Arden Realty Alliance With Eureka Broadband Accelerates Ultra-High-Speed Internet Access and Next- Generation Tenant Services.

LOS ANGELES--(BUSINESS WIRE)--Nov. 30, 1999--

Eureka Targets Major Southern California REIT 

to Launch Strategic Regional Expansion

Arden Realty Inc. (NYSE: ARI) announced today that it has completed an agreement with broadband services provider Eureka Broadband that will provide Arden's tenants with a wide range of next-generation business applications in addition to significantly faster Internet access.

The decision to align with Eureka followed an extensive review by Arden of some of the nation's top telecommunications service providers.

Arden cited Eureka's ability to rapidly deploy its network and unique services in a majority of the company's 253 buildings significantly faster than its competition, as a compelling factor in selecting the firm. Eureka will also pre-provision up to 45Mbps (T-3) of bandwidth over its proprietary fiber optic network in each building.

Eureka is an entrepreneurial company with a regionally-based strategic plan that focuses specifically on key broad-based MSAs. Eureka currently has similar agreements with several of New York City's leading landlords.

With its alliance with Arden, Eureka is launching its expansion into Southern California. As a part of the agreement, Eureka will dedicate substantial resources to a program of service and implementation for Arden that will serve as a new model of broadband applications on the West Coast.

The agreement also calls for an aggressive deployment of facilities in which broadband will be available throughout Arden's portfolio as early as next summer.

The Arden/Eureka alliance will result in an ability to provide significant technological advantages, especially for Arden's wide range of small to medium-size tenants. Portfolio tenants will be offered an extensive menu of broadband services such as superfast Internet, co-location, web hosting and firewall over Eureka's broadband network.

Next-generation content, software applications and e-commerce will be available through Eureka's "Broadband Portal" that will be built for each Arden property.

The two companies will focus on delivering a true broadband Internet experience to Arden's tenants, enabling the next level of services such as unified messaging, voice-over-IP and desktop television that will virtually change the way businesses use the Internet.

The agreement signals Arden's continuing strategy to maximize the value of the concentration and size of its portfolio with an expanding array of top standardized services. Arden was one of the first companies in Southern California to rent its rooftop space to technology companies on a broad scale.

Arden was also the first large office landlord to put the entire space availability of its 18.5 million square-foot portfolio on its website. Arden is currently developing vehicles to use the high-speed technology that Eureka brings to its office buildings to create innovative tenant services such as a virtual concierge program, electronic newsletters, Internet neighborhood "walk-throughs" and preferred vendor resources.

"Providing the best and most cost-effective broadband-based services is a top priority at Arden," stated President and COO Victor J. Coleman. "Our competitive edge lies in our ability to offer not only innovative business solutions, but also to implement those solutions faster than anyone else in the market."

Capitalization for Eureka's regional expansion recently occurred through a private equity placement. Eureka received $22 million in its first round of venture capital funding, predominately through Spectrum Equity Investors and AT&T Ventures.

Brion Applegate, General Partner of Spectrum Equity Investors, said, "We believe that Eureka Broadband has differentiated itself in the building-centric service provider market with its unique approach of bundling content and applications with its broadband Internet Services."

The agreement gives Arden an equity position in Eureka and a revenue-sharing partnership. Revenue and possible impact on FFO is targeted for 2001, although Arden executives state that broadband's greatest advantage is as a selling point to attract and retain tenants.

Arden's Manager of Telecommunication Services, Scott Lyle, commented, "We believe that while our tenants are only beginning to use the next generation of technology services, staying ahead of tenants' needs will enhance both our occupancy and tenant retention, especially as high-tech users continue to enter Southern California in record numbers."

About Arden Realty Inc. (www.ardenrealty.com)

Arden Realty is a self-administered and self-managed REIT engaged in acquiring, developing, renovating, leasing and managing commercial properties located in Southern California. The company is the largest office landlord in Southern California with over 18.5 million square feet of office space in 45 submarkets.

The firm owns and manages a portfolio that contains 142 properties with 253 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.

About Eureka Broadband (www.eurekabroadband.com)

Eureka Broadband Corp., the world's first building-centric ASP (Application Service Provider) and premium broadband Internet access company, provides superfast Internet service in specialized office buildings at speeds ranging from 3Mbps to 100Mbps. Located in more than 300 buildings, Eureka is the leading broadband service provider in New York and Southern California.

Eureka bundles broadband applications and content, such as software rental, video streaming, business TV and other unique IT services over its proprietary packet-based fiber network to serve small and medium-sized businesses. Eureka dedicates an in-building service and technical team to its broadband-enabled buildings to provide outstanding customer service to the tenants.

Certain matters discussed within this news release are deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Arden Realty Inc. believes the expectations reflected in such 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 Arden's expectations include changes in the extent of tenant demand for additional services, the ability of third parties to expand in response to such demand, the state of the law in respect to "forced access" of certain telecommunications provided to office properties, future Regulations, policies and procedures of the Internal Revenue Services, as well as other risks detailed from time to time in the company's SEC reports and filings, including its annual report on Form 10-K. The company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.