GE reaches deal to acquire Arden Realty trust

first_img AD Quality Auto 360p 720p 1080p Top articles1/5READ MORERose Parade grand marshal Rita Moreno talks New Year’s Day outfit and ‘West Side Story’ remake “They are making a concerted effort outside the U.S.,” said Mary Anne Sudol, an analyst with Caris & Co. in New York. “This shows you in selected markets there still are opportunities in the commercial market.” The deal reflects GE’s interest in certain office markets in the U.S., such as Southern California, Phoenix and the Washington, D.C., area, said Joseph Parsons, president of North American equity holdings for GE’s real estate unit. While fast-rising residential property values have created worries of a housing bubble, the office market in some areas of the country is showing renewed strength with growing rents and lower vacancies, Parsons said. “We are particularly bullish on the office market,” Parsons said. “We’re going to be opportunistic in the U.S.” Buying Arden, which has about 300 real estate professionals who manage, lease, acquire and renovate commercial properties, will allow GE to expand its holdings and use its expertise to shift from a passive investor to an active operating partner in the properties it buys, Parsons said. That shift will allow GE to be more competitive and move in and out of markets efficiently, he said. GE Real Estate is paying stockholders $45.25 for each Arden share, a 3.7 percent discount to its Wednesday closing price of $46.99. Shares of Arden fell $1.81, or 3.8 percent, to close at $45.18 Thursday on the New York Stock Exchange. The stock was trading about $38 in late September when speculation arose that the real-estate investment trust might be for sale. The transaction also includes the assumption of about $1.6 billion in debt, bringing the overall acquisition value to about $4.8 billion, the companies said. The deal is expected to close by the end of the first quarter. “This transaction brings us not only a high-quality portfolio of real estate assets in the dynamic Southern California market, but also a great platform and infrastructure from which to grow,” said Michael Pralle, president and chief executive officer of GE Real Estate. Trizec, a Chicago-based owner of office properties, said acquiring Arden’s properties will nearly double its real estate in Southern California to more than 8.6 million square feet. Trizec said Southern California has a strong economy that makes the properties attractive. The portfolio is expected to be 91 percent occupied at the closing of the transaction, Trizec said. GE shares rose 35 cents to close at $35.42 Thursday on the New York Stock Exchange.160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! STAMFORD, Conn. – General Electric Co. has agreed to buy commercial real-estate investment trust Arden Realty Inc. for about $3.2 billion in cash in one of its largest U.S. real estate deals. Arden says it is the largest publicly traded office landlord in Southern California, with 18.5 million square feet in 192 buildings. As part of the deal, Trizec Properties Inc. will buy 13 of Arden’s Southern California properties, with 4.1 million square feet of space, for about $1.63 billion, the companies said Thursday. The properties acquired by Trizec include the Howard Hughes Center, Westwood Center and World Savings Center in West Los Angeles. GE’s real estate group is one of its fastest-growing businesses, with about $48 billion in assets and more than $1 billion in profits last year. Much of the growth is taking place in Europe and Asia.last_img read more