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CHICAGO-When Equity Residential acquired Lexford Residential Trust's portfolio in 1999, some observers were scratching their heads, recalled president and chief executive officer David J. Neithercut. However, the multifamily REIT could see a $1-billion-plus payday, he suggested Monday at Citigroup's 2006 REIT CEO conference.

"This has been a terrific investment for the company," said Neithercut, noting Equity Residential bought the entry-level housing portfolio at a 10.5% capitalization rate. "During the recession, this portfolio outperformed the rest of Equity Residential's portfolio."

Nonetheless, the REIT is exploring the sale of the remaining 27,390 units of the 36,609 it acquired for $733 million seven years ago, hiring JPMorgan last week to advise on a possible sale. "I'm seeing a really strong bid for income-producing property," Neithercut said. "We think this is a terrific time to monetize that portfolio."