ATLANTA, April 27, 1998 -  Homestead Village Incorporated (NYSE: HSD), the leading developer, owner and operator of moderately priced extended-stay lodging facilities, today reported an increase of 89% in earnings before depreciation, amortization and deferred taxes (EBDADT) per diluted share to $0.17 in the first quarter of 1998, compared with $0.09 for the same period one year ago.

Homestead also reported an 89% increase in earnings before interest, taxes, depreciation and amortization (EBITDA) per diluted share for the first quarter to $0.17 per share, compared with $0.09 per share for the prior year. Weekly revenue per available room (RevPAR) for the company's 49 stabilized properties increased 14.1% in the first quarter, to $218 from $191 one year ago. Operating margins for stabilized properties improved to 57.0%, up from 56.4% for the first quarter in 1997.

"We are very pleased with our first quarter results as we continue to build Homestead Village into a national brand with the industry's leading operating system," said Michael D. Cryan, co-chairman and chief operating officer. "Homestead's strong performance reflects the growth in business with major corporate customers as a result of our new service initiatives, expanded sales and marketing efforts, and the strategic extension of our portfolio into new markets."

New Services, Expanded Sales Force Facilitate Business with Multi-Market Corporate Customers

To further its objective of attracting the corporate business traveler, Homestead is implementing service initiatives that make it easier to do business with the company. During the second quarter, Homestead will complete the connection of all its operating properties to Global Distribution Systems (GDS), on-line networks which link Homestead properties to independent travel agents, airline reservationists, car rental agents and corporate travel managers -- critically important target audiences -- across the country and around the world.

In addition, Homestead activated a new 24-hour toll-free reservation number, 888-STAY-HSD, through which a guest can book a reservation at any Homestead property across the country. "In a single step, travel planners can immediately access Homestead Village properties, locations, availability and rate information, all on a national level," said Mr. Cryan. "We expect the GDS and 888-number to be significant contributors to our growth by allowing us to streamline transactions with large, multi-market corporate customers."

Mr. Cryan noted that during the quarter, Homestead Village expanded its national sales and marketing team to 23 professionals in 18 markets to promote the company's extended-stay lodging facilities among targeted corporate customers. The company expects to increase its current sales force to more than 32 professionals in 23 markets by year-end. "As we expand our sales and marketing efforts, we are seeing steady improvement in the number of room nights booked by major corporate users of extended-stay facilities," said Mr. Cryan. "In the first quarter, our sales team produced more than $1 million in incremental revenues, a 32% increase from the previous quarter."

Further complementing Homestead's focus on building a national brand, the company announced the appointment of Amanda Madean as Director of Brand Communications. In this critical role, Ms. Madean is responsible for all aspects of the company's brand communications, including national and local market consumer trade advertising and public relations. Prior to joining Homestead, Ms. Madean was the Director of Advertising/Promotion for Holiday Inn Worldwide and a consultant with the ITT Sheraton Franchise Division. "Amanda's background and leadership are what a dynamic growth company like Homestead Village needs to direct our branding communications strategy," said Mr. Cryan.

New Properties Broaden National Presence

In the first quarter, Homestead opened 11 new properties, bringing the total number of operating properties to 82 in 28 markets across the country. "We are well on our way to achieving our target of 120 operating properties by year-end." said David C. Dressler, co-chairman and chief investment officer. "In addition, our rapidly expanding network of extended-stay properties creates tremendous opportunities for Homestead to service rapidly growing corporate markets such as Minneapolis and Philadelphia."

Mr. Dressler noted that as of March 31, 1998, Homestead's portfolio included 169 properties, either operating, under construction or committed development starts. Approximately 57% of the company's total committed capital in its portfolio is deployed in the Northeast corridor, from Boston to Washington, D.C., and the West Coast from Seattle to San Diego. "Our prudent, research-based approach to site selection and capital deployment successfully supports our ability to develop and sustain strong properties in key, high- growth markets," Mr. Dressler said.

NYSE Listing, Increased Line of Credit Strengthen Financial Position

On April 1, 1998, Homestead's common stock began trading on the New York Stock Exchange (NYSE). "The NYSE listing provides Homestead Village with greater visibility and liquidity among institutional and retail investors, and creates the platform to broaden our investor base," said Mr. Dressler. The company has retained its current ticker symbol, "HSD."

In addition, Homestead announced that it has increased its total short- term borrowing capacity to $200 million. This increase will allow Homestead to finance additional development activities through debt funding. Homestead Village is committed to creating significant shareholder value by becoming the leading developer, 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 its customers a consistent, high-quality, uniform lodging experience. The company's development 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 desirable locations.

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, weather, obtaining governmental approvals and meeting development schedules, and therefore, may differ materially from what is expressed or forecasted in this press release.