<PAGE>   1
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                   FORM 8-K/A

                               
                                 CURRENT REPORT

                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934


     Date of Report (Date of earliest event reported):  April 17, 1998




                     CRESCENT REAL ESTATE EQUITIES COMPANY
            (Exact name of Registrant as specified in its Charter)



           Texas                     1-13038                     52-1862813
  (State of Organization)     (Commission File Number)         (IRS Employer 
                                                          Identification Number)
                                    
      777 Main Street, Suite 2100         
           Fort Worth, Texas                                       76102
(Address of Principal Executive Offices)                         (Zip Code)


                                (817) 321-2100
             (Registrant's telephone number, including area code)
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     On April 28, 1998, Crescent Real Estate Equities Company (the "Company") 
filed a Form 8-K dated April 17, 1998 (the "Original 8-K") listing certain
factors that may affect the Company's operating results and, therefore, the
accuracy of its forward looking statements. This Form 8-K/A amends and restates
the disclosure contained in the Original 8-K to include additional factors that
may affect the Company's operating results and, therefore, the accuracy of its
forward looking statements.

     Item 5. Other Events.

     Crescent Real Estate Equities Company (collectively with its subsidiaries,
the "Company") and its representatives may make forward looking statements (as
such term is defined in the Private Securities Litigation Reform Act of 1995
(the "Act")) from time to time. The Company desires to invoke to the fullest
extent possible the protections of the Act and the judicially created "bespeaks
caution" doctrine with respect to such statements. Accordingly, the Company is
filing this Form 8-K, which lists certain factors that in some cases may have
affected, and in the future could affect, the Company's actual operating 
results and could cause such results to differ materially from those in such
forward looking statements.

     This list is not necessarily exhaustive, and new risk factors emerge 
periodically. There can be no assurance that the disclosure herein lists all
material risks to the Company at any specific point in time. Many of the
important factors discussed below have been disclosed in the Company's previous
filings with the Securities and Exchange Commission. 

                                  RISK FACTORS
 
REGIONAL CONCENTRATION OF ASSETS INCREASES EFFECTS OF ADVERSE TRENDS IN CERTAIN
MARKETS

     The Company owns a portfolio of real estate assets (the "Properties")
including 86 office properties (the "Office Properties") with an aggregate of
approximately 30.8 million net rentable square feet, 90 behavioral healthcare
facilities (the "Behavioral Healthcare Facilities"), seven full-service hotels
with a total of 2,276 rooms and two destination health and fitness resorts that
can accommodate up to 452 guests daily (collectively, the "Hotel Properties"),
the real estate mortgages relating to and non-voting common stock in five
residential development corporations (the "Residential Development
Corporations"), which in turn, through joint venture or partnership
arrangements, own interests in 12 residential development properties (the
"Residential Development Properties") and seven retail properties with an
aggregate of approximately 771,000 net rentable square feet (the "Retail
Properties"). The Company also owns an indirect 38% interest in each of two
partnerships that currently own and operate approximately 80 refrigerated
warehouses with an aggregate of approximately 394 million cubic feet (the
"Refrigerated Warehouse Investment"). In addition, the Company has entered into
a merger agreement, pursuant to which the Company will acquire a corporation
that owns four full-service casino/hotels and two riverboat casinos
(collectively, the "Casino/Hotel Properties"). A significant portion of the
Company's assets are, and revenues are derived from, Properties located in the
metropolitan areas of Dallas/Fort Worth and Houston, Texas. Due to this
geographic concentration, any deterioration in economic conditions in the
Dallas/Fort Worth or Houston metropolitan areas or other geographic markets in
which the Company in the future may acquire substantial assets could have an
adverse effect on the financial condition and results of operations of the
Company and on the Company's ability to satisfy its obligations as they become
due.
 
COMPANY DOES NOT FULLY CONTROL CERTAIN INVESTMENTS AND CONSEQUENTLY HAS NO 
CONTROL OVER REVENUES FROM THE INVESTMENTS
 

     REVENUES FROM HOTELS DEPENDENT ON THIRD-PARTY OPERATORS AND HOSPITALITY
INDUSTRY.  The Company has leased the Hotel Properties to subsidiaries of
Crescent Operating, Inc. ("Crescent Operating"), and such subsidiaries, rather
than the Company, are entitled to exercise all rights of the owner of the
respective hotel. The Company will receive both base rent and a percentage of
gross sales above a certain minimum level pursuant to the leases, which expire
between the years 2004 and 2012. As a result, the Company will participate in
the economic operations of the Hotel Properties only through its indirect
participation in gross sales. To the extent that operations of the Hotel
Properties may affect the ability of such subsidiaries to pay rent, the Company
also may indirectly bear the risks associated with any increases in expenses.
Each of the Hotel Properties is managed pursuant to a management agreement. The
amount of rent payable to the Company under the leases with respect to the Hotel
Properties will depend on the ability of such subsidiaries and the managers of
the Hotel Properties to maintain and increase revenues from the Hotel
Properties. Accordingly, the Company's results of operations, and ultimately its
ability to meet its obligations, will be affected by such factors as changes in
general economic conditions, the level of demand for rooms and related services
at the Hotel Properties, the ability of such subsidiaries and the managers of
the Hotel Properties to maintain and increase gross revenues at the Hotel
Properties, competition in the hotel industry and other factors relating to the
operation of the Hotel Properties. In addition, the Company expects, in
accordance with the terms of the Intercompany Agreement (as defined in "--
Conflicts of Interest -- Relationship with Crescent Operating"), to lease any
hotel properties that it may acquire in the future to Crescent Operating or any
of its subsidiaries which, as lessees of any such hotel properties, will be
entitled to exercise all rights of the owner.

 
     LACK OF CONTROL OF RESIDENTIAL DEVELOPMENT CORPORATIONS AND DIVIDENDS.  The
Company is not able to elect the boards of directors of the Residential
Development Corporations and does not have the authority to control the
management and operation of the Residential Development Corporations. As a
result,
 
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the Company does not have the right to control the timing or
amount of dividends paid by the Residential Development Corporations and,
therefore, does not have the authority to require that funds be distributed to
it by any of these entities. The inability of the Company to
control its access to its dividends from the Residential Development
Corporations increases the likelihood that such dividends might not be available
to the Company, which may adversely affect its results of
operations and its ability to meet its obligations.
 
     AMERICOLD AND URS PARTNERSHIPS CONTROLLED BY THIRD PARTIES.  The Company
owns, through two subsidiaries (the "Crescent Subsidiaries"), a 38% interest in
each of two partnerships, one of which owns Americold Corporation ("Americold")
and the other of which owns URS Logistics, Inc. ("URS"). Crescent Operating owns
a 2% interest in each of the partnerships. The remaining 60% interest in the
partnerships is owned by two subsidiaries of Vornado Realty Trust (collectively,
"Vornado"). The Company currently owns all of the non-voting common stock,
representing an approximately 95% economic interest, in each of the Crescent
Subsidiaries, and Crescent Operating owns all of the voting stock, representing
an approximately 5% economic interest, in each of the Crescent Subsidiaries. As
a result, the Company is not able to elect the boards of directors of the
Crescent Subsidiaries and does not have the authority to control the management
or operation of the Crescent Subsidiaries. Under the terms of the existing
partnership agreements for each of the partnerships, the Company does not have
the right to participate in the decisions with respect to the Partnerships.
Vornado has the right to make all decisions relating to the management and
operation of the partnerships other than certain major decisions that require
the approval of both Crescent Operating and Vornado. The partnership agreement
for each of the partnerships provides for a buy-sell arrangement upon a failure
of Crescent Operating and Vornado to agree on any of the specified major
decisions pursuant to which the entire interest of Crescent Operating and the
Company or the entire interest of Vornado may be purchased by the other party.
Until November 1, 2000, the buy-sell arrangement can only be exercised by
Vornado. Major decisions include approval of the annual capital and operating
budgets for each partnership, decisions to deviate from the budgets by 10% or
more and additional capital contributions. If the Company and Vornado fail to
reach agreement on any of the specified major decisions prior to November 1,
2000, Vornado may purchase the Company's interest at cost (less distributions)
plus a 10% per annum return. During the seven years thereafter, Vornado may set
a price for the buy-sell arrangement, and the Company then may elect either to
sell its interest to Vornado, or to purchase Vornado's interest, at the
designated price. After October 31, 2007, either the Company or Vornado may set
a price for the buy-sell arrangement, and the party who did not set the price
may elect either to sell its interest to the other party, or to purchase the
other party's interest, at the designated price. The exercise of the buy-sell
arrangement in one partnership requires the purchaser under the arrangement to
purchase the interest of the selling party in the other partnership on the same
terms. There can be no assurance that Vornado or Crescent Operating will operate
the partnerships in a way that will maximize the Company's return on its
investment. See "-- Real Estate Risks Specific to the Company's Business --
Joint Ownership of Assets Limits Company's Flexibility with Investments."

     REVENUES FROM PROPOSED CASINO/HOTEL INVESTMENT DEPENDENT ON THIRD-PARTY
OPERATORS AND CASINO/ HOTEL INDUSTRY.  In connection with the proposed merger
(the "Merger") with Station Casinos, Inc. ("Station"), the Company intends to
lease the Casino/Hotel Properties to a new limited liability company (the
"Station Lessee") that will be owned 50% by former management of Station and 50%
by Crescent Operating or one of its affiliates. The Company expects that it will
receive both base rent and a percentage of gross revenues above a certain
minimum level pursuant to the leases, which will expire in 2008, subject to one,
five-year renewal option. Although the rental payments have not yet been finally
determined, it is anticipated that base rental payments will exceed 20% of
current base rental revenues of the Company on an annual basis. As a result of
the percentage rent payments, the Company will participate in the economic
operations of the Casino/Hotel Properties only through its indirect
participation in gross revenues. The amount of rent payable to the Company under
the leases with respect to the Casino/Hotel Properties will depend on the
ability of the Station Lessee to maintain and increase revenues from the Casino/
Hotel Properties. Accordingly, the Company's results of operations and its
ability to meet its obligations will be affected by (i) changes in general and
local economic conditions and the level of demand for the services of the
Casino/Hotel Properties, a deterioration in either of which could adversely
affect the Company's results of operations and its ability to meet its
obligations, (ii) competition in the casino/hotel industry, an increase in which
could reduce the gross revenues at the Casino/Hotel Properties and adversely
affect the Company's results of operations and its ability to meet its
obligations, (iii) governmental regulation that limits the ability of the
Casino/Hotel Properties to continue conducting their business as presently
conducted, (iv) any decision by the Nevada Gaming Commission or the Missouri
Gaming Commission to suspend, revoke or not reissue a gaming license held by the
Company or one of its subsidiaries or the Station Lessee, which decision would
adversely affect the ability of the Station Lessee to continue making its lease
payments to the Company and (v) the temporary or permanent loss of a riverboat
or dockside facility due to casualty, mechanical failure or severe weather,
which could prevent the

 
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Station Lessee from deriving revenue from the affected location and thereby
decrease its ability to make lease payments to the Company.
 
REAL ESTATE RISKS SPECIFIC TO THE COMPANY'S BUSINESS
 
     RISKS RELATED TO INVESTMENT STRATEGY.  In implementing its investment
strategies, the Company has invested in a broad range of real estate assets, and
in the future, it may invest in additional types of real estate assets not
currently included in its portfolio. There can be no assurance, however, that
the Company will be able to implement its investment strategies successfully. As
a result of its real estate investments, the Company will be subject to risks,
in addition to general real estate risks, relating to the specific assets and
asset types in which it invests. The Company is subject to the risks that, upon
expiration, leases for space in the Office Properties and Retail Properties may
not be renewed, the space may not be re-leased, or the terms of renewal or
re-lease (including the cost of required renovations or concessions to tenants)
may be less favorable than current lease terms. Similarly, the Company is
subject to the risk that the success of its investment in the Hotel Properties
will be highly dependent upon such Properties' ability to compete in such
features as access, location, quality of accommodations, room rate structure
and, to a lesser extent, the quality and scope of other amenities such as food
and beverage facilities. In addition, the Company is subject to risks relating
to the Behavioral Healthcare Facilities, including the effect of any failure of
the lessee of the Behavioral Healthcare Facilities to make the required lease
payments (which equal more than 10% of the Company's current base rental
revenues); the effects of factors, such as regulation of the healthcare industry
and limitations on government reimbursement programs, on the ability of the
lessee to make the required lease payments; and the limited number of
replacement tenants in the event of a default under, or non-renewal of, the
lease. If any one or a combination of such risks were realized, the Company
could experience a material adverse change in its financial condition and
results of operations, which could lead to difficulty in meeting its
obligations.
 
     JOINT OWNERSHIP OF ASSETS LIMITS COMPANY'S FLEXIBILITY WITH INVESTMENTS.
The Company has the right to invest, and in certain cases has invested, in
properties and assets jointly with other persons or entities. Joint ownership of
properties, under certain circumstances, may involve risks not otherwise
present, including the possibility that the Company's partners or co-investors
might become bankrupt, that such partners or co-investors might at any time have
economic or other business interests or goals which are inconsistent with the
business interests or goals of the Company, and that such partners or
co-investors may be in a position to take action contrary to the instructions or
the requests of the Company or contrary to the Company's policies or objectives.
Because it gives a third party, which is not controlled by the Company and which
may have different goals and capabilities than the Company, the opportunity to
influence the return the Company can achieve on some of its investments, joint
ownership may adversely affect the ability of the Company to meet its
obligations. See "-- Company Does Not Fully Control Certain Investments and
Consequently Has No Control Over Revenues from the Investments -- Americold and
URS Partnerships Controlled by Third Parties."
 
     RISK THAT ADEQUATE FINANCING WILL NOT BE AVAILABLE TO REFINANCE STATION
DEBT. Station currently has outstanding approximately $919 million of
indebtedness at rates in excess of the Company's current cost of
capital. At the time of the closing of the Merger, as a result of covenants of
certain Station indebtedness, the Company will be required to
refinance an aggregate of approximately $378 million of such outstanding
indebtedness. In addition, the Company intends to finance the
transaction in part by incurring an additional $126 million in debt primarily
related to transaction costs. There are no definitive agreements or arrangements
for any such refinancing or the obtaining of any new debt, and there can be no
assurance that the Company will be able to complete the
refinancing or obtain the necessary financing or that the terms thereof will be
favorable to the Company.
 
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CONFLICTS OF INTEREST
 
     COMMON MANAGEMENT AND OWNERSHIP. Richard E. Rainwater and John C. Goff are,
respectively, the Chairman of the Board and the Vice Chairman of the Board of
both the Company and Crescent Operating, and Gerald W. Haddock serves as the
President, Chief Executive Officer and a director of Crescent Operating, the
General Partner and the Company. As a result, Messrs. Rainwater, Goff and
Haddock have fiduciary obligations to the Company, the Operating Partnership and
Crescent Operating. Messrs. Rainwater, Goff and Haddock, together with the other
management of the Company and the General Partner with a rank of Vice President
or higher beneficially owned, as of April 13, 1998, 9,190,948 common shares of
beneficial interest of the Company, par value $.01 per share (the "Common
Shares") and 9,529,030 units of ownership interest in the Operating Partnership,
representing an approximately 14.3% equity interest in the Company, and
approximately the same percentage of the outstanding common stock of Crescent
Operating through their ownership of 1,712,251 shares of Crescent Operating
common stock. The common management and ownership among these entities may lead
to conflicts of interest in connection with transactions between the Company,
the Operating Partnership and Crescent Operating, because management of the
Company may not have the same financial interests as the other shareholders or
other investors in the Company. Members of management of the Company who also
own shares of Crescent Operating will have a financial interest in the success
of Crescent Operating that will not be shared by shareholders of the Company or
investors in the Operating Partnership who do not also own shares of Crescent
Operating. There can be no assurance that, as a result of such conflicts, the
Company will not have less revenue available with which to satisfy its
obligations when they become due. These conflicts and the material risks
associated with them are set forth below.
 
     RELATIONSHIP WITH CRESCENT OPERATING.  The Company has entered into an
agreement (the "Intercompany Agreement") with Crescent Operating, which
provides, subject to certain terms, that the Company will provide Crescent
Operating with a right of first refusal to become the lessee of any real
property acquired by the Company if the Company determines that, consistent with
the Company's status as a real estate investment trust (a "REIT"), it is
required to enter into a master lease arrangement, provided that Crescent
Operating and the Company negotiate a mutually satisfactory lease arrangement
and the Company determines, in its sole discretion, that Crescent Operating is
qualified to be the lessee. As to opportunities for Crescent Operating to become
the lessee of any assets under a master lease arrangement, the Intercompany
Agreement provides that the Company must provide Crescent Operating with written
notice of the lessee opportunity. During the 30 days following such notice,
Crescent Operating has a right of first refusal with regard to the offer to
become a lessee and the right to negotiate with the Company on an exclusive
basis regarding the terms and conditions of the lease. If a mutually
satisfactory agreement cannot be reached within the 30-day period (or such
longer period to which Crescent Operating and the Company may agree), the
Company may offer the opportunity to others, on terms not more favorable than
those offered to Crescent Operating, for a period of one year thereafter before
it must again offer the opportunity to Crescent Operating in accordance with the
procedures specified above. The Company may, in its discretion, offer any
investment opportunity other than a lessee opportunity to Crescent Operating
upon such notice and other terms as the Company may determine. The certificate
of incorporation of Crescent Operating, as amended and restated, generally
prohibits Crescent Operating, for so long as the Intercompany Agreement remains
in effect, from engaging in activities or making investments that a REIT could
make, unless the Company was first given the opportunity, but elected not to
pursue such activities or investments.
 
     Subsidiaries of Crescent Operating are the lessees of each of the Hotel
Properties. Crescent Operating owns a 50% interest in Charter Behavioral Health
Systems, LLC ("CBHS"), which is the lessee of the Behavioral Healthcare
Facilities and the Company's largest tenant in terms of base
rental revenues. On March 5, 1998, Crescent Operating entered into a definitive
agreement to acquire from a subsidiary of Magellan Health Services, Inc.
("Magellan") the remaining 50% interest in CBHS. The
 
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Company owns all of the non-voting stock and Crescent Operating owns all of the
voting stock of the entities through which the Company made the Refrigerated
Warehouse Investment and its investments in the Desert Mountain and Woodlands
Residential Development Properties. In addition, it is anticipated that Crescent
Operating will have the opportunity to own a 50% interest in the Station Lessee.
The Company expects to offer Crescent Operating the opportunity to become a
lessee and operator of other assets in accordance with the Intercompany
Agreement.

     Due to the common management and ownership between the Company and Crescent
Operating, management of the Company could experience conflicts of interest in
the event of a dispute relating to any of the leases in which Crescent Operating
is the lessee or if there were a default by Crescent Operating under a lease.
Conflicts of interest also could arise in connection with the renegotiation or
renewal of any lease or other agreement with Crescent Operating.

     RELATIONSHIP WITH MAGELLAN HEALTH SERVICES, INC.  Mr. Rainwater, along with
certain affiliates of and members of his family, owns approximately 19% of the
outstanding common stock of Magellan, a subsidiary of which is a 50% owner
(along with Crescent Operating) of CBHS. Mr. Rainwater's spouse, Darla D. Moore,
is a member of the board of directors of Magellan. Through these relationships,
Mr. Rainwater may have the ability to influence decisions of Magellan in a
manner that may benefit Magellan to the detriment of Crescent Operating or the
Company, or vice versa.
 
     JOINT INVESTMENTS.  The Company has in the past and may in
the future structure investments as joint investments with Crescent Operating.
See "-- Relationship with Crescent Operating." The Company could
experience potential conflicts of interest in connection with the negotiation of
the terms of such joint investments due to its ongoing business relationship
with Crescent Operating and the common management and common ownership among the
Company, the Operating Partnership and Crescent Operating.
 
     COMPETITION FOR MANAGEMENT TIME.  Messrs. Rainwater, Goff and Haddock
currently are engaged, and will in the future continue to engage, in the
management of other properties and business entities, including Crescent
Operating. Messrs. Rainwater, Goff and Haddock may experience conflicts of
interest in allocating management time, services and functions among the
Company and the various other business activities, including the
operation of Crescent Operating, in which any of them are or may become
involved.
 
     LEGAL REPRESENTATION.  Shaw Pittman Potts & Trowbridge, which has served as
securities and tax counsel to the Company, also serves as special counsel to
Crescent Operating in connection with certain matters. In the event any
controversy arises in which the interests of the Company appear to be in
conflict with those of Crescent Operating, other counsel may be retained for one
or both parties.
 
RISK OF INABILITY TO MANAGE RAPID GROWTH AND ACQUISITION OF SUBSTANTIAL NEW
ASSETS EFFECTIVELY
 
     From the time it commenced operations in May 1994 through December 31,
1997, the Company has experienced rapid growth, increasing its total assets by
approximately 1,770%, after giving pro forma effect to the proposed Merger with
Station and investments completed after December 31, 1997. There can be no
assurance that the Company will be able to manage its growth effectively and the
failure to do so may have an adverse effect on the financial condition and
results of operations of the Company. If such an adverse effect were great
enough, the Company could have difficulty meeting its obligations when they
become due.
 
GENERAL REAL ESTATE RISKS AFFECTING THE COMPANY
 
     The following paragraphs describe the material factors influencing the
general real estate risks to which the Company is subject.

     COMPANY'S INABILITY TO CONTROL CERTAIN FACTORS AFFECTING PERFORMANCE AND
VALUE.  The economic performance and value of the Company's real estate assets
will be subject to the risks normally associated with changes in national,
regional and local economic and market conditions, as discussed
 
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below. The principal markets in which the Company's Properties are located are
Dallas/Fort Worth, Houston and Austin, Texas and Denver, Colorado. The economic
condition of each of these markets is dependent on a limited number of
industries, and an economic downturn in some or all these industries could
adversely affect the Company's performance in that market. Other local economic
conditions that may affect the performance and value of the Company's Properties
include excess supply of office space and competition for tenants, including
competition based on rental rates, attractiveness and location of the property
and quality of maintenance and management services. These factors may adversely
affect the ability of the tenants to pay rent. In addition, other factors may
affect the performance and value of a Property adversely, including changes in
laws and governmental regulations (including those governing usage, zoning and
taxes), changes in interest rates (including the risk that increased interest
rates may result in decreased sales of lots in any Residential Development
Property) and the availability of financing. Any of these factors, each of which
is beyond the control of the Company, could reduce the income that the Company
receives from the Properties, thereby adversely affecting the Company's ability
to meet its obligations.
 
     REAL ESTATE INVESTMENTS ARE ILLIQUID.  Because real estate investments are
relatively illiquid, the Company's ability to vary its portfolio promptly in
response to economic or other conditions will be limited. In addition, certain
significant expenditures, such as debt service (if any), real estate taxes and
operating and maintenance costs, generally are not reduced in circumstances
resulting in a reduction in income from the investment. The foregoing and any
other factor or event that would impede the ability of the Company to respond to
adverse changes in the performance of its investments could have an adverse
effect on the Company's financial condition and results of operations and its
ability to meet its obligations.
 
     RISK OF ENVIRONMENTAL LIABILITY.  Under various federal, state and local
laws, ordinances and regulations, an owner or operator of real property may
become liable for the costs of removal or remediation of certain hazardous or
toxic substances released on or in its property, as well as certain other costs
relating to hazardous or toxic substances. Such liability may be imposed without
regard to whether the owner or operator knew of, or was responsible for, the
release of such substances. The presence of, or the failure to remediate
properly, such substances, may adversely affect the owner's ability to sell the
affected real estate or to borrow using such real estate as collateral. Such
costs or liabilities could exceed the value of the affected real estate. The
Company has not been notified by any governmental authority of any
non-compliance, liability or other claim in connection with any of the
Properties and the Company is not aware of any other environmental condition
with respect to any of the Properties that management believes would have a
material adverse effect on the Company's business, assets or results of
operations. The application of environmental laws to a specific Property owned
by the Company will be dependent on a variety of Property-specific
circumstances, including the former uses to which the Property was put and the
building materials used at each Property. Prior to the Company's acquisition of
its Properties, independent environmental consultants conducted or updated Phase
I environmental assessments (which generally do not involve invasive techniques
such as soil or ground water sampling) on the Properties. None of these Phase I
assessments or updates revealed any materially adverse environmental condition
not known to the Company or the independent consultants preparing the
assessments. There can be no assurance, however, that environmental liabilities
have not developed since such environmental assessments were prepared, or that
future uses or conditions (including, without limitation, changes in applicable
environmental laws and regulations) will not result in imposition of
environmental liability. If the Company were subject to environmental liability,
the liability could be so great that the Company could have difficulty meeting
its obligations when they become due.
 
FINANCIALLY DISTRESSED PROPERTIES ARE RISKIER INVESTMENTS THAN OTHER PROPERTIES
 
     Implementation of the Company's strategy of investing in real estate assets
in distressed circumstances has resulted in the acquisition of certain
Properties from owners that were in poor financial condition, and such strategy
is expected to result in the purchase of additional properties under similar
 
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<PAGE>   8
circumstances in the future. In addition to general real estate risks,
properties acquired in distressed situations present risks related to inadequate
maintenance, negative market perception and continuation of circumstances which
precipitated the distress originally. If a Property has been inadequately
maintained, capital and maintenance expenditures may be significant. A negative
market perception of a Property may make the Property more difficult to lease
than originally expected, resulting in lower occupancy rates and lease revenues
for a longer period of time than the Company originally anticipated. A
continuation of factors precipitating distress, such as adverse regional
economic conditions, could adversely affect the Company's return on its
investment in the Property or asset and the amount of funds the Company has
available to meet its obligations.
 
CHANGE IN POLICIES

     The Board of Trust Managers provides guidance to the senior management of
the Company regarding the Company's operating and financial policies and
strategies, including its policies and strategies with respect to acquisitions,
growth, operations, indebtedness, capitalization and distributions. These
policies and strategies may be revised, from time to time, without shareholder
approval. Changes in the Company's policies and strategies could adversely
affect the Company's financial condition and results of operations. In
addition, the Company has the right and intends to acquire additional real
estate assets pursuant to and consistent with its investment strategies and
policies without shareholder approval.

COMPANY'S SUCCESS DEPENDS ON KEY PERSONNEL
 
     The Company is dependent on the efforts of senior management personnel of
the Company and the General Partner. These senior management personnel include
Richard E. Rainwater, Chairman of the Board of Trust Managers of the Company,
John C. Goff, Vice Chairman of the Board of Trust Managers of the Company, and
Gerald W. Haddock, President, Chief Executive Officer and Trust Manager of the
Company, and President, Chief Executive Officer and sole Director of the General
Partner. While the Company believes that it would be possible to find
replacements for these key executives, the loss of their services could have an
adverse effect on the operations of the Company. Mr. Rainwater has no employment
agreement with the Company and, therefore, is not obligated to remain with the
Company for any specified term. Each of Messrs. Goff and Haddock has entered
into employment agreements with the Company, and each of Messrs. Rainwater, Goff
and Haddock has entered into a noncompetition agreement with the Company.
Neither the Company nor the General Partner has obtained key-man insurance for
any of its senior management personnel.
 
LIMITED RESTRICTIONS ON INCREASES IN DEBT
 
     The Company is subject to the risks normally associated with debt
financing, including the risk that the Company's net operating income will be
insufficient to meet required payments of principal and interest, risks
associated with possible increases in variable interest rates, the risk that the
Company will not be able to refinance existing indebtedness or, if necessary, to
obtain additional financing for necessary capital expenditures such as
renovations and other improvements on favorable terms or at all. A default under
secured indebtedness could result in a transfer of the secured asset to the
mortgagee, with a consequent loss of income and asset value to the Company.
 
     The Company's organizational documents do not limit the level or amount of
debt that it may incur. It is the Company's current policy to pursue a strategy
of conservative use of leverage, generally with a ratio of debt to total market
capitalization of the Company targeted at approximately 40 percent, although
this policy is subject to reevaluation and modification and could be increased
above 40 percent. The Company has based its debt policy on the relationship
between its debt and its total market capitalization, rather than the book value
of its assets or other historical measures that typically have been employed by
publicly traded REITS, because management believes that market capitalization
more accurately reflects the ability of the Company to borrow money and to meet
its debt service
 
                                      -8-
<PAGE>   9

requirements. Market capitalization is, however, more variable than book value
of assets or other historical measures. There can be no assurance that the ratio
of indebtedness to market capitalization (or any other measure of asset value)
or the incurrence of debt at any particular level would not adversely affect the
financial condition and results of operations of the Company and the ability to
meet its obligations.

POTENTIAL DILUTION FROM TRANSACTIONS WITH AFFILIATES OF UNION BANK OF
SWITZERLAND AND MERRILL LYNCH INTERNATIONAL

     On August 12, 1997, the Company entered into two transactions with
affiliates of Union Bank of Switzerland. In one transaction, the Company sold
4,700,000 Common Shares to one of the affiliates for approximately $148 million
and received approximately $145 million in net proceeds. In the other
transaction, the Company entered into a forward share purchase agreement with a
second affiliate. Under the forward share purchase agreement, the Company
committed to purchase 4,700,000 Common Shares from the second affiliate by
August 12, 1998. The price to be paid by the Company for the 4,700,000 Common
Shares will be determined on the date the Company settles the forward share
purchase agreement and will include a forward accretion component, minus an
adjustment for the Company's distribution rate. The forward accretion
component, which is variable and cannot be determined at this time, represents
a guaranteed rate of return to the second affiliate. The Company may fulfill
its settlement obligations under the forward share purchase agreement in cash
or Common Shares, at its option. In the event that the Company issues
additional Common Shares pursuant to the forward share purchase agreement, the
Company's net income per Common Share and net book value per Common Share will
decrease.

     On December 12, 1997, the Company entered into two transactions with
Merrill Lynch International. In one transaction, the Company sold 5,375,000
Common Shares at $38.125 per share to Merrill Lynch International for
approximately $205 million and received approximately $199.9 million in net
proceeds. In the other transaction, the Company entered into a swap agreement
(the "Swap Agreement") with Merrill Lynch International relating to 5,375,000
Common Shares (the "Settlement Shares"), pursuant to which Merrill Lynch
International will sell, as directed by the Company on or before December 12,
1998, a sufficient number of Common Shares to achieve net sales proceeds equal
to the market value of the Settlement Shares on December 12, 1997
(approximately $204.9 million), plus a forward accretion component, minus an
adjustment for the Company's distribution rate. The forward accretion
component, which is variable and cannot be determined at this time, represents
a guaranteed rate of return to Merrill Lynch International. The precise number
of Common Shares that will be required to be sold pursuant to the Swap
Agreement will depend primarily on the market price of the Common Shares at the
time of settlement. The Common Shares required to be sold by Merrill Lynch
International pursuant to the Swap Agreement are expected to be the same Common
Shares initially issued by the Company (although Merrill Lynch International,
at its option, may substitute other Common Shares that it holds). If however,
as a result of a decrease in the market price of the Common Shares, the number
of Common Shares required to be sold is greater than the number of Settlement
Shares, the Company will deliver additional Common Shares to Merrill Lynch
International. In contrast, if such number of Common Shares is less than the
number of Settlement Shares as a result of an increase in the market price of
the Common Shares, Merrill Lynch International will deliver Common Shares or,
at the option of the Company, cash to the Company. In the event that the
Company issues additional Common Shares pursuant to the Swap Agreement, the
Company's net income per Common Share and net book value per Common Share will
decrease. On February 20, 1998, the Company issued an additional 525,000 Common
Shares to Merrill Lynch International as a result of the decline in market
price of the Common Shares from the date of issuance on December 12, 1997
through February 12, 1998. The issuance of these shares did not have a material
impact on the Company's net income per Common Share or net book value per
Common Share.
 
 
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<PAGE>   10
                                   SIGNATURES

        Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.

Dated:  June 22, 1998               CRESCENT REAL ESTATE EQUITIES COMPANY



                                    By:  /s/ DALLAS E. LUCAS
                                         -----------------------
                                             Dallas E. Lucas
                                        Senior Vice President and
                                         Chief Financial Officer