Crescent Announces Two Investments in California; Crescent Picks up Co-Development Office Opportunity and Additional Mezzanine Investment

Business Wire, June 20, 2005

FORT WORTH, TX -- Crescent Real Estate Equities Company (NYSE:CEI) announced that it has recently made two investments in California. In Orange County, Crescent has committed to co-develop a 260,000 square-foot office property with Hines. In a separate transaction, Crescent invested $20 million in a mezzanine loan secured by the equity interests in an office property in Los Angeles.

Crescent and Hines recently acquired a land parcel in the John Wayne submarket of Orange County, the same submarket as Crescent's Dupont Centre. Further, Crescent has committed to co-develop a 260,000 square-foot Class A office property with Hines on the acquired site. The structure is such that Crescent holds a 40% interest in the project. Upon completion of the project, Crescent expects to have invested approximately $9 million in equity. The development project is anticipated to break ground in the first quarter of 2006, with delivery scheduled for mid-2007.

"We selected Hines as a co-developer based on its reputation and development experience on the West Coast," John C. Goff, Vice Chairman and CEO of Crescent, commented. "Orange County, particularly the John Wayne submarket, continues to be attractive to us due to the anticipated employment growth and demand for high-end office space. That, coupled with the fact that this site is one of the best in the area, makes this a good investment for us."

Also in a recent transaction, Crescent invested $20 million in a mezzanine loan secured by the equity interests in an office property in Los Angeles. The current floating rate yield for the investment is 11.35%. In addition, Crescent received a loan origination fee. The loan has a two-year term with extension options. Including the previously announced mezzanine investments, Crescent has a total of $92 million allocated to this initiative.

ABOUT CRESCENT

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 resorts, including Canyon Ranch(R). For more information, visit Crescent's website at http://www.crescent.com.

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", "intend" and "may". Although Crescent believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, Crescent'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. Crescent is not obligated to update these forward-looking statements to reflect any future events or circumstances.