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Capital Automotive REIT
(Name of Registrant as Specified In Its Charter)
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The following is the text of a press release issued by Capital Automotive REIT on November 3, 2005.
Press Release
Tender Offer and Consent Solicitation Announced for Capital Automotive REIT’s 6.75% Monthly Income Notes Due 2019
MCLEAN, Va., November 3, 2005 — Capital Automotive REIT (Nasdaq: CARS), the nation’s leading specialty finance company for automotive retail real estate, today announced that, in connection with the previously announced merger of Capital Automotive REIT and its operating partnership into subsidiaries of Flag Fund V, LLC (the “Merger”), CA Acquisition Corp., a wholly owned subsidiary of Flag Fund V, has commenced a cash tender offer for any and all of the outstanding $125,000,000 aggregate principal amount of 6.75% Monthly Income Notes Due 2019 of Capital Automotive REIT (the “Notes”) and consent solicitation regarding certain proposed amendments to the indenture governing the Notes.
Noteholders who validly tender their notes and deliver consents before 5:00 p.m., New York City time, on Wednesday, November 16, 2005, unless extended (the “Consent Payment Deadline”), will receive the total consideration of $26.00 per $25.00 principal amount of Notes tendered. The total consideration includes a consent payment of $2.00 per $25.00 principal amount of Notes. Noteholders who validly tender their Notes and deliver consents after the Consent Payment Deadline and before 5:00 p.m., New York City time, on Friday, December 2, 2005, unless extended (the “Expiration Time”), will receive as payment for the Notes $24.00 per $25.00 principal amount of Notes, which is the total consideration per $25.00 principal amount of Notes, less the $2.00 consent payment. In either case, noteholders who validly tender their Notes will be paid accrued and unpaid interest up to, but not including, the date of payment for the Notes.
The offer will expire at the Expiration Time, unless extended. Holders tendering their Notes prior to the Expiration Time, whether before or after the Consent Payment Deadline, will be deemed to consent to certain proposed amendments to the indenture governing the Notes, which will, among other things, eliminate substantially all of the restrictive covenants in the indenture. Tendered Notes may not be withdrawn and consents may not be revoked after the Consent Payment Deadline, except as described in the Offer to Purchase and Consent Solicitation Statement, dated November 2, 2005, or as required by law.
The offer is subject to the satisfaction of certain conditions, including the consummation of the Merger and the receipt of consents of holders representing at least a majority in principal amount of the outstanding Notes. The terms of the offer are described in the Offer to Purchase and Consent Solicitation Statement, dated November 2, 2005, copies of which may be obtained from Global Bondholder Services, the tender and information agent for the offer, at (866) 873-5600 (US toll free) or (212) 430-3774 (collect).



CA Acquisition Corp. is retaining Wachovia Securities to act as the exclusive Dealer Manager in connection with the tender offer and exclusive Solicitation Agent in connection with the consent solicitation. For additional information regarding the tender offer and consent solicitation, contact Wachovia Securities at (866) 309-6316 (US Toll Free) or (704) 715-8341 (collect).
This announcement is not an offer to purchase, a solicitation of an offer to sell or a solicitation of consent with respect to any Notes. The tender offer and consent solicitation is being made solely by the Offer to Purchase and Consent Solicitation Statement, dated November 2, 2005.
About Capital Automotive
Capital Automotive, headquartered in McLean, Virginia, is a self-administered, self-managed real estate investment trust. The Company’s primary strategy is to acquire real property and improvements used by operators of multi-site, multi-franchised automotive dealerships and related businesses. Additional information on Capital Automotive is available on the Company’s website at
Additional Information about the Merger and Where to Find It
On October 14, 2005, the Company filed preliminary proxy materials with the Securities and Exchange Commission relating to its proposed merger with clients advised by DRA Advisors LLC. These proxy materials and other relevant materials, including the definitive merger agreement, may be obtained free of charge at the Securities and Exchange Commission’s website at In addition, shareholders may obtain free copies of the documents that the Company files with the SEC by accessing the Company’s website. SHAREHOLDERS OF THE COMPANY ARE URGED TO READ THESE MATERIALS AND TO READ THE DEFINITIVE PROXY MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN AND WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER AND RELATED ITEMS. Shareholders are urged to read the proxy statement and other relevant materials before making any voting or investment decisions with respect to the proposed merger.
The executive officers and trustees of the Company have interests in the proposed merger, some of which differ from, and are in addition to, those of the Company’s shareholders generally. In addition, the Company and its executive officers and trustees may be participating or may be deemed to be participating in the solicitation of proxies from the security holders of the Company in connection with the proposed merger. Information about the executive officers and trustees of the Company, their relationship with the Company and their beneficial ownership of Company securities is set forth in the preliminary proxy materials filed with the Securities and Exchange Commission on October 14, 2005. Shareholders may obtain additional information regarding the direct and indirect interests of the Company and its executive officers and trustees in the proposed merger by reading the preliminary proxy materials and by reading the definitive proxy materials relating to the plan of merger when they become available.



Forward-Looking Statements
Certain matters discussed within this press release are forward-looking statements within the meaning of the federal securities laws. Although the Company believes that the expectations reflected in the forward-looking statements are based upon reasonable assumptions, the forward-looking statements contained in this press release are subject to risks and uncertainties, including, but not limited to, risks that the proposed merger will not be consummated on the terms disclosed in the merger agreement, or at all; risks resulting from the potential adverse effect on the Company’s business and operations of the covenants the Company made in the merger agreement; risks resulting from the decrease in the amount of time and attention that management can devote to the Company’s business while also devoting its attention to completing the proposed merger; risks associated with the increases in operating costs resulting from the additional expenses the Company has incurred and will continue to incur relating to the proposed merger; risks that the Company’s tenants will not pay rent; risks related to the mortgage loans in the Company’s portfolio, such as the risk that borrowers will not pay the principal or interest or otherwise default, the level of interest income generated by the mortgage loans, the market value of the mortgage loans and of the properties securing the loans, and provisions of federal, state and local law that may delay or limit the Company’s ability to enforce its rights against a borrower or guarantor in the event of a default under a loan; risks related to the Company’s reliance on a small number of dealer groups for a significant portion of its revenue; risks of financing, such as increases in interest rates, the Company’s ability to meet existing financial covenants and to consummate planned and additional financings on terms that are acceptable to the Company; risks that its growth will be limited if the Company cannot obtain additional capital or refinance its maturing debt; risks that planned and additional real estate investments may not be consummated; risks that competition for future real estate investments could result in less favorable terms for the Company; risks relating to the automotive industry, such as the ability of the Company’s tenants to compete effectively in the automotive retail industry or operate profitably and the ability of its tenants to perform their lease obligations as a result of changes in any manufacturer’s production, supply, vehicle financing, incentives, warranty programs, marketing or other practices or changes in the economy generally; risks generally incident to the ownership of real property, including adverse changes in economic conditions, changes in the investment climate for real estate, changes in real estate taxes and other operating expenses, adverse changes in governmental rules and fiscal policies and the relative illiquidity of real estate; risks related to the Company’s financing of new construction and improvements; environmental and other risks associated with the acquisition and leasing of automotive properties; risks related to the Company’s status as a REIT for federal income tax purposes, such as the existence of complex regulations relating to its status as a REIT, the effect of future changes in REIT requirements as a result of new legislation and the adverse consequences of the failure to qualify as a REIT; risks associated with the pending lawsuit against the Company and its trust managers relating to the proposed merger and with any other lawsuits that may arise out of the proposed merger; and those risks detailed in the Offer to Purchase and Consent Solicitation Statement and from time to time in the Company’s SEC reports, including its Form 8-K/A filed on March 11, 2005, its annual report on Form 10-K and its quarterly reports on Form 10-Q.
Contact Information
David S. Kay
Senior Vice President, Chief Financial Officer and Treasurer
Capital Automotive REIT
8270 Greensboro Drive, Suite 950      McLean, Virginia 22102
MAIN (703) 288-3075      FAX (703) 288-3375       WEBSITE