Archstone acquires NY multifamily asset for $131m

The giant apartment REIT in the middle of a heated ownership battle has purchased a 209-unit high-rise building in Manhattan’s Kips Bay neighbourhood.

Amid a contentious custody battle over its future ownership, Archstone has purchased an apartment complex in New York from Madison International Realty and RFR Holding for $131 million. 

A spokesman for Archstone said the acquisition was made on behalf of an Archstone-sponsored partnership, but he declined to disclose whether or not that partnership is Archstone Multifamily Partners, a $500 million club fund targeting apartment buildings in core US markets. As of September, the vehicle was revealed to have closed on $300 million in equity from Allianz Real Estate, the Canada Pension Plan Investment Board and Archstone itself. 

According to a statement by the Denver-based apartment REIT, the property, known as Eastbridge Landing, is a 209-unit high-rise building located at 377 East 33rd Street in the Kips Bay neighbourhood of Manhattan. Post-acquisition, it will be renamed Archstone Kips Bay. 

“Archstone Kips Bay will increase our presence in New York, one of our core markets, to 14 apartment communities,” said R. Scot Sellers, chief executive officer of Archstone, in a statement. The company's holdings include the nearby Archstone Murray Hill at 245 East 40th Street and Archstone East 39th at 300 East 39th Street.

“We are very gratified with the successful completion of the sale,” added Bradley Carroll, managing director of Madison International Realty. “Eastbridge Landing is a high-quality asset in an extremely desirable area of Manhattan. The property attracted a great deal of investor interest, and we are pleased that we were able to conclude the transaction with Archstone.”

The acquisition comes amid a battle for the ownership of Archstone. It was revealed earlier this month that Sam Zell-run Equity Residential had reached an agreement with co-owners Bank of America and Barclays to buy a 26.5 percent minority stake in the apartment owner for $1.33 billion. Lehman Brothers Holdings, which currently owns 47 percent of Archstone, has challenged the validity of the Chicago-based REIT’s bid and has presented a matching offer.  

As of 30 September, Archstone owned or had an ownership position in 428 communities in the US and Europe, representing 74,000 units.

For further news analysis on the battle for Archstone, click here.