Catellus Sells Residential Development for $42 Million Gain

Catellus Sells Residential Development for $42 Million Gain 


SAN FRANCISCO, Dec. 23  /PRNewswire-FirstCall/ -- Catellus Development
Corporation  announced today that a wholly owned subsidiary completed the
redemption of its 30 percent interest in Talega, a residential-community
development project located in San Clemente, California, by its joint venture
partners for $47.4 million, resulting in a pre-tax gain of approximately $42
million.  The redemption price consists of $11.8 million cash and a $35.6
million one-year note.

Catellus and its partners acquired and entitled the land for a total of 4,000
home sites in 1997, and since that time have sold to third party home developers
3,108 lots.  Since 1997, Catellus has invested a total of $15.2 million into the
Talega partnership and realized $83.6 million in pre-tax gain, which includes
the $42 million realized from the redemption transaction.

"With this sale, we are taking advantage of the continued strength in the
housing market and accelerating our efforts to monetize our non-core
businesses," commented Nelson C. Rising, chairman and CEO of Catellus.  "By
structuring a portion of the redemption price in the form of a one-year note, we
have provided additional time to reinvest this sizable gain back into our core
industrial business."

On January 1, 2004, Catellus will officially convert from operating as a C
corporation to operating as a publicly traded real estate investment trust, or
REIT, focused predominantly on developing and owning industrial property, a
transition that was initially announced on March 3, 2003.

Catellus Development Corporation is a publicly traded real estate development
company that owns and operates approximately 38.2 million square feet of
predominantly industrial property in many of the country's major distribution
centers and transportation corridors.  The company's principal objective is
sustainable, long-term growth in earnings, which it seeks to achieve by applying
its strategic resources:  a lower-risk/higher-return rental portfolio, a focus
on expanding that portfolio through development, and the deployment of its
proven land development skills to select opportunities where it can generate
profits to recycle back into its business.  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, and development. We caution you not to place undue reliance on
these forward-looking statements, which reflect our current beliefs and are
based on information currently available to us. We do not undertake any
obligation to publicly revise these forward-looking statements to reflect future
events or changes in circumstances, except as may be required by law.

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:  ability to obtain the consents and satisfy the various other
requirements for consummating the conversion of our business to a real estate
investment trust (REIT) and the timing of the REIT conversion; changes in the
real estate market or in general economic conditions, including a worsening
economic slowdown or recession; product and geographical concentration; industry
competition; availability of financing and changes in interest rates and capital
markets; changes in insurance markets; discretionary government decisions
affecting the use of land, and delays resulting therefrom; changes in the
management team; weather conditions and other natural occurrences that may
affect construction or cause damage to assets; changes in income taxes or tax
laws; liability for environmental remediation and changes in environmental laws
and regulations; failure or inability of third parties to fulfill their
commitments or to perform their obligations under agreements; failure of parties
to reach agreement or definitive terms or to close transactions; increases in
the cost of land and construction materials and availability of properties for
future development; limitations on, or challenges to, title to our properties;
risks related to the financial strength of joint venture projects and co-owners;
changes in policies and practices of organized labor groups; shortages or
increased costs of electrical power; other risks inherent in the real estate
business; and acts of war, other geopolitical events and terrorists activities
that could adversely affect any of the above factors.

For further information, including more detailed risk factors, you should refer
to Catellus Development Corporation's annual report on Form 10-K/A for the
fiscal year ended December 31, 2002, and its reports on Form 10-Q for the
quarters ended March 31, 2003, June 30, 2003, and September 30, 2003, filed with
the Securities and Exchange Commission ("SEC"), as well as the proxy
statement/prospectus filed with the SEC on August 15, 2003.

Information contained in this press release is not a substitute for the proxy
statement/prospectus. STOCKHOLDERS AND INVESTORS ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS, BECAUSE OF ITS IMPORTANT INFORMATION, INCLUDING DETAILED
RISK FACTORS, ABOUT CATELLUS DEVELOPMENT CORPORATION AND THE PROPOSED REIT
CONVERSION. The proxy statement/prospectus is available free of charge at the
SEC's website ( http://www.sec.gov/ ), or at the company's website (
http://www.catellus.com/ ), or by directing a request for such a filing to
Catellus Development Corporation at 201 Mission Street, Second Floor, San
Francisco, California, 94105, Attn.: Director of Investor Relations, or by
telephone at 415-974-4649, or by email to .

  Contacts:
   Margan Mitchell               Minnie Wright
   Corporate Communications      Investor Relations
   415-974-4616                  415- 974-4649


DATASOURCE: Catellus Development Corporation



CONTACT:  Margan Mitchell, Corporate Communications, [phone], or

Minnie Wright, Investor Relations, [phone], both of Catellus

Development Corporation



Web site:  http://www.catellus.com/ 

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