Catellus Closes on Sales of Home Building Division With Brookfield and Residential Site in San Francisco.

Business Editors/Real Estate Writers

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

Catellus Development Corporation (NYSE:CDX) reported today that it has closed on two major transactions in its residential group. Based on the agreement with Brookfield Homes of California, Inc. announced late last quarter, Catellus has completed the transfer of a majority of its merchant housing assets, approximately 900 lots with a book value of approximately $120 million, to a newly formed limited liability company managed by Brookfield in exchange for a total consideration of approximately $161.5 million.

Catellus received $139 million in cash at the close and has retained an interest in the new company valued at $22.5 million. Approximately $77 million of the initial cash proceeds will be used for debt repayment, closing costs, and other expenses related to the transfer of the homebuilding operation. The remaining net proceeds will be added to the Company's working capital to be used for general corporate purposes. Under the agreement, Catellus will receive cash for 55% of its retained interest in early 2001 and anticipates receiving the balance plus 35% of the associated profits in cash over the next 24 to 36 months as homes are built and sold. $22.5 million of the pre-tax gain will be deferred beyond 2000 and recognized as cash is received from the newly formed limited liability company.

In a separate transaction, a venture partially owned by Catellus has closed the sale of an 80-lot project in San Francisco, California. Standard Pacific Corporation paid $21 million for the site, generating a pre-tax gain of approximately $6 million to Catellus.

With the closings of these two transactions, Catellus has completed the restructuring of its residential group. Under the new structure, the Company plans to focus its residential activities on land development and community master-planning, expanding its presence throughout the Western United States and nationally as the group begins to identify development opportunities in new markets. The residential group currently owns or controls approximately 10,000 lots in the Western United States, excluding Catellus' urban group projects (Mission Bay in San Francisco and Santa Fe Depot in San Diego), with more than 8,000 acres in active planning. Its current California portfolio includes the 3,510-acre Talega community in San Clemente; the 3,500-acre Serrano community in Eldorado Hills near Sacramento; the 220-acre New Pacific Properties site in Hercules just north of Berkeley; Westbluffs, a 44-acre development in Los Angeles; and 28 acres in Gilroy.

Catellus Development Corporation is one of the nation's premier diversified real estate development companies. The Company specializes in developing, managing and investing in a broad range of product types including industrial, residential, office, retail and major urban development projects. It owns one of the largest portfolios of developable land in the Western United States 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 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.

-- Competition in the real estate industry.

-- 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.

-- Changes in tax laws and other circumstances that affect our

ability to control the timing and recognition of deferred tax

liability.

-- 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.