Carlton tapped for $1.5b financing.

Carlton Advisory Services' chairman Howard L. Michaels announced that managing directors Marc Sznajderman and Romano Tio have been engaged on an exclusive basis to obtain an approximately $1.5 billion floating-rate acquisition financing package for Cabi Corp.'s high-profile acquisition of a 4.6 million square foot office portfolio in Southern California.

The total cost, according to published reports, is approximately $1.65 billion, including all closing costs and reserves.

Cabi Corp. is the US affiliate of GICSA, Mexico's largest commercial real estate developer, which has developed and owned more than 14 million square feet of office, industrial, retail and residential real estate.

The portfolio, previously owned by Arden Realty, includes 33 properties in Los Angeles, Orange County, Ventura County and San Diego. Sources close to the transaction say that Cabi's business plan calls for the disposition of certain assets in one-off transactions during the first few years of the investment to reduce the leverage and their basis. The floating rate financing will then be refinanced as fixed-rate debt.

The West Los Angeles submarket, regarded as one of the most attractive office markets in the nation, contains the highest concentration of properties followed by the North and South Los Angeles submarkets.

A relatively small number of lending institutions have been solicited for financing proposals given the transaction size and quick closing schedule.

Carlton's representation of Cabi and the floating rate financing request has received a warm reception with CMBS lenders who have pulled the reins in on aggressive fixed-rate financings in the last month, according to the firm.