Cabi Closes $1.5B Arden Office Portfolio

By Bob Howard

LOS ANGELES-Cabi Developers, the local arm of Mexico's Gicsa, has closed its $1.5-billion acquisition of a 33-property office portfolio from Arden Realty. Cabi financed 90% of the acquisition costs with floating rate debt arranged by Carlton Advisory Services of New York City, according to Carlton chairman Howard L. Michaels.

The Cabi portfolio includes 4.6 million sf of properties in Los Angeles, Orange, Ventura and San Diego counties. The company's business plan calls for the disposition of some of the buildings in one-off transactions during the first few years of the investment to reduce leverage on the portfolio, with Cabi planning to retain the remaining properties for the long term.

Carlton marketed the financing deal to a relatively small number of lenders because of the transaction size and tight schedule on the sale, which closed financing within 60 days of Carlton's landing the assignment. The New York City-based mortgage adviser describes the financing as highly structured and priced "at a very competitive spread."
Cabi was represented in the financing by Carlton managing directors Romano Tio and Marc Sznajderman, senior vice president Stephen Scorgie, vice president Chad Buchanan and managing director Thomas McCarthy. Michaels, Tio and Sznajderman placed the financing with a major investment bank.

The Cabi portfolio includes its highest concentration of buildings in the West Los Angeles submarket, one of the strongest in Southern California, as well as a substantial number of buildings in the North L.A. and South Los Angeles submarkets. Among the West L.A. buildings is the 243,000-sf Century Park Center at 9911 W. Pico Blvd.

The L.A. operations of Cabi are managed by partner Henry Shahery, a veteran of the Southern California market. Its US operations are led by CEO Jacobo Cababie.

The closing of the Arden portfolio expands a Gicsa US portfolio, operated through its Cabi subsidiary, that also includes holdings in Texas, Nevada and Florida. Cabi also has its eye on acquisitions in other western states, according to Shahery.

Arden's sale of the 33 properties to Cabi is one of a host of acquisitions and dispositions by the Los Angeles-based company since the former public REIT became a holding of GE Real Estate. Arden, once solely a Southern California landlord, is now pursuing an expansion strategy in which it has acquired office assets in a number of other western markets.

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