Archstone-Smith purchases Oakwood corporate housing.

Archstone-Smith announced March 1 that it has signed an agreement with the property-owning partnerships affiliated with Oakwood Worldwide, the largest global provider of corporate housing, to acquire 30 apartment communities, representing more than 10,000 units, for a purchase price of approximately $1.4 billion.

Archstone-Smith estimates a portfolio acquisition yield of approximately 5.75 percent, based on a 12-month forward-looking estimate of net operating income, before reserves for capital expenditures. The closing of the portfolio will occur in several stages, a majority of which are expected to close late in the second quarter of 2005, subject to completion of Archstone-Smith's due diligence review and customary closing conditions.

This strategic transaction further strengthens Archstone-Smith's dominant ownership position in many of its best-performing submarkets--more than 40 percent of the portfolio is within walking distance of communities that Archstone-Smith currently owns. Approximately 78 percent of the portfolio is concentrated in Archstone-Smith's core markets, including 40 percent in highly desirable neighborhoods in Southern California, 20 percent located in the Washington, D.C., metropolitan area and 18 percent of the portfolio is located in the San Francisco Bay area, Boston, Chicago and Seattle.

"The acquisition of this exceptionally well-located portfolio is a perfect fit with our emphasis on improving the quality of our portfolio with every investment we make," said R. Scot Sellers, Chairman and Chief Executive Officer of Archstone-Smith. "We believe that this transaction further solidifies our dominant ownership position in many of the most protected submarkets in the country. Our relative out-performance in same-store net operating income during the last four years clearly illustrates the long-term benefits of building a dominant position in locations characterized by expensive single-family home prices, limited land for new housing, and diverse economies with strong job growth potential."

"It's a generally well-located portfolio, pretty decent quality portfolio. I think it's a pretty good fit for Archstone-Smith," said Craig Leupold, a Buyside Analyst with REIT research firm Green Street Advisors of Newport Beach, Calif. He said Archstone has been aggressively selling off non-core properties over the past few years, and this acquisition gives the company a chance to reinvest some of those proceeds in one large transaction.

Archstone beat out some high-flying rivals to acquire the portfolio, Dow Jones reported. Others rumored to have looked at it include United Dominion Realty Trust Inc., AvalonBay Communities Inc. and Equity Residential, according to a Dow Jones wire service report.