For a while, Chicago-based Equity Residential has been rumored as a potential buyer for parts of Denver-based Archstone’s massive portfolio. A Wednesday report from The Wall Street Journal verifies that speculation, saying that Equity Residential “has emerged as the lead bidder in the contest to buy roughly half of rival Archstone.”

The Journal says Equity offered more than $2.5 billion in cash and stock to buy 53 percent of Archstone, which has about 77,000 units, held by Bank of America Corp. and Barclays PLC. It left open the possibility for a high bidder to step in. Lehman Brothers Holdings, which purchased the company in 2007, owns the remainder of Archstone and has the ability to match sale of Archstone, according to the Journal. The paper said that Lehman could have concerns about Equity because it would replace its operating structure.

“It’s not a surprise that there is a potential transaction out there,” says Ben Thypin, director of market analysis for New York-based research firm Real Capital Analytics. “That said, it’s uncertain whether this will end up being the winning transaction. The sellers that are selling, Bank of America and Barclay’s, are financial sellers. So one would expect a financial buyer to take their place. Equity is an operator.”

But ultimately, no one knows when the situation will be settled. “For a long time, people have been talking about it eventually getting sold,” Thypin says. “They’ve been selling assets or refinancing assets in preparation for that. There’s still that uncertainty about when and how this will get resolved. At the very least, it shows the recapitalization process has begun in earnest.”