Released By Crescent Resources News Release
March 23, 2001

Crescent Resources, LLC Announces Acquisition of Potomac Yard

Real Estate Unit of Duke Energy to Implement Approved Plan for 300-acre Site

Alexandria/Arlington, Va. (March 23, 2001) – Crescent Resources, LLC today announced it has purchased the 300-acre Potomac Yard site located in the City of Alexandria and Arlington County, Va., from Commonwealth Atlantic Properties Inc. (CAP). Terms were not disclosed.

The transaction includes the continued involvement of select CAP executives in what is now the initial phase of the site plan approval and ensuing build-out process for the former railyard as Crescent develops the property according to City and County approvals.

"Crescent’s purchase of Potomac Yard will allow the approved plans to become a reality for the many Alexandrians and Arlingtonians who had a hand in crafting what will be a vibrant and valuable new part of both communities," said Daniel B. Kohlhepp, Crescent’s regional vice president for the mid-Atlantic region.

"We are excited to have a role in helping to make the promise of Potomac Yard a reality, and we are dedicated to continuing the hard work on the Yard that CAP began in concert with City and County officials and with the community many years ago," he added. "We are also fortunate to be starting with a well-crafted plan that has the support of the surrounding communities."

"Our primary objective at Crescent is to create long-term value and enhanced quality of life in the projects we build and manage," said Arthur W. Fields, president of Crescent Resources, LLC. "Our commitment to a quality development at Potomac Yard means creating a place that both enhances the quality of life for our neighbors as well as for the project’s future residential and commercial tenants."

For many years, Potomac Yard served as the switching yard for the Richmond, Fredericksburg & Potomac Railroad (RF&P), the owner of the Yard. In the early 1990s, rail operations ceased. Discussions and alternative proposed plans about how to best use the land have postponed the productive development of the Yard for many years.

A fund managed by the New York investment bank Lazard Frères purchased RF&P, including Potomac Yard, in 1996, and changed the company’s name to Commonwealth Atlantic Properties Inc. CAP worked closely with the National Park Service, Alexandria Planning Commission and City Council, Arlington Planning Commission and County Board, neighboring civic associations and community interest groups, U.S. Environmental Protection Agency, state and local environmental bodies, and the Metropolitan Washington Airports Authority, among others. CAP also hosted and participated in hundreds of community meetings and other presentations.

As a result of these efforts, CAP received unanimous approval of its development plans from Alexandria in September 1999 and Arlington in October 2000.

The plan for the Alexandria portion of the site is highlighted by a new Town Center. The plan also includes 1.9 million square feet of office space; a 625-room hotel; 135,000 square feet of neighborhood retail; and approximately 1,900 residential units.

The plan for the Arlington site includes 2.8 million square feet of office space; a 625-room hotel; approximately 100,000 square feet of neighborhood retail; and approximately 800 residential units. The plan also calls for a 25-acre park north of Crystal City which will be owned by Arlington County.

The approved plans provide for creation of high-quality mixed-use communities of townhouses, apartments, hotels, retail stores, offices, substantial active and passive open space, pedestrian-friendly neighborhoods, parks and playfields, and a transit-oriented transportation system. Net fiscal benefits to the Arlington and Alexandria communities over a 20-year period are projected to exceed $500 million.

Crescent Resources, LLC is a land management and real estate development company. Formed more than 30 years ago by Charlotte, N.C.-based Duke Energy, the company has land interests in eight states in the southeastern and southwestern United States. In the Washington, D.C. market, Crescent is developing the 101-acre Commonwealth Centre at Westfields in Fairfax County, Va. Plans call for an eight-building, 1.5 million square-foot corporate campus.

Over the last decade, Crescent has developed more than 12 million square feet of commercial office and industrial space. The company carefully attends to the amenities, architectural features, landscaping and property management to foster a good working environment for its clients. Consequently, Crescent renews leases with more than 95 percent of its tenants. During that same time, Crescent’s residential communities have become known as some of the finest in the country and include Sugarloaf Country Club in Atlanta; The Peninsula, The Point and Ballantyne Country Club in Charlotte, N.C; and Oldfield in Hilton Head, S.C.

CAP is a private company based in Washington, D.C. and owned by a fund managed by Lazard Frères Real Estate Investors L.L.C., an affiliate of Lazard. CAP developed and will continue to manage the 600,000 square-foot Potomac Yard Retail Center located in Alexandria. It has also developed and owns numerous other major commercial properties nationally.

For information about Potomac Yard, visit www.potomac-yard.com or Crescent’s Web site at www.crescent-resources.com. More information about CAP is available at www.commonwealthatlantic.com.

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