Cabi West Pays $1.5 Billion for Arden Portfolio

0

A relatively unknown Los Angeles real estate player has scooped up a significant local portfolio, beating out several well-known bidders.


Cabi West Coast Acquisitions LLC has agreed to purchase a 33-property portfolio from Arden Realty Inc., one of the biggest landlords in Southern California, for just under $1.5 billion.


The deal for about 4.6 million square feet of office space includes properties in Los Angeles, San Diego, Orange and Ventura counties. It is expected to close on July 10. Cabi West, which was created in January, is the local subsidiary of GISCA, one of Mexico’s largest real estate developers.


“It’s an opportunity for Cabi to enter into the Southern California market with quality assets and a high profile acquisition,” said Rich Mayo, a principal with Cabi West. “This is the first of many.”


The 33 buildings range in size from 30,000 square feet to about 300,000 square feet. The portfolio includes 21 Los Angeles County properties. Some of the Los Angeles buildings are located in Santa Monica, Beverly Hills, Torrance and Glendale.


Other bidders for the portfolio included Hines, Kennedy-Wilson Inc., Walton Street Capital LLC and Jamison Properties Inc.


“There was tons of interest,” said Tom Bohlinger, a senior vice president at CB Richard Ellis Group Inc. and industry observer.


Cabi West is not as well known as the other real estate companies that vied for the portfolio, but observers say that more deals like this can be expected.


“It’s just another example that there are more and more locally unknown players and global players coming into the L.A. market all the time,” said Bob Safai of Madison Partners, who represented Arden in the sale of four local properties in the portfolio.


Cabi West is headed by Henry Shahery, an investor with the Moinian Group on its Figueroa Central downtown mixed-use project.


GISCA has another U.S. subsidiary, Cabi Developers, an East Coast developer that has been building apartments, retail and office projects in South Florida for the better part of a decade.


Cabi West will not manage its properties and Arden will continue to manage the 33 properties from the portfolio, Mayo said. As Cabi West expands its holdings, Arden, a unit of GE Real Estate, has also been purchasing property in an expansion effort.


“This sale is part of Arden’s portfolio management and growth strategy to move non-core assets in an exceptional market and acquire $1 billion of new properties on the West Coast. As part of that strategy, Arden is continuing to periodically acquire and sell commercial real estate,” the company said in a statement.


Cabi West may have been able to land the portfolio because Arden’s parent, GE Real Estate has financed GISCA real estate deals in Mexico.


Arden was acquired by GE Real Estate, a division of General Electric Co., for $4.8 billion last year. Since then, Arden has been steadily selling off pieces of its portfolio and will have purchased about $850 million of new properties by the end of the second quarter. It owns about 10 million square feet of office space in Southern California.

No posts to display