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LOS ANGELES-Arden Realty has acquired a 533,315-sf portfolio of San Diego office buildings from New York-based DRA Advisors in the first of what the Los Angeles-based company says will be a series of acquisitions. Joaquin De Monet, president and CEO of Arden, tells GlobeSt.com that the deal marks the beginning of an expansion by Arden that will take the company beyond its traditional Southern California roots to new markets in Northern California, the Pacific Northwest and Arizona.

De Monet says that Arden has “a very big appetite for new assets in our core markets and beyond.” The expansion plan also will refocus Arden more on value-added deals, De Monet tells GlobeSt.com.

The Arden president explains that the company sees potential upside in its targeted office markets by boosting NOI through a combination of approaches, depending on the individual buildings. For some buildings that may mean lease-up of vacant space, for others it might be improved management and for others it might be rent increases flowing from capital investments in deferred maintenance.

Arden’s acquisition of the 10-building portfolio in San Diego comes almost simultaneously with the company’s sale of a one-million-sf, $187-million portfolio of office properties in San Diego, Orange and Los Angeles counties to the San Diego-based Shidler Group. In that deal, Shidler acquired 15 buildings in seven projects in the three counties.

The sale to Shidler is part of the Arden strategy, which calls for “selling out of submarkets that we believe are non-strategic in terms of our long-term strategy or selling properties that are non-core,” De Monet says. In addition to the sale to Shidler, Arden also has sold a $70-million building in El Segundo.

The assets that Arden acquired from DRA are in San Diego’s north and central submarkets, which Arden describes as “highly desirable.” Collectively, the 10 buildings are 88% leased to 36 tenants.

The 10 properties include two buildings at the Highlands Plaza in Del Mar Heights, three buildings at Creekside in Sorrento Mesa, one building at 9444 Balboa in Kearny Mesa, three buildings at Carmel Point in Carmel Mountain Ranch and one building at West Bernardo in Rancho Bernardo.

Tenants at the properties include Fireman’s Fund Insurance, Allstate, Panasonic, Samsung and Northrop Grumman. Arden was represented in the acquisition by first VP Paul King and director of acquisitions Doug Campbell. DRA Advisors was represented by Trammell Crow executive VPs and principals Rick Putnam, Jeff Cole and Ed Hernandez.

Arden is one of the largest office landlords in Southern California. Following its latest acquisition and disposition, the company owns 15.3 million sf in 108 properties and 185 buildings from Ventura to San Diego.

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