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Capital Automotive REIT Signs Letters of Intent

2 June 1998

Capital Automotive REIT Signs Letters of Intent for Acquisitions Valued at $125 Million

    MCLEAN, Va., June 2 -- Capital Automotive REIT
today announced that it has entered into 10 letters of intent to purchase
$125 million of automotive dealership properties across the United States at
terms consistent with its business plan.  The Company is in the final stages
of contract negotiation with the sellers and expects to announce execution of
definitive agreements for all or a significant portion of these transactions
by the close of the second quarter, ending June 30, 1998.  The Company did not
disclose the names of the dealers with whom they have reached agreements but
stated that the proposed acquisitions involve 30 properties located in eight
states.
    Thomas D. Eckert, president and chief executive officer, stated, "These
agreements as to basic business terms reflect Capital Automotive's robust
acquisition pipeline, the realization of our significant opportunity for
growth and the results of our continuing efforts to enhance shareholder value.
Today's announcement confirms that our concept remains very attractive to
dealers as we provide liquidity for owners to reinvest in their business with
a favorable tax treatment while allowing long-term site control by an
experienced management team.  This new group of dealers are in-line with our
strategy of acquiring high-quality, multi-site dealership groups that
diversify our asset base geographically at favorable lease terms."
    Capital Automotive REIT, headquartered in McLean, Virginia, is a self-
administered, self-managed real estate investment trust formed to acquire the
real property and improvements used by operators of multi-site, multi-
franchised motor vehicle dealerships and motor vehicle related business.
    The matters discussed in this press release include forward-looking
statements.  In addition, when used in this press release, the words "intends
to," "believes," "anticipates," "expects" and similar expressions are intended
to identify forward-looking statements.  Such statements are subject to a
number of risks and uncertainties.  Actual results in the future could differ
materially and adversely from those described in the forward-looking
statements as a result of various important factors, including the general
economic climate, the supply and demand for automotive properties, interest
rate levels, the availability of financing, and other risks associated with
the acquisition and leasing of properties, including risks that the tenants
will not pay rent or that operating costs may be greater than anticipated and
the other risk factors set forth in the Company's filings with the Securities
and Exchange Commission.  The Company undertakes no obligation to publicly
release the result of any revisions to these forward-looking statements that
may be made to reflect any future events or circumstances.