Bay Apartment Communities Announces Acquisition of San Jose Land Parcel and Plans to Build 312 Apartment Home Community; Company Also Completes Acquisition of Land for New 709-Apartment Home Community in Sunnyvale.

SAN JOSE, Calif.--(BUSINESS WIRE)--May 17, 1996--Bay Apartment Communities (NYSE:BYA) said today it has purchased a 3.2 acre portion of a 7.9 acre assemblage in San Jose.

The company plans to complete the purchase of the adjacent 5.7 acre site by the end of 1996. Bay plans to construct a 312-apartment home community on the site.

In addition, Bay said it has closed the previously announced purchase of a 17.8 acre site in Sunnyvale on which The Mark Apartments, a 709-apartment home community, will be constructed.

The San Jose site is located at the intersection of Lawrence Expressway and Highway 280, where some 225,000 cars pass each weekday. The property borders the communities of San Jose and Cupertino.

"Our extensive market knowledge and creative property acquisition skills enabled us to develop the opportunity for a new residential community at this highly attractive location which was being used for commercial purposes," noted Gilbert M. Meyer, chairman and chief executive officer of Bay.

"This site is one of the premier remaining undeveloped sites in Silicon Valley," Meyer said. "It is located," he continued, "in one of the most desirable areas within the San Francisco Bay Area and one in which rental activity has been very strong."

The garden style community will have approximately 312 units. Resident amenities will include semi-subterranean parking, a swimming pool, health center, a community center, leasing office and generous open space areas. Bay anticipates beginning construction in the spring of 1997 and to complete the community some 18 months later.

Bay expects to begin construction on the 17.8 acre Mark Apartments in Sunnyvale later this month. The project is expected to cost approximately $95.7 million, including $20,250,000 for the land. The company expects the community to reach stabilized occupancy in late 1998.

As currently planned, The Mark will include approximately 15 apartment homes with three bedrooms and three baths, 18 with three bedrooms and two baths, 332 with two bedrooms and two baths, 325 with one bedroom and one bath and 19 junior one-bedroom, one-bath apartment homes. Resident amenities will include underground parking, a large business center and conference area, a major fitness center and two swimming pools.

"These two transactions reflect management's ability to use the company's strengthened capital structure to grow the portfolio and enhance value for our shareholders," Meyer noted.

Earlier this week, Bay announced the sale of approximately $50.5 million in new equity and the execution of a new expanded three-year, $150 million unsecured line of credit for acquisition and construction purposes.

Also this week, the company announced the acquisition of two apartment home communities -- the Park Centre Apartments, 208-apartment home community in Union City, and Parkside Commons, a 192-apartment home community in Sunnyvale.

"In this week alone, we have completed transactions which will eventually add more than 1,400 apartment homes to our portfolio," noted Max L. Gardner, executive vice president and chief operating officer. "We are realizing Bay's vision of being Northern California's leading multifamily real estate development and management company," he added.

Bay Apartment Communities is a fully integrated, multifamily real estate investment trust focused on the acquisition, development, reconstruction and management of high quality apartment communities in the San Francisco Bay Area and Northern California. Bay owns 27 apartment communities containing approximately 6,850 apartment homes.

CONTACT: Bay Apartment Communities

Gilbert M. Meyer or Max L. Gardner, 408/983-1500