Catellus Explores Alternatives for the Homebuilding Division of Its Residential Subsidiary.

Business Editors

SAN FRANCISCO--(BUSINESS WIRE)--March 3, 2000

Catellus Development Corporation (NYSE:CDX) announced today that it is evaluating strategic alternatives for the merchant housing division of its residential subsidiary, Catellus Residential Group (CRG), including a possible sale of the merchant housing division. The merchant housing, or homebuilding division, of CRG builds a full range of single-family housing product in locations throughout Northern and Southern California. Catellus plans to retain CRG's community development division and continue to expand its activities related to the acquisition, entitlement and master-planning of residential communities.

"We've had great success with our homebuilding division since we acquired The Akins Companies in 1996," said Nelson C. Rising, president and chief executive officer of Catellus Development Corporation. "Our inventory of lots in merchant housing is located in areas of California where the economy is exceptionally strong and where demand for houses has increased considerably.

"Consolidation in the homebuilding industry has resulted in a more competitive environment with national homebuilders focusing on higher volume, lower margin activities," Rising added. "Since it is not a part of our corporate strategy to increase the volume of our homebuilding activities substantially, it is an opportune time to explore our alternatives."

Rising continued, "Over 9,000 of the 15,900 residential units in our development portfolio will continue to be developed by Catellus through the community development division. In addition, land for 4,500 units will be developed at Mission Bay by our mixed use division. We continue to identify attractive community development opportunities and look forward to growing that business further."

Consistent with the succession plan that was adopted when The Akins Companies were acquired, Bruce and Carl Akins, who are currently president and chairman of Catellus Residential Group, respectively, will leave the company at the end of March to pursue other opportunities.

"Bruce and Carl have made an invaluable contribution to Catellus," continued Rising. "They are directly responsible for the smooth transition we experienced after acquiring The Akins Companies and the spectacular growth we have since achieved. Their dedication and entrepreneurial ability have well positioned both the community development division and the merchant housing division for future success. We are grateful for the leadership of Carl and Bruce Akins over the past four years and we wish them well."

"We are very proud of the success of our residential group and the achievement of our goals to grow that business over the last couple of years," said Bruce Akins. "It is to the credit of our employees, with their hard work and dedication, that we were able to achieve such great success. We believe that splitting our group into two companies, and exploring a possible sale of the merchant housing division, will allow our employees to develop their careers further."

About Catellus Development Corporation

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 mixed use projects. We have one of the largest portfolios of developable land in the Western United States, which is capable of supporting over 42 million square feet of new commercial development and an estimated 15,900 residential units. For more information on us, please visit the company's website at http://www.catellus.com.

This release includes forward-looking statements concerning market conditions, industry sector trends and margins, economic forecasts, strategic plans of Catellus and of other companies and planned negotiations. These statements are forward-looking statements, which by their nature involve risk and uncertainties. In particular, among the factors that could cause actual results to differ materially are the following: changes in the capital markets; change in interest rates; changes in investment alternatives available to Catellus; changes in tax laws; business and general economic conditions; supply and demand for residential space; political decision affecting land use permits; discretionary governmental decisions affecting use of and access to land and delays resulting therefrom; and other risks inherent in the real estate business. For further information on factors that could affect the company and the statements, the reader should refer to the company's report on Form 10-K for the fiscal year ended December 31, 1998, filed with the Securities and Exchange Commission.