Third Party Development Arrangement to Deliver 564 Luxury Apartment Units
        Beginning Next Year in Fast Growing Rosslyn-Ballston Corridor

    ARLINGTON, Va., Sept. 17 /PRNewswire/ -- Charles E. Smith Residential
Realty, Inc. (NYSE: SRW) announced today that it has contracted to acquire the
564 unit Courthouse Hill luxury high-rise apartment property, which is
currently under construction in the Arlington Courthouse section of the
Rosslyn-Ballston corridor submarket, from the developer, Courthouse Hill LLC.
The acquisition transaction will include a combination of Charles E. Smith
Residential Operating Partnership (OP) units and cash, and the placement of a
construction loan.  The total amount of the transaction will be approximately
$67 million, with the final amount to be based on various incentives and
guarantees. Initial delivery of units is scheduled for the fall of 1998, with
completion in the fall of 1999.
    Ernest A. Gerardi, Jr., President of Charles E. Smith Residential
commented: "This transaction demonstrates a new facet of our accelerated
external growth strategy -- working with experienced third party
builder/developers to leverage our in-house development staff and gain
delivery of a new product one to two years earlier in targeted growth
submarkets.  Courthouse Hill, together with our acquisition of Lincoln Towers
and our Courthouse Plaza property, will provide us with a critical mass of
over 1,600 units of Class A apartment properties in the rapidly growing
Rosslyn-Ballston corridor submarket, which will increase operating
efficiencies.  And, using stock and OP units for a substantial portion of
these transactions increases our equity and further strengthens our balance
sheet."
    In the Courthouse Hill transaction, Courthouse Hill, LLC will receive an
initial payment of $17.5 million, made up of approximately 450,000 Charles E.
Smith Residential OP units and approximately $3.6 million in cash.  In
addition, Charles E. Smith Residential will place a $46.3 million construction
loan on the property.  The final amount of the transaction will be dependent
on various incentives and guarantees.  The contract provides incentives for
factors including construction cost savings and lease-up performance, and
guarantees from the seller with respect to maximum final construction cost,
and operating deficits.  The seller will be responsible for completing
construction of the property at which time Charles E. Smith Residential will
assume full leasing and management responsibility.  Courthouse Hill, LLC is a
joint venture between Bush Construction Corporation, Inc. and Apollo Real
Estate Advisors.  Bush Construction is an experienced Virginia-based developer
of residential properties that has built over 15,000 residential units in the
Virginia/Washington D.C. area. Apollo is a New York-based investment concern
controlled by veteran developer, William Mack.
    Courthouse Hill will be a 20-story building with 564 apartment units and a
620-car parking garage. It is located one block from the Courthouse MetroRail
stop, and directly across the street from Charles E. Smith Residential's
Arlington Courthouse Plaza Apartments.  Courthouse Hill will have extensive
amenities consistent with a Class A property including a two-level swimming
pool/spa complex with a landscaped courtyard, a fully equipped exercise
facility with sauna and aerobics room, a meeting/party room with private
dining and kitchen areas, a well-equipped business center, and a large screen
TV room.  Apartments include studio, one bedroom, one bedroom/den, and two
bedroom units.
    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 multifamily
residential properties for its own account, and provide a full range of real
estate services to other property owners.  The Company owns a portfolio of
17,742 apartment units 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
$1.5 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 PR Newswire's "News on Call" by fax
800-758-5804, ext. 101271, or at: http://www.prnewswire.com.
    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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