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Trizec Portfolio Tilts to the West

CHICAGO-Southern California will produce 30% of the company's net operating income when Trizec Properties Inc. closes on the 4.1-million-sf Arden Realty Inc. portfolio. Two-thirds of NOI will eventually come from three markets--Los Angeles, New York City and Washington, DC.

By Mark Ruda | Updated on February 09, 2006

CHICAGO-Trizec Properties Inc. may be headquartered in the West Loop, but the REIT is increasingly bi-coastal. When the $1.6-billion acquisition of Arden Realty Inc.’s 4.1-million-sf portfolio closes in late March or early April, Southern California will be Trizec Properties’ largest market.

While Southern California will produce 30% of the company’s net operating income, president and chief executive officer Tim Callahan says the company already gets 55% of its NOI from three markets–Los Angeles, New York City and Washington, DC. While the company’s portfolio shakeout has slashed its number of markets from 19 to nine in less than three years, two-thirds of Trizec Properties’ NOI will soon come from those top three markets, Callahan adds.

In 2003, Callahan notes, Trizec Properties got 20% of its net operating income from secondary markets. By the end of last year, the share of NOI from secondary markets had dropped to just 7%, he adds. “We anticipate this percentage could decrease to 3%” Callahan says.

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