MPG Office Trust Inc., the Los Angeles-based landlord formerly known as Maguire Properties, said it will default on a $470 million mortgage for a downtown high-rise as the company seeks to cut debt.
MPG delivered a notice of imminent default to the master servicer for Two California Plaza, a 54-story office tower that is “materially overleveraged,” MPG said in a statement today. The company wants to keep the building as part of a “core set of assets” while working to lower debt obligations, MPG said.
“At this time, we do not believe that funding current and projected operating deficits at this asset with the company’s precious unrestricted cash is in the best interests of our stockholders,” Chief Executive Officer David L. Weinstein said in the statement.
MPG has been cutting repayment and debt-service guarantees, extending loan maturities and selling money-losing buildings since buying 24 office properties and 11 development sites in Los Angeles and Orange County from Blackstone Group LP in 2007. About $2 billion of debt has been eliminated.
The landlord in May changed its name from Maguire Properties after public sparring with its founder Robert F. Maguire III, who resigned as CEO two years earlier.
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