Crescent Announces Strategic Transformation to Pure Play Office REIT

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. October 14, 2008

MARCH 1, 2007. Crescent Real Estate Equities Company (NYSE:CEI) today announced it has concluded an extensive review of strategic alternatives first announced on November 1, 2006. Based on that review, Crescent has designed a plan that will simplify its business model to become a pure play office REIT, create a stronger growth platform and unlock shareholder value by concentrating on its core office properties business.

Key elements of the plan include:

o Sale of all resort and hotel assets. Properties to be sold include the Fairmont Sonoma Mission Inn & Spa(R), Ventana Inn & Spa in Big Sur, the Park Hyatt Beaver Creek Resort & Spa, and three business-class hotels.

o Sale of resort residential developments. Properties and assets to be sold include Crescent Resort Development and Desert Mountain Development Corporation.

o Opportunistic sale of office properties. Properties to be sold include virtually all suburban Dallas properties and all Austin properties, as well as the Company's single assets in Phoenix and in Seattle.

o Reduction of general and administrative expenses by more than $17 million, or $0.14 per share. Implementation of savings will begin immediately and is expected to be fully phased in by the end of 2007. The Company will take a charge of approximately $5 million for severance costs.

o Use of sales proceeds to retire debt. The Company plans to first use the proceeds from asset sales to retire debt. The Company expects that its balance sheet will be significantly strengthened and its cost of capital lowered, giving it capacity for growth.

In addition to the above elements, the Company is considering alternatives for its interest in Canyon Ranch in conjunction with the founders of Canyon Ranch.

John C. Goff, Crescent's vice-chairman and chief executive officer, commented, "By becoming a pure play office REIT, we will have a simpler business model with a higher quality earnings stream that will be easier to understand and to value. We are creating a stronger growth platform based on high-quality office properties, profitable development opportunities, the prospect of value-added office acquisitions and many valuable relationships with institutional co-investors. We believe this is the right path to maximize value for our shareholders."

Crescent intends to align its dividend with industry-accepted pay-out ranges to allow for retention of additional capital for growth. The Company will communicate its dividend plans as it executes asset sales.

After completing these dispositions, Crescent's remaining office portfolio is expected to consist of 22.6 million square feet, of which 11.7 million square feet, or 52%, will be owned in joint venture. Crescent's effective ownership will be 14.0 million square feet.

Further details of this plan are contained in a letter to Crescent shareholders from Mr. Goff, and Dennis H. Alberts, Crescent's president and chief operating officer, which has been posted to Crescent's Web site at www.crescent.com. The full text of the letter follows at the end of this press release.

Crescent also announced today that Jerry R. Crenshaw, Jr., managing director, chief financial officer, intends to resign as a part of the simplification of Crescent's business model. Jane E. Mody, managing director, capital markets, will be named to the additional role of chief financial officer following Mr. Crenshaw's resignation. In order to assist with a smooth transition, the Company anticipates that Mr. Crenshaw will continue as a consultant to Crescent through December 31, 2008. In addition, Kenneth S. Moczulski, managing director, investments, intends to resign, also as a result of the Company's strategic transformation.

"Denny and I want to thank Jerry and Ken for their valuable service to Crescent and we wish them the very best in the future," said Mr. Goff.