Aimco Agrees to Buy Casden

Alan Casden, one of Los Angeles’ largest owners and developers of apartments, announced on Tuesday that he has agreed to sell his company to a Denver real estate firm for about $800 million.

The deal will hand Casden, who has earned a reputation as a hard-charging and ambitious real estate executive, the cash to pursue more housing projects in Los Angeles.

“It gives us the capitalization to go forward with our development business ... and do what we do extremely well,” said Casden, 55, whose firm is in the process of developing about 6,700 apartments in the Los Angeles area.

Apartment Investment & Management Co. will increase its apartment portfolio by 17,383 units and dramatically expand its presence in Southern California with the purchase of Beverly Hills-based Casden Properties. In addition, Apartment Investment will control a Casden subsidiary, National Partnership Investments Corp., which owns an interest in 41,000 other apartment units.

Apartment Investment also has agreed to invest up to $50 million for a 20% interest in Casden’s new development company, Casden Development.

Under the acquisition agreement, Apartment Investment will pay Casden and his partner, an affiliate of the investment firm Blackacre Capital Management, about $166 million in cash, $213 million in stock and other securities and assume $684 million in mortgage debt. Apartment Investments also will take ownership of 1,381 units Casden is building near Park La Brea in the Fairfax district in return for $419 million in cash and the assumption of debt.

The deal, which has been approved by Casden and related shareholders, is scheduled to close early next year.

On the New York Stock Exchange Tuesday, shares of Apartment Investment rose $1.09 to close at $45.24.

Apartment Investment, which also is known as Aimco, has grown rapidly after transforming itself into a publicly traded real estate investment trust in 1994. The company owns and manages more than 300,000 units nationwide.

Since the 1970s, Casden and his companies have developed more than 90,000 apartment units. In addition to building market-rate apartments, Casden has been heavily involved in developing affordable housing financed in part with tax credits.

In January 1999, Casden Properties completed a private stock offering worth $390 million, which converted the company to a private real estate investment trust.

Casden has a reputation for pioneering new markets such as Warner Center in the San Fernando Valley and undertaking large-scale projects, including the massive luxury apartment complex being built next to Park La Brea.

He also has been involved in numerous high-profile deals, some of which have proved controversial. He recently lost out to the Los Angeles Unified School District in a bid to buy and develop the 23.5-acre Ambassador Hotel property in the Wilshire Center district. His firm had offered to purchase the site for $115 million.

Last year, Casden drew opposition from city officials in Inglewood over his plan to build housing on the site of the former Great Western Forum. The arena later was sold to another bidder, Faithful Central Bible Church of Inglewood, for use as a religious and entertainment venue.

As the economy has slipped into recession, apartment values and rent have held up well compared with other types of commercial real estate. Casden said his new development company, which includes Blackacre Capital as a partner, will focus primarily on metropolitan Los Angeles, where housing remains in short supply.

“We see the demand for rental housing going up,” Casden said. “It’s a sound investment.”