Crescent Real Estate Equities, Inc. Announces Real Estate Investments.

NEW YORK--(BUSINESS WIRE)--Sept. 7, 1995--Crescent Real Estate Equities, Inc. (NYSE:CEI) today announced that it has acquired substantially all of the economic interest in Spectrum Center, a 597,000 square foot Class A office building located in the Far North Dallas market. Crescent's economic interest is represented by a mortgage note which is secured by the property. The mortgage note was acquired for $45 million in a negotiated transaction between the original lenders and the owners of the property. The acquisition price of the note is at an amount which approximates 45 percent of the property's original cost. Under the terms of the note, Crescent is entitled to all of the cash flow from the property through 2002, at which time the required payments under the note are expected to increase beyond the property's cash flows resulting in a default under the note. The note provides for a transfer of the property to Crescent upon the occurrence of a default. Spectrum Center is currently 95 percent occupied.

According to Gerald Haddock, president and chief operating officer, "Our investment in Spectrum Center increases our interest in the Class A office space in the Far North Dallas market to approximately 20 percent. This submarket was the most active leasing market in Dallas in the first half of 1995. As a result, Class A office occupancy has increased to 95 percent while rental rates in this submarket have increased 10 percent since the fourth quarter of 1994. With Spectrum Center having current weighted-average rental rates 15 percent below quoted rates on expiring space and with 78 percent of its space expiring through 1997, we expect our initial cash-on-cash return of 9 percent to increase substantially over the next few years."

Crescent also announced that its indirect subsidiary, Crescent Development Management Corp. (CDMC), has agreed to invest up to $15 million in four real estate development ventures located in Colorado. CDMC was established with Harry Frampton, president of East-West Partners, to develop single-family and condominium properties primarily in resort areas of Colorado. Crescent holds over 90 percent of the economic interests in CDMC. In addition to developing the Hyatt Regency Beaver Creek hotel, Frampton has led the development of 130 single-family lots and over 300 condominium/townhome units in Colorado. Three of the developments will consist of 70 luxury condominium/townhome units to be constructed at the Beaver Creek/Arrowhead ski resorts. The fourth venture will consist of 140 single-family residential lots to be developed in Frisco, Colo. which is located 10 miles north of the Breckenridge ski resort.

Mira Vista Development Corp. (MVDC), which owns the Mira Vista residential development located in southwest Fort Worth, has agreed to invest $2.5 million in the Whitehawk Ranch, a residential development located 45 miles northwest of Lake Tahoe, Nev. Crescent, which holds a 98 percent economic interest in MVDC, has agreed to provide financing for the venture. The development venture, which includes 14 developed and 209 planned single-family residential lots and a recently completed 18 hole championship golf course, will be led by Jim Bartlett. Bartlett has led the development of over 2,000 single-family lots in Colorado, Arizona and Texas, including Mira Vista and The Highlands at Breckenridge.

According to Haddock, "We are excited about our opportunity to expand our relationship with Harry Frampton and Jim Bartlett. Both individuals have tremendous experience and unique insight in identifying and leading high quality development projects. Each of these ventures is consistent with our strategy of participating in selective projects that are expected to produce after-tax returns in excess of 20 percent with limited upfront invested capital at risk."

Crescent also announced that it has closed its previously announced $400 million financing arrangement with Nomura Asset Capital Corp.

Crescent will be conducting a conference call on September 13, at 9:00 a.m. CST, to discuss the announcements contained in the press release, as well as providing an update on operating and market trends and future expected acquisition and financing activities. To participate in the conference, call 800/857-5061 and use "Crescent" as the identification code.

Crescent is a real estate investment trust which owns a portfolio of real estate assets, including 26 office properties and two retail centers totaling 7.7 million square feet, two hotels totaling 908 rooms and economic interests in six single family residential land developments. The rental properties are located in 12 metropolitan submarkets in Texas, Colorado and Arizona. Crescent is a fully integrated real estate company that provides management and leasing services with respect to its rental properties.

CONTACT: Dallas E. Lucas, chief financial officer,

Crescent Real Estate Equities, Inc., 212/836-4216