Smith to Acquire 714-Unit Luxury High-Rise in Northern Virginia
                              For $88.5 Million

         Prudential to Acquire $76 million in Charles E. Smith Stock

    ARLINGTON, Va., Sept. 17 /PRNewswire/ -- Charles E. Smith Residential
Realty, Inc. (NYSE: SRW) announced today that it has contracted to acquire a
luxury high-rise apartment property from the Prudential Insurance Company of
America for $88.5 million.  The 714-unit Lincoln Towers property, completed in
1992, is located in Northern Virginia's fast growing Rosslyn-Ballston
corridor. The transaction is subject to final due diligence and is expected to
close within 30 days.
    In a separate transaction, Prudential will purchase new Charles E. Smith
Residential Realty stock in a combination of 1.45 million common shares and
1.22 million shares of non-voting convertible preferred stock with net
proceeds to Charles E. Smith Residential Realty of $76 million.  Prudential
can convert preferred shares into common shares, on a 1 to 1 basis, subject to
a ceiling of 9.8% ownership of common stock outstanding.  The Smith REIT can
redeem preferred shares for common shares at any time. Prudential's stock
purchase may include an investment made on behalf of one or more of its
institutional clients, as well as the company's own General Account.
    Ernest A. Gerardi, Jr., President of Charles E. Smith Residential Realty,
commented: "These transactions clearly demonstrate our accelerated external
growth strategy -- continuing to invest in urban high-rise 'renters by choice'
properties in key growth submarkets, and using stock as acquisition currency
to increase our equity and further strengthen our balance sheet.  Lincoln
Towers is an outstanding property, and together with our nearby Arlington
Courthouse Plaza property, provides us with a critical mass of Class A
apartments in the rapidly growing Rosslyn-Ballston corridor submarket."
    Added Gerardi: "Prudential will become one of our largest shareholders
through the stock purchase transaction, which is important as it demonstrates
the confidence of another major institutional investor in our company and its
aggressive growth strategy."
    For Prudential, the transactions continue its successful real estate
portfolio transformation -- fundamentally changing the way it invests in
commercial real estate for its General Account.  In late 1996, Prudential
disclosed plans to sharply reduce its direct property holdings during the next
three years, while investing in REITs and other vehicles that will provide
greater liquidity and the opportunity for higher yields.  Prudential also has
said it would offer its institutional clients new opportunities to make such
investments alongside its General Account.
    David Twardock, Senior Managing Director in charge of Prudential's General
Account real estate portfolio said, "We are pleased that we -- and potentially
our clients -- will have this opportunity to invest in an outstanding company.
This is just what we had in mind when we launched our new portfolio strategy."
    The Lincoln Towers property contains 714 apartments, 65% one bedroom and
35% two bedroom units.  Built in 1992, it consists of twin 22 story towers
above a three level 721-car parking garage.  Located in the Ballston
submarket, it is less than two blocks from the Ballston Metrorail stop.
Extensive amenities include a swimming pool with a landscaped deck, a fitness
center, conference room, large party room, card access security, and full-
sized washers and dryers in all units.  All apartments have oversized windows
and balconies -- some with dramatic views of the Washington skyline.  The
property also includes over 12,000 square feet of convenience retail space,
with tenants including a deli, gourmet grocery, hair salon, yogurt shop,
travel agency and dry cleaners.  Because of the extensive office employment
nearby in the Rosslyn-Ballston corridor, there is a strong demand for
corporate furnished rentals at the property.
    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 for its own account, and provide a full range of real
estate services to other property owners.  With this transaction the Company
will own a portfolio of 17,742 apartment units and manage an additional 4,000+
units for other owners, and the total market capitalization of the Company --
Charles E. Smith Residential Realty, including its Operating Partnership --
will be approximately $1.5 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, and also through PRNewswire's
"News on Call" by fax 800-758-5804, ext. 101271, or at:
http://www.prnewswire.com.
    Prudential has long been one of the leading investors in commercial real
estate. In addition to its $5.5 billion General Account portfolio, the Newark,
NJ-based insurer manages over $8 billion in assets for more than 400 clients
worldwide through Prudential Real Estate Investors and its affiliated units.
    Certain items discussed in this press release may be deemed to be forward
looking statements within the meaning of the Private Securities Litigation
Reform Act of l995.  Although Charles E. Smith Residential Realty, Inc.
believes that such statements are based on reasonable expectations and
assumptions, it can give no assurance that its expectations will be attained.
Factors that could cause actual results to differ materially from the
Company's expectations include real estate market conditions, information
determined in the course of due diligence review, changes in local economic
conditions and other risks detailed from time to time in the Company's reports
and filings with the Securities and Exchange Commission.  The Company assumes
no obligation to update or supplement forward looking statements that become
untrue because of subsequent events.  Because the described transaction is
subject to satisfactory completion of due diligence and documentation, there
can be no assurance at this time that the transaction will be completed.

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