Archstone-Smith Announces Results for the Third Quarter of 2006

DENVER, Oct. 24 /PRNewswire-FirstCall/ -- Archstone-Smith today announced net earnings per share (EPS) of $0.60 for the quarter ended September 30, 2006, compared with the $0.80 per share reported for the same period in 2005. Funds from operations (FFO) with gains/losses was $0.79 per share in the third quarter of 2006, compared with $0.97 per share for the third quarter of 2005. FFO for the third quarter of 2006 was $0.55 per share, compared with $0.65 for the same period in 2005.

Same-Store Operating Performance Continues to Outperform the Industry

Same-store revenues increased 7.3% in the third quarter of 2006, representing the tenth consecutive quarter of increasing revenue growth. Year-to-date same store expenses have increased only 2.3%, including the 10.4% increase during the third quarter, which was driven by higher turnover costs, personnel expenses, insurance increases and a one-time ground lease payment adjustment in the prior year. The company's same-store net operating income (NOI) grew 5.9% in the third quarter, bringing year-to-date NOI growth to 8.5%. From 2001 through the second quarter of 2006, Archstone-Smith has outperformed the public apartment company average same-store NOI growth by more than 1,100 basis points. "We are very proud of our continued outperformance compared with the rest of the apartment industry, and believe that this momentum will continue throughout 2006 and into 2007," said R. Scot Sellers, chairman and chief executive officer.

Acquisitions, Dispositions and Portfolio Repositioning Continue to Strengthen Core Market Portfolio

Year-to-date, the company has acquired $1.6 billion of apartment communities, representing 3,849 units, primarily in New York City and California. Archstone-Smith has also completed the sale of $790.2 million of apartment communities year-to-date in markets that include Atlanta, Austin, Chicago, Dallas, Denver, Houston, Phoenix and Portland. The company's year-to-date dispositions produced cash gains of $165.1 million -- a profit of approximately 27% on the company's cost basis -- and an unleveraged IRR of 14.9%. "We now have 97% of our capital invested in core markets and will continue to re-invest the proceeds from the sale of non-core assets into outstanding locations in our core markets. We are taking advantage of what we believe is a short term market inefficiency that allows us to complete this important redeployment of capital with minimal dilution to our earnings results, while creating meaningful value for our shareholders in the process," added Mr. Sellers.

$4.0 Billion Development Pipeline Continues to Add Value

At the end of the quarter, including joint ventures and Ameriton, the company had 5,917 units with an expected investment of $1.8 billion, under construction, and 8,024 units, representing an expected investment of $2.2 billion, in planning. The development pipeline is concentrated in core markets that include Manhattan, downtown Boston, Southern California, the San Francisco Bay Area and Washington, D.C. "During the quarter, we stabilized Archstone Westbury, a 396-unit garden community on Long Island, further enhancing our New York City metropolitan area portfolio," said J. Lindsay Freeman, chief operating officer. "In addition, we recently broke ground on an 884-unit garden community in an excellent location within the supply-constrained 'Platinum Triangle' of Orange County, California."

Ameriton Continues to Produce Excellent Results

Archstone-Smith's third quarter 2006 results include gains from the sale of land and operating communities by Ameriton, the company's wholly owned subsidiary, which contributed $10.2 million, or $0.04 per share, to third quarter 2006 EPS, and $10.0 million, or $0.04 per share, to its third quarter FFO. Since 2000 through the third quarter of 2006, Ameriton has completed the sale of $1.8 billion of apartment communities, generating a pre-tax unleveraged IRR of 22.6%, excluding joint ventures.

Archstone-Smith Declares 125th Consecutive Common Share Dividend

The company also announced that its Board declared the company's 125th consecutive quarterly common share dividend. The company will pay a dividend of $0.435 per common share, payable on November 30, 2006 to shareholders of record as of November 15, 2006. On an annualized basis, this represents a dividend of $1.74 per common share.

Archstone-Smith , an S&P 500 company, is a recognized leader in apartment investment and operations. With a current total market capitalization of $21.4 billion, the company's portfolio is concentrated in many of the most desirable neighborhoods in the Washington, D.C. metropolitan area, Southern California, the New York metropolitan area, the San Francisco Bay Area, Boston, Seattle, Southeast Florida and Chicago. The company continually upgrades the quality of its portfolio through the selective sale of assets, using proceeds to fund investments in assets with even better growth prospects. Through its two brands, Archstone and Charles E. Smith, Archstone-Smith strives to provide great apartments and great service to its customers -- backed by unconditional service guarantees. As of September 30, 2006, the company owned or had an ownership position in 354 communities, representing 90,093 units, including units under construction.

Archstone-Smith's Third Quarter 2006 Earnings Release and Supplemental Financial Information and archived press releases are available on its web site at http://www.archstonesmith.com/ or may be obtained by calling (800) 982-9293.

In addition to historical information, this press release and quarterly supplemental information contain forward-looking statements and information under the federal securities law. These statements are based on current expectations, estimates and projections about the industry and markets in which Archstone-Smith operates, management's beliefs and assumptions made by management. While Archstone-Smith management believes the assumptions underlying its forward-looking statements and information are reasonable, such information is necessarily subject to uncertainties and may involve certain risks, many of which are difficult to predict and are beyond management's control. As such, these statements and information are not guarantees of future performance, and actual operating results may differ materially from what is expressed or forecasted in this press release and supplemental information. In addition, the historical performance described herein is not a guarantee of future performance, which may differ materially from past results. See "Risk Factors" in Archstone-Smith's 2005 Annual Report on Form 10-K for factors which could affect Archstone-Smith's future financial performance.

Contact: H. Andrew Cantor 800-982-9293 * 303-708-5959 (Logo: http://www.newscom.com/cgi-bin/prnh/19990907/ASNLOGO)