Bay Apartment Communities Acquires 195-Apartment Home Community in Daly City; Plans Extensive Reconstruction Program.

SAN JOSE, Calif.--(BUSINESS WIRE)--July 17, 1997--Bay Apartment Communities, Inc. (NYSE/PCX:BAY), a multifamily real estate company, has acquired the Regency Apartments, a 195-apartment home community in Daly City, just south of San Francisco.

Bay paid approximately $13.9 million for the community. As it has with a number of other communities, Bay plans a major reconstruction program at the Regency investing an additional $9.3 million in the community.

Bay's repositioning program, which will begin immediately, will include new exterior siding, new roofs, new windows and major repairs to stairwells and decks. Interior upgrades will include new floor and wall coverings, new electrical switches and fixtures, new plumbing fixtures and appliances throughout the community.

In addition, Bay will reconstruct the leasing center and upgrade the community's recreation center and pool area, parking lots, landscaping and drainage.

Built in 1975, the Regency Apartments has 57 homes with two bedrooms and one or two bathrooms; 117 homes with one bedroom and one bathroom; and 21 junior one bedrooms with one bathroom.

"Because of the community's current condition, we were able to purchase it at far below replacement cost, even after consideration of our planned major repositioning program," said Gilbert M. Meyer, chairman and chief executive officer of Bay.

"This opportunity is comparable to our nearby Sea Ridge apartment community in Pacifica where we have generated excellent returns following a similar major reconstruction program there," he added.

The community is well located in the heart of the Northern Peninsula market -- one of the strongest rental markets in the San Francisco Bay Area -- and near major employment centers and transportation, according to Max L. Gardner, Bay's executive vice president and chief operating officer.

"The Regency is within a 30-minute drive of both downtown San Francisco and major employers in San Mateo County, as well as within three blocks of Highway 280 and less than one mile from the Colma BART station," he said. "In addition, it is ten minutes from Highway 101 and San Francisco International Airport," he added.

Bay Apartment Communities is a fully integrated, multifamily real estate investment trust focused on the acquisition, development, construction, reconstruction and management of high quality apartment home communities. With this transaction, the company's portfolio consists of 42 communities containing 10,739 apartment homes.

The company's portfolio includes 34 apartment home communities in the San Francisco Bay Area and Northern California and eight communities in Southern California. The company also owns four land sites in the San Francisco Bay Area on which it is building, or plans to commence building in the future, four communities which will contain an aggregate of approximately 1,525 apartment homes.

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended.

The forward-looking statements contained in this release are statements that involve risks and uncertainties, including, but not limited to, market demand, the effect of economic conditions, the impact of competition and competitive pricing, changes in construction scope or costs, the result of financing efforts, actual purchases under agreement, the effect of the company's accounting policies and other risks detailed in the company's Securities and Exchange Commission filings.

CONTACT: Bay Apartment Communities

Gilbert M. Meyer/Max L. Gardner/Jeffrey B. Van Horn

408/983-1500