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Capital Automotive: the End of Oldsmobile Will Have No Negative Impact on Its Business

14 December 2000

Capital Automotive States That the Discontinuation of Oldsmobile Will Have No Negative Impact on Its Business

  Oldsmobile Franchises Represent Less Than 2% of the Value of the Portfolio

 Management Remains Comfortable With 2000 and 2001 FFO Per Share Estimates Of
                        $1.73 and $1.84, Respectively

    MCLEAN, Va., Dec. 14 Capital Automotive ,
the nation's leading specialty finance company for automotive retail real
estate, today announced that its exposure to Oldsmobile franchises is not
expected to have any negative impact, whatsoever, on its on-going business or
financial results.
    Capital Automotive's portfolio includes thirteen Oldsmobile franchises
operated by nine automobile dealership groups.  These franchises represent
less than two percent of the property value of the Company's entire portfolio
and none of these franchises are of a "stand alone" nature.  This means that
Oldsmobile shares the facility with at least one other franchise brand (for
example Chevrolet, Honda, Pontiac, etc.) and in ten of the locations
Oldsmobile shares the facility with two or more other brands.  In every case,
the leases with the operators of these stores have multiple franchises,
locations, and are cross-guaranteed with the other stores within the dealer
group or Capital Automotive has obtained a corporate guarantee from the parent
company of the dealer group.  As of October 20, 2000, Capital Automotive's
portfolio included 240 properties with an asset value of $991 million
consisting of 356 franchises in 27 states.
    General Motors announced this week that it will phase out its
once-popular Oldsmobile division over the next several years as part of a
company-wide restructuring.  Oldsmobile has been an integral part of America's
rich automotive heritage.  Its production spans more than 100 years, virtually
the entire history of the U.S. automobile industry.  GM indicated that despite
substantial investments in Oldsmobile over the last several years, including
product improvements and advertising, the line is currently holding only about
a two percent market share in the U.S.
    Thomas D. Eckert, President and Chief Executive Officer, stated, "We, as
well as our dealer tenants, have been aware of the potential for GM to
phase-out Oldsmobile for some time.  Because of the large scale of our
multi-franchise, multi-location dealer tenants and the fact that we have no
locations where Oldsmobile is the only franchise, we believe that our
portfolio will not incur any rental payment defaults as a result of the
phase-out.  This announcement by GM further validates our strategy of focusing
on large multi-site, multi-franchise dealer groups who are by their nature
brand diverse.  We therefore remain very comfortable with our 2000 and 2001
adjusted funds from operations (FFO excluding straight-line rents) estimates
of $1.73 and $1.84 per share, respectively."
    John J. Pohanka, Chairman, further noted, "This is a sad day for our
industry, but more for sentimental reasons than financial.  My family has been
an Oldsmobile dealer for 78 years.  However, given that Oldsmobile dealers
nationally sold, on average, less than 10 new vehicles per month during 2000,
this brand has not been a significant contributor to a dealer groups'
profitability."