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BERLIN-A subsidiary of Archstone-Smith is buying Deutsche WohnAnlage GmbH for euro 518 million ($649 million). DeWAG specializes in the acquisition, long-term ownership and re-sale or privatization of upscale residential properties in the major metropolitan areas of Southern and Western Germany. Its portfolio has grown from approximately 200 housing units in December 2001 to more than 6,100 housing units in more than 35 different locations across Germany.

The expansion followed massive investment by Prudential Real Estate Investors, acting on behalf of institutional clients. PREI's merchant-banking team, which made its first strategic investment in the business in 2001 then expanded it in 2005, is selling its stake in the company as part of the transaction.

"This acquisition will provide our company with outstanding management and significant opportunities to expand our platform within Germany," says R. Scot Sellers, chairman and CEO of Archstone. The Englewood, CO-based Archstone-Smith has a current market value of $17.7 billion, and its portfolio is concentrated in major cities situated on both coasts of the US. The transaction is expected to close in July.