SAN BRUNO, CA-The Colorado-based apartment REIT Archstone-Smith Trust has acquired its second asset here, paying $65.1 million for the Paragon Luxury Apartments. The 185-unit multifamily complex represents the second phase of the Crossing at San Bruno, a master planned mixed-use development rising from a 20-acre former US Navy Property.

In December, Archstone-Smith paid $101.2 million for the 300-unit Meridian Luxury Apartments located next to the Paragon development. The developer and seller of both properties is a joint venture of Regis Homes, TMG Partners and MacFarlane Partners. San Francisco-based MacFarlane invested in Meridian and Paragon on behalf of its venture with the California Public Employees' Retirement System. Mary Ann King and Brett Betzler of Moran & Co. brokered both the Paragon and Meridian transactions.

As the new owner of Paragon, Archstone-Smith will oversee completion of the project, which broke ground last summer and is slated for completion in the spring of 2007. The complex will include one-, two- and three-bedroom apartments ranging from 650 sf to 1,300 sf. Twenty percent of the units will be designated for low-income residents. The remaining units will be rented at market lease rates.

Paragon residents also will have use of the Club, an 8,000-sf, $4-million recreation center and fitness club located between Paragon and Meridian. The Club features a conference room, business center, home theater, card and game room, workout rooms and a swimming pool covered with a retractable roof.

"We are proud to have been part of this very exciting project. The Paragon adds another piece to a community that embodies good urban infill development and we are confident the excellent team at Archstone-Smith will carry this vision forward," says Jon Knorpp, a principal with MacFarlane Partners, which invested in both Meridian and Paragon on behalf of its venture with the California Public Employees' Retirement System, the nation's largest public pension fund with assets of $207 billion.

The Crossing is being developed on 20 acres of former US Navy property located at 900-1000 Commodore Dr., across the street from Shops at Tanforan, a 1.1-million-sf retail center. The land for the Crossing was purchased at auction in 2000 from the US General Services Administration. When complete, the Crossing will have about 1,000 residential units (including 300 units for seniors), 300 hotel rooms and a restaurant.

Late last year, SNK Realty Group acquired two parcels at the Crossing for a 350-unit residential development. Scheduled to start in this spring, the project will include two five-story buildings containing 187 condominium units and 163 apartment units and subterranean parking lots.