The reduced EBITDA outlook for the first quarter of 1999 is due primarily to three factors:

• Recognition of revenue at the property level on a fiscal quarter by Homestead versus a calendar quarter by most analysts. Homestead's 1999 first quarter results will exclude the last week of March, which is a seasonally strong period, and instead will recognize revenue from the last week of 1998, seasonally a much slower week.
• Lower than expected occupancy rates particularly in three Texas markets and in Raleigh, North Carolina. Softness in these markets led to lower REVPAR for properties in these locations.
• Slower than expected ramp up of pre-stabilized properties in the Northeast and Midwest. Winter weather conditions led to slower-than-forecasted increases in occupancy rates at new properties in such markets as Boston and Chicago.

Management indicated that first quarter 1999 earnings, as well as earnings before depreciation, amortization, and deferred taxes (EBDADT), will decline in-line with the lower expectation for first quarter EBITDA. If there were a decline in the anticipated level of development, full year 1999 earnings and EBDADT would also be impacted by a decrease in the proportion of interest costs that are capitalized.

Homestead Village Incorporated is committed to creating significant shareholder value as a leading owner and operator of moderately priced, extended stay lodging properties throughout the United States. Homestead is focused on the corporate business traveler, and has developed a proprietary operating system to ensure itscustomers a consistent, high-quality, uniform lodging experience. The company's site selection program targets infill locations proximate to major business centers and convenient to services desired by its customers.

Homestead seeks to build a national brand recognized and valued by its major corporate customers by concentrating on delivering high-quality service and product in strategic locations. The company currently has 125 properties operating in 37 markets, including 24 of the top 25 travel destination markets.

In addition to historical information, this press release contains forward-looking statements under the federal  securities laws. These statements are based on current expectations, estimates and projections about the industry and markets in which Homestead operates, management's beliefs and assumptions made by management. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties which are difficult to predict. Actual operating results may be affected by changes in national and local economic conditions, competitive market conditions, changes in financial markets or interest rates that could adversely affect Homestead's cost of capital and its ability to meet its financing needs and obligations, weather, obtaining governmental approvals and meeting development schedules, and therefore, may differ materially from what is expressed or forecasted in this press release.