The deal is complex. One part calls for the buyer to pay Casden Properties founder Alan Casden and his partner, an affiliate of Blackacre Capital Management, about $166 million in cash, $213 million in stock and other securities, and to assume about $684 million of the partnership's mortgage debt.

Apartment Investment & Management Co., commonly called Aimco, will also take control of 1,381 apartment units that Casden is building near the Fairfax District's sprawling Park LaBrea housing complex in exchange for $419 million in cash and the assumption of debt.

Casden Properties already owns about 17,400 apartment units, primarily in Southern California. It is in various stages of developing another 6,700 units.

Another Casden subsidiary, National Partnership Investments Corp., holds an interest in about 41,000 other units. The deal calls for Aimco to take control of that entity, too.

As part of the deal, Alan Casden also announced the formation of a new company called Casden Development LLC. Various Casden affiliates, along with Aimco and Blackacre Capital, have capitalized the new venture with $320 million, Alan Casden says.

The new company will employ all of Casden Properties' development and management team. Aimco will have an option to purchase future apartments that Casden Development builds.

The new company "will develop both market-rate and affordable housing in the Los Angeles area," Alan Casden says. Its work "will be very positive for the local economy, both in terms of job creation and the relief of the critically acute local rental housing shortage."

The sale has already been approved by Casden and related shareholders, the company says. The transaction is expected to close early next year.

The deal would instantly make Aimco one of the largest apartment owners in Southern California, an area where the firm has longed pined to become a major player. The transaction would raise Aimco's owned and managed US asset base to $15 billion from $12.5 billion, a company official says.

The acquisition would also increase the firm's portfolio of owned and managed units to 363,000 units from 304,000. The publicly held REIT is already the No. 1 US apartment owner in terms of sheer units, though Chicago-based Equity Residential Properties Trust is largest in terms of sales.

Aimco's stock was up 20 cents in mid-afternoon trading on Wall Street Wednesday, at $45.44 a share. It rose $1.09 a share on Tuesday.

Casden Properties completed a private stock offering in 1999 to convert the company into a private REIT.