SAN FRANCISCO -- Taking a big step toward cleaning up its portfolio of bad loans, California Federal Bank said it has agreed to sell $350 million of problem assets to Argo Partnerships, a New York-based real estate investment fund.

The Los Angeles-based thrift did not disclose terms, but a spokesman said the price is "on the higher side of expectations," another sign of a stable-to-improving market for distressed Southern California real estate.

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