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PLACENTIA, CA-Archstone-Smith has acquired the 416-unit Somerset Park apartment complex for $79.3 million in one of the largest Orange County apartment sales this year, a transaction that increases the Denver-based REIT’s Southern California portfolio to 17,015 units. Archstone bought the property from Chicago-based Capri Capital, a pension fund adviser, in a transaction brokered by Scott Davis and Mary Ann King of the Costa Mesa office of Chicago-based Moran & Co.Davis tells GlobeSt.com that the transaction was a little bit unusual in that Moran & Co. had just placed the property on the market when Capri made an offer that was above full price and the seller chose to accept the Capri offer rather than seek other bids. “The owner made the decision to go under contract with Archstone because Archstone was such a strong buyer and has had such a good track record in closing deals,” Davis says. “It was a little bit unusual in that respect, but it was a great result for both the buyer and the seller.”Davis points out that Archstone stands to create value in the complex, which was built in 1986, by upgrading the units and raising rents at the property, which was 94.5% occupied at the time of the sale. Capri had initiated an interior unit rehab program on a fairly small number of the Somerset Park units and had achieved pretty good rent increases, he explains, so Archstone intends to continue that program with some refinements of its own.”In general, what Archstone saw was a desirable property in a market where no new product has been built in quite a while, North Central Orange County, where there is a lot of upside potential for rents,” Davis tells GlobeSt.com. The Somerset Park location is at 310 S. Jefferson St., at the corner of Jefferson and Orangethorpe.Archstone plans to change the name of the property, which comprises 52 two-story buildings of one- and two-bedroom units, to Archstone Placentia Place. With the purchase of Somerset, the REIT now owns 2,063 units in Orange County.Davis notes that Archstone has been consolidating its holdings into core markets, including Southern California, where most of the bidders on the largest apartment deals continue to be institutional players. “Even on deals as large as this, we do see some buyers who are high net worth individuals or partnerships that are trading out of other assets in Southern California, and they can sometimes be competitive on deals this large,” Davis says. But he says by far the largest percentage of bidders are institutional buyers.

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