CB Richard Ellis Closes 15-Year, $60 Million Lease for Ralphs Grocery Company.

LOS ANGELES--(BUSINESS WIRE)--Aug. 18, 1999--

World's Leading Commercial Real Estate Services Firm Represents

Both Tenant and Landlord in Largest Industrial Transaction in

Recent Central Valley History

CB Richard Ellis (NYSE:CBG), the world's leading real estate services firm, announced that Ralphs Grocery Company has signed a lease with Catellus Development Corporation to occupy a two-building, 622,000-square-foot distribution center in Stockton, Calif. The value of the 15-year lease including consideration, capital expenditures and equipment totals more than $60 million.

CB Richard Ellis' David Norrie represented Ralphs, while Blake Rasmussen, also of CB Richard Ellis, represented Catellus Development Corporation. Norrie is co-director of the national Food Facilities Group at CB Richard Ellis, along with Art Rasmussen.

Ralphs, which recently completed a merger with Kroger Company, the Cincinnati, Ohio-based grocery giant, to become the nation's largest grocery store chain, will utilize one of the two buildings for storage of dry goods. Under the agreement, Catellus will add 130,000 square feet of additional space to the existing 177,000-square-foot building to meet Ralphs' dry goods specifications and requirements. Ralphs will take occupancy of the dry storage distribution center immediately.

The other building, a 314,000-square-foot facility, will undergo approximately $12-$15 million worth of retrofitting by Ralphs to facilitate the storage of frozen and perishable goods.

The lease agreement also includes an option for Ralphs to purchase contiguous land adjacent to the distribution center within the next four years for further development of the facility.

The need for Ralphs to open a distribution center in the area came after the company's purchase of 32 grocery stores in Northern California from Albertson's, Inc., after its recent merger with American Stores, Inc.

"Because of our purchase of the Albertson's divestiture stores and plans to embark on an active expansion program in the Central Valley and greater Sacramento areas, the Stockton distribution center will provide Ralphs with the necessary backside support to service our existing Bay Area Cala Food Stores and meet our immediate and future growth needs," said Tom Gast, vice president of corporate real estate for Ralphs. "From a logistical standpoint, one of the attractive features of this site is that it is strategically located between these distinct market areas and has access to major highways to service all of the areas cost effectively."

"As the largest industrial transaction in recent Central Valley history, this deal is very significant for us," said Christopher Peatross, vice president, Northwest Industrial Group, Catellus Development Corporation. "We are pleased to have the opportunity to provide a state-of-the-art distribution facility that will support Ralphs' increasing presence in Northern California over the next 15 years."

CB Richard Ellis (NYSE:CBG) is the world's leading real estate services company. Headquartered in Los Angeles with 10,000 employees worldwide, the company serves real estate owners, investors and occupiers through nearly 250 principal offices in 35 countries. Services include property sales and leasing, property management, corporate services and facilities management, mortgage banking, investment management, capital markets, appraisal/valuation, research and consulting. CB Richard Ellis had 1998 revenues of over $1 billion.