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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 22, 1997
REGISTRATION NO. 333-42417
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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CRESCENT REAL ESTATE EQUITIES COMPANY
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<C> <C>
TEXAS 52-1862813
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
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777 MAIN STREET, SUITE 2100
FORT WORTH, TEXAS 76102
TELEPHONE: (817) 877-0477
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
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GERALD W. HADDOCK
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CRESCENT REAL ESTATE EQUITIES COMPANY
777 MAIN STREET, SUITE 2100
FORT WORTH, TEXAS 76102
TELEPHONE: (817) 877-0477
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
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Copies to:
<TABLE>
<C> <C> <C>
ROBERT B. ROBBINS, ESQ. DAVID M. DEAN, ESQ. J. WARREN GORRELL, JR., ESQ.
SYLVIA M. MAHAFFEY, ESQ. CRESCENT REAL ESTATE EQUITIES COMPANY EVE N. HOWARD, ESQ.
SHAW, PITTMAN, POTTS & TROWBRIDGE 777 MAIN STREET, SUITE 2100 HOGAN & HARTSON L.L.P.
2300 N STREET, N.W. FORT WORTH, TEXAS 76102 555 THIRTEENTH STREET, N.W.
WASHINGTON, D.C. 20037 WASHINGTON, D.C. 20004-1109
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: From time to time after the effective date of the Registration
Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434
of the Securities Act of 1933, please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION DATED DECEMBER 22, 1997
PROSPECTUS
5,900,000 SHARES
[CRESCENT LOGO]
COMMON SHARES
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All of the common shares of beneficial interest, par value $.01 per share
(the "Common Shares"), of Crescent Real Estate Equities Company ("Crescent
Equities") offered hereby (the "Offering") are being offered by the Selling
Shareholder identified herein. See "Selling Shareholder." Crescent Equities will
not receive any of the proceeds from the sale of the Common Shares offered
hereby. The Common Shares are listed and traded on the New York Stock Exchange
(the "NYSE") under the symbol "CEI."
The sale or distribution of all or any portion of the Common Shares offered
hereby may be effected from time to time by the Selling Shareholder directly,
indirectly to or through brokers or dealers or in a distribution by one or more
underwriters on a firm commitment or best efforts basis, on the NYSE, in the
over-the-counter market, on any national securities exchange on which the Common
Shares are listed or traded, in privately negotiated transactions, through sales
involving any distribution reinvestment plan of the Company, or otherwise, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. See "Plan of Distribution."
The Common Shares offered hereby may be offered for sale and sold by the
Selling Shareholder from time to time as described under the caption "Plan of
Distribution." To the extent required, the number of Common Shares to be sold,
the purchase price, the public offering price, if applicable, the name of any
underwriter, agent or broker-dealer, and any applicable commissions, discounts
or other items constituting compensation to such underwriters, agents or
broker-dealers with respect to a particular offering will be set forth in a
supplement or supplements to this Prospectus (each, a "Prospectus Supplement").
The aggregate proceeds to the Selling Shareholder from the sale of the Common
Shares offered hereby generally will be the purchase price of the Common Shares
sold less (i) the aggregate commissions, discounts and other compensation, if
any, paid by the Selling Shareholder to underwriters, agents or broker-dealers
(subject to certain exceptions) and (ii) certain other expenses of the offering
and sale of the Shares that will be the responsibility of the Selling
Shareholder. See "Selling Shareholder."
SEE "RISK FACTORS" AT PAGE 3 HEREIN FOR CERTAIN FACTORS RELEVANT TO AN
INVESTMENT IN THE COMPANY.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS DECEMBER , 1997
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Certain persons participating in this offering may engage in transactions that
stabilize, maintain or otherwise affect the price of the Common Shares offered
hereby. Such transactions may include stabilizing transactions, the purchase of
Common Shares to cover syndicate short positions and the imposition of penalty
bids. For a description of these activities, see "Plan of Distribution."
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THE COMPANY
On December 31, 1996, Crescent Real Estate Equities Company, a Texas real
estate investment trust ("Crescent Equities"), became the successor to Crescent
Real Estate Equities, Inc., a Maryland corporation (the "Predecessor
Corporation"), through the merger of the Predecessor Corporation and CRE Limited
Partner, Inc., a subsidiary of the Predecessor Corporation, into Crescent
Equities. The term "Company" includes, unless the context otherwise requires,
Crescent Equities, the Predecessor Corporation, Crescent Real Estate Equities
Limited Partnership, a Delaware limited partnership (the "Operating
Partnership"), and the other subsidiaries of Crescent Equities.
The Company is a fully integrated real estate company, operated as a REIT,
which owns a portfolio of real estate assets (the "Properties") that, as of the
date of this Prospectus, consists primarily of 79 office properties (the "Office
Properties") with an aggregate of approximately 27.9 million net rentable square
feet, approximately 91 behavioral healthcare facilities (the "Behavioral
Healthcare Facilities"), five full-service hotels with a total of 1,900 rooms
and two destination health and fitness resorts that can accommodate up to 442
guests daily (collectively, the "Hotel Properties"), seven retail properties
(the "Retail Properties") with an aggregate of approximately 771,000 net
rentable square feet and the real estate mortgages and non-voting common stock
in five residential development corporations (the "Residential Development
Corporations"). In addition, the Company owns an indirect 40% interest in each
of two partnerships, one of which owns Americold Corporation ("Americold") and
the other of which owns URS Logistics, Inc. ("URS"). Americold and URS are the
two largest suppliers of public refrigerated warehouse space in the United
States and currently own and operate approximately 79 refrigerated warehouses
with an aggregate of approximately 368 million cubic feet. The Office Properties
and the Retail Properties are located primarily in 21 metropolitan submarkets in
Texas and Colorado.
The Company owns its assets and carries on its operations and other
activities, including providing management, leasing and development services for
certain of its Properties, through the Operating Partnership and its other
subsidiaries. The Company also has an economic interest in the development
activities of the Residential Development Corporations and the operating
activities of Americold and URS. The structure of the Company is designed to
facilitate and maintain its qualification as a REIT and to permit persons
contributing Properties (or interests therein) to the Company to defer some or
all of the tax liability that they otherwise might incur.
As of December 22, 1997, 117,931,374 common shares of beneficial interest,
par value $.01 per share (the "Common Shares") and 6,402,072 units of ownership
interest in the Operating Partnership ("Units") were outstanding.
For a description of certain recent developments relating to the Company's
relationship with the Selling Shareholder, see "Selling Shareholder."
The Company's executive offices are located at 777 Main Street, Suite 2100,
Fort Worth, Texas 76102, and its telephone number is (817) 877-0477.
RISK FACTORS
Prospective investors should carefully consider the following summary
information in conjunction with the other information contained in this
Prospectus before purchasing Common Shares.
CONCENTRATION OF ASSETS
A significant portion of the Company's assets are, and revenues are derived
from, Properties located in the metropolitan areas of Dallas-Fort Worth and
Houston, Texas. Due to this geographic concentration, any deterioration in
economic conditions in the Dallas-Fort Worth or Houston metropolitan areas or
other geographic markets in which the Company in the future may acquire
substantial assets could have a substantial effect on the financial condition
and results of operations of the Company.
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RISKS ASSOCIATED WITH THE ACQUISITION OF SUBSTANTIAL NEW ASSETS
From the closing of the Company's initial public offering in May 1994
through September 30, 1997, the Company has experienced rapid growth, increasing
its total assets by approximately 940 percent. There can be no assurance that
the Company will be able to manage its growth effectively, or that the Company
will be able to maintain its current rate of growth in the future, and the
failure to do so may have a material adverse effect on the financial condition
and results of operations of the Company.
PURCHASES FROM FINANCIALLY DISTRESSED SELLERS
Implementation of the Company's strategy of investing in real estate assets
in distressed circumstances has resulted in the acquisition of certain
Properties from owners that were in poor financial condition, and such strategy
is expected to result in the purchase of additional properties under similar
circumstances in the future. In addition to general real estate risks,
properties acquired in distress situations present risks related to inadequate
maintenance, negative market perception and continuation of circumstances which
precipitated the distress originally.
CHANGE IN POLICIES
The Board of Trust Managers provides guidance to the senior management of
the Operating Partnership regarding the Company's operating and financial
policies and strategies, including its policies and strategies with respect to
acquisitions, growth, operations, indebtedness, capitalization and
distributions. These policies and strategies may be revised, from time to time,
without shareholder approval. Changes in the Company's policies and strategies
could adversely affect the Company's financial condition and results of
operations. In addition, the Company has the right and intends to acquire
additional real estate assets pursuant to and consistent with its investment
strategies and policies without shareholder approval.
POSSIBLE ADVERSE CONSEQUENCES OF OWNERSHIP LIMIT
The limitation on ownership of Common Shares set forth in the Company's
Restated Declaration of Trust (the "Declaration of Trust") could have the effect
of discouraging offers to acquire the Company and of inhibiting or impeding a
change in control and, therefore, could adversely affect the shareholders'
ability to realize a premium over the then-prevailing market price for the
Common Shares in connection with such a transaction.
RELIANCE ON KEY PERSONNEL
The Company is dependent on the efforts of Mr. Richard E. Rainwater,
Chairman of the Board of Trust Managers, and other senior management personnel.
While the Company believes that it could find replacements for these key
executives, the loss of their services could have an adverse effect on the
operations of the Company. Mr. Rainwater has no employment agreement with the
Company and, therefore, is not obligated to remain with the Company for any
specified term. John C. Goff, Trust Manager and Vice Chairman of the Board of
Trust Managers, and Gerald W. Haddock, President, Chief Executive Officer and
Trust Manager, have entered into employment agreements with the Company, and
each of Messrs. Rainwater, Goff and Haddock has entered into a noncompetition
agreement with the Company. The Company has not obtained key-man insurance for
any of its senior management personnel.
RISKS RELATING TO QUALIFICATION AND OPERATION AS A REIT
The Company intends to continue to operate in a manner so as to qualify as
a REIT under the Internal Revenue Code of 1986, as amended (the "Code"). A
qualified REIT generally is not taxed at the corporate level on income it
currently distributes to its shareholders, so long as it distributes at least 95
percent of its taxable income currently and satisfies certain other highly
technical and complex requirements. Unlike many REITs, which tend to make only
one or two types of real estate investment, the Company invests in a broad range
of real estate products, and certain of its investments are more complicated
than those of other REITs. As a result, the Company is likely to encounter a
greater number of interpretative issues under the REIT
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qualification rules, and more such issues which lack clear guidance, than are
other REITs. The Company, as a matter of policy, regularly consults with outside
tax counsel in structuring its new investments. The Company has received an
opinion from Shaw, Pittman, Potts & Trowbridge ("Tax Counsel") that the Company
qualified as a REIT under the Code for its taxable years ending on or before
December 31, 1996, is organized in conformity with the requirements for
qualification as a REIT under the Code and its proposed manner of operation will
enable it to continue to meet the requirements for qualification as a REIT.
However, this opinion is based upon certain representations made by the Company
and the Operating Partnership and upon existing law, which is subject to change,
both retroactively and prospectively, and to possibly different interpretations.
Furthermore, Tax Counsel's opinion is not binding upon either the Internal
Revenue Service or the courts. Because the Company's qualification as a REIT in
its current and future taxable years depends upon its meeting the requirements
of the Code in future periods, no assurance can be given that the Company will
continue to qualify as a REIT in the future. If, in any taxable year, the
Company were to fail to qualify as a REIT for federal income tax purposes, it
would not be allowed a deduction for distributions to shareholders in computing
taxable income and would be subject to federal income tax (including any
applicable alternative minimum tax) on its taxable income at regular corporate
rates. In addition, unless entitled to relief under certain statutory
provisions, the Company would be disqualified from treatment as a REIT for
federal income tax purposes for the four taxable years following the year during
which the qualification was lost. The additional tax liability resulting from
the failure to so qualify would significantly reduce the amount of funds
available for distribution to shareholders.
RISKS RELATING TO DEBT
The Company's organizational documents do not limit the level or amount of
debt that it may incur. It is the Company's current policy to pursue a strategy
of conservative use of leverage, generally with a ratio of debt to total market
capitalization targeted at approximately 40 percent, although this policy is
subject to reevaluation and modification by the Company and could be increased
above 40 percent. The Company has based its debt policy on the relationship
between its debt and its total market capitalization, rather than the book value
of its assets or other historical measures that typically have been employed by
publicly traded REITs, because management believes that market capitalization
more accurately reflects the Company's ability to borrow money and meet its debt
service requirements. Market capitalization is, however, more variable than book
value of assets or other historical measures. There can be no assurance that the
ratio of indebtedness to market capitalization (or any other measure of asset
value) or the incurrence of debt at any particular level would not adversely
affect the financial condition and results of operations of the Company.
RISKS RELATING TO CONTROL OF CERTAIN INVESTMENTS
Hotel Risks. The Company has leased the Hotel Properties to subsidiaries of
an affiliate of the Company, Crescent Operating, Inc. ("Crescent Operating"),
and such subsidiaries, rather than the Company, are entitled to exercise all
rights of the owner of the respective hotel. The Company will receive both base
rent and a percentage of gross sales above a certain minimum level pursuant to
the leases, which expire between 2004 and 2007. As a result, the Company will
participate in the economic operations of the Hotel Properties only through its
indirect participation in gross sales. To the extent that operations of the
Hotel Properties may affect the ability of such subsidiaries to pay rent, the
Company also may indirectly bear the risks associated with any increases in
expenses. Each of the Hotel Properties is managed pursuant to a management
agreement. The amount of rent payable to the Company under the leases with
respect to the Hotel Properties will depend on the ability of such subsidiaries
and the managers of the Hotel Properties to maintain and increase revenues from
the Hotel Properties. Accordingly, the Company's results of operations will be
affected by such factors as changes in general economic conditions, the level of
demand for rooms and related services at the Hotel Properties, the ability of
the subsidiaries and the managers of the Hotel Properties to maintain and
increase gross revenues at the Hotel Properties, competition in the hotel
industry and other factors relating to the operation of the Hotel Properties. In
addition, the Company expects, in accordance with the terms of an intercompany
agreement between the Company and Crescent Operating (the "Intercompany
Agreement"), to lease any hotel properties that it may acquire in the future to
Crescent Operating (or a subsidiary or
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subsidiaries) which, as lessees of any such hotel properties, will be entitled
to exercise all rights of the owner. See "-- Real Estate Risks Specific to the
Company's Business -- Potential Conflicts of Interest."
Lack of Control of Residential Development Corporations. The Company is not
able to elect the boards of directors of the Residential Development
Corporations, and does not have the authority to control the management and
operation of the Residential Development Corporations. As a result, the Company
does not have the right to control the timing or amount of dividends paid by the
Residential Development Corporations and, therefore, does not have the authority
to require that funds be distributed to it by any of these entities.
Lack of Control of Americold and URS. The Company owns, through two
subsidiaries, a 40% interest in each of two partnerships, one of which owns
Americold and the other of which owns URS. The remaining 60% interest in the
partnerships is owned by two subsidiaries of Vornado Realty Trust (collectively,
"Vornado"). Under the terms of the existing partnership agreements for each of
the partnerships, Vornado has the right to make all decisions relating to the
management and operation of the partnerships other than certain major decisions
that require the approval of both the Company and Vornado. The partnership
agreement for each of the partnerships provides for a buy-sell arrangement upon
a failure of the Company and Vornado to agree on any of the specified major
decisions which, until November 1, 2000, can only be exercised by Vornado. In
addition, the Company has offered to Crescent Operating, and expects to transfer
for value, its voting interests in the two subsidiaries that hold the interests
in the partnerships (representing an approximately 5% economic interest in each
of the subsidiaries) to Crescent Operating (or to another entity if Crescent
Operating does not accept the offer), and thereafter the owner of the voting
interests, rather than the Company, will be entitled to approve certain major
decisions relating to the partnerships. See "-- Real Estate Risks Specific to
the Company's Business -- Risks of Joint Ownership of Assets."
GENERAL REAL ESTATE RISKS
Uncontrollable Factors Affecting Performance and Value. The economic
performance and value of the Company's real estate assets will be subject to all
of the risks incident to the ownership and operation of real estate. These
include the risks normally associated with changes in general national, regional
and local economic and market conditions. Such local real estate market
conditions may include excess supply and competition for tenants, including
competition based on rental rates, attractiveness and location of the property
and quality of maintenance, insurance and management services. In addition,
other factors may affect the performance and value of a property adversely,
including changes in laws and governmental regulations (including those
governing usage, zoning and taxes), changes in interest rates (including the
risk that increased interest rates may result in decreased sales of lots in the
Residential Development Properties) and the availability of financing.
Illiquidity of Real Estate Investments. Because real estate investments are
relatively illiquid, the Company's ability to vary its portfolio promptly in
response to economic or other conditions will be limited. In addition, certain
significant expenditures, such as debt service (if any), real estate taxes, and
operating and maintenance costs, generally are not reduced in circumstances
resulting in a reduction in income from the investment. The foregoing and any
other factor or event that would impede the ability of the Company to respond to
adverse changes in the performance of its investments could have an adverse
effect on the Company's financial condition and results of operations.
Environmental Matters. Under various federal, state and local laws,
ordinances and regulations, an owner or operator of real property may become
liable for the costs of removal or remediation of certain hazardous or toxic
substances released on or in its property, as well as certain other costs
relating to hazardous or toxic substances. Such liability may be imposed without
regard to whether the owner or operator knew of, or was responsible for, the
release of such substances. The presence of, or the failure to remediate
properly, such substances, when released, may adversely affect the owner's
ability to sell the affected real estate or to borrow using such real estate as
collateral. Such costs or liabilities could exceed the value of the affected
real estate. The Company has not been notified by any governmental authority of
any non-compliance, liability or other claim in connection with any of the
Properties and the Company is not aware of any other environmental condition
with respect to any of the Properties that management believes would have a
material adverse effect
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on the Company's business, assets or results of operations. Prior to the
Company's acquisition of its Properties, independent environmental consultants
conducted or updated Phase I environmental assessments (which generally do not
involve invasive techniques such as soil or ground water sampling) on the
Properties. None of these Phase I assessments or updates revealed any materially
adverse environmental condition not known to the Company or the independent
consultants preparing the assessments. There can be no assurance, however, that
environmental liabilities have not developed since such environmental
assessments were prepared, or that future uses or conditions (including, without
limitation, changes in applicable environmental laws and regulations) will not
result in imposition of environmental liability.
REAL ESTATE RISKS SPECIFIC TO THE COMPANY'S BUSINESS
Investment Risks. In implementing its investment strategies, the Company
has invested in a broad range of real estate assets, and in the future, may
invest in additional types of real estate assets not currently included in its
portfolio. There can be no assurance, however, that the Operating Partnership
will be able to implement its investment strategies successfully in the future.
As a result of its real estate investments, the Operating Partnership will be
subject to risks, in addition to general real estate risks, relating to the
specific assets and asset types in which it invests. For example, the Operating
Partnership is subject to risks that, upon expiration, leases for space in the
Office Properties and Retail Properties may not be renewed, the space may not be
re-leased, or the terms of renewal or re-lease (including the cost of required
renovations or concessions to tenants) may be less favorable than current lease
terms. In addition, the Company is subject to risks relating to the Behavioral
Healthcare Facilities, including the effect of any failure of the tenant to make
required lease payments (which equal more than 10% of the Company's current base
rental revenues), the effects of factors, such as regulation of the healthcare
industry and limitations on government disbursement programs, on the ability of
the tenant to make the required lease payments, and the limited number of
replacement tenants in the event of default under, or non-renewal of, the lease.
Similarly, the Company is subject to the risk that the success of its investment
in the Hotel Properties will be highly dependent upon the ability of the Hotel
Properties to compete in such features as access, location, quality of
accommodations, room rate structure and, to a lesser extent, the quality and
scope of other amenities such as food and beverage facilities.
Risks of Joint Ownership of Assets. The Company has the right to invest in
properties and assets jointly with other persons or entities. Joint ownership of
properties, under certain circumstances, may involve risks not otherwise
present, including the possibility that the Company's partners or co-investors
might become bankrupt, that such partners or co-investors might at any time have
economic or other business interests or goals which are inconsistent with the
business interests or goals of the Company, and that such partners or co-
investors may be in a position to take action contrary to the instructions or
the requests of the Company or contrary to the Company's policies or objectives,
including the Company's policy with respect to maintaining its qualification as
a REIT. See "-- Risks Relating to Control of Certain Investments -- Lack of
Control of Americold and URS."
Potential Conflicts of Interest. The Company has entered into the
Intercompany Agreement with Crescent Operating pursuant to which each has agreed
to provide the other with rights to participate in certain transactions. The
certificate of incorporation of Crescent Operating, as amended and restated,
generally prohibits Crescent Operating, for so long as the Intercompany
Agreement remains in effect, from engaging in activities or making investments
that a REIT could make, unless the Operating Partnership was first given the
opportunity but elected not to pursue such activities or investments. In
addition, subsidiaries of Crescent Operating are the lessees of each of the
Hotel Properties, and Crescent Operating owns a 50% interest in the entity which
is the lessee of the Behavioral Healthcare Facilities and the Company's largest
tenant in terms of current base rent. Richard E. Rainwater and John C. Goff are,
respectively, the Chairman of the Board and the Vice Chairman of the Board of
both the Company and Crescent Operating, and Gerald W. Haddock also serves as
President, Chief Executive Officer and a director of Crescent Operating, and
serves as President, Chief Executive Officer and a trust manager of the Company.
As of September 30, 1997, senior management and the trust managers of the
Company beneficially owned approximately 17.2% of the Company's common equity
(consisting of Common Shares and Units, including vested options to purchase
Common Shares and Units) and approximately the same percentage of the
outstanding common stock of Crescent Operating. The
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common management and ownership among these entities may lead to conflicts of
interest in connection with transactions between the Operating Partnership and
Crescent Operating.
USE OF PROCEEDS
This Prospectus relates to Common Shares being offered and sold for the
account of the Selling Shareholder. The Company will not receive any proceeds
from the sale of the Common Shares unless the Selling Shareholder is required to
deliver a portion of such proceeds to the Company under the Swap Agreement
described below, in which event the Company will use such proceeds for general
corporate purposes or as described in the applicable Prospectus Supplement. The
Company will pay all expenses related to the registration of the Common Shares
offered hereby. See "Plan of Distribution."
SELLING SHAREHOLDER
GENERAL
This Prospectus relates to the offer and sale from time to time of up to
5,900,000 Common Shares (the "Shares") by Merrill Lynch International (the
"Selling Shareholder"), acting through its agent, Merrill Lynch, Pierce, Fenner
& Smith Incorporated ("Merrill Lynch"). There is no assurance that the Selling
Shareholder will sell any or all of the Shares offered hereby.
This Prospectus has been prepared pursuant to the Company's obligations
under that certain Purchase Agreement, dated as of December 12, 1997, by and
among Crescent Equities, the Operating Partnership, Merrill Lynch and the
Selling Shareholder (the "Purchase Agreement") and that certain Swap Agreement,
effective as of December 12, 1997, by and among Crescent Equities and the
Selling Shareholder (the "Swap Agreement"). In accordance with the Purchase
Agreement and the Swap Agreement, which contain customary representations and
warranties relating to the Company, this Prospectus (and the registration
statement of which it is a part) relates to sales of the Shares by the Selling
Shareholder, subject to the terms and conditions set forth in the Purchase
Agreement and the Swap Agreement.
In addition, in the Purchase Agreement, the Company and the Operating
Partnership have agreed to indemnify the Selling Shareholder and Merrill Lynch
against certain civil liabilities, including liabilities under the Securities
Act of 1933, as amended (the "Securities Act"), or to contribute to payments the
Selling Shareholder may be required to make in respect thereof. Insofar as
indemnification of the Selling Shareholder for liabilities arising under the
Securities Act may be permitted pursuant to such agreements, the Company has
been informed that, in the opinion of the Securities and Exchange Commission
(the "Commission"), such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable.
Because the Selling Shareholder may offer all or some of the Shares
pursuant to the Offering, no estimate can be given as to the principal amount of
the Shares that will be held by the Selling Shareholder after completion of the
Offering.
The Selling Shareholder and any broker or dealer to or through whom any of
the Shares are sold may be deemed to be underwriters within the meaning of the
Securities Act with respect to the Shares offered hereby, and any profits
realized by the Selling Shareholder or such brokers or dealers may be deemed to
be underwriting commissions. Brokers' commissions and dealers' discounts, taxes
and other selling expenses to be borne by the Selling Shareholder are not
expected to exceed normal selling expenses for sales. The registration of the
Shares under the Securities Act shall not be deemed an admission by the Selling
Shareholder or the Company that the Selling Shareholder is an underwriter for
purposes of the Securities Act of any Shares offered under this Prospectus.
8
<PAGE> 10
CERTAIN RELATIONSHIPS BETWEEN THE COMPANY AND THE SELLING SHAREHOLDER
As of December 12, 1997, the Company entered into two transactions with the
Selling Shareholder. In one transaction, the Selling Shareholder purchased
5,375,000 Common Shares from the Company for a purchase price of approximately
$205 million (at a price per Common Share equal to $38.125, the last reported
sale price of the Common Shares on December 12, 1997), pursuant to the Purchase
Agreement and received approximately $200.8 million in net proceeds. Merrill
Lynch received from the Company a placement fee of 2%, or approximately $4.1
million. In the other transaction, the Company entered into the Swap Agreement
with the Selling Shareholder relating to 5,375,000 Common Shares (the
"Settlement Shares"), pursuant to which the Selling Shareholder will sell, as
directed by the Company on or before December 12, 1998, by any one or more of
the methods described under "Plan of Distribution," a sufficient number of the
Shares to achieve net sales proceeds equal to the market value of the Settlement
Shares on December 12, 1997, plus a forward accretion component, minus an
adjustment for the Company's distribution rate. In addition, the Selling
Shareholder will have the right to cause a sale of all or a portion of the
Shares that are the subject of the Swap Agreement under certain market
conditions. The precise number of the Shares that will be required to be sold
pursuant to the Swap Agreement will depend primarily on the market price of the
Common Shares at the time of settlement. If such number of the Shares is greater
than the number of Settlement Shares as a result of a decrease in the market
price of the Common Shares, the Company will deliver additional Common Shares to
the Selling Shareholder. If such number of the Shares is less than the number of
Settlement Shares as a result of an increase in the market price of the Common
Shares, the Selling Shareholder will deliver Common Shares or, at the option of
the Company, cash to the Company.
Merrill Lynch and the Selling Shareholder from time to time provide
investment banking and financial advisory services to the Company, for which
customary compensation has been received. In addition, Merrill Lynch provided an
opinion to the Operating Partnership and a special committee of the Board of
Trust Managers in connection with the acquisition of the Behavioral Healthcare
Facilities and related transactions, for which customary compensation has been
received.
COMMON SHARES OFFERED
The following chart shows, according to the Company's records as of
December 12, 1997, the number of Common Shares currently held by the Selling
Shareholder and the number of Shares of the Selling Shareholder being offered
hereby:
<TABLE>
<CAPTION>
COMMON SHARES
BENEFICIALLY NUMBER OF
NAME OF OWNED PRIOR TO SHARES OFFERED
SELLING SHAREHOLDER OFFERING HEREBY(1)
------------------- -------------- --------------
<S> <C> <C>
Merrill Lynch International..................... 5,375,000 5,375,000
</TABLE>
- ---------------
(1) The Selling Shareholder also may use this Prospectus to offer any of the
Shares that are received from the Company pursuant to the Swap Agreement.
See "Selling Shareholder -- Certain Relationships Between the Company and
the Selling Shareholder."
PLAN OF DISTRIBUTION
The sale or distribution of all or any portion of the Shares may be
effected from time to time by the Selling Shareholder, pledgees, transferees and
other successors in interest of the Selling Shareholder, directly, indirectly
through brokers or dealers or in a distribution by one or more underwriters on a
firm commitment or best efforts basis, on the NYSE, in the over-the-counter
market, on any other national securities exchange on which the Common Shares are
listed or traded, in privately negotiated transactions or otherwise, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. It is anticipated that the Selling
Shareholder will sell its Shares principally to or through Merrill Lynch, a
registered broker-dealer that is an affiliate of the Selling Shareholder. The
Company will not receive any of the proceeds from the sale of the Shares except
as specified in "Use of Proceeds."
9
<PAGE> 11
The methods by which the Shares may be sold or distributed include, without
limitation, one or more of the following: (i) an underwritten fixed price
offering of the Common Shares, (ii) a block trade (which may involve crosses) in
which the broker or dealer so engaged will attempt to sell the Shares as agent
but may position and resell a portion of the block as principal to facilitate
the transaction, (iii) purchases by a broker or dealer as principal and resale
by such broker or dealer for its account pursuant to this Prospectus, (iv)
exchange distributions and/or secondary distributions in accordance with the
rules of the NYSE, (v) ordinary brokerage transactions and transactions in which
the broker solicits purchasers, (vi) an offering at other than a fixed price on
or through the facilities of the NYSE or to or through a market maker otherwise
than on the NYSE, (vii) privately negotiated transactions, (viii) sales to any
distribution reinvestment plan now or hereafter established by the Company, or
to any agent acting on behalf of such plan, for sale to participants in such
plan, (ix) to lenders pledged as collateral to secure loans, credit or other
financing arrangements and any subsequent foreclosure, if any, thereunder; and
(x) by any other legally available means. In effecting sales, brokers or dealers
engaged by the Selling Shareholder may arrange for other brokers or dealers to
participate. Any public offering price and any discount or concessions allowed
or reallowed or paid to dealers may be changed from time to time. The Selling
Shareholder may from time to time deliver all or a portion of the Shares to
cover a short sale or sales or upon the exercise, settlement or closing of a
call equivalent position or a put equivalent position. The Selling Shareholder
and the broker-dealers participating in the distribution of the Shares may be
deemed "underwriters" within the meaning of the Securities Act and any profit on
the sale of the Shares by the Selling Shareholder and any commissions received
by any such broker-dealers may be regarded as underwriting commissions under the
Securities Act. Underwriters, brokers, dealers or agents may be entitled, under
agreements with the Company, to indemnification against and contribution toward
certain civil liabilities, including liabilities under the Securities Act. The
Shares may be sold from time to time at varying prices determined at the time of
sale or at negotiated prices.
The Company will pay all expenses in connection with the registration of
the Shares. The Selling Shareholder will pay any brokerage or underwriting
commissions and taxes of any kind (including, without limitation, transfer
taxes) with respect to any disposition, sale or transfer of the Shares.
In connection with a sale of Shares, the following information will, to the
extent then required, be provided in the Prospectus Supplement relating to such
sale: the number of Shares to be sold, the purchase price, the public offering
price, if applicable, the name of any underwriter, agent or broker-dealer, and
any applicable commissions, discounts or other items constituting compensation
to such underwriters, agents or broker-dealers with respect to the particular
sale.
In connection with the sale or distribution of the Shares, the rules of the
Commission permit Merrill Lynch or any underwriter to engage in certain
transactions that stabilize the price of the Common Shares. Such transactions
may consist of bids or purchases for the purpose of pegging, fixing or
maintaining the price of the Common Shares.
If Merrill Lynch or any underwriter creates a short position in the Common
Shares in connection with the sale or distribution of the Shares, i.e., if they
sell more Common Shares than are set forth on the cover page hereof, Merrill
Lynch may reduce that short position by purchasing Common Shares in the open
market.
In the case of an underwritten offering of the Shares, Merrill Lynch or any
managing underwriter(s) may also impose a penalty bid on certain underwriters
and selling group members. This means that, if Merrill Lynch or any managing
underwriter purchases Common Shares in the open market to reduce any
underwriter's short position, or to stabilize the price of the Common Shares,
Merrill Lynch or such managing underwriter may reclaim the amount of the selling
concession from any such underwriters and selling group members who sold those
Shares.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of a security to the extent that it were
to discourage resales of the security.
10
<PAGE> 12
None of the Company, Merrill Lynch or any underwriter makes any
representation or prediction as to the direction or magnitude of any effect that
the transactions described above may have on the price of the Common Shares. In
addition, none of the Company, Merrill Lynch or any underwriter makes any
representation that Merrill Lynch or any underwriter will engage in such
transactions or that such transactions, once commenced, will not be discontinued
without notice.
Shares not sold pursuant to the registration statement on Form S-3 of which
this Prospectus is a part (the "Registration Statement") could be sold pursuant
to Rule 144 or another exemption from the registration requirements of the
Securities Act. In general, under Rule 144, a person (or persons whose Shares
are aggregated) who has satisfied a one-year holding period may, under certain
circumstances, sell within any three-month period a number of Shares which does
not exceed the greater of one percent of the Company's outstanding Common Shares
or the average weekly reported trading volume of the Company's Common Shares
during the four calendar weeks prior to such sale. Rule 144 also permits, under
certain circumstances, the sale of Shares by a person who is not an affiliate of
the Company and who has satisfied a two-year holding period without any volume
limitation. Therefore, both during and after the effectiveness of the
Registration Statement, sales of the Shares may be made by the Selling
Shareholder pursuant to Rule 144.
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Commission. Such
reports, proxy statements and other information can be inspected at the Public
Reference Section maintained by the Commission at Judiciary Plaza, Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549 and the following regional
offices of the Commission: Citicorp Center, Suite 1400, 500 West Madison Street,
Chicago, Illinois 60661-2511 and Seven World Trade Center, Suite 1300, New York,
New York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Commission also maintains a Web
site (http://www.sec.gov) that contains reports, proxy statements and other
information regarding registrants that file electronically with the Commission.
In addition, the Company's Common Shares are listed on the NYSE and such
reports, proxy statements and other information concerning the Company can be
inspected at the offices of the NYSE, 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission the Registration Statement, of
which this Prospectus is a part, under the Securities Act, with respect to the
Shares. This Prospectus does not contain all of the information set forth in the
Registration Statement, certain portions of which have been omitted as permitted
by the rules and regulations of the Commission. Statements contained in this
Prospectus as to the contents of any contract or other documents are not
necessarily complete, and in each instance, reference is made to the copy of
such contract or documents filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference and the
exhibits and schedules thereto. For further information regarding the Company
and the Shares, reference is hereby made to the Registration Statement and such
exhibits and schedules which may be obtained from the Commission at its
principal office in Washington, D.C. upon payment of the fees prescribed by the
Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed under the Exchange Act by the
Company (Exchange Act file number 1-13038) with the Commission and are
incorporated herein by reference:
(1) The Registration Statement on Form 8-B filed on March 24, 1997 registering
the Common Shares of the Company under Section 12(b) of the Exchange Act.
(2) The Proxy Statement in connection with the Company's 1997 Annual Meeting
of Stockholders.
(3) The Company's Annual Report on Form 10-K for the year ended December 31,
1996, as amended on April 30, 1997 and May 16, 1997.
11
<PAGE> 13
(4) The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1997.
(5) The Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
1997, as amended on August 28, 1997.
(6) The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997, as amended on December 5, 1997.
(7) The Company's Current Report on Form 8-K dated January 29, 1997 and filed
March 24, 1997, as amended on April 9, 1997, April 24, 1997, May 23, 1997
and July 2, 1997.
(8) The Company's Current Report on Form 8-K dated February 28, 1997 and filed
March 17, 1997, as amended on March 21, 1997.
(9) The Company's Current Report on Form 8-K dated April 9, 1997 and filed
April 10, 1997, as amended on April 24, 1997.
(10) The Company's Current Report on Form 8-K dated April 22, 1997 and filed
April 24, 1997.
(11) The Company's Current Report on Form 8-K dated May 8, 1997 and filed May
12, 1997.
(12) The Company's Current Report on Form 8-K dated June 20, 1997 and filed
September 30, 1997, as amended on October 1, 1997.
(13) The Company's Current Report on Form 8-K dated July 22, 1997 and filed
July 23, 1997.
(14) The Company's Current Report on Form 8-K dated August 11, 1997 and filed
August 13, 1997.
(15) The Company's Current Report on Form 8-K dated September 22, 1997 and
filed September 22, 1997.
(16) The Company's Current Report on Form 8-K dated September 22, 1997 and
filed September 30, 1997, as amended on October 1, 1997.
(17) The Company's Current Report on Form 8-K dated September 28, 1997 and
filed October 27, 1997, as amended on November 25, 1997.
(18) The Company's Current Report on Form 8-K dated September 30, 1997 and
filed September 30, 1997, as amended on October 1, 1997.
(19) The Company's Current Report on Form 8-K dated September 30, 1997 and
filed October 1, 1997, as amended on October 9, 1997.
(20) The Company's Current Report on Form 8-K dated October 8, 1997 and filed
October 14, 1997.
(21) The Company's Current Report on Form 8-K dated October 22, 1997 and filed
October 28, 1997.
(22) The Company's Current Report on Form 8-K dated December 12, 1997 and filed
December 18, 1997, as amended on December 19, 1997.
All documents filed subsequent to the date of this Prospectus pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to termination
of the offering of Shares to which this Prospectus relates shall be deemed to be
incorporated by reference in this Prospectus and shall be part hereof from the
date of filing of such document.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained in this
Prospectus (in the case of a statement in a previously filed document
incorporated or deemed to be incorporated by reference herein), or in any other
subsequently filed document that is also incorporated or deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus. Subject to the
foregoing, all information appearing in this Prospectus is qualified in its
entirety by the information appearing in the documents incorporated by
reference.
12
<PAGE> 14
The Company undertakes to provide without charge to each person to whom a
copy of this Prospectus has been delivered, upon the written or oral request of
any such person, a copy of any or all of the documents incorporated by reference
in this Prospectus (other than exhibits and schedules thereto, unless such
exhibits or schedules are specifically incorporated by reference into the
information that this Prospectus incorporates). Written or telephonic requests
for copies should be directed to Crescent Real Estate Equities Company, 777 Main
Street, Suite 2100, Fort Worth, Texas, 76102, Attention: Company Secretary
(telephone number: (817) 877-0477).
EXPERTS
The financial statements and schedule incorporated in this Prospectus by
reference to the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, as amended, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said report.
The financial statements incorporated in this Prospectus by reference to
the Company's Current Reports on Form 8-K (i) dated January 29, 1997 and filed
on March 24, 1997, as amended on April 9, 1997, April 24, 1997, May 23, 1997 and
July 2, 1997, (ii) dated February 28, 1997 and filed on March 17, 1997, as
amended on March 21, 1997, (iii) dated June 20, 1997 and filed on September 30,
1997, as amended on October 1, 1997, (iv) dated September 22, 1997 and filed on
September 30, 1997, as amended on October 1, 1997, (v) dated September 30, 1997
and filed on September 30, 1997, as amended on October 1, 1997, and (vi) dated
October 22, 1997 and filed on October 28, 1997, respectively, have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said report.
LEGAL MATTERS
The legality of the issuance of the Shares will be passed upon for the
Company by Shaw, Pittman, Potts & Trowbridge.
13
<PAGE> 15
======================================================
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY, THE SELLING SHAREHOLDER OR ANY UNDERWRITERS. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF
THE SECURITIES OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER
OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF THIS
PROSPECTUS OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
SUCH DATE.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Company........................... 3
Risk Factors.......................... 3
Use of Proceeds....................... 8
Selling Shareholder................... 8
Plan of Distribution.................. 9
Available Information................. 11
Incorporation of Certain Documents by
Reference........................... 11
Experts............................... 13
Legal Matters......................... 13
</TABLE>
======================================================
======================================================
5,900,000 SHARES
[CRESCENT LOGO]
COMMON SHARES
PROSPECTUS
DECEMBER , 1997
======================================================
<PAGE> 16
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses to be incurred in connection with the issuance and
distribution of the Common Shares covered by this Registration Statement, all of
which will be paid by the Registrant, are as follows:
<TABLE>
<S> <C>
Registration Fee............................................ $64,236
Printing, Engraving and Filing Expenses..................... $10,000
Accounting Fees and Expenses................................ $ 2,000
Legal Fees and Expenses..................................... $15,000
Miscellaneous............................................... $ 1,500
-------
Total....................................................... $92,736
=======
</TABLE>
ITEM 16. EXHIBITS.
The following is a list of all exhibits filed as a part of this
Registration Statement on Form S-3, including those incorporated herein by
reference.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
<C> <S>
1.01 Purchase Agreement, effective as of December 12, 1997 by and among the Registrant, the
Operating Partnership and the Selling Shareholder (filed as Exhibit 1.01 to the
Registrant's Current Report on Form 8-K dated December 12, 1997 and filed December 18,
1997, as amended on December 19, 1997 (the "December Form 8-K") and incorporated herein
by reference)
1.02 Swap Agreement, effective as of December 12, 1997 by and between the Registrant and
Merrill Lynch International (filed as Exhibit 1.02 to the December Form 8-K and
incorporated herein by reference)
4.01 Restated Declaration of Trust of the Registrant (filed as Exhibit No. 4.01 to the
Registrant's Registration Statement on Form S-3 (File No. 333-21905) (the "1997 Form
S-3") and incorporated herein by reference)
4.02 Amended and Restated Bylaws of the Registrant, as amended (filed as Exhibit No. 4.02 to
the Registrant's Current Report on Form 8-K dated October 8, 1997 and filed October 14,
1997 and incorporated herein by reference)
4.03 Form of Common Share Certificate (filed as Exhibit No. 4.03 to the 1997 Form S-3 and
incorporated herein by reference)
4.04 Second Amended and Restated Agreement of Limited Partnership of Crescent Real Estate
Equities Limited Partnership dated as of November 1, 1997 (filed as Exhibit No. 4.06 to
the Registrant's Registration Statement on Form S-3 (File No. 333-41049) and
incorporated herein by reference)
4.05 Purchase Agreement (filed as Exhibit No. 1.01 to this Registration Statement)
5.01 Opinion of Shaw, Pittman, Potts & Trowbridge as to the legality of the securities being
registered by Crescent Real Estate Equities Company
23.01 Consent of Shaw, Pittman, Potts & Trowbridge (included in its opinion filed as Exhibit
No. 5.01 to this Registration Statement)
23.02 Consent of Arthur Andersen LLP, Certified Public Accountants, dated December 19, 1997
(filed herewith)
23.03 Consent of Arthur Andersen LLP, Certified Public Accountants, dated December 19, 1997
(filed herewith)
24.01 Powers of Attorney (previously filed)
</TABLE>
II-1
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fort Worth, State of Texas, on the 22nd day of
December, 1997.
CRESCENT REAL ESTATE EQUITIES COMPANY
By: /s/ GERALD W. HADDOCK
-------------------------------------
Gerald W. Haddock
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<C> <S> <C>
/s/ RICHARD E. RAINWATER* Trust Manager and Chairman of the December 22, 1997
- ----------------------------------------------------- Board
Richard E. Rainwater
/s/ JOHN C. GOFF* Trust Manager and Vice Chairman of December 22, 1997
- ----------------------------------------------------- the Board
John C. Goff
/s/ GERALD W. HADDOCK Trust Manager, President and Chief December 22, 1997
- ----------------------------------------------------- Executive Officer (Principal
Gerald W. Haddock Executive Officer)
/s/ DALLAS E. LUCAS Senior Vice President and Chief December 22, 1997
- ----------------------------------------------------- Financial Officer (Principal
Dallas E. Lucas Financial and Accounting
Officer)
/s/ ANTHONY M. FRANK* Trust Manager December 22, 1997
- -----------------------------------------------------
Anthony M. Frank
/s/ MORTON H. MEYERSON* Trust Manager December 22, 1997
- -----------------------------------------------------
Morton H. Meyerson
/s/ WILLIAM F. QUINN* Trust Manager December 22, 1997
- -----------------------------------------------------
William F. Quinn
/s/ PAUL E. ROWSEY, III* Trust Manager December 22, 1997
- -----------------------------------------------------
Paul E. Rowsey, III
/s/ MELVIN ZUCKERMAN* Trust Manager December 22, 1997
- -----------------------------------------------------
Melvin Zuckerman
</TABLE>
*By: /s/ GERALD W. HADDOCK
----------------------------------
Gerald W. Haddock
Attorney-In-Fact
II-2
<PAGE> 18
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
<C> <S>
1.01 Purchase Agreement, effective as of December 12, 1997 by and among the Registrant, the
Operating Partnership and the Selling Shareholder (filed as Exhibit 1.01 to the
Registrant's Current Report on Form 8-K dated December 12, 1997 and filed December 18,
1997, as amended on December 19, 1997 (the "December Form 8-K") and incorporated herein
by reference)
1.02 Swap Agreement, effective as of December 12, 1997 by and between the Registrant and
Merrill Lynch International (filed as Exhibit 1.02 to the December Form 8-K and
incorporated herein by reference)
4.01 Restated Declaration of Trust of the Registrant (filed as Exhibit No. 4.01 to the
Registrant's Registration Statement on Form S-3 (File No. 333-21905) (the "1997 Form
S-3") and incorporated herein by reference)
4.02 Amended and Restated Bylaws of the Registrant, as amended (filed as Exhibit No. 4.02 to
the Registrant's Current Report on Form 8-K dated October 8, 1997 and filed October 14,
1997 and incorporated herein by reference)
4.03 Form of Common Share Certificate (filed as Exhibit No. 4.03 to the 1997 Form S-3 and
incorporated herein by reference)
4.04 Second Amended and Restated Agreement of Limited Partnership of Crescent Real Estate
Equities Limited Partnership dated as of November 1, 1997 (filed as Exhibit No. 4.06 to
the Registrant's Registration Statement on Form S-3 (File No. 333-41049) and
incorporated herein by reference)
4.05 Purchase Agreement (filed as Exhibit No. 1.01 to this Registration Statement)
5.01 Opinion of Shaw, Pittman, Potts & Trowbridge as to the legality of the securities being
registered by Crescent Real Estate Equities Company
23.01 Consent of Shaw, Pittman, Potts & Trowbridge (included in its opinion filed as Exhibit
No. 5.01 to this Registration Statement)
23.02 Consent of Arthur Andersen LLP, Certified Public Accountants, dated December 19, 1997
(filed herewith)
23.03 Consent of Arthur Andersen LLP, Certified Public Accountants, dated December 19, 1997
(filed herewith)
24.01 Powers of Attorney (previously filed)
</TABLE>
<PAGE> 1
EXHIBIT 5.01
[LETTERHEAD OF SHAW, PITTMAN, POTTS & TROWBRIDGE]
December 22, 1997
Crescent Real Estate Equities Company
777 Main Street, Suite 2100
Fort Worth, Texas 76102
RE: CRESCENT REAL ESTATE EQUITIES COMPANY
Ladies and Gentleman:
We have acted as counsel to Crescent Real Estate Equities Company, a Texas
real estate investment trust (the "Company"), in connection with the
Registration Statement on Form S-3 (File No. 333-42417) filed by the Company on
December 16, 1997 with the Securities and Exchange Commission under the
Securities Act of 1933, as amended to date (the "Registration Statement"), and
any subsequent amendments thereto, relating to the offering by a certain Selling
Shareholder (as defined in the Registration Statement) from time to time of up
to 5,900,000 common shares of beneficial interest, par value $.01 per share (the
"Common Shares"). Of the 5,900,000 Common Shares offered hereby, 5,375,000
Common Shares are outstanding (the "Outstanding Shares") and up to the remaining
525,000 Common Shares (the "Additional Shares") are issuable in accordance with
the terms of that certain Swap Agreement (the "Agreement"), effective as of
December 12, 1997, between the Company and the Selling Shareholder.
Based upon our examination of originals and copies of such documents,
corporate records, certificates of officers of the Company and other instruments
as we have deemed necessary and upon the laws as presently in effect, we are of
the opinion that (i) the Outstanding Shares were validly issued by the Company
and are fully paid and nonassessable and (ii) upon issuance of the Additional
Shares in accordance with the Agreement, and the Company's receipt of the
consideration provided for therein, the Additional Shares will be validly issued
by the Company, fully paid and nonassessable.
We hereby consent to your filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the Prospectus included therein.
Very truly yours,
/s/ SHAW, PITTMAN, POTTS & TROWBRIDGE
----------------------------------------
Shaw, Pittman, Potts & Trowbridge
<PAGE> 1
EXHIBIT 23.02
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement on Form S-3 of our report dated
January 17, 1997 included in Crescent Real Estate Equities Company's Form 10-K
for the year ended December 31, 1996, and of our reports dated February 14, 1997
on Trammell Crow Center, March 18, 1997 on Carter-Crowley Real Estate Portfolio,
July 23, 1997 on Fountain Place, August 21, 1997 on Miami Center, August 22,
1997 on Houston Center, and October 15, 1997 on Bank One Center included in
Crescent Real Estate Equities Company's Forms 8-K and to all references to our
Firm included in this Registration Statement.
ARTHUR ANDERSEN, LLP
Dallas, Texas
December 19, 1997
<PAGE> 1
EXHIBIT 23.03
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement on Form S-3 of our report dated
November 7, 1996 on the Provider Segment of Magellan Health Services, Inc.
included in Crescent Real Estate Equities Company's Form 8-K dated January 29,
1997, as amended by Form 8-K/A on July 2, 1997, and to all references to our
Firm included in this Registration Statement.
ARTHUR ANDERSEN, LLP
Atlanta, Georgia
December 19, 1997
