Excel Legacy Announces First Earnings Report.

SAN DIEGO--(BUSINESS WIRE)--June 11, 1998--Excel Legacy Corp. (NASDAQ OTC:XLCY) (Legacy) today announced it had filed its first quarterly earnings report with the Securities and Exchange Commission.

The report was for the company's quarter ending April 30, 1998 and represents the company's third quarter earnings for the company's fiscal year ending July 31, 1998.

Legacy was formed on Nov. 17, 1997 as a wholly owned subsidiary of Excel Realty Trust Inc., (Excel) and on March 31, 1998 was "spun-off" as a separate company to the common shareholders of Excel. The first earnings report of the company primarily represents operations for one month from March 31, 1998 to April 30, 1998 for assets acquired in conjunction with the spin-off.

Legacy today reported total revenue for the quarter ended April 30, 1998 of $1.3 million. Net income for the quarter was $363,000 or under the basic earnings per share (basic) was $0.03 per share and $0.02 per share under the diluted earnings per share (diluted). The weighted average number of common shares outstanding for the basic calculation was 10,991,000 and for the diluted calculation it was 18,288,000.

The company uses a supplemental performance measure called Earnings Before Depreciation (EBD) to report its earnings. This parameter represents net income plus depreciation on real estate assets. EBD is not a measure of operating results or cash flows from operating activities as defined by generally accepted accounting principles and it should not be used as an indicator of cash available or as an alternative to cash flows.

The company believes however, that EBD provides relevant information about its operations and is necessary, along with net income, for an understanding of its operating results. EBD for the quarter ended April 30, 1998 was $615,000 or $0.06 per share basic and $0.03 per share diluted.

The balance sheet of the company reported assets at April 30, 1998 of approximately $215 million and liabilities of approximately $54 million. Net real estate assets were approximately $130 million and total stockholders' equity was approximately $161 million.

"With this first earnings report, we are defining for the marketplace the financial parameters which the company will report its earnings." stated David A. Lund, chief financial officer. "We examined the reporting of several similar public real estate companies and the indicators they chose, and we think this is a simple yet effective way to report and understand the company's earnings. "

"The company's focus is on long-term capital gains rather than quarter to quarter earnings," stated Gary B. Sabin, president and chief executive officer. "Legacy has an excellent pipeline of projects and a professional management team we are very excited about"

Since the spin-off on March 31, 1998 Legacy has completed construction on two AMC theater complexes and obtained 20 year non-recourse, fixed-rate, fully-amortizing debt on the two projects. In addition Legacy acquired TenantFirst Real Estate Services Inc., a fully integrated real estate development company providing development expertise, leasing, property management and construction management services.

Legacy has also acquired Desert Fashion Plaza, an urban mall in Palm Springs, Calif., which it intends to redevelop, and has invested in a Canadian Office complex in Winnipeg, Canada consisting of a 17 story, 156,000 square foot office tower and a 2 story 2,500 square foot retail building. These projects are part of a strong pipeline of opportunities for Legacy in various stages of planning and/or development.

In all Legacy has projects totaling more than $1.5 billion in the following categories: retail entertainment (7 projects), office/industrial, (4 projects); hotel/hospitality, (5 projects); and real estate related operating businesses (2 projects).

Legacy is a public real estate company organized to create value through the acquisition, development and management of real property and real estate related operating companies. The company is actively pursuing a variety of real estate opportunities including among others, developing long-term, mixed-use, development/entertainment projects; engaging in short term trading opportunities; investing in properties requiring significant restructuring or redevelopment in order to create substantial value, such as changing the use, tenant mix or focus of the property; and acquiring single-tenant properties that can be leveraged with long-term fully amortizing debt.

CONTACT: Excel Legacy Corp.

Graham R. Bullick, 619/485-9400 ext. 203