Robert F. Maguire III is planning a bid for the remaining Los Angeles office buildings owned by MPG Office Trust Inc. (MPG), the company he helped found in 1965 and left 43 years later. The shares rose the most in eight months.
Maguire and a group of investors are looking to buy the four downtown buildings still on the market -- the Gas Company Tower at 555 West Fifth St.; Wells Fargo Tower and KPMG Tower, both on South Grand Avenue; and 777 Tower on South Figueroa Street, he said. He estimates the portfolio value at about $2 billion, including debt, and wouldn’t say how much he’ll bid.
“There are lots of exciting things happening downtown,” Maguire, 77, said in a e-mail. “The future is very positive. As a result, we plan to bid on the MPG portfolio.”
The Los Angeles-based company has been selling buildings to pay debt incurred in 2007, when it bought 24 properties and 11 development sites from Blackstone Group LP (BX) for about $2.88 billion. The company had about $1.9 billion of debt as of Dec. 31, including about $638 million maturing this year on the KPMG and 777 towers, according to its annual report filed last week. It doesn’t have committed sources of cash adequate enough to fund its potential needs, the company said in the filing.
Peggy Moretti, an MPG spokeswoman, didn’t return a telephone call seeking comment on Maguire’s planned bid.
MPG rose 7.6 percent to $2.70 at the close of New York trading. It was the biggest increase since July 26.
Earlier this month, MPG agreed to sell Los Angeles’s U.S. Bank Tower, the West Coast’s tallest office building, for $367.5 million to Singapore-based Overseas Union Enterprise Ltd. (OUE) MPG expects net proceeds of about $103 million, some of which may be used toward debt payments coming due this year, according to its annual report.
Maguire founded Maguire Partners, a predecessor company to MPG, 48 years ago and took Maguire Properties public in 2003. He made a $745 million buyout offer in April 2008 that was rejected, with a special committee of the board saying the bid was “subject to numerous, substantial contingencies and questions.” Maguire resigned in May 2008, and the company changed its name to MPG in 2010. Maguire is now chief executive officer of Santa Monica, California-based Maguire Investments.
The Maguire-led group would plan to refurbish parts of the remaining MPG portfolio, including common areas, to increase occupancy, he said. Vacancies at MPG’s downtown properties were 21.6 percent as of Dec. 31, according to the company’s annual report. Office vacancies in downtown Los Angeles were 17.8 percent in the fourth quarter, brokerage Jones Lang LaSalle Inc. said.
Maguire said he’s close to having financing lined up, and the transaction could close within six months should the group get the required two-thirds vote from preferred shareholders.
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