LAST YEAR WAS A VERY ACTIVE ONE FOR ENGLEWOOD, Colo.-based Archstone-Smith (NYSE:ASN) — and that is reflected in the REIT's performance in the National Multi Housing Council's (NMHC) annual listing of the largest apartment managers. At the end of last year, the company had a management interest in 103,000 apartment units, an increase of about 62% from the start of 2000. No other apartment manager's portfolio grew by more units. In this year's rankings, the company placed fifth overall, up one spot from last year.

The vast majority of the units were added last fall, when Archstone (then Archstone Communities Trust) finalized its $3.6 billion purchase of Arlington, Va.-based Charles E. Smith Residential Realty, which specialized in developing high-rise, urban apartments in Washington, D.C., Chicago, Boston and southeast Florida. Archstone has long had an objective of concentrating its properties in the high-barrier-to-entry markets of Northern California, Southern California, Seattle, Chicago, Boston, the New York City area and southeast Florida.

“It was a natural transaction in terms of advancing our investment strategy,” says Jack Callison, group vice president of Archstone-Smith. “Their markets lined up very well with ours, as well as the common culture and values the companies shared.” There are two types of properties in the combined portfolio. The Archstone brand name is attached to garden-style properties and the Smith name is used for the high-rise properties that Smith brought to the merger.

Archstone-Smith was in the headlines again recently when the company entered the Manhattan market with the $209 million acquisition of 101 West End Ave., a 35-story apartment building on the Upper West Side. New York-based Tishman Speyer Properties Inc. was the seller of the building, which was completed in 2000 and features monthly rents ranging from $2,350 to $8,590.

Archstone-Smith won't manage the property. Instead, it has hired a local property manager, Rose Associates, which owns and manages about 17,000 units in Manhattan, to run the building.

“Manhattan has a very unique market, so we want to make sure that we are very thoughtful about how we enter the market,” Callison says, adding that The Rose Group will manage the property for the foreseeable future. “It was a logical choice to engage them [Rose Associates] to assist us with our foray into Manhattan.”

Archstone-Smith, which has a market capitalization of $4.6 billion, eventually wants to expand its presence in the Manhattan apartment market, but realizes it could take a long time to do that. “It's a very difficult market to penetrate because real estate is predominantly owned by families,” Callison says. “They understand the value of owning real estate in Manhattan over a long period of time, so very little trades there.”

As for other future expansion, Archstone-Smith would like to increase its presence in the San Francisco Bay Area and Southern California, Callison adds. Approximately 12% of the company's portfolio is in Southern California and 10% in the San Francisco Bay Area.

On June 17, Archstone-Smith's stock closed at $26.50, down from a 52-week high of $29.19. The stock's 52-week low was $24.

National Multi Housing Council (NMHC) Top 25 Apartment Managers

The following list is a condensed version of the apartment management portion of the 2002 NMHC 50, an annual ranking of the 50 largest U.S. apartment owners and the 50 largest U.S. apartment managers published in NREI's March issue. The companies below are ranked according to the number of apartment units they managed as of Jan. 1, 2002.

  1. Apartment Investment and Management Company
    Headquarters: Denver, CO
    CEO: Terry Considine
    Apartments With Management Interest: 303,805

  2. Equity Residential Properties Trust
    Headquarters: Chicago, IL
    CEO: Douglas Crocker, II
    Apartments With Management Interest: 232,505

  3. Pinnacle Realty Management Company
    Headquarters: Seattle, WA
    CEO: Stan J. Harrelson
    Apartments With Management Interest: 113,546

  4. Lincoln Property Company
    Headquarters: Dallas, TX
    CEO: J. Timothy Byrne
    Apartments With Management Interest: 103,255

  5. Archstone-Smith
    Headquarters: Englewood, CO
    CEO: R. Scot Sellers
    Apartments With Management Interest: 103,000

  6. United Dominion Realty Trust, Inc.
    Headquarters: Richmond, VA
    CEO: Thomas W. Toomey
    Apartments With Management Interest: 77,567

  7. Trammell Crow Residential
    Headquarters: Atlanta, GA
    CEO: J. Ronald Terwilliger
    Apartments With Management Interest: 65,409

  8. Sentinel Real Estate Corporation
    Headquarters: New York, NY
    CEO: John H. Streicker
    Apartments With Management Interest: 62,737

  9. Whitehall Funds
    Headquarters: New York, NY
    CEO: Daniel Neidich
    Apartments With Management Interest: 58,000

  10. Alliance Holdings, L.L.C.
    Headquarters: Chicago, IL
    CEO: Andrew W. Schor
    Apartments With Management Interest: 52,691

  11. Camden Property Trust
    Headquarters: Houston, TX
    CEO: Richard J. Campo
    Apartments With Management Interest: 52,650

  12. Home Properties
    Headquarters: Rochester, NY
    CEO: Norman Leenhouts/Nelson Leenhouts
    Apartments With Management Interest: 49,734

  13. Fairfield Residential, L.L.C.
    Headquarters: San Diego, CA
    CEO: Christopher E. Hashioka
    Apartments With Management Interest: 49,230

  14. ConAm Group of Companies
    Headquarters: San Diego, CA
    CEO: Daniel J. Epstein
    Apartments With Management Interest: 48,000

  15. Edward Rose Building Enterprises
    Headquarters: Farmington Hills, MI
    CEO: Sheldon Rose
    Apartments With Management Interest: 45,820

  16. Gables Residential Trust
    Headquarters: Atlanta, GA
    CEO: Chris D. Wheeler
    Apartments With Management Interest: 45,267

  17. AvalonBay Communities, Inc.
    Headquarters: Alexandria, VA
    CEO: Bryce Blair
    Apartments With Management Interest: 41,589

  18. Lefrak Organization, Inc.
    Headquarters: Rego Park, NY
    CEO: Samuel J. Lefrak
    Apartments With Management Interest: 40,657

  19. Walden
    Headquarters: Dallas, TX
    CEO: John B. Bartling
    Apartments With Management Interest: 40,297

  20. WinnResidential
    Headquarters: Boston, MA
    CEO: Samuel Ross
    Apartments With Management Interest: 38,462

  21. Greystar Real Estate Partners, L.L.C.
    Headquarters: Charleston, SC
    CEO: Robert A. Faith
    Apartments With Management Interest: 37,215

  22. Milstein Properties
    Headquarters: New York, NY
    CEO: Howard P. Milstein
    Apartments With Management Interest: 37,000

  23. Westdale Asset Management
    Headquarters: Dallas, TX
    CEO: Joseph G. Beard
    Apartments With Management Interest: 36,993

  24. Mid-America Apartment Communities, Inc.
    Headquarters: Memphis, TN
    CEO: H. Eric Bolton, Jr.
    Apartments With Management Interest: 33,363

  25. Associated Estates Realty Corporation
    Headquarters: Richmond Heights, OH
    CEO: Jeffrey I. Friedman
    Apartments With Management Interest: 31,350