REG-Eurocastle Inv. Ltd Acquisition

Released: 22/12/2005

22 December 2005 – Eurocastle Investment Limited (Euronext Amsterdam: ECT), which is managed by Fortress Investment Group LLC, today announced that it has signed a definitive agreement with Dresdner Bank AG to acquire 100% of anopen-end fund which owns a portfolio of 303 commercial properties for approximately €2 billion. The properties consist primarily of office buildings and are largely occupied by Dresdner. The bank will continue to occupy their current space which represents approximately 80% of rental income on the portfolio. Dresdner’s average remaining lease term is 9 years, while the average remaining lease term of the entire portfolio is approximately 8 years. Approximately 15% of the portfolio is currently vacant.

The properties, totaling approximately 9 million square feet (845,516 square meters) ofleasable space, are located throughout Germany, with concentrations in Frankfurt, Hamburg, Munich, Düsseldorf and Berlin. The assets are generally in major metropolitan areas and Eurocastle believes that the properties are among the best-located and highest quality assets in their respective markets. The purchase reflects an unleveraged initial yield of approximately 5%.

“This transaction provided a unique opportunity for Eurocastle to acquire a large scale portfolio that combines prime assets with a high quality core tenant under long-term leases," commented Robert Kauffman, head of Fortress’s European investment operations. "We look forward to a strong partnershipwith Dresdner and the Allianz Group."

Eurocastle expects to fund the purchase with equity and debt financing. The debt has been committed to by various banks and the equity will be raised through a public offering of common stock combined with an investment from a private equity fund managed by Fortress Investment Group. The closing of this transaction is expected to occur in the beginning of 2006.

Today, Eurocastle’s investment portfolio is made up of approximately 50% in credit leased real estate and 50% real estate debt and securities (based on invested equity). Upon the closing of this transaction, credit leased real estate will increase to at least 75% of Eurocastle’s portfolio, and will include over 17 million square feet (1.6 million squaremeters) of leasable European commercial real estate, with German assets making up 93% of Eurocastle’s direct real estate investments.

Following the acquisition, Eurocastle will own approximately €2.7 billion of commercial real estate assets, together with €1.6 billion of real estate securities and other real estate related loans.

With respect to the transaction, Eurocastle director, Wesley Edens said, "The acquisition of the Dresdner portfolio provides Eurocastle with an attractive opportunity to accelerate our stated strategy and interest in Germany. This transaction will mark a significant transformation for Eurocastle, making us one of the largest owners of commercial real estate in Germany. We now own one of the best office portfolios in Germany and expect the Dresdner assets to provide a valuable new source of income growth and platform for other strategic acquisitions."

• High quality assets – The Dresdner portfolio is among the highest quality commercial portfolios in Germany, and provides a unique opportunity to increase Eurocastle’s exposure to the recovering German commercial real estate sector on a large scale. The portfolio consists of primarily Class A office space in the major metropolitan areas in Germany, as well as smaller assets spread throughout Germany but situated primarily in prime locations within those jurisdictions.
• Stable cash flows – The leases with Dresdner, a AA3/AA- rated credit, represent 80% of current income on the portfolio with an average lease term of approximately 9 years. The portfolio provides a stable 5% initial yield with upside potential as the properties are fully leased.
• Improving real estate fundamentals – Germany’s commercial property markets,which have been severely affected by overbuilding and five years of sluggish economic growth, appear to have bottomed out. With little new construction taking place, the Dresdner portfolio is well positioned to benefit from positive net space absorption in its major markets.

We also believe that with this acquisition, the Company will be in a strong position to take advantage of growing investor demand for exposure to the sector. Pending adoption of REIT legislation in Germany, improving real estate fundamentals and distress among German open end funds are expected to provide strong growth prospects for Eurocastle.

Conference Call
Management will conduct a conference call on Wednesday, 4 January 2006 to review the Dresdner acquisition. The conference call is scheduled for 3:00 P.M. London time (10:00 A.M. New York time). All interested parties are welcome to participate on the live call. You can access the conference call by dialing +1-866-323-3742 (from within the U.S.) or +1-706-643-0550 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “Eurocastle Dresdner Acquisition Call.”

For those who are not available to listen to the live call, a replay will be available until 11:59 P.M. New York time on 31 January 2006 by dialing +1-800-642-1687 (from within the U.S.) or +1-706-645-9291 (from outside of the U.S.); please reference access code “3834413.”

About Eurocastle
Eurocastle Investment Limited is a Euro denominated Guernsey closed-ended investment company that invests in and manages a diverse portfolio consisting primarily of European credit leased real estate and real estate related debt. Eurocastle is managed by Fortress Investment Group, a global alternative investment and asset management firm with approximately $16 billion in equity capital currently under management. For more information regarding Eurocastle Investment Limited and to be added to our email distribution list, please visit www.eurocastleinv.com.

Forward-Looking Statements
Some of the statements in this announcement may include forward-looking statements which reflect the Company’s or, as appropriate, the Directors’ current views with respect to future events and financial performance. These statements include forward-looking statements. Statements which include the words “expect”, “intend”, “plan”, “project”, “anticipate”, “will” and similar statements of a future or forward-looking nature identify forward-looking statements for the purposes of the US federal securities laws or otherwise.

All forward-looking statements address matters that involve risks and uncertainties.Accordingly, there are or will be important factors that could cause the Company’s actual results to differ materially from those indicated in these statements.

Any forward-looking statements reflect the Company’s current views with respect to future events and are subject to risks, uncertainties and assumptions relating to the Company’s operations, results, strategy and liquidity. Subject to its legal and regulatory obligations, the Company undertakes no obligation to publicly update or review any forward-looking statement contained in this announcement, whether as a result of new information, future developments or otherwise.

Contact for journalists:

Lilly H. Donohue, Fortress Investment Group
Tel: +1-212-798-6118

Winfried Peters, Citigate Demuth
Tel: +49-69-170071-29

Robert Kauffman, Fortress Investment Group
Tel: +44-207-2905608