CAPTEC NET LEASE REALTY, INC.
24 FRANK LLOYD WRIGHT DRIVE
LOBBY L, 4TH FLOOR - P.O. BOX 544
ANN ARBOR, MI 48106
WWW.CAPTEC.COM
NASDAQ: CRRR

AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:

Patrick L. Beach W. Ross Martin Michael Rosenbaum Claire Koeneman Darcy Bretz
President & CEO Chief Financial Officer General Information Analysts/Investors Media Inquiries
(734) 994-5505 (734) 994-5505 (312) 266-7800 (312) 640-6784 (312) 640-6756

MONDAY, MAY 1, 2000

CAPTEC AND AFFILIATES CANCEL MERGER PLANS;
REIT STUDIES OPTIONS TO MAXIMIZE VALUE

ANN ARBOR, MI, MAY 1, 2000 -- CAPTEC NET LEASE REALTY (NASDAQ: CRRR) today
announced cancellation of plans to merge with its affiliates into a full
service, specialty commercial finance company. Citing indications of less than
overwhelming shareholder support for the plan announced last December, the
publicly traded Real Estate Investment Trust indicated other options would be
studied.

"Since this transaction was announced, we have closely monitored our
shareholders' reaction to it," said Patrick Beach, chief executive officer of
Captec Net Lease Realty. "While we continue to believe the plan announced in
December would maximize value for all shareholders over the long term, there
does not appear to be overwhelming support for this transaction. In light of
that fact, the parties have mutually agreed to terminate the merger agreement."

In December, Captec Net Lease Realty announced a series of strategic actions
designed to enhance growth opportunities by signing a definitive agreement to
merge with its affiliates, Captec Financial Group, Inc. (CFG), a specialty
finance company serving the franchise restaurant market, and Captec Net Lease
Realty Advisors, Inc. (Advisors), the company's external advisor. The merger was
to have created a fully integrated, specialty commercial finance company focused
on the net lease and franchise finance sectors. As a result of the merger, the
company would have terminated its status as a real estate investment trust
(REIT) and converted to a C Corporation, bringing its operations more in line
with other public commercial finance companies. In announcing the termination of
the merger, Captec also stated that it is canceling its plan to terminate its
REIT status at this time.

Beach said Captec will consider other options to increase share value. In a
market unreceptive to REIT investment, management's goal continues to be a
differentiation between Captec's investment properties and strategies and those
of its industry.

Finally, Beach said, "Our goal has been, is and will continue to be to increase
returns to shareholders, period. Our study of alternate approaches will look at
all available options to accomplish that goal."

Captec also announced that it has learned that two shareholders of Captec have
each filed a separate class action complaint in the Delaware Chancery Court for
New Castle County against Captec, CFG, Advisors

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and each member of Captec's board of directors. Each complaint arises out of the
proposed merger (which has been terminated by the parties), alleges that the
defendants breached their duties owed to the shareholders of Captec in
connection with the proposed merger and seeks to bring a class action to enjoin
the proposed merger and compensatory damages. Mr. Beach stated that the lawsuits
had not yet been served on Captec, and that they would study the allegations and
respond as and when appropriate.

ABOUT CAPTEC

Captec Net Lease Realty, Inc. is a real estate investment trust (REIT) that
invests in long-term net leased restaurant and retail properties. At December
31, 1999, Captec owned and/or managed a diversified portfolio of 253
freestanding restaurant, retail and entertainment properties throughout the
United States.

SAFE HARBOR STATEMENT

Statements in this press release, which are not strictly historical, are
"forward-looking" statements. Forward-looking statements involve known and
unknown risks, which may cause the company's actual results in the future to
differ materially from expected results. These risks include, among others,
general economic conditions, local real estate conditions, construction delays
or other delays, and the availability of capital to finance planned growth, as
described in the company's filings with the Securities and Exchange Commission.
Consequently, such forward-looking statements should be regarded solely as
reflections of the company's current operating and development plans and
estimates. Actual operating results may differ materially from what is expressed
or forecast in this press release.

FOR MORE INFORMATION ABOUT CAPTEC TOLL-FREE VIA FAX, DIAL 1-800-PRO-INFO
(1-800-776-4636), FOLLOW THE VOICE MENU PROMPTS AND ENTER THE
COMPANY CODE "CRRR" (2777) ON ANY TOUCH TONE PHONE.

VISIT THE CAPTEC WEB SITE AT: WWW.CAPTEC.COM

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