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 US real estate deals.
Arden says it is the largest publicly traded office landlord in Southern California, with 18.5 million square feet.
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 yesterday. 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.
''They are making a concerted effort outside the US," 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 domestic office markets, 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.
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 shift from passive investor to active operating partner in the properties it buys, Parsons said.