Archstone Shops DC-Area Rentals With Land
Archstone is pitching an apartment property that offers a rare opportunity for additional development in the tight suburban Washington market.
The 828-unit Archstone Crystal House complex in Arlington, Va., comes with two adjacent sites that have permits for construction of buildings with 252 and 98 units. Bids are expected to top $280 million. CBRE has the listing, the latest of several recent Washington-area offerings from Archstone.
The offering is likely to appeal to a mix of investors. Crystal House is suitable for core or core-plus investors, while the parcels are geared toward high-yield players. An investor could buy both and flip the one it doesn’t want, or investors with different strategies could join up on a bid and then split the pieces. Another possibility: A high-yield player could keep both pieces, with an eye toward developing the two buildings and boosting the value of Crystal House by upgrading its units.
The two existing 11-story towers, at 2000 South Eads Street in the Crystal City submarket, are 95% occupied. Apartments range from studios to three-bedrooms and feature patios or balconies. The property, developed in 1963, has an Olympic-sized swimming pool, a rooftop fitness center and 24-hour concierge service.
The apartment market is booming in metropolitan Washington. The average apartment occupancy rate is 96.1%, and developers have been scrambling to buy construction sites. Marcus & Millichap predicts 4,700 units will be added to the market this year, up from 2,448 last year.
Archstone has sold several large Washington-area properties since last year and the Englewood, Colo., multi-family REIT continues to bring out listings. Jones Lang LaSalle is currently taking bids on the 912-unit Archstone Crystal Towers, at 1600 South Eads Street. That complex is expected to trade for $400 million, or $438,000/unit. Meanwhile, CBRE is also shopping the four-year-old Archstone Westchester at Rockville Station. The 192-unit property in Rockville, Md. is expected to attract bids of about $60 million, or $312,000/unit.