Crescent Real Estate Equities Announces Acquisition of Washington D.C. Office Building.

FORT WORTH, Texas--(BUSINESS WIRE)--Feb. 25, 1998--Crescent Real Estate Equities Company (NYSE:CEI), one of the country's largest real estate investment trusts, today announced that it has acquired Washington Harbour, a 536,000 square foot class A office complex located in the Georgetown/West End submarket of Washington D.C. The property was purchased from a Japanese financial institution for $161 million.

Washington Harbour is uniquely situated in historic Georgetown along the Potomac River offering sweeping views of the Kennedy Center, the Key Bridge and Theodore Roosevelt Island. The property was constructed in 1986 and provides a first class, mixed-use environment including a landscaped promenade with 73,000 square feet of retail shops and 35 luxury condominiums (which are not included in the purchase) located atop the west office tower. The site also provides for the development of 65,000 square feet of new office space.

The complex is presently 95% occupied with major tenants including the prestigious law firms of Swidler & Berlin, Collier, Shannon, Rill & Scott and Foley & Lardner. As of Dec. 31, 1997, the building had an in-place weighted-average full-service rental rate of approximately $35.00 per square foot, which is approximately 75% of estimated replacement cost rental rates, and a weighted-average remaining lease term of approximately 7 years. The property currently has a full-service marketed rental rate of $39.50 per square foot. As of Dec. 31, 1997, the Georgetown/West End submarket and the Washington D.C. metropolitan area had a class A office occupancy of 95% and 94%, respectively.

Gerald W. Haddock, Crescent's president and chief executive officer commented, "Our entry into Washington D.C. is consistent with our strategy of selectively investing outside of our core office markets in cities which offer attractive long-term demand fundamentals coupled with constraints on new supply. Benefiting from tight suburban markets and little new construction, Washington D.C. experienced approximately 1.3 million square feet of net office space absorption in 1997, the most since 1992, pushing vacancy rates to their lowest level in 8 years."

Crescent is a fully integrated real estate company, which upon completion of certain pending transactions, will own through its subsidiaries a portfolio of real estate assets, consisting of 85 office properties and 7 retail properties totaling 31.6 million square feet, an approximate 40% interest in 79 refrigerated warehouse facilities, 90 behavioral healthcare facilities, 6 hotel/casino properties, 7 full-service hotel properties totaling 2,276 rooms, 2 destination health and fitness resorts, and economic interests in 5 residential development corporations. The office and retail properties are located primarily in 21 metropolitan submarkets in Texas and Colorado.

CONTACT: Crescent Real Estate Equities Company 

Dallas E. Lucas, 817/878-0426.

www.cei-crescent.com.