Crescent Announces Joint Ventures Of Trophy Office Assets
Company Accelerates Real Estate Investment Management Strategy
FORT WORTH, TEXAS, November 8, 2004 Ñ Crescent Real Estate Equities Company (NYSE: CEI) today announced significant joint venture transactions involving five of its landmark office properties from its existing portfolio. The 7.9 million square-foot collection includes The Crescent, Trammell Crow Center, and Fountain Place in Dallas and Houston Center and Post Oak Central in Houston. The total valuation for the transactions is $1.2 billion.
John C. Goff, Vice Chairman and Chief Executive Officer states, "These transactions serve as the cornerstone of our joint venture strategy. Denny Alberts and our asset management and leasing teams have built an award Winning platform that continues to attract premier partners such as JP Morgan Investment Management. We continue to look to this platform to provide significant growth opportunities for our company in the future."
Denny Alberts, President and Chief Operating Officer, continued, "One of our key strategic goals was to more than double the size of our previous joint venture portfolio by the end of 2005, and we are ahead of schedule in doing just that. FolloWing these transactions, $2.1 billion of our office portfolio will be in a joint venture structure, all of which we manage and lease, which in turn increases our return on equity and, ultimately, our return to our shareholders."
The transactions are in two phases. The first phase is a joint venture of three properties, The Crescent, Houston Center and Post Oak Central, totaling 5.6 million square feet. Recently, Crescent and JPMorgan Asset Management ("JPM") closed into escrow a joint venture arrangement whereby JPM will hold a 60% interest in the $898.5 million valuation of the three properties and Crescent will hold the remaining 40% interest. Crescent is currently in negotiations with another institutional partner, whereby Crescent's 40% interest in the first phase properties would be reduced further to a 24% interest. Crescent expects that those negotiations will be finalized by year end.
The second phase is a joint venture of two properties, Trammell Crow Center and Fountain Place, totaling 2.3 million square feet. Crescent is in final negotiations with JPM on its acquisition of a 76% interest in the $320.5 million valuation of the two properties, with Crescent retaining the remaining 24% interest.
After completion of both transaction phases, Crescent expects to have generated $316 million in net cash proceeds and to record a $211 million gain on the sale of the combined 76% interest in the fourth quarter of 2004.
Both joint venture agreements contemplate that Crescent will act as general partner and continue to manage and lease the properties for market-based fees. In addition, Crescent will receive promoted interests based upon certain long-term performance measures of the properties.
In both transactions, Lehman Brothers served as advisor to Crescent.
ABOUT THE COMPANY:
Celebrating its tenth year, Crescent Real Estate Equities Company (NYSE: CEI) is one of the largest publicly held real estate investment trusts in the nation. Through its subsidiaries and joint ventures, Crescent owns and manages a portfolio of more than 70 premier office buildings totaling more than 29 million square feet primarily located in the Southwestern United States, with major concentrations in Dallas, Houston, Austin, Denver, Miami and Las Vegas. In addition, Crescent has investments in world-class resorts and spas and upscale residential developments. For more information, visit the Company's website at http://www.crescent.com.
FOR MORE INFORMATION:
Keira B. Moody, Vice President, Investor Relations and Corporate Communications, 817.321.1412