"In 1995, roughly 85% of our portfolio was located in Texas, Arizona and New Mexico,'' Sellers says. ''Our merger with Charles E. Smith Residential represents the textbook execution of our long-term strategy because Downtown high-rise apartments are the ultimate in protected assets. I'm pleased that 80% of our portfolio is now located in our core, protected markets including the greater Washington, D.C. metropolitan area, Northern and Southern California, Chicago, Boston, Southeast Florida and Seattle. This positions Archstone-Smith very well for excellent long-term performance."

During the fourth quarter, Archstone-Smith's same-store revenues increased 2.3%, with a 2.4% increase in same-store net operating income. The greater Washington, D.C. principally drove this performance. The metropolitan area produced a 6.5% increase in fourth quarter same-store revenues, and a 10.3% increase in same-store NOI.

"This year has been a challenging one for our economy, and many companies saw deteriorating earnings," Sellers says. "In light of this difficult economic environment, we produced solid results in our same-store portfolio, which we attribute to the strength of our brands and our focus on protected markets."

Archstone-Smith's three largest markets, which represent 54.8% of its total portfolio based on NOI, have generated attractive revenue and NOI growth over the past three years, he says.

"We believe that the diminishing level of single-family home purchases and declining volume of apartment starts set the stage for strong performance when the economy recovers," Sellers says. "These fundamentals will be augmented by very positive demographic growth within the 20-29 and 55-plus age groups that should improve the overall apartment market during the next 10 years.