Capital Lease Funding Acquires $108 Million of Net Lease Properties and Agrees to Buy Another $46 Million of Properties.

NEW YORK -- Capital Lease Funding, Inc. (NYSE: LSE) announced today the following investment portfolio transactions:

--The closing of a $55.6 million acquisition of an approximate 167,000 square foot office building in Herndon, Virginia net leased to ITT Industries, Inc. (currently rated BBB+/ Baa1 by S&P/Moody's), and a 10-year mortgage financing on the property from Wachovia Bank in the aggregate of $41.7 million at a coupon rate of 5.33%. We also issued an approximate $6.3 million 10-year 5.33% coupon intercompany corporate credit note on the property that can be used as collateral for future long-term financing structures. The remaining lease term on the property is approximately 13.5 years.

--The closing of a $52.86 million acquisition of an approximate 185,000 square foot real property in Aliso Viejo, California net leased primarily to two tenants: Lowe's HIW, Inc. (with the lease guaranteed by Lowe's Companies, Inc., which is currently rated A+/A2 by S&P/Moody's) and Michaels Stores, Inc. (currently rated BB+/Ba1 by S&P/Moody's). The remaining lease term on the Lowe's lease is approximately 19 years and the Michaels Stores lease is approximately 10 years.

--The signing of a purchase and sale agreement to acquire two office buildings in Texas for an aggregate purchase price of $46 million. The two properties total approximately 260,000 square feet of space and have an average of approximately 8 years remaining on the lease term. The tenants of each property are currently rated investment grade. This transaction is expected to close on or about June 23, 2005. Closing of the transaction is subject to our satisfactory completion of due diligence procedures and other customary closing conditions and, therefore, the timing and certainty of the acquisition cannot be assured.

Paul McDowell, Chief Executive Officer, stated, "We are very pleased with the progress we are making in building a high credit quality, geographically diverse portfolio of net lease assets which produce attractive risk-adjusted returns for our stockholders."

About the Company:

Capital Lease Funding, Inc. (NYSE: LSE) is real estate investment trust, or REIT, focused on financing and owning commercial real estate that is net leased primarily to single tenants with investment grade or near investment grade credit ratings.