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DENVER-Imagine being so successful at running your business that you think others could benefit from your expertise. Now imagine using that opportunity to create a business line that will provide a new revenue stream to your firm, despite the economic turmoil that’s plaguing many property players right now.

Archstone did just that when it launched its Archstone Real Estate Advisory Services business earlier this year. The locally based firm is now helping investors and lenders–mainly those who provided capital to developers and operators that could not repay or refinance the funds–improve on the value of their multifamily and mixed-use holdings.

The idea for the services group came about sometime late last year, according to Neil Brown, executive vice president of the East region for Archstone. “We recognized that there were numerous problems in the real estate arena, and given where the market and the economy are, we think that our expertise could be of value to others,” he explains.

What the firm is doing is nothing new; many players are offering such services these days. But Archstone is armed with not only years of experience–the company was formed in 1963–but also an established reputation in the industry. Before it was taken private, Archstone was one of the largest and successful apartment REITs in the business. As of year-end 2008, it owned or has interests in nearly 85,000 units in 443 communities across the country. On the transaction side, the company has also closed $30.8 billion in acquisitions and dispositions and $6.7 billion of development and redevelopment projects. As a REIT, and later as a private company, Archstone handled all aspects of the business, from land acquisition and securing entitlements, to design and construction.

Similarly, Archstone REAS will help lenders and investors with properties through all stages of the value chain, providing such services as asset strategy, development, construction management and asset management. Clients can tap Archstone for support in all areas or for individual services, based on their particular needs, for anything from single properties or a portfolio of assets.

The focus, says Brown, encompasses everything from strategic analysis of the existing asset–to determine whether it’s performing as fully as it would given the environment–to analysis of whether a particular company should hold onto an asset for a while or whether they’d be better off in selling it. Brown says the company can provide expertise, particularly to institutions who have ended up with real estate assets they had not expected to end up with–either because they are a lender and had to foreclose or the developers or mezz lender are out of money and abandoned the project and, therefore, the development in trouble.

“There are both short and long-term problems we can help people with,” says Brown. “The longer-term issues really revolve around hold decisions versus sell-now decisions, and each of those decisions are going to be on a case-by-case basis, depending on the market and the property.”

Another group the Archstone REAS is seeking to help are institutions that are trying to buy assets at a discount these days. “They may not have the expertise to handle what they want to buy even though they may recognize it as a significant value,” relates Brown. “We advise on those deals from the beginning to the end. We’ve probably bought and sold as much real estate in the past decade as anybody in the multifamily arena.”

He continues, “We can even take a project over in the middle of production–we can hire the general contractor to complete it, supervise the completion of it, make decision[s] while it’s being finished, and consider whether there would be opportunities to change the product a little bit,” he adds.

Currently, Archstone REAS does not constitute a large chunk of the overall company, but Brown says the firm is hoping it will grow to become a significant component. “Will it ever be 50%? I can’t imagine it would be, but it certainly has the potential to be a significant part of our revenue stream for the development and investment group.”

And Brown and his colleagues are not taking the economic downturn lightly. He contends that being a large, well-known player doesn’t make one successful by default. But it doesn’t hurt, either.

“It’s a very difficult market,” he relates. “We’re seeing the challenges the industry is facing. Raising equity is very difficult, and raising debt on things that used to be easy is also very challenging now. The size of the project has a significant effect on one’s ability to get capital for it. But we do think in the more difficult times, for a company that’s been in the business a long time–and has demonstrated success–is probably a better partner than one [that] has not been around nearly as long. And [Archstone doesn't] have a lot of the same problems others are facing, so our attention is it not distracted by having to deal with a bunch of problem loans and things like that, so we can devote our energy to solving the problems that people bring to us.”

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