52-Story Project to be City's
              First New Downtown Rental Building in Eight Years

    CHICAGO, Dec. 3 /PRNewswire/ -- Charles E. Smith Residential Realty, Inc.
(NYSE: SRW), a leading national real estate investment trust specializing in
high rise multifamily rental properties, announced plans today to build a
52-story, 809-unit luxury high rise apartment and commercial center in
downtown Chicago.  The $112 million project will also include a new Whole
Foods supermarket and other retail space.  The new project will occupy the
entire block bounded by State, Superior, Dearborn and Huron Streets -- an
exceptional location in the vibrant River North neighborhood, just two blocks
from Chicago's famed "Magnificent Mile" of prestigious retail stores on
Michigan Avenue.  Construction will commence immediately with initial
occupancy expected in late summer of 1999, which will make it the first major
new market-rate rental apartment building to open in downtown Chicago since
1991.
    Northern Virginia-based Smith Residential -- which recently purchased
another Chicago property, a nearby 306-unit high rise apartment building at
One East Delaware -- will use local developers, Near North Properties, Inc.
and Magellan Development Group Ltd. to manage development of the project.
Loewenberg & Associates of Chicago is the architect and Teitelbaum
Construction Co. of Chicago will be the general contractor.  Clark
Construction Co. -- one of the country's largest construction firms -- will
provide construction project management services for the owners.  Funding for
the project will be provided by NationsBank, together with $25 million drawn
from a previously arranged convertible preferred stock purchase by Security
Capital Preferred Growth, one of Smith Residential's largest investors.
    "This building will be a significant addition to Chicago's vibrant Near
North Side," Chicago Mayor Richard M. Daley said.  "More and more people want
to live near downtown so they can be only minutes away from their jobs and
from some of the world's finest shopping, restaurants and cultural
attractions."
    Ernest Gerardi, Jr., President of Charles E. Smith Residential, said, "We
are excited to be developing a significant project that we believe will
enhance the quality of life for many people who live and work in the city of
Chicago.  Our Company specializes in owning and operating premier urban
multifamily rental properties in growing metropolitan markets.  The Chicago
market combines a strong economic outlook with a thriving downtown and a
tradition of urban living to create an attractive investment opportunity.
This new project will contribute to downtown Chicago's "24 hour" vitality by
adding over 800 first class new rental apartments, as well as adding Whole
Foods and other retail outlets that will benefit the entire community.  With
high rise rental occupancy rates at 97%, and net reductions in rental units
due to condo conversions in recent years, downtown Chicago clearly has a need
for quality rental apartments.  As demonstrated by our purchase last month of
the One East Delaware apartment building, we believe strongly in Chicago's
future and look forward to increasing the number of Smith apartment properties
in the city."
    Gerardi added, "This project underscores our Company's strong history and
expertise in property development, and, more specifically, our successful
third-party development approach in which we work with knowledgeable local
developers to expedite the delivery of new projects in strong urban markets.
Including this new project we now have over 2,000 apartment units under
construction between Chicago and Northern Virginia, and more in the
development pipeline."
    The new complex will incorporate 809 apartments, 52,000 square feet of
commercial space, and garage parking for 867 cars.  The apartments will
include studios, one and two bedroom units, and range in size from 600 to
1,200 square feet.  Building features will include a state-of-the-art security
system, a 24-hour doorman, and a Club floor providing an outdoor swimming pool
and sundeck, a fitness facility, a business center and meeting rooms.
Individual residences will be wired for high-speed Internet and cable access.
Many of the apartments will have balconies to take full advantage of
spectacular, unobstructed views in all directions.
    Charles E. Smith Residential Realty, Inc. is a self-managed real estate
investment trust listed on the New York Stock Exchange (SRW).  The Company and
its subsidiaries and affiliates own, acquire, develop, and manage multi-family
residential properties; and in addition, provide a full range of real estate
services to other property owners.  The Company owns a portfolio of 18,236
apartment units, has over 2,000 units under construction, and manages an
additional 4,000+ units for other owners.  The total market capitalization of
the Company -- Charles E. Smith Residential Realty, including its Operating
Partnership -- is approximately $1.7 billion.  Investor information including
press releases about Charles E. Smith Residential Realty is available on the
Company's Web site at:  http://www.smithreit.com.
    This news release contains forward-looking statements regarding the
Company's outlook, including statements of goals, intentions, and expectations
regarding or based on assumptions about general economic and market
conditions, competitive dynamics and other factors that, by their nature, are
subject to significant uncertainties, some of which are discussed in the
Company's filings with the Securities and Exchange Commission.  Because of
these uncertainties, and the assumptions on which statements in this release
are based, actual future results may differ materially.  The Company assumes
no obligation to update or supplement forward-looking statements that may
become untrue because of subsequent events.

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