AMB Property Corporation Teams with Pension Funds, Foundations and Endowments to Form Private Fund.

SAN FRANCISCO--(BUSINESS WIRE)--Sept. 27, 1999--

Investment management history allows AMB to create private,

multi-investor fund; provides AMB an alternative source of long-term

capital.

AMB Property Corporation (NYSE: AMB), today announced the first closing of AMB Institutional Alliance Fund I, a multi-investor fund including ten pension funds, foundations and endowments that have co-invested alongside AMB.

Investors including the Citigroup Pension Plan, the John D. and Catherine T. MacArthur Foundation, The Bush Foundation and the University of Chicago committed equity totaling $120 million to Fund I. When combined with debt financings and AMB's equity investment, the committed capitalization for the first closing of Fund I is approximately $300 million. In addition, AMB expects to announce a second and final closing of equity for Fund I by year-end 1999.

Fund I's investment objectives parallel AMB's strategy of acquiring and developing industrial distribution facilities in major U.S. cities near airports, ports and key interstate highways. The fund will invest in supply-constrained metro areas and in high throughput distribution facilities serving customers that must move goods to businesses and consumers quickly. Such facilities benefit from growth in expedited commerce including demand from e-commerce.

The private capital strategy continues a 16-year tradition at AMB, which was a private investment manager before going public in November 1997. Four of the ten investors that participated in the first closing of Fund I were prior institutional clients of AMB.

"AMB's commitment to accessing private capital builds on our history of investing for major pension funds, foundations and endowments. Our background allows us to access these investors directly using our own capital raising resources", said Douglas D. Abbey, chairman of AMB Investment Management, AMB's investment management subsidiary.

"Our public operating structure allows AMB to align its interests with those of our private capital partners by investing alongside them and by providing access to quality properties, economies of scale and diversification not otherwise available to them," Abbey said.

Hamid R. Moghadam, president and CEO of AMB, said the long-term private funding initiative will benefit stockholders over time by increasing AMB's return on invested capital without the dilution of selling additional common shares.

"Accessing private capital is integral to our strategy. AMB was the first public REIT to look to private capital sources as long-term alliance partners," Moghadam said. "We are improving on the traditional co-mingled pension fund model for the benefit of our institutional partners and our stockholders."

AMB expects that Fund I will utilize no more than 50% leverage. As of the first closing, AMB will have the largest interest in Fund I and will maintain a minimum equity ownership of 20%. AMB and its investment management subsidiary will receive acquisition fees and portfolio management fees on the capital invested by its institutional partners, and AMB may receive a promoted interest if certain return thresholds are met.

AMB is one of the nation's largest owners and operators of industrial real estate nationwide. As of June 30, 1999, AMB owned and managed 67.6 million square feet and 706 buildings in 28 U.S. metropolitan markets, including 3.2 million square feet and 40 industrial buildings owned with institutional investors through its subsidiary AMB Investment Management. In addition, AMB owns a majority limited partnership interest in an unconsolidated joint venture that owns 36 buildings containing 4.0 million square feet in Chicago and AMB Investment Management manages 4.3 million square feet on behalf of institutional investors. At June 30, 1999 the Company had 91.1 million common shares and units outstanding. AMB - A tradition of nontraditional thinking.

Additional information on AMB Institutional Alliance Fund I may be found on our website at www.amb.com or by calling our toll free investor relations line at [phone].

This press release contains forward-looking statements about the occurrence and timing of a second closing for AMB Institutional Alliance Fund I, business strategy related to accessing private capital, Fund I and its business strategy and the benefit of private capital to stockholders. These statements are made pursuant to the safe-harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements involve numerous risks and uncertainties and should not be relied upon as predictions of future events. The events or circumstances reflected in our forward-looking statements might not occur. In particular, a number of factors could cause AMB's actual results to differ materially from those anticipated, including, among other things, defaults on or non-renewal of leases by tenants, increased interest rates and operating costs, AMB's failure to obtain necessary outside financing, difficulties in identifying properties to acquire and in effecting acquisitions, AMB's failure to successfully integrate acquired properties and operations, AMB's failure to dispose of properties it has contracted to sell or to timely reinvest proceeds from any such dispositions, risks and uncertainties affecting property development and construction (including construction delays, cost overruns, AMB's inability to obtain necessary permits and public opposition to these activities), AMB's failure to qualify and maintain its status as a real estate investment trust under the Internal Revenue Code, environmental uncertainties, risks related to natural disasters, financial market fluctuations, changes in real estate and zoning laws and increases in real property tax rates. AMB's success also depends upon economic trends generally, including interest rates, income tax laws, governmental regulation, legislation and population changes. For further information on these and other factors that could impact AMB and the statements contained herein, reference should be made to AMB's filings with the Securities and Exchange Commission, including AMB's quarter report on Form 10-Q for the quarter ended June 30, 1999.