Catellus Board Names New Board Chairman.

Business Editors/Real Estate Writers

SAN FRANCISCO--(BUSINESS WIRE)--May 26, 2000

The Board of Directors of Catellus Development Corporation (NYSE:CDX) announced today that it has elected Nelson C. Rising as its new Chairman of the Board of Directors. Rising has been the President and Chief Executive Officer of Catellus since September 1994. The Company had previously extended Mr. Rising's contract to serve as Chief Executive Officer through the end of 2004.

William M. Kahane, Chief Executive Officer, Peracon, Inc., the outgoing Non-Executive Chairman of the Board, will continue to serve as a Director and will also serve as Chairman of the Compensation Committee. Kahane was elected Chairman in 1998 and has been a Director of Catellus since 1997. Rising said, "I speak for the entire Board in expressing our gratitude for the significant contributions Bill has made during his tenure as our Board Chairman."

The company also announced today that Richard D. Farman, Chairman and Chief Executive Officer, Sempra Energy, was elected to serve as Vice Chairman, Lead Independent Director and Chairman of the Corporate Governance Committee. Farman said, "Catellus' corporate governance practices, together with the strong management team under Nelson's capable leadership, have been designed to enable the Company to respond quickly and decisively to the many development opportunities we have before us."

Daryl J. Carter, Co-Chairman, Capri Capital, LP, was re-elected to serve as Chairman of the Audit Committee; and Stephen F. Bollenbach, President and Chief Executive Officer, Hilton Hotels Corporation, was re-elected to serve as Chairman of the Finance Committee.

Other Matters

      --  Hercules: In 1997, a venture between a Catellus subsidiary and
        a remediation firm acquired an obsolete oil refinery on the
        San Francisco Bay. In the last three years, the venture has
        demolished the refinery, undertaken remediation activities,
        and sought entitlements, preparing the property for
        development by Catellus Residential Group, upon the exercise
        by a Catellus subsidiary of its option to acquire the
        property. Last week, the 30-day legal challenge period for the
        certification of the Final Environmental Impact Report for the
        project expired. Together with the adoption by the Hercules
        City Council of a General Plan Amendment and Specific Plan for
        the site, this event marks the successful entitlement of the
        Company's planned "Victoria by the Bay" project, a premier
        example of brownfields redevelopment. A subsidiary of the
        Company expects to commence development activities for a
        community including up to 880 homes, 6 acres of retail and a
        new elementary school site. The project also includes a
        comprehensive network of parks and trails including the
        completion of a key new link in the regional bayshore trail.

      --  Management Services: Catellus announced it has decided not to
        pursue renewal of its management agreement with BNSF that
        expires December 31, 2000. Rising said, "We have enjoyed an
        extraordinarily positive relationship with BNSF but have
        decided not to seek renewal of our agreement because the
        contract has evolved from a value enhancement opportunity to a
        traditional property management contract."

          During the term of the agreement, Catellus has managed the
        property sales of more than $200 million, increased lease
        renewals by $8.5 million annually, and new lease income by
        $4.5 million annually, and generated new permit revenue of $13
        million. Jim O'Neil, Vice President, Property and Industrial
        Development, BNSF, said, "We have had an outstanding
        relationship with Catellus that has been beneficial to both
        companies. We were disappointed with their decision not to
        pursue renewal of our agreement but are grateful for their
        efforts and the value they have added to BNSF over the past
        five years."

Catellus Development Corporation is one of the nation's premier diversified real estate development companies. We develop, manage and invest in a broad range of product types including industrial, residential, office, retail and major urban development projects. We have one of the largest portfolios of developable land in the Western United States, which is capable of supporting over 41 million square feet of new commercial development and an estimated 16,300 residential units. More information on the company is available at http://www.catellus.com.

Except for historical matters, the matters discussed in this release are forward-looking statements that involve risks and uncertainties. Forward-looking statements include, but are not limited to, statements about plans; opportunities; negotiations; markets and economic conditions; and development and sales activities. These forward-looking statements are subject to risks and uncertainties that could cause our actual results, performance, or achievements to differ materially from those expressed in or implied by these statements. In particular, among the factors that could cause actual results to differ materially are:

      --  Changes in the real estate market or in general economic
        conditions in the areas in which we own property.
      --  Availability of financing to meet our capital needs, the
        variability of interest rates, and our ability to use our
        collateral to secure loans.
      --  Delay in receipt of or denial of government approvals and
        entitlements for development projects, other political and
        discretionary government decisions affecting the use of or
        access to land, or legal challenges to the issuance of
        approvals or entitlements.
      --  Exposure of our assets to damage from natural occurrences such
        as earthquakes, and weather conditions that affect the
        progress of construction.
      --  Liability for environmental remediation at properties owned,
        managed, or formerly owned or managed by us or our
        predecessors, and changes in environmental laws and
        regulations.
      --  Failure to reach agreement with third parties on definitive
        terms or failure to close transactions.

For more information about these and other risk factors, please review our report on Form 10-Q for the quarter ended March 31, 2000, filed with the Securities and Exchange Commission.