UPDATE: Archstone's $322M Trade was 1031 Exchange

ARLINGTON, VA-The eye-popping $322.25 million trade of Archstone Crystal Towers, which we reported early Thursday morning, was a 1031 exchange for the buyer, Dweck Properties, according to Jones Lang LaSalle's Al Cissel. Cissel and colleague Scott Melnick led the team that represented Equity Residential in the sale.

The asset Dweck is selling as part of the exchange is an office, Cissel tells GlobeSt.com. Per the usual though, for Dweck, this will likely be a buy and hold trade.

As far as the pricing – which by all account appears to be a record-breaker for multifamily – it was based strictly on the building's cash flow. "This is a very large asset and is performing very well," Cissel says.

Archstone Crystal Towers consists of two, 12-story, 912-unit multifamily towers, sitting on nearly 10 acres of land. Also the market, Crystal City, tends to get high rents. Rents in the Crystal Towers are trending around $2 per square foot, or roughly $2,200 per unit, Cissel says. "Crystal City in the last few years as become more of a private sector-oriented submarket with a lot of younger residents. It has just been thriving and there is not that much multifamily product to meet the growing demand."

Indeed, this trade will likely put Crystal City on investors' map, if it isn't there already, Daniel Bauman, a Fairfax-based executive with FirstService Residential, tells GlobeSt.com. "Crystal City is an appealing submarket. I don't think its full potential was recognized in past with all the attention paid to other markets but with the transit options and highway access, Crystal City is definitely gaining traction." Also significant is the exciting foot traffic and amenities for renters, he adds. "The days of Crystal City being thought of as a concrete jungle are long over," Bauman says.

Baumen thinks the fact that a local player is taking over the asset will be significant in terms of its yield. "Good management can increase an asset's NOI and with a solid management team in place you can increase yield right off the bat," he says.