"It's a miracle to pull off any deal in the Silicon Valley these days," says broker Curtis Palmer of CB Richard Ellis, who with partners Herb Chase and Alex Quintana represented the seller. "Santa Clara County has lost 175,000 jobs since 2001; the market has been destroyed."

Located at 1650 Hope Drive, the three-story, three-year-old complex offers luxury finishes and such amenities as high-speed Internet access, a clubhouse, fitness center, business center, swimming pool, spa and hot tub, and a BBQ/picnic area. Palmer declined to go into detail regarding the reason for the sale, but local brokers familiar with the property say A.F. Evans was forced by its lenders to sell the property after being unable to refinance the debt to account for deteriorating rents and occupancies. A source at A.F. Evans Development could not immediately be reached for comment Thursday afternoon.

Local brokers say the project had already been performing poorly when The Irvine Co. began delivering a nearby project called North Park and handing out hefty commissions to attract tenants. By the end of 2002, occupancy was barely above 80%. Occupancy has since been raised back up to around 90%, but rents are off as much as $500 from one-year ago and new tenants are receiving one-month free rent on a one-year commitment.

Essex reportedly had the property in Escrow at one point but backed out as rents continued to deteriorate. "Quite frankly, there was a time when we were concerned whether anybody would buy it," says Palmer, whose team won the disposition assignment in October 2002.

For $80 million, though, Archstone is getting a top-notch complex for well below replacement cost and, if the market has indeed hit bottom, Palmer says the company stands to realize significant appreciation in both cash flow and value if it can hold on long enough.