Seeking asylum.

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ASIDES & INSIDES

The real estate maxim that location is everything apparently even applies to former state mental institutions, many of which are being converted to high-end residences.

"There's obviously a lot of notoriety associated with the site. We think, at the end of the day, that will be helpful," says Scott Dale, a vice president at AvalonBay Communities, which is turning the former Danvers (Mass.) State Hospital into 497 luxury apartments and condominiums. The facility was once described as "the scariest building in the world" and was a magnet for ghost seekers.

The formula has been successful elsewhere. Six hundred would-be buyers signed up for the first 60 homes built at the site of the former Dammasch State Hospital, a $500 million project in Wilsonville, Ore., 20 miles south of Portland, city officials say. However, sales materials did not mention the facility's past.

Meanwhile, rents at the 500-unit Octagon, the former New York City Lunatic Asylum on Manhattan's Roosevelt Island, are 10% higher than expected, developer Bruce Becker says. Studio apartments in the $170 million development start at $1,700 per month.

Rebecca Shaw, a 30-year-old social worker who grew up on Roosevelt Island, is moving in the Octagon next month. "It certainly still has a slight mystery to it, but I wouldn't say scary or haunted."

What it does have, Shaw says, is location. "For my work, I need to be close to the city," she says. And there's good parking, too.

PHOTO (COLOR): Danvers State Hospital has gone condo.