Arden Realty Adds to Westside Office Concentration With Acquisition of 6701 Center Drive at Howard Hughes Center.

LOS ANGELES--(BUSINESS WIRE)--June 3, 1999--

Officials at Arden Realty Inc. (NYSE:ARI) announced today that the company has purchased 6701 Center Drive at the Howard Hughes Center in West Los Angeles, for a purchase price of $53 million or approximately $169 per square foot.

The 313,726-square-foot, Class "A" office tower was purchased by Arden Realty as a strategic complement to its ownership of buildings in the Howard Hughes Center, which Arden is in the process of developing. With the purchase of this building, Arden owns two of the three office buildings within the Howard Hughes Center as well as the Spectrum Executive Health Club.

In addition, Arden has complete design and aesthetic control of future development in the 72-acre Howard Hughes Center, one of the few multi-phase, master-planned commercial development projects in Los Angeles, with full entitlements and a development agreement in place.

6701 Center Drive, which will be renamed the Howard Hughes Tower, is one of the most highly visible and recognized buildings on Los Angeles' Westside. Over 500,000 motorists view The Howard Hughes Center daily at its location overlooking the 405 Freeway, and the 16-story office tower is the site's tallest and most recognized building.

The Howard Hughes Center has its own on- and offramps from the freeway that afford immediate access to The Howard Hughes Tower and the surrounding Culver City/Playa Vista area. More information on Arden's Howard Hughes Center is available on Arden's Web site at www.ardenrealty.com.

The acquisition of The Howard Hughes Tower brings Arden's ownership of office properties within a 3-mile radius to a total of 935,000 square feet, in addition to the approximately 4 million square feet that Arden owns in the overall Westside office market.

This purchase typifies Arden's consistent external growth strategy of acquiring only in markets in which the company has a high concentration of properties that enable economies of management and services to keep operating costs at their most efficient levels.

"The acquisition of The Howard Hughes Tower enhances Arden's strategic position as the owner and developer of the Howard Hughes Center," stated Victor Coleman, Arden's president and chief operating officer. "In addition, ownership of this property furthers our dominance in the area's office market. It allows our fully integrated leasing and management team to offer a wide range of office space alternatives and services to potential and existing tenants in this submarket."

The building is currently 80% leased to a roster of prestigious tenants, including Blue Shield of California, Perot Systems Corporation, the National Football League, Univision Station Group Inc. (which services 88% of the Spanish-speaking television viewers in Los Angeles), AT&T and a wide range of other entertainment, financial and telecommunication companies.

Arden has already begun its aggressive leasing and management program, targeting 95% occupancy for The Howard Hughes Tower in the next 12 months. Several potential leasing transactions are already in the pipeline.

The program calls for stabilized occupancy of The Howard Hughes Tower prior to completion of 6060 Center Drive, a 240,000-square-foot office building which Arden currently has under construction and which will be ready for occupancy in the second quarter of 2000. Supporting Arden's strategy is the fact that the Westside submarket is extremely tight, boasts a 92% overall occupancy rate and has significant barriers to new construction.

In addition, rental rates continue to escalate on the Westside, giving Arden the opportunity to adjust existing expiring lease rates, which currently average 15% below market levels. Average in-place rental rates at the Howard Hughes Tower are $1.98 per square foot per month, while asking rental rates for available space in that building range from $2.35 to $2.75 per square foot.

Arden Realty is a self-administered and self-managed REIT engaged in acquiring, developing, renovating, leasing and managing commercial properties located in Southern California. With headquarters in West Los Angeles, the company is the largest office landlord in Southern California with over 18 million square feet of office space in 45 submarkets.

The firm owns and manages a portfolio that contains 141 properties with 252 office buildings in seven counties from Kern to San Diego. Arden's in-house operations include leasing, property and asset management, construction, development, redevelopment and acquisition.

Statements in this news release that are not historical may be deemed forward-looking statements within the meaning of the Private Securities Reform Act of 1995. Although the company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the company's expectations include the availability and cost of capital for future investments, competition within the industry, real estate and economic conditions and other risks detailed from time to time in the company's SEC filings.