Bay Apartment Communities Makes First Acquisition in Los Angeles County with Purchase of West Covina Apartment Community.

SAN JOSE, Calif.--(BUSINESS WIRE)-- March 18, 1997--Bay Apartment Communities, Inc. (NYSE/PSE Symbol: BYA), a multifamily real estate company, said today it has acquired The Village Apartments, a 209-apartment home community in West Covina.

This transaction marks the initial entry into the Los Angeles market for Bay, which has acquired communities in Orange and San Diego counties during the past several months.

The Village is located at 200 N. Grand Avenue, one block north of Interstate 10. Bay paid $9,725,000 for the community and expects to invest approximately $3.7 million for a major repositioning program at the community. The community's current return on cost is approximately 9.2 percent.

Bay's repositioning program will include water intrusion repairs to the roof, wood exteriors, decks and patios, repainting of the wood exteriors, improvements to the apartment interiors, renovation of the leasing office and recreation facilities, upgrading of the landscaping and the installation of security gates.

Built in 1972, The Village Apartments has 64 units with three bedrooms and two bathrooms; 63 units with two bedrooms and two bathrooms; 50 units with two bedrooms and one bathroom; and 32 units with one bedroom and one bathroom. Resident amenities include a pool, spa, fitness facility, children's play areas, two laundry facilities, a leasing facility and 426 parking spaces.

"The Village is a well-located community adjacent to one of Southern California's major east-west freeways, close to downtown Los Angeles area and convenient to the Inland Empire region of Riverside and San Bernardino," noted Gilbert M. Meyer, chairman and chief executive officer of the company.

"In addition," he continued, "the community is located near employment centers and within two blocks of a major regional shopping mall."

"Housing demand in the market has remained stable and the Los Angeles area is demonstrating signs of an economic rebound," noted Max L. Gardner, Bay's executive vice president and chief operating officer. "There has been virtually no new multifamily construction in the West Covina area for quite some time and the market is essentially built-out. As the area's economy continues to improve, we would anticipate demand will increase. With our planned repositioning program and strong management and leasing skills, we expect to significantly enhance the returns on this community," 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 owns 36 apartment communities containing 9,187 apartment homes. The company's portfolio consists of 31 apartment home communities in the San Francisco Bay Area and Northern California, three communities in Orange County and one each in San Diego and the Los Angeles area.

CONTACT: Bay Apartment Communities

Gilbert M. Meyer, Max L. Gardner or

Jeffrey B. Van Horn, 408/983-1500