Chase Manhattan Bank took over ownership at the Promenade cooperative apartments in Bethesda yesterday from American Invsco, the controversial Chicago-based converter, a Chase spokesman announced.

Invsco defaulted on millions of dollars in loans to the bank several months ago and was unable to come up with the cash before the end of a grace period the bank allowed the developer.

While the transaction technically was not a foreclosure because legal proceedings were not started against Invsco, the result is the same, the Chase spokesman said. In an agreement between the bank and the developer, Chase takes over ownership of 612 unsold units at the 1,072-unit Promenade, and Invsco's debt is wiped out. The spokesman declined to say how much Invsco owed the bank. Invsco, which denied an earlier report that the takeover would occur, had no comment yesterday.

Rose Associates, the New York-based firm that is developing Pentagon City in Arlington, was officially signed on by Chase yesterday to manage and market the cooperative high-rise.

Daniel Rose, president of the development firm that bears his name, said in a telephone interview that the first step will be to conduct a thorough study of the property and the market.

"We want to take a totally fresh look at a job that has excellent real estate and physical characteristics," he said. "It's a first-rate building and we want to bring it up to first-rate standards."

It may be a while before units at the Promenade go back on the market. "Time is not of the essence; quality is," Rose said yesterday. "We want to do it appropriately rather than quickly."

One issue to be studied is whether to turn the cooperative into a condominium, Rose said. Invsco converted the luxury apartments into cooperatives rather than condominiums, escaping payment of Montgomery County's 4 percent condo conversion tax. But the approach backfired because Washington-area homebuyers -- who have broadly accepted condominiums -- are unfamiliar and generally wary of the co-op concept.

Invsco also converted at a time when the real estate market was starting into one of its longest and deepest declines ever. Its ability to sell the units was further complicated by the strong and vocal opposition of the middle-class tenants at the Promenade to the conversion itself, including protests that spurred congressional hearings into Invsco's conversions.

Both homeowners and tenants at the Promenade hailed the takeover by Chase and said they looked forward to working with Rose Associates. One reason is the strong dislike for Invsco, which many homeowners said had misled and abandoned them. Chase Takes Over Promenade By Sandra Evans Teeley Washington Post Staff Writer

Chase Manhattan Bank took over ownership at the Promenade cooperative apartments in Bethesda yesterday from American Invsco, the controversial Chicago-based converter, a Chase spokesman announced.

Invsco defaulted on millions of dollars in loans to the bank several months ago and was unable to come up with the cash before the end of a grace period the bank allowed the developer.

While the transaction technically was not a foreclosure because legal proceedings were not started against Invsco, the result is the same, the Chase spokesman said. In an agreement between the bank and the developer, Chase takes over ownership of 612 unsold units at the 1,072-unit Promenade, and Invsco's debt is wiped out. The spokesman declined to say how much Invsco owed the bank. Invsco, which denied an earlier report that the takeover would occur, had no comment yesterday.

Rose Associates, the New York-based firm that is developing Pentagon City in Arlington, was officially signed on by Chase yesterday to manage and market the cooperative high-rise.

Daniel Rose, president of the development firm that bears his name, said in a telephone interview that the first step will be to conduct a thorough study of the property and the market.

"We want to take a totally fresh look at a job that has excellent real estate and physical characteristics," he said. "It's a first-rate building and we want to bring it up to first-rate standards."

It may be a while before units at the Promenade go back on the market. "Time is not of the essence; quality is," Rose said yesterday. "We want to do it appropriately rather than quickly."

One issue to be studied is whether to turn the cooperative into a condominium, Rose said. Invsco converted the luxury apartments into cooperatives rather than condominiums, escaping payment of Montgomery County's 4 percent condo conversion tax. But the approach backfired because Washington-area homebuyers -- who have broadly accepted condominiums -- are unfamiliar and generally wary of the co-op concept.

Invsco also converted at a time when the real estate market was starting into one of its longest and deepest declines ever. Its ability to sell the units was further complicated by the strong and vocal opposition of the middle-class tenants at the Promenade to the conversion itself, including protests that spurred congressional hearings into Invsco's conversions.

Both homeowners and tenants at the Promenade hailed the takeover by Chase and said they looked forward to working with Rose Associates. One reason is the strong dislike for Invsco, which many homeowners said had misled and abandoned them.