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Texas firm buys offices in L.A. area

The developer takes over 53 Southland buildings valued at almost $1.4 billion.

December 02, 2008|Roger Vincent | Vincent is a Times staff writer.

A major Texas developer confirmed Monday that it took possession of 53 Southern California office buildings last week in a transaction valued at almost $1.4 billion after the previous owners were unable keep up their loan payments.

Privately held Hines recently said it controlled international real estate valued at $23 billion that included several properties in California, such as office buildings One Wilshire and Union Bank Plaza in downtown Los Angeles.

The new office purchases include South Bay Centre in Gardena, the Beverly Atrium in Beverly Hills and Fountain Valley Plaza in Fountain Valley.

The portfolio in Los Angeles, Orange and San Diego counties was purchased for $1.51 billion by a group of 32 investors in 2007 by Arden Realty Inc. of Los Angeles.

For The Record
Los Angeles Times Thursday, December 04, 2008 Home Edition Main News Part A Page 2 National Desk 2 inches; 92 words Type of Material: Correction
Office buildings: An article in Business on Tuesday about Texas developer Hines taking possession of 53 Southern California office buildings in a transaction valued at almost $1.4 billion incorrectly said the buildings had been purchased by a group of 32 investors in 2007 by Arden Realty Inc. of Los Angeles. It should have said they were purchased from Arden Realty by that group of investors. It was that group, represented by Cabi Developers of Miami, that was unable to keep up the loan payments, paving the way for Hines to take ownership.

Hines, based in Houston, was one of 11 lenders for the 32 investors, who were represented by Cabi Developers of Miami. An affiliate of Cabi managed the portfolio.

"We were first in line when they defaulted on the mortgage," said Colin Shepherd, a senior vice president at Hines. "They negotiated in lieu of a foreclosure to turn the assets over to us."

Shepherd valued the transaction, which involved assuming all debts to other lenders, at close to $1.4 billion.

Cabi sold two buildings from the original portfolio to raise money for interest payments.

Hines is working on a strategy to get maximum profit from the multi-tenant buildings, but probably won't part with any of them soon, Shepherd said.

"I would not anticipate that we would be selling any of the assets in the near term," he said.

--

roger.vincent@latimes.com

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