BRE Properties Completes Sale of Land For $58 Million; Gain on Sale of $50 Million to be Used in Tax-Deferred Exchanges to Acquire Additional Multifamily Properties

Business Wire, July 17, 1996

SAN FRANCISCO--(BUSINESS WIRE)--July 17, 1996--BRE Properties Inc. (NYSE: BRE) today announced completion of the sale of 47 acres of land in Daly City, Calif., to the owner of the improvements for a cash purchase price of $58 million.

BRE immediately began to use the net gain on the sale of approximately $50 million in a series of tax-deferred exchanges to acquire additional multifamily properties in the Western United States.

Frank C. McDowell, BRE president and chief executive officer, said, "We believe the sale of this passive land lease investment and the redeployment of proceeds into actively managed multifamily properties will result in increased long-term value for our shareholders. It further advances the company toward its goal of becoming the preeminent multifamily REIT in the West."

BRE used the tax-deferred exchange provisions of the Internal Revenue Service Code (Section 1031) to acquire Arcadia Cove, a newly constructed 432-unit apartment community in Phoenix, Ariz., for $24.2 million. In a second acquisition, the company purchased Berkshire Court, a newly constructed 266-unit apartment community in Portland, Ore., for $16.4 million.

"Arcadia Cove has recently begun its lease-up and is 34% occupied; we expect the property to reach stabilization within one year and produce a yield of approximately 10%," said McDowell. "Berkshire Court is further along in its lease-up at 85%; the expectation is for a 9% yield on stabilization. As development properties, the purchase prices of these assets are subject to adjustment as some budgeted closing and lease-up costs are capitalized."

McDowell added, "Since the beginning of 1996, BRE has doubled the number of apartment units in its portfolio, adding 3,600 in the merger of REIT of California, and approximately 1,600 through acquisition. BRE now has nearly 11,000 units located in nine major Western U.S. markets. We have an expanding portfolio that is not overly dependent on any one market, but one that retains a defined regional focus."

BRE Properties is a self-administered, self-managed and fully integrated equity real estate investment trust focusing on multifamily properties in the Western United States. BRE owns 50 apartment communities totaling 10,642 units in nine major markets in California, Arizona, Washington, Oregon and Nevada.

CONTACT: BRE Properties Inc., San Francisco

Lauren L. Barr, 415/445-6523