CAPREIT completes CRITEF mergers; one of largest acquisitions of securitized tax-exempt bonds.

ROCKVILLE, Md.--(BUSINESS WIRE)--Dec. 5, 1996--Capital Apartments Properties Inc. (CAPREIT) today announced it had completed the mergers with CRITEF-I, CRITEF-II and CRITEF-III (ASE:CRA, CRB, CRL) partnerships, which were approved at special meetings of the partnerships on Nov. 27.

The mergers involve CAPREIT's acquisition of 15 luxury, multifamily properties totaling 3,212 units and an additional three performing mortgages totaling 553 units. All 3,765 units are financed with favorable tax-exempt financing.

In announcing the mergers, Richard L. Kadish, president of CAPREIT, said: "This transaction will result in CAPREIT more than doubling the size of its portfolio since its original capitalization in 1994. The favorable rates associated with the tax-exempt financing will dramatically reduce the company's average debt cost and substantially increase the company's cash flow."

The 18 new properties are described as well located, class "A" garden and mid-rise residential properties in the Midwest and Southeast United States. The properties are all less than eight years old. There is a 96 percent average physical occupancy of the portfolio as of 1996.

CentRe Mortgage Capital, L.L.C., a real estate merchant bank, acted as a financial conduit and advisor to CAPREIT on the acquisition and the financing of a $234-million securitized multifamily tax-exempt bond portfolio by CAPREIT. The financing was used to fund both the merger costs and the simultaneous refinancing of eight properties currently owned by CAPREIT. The transaction represents one of the largest acquisitions ever of securitized tax-exempt bonds.

The limited partnerships, known as CRITEF-I, II and III, were formed in 1986 and 1987 by CRI Inc., a real estate investment firm, and began trading on the American Stock Exchange on July 1, 1993.

As a result of the mergers, holders of CRITEF BACs received a total of approximately $166 million in cash for their interests. Each BAC holder received $15.42 per BAC in the case of CRITEF, Series I (CRA); $15.11 per BAC in the case of CRITEF, Series II (CRB); and $15.73 per BAC in the case of CRITEF III (CRL).

This merger transaction is the culmination of nearly two years of negotiations over complex and unique issues. "We worked very hard to provide the CRITEF partners with an equitable offer and are pleased with the results," Kadish said. "We strongly believe that the effort was well worth it since CAPREIT has acquired a quality portfolio with favorable financing. This transaction gives CAPREIT a market capitalization in excess of a half billion dollars, which positions CAPREIT to continue to grow and prosper."

CAPREIT, based in Rockville, Md., is a self-managed private real estate investment trust. It now owns and/or manages 70 properties, totaling 16,616 units, in 15 states. The largest investor in CAPREIT is Apollo Real Estate Investment Fund, L.P.

CONTACT: CAPREIT

Richard L. Kadish, 301/231-8700

or

KCSA 

Leslie A. Schupak, 212/682-6565, ext. 207

212/697-0910 (fax)

e-mail: [e-mail]