'Virtual Real Estate'.

Corporate housing provider Oakwood Worldwide may have sold its U.S. portfolio to Archstone-Smith Trust, but that doesn't mean it's getting out of the business.

Los Angeles-based Oakwood Worldwide announced last week it will sell its U.S. portfolio of 30 apartment buildings to Archstone-Smith for $1.4 billion, including its flagship 1,151-unit Oakwood Toluca Hills property.

The transaction includes 10,000 apartment units, more than 40 percent of them in Southern California, Archstone-Smith said in a press release. Oakwood, a manager and owner of corporate housing and furnished apartments, will continue to manage about half of the units being sold.

It will be left with a portfolio of 20,000 managed corporate housing and furnished units worldwide, including 3,000 units in Los Angeles. Its only owned properties will be overseas; part of the funds from the sale will be used to expand its holdings in Asia and Europe.

Even without owning anything in the U.S., Oakwood Worldwide will still manage more rooms than its 10 largest competitors combined, according to Oakwood Chairman Howard F. Ruby.

The sale is intended to give Oakwood's more than 30 investors a return and more flexibility. It's also a way for the company to control buildings without owning them and still draw strong cash flows.

"We want to refocus our attention away from board-and-nail asset owners and move more into what we like to call virtual real estate," Ruby said.

Large corporations hire Oakwood to provide temporary housing to employees on short-term assignments or those transferring to a new city. The company was founded in 1960 by Ruby, Ed Broida and Bob Franks and remains privately held.

The deal will boost Archstone-Smith's Southern California assets to 22 percent of its portfolio from 19 percent. Closing is expected to occur in stages, beginning in April.

Also included in the sale are the 883-unit Oakwood Woodland Hills East in Woodland Hills, the 597-unit Oakwood Marina del Rey and the 549-unit Oakwood Long Beach Marina in Seal Beach. There are also smaller buildings in Pasadena, Thousand Oaks and La Jolla.

Other Oakwood properties being sold are located in the Washington, D.C., area, the San Francisco Bay Area and a number of smaller properties in Boston, Chicago and near Seattle.

In recent years, Englewood, Colo.-based Archstone-Smith has been aggressively acquiring properties throughout the L.A. region, particularly on the Westside. The publicly traded real estate investment trust is the nation's third-largest apartment owner with 250 complexes that altogether contain 90,000 units.

Staff reporter Andy Fixmer can be reached by phone at [phone], ext. 263, or by e-mail at [e-mail].