National Office Partners Limited Partnership Sells 12 Assets

(HOUSTON, TX) – National Office Partners Limited Partnership (NOP), a joint venture between Hines, the international real estate firm, and the California Public Employees’ Retirement System (CalPERS), announced today the recent sale of 12 buildings from its portfolio.

The partnership sold five buildings to Teachers Insurance and Annuity Association—College Retirement Equities Fund (TIAA-CREF), including:

1001 Pennsylvania Avenue and 1900 K Street in Washington D.C.; 50 Fremont in San Francisco;

Stoneridge Corporate Plaza in Pleasanton, CA; and IDX Tower at Fourth & Madison in Seattle.

RREEF, Deutsche Bank’s real estate division, acquired three assets from the NOP portfolio including: Riverfront Office Park in Cambridge, MA; Woodside Technology Center in Redwood City, CA; and 505 Montgomery in San Francisco.

Willrich Holdings, a joint venture of the Willett Companies and Warren & Partners, purchased 55 Railroad in Greenwich, CT.

NOP also sold: four buildings located in an office park known as The Chancellory in Itasca, IL to an investment partnership represented by Hamilton Partners and Kennedy Associates Real Estate Counsel, Inc.; 601 California in San Francisco to a public pension fund represented by Lincoln Properties.; and RiverPark in Norwalk, CT to CB Richard Ellis Investors.

The total market value for these 12 properties was approximately $2.2 billion.

NOP announced in June its plans to bring 13 properties in its 10 million-square-foot portfolio to market in August 2004 for possible disposition or solicitation of interest in the formation of a joint venture.

A bid date was set in September of 2004, and bids were accepted on individual properties as well as on regional sub-portfolios.

To date, NOP has disposed of 12 buildings since it began accepting bids four months ago.

“CalPERS and Hines have been extremely pleased with the success of this disposition effort,” said Hines Senior Vice President and NOP Portfolio Manager Daniel MacEachron.

“Over the past six years, we have assembled an exceptional collection of assets through a combination of ground-up developments and acquisitions.

The highly competitive capital-market environment in 2004, particularly for the sort of well-located, well-leased core assets in the NOP portfolio, was a major factor in leading to the decision to take a large percentage of our portfolio to the market. Our optimistic sales-price expectations were achieved or exceeded across the portfolio, with record-level per-square-foot pricing in at least three different markets.”

NOP’s strategy going forward is to continue to aggressively seek new development and existing-building investment opportunities, with capital commitments from its partners for 2005 that reach a new investment capacity of up to $1.5 billion.

“CalPERS and Hines agreed that it was logical and appropriate to sell a substantial number of properties in 2004 at the pricing levels achieved,” MacEachron explained.

“At the same time, like many major institutional investors and pension funds, CalPERS continues to find the returns on a risk-adjusted basis from real estate attractive relative to other asset classes.

CalPERS expects to increase substantially its level of capital invested in real estate as its partners, including Hines for NOP, locate and acquire new properties over the next several years.”

Details for the disposed buildings are as follows:

City, State

Project Name

Approx. Area (RSF)

Closing

Broker

Purchaser

Cambridge, MA

Riverfront Office Park

668,000

Cushman & Wakefield

RREEF

Greenwich, CT

55 Railroad Avenue

132,000

CBRE

Willrich Holdings

Itasca, IL

The Chancellory (four buildings)

1,072,000

Cushman & Wakefield

Hamilton Group

Norwalk, CT

RiverPark

403,000

CBRE

CB Richard Ellis Investors

Pleasanton, CA

Stoneridge Corporate Plaza

560,000

Secured Capital

TIAA-CREF

Redwood City, CA

Woodside Technology Center

254,000

Secured Capital

RREEF

San Francisco, CA

505 Montgomery

601 California

50 Fremont

346,000

251,000

817,000

Secured Capital

RREEF

Lincoln Properties

TIAA-CREF

Seattle, WA

IDX Tower at Fourth & Madison

846,000

Secured Capital

TIAA-CREF

Washington, DC

1001 Pennsylvania Avenue

1900 K Street

759,000

343,000

Cassidy & Pinkard

TIAA-CREF

TIAA-CREF

National Office Partners was formed in 1998.

Following the recent sales of these 12 properties, and including the anticipated acquisition of a new project in Chicago, the investment partnership will own a portfolio of five Class A office assets valued at approximately $650 million.

Remaining NOP assets are located in suburban Boston, midtown Atlanta, and the downtown markets in Houston, Chicago and San Francisco.

For further information on NOP, refer to www.noplp.com.

CalPERS is the nation’s largest public pension fund with assets totaling $180 billion, of which $13 billion is invested in real estate.

The System provides retirement and health benefits to more than one million state and public employees and their families.

For further information on CalPERS, visit the System’s Web site at www.calpers.ca.gov.

Hines is a privately owned real estate firm involved in developing, acquiring, leasing and managing real estate, as well as providing extensive international investment management and advisory services. The Hines portfolio of projects completed, underway, acquired and managed for third parties includes more than 700 properties representing over 244 million square feet of office, mixed-use, industrial, hotel, medical, sports facilities and residential properties, as well as large, master-planned communities and land developments.

With offices in 69 U.S. cities and 12 foreign countries, and controlled assets valued at approximately $11 billion, Hines is one of the largest real estate organizations in the world. Access www.hines.com for more information.

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