The building, called the Palatine, was sold to an LLC called 1301 N.Troy, which is owned by the principals of Crescent Heights. The dealclosed earlier this month. The new owners intend to convert it back to condos, Darby says. Theirtiming is appropriate--the real estate industry is projecting ashortage of multifamily and condo units in the DC area as soon as2012.

The average cost per unit at the 262-unit Palatine pencils in at$450,000 each, Darby says, which is what condos are trading at roughly right now. For the buyer to make money it will have to wait a bit for the market to turn; essentially, he concludes, it isentering at just the right time.

Monument completed the development of the Palatine in August 2008.The building was originally developed as a condominium, but Monumentstopped selling units when the condo market collapsed in 2007 shifting to a multifamily strategy. It completed the initial lease-up in October 2009. The Palatine is currently 95% occupied.When the property went to auction on Feb. 10, 10 bidders posted the$9 million deposit required to bid on the property. Three hadpushed the price to $112 million before 1301 N. Troy stepped in withits $118-million offer.