Archstone-Smith Posts Record Earnings

Earnings per share for the fourth quarter of 2003 were 63 cents per share, compared with 56 cents per share for the same period in 2002. Also, funds from operations with gains/losses for the full year of 2003 was $2.54 per share, compared with $2.40 per share in 2002. FFO with gains/losses was 73 cents per share in the fourth quarter of 2003, compared with 72 cents per share for the fourth quarter.

"We're extremely pleased with our 2003 performance, and are encouraged by our improving same-store results," says R. Scott Sellers, chairman and CEO. "Even in the midst of what many have called an exceptionally difficult time for the apartment industry, our same-store NOI decreased only 4.2% in the two years since the first quarter of 2002, despite the loss of more than 450,000 jobs in the US during that time." Sellers attributes the company's preformance to owning apartments in desirable neighborhoods with expensive single-family home prices, and very little land available to build new housing.

Last year, the company completed $1.4 billion of dispositions at an average cap rate of 6.4%, generating $180.5 million in gross gains and an unleveraged internal rate of return of 13%. Including these dispositions, the company's significant portfolio repositioning strategy it commenced in 1995 is largely complete. Today, 88% of the company's portfolio is concentrated in its eight supply-constrained core markets--the greater Washington, DC metropolitan area, Southern California, the San Francisco Bay area, Chicago, Boston, Southeast Florida, Seattle and the greater New York City metropolitan area.

Archstone-Smith's fourth quarter 2003 results include gains from the sale of apartment communities by Ameriton Properties Inc., which contributed $7.4 million, or approximately $0.03 per share, to FFO with gains/losses and EPS. Ameriton, one of the company's wholly owned taxable REIT subsidiaries, utilizes Archstone-Smith's development, acquisition and operating expertise to capitalize on short-term real estate investment opportunities.