Crescent Announces Ownership in Broadband Office, Inc.; Crescent Receives Equity Interest and Royalty Income in Exchange For Access to Office Properties.

FORT WORTH, Texas--(BUSINESS WIRE)--Oct. 7, 1999--

Crescent Real Estate Equities Company (NYSE:CEI), one of the nation's largest real estate investment trusts, today announced that it has joined with venture capitalist Kleiner Perkins Caufield and Byers as a founding shareholder in Broadband Office, Inc. Broadband Office is a national telecommunications company dedicated to providing state of the art broadband telecommunications services to commercial office properties across the country.

Crescent received its equity interest and representation on the board of directors of Broadband Office in exchange for granting Broadband Office access to Crescent's office property portfolio. In addition to the equity value of Crescent's ownership interest in Broadband Office, Crescent and its shareholders will also benefit from the continuing royalty payments received from the sale of Broadband Office services at Crescent properties. Broadband Office further has committed to fund all capital improvements necessary to provide these advanced services to Crescent's office properties.

John C. Goff, Chief Executive Officer of Crescent, stated, "We have previously entered into access agreements with major telecommunication providers to meet the telecommunication needs of our tenants. We chose Broadband Office for this additional opportunity because of our strong belief that this arrangement will deliver state of the art telecommunications services to our tenants and capture significant additional value for Crescent and its shareholders." Goff continued, "Kleiner Perkins has an outstanding track record sponsoring some of the nation's most successful technology companies and has demonstrated their ability to grow young companies and attract industry leading talent. The current members of Broadband Office's management team were hand picked from some of the most successful telecommunication companies and already represent one of the most talented management teams in the industry," said Goff. "Finally, Broadband Office is expected to quickly increase in size as the company penetrates the combined office properties represented by Crescent and the other real estate companies who are founding members of Broadband Office (CarrAmerica Realty Corporation (NYSE:CRE), Duke-Weeks Realty Corporation (NYSE:DRE), Equity Office Properties Trust (NYSE:EOP), Highwoods Properties, Inc. (NYSE:HIW), the Hines organization, Mack-Cali Realty Corporation (NYSE:CLI) and Spieker Properties, Inc. (NYSE:SPK)). These interests represent nearly 40% of all office space that is owned by real estate investment trusts in the United States, providing Broadband Office with an immediate customer base to access and substantial growth potential.

"Crescent is committed to providing our tenants with first class management and an array of amenities that they expect and desire consistent with our premier office property portfolio," Goff continued. "This includes making sure our tenants have access to cutting edge telecommunications required to conduct business in the 21st century."

Crescent's office property portfolio is primarily located in the major metropolitan markets of Dallas/Fort Worth, Houston, Austin and Denver. Tenants at these and other Crescent locations will be able to contract with Broadband Office for local, long-distance, voice, high-speed Internet, data and video connectivity, e-mail and web hosting, thus enabling them to tap into the latest technology at group pricing, with the convenience of consolidated billing. "Over time," said Goff, "these bundled services will expand to meet the changing telecommunications needs of our tenants and we will capture a greater proportion of their telecommunication expenditures."

Crescent, one of the country's largest real estate investment trusts, owns and manages a diversified portfolio consisting of Class A office and retail properties, hotels and destination fitness resorts, residential land developments, temperature controlled logistic (refrigerated storage) properties and behavioral healthcare facilities. Our mission is to maximize value to our shareholders by: i) distinguishing ourselves as the undisputed leader in each of our businesses through customer service and asset quality; and ii) executing a disciplined real estate investment and operating strategy that focuses on market leadership, innovative growth opportunities, and outstanding employee and partner alliances.

Certain matters discussed within this press release are forward-looking statements within the meaning of the federal securities laws. Although Crescent believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, Crescent's future operations will depend on a number of factors that may differ materially from Crescent's assumptions. These factors are detailed from time to time in Crescent's SEC reports, including its annual report on Form 10-K, quarterly reports on Form 10-Q, and reports on Form 8-K.

For further information on Crescent Real Estate Equities Company, visit the Company's updated Web site at www.cei-crescent.com.