Archstone-Smith Acquires 550-unit High-rise Apartment Community in Manhattan for $342 Million
Strategic Acquisition of The Gershwin Brings Current Commitment
to the New York City Metropolitan Area to $1.5 Billion

DENVER — January 9, 2006 — Archstone-Smith (NYSE:ASN), one of the nation's largest apartment companies, announced the acquisition of The Gershwin, a 40-story, 550-unit high-rise apartment community in Manhattan, for $342.0 million. With the completion of this acquisition, Archstone-Smith owns nine apartment communities in the New York City metropolitan area including The Mosaic, a 627-unit joint-venture development in Manhattan which has been under construction since July. With the acquisition of The Gershwin, the company's current committed total expected investment in the New York City metropolitan area totals $1.5 billion and 3,283 units.

"We are extremely pleased to add The Gershwin to our Manhattan portfolio, underscoring our commitment to Manhattan as an important part of our protected-market portfolio," said R. Scot Sellers, chairman and chief executive officer. Currently, the New York City metropolitan area represents approximately 13% of Archstone-Smith's national portfolio, based on total expected investment of operating and development communities, including joint venture developments.

Built in 1998, The Gershwin is located on 8th Avenue between 49th and 50th Streets in Manhattan's Midtown West neighborhood – an area that is emerging as a thriving cultural and residential district. Residents are within walking distance to the Midtown employment center – New York City's largest – and enjoy immediate access to the C and E subway lines via its on-site 50th Street Subway Station. The community offers studio-, one- and two-bedroom apartments with amenities that include 24-hour concierge, state-of-the-art full-service health club, indoor swimming pool, sunbathing terrace, open kitchen floor plans, tile floors and a 120-space on-site garage. The Gershwin's nearly 41,200 square feet of retail space is fully occupied with tenants that include The Palm Restaurant, Thalia Restaurant, a dry cleaner and the Food Emporium Supermarket.

The equity for this acquisition was funded with tax-deferred exchange proceeds from dispositions of non-core assets and $7.5 million of operating partnership units. Archstone-Smith also assumed $100.5 million of tax-exempt floating rate bond financing and $11.8 million of conventional debt at an estimated combined all-in interest rate of 4.1%.

Archstone-Smith (NYSE: ASN), an S&P 500 company, is a recognized leader in apartment investment and operations. With a current total market capitalization of $16.5 billion, the company's portfolio is concentrated in many of the most desirable neighborhoods in the Washington, D.C. metropolitan area, Southern California, the San Francisco Bay Area, the New York City metropolitan area, Boston, Southeast Florida, Chicago, and Seattle. 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.  Currently, Archstone-Smith owned or had an ownership position in 257 communities, representing 87,082 units, including units under construction.

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Archstone-Smith's archived press releases are available on its web site at www.ArchstoneSmith.com or may be obtained by calling (800) 982-9293.

In addition to historical information, this press release contains 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. See "Risk Factors" in Archstone-Smith's 2004 Annual Report on Form 10-K for factors that could affect Archstone-Smith's future financial performance.