Capstone Capital announces commitment to develop and lease community-based integrated healthcare facilities.

BIRMINGHAM, Ala.--(BUSINESS WIRE)--July 8, 1996--Capstone Capital Corp. (NYSE: CCT) announced today that it has entered into a definitive agreement with Arcon Healthcare Inc., a privately-held, Nashville, Tennessee-based healthcare provider, for the development and leasing of several integrated healthcare facilities.

These facilities, the total cost of which will not exceed $25 million, will be developed over a 24 month period in non-urban areas where access to quality, cost-efficient healthcare is limited. Each facility, which will be staffed and operated by Arcon employees, will be designed to provide at least primary and urgent care, ambulatory surgery services and diagnostic services.

John W. McRoberts, president and chief executive officer of Capstone, commented, "Capstone is excited to work with a provider the caliber of Arcon in order to create access to quality healthcare services in certain areas of the country where currently the healthcare needs are not being adequately met. This transaction will serve to continue Capstone's focus of investing in cost-efficient alternate site healthcare facilities."

Capstone Capital Corp. is a self-administered real estate investment trust (REIT) which currently owns, leases and provides mortgage financing for 48 healthcare related properties located in 13 states that are diversified as to operator, facility type and healthcare segment.

CONTACT: Capstone Capital Corp.

Andrew L. Kizer, 205/967-2092

or

Morgen-Walke Associates

Robert P. Jones/Sue Rodney

Media Contact: Michelle Zawrotny, 212/850-5600