Arden is the largest public real estate company in the Southern California region with some 18.5 million sf of assets. As part of the transaction, Chicago-based Trizec Properties Inc. will acquire part of the locally based REIT's office portfolio for $1.63 billion. GE will also assume approximately $1.6 billion of Arden debt as part of the deal.

Trizec's part of the deal is expected to include 13 of the REIT's assets totaling some 4.1 million sf in West L.A. (10 holdings) and San Diego (three). The assets are roughly 91% occupied and include land parcels at the Howard Hughes Center. These can accommodate up to 490,000 sf of office development and roughly 600 housing units.

The deal is part of a longstanding trend in REIT buys--specifically REITs going into private structures. As GlobeSt.com reports in its new Issues in Focus feature, privatization is "definitely a trend," according to Gregory Pressman, a partner in the real estate department of Manhattan-based law firm Schulte, Roth & Zabel LLP. "The market is simply undervaluing the stock compared to what management believes is the real value of their assets. It's a classic buyback situation."

How much of a trend is it? According to Real Estate Forum, which based its statistics on Real Capital Analytics figures, of the $260.5 billion of core properties that traded last year, $130.8 billion went to private buyers.