Capital Lease Funding Acquires $97.5 Million of United States Government Properties.

NEW YORK -- Capital Lease Funding, Inc. (NYSE: LSE) announced today it has closed on the previously announced $97.5 million acquisition of a portfolio of five real properties leased entirely to the United States Government. The five properties are summarized below.

Rentable      Lease
Property




				

				
				 
				


 Description       Location           Square Feet    Maturity
--------------------       --------           -----------    --------
Federal Bureau of
 Investigation (FBI)
 Field Office            Birmingham, Alabama     86,199      5/8/2020
Drug Enforcement
 Agency (DEA) and
 Bureau of Alcohol,
 Tobacco, Firearms
 and Explosives
 (ATF) Office Building   Birmingham, Alabama     35,616          *
Occupational Safety
 and Health
 Administration (OSHA)
 Technical Center        Sandy, Utah             75,000    11/30/2023
Environmental Protection
 Agency (EPA) Regional
 Science and Technology
 Building                Kansas City, Kansas     71,979     3/31/2023
Social Security
 Administration (SSA)
 Office Building         Austin, Texas           23,311          *
                                              ----------
      Total                                     292,105
                                              ==========


    --  The DEA/ATF and SSA office buildings are under construction
        and are expected to be completed between December 2005 and
        March 2006, respectively. Each of the buildings is subject to
        an in-place lease with rent commencing upon completion of the
        building and continuing thereafter for 15 years. The tenant
        has the right to terminate the lease on the SSA property after
        10 years.

In connection with the above acquisitions, CapLease assumed debt of approximately $36.3 million and issued mortgage debt of approximately $35.5 million. The assumed debt carries coupon rates ranging from 6.28% to 7.65% and has maturity dates ranging from October 2005 through January 2024. The mortgage debt carries a coupon rate of 5.23% and matures in September 2015. CapLease also issued approximately $9.7 million of intercompany notes that can be used as collateral for future long-term financing structures.

Paul McDowell, Chief Executive Officer, stated, "We are delighted to announce the nearly simultaneous closing and long-term financing of this complex transaction. This deal exemplifies CapLease's capabilities and demonstrates our commitment to the GSA market. We are exceptionally proud to be landlord for the FBI, DEA, ATF, OSHA, EPA and the SSA and the owner of some terrific buildings constructed to the latest GSA specifications."

About the Company:

Capital Lease Funding, Inc. (NYSE: LSE) is real estate investment trust, or REIT, focused on financing and owning commercial real estate that is net leased primarily to single tenants with investment grade or near investment grade credit ratings.