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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.