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DENVER-Locally based Archstone Communities, one of the largest apartment real estate trusts in the country, so far this year has disposed of $910 million of non-core assets. It sold the properties at an average capitalization rate of 8.5%.

The sales include three joint venture transactions with a large institutional investor, through which Archstone contributed 27 communities with a value of approximately $650 million.

“Since 1995, Archstone has completed the disposition of $3.3 billion of non-core assets–producing $430 million in aggregate gains–substantially improving the quality of our earnings and our long-term growth rate,” says R. Scot Sellers, chairman and chief executive officer.

Archstone used a portion of its disposition proceeds to fund the industry’s largest common share repurchase program, and has successfully redeployed capital into protected locations with excellent long-term growth prospects.

Those markets include Southern California, the San Francisco Bay area, Texas and Arizona. It also currently is active in the Midwest and Northeast, Washington, DC, Atlanta and other Southeast markets.

Same-store projected growth during the second quarter is expected to exceed 6%.

“Our markets continue to perform very well, and the absorption of our new development communities currently in lease-up is excellent,” Sellers says. “Our extensive capital recycling program has not only dramatically repositioned the company, but has also given us tremendous financial flexibility.”

Of the $910 million in dispositions in 2001, $595 million was used to pay down Archstone’s credit facilities, which currently have no outstanding balance and $680 million of available capacity. In addition, the company currently has approximately $360 million of cash on hand to fund future investment activity. Archstone expects to use $140 million to $160 million of this cash to fund acquisition activity through tax-deferred exchanges. The balance of the capital will be used to fund ongoing development activity and costs associated with the proposed merger with Charles E. Smith Residential Realty.

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