Crescent Sells 5 Houston Center; Record Sale Realizes Joint Venture Promoted Interest.

FORT WORTH, Texas -- Crescent Real Estate Equities Company (NYSE:CEI) announced today that it has sold 5 Houston Center on behalf of Crescent 5 Houston Center, L.P., the joint venture which owns the office property. The office property was sold for $166 million, or $286 per square foot, resulting in a merchant building gain to Crescent of approximately $25 million, including a promoted interest earned of approximately $13 million.

John C. Goff, Crescent's vice-chairman and chief executive officer, commented on the sale, "We are very pleased with the sale of 5 Houston Center and realizing our first promoted interest in our office joint venture program. When we modernized our office business and initiated our office joint venture strategy, we told the market that this program would increase our operating return on equity by 300 to 600 basis points, as well as generate significant promoted interest income. The sale of 5 Houston Center produced an overall gain of approximately $25 million to Crescent, including an approximate $13 million promoted interest. The sale was at $286 per square foot, a record for Houston."

Mr. Goff continued, "We had estimated the value of the promoted interest for our existing joint ventures on our third quarter 2005 earnings conference call to be in the range of $90 million to $100 million. We expect to continue harvesting these promoted interest gains for our shareholders in the future."

Crescent completed the development of 5 Houston Center in a 75%/25% joint venture with an affiliate of JPMorgan Asset Management in 2002. Crescent will continue to manage the property for the new owner, Wells Real Estate Investment Trust II, Inc. 5 Houston Center is currently 95.5% occupied.

Earnings Guidance

Due to the recognition of the merchant building gain on the sale of 5 Houston Center, Crescent is increasing its previously disclosed 2005 earnings guidance of $1.05 to $1.15 funds from operations per share to $1.15 to $1.20 per share. The recognition of the gain on the sale of 5 Houston Center, including the promoted interest, is expected to be partially offset by residential closings in Tahoe that will now close in January 2006 rather than December 2005 as originally scheduled.

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," "anticipate" and "may." Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, the Company's actual results could differ materially from those described in the forward-looking statements. 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 Real Estate Equities Company (NYSE:CEI) is a real estate investment trust headquartered in Fort Worth, Texas. Through its subsidiaries and joint ventures, Crescent owns and manages a portfolio of more than 75 premier office buildings totaling more than 30 million square feet located in select markets across the United States, with major concentrations in Dallas, Houston, Austin, Denver, Miami and Las Vegas. Crescent also makes strategic investments in resort residential development, as well as destination resorts, including Canyon Ranch(R). For more information, visit the Company's website at http://www.crescent.com.