Chateau Communities, Inc. to Acquire Remaining Interest in N'Tandem Trust.

Business Editors

GREENWOOD VILLAGE, Colo.--(BUSINESS WIRE)--Jan. 21, 2003

Chateau Communities, Inc. (NYSE:CPJ), the largest owner and operator of manufactured home communities in the U.S., reported today its Board of Directors has unanimously elected to complete the acquisition of the remaining equity in N'Tandem Trust, a California business trust ("N'Tandem").

Chateau currently serves as N'Tandem's external investment adviser and property manager, holds a 20 percent equity interest in N'Tandem, and has outstanding loans and advances to N'Tandem of $40 million. The N'Tandem portfolio consists of 33 communities with approximately 7,500 sites in 15 states. The portfolio is 80% occupied and carries a weighted average monthly rent of $300. When complete, the acquisition will bring Chateau's total portfolio to 235 owned communities, representing approximately 75,700 homesites in 36 states.

Total consideration for the acquisition will be approximately $150 million, representing an approximate 8% capitalization rate. Chateau will finance the acquisition by assuming $85 million of secured debt, $3 million of other liabilities and $16.5 million outstanding under N'Tandem's credit facility which Chateau currently guarantees. In addition, Chateau will borrow $5 million on its existing credit facilities and retire its loans and advances to N'Tandem.

Rees F. Davis, Jr., President, said today: "The incremental investment of $5 million provides us with the flexibility we need to maximize the value of this portfolio of assets. Our assessment of the portfolio is that 35% of its net operating income is derived from quality assets that we believe fit well with our long-term asset ownership goals and strategy. About 50% of its net operating income is derived from three-to-five year hold properties where asset repositioning and/or market improvement will provide enhanced value. Furthermore, roughly 15% of the portfolio's net operating income is derived from assets we do not believe meet our criteria for long-term investment and those assets will be marketed for disposition immediately upon closing this transaction." Mr. Davis also commented that, "This acquisition does not in any way detract from our broader commitment to step up our efforts on the property disposition side."

The transaction is expected to close during the next 60 to 90 days, subject to the satisfaction of customary closing conditions, including approval of the transaction by shareholders representing at least two thirds of the outstanding N'Tandem shares.

Headquartered in Greenwood Village, Colorado, Chateau Communities is a fully integrated, self-administered real estate investment trust (REIT), and the largest owner and operator of manufactured home communities in the U.S. Its portfolio consists of 205 communities, with an aggregate of approximately 68,300 residential homesites and 1,400 park model/RV sites, and 35 managed communities with approximately 7,800 sites. In addition, the Company owns 11 greenfield development communities with approximately 4,600 sites when fully developed. Chateau Communities operates in 36 states.

The information in this news release contains forward-looking statements of the Company's plans, objectives, and expectations, which are dependent upon a number of factors, including that the performance of N'Tandem following its merger with the Company and other matters relating to the transaction are subject to a number of contingency factors such as the effects of national and local economic conditions, the ability of the Company to achieve a successful integration of the proposed merger, changes in interest rates, supply and demand for affordable housing, and the condition of the capital markets, all of which may affect the Company's financial performance and its ability to achieve its objectives.