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SAN FRANCISCO- AMB Property Corp. announced this morning the first closing of AMB Institutional Alliance Fund II. A group of pension funds, foundations, insurance companies and private investors are investing in locally based AMB’s specialty: distribution facilities in major U.S. cities near airports, ports and key interstate highways.

Among the investors are Citigroup Pension Plan, the John D. and Catherine T. MacArthur Foundation and The Bush Foundation. Five of the 10 investors were partners in Alliance Fund I, which closed in March 2000.

At closing, Alliance Fund II owned five properties consisting of 17 buildings, acquired by AMB on behalf of the Fund for $111 million between October of 2000 and May of 2001. Total equity committed to the Fund by investors and AMB is $200 million.

At closing, 5% of the equity capital committed had been contributed by investors and AMB. Bank of America N.A. provided Alliance Fund II with a credit facility of $125 million to finance the remaining capital requirements, of which $100 million was drawn at closing. A second and final closing is expected to occur in the third quarter of 2001.

Proceeds from the equity contribution and financing were used to repay loans made by AMB and to acquire the properties. When combined with additional financings, not to exceed 50% of the total of the value of the Fund’s assets, the total capitalization of Alliance Fund II is expected to be $400 million.

AMB expects to be the largest investor in the fund with a minimum equity ownership of 20%. AMB, as general partner, receives acquisition fees and a priority distribution for asset and portfolio management obligations. AMB has the ability to receive additional incentive distributions if it exceeds certain internal rate of return benchmarks.

As of March 31, AMB owned, managed and had renovation and development projects totaling 93 million square feet and 998 buildings in 27 metropolitan markets. At the close of trading Monday, shares in the company were trading at $25.40, up 4 cents from Friday and within 66 cents of the company’s 52-week high.

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