Shepherd says that Hines, which had purchased a portion of the debt that Cabi placed on the properties at the time it bought them from Arden, negotiated to acquire the portfolio in lieu of a foreclosure after Cabi had trouble making debt payments. Shepherd explains that the deal converts Hines' debt to equity, with Hines also assuming the other debt on the properties. The effective purchase price is the face amount of the debt, which is about $1.35 billion.

About 70% of the new Hines buildings are in Los Angeles County, with the remainder in Orange, Ventura and San Diego counties. Shepherd describes Hines' newly acquired properties as "a great portfolio of assets in diverse geographic areas of Southern California, which is a market we have a lot of faith in for the long term."

The buildings in general are well leased, and Hines has no immediate plans to sell any of them, Shepherd notes. "Our objective right now is to stabilize the properties, manage them well and serve the interests of our tenants," he says. At some point, after the economy improves, "We will look at the portfolio on a building-by-building basis, and market-by-market, to determine the best strategy for each property."

According to a GlobeSt.com report at the time of Cabi's deal with Arden, the highest concentration of the office buildings is in the West Los Angeles submarket, one of the strongest in Southern California. Among the West LA buildings is the 243,000-square-foot Century Park Center at 9911 W. Pico Blvd.

The acquisition of the nearly 4.5-million-square-foot portfolio follows Hines' purchase in September of the 891,000-square-foot Citigroup Center at 444 S. Flower St. in Downtown Los Angeles from New York City-based Broadway Partners. Terms of that sale were not disclosed, but sources pegged the deal at $280 million. Hines' Southern California properties are part of a portfolio of assets valued at approximately $22.9 billion that the Houston-based company controls, according to its website.