Leading Real Estate Companies and Kleiner Perkins Create National Telecommunications Company

10/05/1999 Category: Miscellaneous

Broadband Office, Inc. to Offer Comprehensive Telecommunications Solutions to Businesses Nationally

Company to Initially Serve Nationwide Tenant Audience/Leverage Kleiner's Strength to Enter New Markets, Serve Wider Array of Business Customers

FAIRFAX COUNTY, VA--October 5, 1999--Eight of the country's largest real estate companies and the nation's premier venture capital firm, Kleiner Perkins Caufield and Byers, today announced the formation of a national telecommunications company, Broadband Office, Inc. Formed over the past six months, Broadband Office brings a unique approach to the introduction and delivery of next generation telecommunications services to small to mid-sized corporations.

Designed to provide state-of-the-art high bandwidth voice and data communication services to a wide range of tenants in office buildings across the country, Broadband Office will solve a pressing telecommunications need for businesses and offer an important competitive advantage to building owners. Broadband Office will begin delivering services over the next 45 days.

Under the terms of the agreement, a consortium of real estate companies, including CarrAmerica Realty Corporation (NYSE:CRE), Crescent Real Estate Equities Company (NYSE:CEI), Duke-Weeks Realty Corporation (NYSE:DRE), Equity Office Properties Trust (NYSE: EOP), Highwoods Properties, Inc. (NYSE:HIW), the Hines organization, Mack-Cali Realty Corporation (NYSE:CLI) and Spieker Properties, Inc. (NYSE:SPK), will retain a meaningful ownership stake in Broadband Office and provide access to their respective office property portfolios to Broadband Office.

The real estate consortium commented: "We are extremely excited about the prospects for Broadband Office as we believe the venture offers numerous benefits to our respective tenants, shareholders and the real estate industry at large. Our tenants will get what they've been asking for: more choice, faster turn-up of mission critical communications services, one-stop shopping and simplified billing, supported by a world-class service organization. And the founding real estate companies will benefit from a mutual ownership arrangement that demonstrates their desire to identify new avenues of growth and to serve as a conduit for the delivery of a number of services to tenants, further evidence of the power of owning real estate."

Broadband Office's initial national footprint will span approximately 40 percent of all of the office space owned by REITs in the United States and represent approximately 10 percent of the entire commercial office space market in the United States. Broadband Office's presence will span nearly every major metropolitan area of the country, including the 30 largest office markets in the country and well over 2,000 office buildings. Moreover, Broadband Office is engaged in further discussions with a number of other major real estate owners to expand its number of buildings served and extend the Company's dominant position in the industry.

Kleiner Perkins has been a founding investor in a number of the country's fastest growing and most successful businesses including @Home, America Online, Amazon.com, Ascend, Cerent, Compaq, Excite, Healtheon, Juniper Networks, Netscape, Rhythms, and Sun Microsystems.

Kleiner Perkins General Partner Kevin Compton commented: "The goal of this company is nothing less than to create the leading player in what we believe to be one of the business world's most dynamic industries - the telecommunications industry. Kleiner Perkins is confident the competitive advantages afforded through our partners' real estate holdings and strong tenant relationships, along with our ability to broaden the market beyond that audience, will propel Broadband Office to become the dominant player in the building-centric telecommunications business."

Broadband Office's Board of Directors will consist of Kleiner partners Kevin Compton and Vinod Khosla, as well as leading executives from the telecommunications industry and the founding real estate companies. The Company is based in the Washington D.C. and the San Francisco Bay areas.

Compton further commented, "The success of Kleiner Perkins-backed industry leaders like @Home, Amazon.com, Juniper Networks and others has been predicated on our ability to attract the technology and telecommunications industry's top talent. To that end, we are currently building what we believe will be the deepest and most talented management team in the industry - we have already assembled a broad senior executive team with prior leadership experience from MCI Worldcom, Uunet, Level 3, Booz-Allen Hamilton, Bell South, and other companies."

Businesses will be able to purchase from Broadband a comprehensive offering of increasingly important communication services from a single vendor with a minimum of complexity. Among the products the company will offer are local and long distance voice service, high speed Internet, data and video connectivity, voice and e-mail, and web hosting. Over time, these bundled services will be expanded to meet the changing telecommunication needs of tenants and to capture a greater proportion of telecommunication expenditures.

For more information on the company's products and services please visit our website at www.broadbandoffice.net

Certain matters discussed within this press release may be deemed to be forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although it is believed the expectations reflected in such forward looking statements are based on reasonable assumptions, no assurance can be given that these expectations will be attained. Factors that could cause actual results to differ materially from expectations include, without limitation, lack of demand for service, insufficient capital, risks associated with a start-up company, contingencies in the applicable agreements, and the highly competitive nature of the telecommunications industry. Neither the Company nor any owners of the Company assume any obligation to update or supplement forward-looking statement.