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                                                                   EXHIBIT 10.45



                           REVOLVING LOAN AGREEMENT
                           
                           DATED AS OF MARCH 4, 1999

                                     AMONG

                                 COMERICA BANK

                                      AND

                       CAPITAL AUTOMOTIVE, L.P., ET AL.



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     THIS REVOLVING LOAN AGREEMENT is made as of the 4th day of March, 1999, by
and among Capital Automotive, L.P., a Delaware limited partnership ("CALP"), CAR
GR1 L.P., CAR Alexander L.P., CAR MOT II L.L.C., and CAR MOT L.L.C. and such
additional entities as shall execute a Joinder Agreement in form attached as
Exhibit A (all of the foregoing entities, including CALP and such additional
entities as hereafter execute a Joinder Agreement, being collectively identified
as "Companies" and individually as a "Company") and COMERICA BANK, a Michigan
banking corporation, of Detroit, Michigan (herein called "Bank");

                               R E C I T A L S:

     NOW, THEREFORE, Bank and Companies agree as follows:

                             W I T N E S S E T H:

1.   DEFINITIONS

     For the purposes of this Agreement the following terms will have the
following meanings:

     1.1  "Adjusted Net Worth" shall mean, as of any date, the
stockholders' equity of the REIT and its Consolidated Subsidiaries as determined
in accordance with GAAP plus, to the extent not included in stockholders'
                        ----                                             
equity, the minority interest held in CALP, minus, to the extent included in
                                            -----                           
stockholder's equity, all amounts owing to the REIT from its stockholders or
other Affiliates other than amounts which Bank reasonably determines may be
included in the calculation of stockholders' equity, minus the REIT's
                                                     -----           
Consolidated intangible assets, including, without limit, goodwill, trademarks,
tradenames, mailing lists, catalogs, bond discount and underwriting expenses,
organization expenses, patents, licenses and similarly classified assets, plus
                                                                          ----
the REIT's Consolidated Subordinated Debt.

     1.2  "Advance" shall mean a borrowing requested by any Company and
made by Bank under Section 2.3 of this Agreement.

     1.3  "Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to control a
Person for the purposes of this definition if such Person possesses, directly or
indirectly, the power (i) to vote 10% or more of the securities or other equity
interest having ordinary voting power for the election/appointment of directors
general partners/managers of such Person or (ii) to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or other voting equity interests, by contract or
otherwise.

     1.4  "Agreement" shall mean this Revolving Loan Agreement as the same
may hereafter be amended, modified or restated from time to time.

     1.5  "Applicable Interest Rate" shall mean the LIBOR-based Rate.  If
the LIBOR-based Rate is not available as later set forth in this Agreement, then
the Prime-based Rate shall be the Applicable Interest Rate, provided, further,
that if the Prime-based Rate is not available as later provided, then the Base
Rate shall be the Applicable Interest Rate.
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     1.6    "Appraisal" shall mean an MAI appraisal of a Property, by an
appraiser and in form satisfactory to Bank.

     1.7    "Appraised Value" shall mean the value of a Property determined
under an appraisal prepared by an appraiser acceptable to Bank, which value is
accepted by Bank's in-house appraiser.

     1.8    "Base Rate" shall mean for any calendar day a rate per annum
(rounded upwards, if necessary, to the next higher 1/16 of 1%) equal to the
Federal Funds Effective Rate in effect on such day plus one percent (1%).

     1.9    "Borrowing Base " shall mean an amount equal to the Mortgaged
Property Values plus the Nonmortgaged Property Values, subject to the following
                ----
limitations:

            a.   Any Mortgaged Properties that constitute a portion of the
Borrowing Base (i) for more than 365 consecutive days shall be valued at the
lesser of (A) 50% of the Cost or (B) 50% of Appraised Value, or (ii) for more
than 730 consecutive days shall be valued at $0.

            b.   Any Property on which the lease is in default beyond the lesser
of (i) thirty (30) days for a material payment default, including by way of
illustration and not limitation, failure to pay rent, property taxes insurance
premiums or (ii) sixty (60) days for all other material defaults, shall be
valued at $0.

            c.   Not more than 10% of the Borrowing Base may consist of
miscellaneous parcels used in connection with the operation of an automobile
dealership; all other Properties in the Borrowing Base must be new automobile
vehicle sales and service facilities.

            d.   The Borrowing Base value of Properties acquired from a
Dealership Group will not exceed $17,500,000.

            e.   If and when the Indebtedness exceeds $25,000,000, the
Nonmortgaged Properties Value shall not be included in the Borrowing Base.

            f.   In no event shall the Borrowing Base exceed the lesser of (i)
85% of the Cost, or (ii) 85% of the Appraised Value of the Mortgaged Properties.

For purposes of determining/calculating the Borrowing Base, examples of such
calculation are annexed hereto as Exhibit 1.9.

     1.10   Borrowing Base Certificate" shall mean the certificate referenced in
Section 7.1.d of this Agreement in the form annexed hereto as Exhibit 1.10 .

     1.11   "Business Day" shall mean any day, other than a Saturday, Sunday or
holiday, during which Bank is open for domestic and international business
(including dealings in foreign exchange) in Detroit, Michigan and, in respect of
notices and determinations relating to the LIBOR-based Rate, also a day on which
transactions in the interbank eurodollar market are conducted.

     1.12   "Capital Lease" shall mean any lease of any property (whether real,
personal or mixed) by a Person as lessee which, in conformity with GAAP, is, or
is required to be accounted for as a

                                    PAGE 2
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capital lease on the balance sheet of such Person, together with any renewals of
such leases (or entry into new leases) on substantially similar terms.


     1.13   "Consolidated" or "Consolidating" shall, when used with reference to
any financial information pertaining to (or when used as a part of any defined
term or statement pertaining to the financial condition of) REIT and its
Consolidated Subsidiaries, mean the accounts of REIT and its Consolidated
Subsidiaries determined on a consolidated or consolidating basis, as the case
may be, all determined as to principles of consolidation and, except as
otherwise specifically required by the definition of such term or by such
statements, as to such accounts, in accordance with GAAP and consistent with the
financial statements, if any, as at and for the fiscal year ended December 31,
1998.

     1.14   "Cost" shall mean the actual gross cost of a Property, including
closing costs, transfer taxes, recording fees, sales commissions and other costs
customarily incurred in connection with the acquisition of a Property.

     1.15   "Current Liabilities" shall mean current liabilities as
determined in accordance with GAAP plus, to the extent not included in current
liabilities as determined in accordance with GAAP, all amounts owing by the
                                                   ---                     
Companies to Bank under the Revolving Credit.

     1.16   "Dealership Group" shall mean an entity or its Affiliates that
owned, prior to acquisition by a Company, a Property and which operates the
automobile dealership on such Property, together with all Affiliates of such
entity.

     1.17   "Debt to Adjusted Net Worth Ratio" shall mean, at the date of
determination, the ratio, expressed as a fraction, the numerator of which is
Debt and the denominator of which is Adjusted Net Worth.

     1.18   "Debt Service Coverage Ratio" shall mean, at the date of
determination, the ratio, expressed as a fraction, the numerator of which is
EBITDA and the denominator of which is the current portion of long term debt
amortization plus interest expense for the four (4) preceding fiscal quarters.

     1.19   "Debt" shall mean, as of any applicable date of determination, all
items of indebtedness, obligation or liability of a Person, whether matured or
unmatured, liquidated or unliquidated, direct or indirect, absolute or
contingent, joint or several, that should be classified as liabilities in
accordance with GAAP plus certain contingent liabilities that would not be
classified as liabilities in accordance with GAAP but are to be considered Debt
under this Agreement pursuant to the written determination of Bank in the
reasonable exercise of its discretion.

      1.20  "EBITDA" shall mean, as of any date of determination, the sum of
the Net Income of REIT and its Consolidated Subsidiaries, for the four (4)
preceding fiscal quarters ending on such date of determination, plus, to the
extent deducted in computation of such Consolidated Net Income, (i) income taxes
for that period, (ii) interest expense for that period and (iii) depreciation
and amortization expense for that period, in each case determined in accordance
with GAAP.

     1.21   "Environmental Laws" shall mean all federal, state and local laws
including statutes, regulations, ordinances, codes, rules, and other
governmental restrictions and requirements, relating to environmental pollution,
contamination or other impairment of the environment or any hazardous or toxic
substances of any nature. These Environmental Laws shall include but not be
limited to the

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Federal Solid Waste Disposal Act, the Federal Clean Air Act, the Federal Clean
Water Act, the Federal Resource Conservation and Recovery Act of 1976, the
Federal Comprehensive Environmental Response, Compensation and Liability Act of
1980, and the Federal Superfund Amendments and Reauthorization Act of 1986.

     1.22   "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, or any successor act or code.

     1.23   "Eurodollar Lending Office" shall mean Bank's office located in the
Cayman Islands, British West Indies, or such other branch of Bank, domestic or
foreign, as Bank may hereafter designate as its Eurodollar Lending Office by
notice to Companies.

     1.24   "Event of Default" shall mean any of the Events of Default
specified in Section 10 of this Agreement following notice and opportunity to
cure such default provided in Section 10, if any.

     1.25   "Federal Funds Effective Rate" shall mean, for any day, a
fluctuating interest rate per annum equal to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by Bank from three federal funds brokers of recognized
standing selected by Bank.

     1.26   "GAAP" shall mean, as of any applicable date of determination,
generally accepted accounting principles consistently applied, as in effect from
time to time.

     1.27   "Indebtedness" shall mean all loans, advances, indebtedness,
obligations and liabilities of Companies to Bank under this Agreement, together
with all other indebtedness, obligations and liabilities whatsoever of Companies
to Bank arising under or in connection with the Loan Documents, whether matured
or unmatured, liquidated or unliquidated, direct or indirect, absolute or
contingent, joint or several, due or to become due, now existing or hereafter
arising.

     1.28   "Interest Period" shall mean a period of one (1) month, two (2)
months or three (3) months as selected by Companies in accordance with Section
2.3b of this Agreement, provided that any Interest Period which would otherwise
end on a day which is not a Business Day shall be extended to the next
succeeding Business Day, except that as to an Interest Period with respect to a
LIBOR Advance, if the next succeeding Business Day falls in another calendar
month, the Interest Period shall end on the next preceding Business Day, and
when an Interest Period begins on a day which has no numerically corresponding
day in the calendar month during which such Interest Period is to end, it shall
end on the last Business Day of such calendar month.

     1.29   "LIBOR Advance" shall mean an Advance which bears interest at
the LIBOR-based Rate.

     1.30   "LIBOR-based Rate" shall mean the LIBOR Rate plus the LIBOR
Margin.

     1.31   "LIBOR Margin" shall mean one and seventy five hundredths
(1.75%) percent per annum.

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     1.32   "LIBOR Rate" shall mean the British Banker's Association ("BBA")
interest settlement rate based on an average of rates quoted by BBA designated
banks as being, in BBA's view the offered rate at which deposits in U.S. Dollars
are being quoted to prime banks in the London interbank market at 11:00 a.m.
(London Time) two (2) Business Days prior to the day with respect to which the
LIBOR Rate is being determined, for one (1) month, two (2) month or three (3)
month deposits, as applicable, in amount equal or comparable to the applicable
LIBOR Advance, as such rates are determined by the BBA, as reported by "The
Bloomberg Financial Markets, Commodities and News" financial reporting service.
The LIBOR Rate shall be rounded to 4 decimal places.

     1.33   Loan Documents" shall mean collectively, this Agreement, the
Note required by Section 2.1 and any other instruments or agreements executed at
any time pursuant to or in connection with any such documents.

     1.34   "Mortgage" shall mean a mortgage, deed of trust or similar
instrument and/or an  assignment of leases and rents which creates or purports
to create a lien, encumbrance and/or security interest in a Property and the
rents thereof in favor of Bank upon execution by a Company and delivery to Bank.

      1.35  "Mortgaged Property" shall mean a Property on which:

            a. A Company has granted to Bank a Mortgage securing all or a
portion of the Indebtedness that is a first priority lien on the Property and
which Mortgage is or is to be recorded or filed in the appropriate governmental
office to provide record notice of Bank's lien in the property; and

            b.  Bank has received an ALTA title policy without standard
exceptions, issued by a title company satisfactory to Bank, insuring the
Mortgage to be a first priority lien on the Property, subject only to such
exceptions as Bank shall approve in writing, in the amount of the Advance
attributable to the Property encumbered by such Mortgage.

     1.36   "Mortgaged Property Values" shall mean the lesser of (i) 60% of
the Cost or (ii) 60% of the Appraised Value of the Mortgaged Properties.

     1.37   "Net Income" shall mean the net income (or loss) of REIT and its
Consolidated Subsidiaries for any period determined in accordance with GAAP on a
Consolidated basis.

     1.38   "Nonmortgaged Property" shall mean a Property that is identified
by a Company as part of the Borrowing Base, and which is not a Mortgaged
Property because the recording of the Bank's Mortgage is to be deferred,
pursuant to Section 5.2.a. of this Agreement below, but otherwise meets the
conditions of being a Mortgaged Property except that the title commitment
referenced in Section 1.46 a.vi is permitted in lieu of the title policy
referenced in Section 1.35 b.

     1.39   "Nonmortgaged Property Values" shall mean the lesser of (i) 50%
of the Cost, or (ii) 50% of the Appraised Value of the Nonmortgaged Properties.

     1.40   "Note" or "Revolving Credit Note" shall mean the Revolving
Credit Note executed by the Companies pursuant to this Agreement.

     1.41   "Permitted Liens" shall mean with respect to any Property:

                                    PAGE 5
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            a.   liens for taxes not yet delinquent or which are being contested
in good faith by appropriate proceedings diligently pursued, provided that
provision for the payment of all such taxes has been made on the books of such
Person as may be required by GAAP;

            b.   easements or reservations, or rights of others for rights-of-
way, utilities and other similar purposes, or zoning or other restrictions as to
the use of real properties, which do not materially interfere with the business
operated on the Property;

            c.   exceptions to the title of Properties approved by Bank in
writing; or

            d.   leasehold mortgages that only encumber or attach to the
leasehold interest of the tenant of a Property.

     1.42   "Person" or "person" shall mean any individual, corporation,
partnership, joint venture, limited liability company, association, trust,
unincorporated association, joint stock company, government, municipality,
political subdivision or agency, or other entity.

     1.43   "Prime-based Rate" shall mean the Prime Rate minus three
quarters of one (.75%) percent per annum.

     1.44   "Prime Rate" shall mean the per annum interest established by
Bank as its prime rate for its borrowers as such rate may vary from time to
time, which rate is not necessarily the lowest rate on loans made by Bank at any
such time.

     1.45   "Prime-based Advance" shall mean an Advance which bears interest
at the Prime-based Rate.

     1.46   "Property" shall mean a parcel of real estate as to which all of
the following conditions have been satisfied:

            a.   Bank has received the following, each dated not later than the
first Advances of the Revolving Credit in connection with such property,
prepared by a company acceptable to Bank, and in form and substance satisfactory
to Bank:

                 i.   an Appraisal;

                 ii.  a Phase I Environmental Report;

                 iii. an ALTA survey conforming to Bank's standard survey
requirements annexed hereto as Exhibit "1.46";

                 iv.  Property and liability insurance, showing Bank as a
mortgagee and additional insured, respectively, and under which Bank will be
provided 30 calendar days notice of cancellation or material modification of
coverage;

                 v.   copies of all leases and subleases;

                 vi.  a commitment for an ALTA mortgagee's policy, without
standard exceptions if the Property is a Mortgaged Property and, if the Property
is a Nonmortgaged Property, a copy of an ALTA commitment for an owner's policy
of title insurance without standard

                                    PAGE 6
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exceptions;

                 vii. an executed Mortgage;

            b.   it is improved as an automotive dealership operated by a new
vehicle franchised dealer;

            c.   it is owned by a Company and has been leased to a franchised
new vehicle automotive dealer or an affiliate of such dealer;

            d.   The lease of the Property is for a term of at least eight (8)
years and is satisfactory to Bank as to form, substance and detail;

            e.   The tenant under the lease has signed a Subordination Agreement
and Estoppel Certificate satisfactory to Bank;

            f.   The lease of the Property satisfies CALP's general internal
leasing policies, as they may be modified from time to time; and

            g.  that is acceptable to Bank for inclusion in the Borrowing Base.

     1.47   "REIT" shall mean Capital Automotive REIT, a real estate
investment trust formed under the laws of the State of Maryland.

     1.48   "Request for Advance" shall mean a form Request for Advance
issued by a Company under this Agreement in the form annexed to this Agreement
as Exhibit "1.48".

     1.49   "Revolving Credit" shall mean the revolving credit facility
described in Section 2 of this Agreement.

     1.50   "Revolving Credit Commitment Amount" shall mean Fifty Million
($50,000,000) Dollars.

     1.51   "Revolving Credit Maturity Date" shall mean three (3) years from
the date of this Agreement.

     1.52   "Subordinated Debt" shall mean Debt of any Person which has been
subordinated in right of payment and priority to the Indebtedness, all on terms
and conditions satisfactory to the Bank.

     1.53   "Subsidiary" shall mean a corporation or other entity of which
more than fifty percent (50%) of the outstanding voting stock or other equity
interests is owned by a Company, either directly or indirectly, through one or
more intermediaries.

     1.54   "UCC" or "Uniform Commercial Code" shall mean the Uniform
Commercial Code in effect in the State of Michigan from time to time.

2.   THE INDEBTEDNESS: REVOLVING CREDIT

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     2.1    Subject to the terms and conditions of this Agreement and provided
no Event of Default then exists, Bank agrees to make Advances to Companies from
time to time from the effective date hereof until the Maturity Date. Advances of
the Revolving Credit outstanding at any time shall not, in the aggregate, exceed
the lesser of the Borrowing Base or the Revolving Credit Commitment Amount. All
of the Advances under the Revolving Credit shall be evidenced by the Revolving
Credit Note under which advances, repayments and readvances may be made, subject
to the terms and conditions of this Agreement.

     2.2    The Revolving Credit Note shall mature on the Revolving Credit
Maturity Date.  Each time a Company executes a Joinder Agreement, at Bank's
request all Companies shall execute a replacement Revolving Credit Note
consistent with this Agreement which replacement Note shall be delivered to Bank
concurrently with cancellation of the prior Note.  Each Advance from time to
time outstanding under the Revolving Credit Note shall bear interest at the
Applicable Interest Rate. The amount and date of each Advance, its Applicable
Interest Rate, and the amount and date of any repayment shall be noted on Bank's
records, which records will be conclusive evidence thereof absent manifest
error.

     2.3    Companies may request an Advance under the Revolving Credit
upon the delivery to Bank at its address set forth in Section 11.5 of this
Agreement of a Request for Advance executed by an authorized signatory of CALP
subject to the following:

            a.   no Event of Default shall have occurred and be continuing;

            b.  each such Request for Advance shall set forth the information
required on the Request for Advance form annexed hereto as Exhibit "1.48";

            c.   each such Request for Advance shall be delivered to Bank by
11:00 a.m. (Detroit, Michigan time) on the proposed date of Advance;

            d. the requested Advance when combined with all outstanding
Advances, will not exceed the lesser of the Borrowing Base or the Revolving Loan
Commitment Amount;

            e. the principal amount of each Advance, plus the amount of any
outstanding indebtedness to then be combined therewith having the same
Applicable Interest Rate and Interest Period shall be at least One Million
($1,000,000.00) Dollars and if greater, in integral multiples of One Hundred
Thousand ($100,000) Dollars;

            f.   the proposed date of any refunding of any outstanding LIBOR
Advance shall only be on the last day of the Interest Period applicable thereto;

            g.   a Request for Advance, once delivered to Bank, shall not be
revocable by Companies: and

            h.   a Borrowing Base Certificate if required by Section 7.1d
hereof.

Bank may, at its option, lend under this Section 2 upon the telefacsimile
request of an authorized officer of a Company and, in the event Bank makes any
such advance upon a telefacsimile request, the requesting officer shall, if so
requested by Bank, mail to Bank, on the same day as such telephone

                                    PAGE 8
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request, a Request for Advance in the form attached as Exhibit "1.48". Companies
hereby authorize Bank to disburse advances under this Section 2 pursuant to the
telefacsimile instructions of any person purporting to be an authorized officer
of CALP and Companies shall bear all risk of loss resulting from disbursements
made upon any telefacsimile request. Each telefacsimile request for an Advance
shall constitute a certification of the matters set forth in the Request for
Advance form as of the date of such requested Advance.

     2.4    Proceeds of Advances under the Revolving Credit Note shall be
used solely for acquisition or financing of real properties and for working
capital for Companies.

     2.5    The sum of the aggregate principal amount at any one time
outstanding under the Revolving Credit Note shall never exceed the Borrowing
Base.  Companies shall immediately make all payments necessary to comply with
this provision.

     2.6    Beginning sixty (60) days from the date hereof until the
termination of this Agreement, Companies shall pay to Bank an unused facility
fee equal to fifteen basis points (0.15%) per annum multiplied by the average
unused Revolving Credit Commitment Amount for each month.  The unused facility
fee shall be payable monthly in arrears commencing June 1, 1999 and on the first
day of each month thereafter and on the Revolving Credit Maturity Date and shall
be computed on the basis of a year of 360 days and assessed for the actual
number of days elapsed.

     2.7    Companies also agrees to pay to Bank a loan origination fee as
set forth in a separate letter agreement between the Bank and Companies.

3.   INTEREST, INTEREST PERIODS, CONVERSIONS, PREPAYMENTS.

     3.1    Advances under the Revolving Credit shall bear interest from the
date thereof on the unpaid principal balance thereof from time to time
outstanding, at a rate per annum equal to the LIBOR-based Rate unless the LIBOR-
based Rate is not available pursuant to sections 4.2 or 4.3 below.  Interest for
the preceding month shall be payable in arrears on the tenth (10th) calendar day
of the following month. Notwithstanding the foregoing, from and after the
occurrence of any Event of Default and solely during the continuation thereof,
the Advances shall bear interest, payable on demand, at a rate per annum equal
to three percent (3%) above the rate which would otherwise be applicable under
this Section 3.1. Interest on all Advances shall be calculated on the basis of a
360 day year for the actual number of days elapsed. The interest rate with
respect to any Advance that accrues interest at either the Prime-based Rate or
the Base Rate shall change on the effective date of any change in the Prime-
based Rate or the Base Rate.

4.   SPECIAL PROVISIONS, CHANGES IN CIRCUMSTANCES AND YIELD PROTECTION.

     4.1    For any Interest Period for which the Applicable Interest Rate is
the LIBOR-based Rate, if Bank shall designate a Eurodollar Lending Office which
maintains books separate from those of the rest of Bank, Bank shall have the
option of maintaining and carrying the relevant Advance or portion of the
Revolving Credit on the books of such Eurodollar Lending Office.

     4.2    If Bank reasonably determines that, by reason of circumstances
affecting the foreign exchange and interbank markets generally, deposits in
eurodollars in the applicable amounts are not

                                     PAGE 9
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being offered to the Bank for such Interest Period, then Bank shall forthwith
give notice thereof to the Companies. Thereafter, until Bank notifies Companies
that such circumstances no longer exist, the obligation of Bank to make LIBOR-
based Advances shall be suspended, and all Advances shall bear interest at the
Prime-based Rate, and if the Prime-based Rate is not available, then at the Base
Rate.

     4.3    If, after the date hereof, the introduction or implementation of,
or any change in, any applicable law, rule or regulation, or in the
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by Bank (or its
Eurodollar Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, shall make it unlawful or impossible
for the Bank (or its Eurodollar Lending Office) to honor its obligations
hereunder to make or maintain any Advance or the Indebtedness at the LIBOR-based
Rate, Bank shall forthwith give notice thereof to Companies. Thereafter (a) the
obligation of Bank to make LIBOR-based Advances and the right of Companies to
refund an Advance as a LIBOR-based Advance and to elect the LIBOR-based Rate
shall be suspended, and thereafter the Applicable Interest Rate shall be that
rate which remains available, and (b) if Bank may not lawfully continue to
maintain an Advance to the end of the then current Interest Period applicable
thereto, the Prime-based Rate shall be the Applicable Interest Rate for the
remainder of such Interest Period.

     4.4    If the adoption or implementation after the date hereof, or any
change after the date hereof in, any applicable law, rule or regulation of any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Bank (or its
Eurodollar Lending Office) with any request or directive (whether or not having
the force of law) made by any such authority, central bank or comparable agency
after the date hereof:

            a.   shall subject Bank (or its Eurodollar Lending Office) to any
tax, duty or other charge with respect to any Advance or the Revolving Credit
Note or shall change the basis of taxation of payments to Bank (or its
Eurodollar Lending Office) of the principal of or interest on any Advance or the
Revolving Credit Note or any other amounts due under this Agreement in respect
thereof (except for changes in the rate of tax on the overall net income of Bank
or its Eurodollar Lending Office imposed by any jurisdiction in which Bank is
organized or engaged in business); or

            b.   shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the Federal Reserve
System), special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by Bank (or its Eurodollar Lending
Office) or shall impose on Bank (or its Eurodollar Lending Office) or the
foreign exchange and interbank markets any other condition affecting any Advance
or the Note;

            c.   and the result of any of the foregoing is to increase the costs
to Bank of maintaining any part of the Indebtedness or to reduce the amount of
any sum received or receivable by Bank under this Agreement or under the
Revolving Credit Note by an amount deemed by the Bank to be material, then Bank
shall promptly notify Companies of such fact and demand compensation therefor
and, within fifteen days after demand by Bank, Companies agree to pay to Bank
such additional amount or amounts as will compensate Bank for such increased
cost or reduction. Bank will promptly notify Companies of any event of which it
has knowledge which will entitle Bank to compensation pursuant to this Section
4.4. A certificate of Bank setting forth the basis for determining such
additional amount or amounts necessary to compensate Bank shall be conclusively
presumed to be correct save for manifest error. Bank agrees that, as promptly as
practical after it becomes aware of 

                                     PAGE 10
<PAGE>
 
the occurrence of any event or the existence of a condition that will cause Bank
to be entitled to compensation under this Section 4.4, it will, to the extent
not inconsistent with Bank's internal policies, use reasonable efforts to make,
fund or maintain any affected LIBOR-based Advance through another lending office
of Bank if as a result thereof the additional monies which would otherwise be
required to be paid in respect of such LIBOR-based Advance would be materially
reduced and if, as determined by Bank in its reasonable discretion, the making,
funding or maintaining of such LIBOR-based Advance through such other lending
office would not materially adversely affect such Advance or portion of a loan
or Bank. Companies shall pay all reasonable expenses incurred by Bank in
utilizing another lending office pursuant to this Section 4.4.

          4.5  In the event that at any time after the date of this Agreement
any change in law such as described in Section 4.4 hereof shall, in the
reasonable opinion of Bank, require that the credit provided under this
Agreement be treated as an asset or otherwise be included for purposes of
calculating the appropriate amount of capital to be maintained by Bank or any
corporation controlling Bank and such change has or would have the effect of
reducing the rate of return on Bank's or Bank's parent corporation's capital or
assets as a consequence of the Bank's obligations hereunder to a level below
that which Bank or Bank's parent corporation would have achieved but for such
change, then Bank shall notify Companies and demand compensation therefor and,
within fifteen days after demand by Bank, Companies agree to pay to Bank such
additional amount or amounts as will compensate Bank for such reduction. Bank
will promptly notify Companies of any event of which it has knowledge which will
entitle Bank to compensation pursuant to this Section 4.5.  A certificate of
Bank setting forth the basis for determining such additional amount or amounts
necessary to compensate Bank shall be conclusively presumed to be correct save
for manifest error.

            4.6   If, as to any outstanding LIBOR-based Advance, Bank shall not
timely receive a Request for Advance in accordance with Section 2.3b hereof
requesting the refunding of such Advance as a LIBOR-based Advance and
establishing the Interest Period with respect thereto, the principal amount of
such Advance which is not then repaid shall automatically on the last day of the
Interest Period applicable thereto be deemed a LIBOR-based Advance having an
Interest Period of one (1) month, subject in all respects to the terms and
conditions of this Agreement. The foregoing shall not in any way whatsoever
limit or otherwise affect any of Bank's rights or remedies upon the occurrence
of any Event of Default.

            4.7   Companies may prepay all or part of the outstanding balance of
any LIBOR-based Advance as to which the Interest Period is one (1) month, any
Prime-based Advance or Base-Rate Advance at any time. Companies may prepay all
or part of any other LIBOR-based Advance as to which the Interest Period is
either two (2) or (3) months on the last day of the Interest Period applicable
thereto, provided that with respect to any partial prepayment of such LIBOR-
based Advance (i) the aggregate balance of the unpaid LIBOR-based Advances
having the same Interest Period outstanding after such prepayment shall be at
least Five Hundred Thousand and 00/100 ($500,000.00) Dollars plus, with respect
to any portion of the aggregate balance of LIBOR-based Advances having the same
Interest Period which is in excess of Five Hundred Thousand and 00/100
($500,000.00) Dollars, such amount shall be in integral multiples of One Hundred
Thousand and 00/100 ($100,000.00) Dollars, and (ii) the unpaid portion of such
LIBOR-based Advance which is refunded or converted shall be subject to the
limitations set forth in this Agreement. Any prepayment made in accordance with
this Section 4.7 shall be without premium or penalty. Any other prepayment shall
be otherwise restricted by and subject to the terms of this Agreement.

                                     PAGE 11
<PAGE>
 
            4.8  Subject to the definition of an "Interest Period" contained in
Section 1.28 hereof, in the event that any payment under the Note becomes due
and payable on any day which is not a Business Day, the due date thereof shall
be extended to the next succeeding Business Day, and, to the extent applicable,
interest shall continue to accrue and be payable thereon during such extension
at the rates set forth in the Note.

            4.9  If Companies make any payment of principal with respect to any
LIBOR-based Advance which has an Interest Period of two (2) months or three (3)
months on any day other than the last day of the Interest Period applicable
thereto (whether voluntarily, by acceleration, or otherwise), or if Companies
fail to borrow any LIBOR-based Advance after notice has been given by Companies
to Bank in accordance with the terms of a Request for Advance given to Bank by
Companies requesting such Advance, or if Companies fail to make any payment of
principal or interest in respect of a LIBOR-based Advance when due, Companies
shall reimburse Bank on demand for any resulting loss, cost or expense incurred
by Bank as a result thereof, including, without limitation, any such loss, cost
or expense incurred in obtaining, liquidating, employing or redeploying deposits
from third parties, whether or not Bank shall have funded or committed to fund
such Advance. Such amount payable by Companies to Bank may include, without
limitation, an amount equal to the excess, if any, of (i) the amount of interest
which would have accrued on the amount so prepaid, or not so borrowed, refunded
or converted, for the period from the date of such prepayment or of such failure
to borrow, refund or convert through the last day of the relevant Interest
Period, at the applicable rate of interest for said Advance(s) less the LIBOR
Margin (ii) the amount of interest (as reasonably determined by Bank) which
would have accrued to Bank on such amount by placing such amount on deposit for
a comparable period with leading banks in the interbank Eurodollar market.
Calculation of any amounts payable to Bank under this Section 4.9 shall be made
as though Bank shall have actually funded or committed to fund the relevant
LIBOR-based Advance through the purchase of an underlying deposit in an amount
equal to the amount of such Advance and having a maturity comparable to the
relevant Interest Period; provided, however, that Bank may fund any LIBOR-based
Advance in any manner it deems appropriate and the foregoing assumptions shall
be utilized only for the purpose of the calculation of amounts payable under
this Section 4.9.  Upon the written request of Companies, Bank shall deliver to
Companies a certificate setting forth the basis for determining such losses,
costs and expenses, which certificate shall be presumed correct, absent manifest
error.

5.        CONDITIONS

          5.1  Companies agree to furnish Bank prior to the initial borrowing
under this Agreement, in form and substance to be satisfactory to Bank, with (i)
certified copies of resolutions of the managers/general partners/directors of
Companies evidencing approval of the borrowings and transactions contemplated
hereunder; (ii) a certificate of good standing/fact/status from the state of
each Company's organization and from the state(s) in which each of them is
required to be qualified to do business; (iii) the certified copies of the
articles of incorporation/articles of organization/limited partnership
certificate of each of the Companies as filed in the state of such Companies'
organization; (iv) the limited partnership certificate and limited partnership
agreement of CALP; (v) the certified organizational documents of REIT conforming
to clauses (i), (ii) and (iii) above; and (vi) such other documents and
instruments as Bank may reasonably require. In each instance of a borrowing
which includes a Company not previously a part of the Companies requesting
borrowings under this Agreement, Companies shall furnish Bank the organizational
documents of such new Company as required by the preceding sentence.

                                     PAGE 12
<PAGE>
 
          5.2  As security for all indebtedness of Companies to Bank hereunder,
Companies agree to furnish, execute and deliver to Bank, or cause to be
furnished, executed and delivered to Bank, prior to or simultaneously with the
initial borrowing hereunder, in form, substance and detail satisfactory to Bank
and supported by appropriate resolutions in certified form authorizing same, the
following:

          a.  A Mortgage on each Property.  For each Mortgage as to a
NonMortgaged Property, such Mortgage may be recorded by Bank upon the earlier of
(i) an Event of Default or (ii) the Revolving Credit Maturity Date.

          b.  At the Request of Companies, Bank will release Properties from the
respective Mortgages subject to the following conditions:

               i.   Companies shall have provided to Bank a Borrowing Base
Certificate reflecting the release of the Property or the substitution of a new
Property therefor;

               ii.  Companies shall have paid to Bank an amount necessary in
order to remain in conformance/compliance with the Borrowing Base Requirements,
or shall have substituted sufficient new Properties to maintain such compliance;

               iii. No Event of Default shall exist unless such a release and
coincident pay-down or substitution cures the Event of Default; and

               iv.  All Properties operated by a Dealership Group must be
released concurrently, unless Bank agrees otherwise.

          Upon a release of a Property, the released Property will no longer be
deemed a Property under this Agreement, including for purposes of determining
the Borrowing Base, and any Event of Default that relates solely to such
Property shall be deemed cured.

          If a new Property is owned by a Person not yet a Company under this
Agreement, then such Property shall not become a part of the Borrowing Base
until that Person (i) becomes a Company by virtue of execution and delivery of a
Joinder Agreement, (ii) delivery of a copy of its organizational documents as
required by Section 5.1 hereof and (iii) provides for execution and delivery to
Bank of an amendment to or replacement of the Note, as Bank may require.

          If, as a result of the release of any Property owned by a Company, the
Borrowing Base no longer is comprised of any Properties owned by such Company,
then such Company's liability under this Agreement, the Note and the Loan
Documents shall cease except for its liability to Bank under Section 9, which
liability to Bank shall continue as set forth in Section 9.

6.        REPRESENTATIONS AND WARRANTIES

          Each of the Companies represents and warrants, and, except for the
warranties and representations contained in Sections 6.5, 6.10 and 6.11, such
representations and warranties shall be deemed to be continuing representations
and warranties during the entire term of this Agreement:

          6.1  It is an entity duly organized and existing in good standing
under the laws of the jurisdiction of its organization and is duly qualified to
do business and in good standing in every 

                                     PAGE 13
<PAGE>
 
jurisdiction in which such qualification is material to its business and
operation or the ownership or lease of its properties; execution, delivery and
performance of this Agreement and other documents and instruments required under
this Agreement, and the issuance of the Note and execution of a Mortgage by
Companies are within its powers, have been duly authorized, are not in
contravention of law or the terms of its organizational documents, and do not
require the consent or approval of any governmental body, agency or authority;
and this Agreement, the Note, the Mortgage and the other Loan Documents, when
issued and delivered, will be valid and binding in accordance with their terms;

          6.2  The execution, delivery and performance of this Agreement and any
other Loan Documents, and the issuance of the Note and the Mortgage by Companies
are not in contravention of the unwaived terms of any indenture, agreement or
undertaking to which any Company is a party or by which any Company is bound.

          6.3  No litigation or other proceeding before any court or
administrative agency is pending, or to the knowledge of its officer general
partners/managers is threatened against Companies the outcome of which could
materially impair any of the Companies' financial condition or its or their
ability to carry on its or their businesses, taken as a whole.

          6.4  There are no security interests in, liens, mortgages, or other
encumbrances on any of the Properties, except in favor of the Bank or which are
not Permitted Liens.

          6.5  None of the Companies nor any Subsidiary maintains or contributes
to any employee pension benefit plan subject to ERISA at the date of this
Agreement.   There is no unfunded past service liability of the pension plan and
there is no accumulated funding deficiency within the meaning of ERISA, or any
existing material liability with respect to any pension plan owed to the Pension
Benefit Guaranty Corporation ("PBGC") or any successor thereto, except any
funding deficiency for which an application to the PBGC for waiver is pending or
for which a waiver has been granted by the PBGC.

          6.6  The financial statements of REIT dated December 31, 1998,
previously furnished Bank, are complete and correct in all material respects and
fairly present the financial condition of REIT and its Consolidated Subsidiaries
as of their respective dates; since December 31, 1998 there has been no material
adverse change in the financial condition of any of the REIT and its
Consolidated Subsidiaries; to the knowledge of its officers/general
partners/managers, the REIT and its Consolidated Subsidiaries have no contingent
obligations (including any liability for taxes) not disclosed by or reserved
against in said financial statements and at the present time there are no
material unrealized or anticipated losses from any present commitment of the
REIT and its Consolidated Subsidiaries.

          6.7  All tax returns and tax reports of Companies required by law to
have been filed have been duly filed or extensions obtained, and all taxes,
assessments and other governmental charges or levies (other than those presently
payable without penalty and those currently being contested in good faith for
which adequate reserves have been established) upon Companies or any of their
properties which are due and payable or which the failure to pay would
materially adversely affect their business or the value of their property or
assets (taken as a whole) have been paid. The charges, accruals and reserves on
the books of Companies in respect of the federal income tax for all periods are
adequate in the opinion of Companies.

          6.8  Each Company is, in the conduct of its respective business, in
compliance in all 

                                     PAGE 14
<PAGE>
 
material respects with all federal, state or local laws, statutes, ordinances
and regulations applicable to any of them, the enforcement of which, if such
Company was not in compliance, would reasonably be expected to materially
adversely affect its business or the value of its property or assets (taken as a
whole). Each Company has all approvals, authorizations, consents, licenses,
orders and other permits of all governmental agencies and authorities, whether
federal, state or local, required to permit the operation of its business as
presently conducted, except such approvals, authorizations, consents, licenses,
orders and other permits with respect to which the failure to have would
reasonably be expected to materially adversely affect its business or the value
of its property or assets (taken as a whole).

          6.9  None of the Companies is party to any material litigation or
administrative proceeding nor, so far as is known by it, is any material
litigation or administrative proceeding threatened against it or any other
Company, which (A) asserts or alleges that any Company violated Environmental
Laws, (B) asserts or alleges that any Company is required to clean up, remove,
or take remedial or other response action due to the disposal, deposit,
discharge, leak or other release of any hazardous substances or materials, or
(C) asserts or alleges that any Company is required to pay all or a portion of
the cost of any past, present, or future cleanup, removal or remedial or other
response action which arises out of or is related to the disposal, deposit,
discharge, leak or other release of any hazardous substances or materials by any
Company.

          6.10  To the best of its knowledge, after due inquiry, and except as
otherwise previously disclosed in writing by Companies to Bank, there are no
conditions existing currently or likely to exist during the term of this
Agreement which would subject any Company to material damages, penalties,
injunctive relief or cleanup costs under any Environmental Law or which require
or are likely to require material cleanup, removal, remedial action or other
response pursuant to Environmental Law by any Company.

          6.11  None of the Companies is subject to any material judgment,
decree, order or citation related to or arising out of Environmental Law and to
the best of their knowledge, after due inquiry, except as otherwise previously
disclosed in writing to the Bank, no Company has been named or listed as a
potentially responsible party by any governmental body or agency in a material
matter arising under any Environmental Law.

          6.12  Each of the Companies has all material permits, licenses and
approvals required under applicable Environmental Laws.

          6.13  None of the Companies is an "investment company" within the
meaning of the Investment Company Act of 1940, as amended. None of the Companies
is engaged principally, or as one of its important activities, directly or
indirectly, in the business of extending credit for the purpose of purchasing or
carrying margin stock, and none of the proceeds of any of the loans hereunder
will be used, directly or indirectly, for any purpose which would violate the
provisions of Regulation U or X of the Board of Governors of the Federal Reserve
System. Terms for which meanings are provided in Regulation U of the Board of
Governors of the Federal Reserve System or any regulations substituted therefor,
as from time to time in effect, are used in this paragraph with such meanings.

          6.14  Each Company has good and valid title to the property pledged,
mortgaged or otherwise encumbered or to be encumbered by it under the Loan
Documents to which such Company is a party.

                                     PAGE 15
<PAGE>
 
7.        AFFIRMATIVE COVENANTS

          Each of the Companies covenants and agrees that it will, so long as
Bank may make any Advance under this Agreement, and thereafter so long as any
Indebtedness remains outstanding under this Agreement to:

          7.1  Furnish Bank:

          a.  prompt notification of any condition or event which constitutes or
with the running of time and/or the giving of notice would constitute an Event
of Default under this Agreement, and promptly inform the Bank of any material
adverse change in any of the Companies' financial condition;

          b.  as soon as available and in any event within 5 days after the time
required for filing, forms 10Q and 10K with the Securities and Exchange
Commission;

          c.  on a quarterly basis coincident with the timely filing of the
forms 10Q and/or 10K, as the case may be, a report providing detailed
information respecting each and every property owned, directly or indirectly, by
REIT, CALP and/or Companies including, by property, the name of each tenant,
whether such property is included within a group of properties acquired from a
related seller or sellers, the appraised value of the property, whether the
property is a Mortgaged Property or a Nonmortgaged Property, and other
information as required by Bank, in form acceptable to Bank, certified by an
officer/general partner/manager of REIT, CALP and/or each of the Companies;

          d.  coincident with the Request for Advance for purposes of the
Companies' acquisition of new Properties or the reduction of the principal
portion of the Indebtedness, a Borrowing Base Certificate in the form annexed
hereto as Exhibit "1.10"; and

          e.  from time to time, such further information regarding the business
affairs and financial condition of the Companies as the Bank may reasonably
request.

          7.2  Pay and discharge, and/or cause its tenants to pay and discharge,
all taxes and other governmental charges and all contractual obligations calling
for the payment of money, before the same shall become overdue, unless and to
the extent only that such payment is being contested in good faith and adequate
reserves have been established therefor in accordance with GAAP.

          7.3  Maintain, and/or cause its tenants to maintain insurance coverage
on the Properties and against other business risks in such amounts and of such
types as are customarily carried by companies similar in size and nature, and in
the event of acquisition of additional property, real or personal, or of
incurrence of additional risks of any nature, increase such insurance coverage
in such manner and to such extent as prudent business judgment and present
practice would dictate; and in the case of all policies covering property
mortgaged or pledged to Bank or property in which Bank shall have a security
interest of any kind whatsoever, other than those policies protecting against
casualty liabilities to strangers, all such insurance policies shall provide
that the loss payable thereunder shall be payable to Companies and Bank as their
respective interests may appear; copies of all certificates of insurance,
including all endorsements thereto and those required hereunder, to be deposited
with Bank.

          7.4  Permit Bank, through its authorized attorneys, accountants, and
representatives, to

                                     PAGE 16
<PAGE>
 
examine each Company's books, accounts, records, ledgers and assets of every
kind and description at all reasonable times upon written request of Bank,
including, without limitation, collateral audits of Companies at the expense of
Companies following an Event of Default and at Bank's expense at all other
times.

          7.5  Intentionally Omitted.

          7.6  Furnish to the Bank concurrently with the delivery of each of the
reports and forms 10Q or 10K, as applicable, required by Section 7.1b. hereof, a
statement prepared and certified by any of the chief financial officer, chief
executive officer, chief operating officer or treasurer of the consolidated
Companies (a) setting forth all computations necessary to show compliance by
Companies with the financial covenants contained in Sections 7.10 and 7.11 of
this Agreement as of the date of such reports and/or forms, (b) stating that as
of the date thereof to the signer's best knowledge after due inquiry, no
condition or event which constitutes an Event of Default or which with the
running of time and/or the giving of notice would constitute an Event of Default
has occurred and is continuing, or if any such event or condition has occurred
and is continuing or exists, specifying in detail the nature and period of
existence thereof and any action taken with respect thereto taken or
contemplated to be taken by Companies and (c) stating that the signer has
personally reviewed this Agreement and that such certificate is based on an
examination sufficient to assure that such certificate is accurate.

          7.7  Maintain in good standing, and cause each Subsidiary to maintain
in good standing, all material, licenses required by the governmental authority
having jurisdiction over such matters that may be necessary or required for a
Company or any Subsidiary to carry on its general business objects and purposes.

          7.8  Comply, and cause each Subsidiary to comply, with all material
requirements imposed by ERISA as presently in effect or hereafter promulgated
including, but not limited to, the minimum funding requirements of the Pension
Plans.

          7.9  Promptly notify Bank after the occurrence thereof in writing of
any of the following events:

               a. the termination of any Company's or any Subsidiary's Pension
Plan pursuant to Subtitle C of Title IV of ERISA or otherwise;
     
               b. the appointment of a trustee by a United States District Court
to administer the Pension Plan;

               c. the commencement by the Pension Benefit Guaranty Corporation,
or any successor thereto of any proceeding to terminate any Company's or any
Subsidiary's Pension Plan;

               d. the failure of any Company's or any Subsidiary's Pension Plan
to satisfy the minimum funding requirements for any plan year as established in
Section 412 of the Internal Revenue Code of 1954, as amended;

               e. the withdrawal of any Company or any Subsidiary from a Pension
Plan; or

                                     PAGE 17
<PAGE>
 
           f.  a reportable event, within the meaning of Title IV of ERISA.

     7.10  Maintain, on a Consolidated basis as of the end of each fiscal
year a Debt Service Coverage Ratio of not less than 1.50:1.00.

     7.11  Maintain on a Consolidated basis as of the end of each fiscal
year a Debt to Adjusted Net Worth Ratio of not more than 1.4:1.00.

     7.12  Perform all acts reasonably necessary to ensure, in all material
respects,  that each Company and Subsidiary and any business in which any
Company holds a substantial interest, and all customers, suppliers and vendors
that are material to a Company's business, become Year 2000 Compliant in a
timely manner. Such acts shall include, without limitation, performing a
comprehensive review and assessment of all of the Companies' systems and
adopting a detailed plan, with itemized budget, for the remediation, monitoring
and testing of such systems. As used in this paragraph, "Year 2000 Compliant"
shall mean, in regard to any entity, that all software, hardware, firmware,
equipment, goods or systems utilized by or material to the business operations
or financial condition of such entity, will properly perform date sensitive
functions before, during and after the year 2000. The Companies' shall, promptly
upon request, provide to the Bank such certifications or other evidence of the
Companies' compliance with the terms of this Section 7.12 as the Bank may from
time to time reasonably require.

     7.13  Assure that all Companies shall be wholly owned, directly or
indirectly, by CALP and/or REIT.

8.   NEGATIVE COVENANTS

     Each of the Companies covenants and agrees that, so long as Bank may
make any Advances under this Agreement and thereafter so long as any
Indebtedness remains outstanding under this Agreement, it will not, without the
prior written consent of Bank:

     8.1   Except for the Permitted Liens, affirmatively pledge or mortgage
any Property, whether now owned or hereafter acquired, or create, suffer or
permit to exist any lien, security interest in, or encumbrance thereon, except
in favor of Bank.

     8.2   Materially alter the character of its businesses from that
conducted as of the date of this Agreement.

     8.3   Enter into any transaction or series of transactions with any
Affiliate other than on terms and conditions as favorable to Companies as would
be obtainable in a comparable arms-length transaction with a Person other than
an Affiliate.

     8.4   Allow any fact, condition or event to occur or exist with respect
to any employee pension and/or profit sharing plan of any of the Companies or
any Subsidiaries, which shall constitute grounds for termination of such plan by
the PBGC or for the appointment by a United States District Court of a trustee
to administer any such plan.

9.   ENVIRONMENTAL PROVISIONS

                           REVOLVING LOAN AGREEMENT
                                    Page 18
<PAGE>
 
     With respect to the Properties:

     9.1   Each of the Companies shall timely comply or cause its tenants to
timely comply, in all material respects, with all applicable Environmental Laws.

           9.2  Each of the Companies shall provide to the Bank, immediately
upon receipt, copies of any correspondence, notice, pleading, citation,
indictment, complaint, order, decree, or other document from any source
asserting or alleging a material circumstance or condition which requires or may
require a substantial financial contribution by any of the Companies or a
cleanup, removal, remedial action, or other response by or on the part of either
of the Companies under applicable Environmental Laws or which seeks damages or
civil, criminal or punitive penalties from any Company for an alleged violation
of Environmental Laws.

           9.3  Each of the Companies shall promptly notify the Bank in writing
as soon as it becomes aware of any condition or circumstance which makes the
environmental warranties contained in this Agreement incomplete or inaccurate in
any material respect as of any date.

           9.4  In the event of any condition or circumstance that makes any
environmental warranty, representation and/or agreement incomplete or inaccurate
in any material respect as of any date, Companies shall, at their sole expense,
if reasonably requested by Bank, retain an environmental professional
consultant, reasonably acceptable to Bank, to conduct a thorough and complete
environmental audit regarding the changed condition and/or circumstance and any
environmental concerns arising from that changed condition and/or circumstance.
A copy of the environmental consultant's report will be promptly delivered to
both Bank and Companies upon completion.

           9.5  At any time any of the Companies, directly or indirectly through
any professional consultant or other representative, determines to undertake an
environmental audit, assessment or investigation, it shall promptly provide the
Bank with written notice of the initiation of the environmental audit, fully
describing the purpose and intended scope of the environmental audit. Upon
receipt, Companies will promptly provide to Bank copies of all final findings
and conclusions of any such environmental investigation. Preliminary findings
and conclusions shall be provided if final reports have not been completed and
delivered to the Bank within 60 days following completion of the preliminary
findings and conclusions.

           9.6  Each of the Companies hereby indemnifies, saves and holds the
Bank and any of its past, present and future officers, directors, shareholders,
employees, representatives and consultants harmless from any and all loss,
damages, suits, penalties, costs, liabilities and expenses (including but not
limited to reasonable investigation, environmental audit(s), and legal expenses)
arising out of any claim, loss or damage of any property, injuries to or death
of persons, contamination of or adverse affects on the environment, or any
violation of any applicable Environmental Laws, caused by or in any way related
to any property owned, leased or operated by Companies, or due to any acts of
either of the Companies, its officers, directors, shareholders, employees,
consultants and/or representatives. In no event shall either of the Companies be
liable hereunder for any loss, damages, suits, penalties, costs, liabilities or
expenses arising from any act of gross negligence of the Bank, or its agents or
employees.

           9.7  It is expressly understood and agreed that the indemnifications
granted herein are intended to protect the Bank, its past, present and future
officers, directors, shareholders,

                           REVOLVING LOAN AGREEMENT
                                    Page 19
<PAGE>
 
employees, consultants and representatives from any claims that may arise by
reason of the security interest, liens and/or mortgages granted to the Bank, or
under any other document or agreement given to secure repayment of any
indebtedness from either of the Companies, whether or not such claims arise
before or after the Bank has foreclosed upon and/or otherwise become the owner
of any such property. All obligations of indemnity as provided hereunder shall
be secured by the collateral documents.

           9.8  It is expressly agreed and understood that the provisions hereof
shall and are intended to be continuing and shall survive the repayment of any
Indebtedness from Companies to the Bank.

           9.9  Each of the Companies have and shall maintain all permits,
licenses and approvals required under applicable Environmental Laws.

     10.   EVENTS OF DEFAULT

     10.1  Upon occurrence of any of the following events:

           a. non-payment of any installment of the principal or interest on the
Note within five (5) days of the date when due in accordance with the terms
thereof;

           b. upon non-payment of any other outstanding Indebtedness within
thirty (30) days of the date when due in accordance with the terms thereof;

           c. default in observance or performance of any of the other
conditions, covenants or agreements of any Company in this Agreement or any of
the Loan Documents, and continuance thereof for thirty (30) days after notice to
Companies by Bank; provided, that Bank may, in writing, extend the time within
which Companies may fully cure such default if Companies demonstrate to Bank
that they have timely commenced action to cure such default and are diligently
and continuously pursuing the curing of such default;

           d. any representation or warranty made by any Company herein or in
any instrument submitted pursuant hereto proves untrue in any material respect
when made or deemed made;

           e. judgments for the payment of money in excess of the sum of One
Million ($1,000,000) Dollars in the aggregate shall be rendered against REIT and
the Consolidated Subsidiaries and such judgments shall remain unpaid, unvacated,
unbonded or unstayed by appeal or otherwise for a period of thirty (30)
consecutive days from the date of its entry and such judgment is not covered by
insurance from a solvent insurer who is defending such action without
reservation of rights;

           f. the occurrence of any "reportable event", as defined in the
Employee Retirement Income Security Act of 1974 and any amendments thereto,
which is determined to constitute grounds for termination by the Pension Benefit
Guaranty Corporation of any employee pension benefit plan maintained by or on
behalf of any Company for the benefit of any of its employees or for the
appointment by the appropriate United States District Court of a trustee to
administer such plan and is reasonably likely that the occurrence of such event
would result in a material adverse effect on Companies, and such reportable
event is not corrected and such determination is not revoked within

                           REVOLVING LOAN AGREEMENT
                                    Page 20
<PAGE>
 
thirty (30) days after notice thereof has been given to the plan administrator
or Companies; or the institution of proceedings by the Pension Benefit Guaranty
Corporation to terminate any such employee benefit pension plan or to appoint a
trustee to administer such plan; or the appointment of a trustee by the
appropriate United States District Court to administer any such employee benefit
pension plan;

           g.   if there shall be any change for any reason whatsoever in the
management, ownership or control of any of the Companies which shall in the
reasonable judgment of Bank materially, adversely affect future prospects for
the successful operation of any Company or adversely affects such Company; or

           h.   if REIT shall lose its qualification as a real estate investment
trust under the Internal Revenue Code; then, or at any time thereafter, unless
such default is remedied, Bank may give notice to Companies declaring all
outstanding indebtedness hereunder and under the Note to be due and payable,
whereupon all indebtedness then outstanding hereunder and under the Note shall
immediately become due and payable without further notice and demand, and Bank
shall not be obligated to make further Advances under this Agreement.

     10.2  If a creditors' committee shall have been appointed for the
business of any Company in connection with any bankruptcy or insolvency; or if
any Company shall have made a general assignment for the benefit of creditors or
shall have been adjudicated bankrupt, or shall have filed a voluntary petition
in bankruptcy or for reorganization or to effect a plan or arrangement with
creditors; or shall file an answer to a creditor's petition or other petition
filed against it, admitting the material allegations thereof for an adjudication
in bankruptcy or for reorganization; or shall have applied for or permitted the
appointment of a receiver, or trustee or custodian for any of its property or
assets; or such receiver, trustee or custodian shall have been appointed for any
of its property or assets (otherwise than upon application or consent of the
applicable Company), and such receiver, trustee or custodian so appointed shall
not have been discharged within sixty (60) days after the date of his
appointment or if an order shall be entered and shall not be dismissed or stayed
within sixty (60) days from its entry, approving any petition for reorganization
of any Company; then the Note and all indebtedness then outstanding hereunder
shall automatically become immediately due and payable and Bank shall not be
obligated to make further Advances under this Agreement.

     10.3  Upon the occurrence and during the continuance of an Event of
Default, unless the Indebtedness is then immediately fully paid, Bank shall have
and may exercise any one or more of the rights and remedies for which provision
is made for a secured party under the UCC, under the Loan Documents or under any
other document contemplated hereby or for which provision is provided by law or
in equity, including, without limitation, the right to take possession and sell,
lease or otherwise dispose of any or all of the collateral as permitted by law,
and to set off against the Indebtedness any amount owing by Bank to a Company
and/or any property of a Company in possession of Bank.  Companies agree, upon
request of Bank, to assemble the collateral and make it available to Bank at any
place designated by Bank which is reasonably convenient to Bank and Companies.

     10.4  All of the Indebtedness shall constitute one loan secured by
Bank's security interest in the collateral and by all other security interests,
mortgages, liens, claims, and encumbrances now and from time to time hereafter
granted from Companies to Bank under the Loan Documents.  Upon the occurrence
and during the continuance of an Event of Default, Bank may in its sole
discretion apply the collateral to any portion of the Indebtedness.  The
proceeds of any sale or other disposition of the

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                                    Page 21
<PAGE>
 
Collateral authorized by this Agreement shall be applied by Bank, first upon all
expenses authorized by the Michigan Uniform Commercial Code (or other applicable
law) or otherwise in connection with the sale and all reasonable attorneys' fees
and legal expenses incurred by Bank; the balance of the proceeds of such sale or
other disposition shall be applied in the payment of the Indebtedness, first to
interest, then to principal, then to other Indebtedness and the surplus, if any,
shall be paid over to Companies or to such other Person or Persons as may be
entitled thereto under applicable law. Companies shall remain liable for any
deficiency, which Companies shall pay to Bank immediately upon demand.

     10.5  The remedies provided for herein are in addition to the remedies
for collection of the Indebtedness as provided by law, in equity or by any
mortgage, security agreement or other document contemplated hereby.  Nothing
herein contained is intended, nor shall it be construed, to preclude Bank from
pursuing any other remedy for the recovery of any other sum to which Bank may be
or become entitled for the breach of this Agreement by Companies.

     10.6  Upon the occurrence of an Event of Default, any or all
unrecorded Mortgages held by Bank may be recorded.

11.  MISCELLANEOUS

     11.1  This Agreement shall be binding upon and shall inure to the
benefit of Companies and Bank and their respective successors and assigns,
except that the credit provided for under this Agreement and no part thereof and
no obligation of Bank hereunder shall be assignable or otherwise transferable by
any Companies.

     11.2  Companies shall pay all closing costs and expenses, including,
by way of description and not limitation, reasonable attorney fees (including
the fee of special and local counsel to the Bank), lien search fees, and title
policy fees incurred by Bank in connection with the commitment, consummation and
closing of this Agreement.  All costs, including reasonable attorney fees
incurred by Bank in protecting or enforcing any of its or any of the Bank's
rights against Companies or any collateral or in defending Bank from any claims
or liabilities by any party or otherwise incurred by Bank in connection with an
event of default or the enforcement of this Agreement or the related documents,
including by way of description and not limitation, such charges in any court or
bankruptcy proceedings or arising out of any claim or action by any person
against Bank which would not have been asserted were it not for Bank's
relationship with Companies hereunder, shall also be paid by Companies.

     11.3  Where the character or amount of any asset or liability or item
of income or expense is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of this
Agreement, it shall be done in accordance with GAAP.

     11.4  No delay or failure of Bank in exercising any right, power or
privilege hereunder shall affect such right, power or privilege, nor shall any
single or partial exercise thereof preclude any further exercise thereof, or the
exercise of any other power, right or privilege. The rights of Bank under this
Agreement are cumulative and not exclusive of any right or remedies which Bank
would otherwise have.

     11.5  All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed to have been duly given (i) if
physically delivered, (ii) three (3) business days after

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                                    Page 22
<PAGE>
 
having been deposited in the United States Mail, as certified mail with return
receipt requested and with postage prepaid, or (iii) one (1) business day after
having been transmitted to a third party providing delivery services in the
ordinary course of business which guarantees delivery on the next business day
after such transmittal (e.g., via Federal Express), all of which notices or
other communications shall be addressed to the recipient as follows:

     To Companies:     c/o Capital Automotive REIT
                       1420 Spring Hill Rd., Suite 525
                       McLean, Virginia 22102
                       Attention: Treasurer

     courtesy copy to: c/o Capital Automotive REIT
                       1420 Spring Hill Rd., Suite 525
                       McLean, Virginia 22102
                       Attention:   General Counsel

     To Bank:          Comerica Bank
                       One Detroit Center (M/C 3256)
                       500 Woodward Avenue, 7th Floor
                       Detroit, Michigan   48226
                       Attention: David J. Campbell

effective for all purposes if delivered to Treasurer c/o REIT, whether or not
notice is delivered to General Counsel. However, Bank will use its best efforts
to deliver a courtesy copy of a required notice to REIT's General Counsel.

     11.6  This Agreement and the Note have been delivered at Detroit,
Michigan, and shall be governed by and construed and enforced in accordance with
the laws of the State of Michigan. Whenever possible each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

     11.7  No amendments or waiver of any provisions of this Agreement nor
consent to any departure by Companies therefrom shall in any event be effective
unless the same shall be in writing and signed by the Bank and Companies, and
then such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No amendment, waiver or
consent with respect to any provision of this Agreement shall affect any other
provision of this Agreement.

     11.8  All sums payable by Companies to Bank under this Agreement or
the other documents contemplated hereby shall be paid directly to Bank at its
principal office set forth in Section 11.5 hereof in immediately available
United States funds, without set off, deduction or counterclaim.  In its sole
discretion, Bank may charge any and all deposit or other accounts (including
without limit an account evidenced by a certificate of deposit) of each Company
with Bank for all or a part of any Indebtedness then due; provided, however,
that this authorization shall not affect Companies' obligation to pay, when due,
any Indebtedness whether or not account balances are sufficient to pay amounts
due.

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                                    Page 23
<PAGE>
 
11.9  Any payment of the Indebtedness made by mail will be deemed
tendered and received only upon actual receipt by Bank at the address designated
for such payment, whether or not Bank has authorized payment by mail or any
other manner, and shall not be deemed to have been made in a timely manner
unless received on the date due for such payment, time being of the essence.
Companies expressly assume all risks of loss or liability resulting from non-
delivery or delay of delivery of any item of payment transmitted by mail or in
any other manner.  Acceptance by Bank of any payment in an amount less than the
amount then due shall be deemed an acceptance on account only, and the failure
to pay the entire amount then due shall be and continue to be an Event of
Default, and at any time thereafter and until the entire amount then due has
been paid, Bank shall be entitled to exercise any and all rights conferred upon
it herein upon the occurrence of an Event of Default. Upon the occurrence and
during the continuance of an Event of Default, Companies waive the right to
direct the application of any and all payments at any time or times hereafter
received by Bank from or on behalf of Companies. Upon the occurrence and during
the continuance of an Event of Default, Companies agree that Bank shall have the
continuing exclusive right to apply and to reapply any and all payments received
at any time or times hereafter against the Indebtedness in such manner as Bank
may deem advisable, notwithstanding any entry by Bank upon any of its books and
records.  Companies expressly agree that to the extent that Bank receives any
payment or benefit and such payment or benefit, or any part thereof, is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or is required to be repaid to a trustee, receiver, or any other party under any
bankruptcy act, state or federal law, common law or equitable cause, then to the
extent of such payment or benefit, the Indebtedness or part thereof intended to
be satisfied shall be revived and continued in full force and effect as if such
payment or benefit had not been made and, further, any such repayment by Bank,
to the extent that Bank did not directly receive a corresponding cash payment,
shall be added to and be additional Indebtedness payable upon demand by Bank.

11.10 In the event Companies' obligation to pay interest on the
principal balance of the Note is or becomes in excess of the maximum interest
rate which Companies are permitted by law to contract or agree to pay, giving
due consideration to the execution date of this Agreement, then, in that event,
the rate of interest applicable shall be deemed to be immediately reduced to
such maximum rate and all previous payments in excess of such maximum rate shall
be deemed to have been payments in reduction of principal and not of interest.

11.11 This Agreement shall become effective upon the execution hereof
by Bank and Companies.

11.12 COMPANIES AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY
IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING
(OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE,
KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY RIGHT TO
TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT, THE NOTES OR THE
INDEBTEDNESS.

11.13 When used in this Agreement, the term "Companies" shall mean
all or any of them. The obligations and liabilities of Companies under this
Agreement are joint and several.

11.14 The Indebtedness and the obligations of the Companies under the
Note and the Loan Documents will be without recourse to REIT in its capacity as
general partner of CALP; provided, however, that notwithstanding the foregoing
limitation of liability, REIT shall be fully liable under and

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                                    Page 24
<PAGE>
 
to the extent of the guaranty agreement executed of even date herewith.

Witness the due execution hereof as of the day and year first above written.


                               COMPANIES:

                 CAPITAL AUTOMOTIVE L.P.
                             By:   Capital Automotive REIT
                             Its:  General Partner

                                        By:   /s/ Peter C. Staaf
                                              ------------------
                                        Peter C. Staaf
                                        Its: Treasurer

                             CAR GR1 L.P.
                             By:   CAR GP1 Inc.
                             Its:  General Partner

                                        By:   /s/ Peter C. Staaf
                                              ------------------
                                        Peter C. Staaf
                                        Its: Treasurer

                             CAR ALEXANDER L.P.
                             By:   CAR I Alexander Inc.
                              Its: General Partner

                                        By:   /s/ Peter C. Staaf
                                              ------------------
                                        Peter C. Staaf
                                    Its:Treasurer

                             CAR MOT II L.L.C.
                             By:   Capital Automotive L.P.
                             Its:  Managing Member
                                   By:  Capital Automotive REIT
                                   Its: General Partner

                                        By:   /s/ Peter C. Staaf
                                              ------------------
                                        Peter C. Staaf
                                    Its:Treasurer

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                                    Page 25
<PAGE>
 
                             CAR MOT L.L.C.
                             By:   Capital Automotive L.P.
                             Its:  Managing Member
                             By:   Capital Automotive REIT
                             Its:  General Partner

                                        By:   /s/ Peter C. Staaf
                                              ------------------
                                        Peter C. Staaf
                                    Its:Treasurer

 
                             CAR MOT L.L.C.
                             By:   Capital Automotive L.P.
                             Its:  Managing Member
                             By:   Capital Automotive REIT
                                        Its: General Partner

 
                                        By:   /s/ Peter C. Staaf
                                              ------------------
                                        Peter C. Staaf
                                    Its:Treasurer

                           REVOLVING LOAN AGREEMENT
                                    Page 26