Crescent Operating, Inc. Announces Continued Restructuring Discussions With Crescent Real Estate Equities.

Business Editors

FT. WORTH, Texas--(BUSINESS WIRE)--Dec. 29, 2000

Crescent Operating, Inc. (the "Company") announced today that it is continuing discussions with Crescent Real Estate Equities Company, lenders and other potential equity investors with regard to a restructure of the Company in light of the REIT Modernization Act which takes effect January 1, 2001. This legislation will allow Crescent Real Estate Equities Company, through its subsidiaries, to own and operate certain residential development corporations and operate certain hotel/resort properties currently owned and/or operated by the Company. Although there is no assurance that all issues surrounding the discussions can be fully resolved, management of the Company remains confident that a suitable restructure is likely to be announced by the end of the first quarter 2001.

Crescent Operating is a diversified management company which through various subsidiaries and affiliates, owns, leases or operates a portfolio of assets consisting primarily of six full-service hotels and two destination health and fitness resorts, an interest in a temperature controlled logistics operating company, an interest in three real estate development operations, and an equipment sales and leasing business.

Certain of the statements in this press release constitute forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although Crescent Operating believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, Crescent Operating's actual results could differ materially from those set forth in the forward-looking statements. Factors that could cause actual results to differ materially from Crescent Operating's expectations include, among others, the outcome of current restructuring discussions with lenders and potential equity investors which in turn will affect Crescent Operating's ability to service existing debt and meet other operating expenses, the availability of debt and equity financing, the possibility that Crescent Operating's outstanding debt (some of which requires so-called balloon payments of principal) may be refinanced at higher interest rates or otherwise on terms less favorable to Crescent Operating, the ability of the Company's segments to continue to achieve operating results at or above current levels and at a level sufficient to meet current projections, and other general risk factors. For a more complete discussion of these and other risk factors, please see Crescent Operating's SEC reports, including its annual report on Form 10-K, quarterly reports on Form 10-Q, reports on Form 8-K, and the Company's Registration Statement on Form S-4.

For further information, please contact Rick Knight, Chief Financial Officer at [phone]. Crescent Operating is also online at www.crescentoperating.com.