Group 1 Automotive Arranges Sale/Leaseback of Nine Properties

21 December 1998
Group 1 Automotive Arranges Sale/Leaseback of Nine Properties
         Will Convert Approximately $32 Million in Real Estate Assets

    HOUSTON, Dec. 21 -- Group 1 Automotive, Inc. , a
leading operator and consolidator in the automotive retailing industry, today
announced that it has signed a definitive agreement for a sale/leaseback of
nine dealership properties with Capital Automotive REIT for
approximately $32 million in cash.
    The assets include dealership properties in Texas and Colorado.  The
parcels are exceptional retail properties located on major thoroughfares in
metropolitan areas.  The initial lease term for the properties is 30 years,
with termination options after years 15, 20 and 25.  Group 1 expects to use
the proceeds to pay off $9.3 million in long-term debt and fund future
acquisitions.
    "This transaction is a good opportunity for Group 1," stated B.B.
Hollingsworth Jr., chairman, president and chief executive officer of Group 1.
"Long-term lease rates are attractive and by monetizing these assets, we can
use our capital more efficiently to grow our business.  We are pleased to
partner with Capital Automotive, who have proven to offer an attractive
financing alternative for the automotive retailing community."
    Hollingsworth continued, "This transaction, combined with the recent
increase in our revolving credit facility to $425 million, is expected to
provide resources to support our disciplined acquisition strategy."
    Thomas D. Eckert, president and chief executive officer of Capital
Automotive, stated, "This transaction with Group 1 reinforces our continuous
effort to partner with the highest quality dealer groups in the country.
Since going public last year, Group 1 has distinguished itself among the
leading dealer groups and has demonstrated its commitment to high-quality
growth."
    Capital Automotive REIT, headquartered in McLean, Va., is the first
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
businesses.  Capital Automotive owns the property used by 23 dealership
groups, 11 of which are in the top 100 dealer groups in the country, according
to Automotive News.
    Group 1 was founded to become a leading operator and consolidator in the
highly fragmented automotive retailing industry.  Group 1 owns 57 dealership
franchises comprised of 22 different brands, and 12 collision service centers
located in Texas, Oklahoma, New Mexico, Colorado, Florida and Georgia.
Through its dealerships the company sells new and used cars and light trucks,
provides maintenance and repair services, sells replacement parts and arranges
related financing, insurance and vehicle service contracts.
    This press release contains certain forward-looking statements within the
meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934,
which involve known and unknown risks, uncertainties or other factors not
under the company's control which may cause the actual results, performance or
achievements of the company to be materially different from the results,
performance or other expectations implied by these forward-looking statements.
Some of these risks and factors include, but are not limited to those
disclosed in the company's filings with the Securities and Exchange
Commission.
    Group 1 Automotive, Inc. can be reached on the Internet at
http://www.group1auto.com