When GlobeSt.com reported on the initial acquisition of Paragon on March 21, Archstone-Smith wasn't commenting because it had yet to announce the deal. Today, it says the equity for the acquisition was funded primarily with tax-deferred exchange proceeds. The debt portion of the deal involved the assumption of $49.6 million of variable rate, tax-exempt bonds with an estimated all-in interest rate of 3.97%.

The seller was the developer, a joint venture of Regis Homes, TMG Partners and MacFarlane Partners. In December, the JV sold Archstone-Smith the neighboring project, the 300-unit Meridian Luxury Apartments, for $101.2 million. San Francisco-based MacFarlane invested in Meridian and Paragon on behalf of its venture with the California Public Employees' Retirement System.

Both Paragon and Meridian are located within walking distance to the San Bruno BART station and across the street from the 1.1-million-sf Shops at Tanforan. Paragon 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.

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.

Both Paragon and Meridian residents 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.

Mary Ann King and Brett Betzler of Moran & Co. brokered both the Paragon and Meridian transactions.