Apartment REIT Archstone-Smith Realty Trust has agreed to pay $342 million for a high-rise apartment building in midtown Manhattan. The acquisition of the Gershwin, a 40-story, 550-unit apartment building, will bring the Archstone portfolio up to 9 buildings in the New York City metro region.

The REIT plans to use tax-deferred exchange proceeds from property sales plus $7.5 million of operating partnership units to finance most of the deal.

The Gershwin is designated as an 80/20 project, meaning that 20% of its units feature below-market rents. The building was developed in 1998 by Jack Resnick & Sons, which sold the property to Archstone-Smith.