You can say أنا آسف لخسارتك (ana aasif li khasaaratek)
Also, this is a very common expression : رَحِمَهُ الله (rahimahu allah) if the person who died is a male
رَحِمَها الله (rahimaha allah) id the person who died is a female
This expression means : May God have mercy on him / her
You can add أَسْكَنَهُ الله فَسيحَ جِنانِه (Askanahu allah faseeha jenaaneh) if the person who died is a male
Or you change the 1st word to أَسْكَنَها (askanaha) if the person who died is a female.
Maybe this 2nd expression is a bit hard, it means : May God makes him / her live in his wide heaven.