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                                                                    EXHIBIT 99.1


Donald G. Herrman
Chief Financial Officer
(949) 223-5000


FOR IMMEDIATE RELEASE
MARCH 2, 2001

                  PACIFIC GULF PROPERTIES AGREES TO MERGE WITH
                AN AFFILIATE OF PRUDENTIAL REAL ESTATE INVESTORS
                       TO DEVELOP SENIOR APARTMENT ASSETS

         NEWPORT BEACH, CA - March 2, 2001 - Pacific Gulf Properties Inc. (NYSE:
PAG) today announced that on March 1 it entered into a definitive merger
agreement with FountainGlen Properties LLC ("FountainGlen"), an affiliate of
Prudential Real Estate Investors ("PREI"). Under the merger agreement, Pacific
Gulf will be merged with and into FountainGlen in a cash transaction valued at
approximately $143 million, consisting of approximately $78 million in equity
consideration, or approximately $3.00 per share, plus assumption of related debt
of approximately $65 million. The transaction was approved by the Board of
Directors of Pacific Gulf and remains subject to the approval of Pacific Gulf's
shareholders.

         The merger agreement provides that FountainGlen will acquire only
Pacific Gulf's senior housing assets and the corporate office building. Prior to
the closing of the merger, Pacific Gulf intends to continue with its previously
announced plan to sell its remaining conventional multifamily and industrial
assets to third parties in one or more sales. In a transaction to be undertaken
separately from the merger, Pacific Gulf will transfer any remaining
conventional multifamily and industrial assets, as well as the cash proceeds
from any such sales, to a liquidating trust for the benefit of shareholders. The
trust will be responsible for selling any assets transferred to it and
distributing the proceeds received from sales to the shareholders.

         Under the terms of the agreement between Pacific Gulf and FountainGlen,
Pacific Gulf shareholders will receive, in exchange for their shares of Pacific
Gulf stock, an aggregate amount of approximately $78 million in cash, or $3.00
per share, subject to certain adjustments. These adjustments are based on
amounts that Pacific Gulf has agreed to deliver at closing for items such as net
working capital, total equity invested in the senior properties, total deposits
for new senior properties and any increases in the development budgets for the
senior properties.

         Pacific Gulf currently estimates, based on the per share price in the
merger and the value of assets and cash expected to be distributed to
shareholders through the liquidating trust (after consideration of transaction
costs, including the costs of the merger) that shareholders may receive up to
$6.40 per share. This figure is a preliminary estimate and the actual amount
distributed will likely differ, perhaps materially, from the estimate depending
on market conditions for the sales of the remaining multifamily and industrial
assets, claims asserted by the purchasers of the properties, the adjustments to
the per share price in the FountainGlen merger, future liabilities and other
factors.



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         The merger is subject to several conditions, including the approval of
Pacific Gulf Properties' shareholders and Pacific Gulf obtaining insurance
policies, in favor of FountainGlen, covering contingent liabilities of Pacific
Gulf. FountainGlen's obligation to close is conditioned upon Glenn L. Carpenter,
Pacific Gulf's Chairman and Chief Executive Officer, and members of the Pacific
Gulf management team entering into employment agreements with FountainGlen at
the closing. Mr. Carpenter and such members have agreed with Pacific Gulf that
they intend to do so. The transaction is expected to close mid-2001, subject to
the satisfaction of these conditions.

         Mr. Carpenter said "This transaction represents the second major step
Pacific Gulf has taken to complete its plan of liquidation. By selecting
Prudential as our merger partner, Pacific Gulf is dealing with a buyer that is
reputable, established and knowledgeable in various real estate investments.
Additionally, our senior management team looks forward to working with PREI in
the future."

         Marc R. Halle, Principal of PREI, said "We are pleased to enter into
this transaction with Pacific Gulf. Glenn Carpenter and his team have developed,
refined and successfully implemented a unique investment strategy. We look
forward to working with Glenn and his team to build unassisted age-restricted
multi-family housing in the United States."

         Morgan Stanley is financial advisor to Pacific Gulf Properties and has
issued a fairness opinion to the company in connection with the proposed merger.

         PREI provides global real estate investment management services to
institutional clients in the U.S., Europe, Asia, and Latin America. PREI
currently manages $12.3 billion assets on behalf of 325 institutional clients as
of December 31, 2000. PREI is a unit of Prudential Investment Corporation, an
affiliate of The Prudential Insurance Company of America.

         Pacific Gulf Properties Inc. is a real estate investment trust (REIT)
that is in the process of liquidating its assets. The Company is headquartered
in Newport Beach, California.

         Forward-looking statements and comments in this press release are made
pursuant to the safe harbor provisions of Section 21E of the Securities Exchange
Act of 1934. Such statements relating to, among other things, events,
conditions, prospects, expectations and financial trends that may affect the
transactions discussed herein, as well as the Company's future distributions,
plans of operations and financial position are not guarantees of future
performance and are necessarily subject to risks and uncertainties, some of
which are significant in scope and nature, including without limitation, the
conditions to such transactions, increased competition, adverse economic trends,
increasing interest rates, future liabilities and other factors.


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