Atlantic Gulf Announces New Projects In Dallas And Ft. Lauderdale.

MIAMI, Fla.--(BUSINESS WIRE)--Aug. 7, 1997--Atlantic Gulf Communities Corp. (NASDAQ:AGLF) announced the closings on two new projects, one in suburban Dallas, and the other in downtown Forth Lauderdale, Fla.

These two projects represent the company's first new acquisitions following the sale in late June of $45 million of preferred and common stock to a series of large investors, including affiliates of Apollo Real Estate Advisors, Elliott Associates and Morgan Stanley Asset Management.

According to Kim Woodbury, Atlantic Gulf's senior vice president for Acquisitions, the company purchased a 632 acre parcel in rapidly-growing North Dallas, and optioned an additional 110 acres for a golf course. Woodbury said that Atlantic Gulf is planning a community of 1,725 single family homes with several recreation centers linked by an extensive greenway system of trails and paths. Atlantic Gulf expects to begin developing this project, called The Trails, in 60 to 90 days. Four homebuilders have already signed letters of intent to build in The Trails, said Woodbury. Atlantic Gulf purchased the Texas parcel for $7.5 million. Woodbury said the company expects The Trails to generate $70 million of gross revenue over five years.

Atlantic Gulf also purchased a 2.9 acre parcel in the heart of Fort Lauderdale's central business district, on Las Olas Boulevard and the New River. J. Larry Rutherford, Atlantic Gulf's president and chief executive officer, announced the company plans to construct a 36-story, 360-unit luxury rental building on a portion of this site, and sell the balance for either a hotel or an office building. Rutherford cited an acute shortage of luxury and semi-luxury rental apartments in the downtown Fort Lauderdale area. He added that the parcel was perfectly situated on the Riverwalk, within walking distance of the arts and entertainment district, the restaurants and shopping of Las Olas, the urban campuses of two colleges, and every major high-rise office tower in the downtown area. The property, which was owned by The Tribune Co., was one of the last parcels available in the downtown area and was purchased for $5.5 million.

According to Woodbury, the Texas acquisition is part of Atlantic Gulf's plan to expand its land development holdings beyond its Florida base by selectively entering growing markets throughout the South and Southeast. Woodbury noted that the company recently announced a new project in Cary, N.C., and is pursuing other potential acquisitions in the Carolinas and the Atlanta area. Rutherford added that the new Fort Lauderdale high-rise project represented the company's first step into income property development, as well as its continuing commitment to the Broward market. Atlantic Gulf is also developing three major residential communities and two commercial projects in the Southwestern portion of Broward County.

Rutherford said that with the $45 million of new equity capital and an additional $10 million rights offering of preferred stock expected this fall, the company would increase the pace of new project acquisitions in active markets. He added that the company planned to maintain its accelerated disposition of predecessor tract assets and debt reduction, in an effort to capture in 1997 any remaining losses associated with the turnaround process. "These are exciting times for Atlantic Gulf and its investors. We have nearly completed the turnaround and some very smart money is being bet on our ability to make this company a real estate development powerhouse in the Southeast," said Rutherford.

Atlantic Gulf Communities Corp., with assets of $237 million and 1996 revenues exceeding $165 million, is one of the Southeast's largest residential real estate developers. The company develops residential lots for homebuilders in many of Florida's most active markets, including South Florida, Jacksonville, Tampa, and Orlando, as well as a new project in Raleigh-Durham, N.C. The company is acquiring additional property for development in the Naples, Fla. area. The company's predecessor assets include 25,000 acres of land in other parts of Florida and approximately 18,000 developed homesites in Florida and the Cumberland Plateau area of Tennessee. With headquarters in Miami, the company is a proven leader in professional development services and is known for its leadership role in environmental quality.

This press release includes "forward-looking" statements that are subject to risks and uncertainties. The following factors could affect the company's future results and could cause those results to differ materially from those expressed in the forward-looking statements: (a) the inability to generate growth in revenues and net income; (b) unanticipated capital expenditures, including costs associated with real estate development prices; (c) unanticipated costs, difficulties or delays in completing or realizing the intended benefits of development projects; (d) adverse changes in current financial market and general economic conditions, including interest rate increases; and (e) actions by competitors.

CONTACT: Atlantic Gulf Communities Corp., Miami

Harry Rose, 305/859-4376

305/859-4029 (Fax)

http://www.atlanticgulf.com