announcement
the registration statement has not become effective.
    Cross-Continent Auto Retailers, Inc. owns and operates a group of
franchised automobile retail dealerships in Texas, Oklahoma, Nevada and
Colorado.  Through these dealerships, the company sells new and used cars and
light trucks, arranges related financing and insurance, sells replacement
parts and provides vehicle maintenance and repair services.
    Cross-Continent Auto Retailers, Inc. is listed on the New York Stock
Exchange under the symbol XC.
    Cross-Continent Auto Retailers, Inc. believes its shareholders benefit
from the views of management about the future of the company's business.
Included herein are forward-looking statements, including statements with
respect to anticipated revenue growth, acquisitions and profitability.  There
are many factors which affect management's views about future events and
trends of the company's business.  These factors involve risks and
uncertainties that could cause actual results or trends to differ materially
from management's view, including without limitation economic conditions,
risks associated with acquisitions and the risk factors set forth from time to
time in the company's filings with the Securities and Exchange Commission.
    Capital Automotive REIT has filed a Registration Statement on Form S-11
with the Securities and Exchange Commission.  Securities offered thereunder
have not been approved or disapproved by the Securities and Exchange
Commission nor has the Securities and Exchange Commission or any State
Securities Commission passed upon the accuracy or adequacy of the prospectus.
The information contained herein shall not constitute an offer to sell or
solicit an offer to buy any securities.

SOURCE  Cross-Continent Auto Retailers, Inc.