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PLACENTIA, CA-Archstone-Smith has acquired the 416-unit SomersetPark apartment complex for more than $77.2 million in one of thelargest Orange County apartment sales this year, a transaction thatincreases the Denver-based REIT's Southern California portfolio to17,015 units. Archstone bought the property from Chicago-basedCapri Capital, a pension fund adviser, in a transaction brokered byScott Davis and Mary Ann King of the Costa Mesa office ofChicago-based Moran & Co.Davis tells GlobeSt.com that thetransaction was a little bit unusual in that Moran & Co. hadjust placed the property on the market when Archstone made an offerthat was above full price and the seller chose to accept theArchstone offer rather than seek other bids. "The owner made thedecision to go under contract with Archstone because Archstone wassuch a strong buyer and has had such a good track record in closingdeals," Davis says. "It was a little bit unusual in that respect,but it was a great result for both the buyer and the seller."Davispoints out that Archstone stands to create value in the complex,which was built in 1986, by upgrading the units and raising rentsat the property, which was 94.5% occupied at the time of the sale.Capri had initiated an interior unit rehab program on a fairlysmall number of the Somerset Park units and had achieved prettygood rent increases, he explains, so Archstone intends to continuethat program with some refinements of its own."In general, whatArchstone saw was a desirable property in a market where no newproduct has been built in quite a while, North Central OrangeCounty, where there is a lot of upside potential for rents," Davistells GlobeSt.com. The Somerset Park location is at 310 S.Jefferson St., at the corner of Jefferson andOrangethorpe.Archstone plans to change the name of the property,which comprises 52 two-story buildings of one- and two-bedroomunits, to Archstone Placentia Place. With the purchase of Somerset,the REIT now owns 2,063 units in Orange County.Davis notes thatArchstone has been consolidating its holdings into core markets,including Southern California, where most of the bidders on thelargest apartment deals continue to be institutional players. "Evenon deals as large as this, we do see some buyers who are high networth individuals or partnerships that are trading out of otherassets in Southern California, and they can sometimes becompetitive on deals this large," Davis says. But he says by farthe largest percentage of bidders are institutional buyers.

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