Crescent Operating Announces Modification to Pricing of Previously Announced Planned Rights Offering.

Business Editors

FORT WORTH, Texas--(BUSINESS WIRE)--Nov. 1, 2001

Crescent Operating, Inc. ("Crescent Operating" or the "Company") (OTCBB:COPI.OB) today announced that it has modified the anticipated pricing and timing of its plan, announced on June 29 of this year, for a rights offering of approximately $15 million of additional shares of common stock to its common shareholders.

The rights offering is now expected to commence in early 2002 following the close of its restructuring transaction which is anticipated to occur in December 2001. The per share purchase price is expected to equal the lesser of (a) the average of the reported closing prices for Crescent Operating common stock for the twenty (20) trading days immediately preceding the fifth day prior to the commencement date of the rights offering, or (b) the average of the reported closing prices for Crescent Operating common stock for the twenty (20) trading days immediately following the commencement date of the rights offering. The principal purpose of the rights offering is to raise funds to reduce Crescent Operating's debt burden. No record date has yet been set for the offering, which is subject to the filing and effectiveness of an appropriate registration statement with the Securities and Exchange Commission.

This notice does not constitute an offer of any securities for sale.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are generally characterized by terms such as "believe", "expect", "may" and "will".

Although the Company believes that the expectations reflected in its forward-looking statements are based upon reasonable assumptions, actual results could differ materially from those given in the forward-looking statements.

The following factors might cause such a difference:

-- the inability of the Company to consummate the previously announced
agreements for the sale of assets within its Hospitality and Land Development
segments and for capital infusions into its Equipment Sales and Leasing
segment,

-- the inability of the Company to pay its obligations to Crescent Real Estate
Equities Limited Partnership, the operating partnership of Crescent Real Estate
Equities Company (NYSE:CEI) as they come due which is probable in the absence
of a successful restructuring of the Company or infusion of equity,

-- the relatively high levels of debt that the Company maintains and the
Company's ability to generate revenue sufficient to meet debt service payments
and other operating expenses,

-- the availability of equity and debt financing that may be necessary or
advantageous to expand or maintain the Company's operations and investments,

-- the underperformance or non-performance of the Company's existing business
investments,

-- any unfavorable resolution of issues that relate to the bankruptcy petition
of Charter Behavioral Health Systems, LLC ("CBHS"), including, but not limited
to, judgments against the Company in respect of lawsuits instituted in
connection with the closure of certain CBHS facilities prior to CBHS's filing
bankruptcy,

-- the impact of terrorism acts on the industries in which the Company's
business and investments operate (including equipment sales and leasing,
hospitality, temperature controlled logistics and land development); and

-- the impact of changes in the industries in which the Company's businesses
and investments operate (including equipment sales and leasing, hospitality,
temperature controlled logistics and land development) and the economic,
demographic and other competitive conditions affecting those industries, the
Company's cash flows and the value of the Company's investments.

For a more complete discussion of these and other risk factors, please see the Company's SEC reports, including its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and Registration Statements on Forms S-1 and S-4, and especially including its annual report on Form 10-K for the year ended December 31, 2000, its quarterly report on Form 10-Q for the quarters ended March 31, 2001 and June 30, 2001, and its proxy statement filed today for the December 2001 annual meeting of shareholders.

Given these uncertainties, readers are cautioned not to place undue reliance on such statements. The Company is not obligated to update these forward-looking statements to reflect any future events or circumstances.

ABOUT THE COMPANY

Crescent Operating is a diversified management company which through various subsidiaries and affiliates, owns, leases or operates a portfolio of assets consisting primarily of three business-class hotels, five luxury resorts and spas, an interest in a temperature controlled logistics operating company, an interest in three residential developments, and an equipment sales and leasing business.