CRESCENT REAL ESTATE EQUITIES CO
S-3, 1999-05-06
REAL ESTATE INVESTMENT TRUSTS
Previous: LKCM FUND, 497, 1999-05-06
Next: DT INDUSTRIES INC, 8-K, 1999-05-06



<PAGE>   1
 
      AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 6, 1999
 
                                                     REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                             ---------------------
                                    FORM S-3
            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
                             ---------------------
                     CRESCENT REAL ESTATE EQUITIES COMPANY
             (Exact Name of Registrant as Specified in Its Charter)
 
<TABLE>
<S>                                              <C>
                     TEXAS                                          52-1862813
          (State or Other Jurisdiction                           (I.R.S. Employer
       of Incorporation or Organization)                       Identification No.)
</TABLE>
 
                          777 MAIN STREET, SUITE 2100
                            FORT WORTH, TEXAS 76102
                           TELEPHONE: (817) 321-2100
 
  (Address, Including Zip Code, and Telephone Number, Including Area Code, of
                   Registrant's Principal Executive Offices)
                             ---------------------
                               GERALD W. HADDOCK
                     PRESIDENT AND CHIEF EXECUTIVE OFFICER
                     CRESCENT REAL ESTATE EQUITIES COMPANY
                          777 MAIN STREET, SUITE 2100
                            FORT WORTH, TEXAS 76102
                           TELEPHONE: (817) 321-2100
 
 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
                             of Agent For Service)
                             ---------------------
                                   Copies to:
 
<TABLE>
<S>                                              <C>
            ROBERT B. ROBBINS, ESQ.                            DAVID M. DEAN, ESQ.
            SYLVIA M. MAHAFFEY, ESQ.                  CRESCENT REAL ESTATE EQUITIES COMPANY
       SHAW, PITTMAN, POTTS & TROWBRIDGE                   777 MAIN STREET, SUITE 2100
              2300 N STREET, N.W.                            FORT WORTH, TEXAS 76102
             WASHINGTON, D.C. 20037
</TABLE>
 
                             ---------------------
 
     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.  [ ]
 
                        CALCULATION OF REGISTRATION FEE
 
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
                                                      PROPOSED MAXIMUM     PROPOSED MAXIMUM
         TITLE OF SHARES             AMOUNT TO BE     AGGREGATE PRICE     AGGREGATE OFFERING     AMOUNT OF
         TO BE REGISTERED             REGISTERED          PER UNIT              PRICE         REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------
<S>                                <C>              <C>                  <C>                  <C>
Common Shares, par value $.01.....     311,634          $22.15625(1)        $6,904,640.81          $1,920
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
</TABLE>
 
(1) Estimated solely for purposes of calculating the registration fee pursuant
    to Rule 457(c) under the Securities Act of 1933 and based upon prices on the
    New York Stock Exchange on May 3, 1999.
 
     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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>   2
 
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted.
 
                    SUBJECT TO COMPLETION, DATED MAY 6, 1999
 
PROSPECTUS
 
                                 311,634 SHARES
 
                                [CRESCENT LOGO]
 
                                 COMMON SHARES
 
                            ------------------------
 
     The selling shareholders named in this prospectus may offer up to 311,634
of our common shares of beneficial interest, par value $.01 per share. We will
not receive any proceeds from the sale of the common shares, but we will incur
expenses in connection with the registration of the common shares.
 
     The selling shareholders propose to sell the common shares from time to
time in public or private transactions occurring on or off the New York Stock
Exchange, at prevailing market prices or at negotiated prices. Sales may be made
directly to purchasers or through brokers or to dealers, who are expected to
receive customary commissions or discounts.
 
     Our common shares are listed on the New York Stock Exchange under the
symbol "CEI."
 
     SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR CERTAIN FACTORS RELEVANT TO AN
INVESTMENT IN THE COMMON SHARES.
 
                            ------------------------
 
    NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
 COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
                               CRIMINAL OFFENSE.
 
                            ------------------------
 
                  THE DATE OF THIS PROSPECTUS IS        , 1999
<PAGE>   3
 
                             ABOUT THIS PROSPECTUS
 
     This Prospectus is a part of a registration statement that we have filed
with the Securities and Exchange Commission (the "SEC"). This Prospectus does
not contain all of the information included in the registration statement. You
should read this Prospectus and any supplement together with the additional
information included in the registration statement and the additional
information described under "Where You Can Find More Information."
 
     All references in this Prospectus to "Crescent," the "Company," "we," "us,"
or "our" mean, unless the context otherwise requires, Crescent Real Estate
Equities Company, a Texas real estate investment trust ("Crescent Equities"),
Crescent Real Estate Equities Limited Partnership, a Delaware limited
partnership (the "Operating Partnership"), and the other subsidiaries of
Crescent Equities.
 
                                    CRESCENT
 
     Crescent is a fully integrated real estate company, operated as a real
estate investment trust for federal income tax purposes (a "REIT"). Our assets
include:
 
     - 89 office properties with an aggregate of approximately 31.8 million net
       rentable square feet;
 
     - 88 behavioral healthcare facilities;
 
     - seven full-service hotels with a total of 2,247 rooms and two destination
       health and fitness resorts that can accommodate up to 462 guests daily;
 
     - the real estate mortgages relating to and non-voting common stock in five
       residential development corporations, which in turn, through joint
       venture or partnership arrangements, own interests in 13 residential
       development properties;
 
     - seven retail properties with an aggregate of approximately .8 million net
       rentable square feet; and
 
     - an indirect 39.6% interest in 92 refrigerated warehouses with an
       aggregate of approximately 19.2 million square feet.
 
     Crescent 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. We also have an economic interest in the development activities of
the residential development corporations. The structure of Crescent is designed
to facilitate and maintain our qualification as a REIT and to permit persons
contributing assets to Crescent to defer some or all of the tax liability that
they otherwise might incur.
 
     As of May 3, 1999, 126,820,055 common shares of beneficial interest of
Crescent, par value $.01 per share, 6,551,841 units of ownership interest in the
Operating Partnership and 8,000,000 shares of 6 3/4% Series A Convertible
Cumulative Preferred Shares of beneficial interest of Crescent, par value $.01
per share, were outstanding.
 
     Our executive offices are located at 777 Main Street, Suite 2100, Fort
Worth, Texas 76102, and its telephone number is (817) 321-2100.
 
                                        2
<PAGE>   4
 
                                  RISK FACTORS
 
     Prospective investors should carefully consider the following summary
information in conjunction with the other information contained in this
Prospectus before purchasing securities.
 
REAL ESTATE RISKS SPECIFIC TO CRESCENT'S BUSINESS
 
     INVESTMENTS AND INVESTMENT STRATEGIES SUBJECT CRESCENT TO RISKS FROM A
VARIETY OF ASSET CLASSES. In implementing our investment strategies, we have
invested in a broad range of real estate assets, and in the future, we may
invest in additional types of real estate assets not currently included in our
portfolio. As a result of our real estate investments, we will be subject to
risks, in addition to general real estate risks, relating to the specific assets
and asset types in which we invest (as of March 31, 1999, office properties,
hotel properties, behavioral healthcare facilities, refrigerated warehouses and
residential property developments). We are subject to the risks that, upon
expiration, leases for space in our 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. Similarly, we are subject to the
risk that the success of our investment in hotel properties will depend 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. In
addition, we are subject to risks relating to our behavioral healthcare
facilities, including the effect of any failure of the lessee of the behavioral
healthcare facilities to make the required lease payments, which equal more than
8% of Crescent's current rental revenues; the effects of factors, such as
regulation of the healthcare industry and limitations on government
reimbursement programs, on the ability of the lessee to make the required lease
payments; and the limited number of replacement tenants if a default occurs
under the lease or if the lease is not renewed upon expiration in 2009. If any
one or more of these risks occurred, or if we are unable to implement our
investment strategies successfully in the future, it could adversely affect the
value of your investment in Crescent.
 
     REGIONAL CONCENTRATION OF OUR ASSETS INCREASES EFFECTS OF ADVERSE TRENDS IN
CERTAIN MARKETS. As of March 31, 1999, approximately 72% of our office and
retail assets were 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
in other geographic markets in which Crescent in the future may acquire
substantial assets) could adversely affect the value of your investment in
Crescent.
 
     JOINT OWNERSHIP OF ASSETS LIMITS OUR FLEXIBILITY WITH INVESTMENTS. We have
the right to invest, and in certain cases have invested, in properties and
assets jointly with other persons or entities. Joint ownership of properties may
involve special risks, including the possibility that Crescent's partners or
co-investors might become bankrupt, that those partners or co-investors might
have economic or other business interests or goals which are unlike or
incompatible with the business interests or goals of Crescent, and that those
partners or co-investors may be in a position to take action contrary to the
instructions or requests of Crescent or in opposition to Crescent's policies or
objectives. Joint ownership gives a third party the opportunity to influence the
return Crescent can achieve on some of its investments and may adversely affect
the ability of Crescent to make distributions to its shareholders.
 
WE DO NOT CONTROL REVENUES FROM OUR HOTEL, BEHAVIORAL HEALTHCARE, REFRIGERATED
WAREHOUSE OR RESIDENTIAL DEVELOPMENT INVESTMENTS
 
     REVENUES FROM HOTELS DEPENDENT ON THIRD-PARTY OPERATORS AND HOSPITALITY
INDUSTRY. We lease our hotel properties to Crescent Operating, Inc. ("Crescent
Operating") or its subsidiaries, except the Omni Austin Hotel, which is leased
to a nonaffiliated third party. Each of those hotel operators, rather than
Crescent, is entitled to exercise all rights of the owner of the hotel it
leases. Under the leases, which expire between 2004 and 2012, the hotel
operators will pay Crescent both minimum rent and a percentage of gross receipts
above a fixed amount. As a result, both successful and unsuccessful operations
at the hotel properties will affect Crescent only if they affect the amount of
rent we receive under the hotel leases. The amount of
 
                                        3
<PAGE>   5
 
that rent (and whether it exceeds the minimum rent) will depend on the ability
of the hotel operators and the managers of the hotel properties to maintain and
increase the gross receipts from the hotels. Accordingly, the value of your
investment in Crescent 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, competition in the hotel industry, changes in the expenses of
operating hotels and other factors relating to the operation of the hotel
properties. We expect to lease any hotel properties that we may acquire in the
future to Crescent Operating or a subsidiary on similar terms.
 
     BEHAVIORAL HEALTHCARE FACILITIES OPERATED BY THIRD PARTIES. We lease our
behavioral healthcare facilities to Charter Behavioral Health Systems, LLC, or
CBHS, which is one of Crescent's two largest tenants in terms of rental revenue.
Crescent Operating owns a 50% interest in CBHS, and Magellan Health Services,
Inc. owns the other 50% interest. Under the terms of the CBHS limited liability
company agreement, Magellan now has the right to make all decisions relating to
the management and operation of CBHS other than certain major decisions that
require the approval of both Crescent Operating and Magellan. Major decisions
include approval of the annual budget and approval of limited liability company
agreement amendments. Because the facilities are leased to CBHS, both successful
and unsuccessful operations at the behavioral healthcare facilities will affect
Crescent only if they affect the amount of rent we receive under the lease with
CBHS. The ability of CBHS to pay its rent will depend on the ability of CBHS and
the managers of the behavioral healthcare facilities to maintain and increase
the gross receipts from the facilities. Risks relating to the behavioral
healthcare facilities include regulation of the healthcare industry and
limitations on government reimbursement programs, seasonal fluctuations in
income and the limited number of replacement tenants. There can be no assurance
that Magellan or Crescent Operating will operate CBHS in a way that will allow
CBHS to continue making rent payments to Crescent.
 
     REFRIGERATED WAREHOUSE INVESTMENT CONTROLLED BY THIRD PARTIES. We own,
through two Crescent subsidiaries, a 39.6% interest in each of three
partnerships. Each of the partnerships owns one or more corporations or limited
liability companies that own an aggregate of approximately 19.2 million square
feet of public refrigerated warehouse space located in 92 refrigerated storage
properties throughout the United States. Crescent Operating owns a .4% interest
in each of the partnerships that own the refrigerated storage properties. The
remaining 60% interest in the partnerships is owned by two subsidiaries of
Vornado Realty Trust. We own approximately 99% of each of the Crescent
subsidiaries that own the interests in these partnerships, and Crescent
Operating owns approximately 1% of each of the Crescent subsidiaries. Crescent
Operating holds all of the voting power in each of the Crescent subsidiaries. We
do not have the authority to control the management or operation of the Crescent
subsidiaries or the partnerships. 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 Crescent
Operating and Vornado. Major decisions include approval of the annual capital
and operating budgets for each partnership, decisions to deviate from the
budgets by 10% or more and additional capital contributions. The partnership
agreement for each of the partnerships provides for a buy-sell arrangement if
Crescent Operating and Vornado cannot agree on any of the major decisions. If
Crescent Operating and Vornado fail to reach agreement on any of the major
decisions prior to November 1, 2000, Vornado may purchase Crescent's interest at
cost, less distributions, plus a 10% per annum return. During the seven years
thereafter, Vornado may set a price for the buy-sell arrangement, and Crescent
Operating then may elect either to sell our interest to Vornado, or to purchase
Vornado's interest, at the designated price. After October 31, 2007, either
Crescent Operating or Vornado may set a price for the buy-sell arrangement, and
the party who did not set the price may elect either to sell its interest to the
other party, or to purchase the other party's interest, at the designated price.
The exercise of the buy-sell arrangement in one partnership requires the
purchaser under the arrangement to purchase the interest of the selling party in
the other partnership on the same terms. The refrigerated storage properties are
operated, pursuant to triple-net master leases, by a partnership owned 60% by an
affiliate of Vornado Realty Trust and 40% by Crescent Operating. As a result, we
do not have an interest in, or the ability to control, the partnership that
operates the refrigerated storage properties. There can be no assurance that
Vornado or Crescent Operating will operate the partnerships or the refrigerated
storage properties in a way that will maximize the return on our investment.
 
                                        4
<PAGE>   6
 
     LACK OF CONTROL OF RESIDENTIAL DEVELOPMENT CORPORATIONS AND DIVIDENDS. We
do not have the authority to control the management and operation of the
residential development corporations in which we invest. As a result, we do not
have the right to require that funds be distributed to us by any of these
entities at any time. The inability of Crescent to control its access to its
dividends from the residential development corporations increases the likelihood
that such dividends might not be available to Crescent when needed or desirable,
which may adversely affect the value of your investment in Crescent.
 
DEBT FINANCING CARRIES RISKS OF REFINANCING DIFFICULTIES, LOSS OF MORTGAGED
PROPERTIES, REDUCED ABILITY TO OBTAIN NEW FINANCING AND INCREASES IN INTEREST
 
     DIFFICULTIES IN REFINANCING DEBT COULD ADVERSELY AFFECT OUR FINANCIAL
CONDITION. Our business is subject to risks normally associated with debt
financing. As of December 31, 1998, we had approximately $2.3 billion of debt
outstanding, of which approximately $1.3 billion was secured debt. Our cash flow
could be insufficient to meet required payments of principal and interest, and
we may not be able to refinance our existing indebtedness (which in many cases
requires substantial "balloon" payments of principal at maturity). If we are
able to refinance our debt, there is also a risk that the terms of the
refinancing will not be as favorable as the terms of existing indebtedness. If
principal payments due at maturity cannot be refinanced, extended or paid with
proceeds of other capital transactions, such as new equity capital, our cash
flow will not be sufficient in all years to repay all maturing debt. If
prevailing interest rates or other factors at the time of refinancing (such as
the possible reluctance of lenders to make commercial real estate loans) result
in higher interest rates, increased interest expense would adversely affect cash
flow and our ability to service debt and make distributions to our shareholders.
 
     INABILITY TO MAKE SECURED DEBT PAYMENTS COULD RESULT IN LOSS OF MORTGAGED
PROPERTY. As of December 31, 1998, approximately 40.0% of Crescent's assets were
mortgaged to secure debt. If we cannot meet our secured debt obligations, the
lender could take the collateral and we would lose both the asset and the income
it produces. Foreclosure on mortgaged properties or an inability to refinance
existing indebtedness would likely have a negative impact on our financial
condition and results of operations.
 
     OUR DEGREE OF LEVERAGE COULD LIMIT OUR ABILITY TO OBTAIN ADDITIONAL
FINANCING. Our organizational documents do not limit the level or amount of debt
that we may incur. Our policy with regard to the incurrence and maintenance of
debt is based on a review and analysis of investment opportunities for which
capital is required and the cost of debt in relation to such investment
opportunities, the type of debt available (secured or unsecured), the effect of
additional debt on existing coverage ratios and the maturity of the proposed
debt in relation to maturities of existing debt. Our debt service coverage ratio
for the year ended December 31, 1998 was approximately 3.1. Debt service
coverage is generally calculated as net income plus depreciation and
amortization, plus interest expense, plus extraordinary or non-recurring losses,
minus extraordinary or non-recurring gains, divided by debt service (including
principal and interest payable during the period of calculation). The most
restrictive debt service coverage ratio we are required to maintain as
stipulated by our debt arrangements and calculated as described above is 1.5. In
addition, our credit facility requires a debt service coverage ratio (which is
calculated in a different manner) of 2.5. Under this calculation, our debt
service coverage ratio was 3.5. The degree of leverage could have important
consequences to shareholders, including affecting our ability to obtain
additional financing in the future for working capital, capital expenditures,
acquisitions, development or other general corporate purposes and making us more
vulnerable to a downturn in business or the economy generally. 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 value of your investment in Crescent.
 
     DEFAULT UNDER DEBT COVENANTS COULD PERMIT LENDER TO REQUIRE REPAYMENT. Our
secured debt generally contains customary covenants, such as requirements
relating to the maintenance of the property securing the debt, restrictions on
pledging and creating other liens on the property, restrictions on incurring
additional indebtedness and restrictions on transactions with affiliates. Our
unsecured debt generally contains customary covenants, such as requirements
relating to the maintenance of Crescent's properties, the maintenance of
financial ratios, including leverage and debt coverage ratios, restrictions on
incurring additional indebtedness, restrictions on additional investments and
restrictions on distributions. Our unsecured public
 
                                        5
<PAGE>   7
 
notes cross-accelerate to other Company debt, and our unsecured credit facility
cross-defaults to other indebtedness of Crescent, which means that a default
under Crescent's other indebtedness may cause a default under the public notes
or credit facility. If we were to breach certain of our debt covenants, the
lender could require us to repay the debt immediately, and, if the debt is
secured, could immediately take possession of the property securing the loan. In
addition, if any other lender declared its loan due and payable as a result of a
default, the holders of our public notes and the lenders under our bank credit
facility might be able to require that those debts be paid immediately. As a
result, any default by Crescent under its debt covenants could have an adverse
effect on Crescent's financial condition and the value of your investment in
Crescent.
 
     RISING INTEREST RATES COULD ADVERSELY AFFECT CASH FLOW. Of Crescent's
approximately $2.3 billion of debt outstanding as of December 31, 1998,
approximately $1.3 billion, or 56.8%, bore interest at variable rates, including
approximately $660 million outstanding under Crescent's credit facility. We also
may borrow additional money at variable interest rates in the future. Increases
in interest rates would increase our interest expense on our variable rate debt,
which would adversely affect cash flow and our ability to service our debt and
make distributions to shareholders. The weighted average interest rate on
Crescent's variable rate debt was 7.0% as of December 31, 1998. A 10% (70 basis
point) increase in the weighted average interest rate on such variable rate debt
would result in a decrease in net income and cash flows of approximately $9.1
million based on the variable rate debt outstanding as of December 31, 1998, as
a result of the increased interest expense associated with the change in rate.
Conversely, a 10% (70 basis point) decrease in the weighted average interest
rate on such variable rate debt would result in an increase in net income and
cash flows of approximately $9.1 million based on the variable rate debt
outstanding as of December 31, 1998, as a result of the decreased interest
expense associated with the change in rate.
 
CONFLICTS OF INTEREST COULD RESULT IN DECISIONS NOT IN SHAREHOLDERS' BEST
INTERESTS
 
     COMMON MANAGEMENT AND OWNERSHIP MAY RESULT IN CONFLICTS OF
INTEREST. Certain members of senior management of Crescent are also members of
senior management of the Operating Partnership, Crescent Operating, or both.
Richard E. Rainwater and John C. Goff are, respectively, the Chairman of the
Board and the Vice Chairman of the Board of both Crescent and Crescent
Operating, and Gerald W. Haddock serves as the President, Chief Executive
Officer and a director of Crescent Operating, CREE Ltd., and Crescent. As a
result, Messrs. Rainwater, Goff and Haddock have fiduciary obligations to
Crescent, the Operating Partnership and Crescent Operating that may conflict
with one another. Decisions that are favorable to one of these companies will
not necessarily be favorable to all of them.
 
     Messrs. Rainwater, Goff and Haddock, together with the other management of
Crescent and CREE Ltd. with a rank of Vice President or higher beneficially
owned, as of April 23, 1999, 7,745,576 common shares and 10,940,870 units of
ownership interest in the Operating Partnership, representing an approximately
14.1% equity interest in Crescent. As of April 16, 1999, Messrs. Rainwater, Goff
and Haddock beneficially owned approximately 15.1% of the outstanding common
stock of Crescent Operating through their ownership of 1,740,226 shares of
Crescent Operating common stock. The common management and ownership among these
entities may lead to conflicts of interest in connection with transactions among
Crescent, the Operating Partnership or Crescent Operating, because management of
Crescent may not have the same financial interests as the other shareholders or
other investors in Crescent. Members of management of Crescent who also own
shares of Crescent Operating will have a financial interest in the success of
Crescent Operating that will not be shared by shareholders of Crescent or
investors in the Operating Partnership who do not also own shares of Crescent
Operating. There can be no assurance that, as a result of such conflicts, the
value of your investment in Crescent will not be adversely affected.
 
     These conflicts of interest and the material risks associated with them are
set forth below.
 
     RELATIONSHIP WITH CRESCENT OPERATING. The Company and Crescent Operating
have entered into the Intercompany Agreement, which provides that we will
provide Crescent Operating with a right of first refusal to become the lessee of
any real property that we acquire if (i) we determine that, consistent with
Crescent's status as a REIT, it is required to enter into a master lease
arrangement, (ii) Crescent Operating and Crescent negotiate a mutually
satisfactory lease arrangement and (iii) we determine that Crescent Operating is
 
                                        6
<PAGE>   8
 
qualified to be the lessee. The Intercompany Agreement provides that we must
provide Crescent Operating with written notice of the lessee opportunity. During
the 30 days following the notice, Crescent Operating has the right to accept the
offer to become a lessee and to negotiate with us on an exclusive basis
regarding the terms and conditions of the lease. If we cannot reach a mutually
satisfactory agreement with Crescent Operating within the 30 days, we may offer
the opportunity to others for one year on terms not more favorable than those
offered to Crescent Operating. After the one-year period, we again must offer
the opportunity to Crescent Operating. We also may offer any investment
opportunity, other than a lessee opportunity, to Crescent Operating. As long as
the Intercompany Agreement is in effect, the certificate of incorporation of
Crescent Operating generally prohibits Crescent Operating from engaging in
activities or making investments that a REIT could make, unless Crescent
Operating first gives the opportunity to Crescent and we elect not to pursue the
opportunity.
 
     Subsidiaries of Crescent Operating are the lessees of each of Crescent's
hotel properties, except the Omni Austin Hotel. Crescent Operating owns a 50%
interest in CBHS, which is the lessee of our behavioral healthcare facilities
and Crescent's largest tenant in terms of base rental revenues. We own all of
the non-voting stock and Crescent Operating owns all of the voting stock of the
various companies through which we made our investment in refrigerated
warehouses and our investments in the Desert Mountain and The Woodlands
residential development properties. We expect to offer Crescent Operating the
opportunity to become a lessee and operator of other assets in accordance with
the Intercompany Agreement.
 
     As of March 31, 1999, we had agreed to make available up to $63.8 million
in loans to Crescent Operating, and Crescent Operating had borrowed $54.9
million. In general, these loans are secured and have been made on terms which
our management believes are at least as favorable to us as if the loans had been
made to a third party.
 
     Due to the common management and ownership between us and Crescent
Operating, our management could experience conflicts of interest in the event of
a dispute relating to any of the leases of which Crescent Operating is the
lessee or any loan from us to Crescent Operating, or if there were a default by
Crescent Operating under a lease or a loan arrangement. Conflicts of interest
also could arise in connection with the negotiation, renegotiation or renewal of
any lease or other agreement with Crescent Operating.
 
     NEGOTIATION OF JOINT INVESTMENTS MAY NOT BE ARMS-LENGTH. We have in the
past and may in the future structure investments as joint investments with
Crescent Operating. We could experience potential conflicts of interest in
connection with the negotiation of the terms of such joint investments due to
our ongoing business relationship with Crescent Operating and the common
management and common ownership among Crescent, the Operating Partnership and
Crescent Operating.
 
     COMPANY AND CRESCENT OPERATING COMPETE FOR MANAGEMENT TIME. Messrs.
Rainwater, Goff and Haddock currently are engaged, and will continue to engage,
in the management of other properties and business entities, including Crescent
Operating. Messrs. Rainwater, Goff and Haddock may experience conflicts of
interest in allocating management time, services and functions among Crescent
and the other business activities, including the operation of Crescent
Operating, in which any of them are or may become involved.
 
     MAGELLAN HEALTH SERVICES, INC.'S INTERESTS MAY CONFLICT WITH COMPANY'S. Mr.
Rainwater, along with certain of his affiliates and family members, owns
approximately 19% of the outstanding common stock of Magellan Health Services,
Inc. A subsidiary of Magellan is a 50% owner, along with Crescent Operating, of
CBHS. Mr. Rainwater's spouse, Darla D. Moore, is a member of the board of
directors of Magellan. Through these relationships, Mr. Rainwater may have the
ability to influence decisions of Magellan in a manner that may benefit Magellan
to the detriment of Crescent Operating or Crescent, or vice versa.
 
     COMPANY AND CRESCENT OPERATING HAVE SAME LEGAL COUNSEL. Shaw Pittman Potts
& Trowbridge, which has served as securities and tax counsel to Crescent, also
serves as special counsel to Crescent Operating in connection with certain
matters. In the future, controversies may arise in which the interests of
Crescent appear to be in conflict with those of Crescent Operating. In that
event, counsel may experience
 
                                        7
<PAGE>   9
 
conflicts in connection with the representation, and we and Crescent Operating
may choose to retain other counsel in an effort to address the conflicts.
 
WE MAY NOT BE ABLE TO MANAGE RAPID GROWTH AND ACQUISITION OF SUBSTANTIAL NEW
ASSETS EFFECTIVELY
 
     From the time we commenced operations in May 1994 through March 31, 1999,
we have experienced rapid growth, increasing our total assets by approximately
1,567%. There can be no assurance that we will be able to manage our growth
effectively and the failure to do so may have an adverse effect on the financial
condition and results of operations of Crescent. If such an adverse effect were
great enough, it could adversely affect the value of your investment in
Crescent.
 
THE MARKET VALUE OF OUR PUBLICLY TRADED SECURITIES CAN BE ADVERSELY AFFECTED BY
A NUMBER OF FACTORS
 
     THE NUMBER OF SHARES AVAILABLE FOR FUTURE SALE COULD ADVERSELY AFFECT THE
MARKET PRICE OF OUR PUBLICLY TRADED SECURITIES. The Company has entered into
various private placement transactions whereby units of ownership interest in
the Operating Partnership that are currently exchangeable for common shares of
Crescent on the basis of two shares for each one unit were issued in exchange
for properties or interests in properties. Upon exchange for common shares of
Crescent, those common shares may be sold in the public market pursuant to
registration rights. In addition, we have reserved a number of common shares for
issuance pursuant to our employee benefit plans, and such common shares will be
available for sale from time to time. We also have granted options to purchase
additional common shares to certain of our executive officers, employees, trust
managers and consultants. We can not predict the effect that future sales of
common shares, or the perception that such sales could occur, will have on the
market prices of our equity securities.
 
     CHANGES IN MARKET CONDITIONS COULD ADVERSELY AFFECT THE MARKET PRICE OF OUR
PUBLICLY TRADED SECURITIES. As with other publicly traded equity securities, the
value of our publicly traded securities depends on various market conditions,
which may change from time to time. Among the market conditions that may affect
the value of our publicly traded securities are the following: the extent of
institutional investor interest in Crescent; the reputation of REITs and office
REITs generally and the attractiveness of our equity securities in comparison to
other equity securities (including securities issued by other real estate
companies); our financial condition and performance; and general financial
market conditions.
 
     OUR EARNINGS AND CASH DISTRIBUTIONS WILL AFFECT THE MARKET PRICE OF OUR
PUBLICLY TRADED SECURITIES. We believe that the market value of a REIT's equity
securities is based primarily upon the market's perception of the REIT's growth
potential and its current and potential future cash distributions and is
secondarily based upon the real estate market value of the underlying assets.
For that reason, shares may trade at prices that are higher or lower than the
net asset value per share. To the extent we retain operating cash flow for
investment purposes, working capital reserves or other purposes, these retained
funds, while increasing the value of our underlying assets, may not
correspondingly increase the market price of our shares. Our failure to meet the
market's expectations with regard to future earnings and cash distributions
would likely adversely affect the market price of our publicly traded
securities.
 
     MARKET INTEREST RATES MAY HAVE AN EFFECT ON THE VALUE OF OUR PUBLICLY
TRADED SECURITIES. One of the factors that investors consider important in
deciding whether to buy or sell shares of a REIT is the distribution rate on
such shares (as a percentage of the price of such shares) relative to market
interest rates. If market interest rates go up, prospective purchasers of REIT
shares may expect a higher distribution rate. Higher interest rates would not,
however, result in more funds for us to distribute and, in fact, would likely
increase our borrowing costs and potentially decrease funds available for
distribution. Thus, higher market interest rates could cause the market price of
our publicly traded securities to go down.
 
GENERAL REAL ESTATE RISKS AFFECTING CRESCENT
 
     The following paragraphs describe the material factors influencing the
general real estate risks to which we are subject.
 
                                        8
<PAGE>   10
 
     WE CANNOT CONTROL CERTAIN FACTORS AFFECTING PERFORMANCE AND VALUE. The
economic performance and value of our real estate assets will be subject to the
risks described below that are normally associated with changes in national,
regional and local economic and market conditions. Our properties are located
principally in the metropolitan areas of Dallas/Fort Worth and Houston, Texas.
The economic condition of each of these markets is dependent on a limited number
of industries, and an economic downturn in some or all these industries could
adversely affect Crescent's performance in that market. These factors may
adversely affect the ability of the tenants to pay rent. Other local economic
conditions that may affect the performance and value of Crescent's properties
include excess supply of office space and competition for tenants, including
competition based on rental rates, attractiveness and location of the property
and the quality of maintenance 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 any residential
development property) and the availability of financing. Adverse changes in any
of these factors, each of which is beyond the control of Crescent, could reduce
the income that we receive from the properties, and adversely affect the value
of your investment in Crescent.
 
     REAL ESTATE INVESTMENTS ARE ILLIQUID. Because real estate investments are
relatively illiquid, we may not be able to vary our portfolio promptly in
response to changes in economic or other conditions. In addition, economic
factors that might cause the income from our real estate portfolio to decrease
generally will not reduce significant expenditures, such as debt service, if
any, real estate taxes and operating and maintenance costs. Our inability, for
these or other reasons, to respond quickly to adverse changes in the performance
of our investments could have an adverse effect on the value of your investment
in Crescent.
 
     ENVIRONMENTAL PROBLEMS ARE POSSIBLE AND MAY BE COSTLY. Under various
federal, state and local laws, ordinances and regulations, we may be required to
investigate and clean up certain hazardous or toxic substances released on or in
properties we own or operate, and also may be required to pay other costs
relating to hazardous or toxic substances. This liability may be imposed without
regard to whether we knew about the release of these types of substances or were
responsible for their release. The presence of contamination or the failure to
remediate properly contaminations at any of Crescent's properties may adversely
affect our ability to sell or lease the properties or to borrow using the
properties as collateral. The costs or liabilities could exceed the value of the
affected real estate. We have not been notified by any governmental authority,
however, of any non-compliance, liability or other claim in connection with any
of our properties, and we are not aware of any other environmental condition
with respect to any of our properties that management believes would have a
material adverse effect on Crescent's business, assets or results of operations
taken as a whole.
 
     The uses of any of Crescent's properties prior to our acquisition of the
property and the building materials used at the property are among the
property-specific factors that will affect how the environmental laws are
applied to Crescent's properties. In general, before we purchased each of our
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. None of these Phase I assessments or
updates revealed any materially adverse environmental condition relating to any
particular property not known to us or the independent consultants preparing the
assessments. There can be no assurance, however, that environmental liabilities
have not developed since these environmental assessments were prepared, or that
future uses or conditions, including changes in applicable environmental laws
and regulations, will not result in imposition of environmental liability. If we
were subject to environmental liability, the liability could adversely affect
the value of your investment in Crescent.
 
CRESCENT COULD LOSE ITS QUALIFICATION AS A REIT
 
     Crescent intends to continue to operate in a manner that allows it to meet
the requirements for qualification as a REIT under the Internal Revenue Code of
1986, as amended. A REIT generally is not taxed at the corporate level on income
it distributes to its shareholders, as long as it distributes at least 95
percent of its income to its shareholders annually and satisfies certain other
highly technical and complex requirements. Unlike many REITs, which tend to make
only one or two types of real estate investments, Crescent invests in a broad
range of real estate products. Several of Crescent's investments also are more
complicated than those
 
                                        9
<PAGE>   11
 
of other REITs. As a result, Crescent is likely to encounter a greater number of
interpretative issues under the REIT qualification rules, and more issues which
lack clear guidance, than are other REITs. Crescent, as a matter of policy,
consults with outside tax counsel in structuring its new investments in an
effort to satisfy the REIT qualification rules. Shaw Pittman Potts & Trowbridge
has given Crescent an opinion stating that Crescent qualified as a REIT under
the Internal Revenue Code for its taxable years ending on or before December 31,
1998, that is organized in conformity with the requirements for qualification as
a REIT under the Internal Revenue Code and that its proposed manner of operation
will permit it to continue to meet the requirements for qualification as a REIT.
This opinion is based on representations made by Crescent and the Operating
Partnership as to factual matters and on existing law, which is subject to
change, both retroactively and prospectively, and to possibly different
interpretations. Shaw Pittman's opinion also is not binding on either the
Internal Revenue Service or the courts.
 
     Crescent must meet the requirements of the Internal Revenue Code in order
to qualify as a REIT now and in the future, so it is possible that Crescent will
not continue to qualify as a REIT in the future. The laws and regulations
governing federal income taxation are the subject of frequent review and
amendment, and proposed or contemplated changes in the laws or regulations may
affect Crescent's ability to qualify as a REIT and the manner in which it
conducts its business. If Crescent fails 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 at regular corporate rates. In addition to these taxes, Crescent may be
subject to the federal alternative minimum tax. Unless Crescent is entitled to
relief under certain statutory provisions, Crescent could not elect to be taxed
as a REIT for four taxable years following the year during which Crescent was
first disqualified. Therefore, if Crescent loses its REIT status, it could be
required to pay significant income taxes, which would reduce its funds available
for investments or for distributions to its shareholders. This would likely
adversely affect the value of your investment in Crescent. In addition, Crescent
would no longer be required by law or its operating agreements to make any
distributions to its shareholders.
 
MARKET PRICE RISK FROM TRANSACTIONS WITH AFFILIATES OF UBS, AG
 
     On August 12, 1997, we entered into two transactions with affiliates of the
predecessor of UBS, AG, which are collectively referred to as UBS. In one
transaction, we sold 4,700,000 common shares to UBS for approximately $148
million and received approximately $145 million in net proceeds. In the other
transaction, we entered into a forward share purchase agreement with UBS. On
August 11, 1998, we paid a fee of approximately $3.0 million to UBS in
connection with the exercise by Crescent and UBS of the right to extend the term
of the forward share purchase agreement until August 12, 1999. Under the forward
share purchase agreement, we are committed to settle our obligations under the
agreement by purchasing 4,700,000 common shares from UBS by August 12, 1999. The
price to be paid by Crescent (the "Settlement Price") will be determined on the
date we settle the forward share purchase agreement and will be calculated based
on the gross proceeds received by Crescent from the original issuance of the
common shares, plus a forward accretion component equal to LIBOR plus 75 basis
points, minus an adjustment for Crescent's distributions paid to UBS. The
forward accretion component represents a guaranteed rate of return to UBS.
 
     We may settle the forward share purchase agreement in cash or common
shares, at our option, on or before August 12, 1999. In the event that we elect
to settle in cash, it will decrease our liquidity. Accordingly, we will evaluate
our sources of capital and the potential uses of our capital at the time that
settlement is required under the forward share purchase agreement or at such
earlier time as we determine to settle the agreement.
 
     In the event that we elect to settle in common shares, UBS will sell, on
behalf of Crescent, a sufficient number of common shares to realize the
Settlement Price. If, as a result of a decrease in the market price of the
common shares, the number of common shares required to be sold to achieve the
Settlement Price is greater than the number of common shares previously issued
to UBS, we will deliver additional common shares to UBS. In contrast, if, as a
result of an increase in the market price of the common shares, such number of
common shares is less than the number of common shares previously issued to UBS,
UBS will deliver common shares to Crescent.
 
                                       10
<PAGE>   12
 
     On a quarterly basis, if the number of common shares previously delivered
to UBS is not sufficient to permit UBS to realize the Settlement Price through
the sale of such common shares, we must deliver additional common shares to UBS.
On November 20, 1998, we issued an additional 1,852,162 common shares to UBS
and, on April 30, 1999, we issued an additional 747,598 common shares to UBS. To
the extent that we are obligated, as a result of a decline in the market price
of the common shares, to issue additional common shares in the future under the
terms of the forward share purchase agreement, the issuance will reduce
Crescent's net income per common share and net book value per common share.
 
SHAREHOLDERS' ABILITY TO EFFECT CHANGES IN CONTROL OF CRESCENT IS LIMITED
 
     PROVISIONS OF OUR DECLARATION OF TRUST AND BYLAWS COULD INHIBIT CHANGES IN
CONTROL. Certain provisions of our Declaration of Trust and Bylaws may delay or
prevent a change in control of Crescent or other transaction that could provide
the shareholders with a premium over the then-prevailing market price of their
shares or which might otherwise be in the best interest of our security holders.
These include a staggered Board of Trust Managers and the Ownership Limit
described below. In addition, any future series of preferred shares may have
certain voting provisions that could delay or prevent a change of control or
other transaction that might involve a premium price or otherwise be good for
our security holders. The Declaration of Trust also establishes special
requirements with respect to "business combinations" (including certain
issuances of equity securities) between Crescent and an "interested shareholder"
of Crescent, and the procedure for obtaining voting rights with respect to
"control shares" of Crescent acquired in a control share acquisition.
 
     WE HAVE A SHARE OWNERSHIP LIMIT FOR REIT TAX PURPOSES. To remain qualified
as a REIT for federal income tax purposes, not more than 50% in value of
Crescent's outstanding shares may be owned, directly or indirectly, by five or
fewer individuals (as defined in the federal income tax laws applicable to
REITs) at any time during the last half of any taxable year, and Crescent's
outstanding shares must be beneficially owned by 100 or more persons at least
335 days of a taxable year. To facilitate maintenance of our REIT qualification,
Crescent's Declaration of Trust, subject to certain exceptions, prohibits
ownership by any single shareholder of more than 8.0% of Crescent's issued and
outstanding common shares or more than 9.9% of Crescent's issued and outstanding
preferred shares. In addition, the Declaration of Trust prohibits ownership by
Mr. Rainwater, the Chairman of the Board of Trust Managers of Crescent, together
with certain of his affiliates or relatives, of more than 8.0% of Crescent's
issued and outstanding common shares. We refer to these limits collectively as
the "Ownership Limit." Under certain circumstances, Crescent's Declaration of
Trust permits the Board of Trust Managers to increase the Ownership Limit with
respect to any common shareholder, other than Mr. Rainwater, together with his
affiliates and relatives. Further, any transfer of shares may be null and void
if it causes a person to violate the Ownership Limit, and the intended
transferee or holder will acquire no rights in the shares. Those shares will
automatically convert into excess shares of Crescent, and the shareholder's
rights to distributions and to vote will terminate. The shareholder would have
the right to receive payment of the purchase price for the shares and certain
distributions upon liquidation of Crescent. Excess shares will be subject to
repurchase by Crescent at its election. While the Ownership Limit helps preserve
Crescent's status as a REIT, it could also delay or prevent any person or small
group of persons from acquiring, or attempting to acquire, control of Crescent
and, therefore, could adversely affect our shareholders' ability to realize a
premium over the then-prevailing market price for their shares.
 
CRESCENT'S BOARD CAN CHANGE POLICIES WITHOUT SHAREHOLDER APPROVAL
 
     The Board of Trust Managers provides guidance to the senior management of
Crescent regarding our operating and financial policies and strategies,
including Crescent's policies and strategies relating to acquisitions, growth,
operations, indebtedness, capitalization and distributions. These policies and
strategies may be changed from time to time without shareholder approval.
Changes in Crescent's policies and strategies could adversely affect the value
of your investment in Crescent. In addition, we have the right and intend to
acquire additional real estate assets consistent with our investment strategies
and policies without shareholder approval.
 
                                       11
<PAGE>   13
 
OUR SUCCESS DEPENDS ON KEY PERSONNEL
 
     We are dependent on the efforts of senior management personnel of Crescent
and CREE Ltd. These senior management personnel include Richard E. Rainwater,
Chairman of the Board of Trust Managers of Crescent, John C. Goff, Vice Chairman
of the Board of Trust Managers of Crescent, and Gerald W. Haddock, President,
Chief Executive Officer and Trust Manager of Crescent, and President, Chief
Executive Officer and sole Director of CREE Ltd. While we believe that it would
be possible to find replacements for these key executives, the loss of their
services could adversely affect the operations of Crescent. Mr. Rainwater has no
employment agreement with Crescent and, therefore, is not obligated to remain
with Crescent for any specified period of time. Each of Messrs. Goff and Haddock
has entered into an employment agreement with Crescent, but only for one year
ending in April 1999. Each of Messrs. Rainwater, Goff and Haddock has entered
into a noncompetition agreement with Crescent, which prohibits them from
engaging in many of the types of activities in which Crescent currently engages
or may engage in the future. Neither Crescent nor CREE Ltd. has obtained key-man
insurance for any of their senior management personnel, which means that
Crescent will not receive any cash amounts as a result of the disability or
death of a member of senior management.
 
                              RECENT DEVELOPMENTS
 
     On April 14, 1999, Crescent and Station Casinos, Inc. ("Station") announced
that they had entered into an agreement (the "Settlement Agreement") for the
mutual settlement and release of all claims between Crescent and Station arising
out of the Agreement and Plan of Merger between Crescent and Station, which
Crescent terminated in August 1998. As part of the Settlement Agreement,
Crescent agreed to pay $15 million to Station.
 
                            NO PROCEEDS TO CRESCENT
 
     This Prospectus relates to the offer and sale of our common shares by the
selling shareholders. We will not receive any proceeds from the sale of the
common shares, but we will pay all expenses related to the registration of the
common shares. See "Plan of Distribution."
 
                              SELLING SHAREHOLDERS
GENERAL
 
     This Prospectus relates to the offer and sale from time to time of up to
311,634 of our common shares by Armada-Hoffler Holding Company, a Virginia
corporation and Alan R. Novak, who are the selling shareholders. It is unknown
if, when or in what amounts either of the selling shareholders may offer the
common shares for sale. There is no assurance that either of the selling
shareholders will sell any or all of the common shares.
 
     This Prospectus has been prepared pursuant to our obligations under that
certain Registration Rights Agreement, dated as of April 27, 1998, by and among
Crescent Equities, the Operating Partnership, Armada-Hoffler Holding Company and
Mr. Novak (the "Registration Rights Agreement"). In accordance with the
Registration Rights Agreement, which contains customary representations and
warranties relating to Crescent, this Prospectus (and the registration statement
of which it is a part) relates to sales of the common shares by the selling
shareholders, subject to the terms and conditions set forth in the Registration
Rights Agreement.
 
     In addition, in the Registration Rights Agreement, we have agreed to
indemnify the selling shareholders against certain civil liabilities, including
liabilities under the Securities Act of 1933, as amended (the "Securities Act"),
or to contribute to payments the selling shareholders may be required to make in
respect thereof. Insofar as indemnification of the selling shareholders for
liabilities arising under the Securities Act may be permitted pursuant to such
agreements, we have been informed that, in the opinion of the SEC, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
 
                                       12
<PAGE>   14
 
     Because the selling shareholders may offer all or some of the common shares
pursuant to this Prospectus, and because there are currently no agreements,
arrangements or understandings with respect to the sale of any of the common
shares, no estimate can be given as to the number of common shares that will be
held by each selling shareholder after completion of the offering.
 
     The selling shareholders and any broker or dealer to or through whom any of
the common shares are sold may be deemed to be underwriters within the meaning
of the Securities Act with respect to the common shares offered by this
Prospectus, and any profits realized by the selling shareholders or such brokers
or dealers may be deemed to be underwriting commissions. Brokers' commissions
and dealers' discounts, taxes and other selling expenses the selling
shareholders will bear are not expected to exceed normal selling expenses for
sales. The registration of the common shares under the Securities Act shall not
be deemed an admission by any of the selling shareholders or Crescent that the
selling shareholders are underwriters for purposes of the Securities Act of any
common shares offered by this Prospectus.
 
COMMON SHARES OFFERED
 
     The following chart shows, according to our records, the number of common
shares each selling shareholder currently holds and the number of common shares
of each selling shareholder offered by this Prospectus.
 
<TABLE>
<CAPTION>
                                                    COMMON
                                                    SHARES
                                                 BENEFICIALLY         NUMBER OF
                   NAME OF                      OWNED PRIOR TO      SHARES OFFERED
             SELLING SHAREHOLDER                 OFFERING(1)      BY THIS PROSPECTUS
             -------------------                --------------    ------------------
<S>                                             <C>               <C>
Armada-Hoffler Holding Company................     206,646             206,646
Alan R. Novak.................................     104,988             104,988
                                                   -------             -------
          Total...............................     311,634             311,634
</TABLE>
 
- ---------------
 
(1) The number of common shares beneficially owned prior to the offering
    represents units of ownership interest in the Operating Partnership that are
    exchangeable for common shares, subject to certain exceptions, on a
    one-for-two basis. Alternatively, the units are exchangeable, at our option,
    for cash.
 
                              PLAN OF DISTRIBUTION
 
     We will not receive any of the proceeds from the sale of common shares.
 
     The sale or distribution of all or any portion of the common shares may be
effected from time to time by the selling shareholders, or successors in
interest to the selling shareholders, at market prices prevailing at the time of
sale or at prices related to such prevailing market prices, or at negotiated
prices. The common shares may be sold:
 
     - 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
 
     - through any other legally available means.
 
                                       13
<PAGE>   15
 
     The methods by which the common shares may be sold or distributed include:
 
     - a block trade (which may involve crosses) in which the broker or dealer
       so engaged will attempt to sell the common shares as agent but may
       position and resell a portion of the block as principal to facilitate the
       transaction;
 
     - purchases by a broker or dealer as principal and resale by such broker or
       dealer for its account pursuant to this Prospectus;
 
     - exchange distributions and/or secondary distributions in accordance with
       the rules of the NYSE;
 
     - ordinary brokerage transactions and transactions in which the broker
       solicits purchasers;
 
     - pro rata distributions as part of the liquidation and winding up of the
       affairs of the selling shareholders; or
 
     - any other legally available means.
 
     The selling shareholders may from time to time deliver all or a portion of
the common 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 shareholders and the broker-dealers participating in the
distribution of the common shares may be deemed "underwriters" within the
meaning of the Securities Act. Any profit on the sale of the common shares by
the selling shareholders 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
us, to indemnification against the contribution toward certain civil
liabilities, including liabilities under the Securities Act. The common shares
may be sold from time to time at varying prices determined at the time of sale
or at negotiated prices.
 
     We will pay all expenses in connection with the registration of the common
shares. The selling shareholders will pay for 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 common shares.
 
     Common shares not sold pursuant to the registration statement on Form S-3
of which this Prospectus is a part may be subject to certain restrictions under
the Securities Act and could be sold, if at all, only 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 common shares are
aggregated) who has satisfied a one-year holding period may, under certain
circumstances, sell within any three-month period a number of common shares
which does not exceed the greater of one percent of the our outstanding common
shares or the average weekly reported trading volume of our common shares during
the four calendar weeks prior to such sale. Rule 144 also permits, under certain
circumstances, the sale of common shares by a person who is not an affiliate of
Crescent and who has satisfied a two-year holding period without any volume
limitation. Therefore, both during and after the effectiveness of the
registration statement, selling shareholders may sell common shares pursuant to
Rule 144.
 
                                       14
<PAGE>   16
 
                      WHERE YOU CAN FIND MORE INFORMATION
 
     We are subject to the information requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and file annual, quarterly and
special reports, proxy statements and other information with the SEC. You may
read and copy any materials that we file with the SEC at the Public Reference
Room that the SEC maintains at 450 Fifth Street, N.W., Washington, D.C. 20549
and at the following regional offices of the SEC: Citicorp Center, Suite 1400,
500 West Madison Street, Chicago, Illinois 60661-2511 and Seven World Trade
Center, Suite 1300, New York, New York 10048. You may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In
addition, we file many of our documents electronically with the SEC, and you may
access those documents over the Internet. The SEC maintains a Web site
(http://www.sec.gov) that contains reports, proxy statements and other
information regarding registrants that file electronically with the SEC. We also
maintain a Web site (www.cei-crescent.com) that contains information regarding
Crescent. In addition, our common shares are listed on the NYSE and you can
inspect any reports, proxy statements and other information at the offices of
the NYSE, 20 Broad Street, New York, New York 10005.
 
     The SEC allows us to "incorporate by reference" in this Prospectus the
information that we file with them, which means that we can disclose important
information to you by referring you to the other information that we have filed
with the SEC. The information that we incorporate by reference is considered to
be part of this Prospectus, and information that we file later with the SEC will
automatically update and supersede the information in this Prospectus, including
information incorporated by reference.
 
     The following documents filed by Crescent with the SEC under the Exchange
Act (File No. 1-13038) and any future filings under Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act made prior to the termination of the offering are
incorporated by reference:
 
 (1)  The Registration Statement on Form 8-B filed on March 24, 1997 registering
      our common shares under Section 12(b) of the Exchange Act.
 
 (2)  The Proxy Statement in connection with our 1999 Annual Meeting of
      Shareholders.
 
 (3)  Our Annual Report on Form 10-K for the year ended December 31, 1998.
 
 (4)  Our Current Report on Form 8-K dated October 15, 1997 and filed June 24,
      1998.
 
 (5)  Our Current Report on Form 8-K dated December 22, 1997 and filed March 4,
      1998.
 
 (6)  Our Current Report on Form 8-K dated June 30, 1998 and filed July 9, 1998,
      as amended on September 16, 1998.
 
 (7)  Our Current Report on Form 8-K dated April 29, 1999 and filed April 30,
      1999.
 
     We will provide without charge to each person to whom a copy of this
Prospectus is delivered a copy of any or all of the documents incorporated by
reference in this Prospectus (other than exhibits and schedules, unless such
exhibits or schedules are specifically incorporated by reference into the
information that this Prospectus incorporates). Requests for copies may be made
by writing or telephoning Crescent Real Estate Equities Company, 777 Main
Street, Suite 2100, Fort Worth, Texas, 76102, Attention: Company Secretary
(telephone number: (817) 321-2100).
 
                                       15
<PAGE>   17
 
                                    EXPERTS
 
     The financial statements and schedule incorporated in this Prospectus by
reference to our Annual Report on Form 10-K for the year ended December 31,
1998, 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
our Current Reports on Form 8-K (i) dated October 15, 1997 and filed June 24,
1998, (ii) dated December 22, 1997 and filed on March 4, 1998 and (iii) dated
June 30, 1998 and filed on July 9, 1998, as amended on September 16, 1998,
respectively, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports.
 
                                 LEGAL MATTERS
 
     The legality of the issuance of the common shares will be passed upon for
Crescent by Shaw Pittman Potts & Trowbridge.
 
                                       16
<PAGE>   18
 
- ------------------------------------------------------
- ------------------------------------------------------
 
  YOU SHOULD RELY ONLY ON THE INFORMATION PROVIDED OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS OR ANY SUPPLEMENT. WE HAVE NOT AUTHORIZED ANYONE ELSE TO
PROVIDE YOU WITH ADDITIONAL OR DIFFERENT INFORMATION. THE COMMON SHARES ARE NOT
BEING OFFERED IN ANY JURISDICTION WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD
NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY SUPPLEMENT IS ACCURATE
AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF SUCH DOCUMENT.
 
                             ---------------------
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                        PAGE
<S>                                     <C>
About This Prospectus.................    2
Crescent..............................    2
Risk Factors..........................    3
Recent Developments...................   12
No Proceeds to Crescent...............   12
Selling Shareholders..................   12
Plan of Distribution..................   13
Where You Can Find More Information...   15
Experts...............................   16
Legal Matters.........................   16
</TABLE>
 
- ------------------------------------------------------
- ------------------------------------------------------
 
- ------------------------------------------------------
- ------------------------------------------------------
 
                                 311,634 SHARES
                                [CRESCENT LOGO]
                                 COMMON SHARES
                                   PROSPECTUS
                                         , 1999
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE>   19
 
                                    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.......................................    $    1,920
     Printing, Engraving and Filing Expenses................    $   10,000
     Accounting Fees and Expenses...........................    $    5,000
     Legal Fees and Expenses................................    $   10,000
                                                                ----------
     Total..................................................    $   26,920
                                                                ==========
</TABLE>
 
ITEM 15. INDEMNIFICATION OF TRUST MANAGERS AND OFFICERS.
 
     The Company's Restated Declaration of Trust (the "Declaration of Trust")
provides that no trust manager shall be liable to the Company for any act,
omission, loss, damage, or expense arising from the performance of his duties to
the Company save only for his own willful misfeasance or willful malfeasance or
gross negligence. In addition to, but in no respect whatsoever in limitation of
the foregoing, the liability of each trust manager for monetary damages shall be
eliminated to the fullest extent permitted by applicable law. The Declaration of
Trust also provides that no amendment thereto may limit or eliminate this
limitation of liability with respect to events occurring prior to the effective
date of such amendment.
 
     The Company's Declaration of Trust provides that the trust managers and
officers shall be indemnified to the maximum extent permitted by Texas law.
Under current Texas law, the trust will indemnify a person who was, is, or is
threatened to be made a named defendant or respondent in a proceeding because
the person is or was a trust manager or officer if it is determined that the
person (i) conducted himself in good faith; (ii) reasonably believed: (a) in the
case of conduct in his official capacity as a trust manager or officer of the
real estate investment trust, that his conduct was in the real estate investment
trust's best interests; and (b) in all other cases, that his conduct was at
least not opposed to the real estate investment trust's best interests; and
(iii) in the case of any criminal proceeding, had no reasonable cause to believe
that his conduct was unlawful. Except to the extent provided in the following
sentence, a trust manager or officer may not be indemnified (i) in respect of a
proceeding in which the person is found liable on the basis that personal
benefit was improperly received by him, whether or not the benefit resulted from
an action taken in the person's official capacity; or (ii) in which the person
is found liable to the real estate investment trust. Notwithstanding the
foregoing, a person may be indemnified against judgments, penalties (including
excise and similar taxes), fines, settlements, and reasonable expenses actually
incurred by the person in connection with the proceeding; provided that if the
person is found liable to the real estate investment trust or is found liable on
the basis that personal benefit was improperly received by the person, the
indemnification (i) is limited to reasonable expenses actually incurred by the
person in connection with the proceeding, and (ii) shall not be made in respect
of any proceeding in which the person shall have been found liable for willful
or intentional misconduct in the performance of his duty to the real estate
investment trust. In addition, the Company's Declaration of Trust and Bylaws
require it to pay or reimburse, in advance of the final disposition of a
proceeding, reasonable expenses incurred by a present or former trust manager or
officer made a party to a proceeding by reason of his status as a trust manager
or officer, provided that the Company shall have received (i) a written
affirmation by the trust manager or officer of his good faith belief that he has
met the standard of conduct necessary for indemnification by the Company as
authorized by the Bylaws and (ii) a written undertaking by or on his behalf to
repay the amount paid or reimbursed by the Company if it shall ultimately be
determined that the standard of conduct was not met. The Company's Declaration
of Trust and Bylaws also permit the Company to provide indemnification, payment
or reimbursement of expenses to any employee or agent of the Company in such
capacity. The Company's Declaration of Trust and Bylaws also permit the Company
to indemnify a
 
                                      II-1
<PAGE>   20
 
person who was or who agreed to appear as a witness or other participant in a
proceeding at a time when he is not named a defendant or respondent in the
proceeding. Any indemnification, payment or reimbursement of the expenses
permitted by the Declaration of Trust and Bylaws shall be furnished in
accordance with the procedures provided for indemnification and payment or
reimbursement of expenses under Texas Real Estate Investment Trust Act for trust
managers.
 
     The limited partnership agreement of the Operating Partnership contains
indemnification provisions comparable to those contained in the Declaration of
Trust.
 
     The Company carries insurance that purports to insure officers and trust
managers of the Company against certain liabilities incurred by them in the
discharge of their official functions.
 
     The Company has entered into indemnification agreements with each of the
Company's executive officers and trust managers. The indemnification agreements
require, among other things, that the Company indemnify such officers and trust
managers to the fullest extent permitted by law, and advance to the officers and
directors all related expenses, subject to reimbursement if it is subsequently
determined that indemnification is not permitted. The Company also must
indemnify and advance expenses incurred by officers and directors seeking to
enforce their rights under the indemnification agreements and cover officers and
directors under the Company's directors' and officers' liability insurance, if
any. Although the indemnification agreements offer substantially the same scope
of coverage afforded by provisions in the Declaration of Trust and the Company's
Bylaws, they provide greater assurance to directors and executive officers that
indemnification will be available, because, as contracts, they cannot be
modified unilaterally in the future by the Board of Trust Managers or by the
stockholders to alter, limit or eliminate the rights they provide.
 
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>
    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 (filed as Exhibit 3.02 to the
              Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30,
              1998 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)
    4.06      Statement of Designation of 6 3/4% Series A Convertible Cumulative Preferred Shares of
              the Registrant (filed as Exhibit 4.07 to the Registrant's Annual Report on Form 10-K
              for the fiscal year ended December 31, 1997 and incorporated herein by reference)
   *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
   23.02      Consent of Arthur Andersen LLP (Dallas), Certified Public Accountants, dated May 4,
              1999 (filed herewith)
   24.01      Powers of Attorney (filed herewith)
</TABLE>
 
- ---------------
 
* To be filed by amendment.
 
                                      II-2
<PAGE>   21
 
ITEM 17. UNDERTAKINGS.
 
     (a) The undersigned registrant hereby undertakes:
 
          (1) To file, during any period in which offers or sales are being
     made, a post-effective amendment to this Registration Statement:
 
             (i) To include any prospectus required by Section 10(a)(3) of the
        Securities Act;
 
             (ii) To reflect in the prospectus any facts or events arising after
        the effective date of the Registration Statement (or the most recent
        post-effective amendment thereof) which, individually or in the
        aggregate, represent a fundamental change in the information set forth
        in the Registration Statement. Notwithstanding the foregoing, any
        increase or decrease in volume of securities offered (if the total
        dollar value of securities offered would not exceed that which was
        registered) and any deviation from the low or high and of the estimated
        maximum offering range may be reflected in the form of prospectus filed
        with the Commission pursuant to Rule 424(b) if, in the aggregate, the
        changes in volume and price represent no more than 20% change in the
        maximum aggregate offering price set forth in the "Calculation of
        Registration Fee" table in the effective Registration Statement;
 
             (iii) To include any material information with respect to the plan
        of distribution not previously disclosed in the Registration Statement
        or any material change to such information in the Registration
        Statement.
 
          Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
     apply if the information required to be included in a post-effective
     amendment by those paragraphs is contained in periodic reports filed by the
     registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that
     are incorporated by reference in the Registration Statement.
 
             (2) That, for the purpose of determining any liability under the
        Securities Act, each such post-effective amendment shall be deemed to be
        a new registration statement relating to the securities offered therein,
        and the offering of such securities at that time shall be deemed to be
        the initial bona fide offering thereof.
 
             (3) To remove from registration by means of a post-effective
        amendment any of the securities being registered which remain unsold at
        the termination of the offering.
 
          (b) The undersigned registrant hereby undertakes that, for purposes of
     determining any liability under the Securities Act, each filing of the
     registrant's annual report pursuant to Section 13(a) or Section 15(d) of
     the Exchange Act that is incorporated by reference in the Registration
     Statement shall be deemed to be a new registration statement relating to
     the securities offered therein, and the offering of such securities at that
     time shall be deemed to be the initial bona fide offering thereof.
 
          (c) Insofar as indemnification for liabilities arising under the
     Securities Act may be permitted to directors, officers and controlling
     persons of the registrant pursuant to the foregoing provisions, or
     otherwise, the registrant has been advised that in the opinion of the
     Commission such indemnification is against public policy as expressed in
     the Securities Act and is, therefore, unenforceable. In the event that a
     claim for indemnification against such liabilities (other than the payment
     by the registrant of expenses incurred or paid by a director, officer or
     controlling person of the registrant in the successful defense of any
     action, suit or proceeding) is asserted by such director, officer or
     controlling person in connection with the securities being registered, the
     registrant will, unless in the opinion of its counsel the matter has been
     settled by controlling precedent, submit to a court of appropriate
     jurisdiction the question whether such indemnification by it is against
     public policy as expressed in the Securities Act and will be governed by
     the final adjudication of such issue.
 
                                      II-3
<PAGE>   22
 
                                   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 5th day of May,
1998.
 
                                        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           May 5, 1999
- -----------------------------------------------------      Board
                Richard E. Rainwater
 
                  /s/ JOHN C. GOFF*                      Trust Manager and Vice Chairman of          May 5, 1999
- -----------------------------------------------------      the Board
                    John C. Goff
 
                /s/ GERALD W. HADDOCK                    Trust Manager, President and Chief          May 5, 1999
- -----------------------------------------------------      Executive Officer (Principal
                  Gerald W. Haddock                        Executive Officer)
 
                /s/ JACK I. TOMPKINS                     Executive Vice President and Chief          May 5, 1999
- -----------------------------------------------------      Financial Officer
                  Jack I. Tompkins                         (Principal Financial and
                                                           Accounting Officer)
 
                /s/ ANTHONY M. FRANK*                    Trust Manager                               May 5, 1999
- -----------------------------------------------------
                  Anthony M. Frank
 
               /s/ MORTON H. MEYERSON*                   Trust Manager                               May 5, 1999
- -----------------------------------------------------
                 Morton H. Meyerson
 
                /s/ WILLIAM F. QUINN*                    Trust Manager                               May 5, 1999
- -----------------------------------------------------
                  William F. Quinn
 
              /s/ PAUL E. ROWSEY, III*                   Trust Manager                               May 5, 1999
- -----------------------------------------------------
                 Paul E. Rowsey, III
 
                /s/ MELVIN ZUCKERMAN*                    Trust Manager                               May 5, 1999
- -----------------------------------------------------
                  Melvin Zuckerman
</TABLE>
 
                                            *By:   /s/ GERALD W. HADDOCK
                                              ----------------------------------
                                                      Gerald W. Haddock
                                                       Attorney-In-Fact
 
                                      II-4
<PAGE>   23
 
                               INDEX TO EXHIBITS
 
<TABLE>
<CAPTION>
EXHIBIT NO.                                   DESCRIPTION OF EXHIBIT
- -----------                                   ----------------------
<C>           <S>
    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 (filed as Exhibit 3.02 to the
              Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30,
              1998 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)
    4.06      Statement of Designation of 6 3/4% Series A Convertible Cumulative Preferred Shares of
              the Registrant (filed as Exhibit 4.07 to the Registrant's Annual Report on Form 10-K
              for the fiscal year ended December 31, 1997 and incorporated herein by reference)
   *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
   23.02      Consent of Arthur Andersen LLP (Dallas), Certified Public Accountants, dated May 4,
              1999 (filed herewith)
   24.01      Powers of Attorney (filed herewith)
</TABLE>
 
- ---------------
 
* To be filed by amendment.

<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 February 17, 1999 (except with respect to the matters discussed in
Note 14, as to which the date is March 19, 1999) included in Crescent Real
Estate Equities Company's Form 10-K for the year ended December 31, 1998, and of
our reports dated December 12, 1997 on Austin Centre, January 16, 1998 on Post
Oak Central, January 16, 1998 on Washington Harbour, March 4, 1998 on Datran
Center and June 12, 1998 on BP Plaza included in Crescent Real Estate Equities
Company's Forms 8-K and to all references to our Firm included in this
Registration Statement.


                                                      /s/ ARTHUR ANDERSEN LLP
                                                     ---------------------------
                                                       ARTHUR ANDERSEN LLP

Dallas, Texas
May 4, 1999







<PAGE>   1

                                                                   EXHIBIT 24.01


                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints each of Gerald W. Haddock, David M. Dean and Dallas E. Lucas, and
each of them, as his true and lawful attorney-in-fact and agent, each with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, with full power to act alone, to sign any or
all documents (including both pre- and post-effective amendments to this
Registration Statement on Form S-3) and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto each said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as each said attorney-in-fact and agent might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or any substitute or substitutes for any of them, may lawfully do
or cause to be done by virtue hereof.





Date:  April 24, 1998                /s/ Gerald W. Haddock
       --------------                ---------------------
                                     Gerald W. Haddock
                                     President, Chief Executive Officer and 
                                     Trust Manager




                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints each of Gerald W. Haddock, David M. Dean and Dallas E. Lucas, and
each of them, as his true and lawful attorney-in-fact and agent, each with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, with full power to act alone, to sign any or
all documents (including both pre- and post-effective amendments to this
Registration Statement on Form S-3) and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto each said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as each said attorney-in-fact and agent might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or any substitute or substitutes for any of them, may lawfully do
or cause to be done by virtue hereof.


Date: April 24, 1998                 /s/ Richard E. Rainwater
      --------------                 ------------------------
                                     Richard E. Rainwater
                                     Trust Manager and Chairman of the Board



<PAGE>   2


                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints each of Gerald W. Haddock, David M. Dean and Dallas E. Lucas, and
each of them, as his true and lawful attorney-in-fact and agent, each with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, with full power to act alone, to sign any or
all documents (including both pre- and post-effective amendments to this
Registration Statement on Form S-3) and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto each said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as each said attorney-in-fact and agent might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or any substitute or substitutes for any of them, may lawfully do
or cause to be done by virtue hereof.





Date: April 24, 1998                        /s/ John C. Goff
      --------------                        ----------------
                                            John C. Goff
                                            Trust Manager and Vice Chairman 
                                            of the Board




                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints each of Gerald W. Haddock, David M. Dean and Dallas E. Lucas, and
each of them, as his true and lawful attorney-in-fact and agent, each with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, with full power to act alone, to sign any or
all documents (including both pre- and post-effective amendments to this
Registration Statement on Form S-3) and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto each said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as each said attorney-in-fact and agent might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or any substitute or substitutes for any of them, may lawfully do
or cause to be done by virtue hereof.





Date: April 24, 1998                               /s/ Anthony M. Frank
      --------------                               --------------------
                                                   Anthony M. Frank
                                                   Trust Manager



<PAGE>   3

                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints each of Gerald W. Haddock, David M. Dean and Dallas E. Lucas, and
each of them, as his true and lawful attorney-in-fact and agent, each with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, with full power to act alone, to sign any or
all documents (including both pre- and post-effective amendments to this
Registration Statement on Form S-3) and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto each said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as each said attorney-in-fact and agent might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or any substitute or substitutes for any of them, may lawfully do
or cause to be done by virtue hereof.





Date: April 24, 1998                              /s/ Morton H. Meyerson
      --------------                              ----------------------
                                                  Morton H. Meyerson
                                                  Trust Manager






                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints each of Gerald W. Haddock, David M. Dean and Dallas E. Lucas, and
each of them, as his true and lawful attorney-in-fact and agent, each with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, with full power to act alone, to sign any or
all documents (including both pre- and post-effective amendments to this
Registration Statement on Form S-3) and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto each said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as each said attorney-in-fact and agent might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or any substitute or substitutes for any of them, may lawfully do
or cause to be done by virtue hereof.





Date: April 24, 1998                       /s/ William F. Quinn
      --------------                       --------------------
                                           William F. Quinn
                                           Trust Manager


<PAGE>   4

                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints each of Gerald W. Haddock, David M. Dean and Dallas E. Lucas, and
each of them, as his true and lawful attorney-in-fact and agent, each with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, with full power to act alone, to sign any or
all documents (including both pre- and post-effective amendments to this
Registration Statement on Form S-3) and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto each said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as each said attorney-in-fact and agent might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or any substitute or substitutes for any of them, may lawfully do
or cause to be done by virtue hereof.





Date: April 24, 1998                             /s/ Paul E. Rowsey, III
      --------------                             -----------------------
                                                 Paul E. Rowsey, III
                                                 Trust Manager



                                POWER OF ATTORNEY


         KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints each of Gerald W. Haddock, David M. Dean and Dallas E. Lucas, and
each of them, as his true and lawful attorney-in-fact and agent, each with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, with full power to act alone, to sign any or
all documents (including both pre- and post-effective amendments to this
Registration Statement on Form S-3) and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto each said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as each said attorney-in-fact and agent might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or any substitute or substitutes for any of them, may lawfully do
or cause to be done by virtue hereof.





Date: April 24, 1998                            /s/ Melvin Zuckerman
      --------------                            --------------------
                                                Melvin Zuckerman
                                                Trust Manager





© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission