Archstone-Smith Acquires Two High-rise Apartment Communities in Manhattan

DENVER, Aug. 10 /PRNewswire-FirstCall/ -- Archstone-Smith , one of the nation's largest apartment companies, announced the acquisition of two high-rise apartment communities, adding nearly 500 units to its Manhattan portfolio. The company acquired The Aston, a 266-unit community in Manhattan's Chelsea neighborhood, for $195.0 million, and The Foundry, a 222-unit community in Manhattan's Clinton neighborhood, for $87.6 million.

"We entered the Manhattan market in 2002 with the intention for it to become a significant component of our national portfolio," said R. Scot Sellers, chairman and chief executive officer. "We are extremely pleased to expand our presence in this important market in such a meaningful way. Manhattan has extremely high housing costs, and nearly 70% of households in New York City are renters, making the market exceptionally attractive to apartment owners."

With these acquisitions, Archstone-Smith owns seven apartment communities in the New York City metropolitan area, including The Sonoma in Murray Hill, The Park Hudson on West End Avenue, Hudson Park in Hoboken, Archstone Westbury on Long Island and Archstone Stamford in Fairfield County. In addition, the company recently announced plans to develop The Mosaic, a 627-unit community in Manhattan's Clinton neighborhood. Including its operating communities and The Mosaic development, the company's committed total expected investment to the New York City metropolitan area totals $1.2 billion and 2,733 units.

Built in 2004, The Aston is a 266-unit community with high-quality street-level retail with tenants that include Bank of America and HSBC, as well as a 57-space garage. This 38-story community offers studio, one- and two-bedroom apartments as well as a penthouse residence. Amenities include maple cabinetry and granite countertops, marble baths, bamboo floors, large floor-to-ceiling windows, 24-hour concierge, state-of-the-art fitness center and rooftop terrace. The community is located in Chelsea -- one of Manhattan's most fashionable neighborhoods -- on 6th Avenue between 27th and 28th Streets. Bordered by the Fashion District to the north, the West Village to the south, 5th Avenue to the east and the Hudson River to the west, Chelsea is well-served by numerous commercial, retail and entertainment outlets.

The Foundry is a 222-unit community built in 2001 at the intersection of 10th Avenue and 55th Street. Offering studio, one- and two-bedroom apartments, this 12-story community's amenities include wood floors, tile baths with pedestal sinks, large windows, a 24-hour concierge, a landscaped garden, sunbathing terrace, fitness center and club room. The community is in Manhattan's Clinton neighborhood, one of the fastest-growing residential areas of the city, known for its convenient access to the Midtown employment center -- New York City's largest -- the Theatre District/Times Square the West Side Highway and trendy nightclubs, restaurants and entertainment venues.

The equity for these acquisitions will be funded with tax-deferred exchange proceeds from dispositions of non-core assets. Archstone-Smith also assumed $95.5 million of floating rate tax-exempt bond debt financing provided by The New York State Housing Finance Agency (HFA) at an estimated all-in interest rate of 3.2% for The Aston acquisition, and $55.1 million of floating rate tax-exempt bond debt financing from The New York City Housing Development Corporation (HDC), with an estimated all-in interest rate of 3.3% for The Foundry acquisition.

Archstone-Smith is a recognized leader in apartment investment and operations. With a current total market capitalization of $14.3 billion, Archstone-Smith owns and operates an irreplaceable portfolio of high-rise and garden apartment communities concentrated in many of the most desirable neighborhoods in the Washington, D.C. metropolitan area, Southern California, the San Francisco Bay area, the New York City metropolitan area, Boston, Southeast Florida, Chicago and Seattle. The company continually upgrades the quality of its portfolio through the selective sale of assets, using proceeds to fund investments with even better growth prospects. Through its two brands, Archstone and Charles E. Smith, Archstone-Smith strives to provide great apartments and great service to its customers -- backed by unconditional service guarantees. As of August 10, 2005, Archstone-Smith owned or had an ownership position in 254 communities, representing 86,827 units, including units under construction.

Archstone-Smith, an S&P 500 company, was recognized as one of America's Most Admired Companies for 2004 by Fortune Magazine and ranks 991 on the Forbes 2000 List, the magazine's comprehensive ranking of the world's largest companies, for 2005. To find out more, visit ArchstoneSmith.com.

Archstone-Smith's press releases are available on the company's web site at http://www.archstonesmith.com/ or by calling (800) 982-9293.

In addition to historical information, this press release contains forward-looking statements and information under the federal securities law. These statements are based on current expectations, estimates and projections about the industry and markets in which Archstone-Smith operates, management's beliefs and assumptions made by management. While Archstone-Smith management believes the assumptions underlying its forward-looking statements and information are reasonable, such information is necessarily subject to uncertainties and may involve certain risks, many of which are difficult to predict and are beyond management's control. As such, these statements and information are not guarantees of future performance, and actual operating results may differ materially from what is expressed or forecasted in this press release and supplemental information. See "Risk Factors" in Archstone-Smith's 2004 Annual Report on Form 10-K for factors that could affect Archstone-Smith's future financial performance.