Arden in Talks to Buy LBA Portfolio of 50 Properties

Beverly Hills-based Arden Realty Inc. is negotiating its largest purchase yet, the acquisition of 5 million square feet of office and industrial space, from LBA Properties Inc. of Newport Beach.

The real estate investment trust is said to be close to signing an agreement to purchase the LBA portfolio of nearly 50 properties, smaller buildings that are similar to its own holdings and in some cases, across the street from Arden properties.

When LBA filed a prospectus for a public offering earlier this year, it pegged the value of its stock at $378.5 million. However, a private sale should fetch even more, sources speculate.

Arden is one of a handful of bidders negotiating to purchase the LBA portfolio, Arden Chief Executive Richard S. Ziman acknowledged this week at a real estate event. He said a high bidder could be picked as early as next week for the purchase. However, Arden had not yet struck an agreement to purchase the properties. LBA officials declined comment.

The deal would boost Arden’s holdings by more than half to 14.7 million square feet. It is reportedly bidding against real estate companies such as Crescent Real Estate Equities Inc., Spieker Properties Inc. and Prentiss Properties for the assets.

LBA was founded in 1991 by Steven Layton, a former Koll Co. executive. Since 1994 the company has purchased property from San Diego to Los Angeles with the backing of financial partner Boston-based Aldrich Eastman & Waltch.