Finance REITs
Aug 28, 2008
By: Barbra Murray, Contributing Editor
Los Angeles-based Maguire Properties Inc. has closed the disposition of Main Plaza, selling the 607,000-square-foot trophy office complex in Irvine, Calif., to Shorenstein Properties L.L.C for $211 million including the assumption of $161 million of project level financing.
The transaction reached completion two months after the parties entered into the agreement, and leaves Maguire with net proceeds totaling $48 million to be used for debt reduction and general corporate purposes.
Maguire revealed in June that reducing debt through the sale of certain Orange County assets would be one component of its multi-faceted plan to revitalize the company, which has seen its stock plummet as much as 75 percent over the last year.
Located a stone's throw from the 405 Freeway and just minutes from John Wayne Airport, Main Plaza consists of twin 12-story structures that were built in 1988 and a six-level parking facility connected to the structures by an enclosed glass bridge. Maguire came into possession of 1920 Main Plaza and 2010 Main Plaza when it purchased a portfolio of former Equity Office Properties holdings consisting of 24 buildings and development sites in Los Angeles and Orange County totaling 8.1 million square feet from The Blackstone Group for nearly $3 billion in April 2007. The company relied on new mortgage financings totaling $2.3 billion, a $530 million corporate facility and a $223 million bridge loan to finance that acquisition.
Not long after the mega-transaction, Maguire began to run into trouble. In December 2007, Maguire announced the formation of a special committee, with Morgan Stanley & Co. acting as financial advisor, to consider strategic alternatives for increasing shareholder value, including a potential sale of the company. In March, in the midst of finalizing its review of strategic alternatives, the company removed selling from the list of options, citing the state of the credit markets and a lack of feasible acquisition offers. The next month, Maguire received an expression of interest from chairman & CEO Robert Maguire involving a proposed purchase at $21 per share, but the deal never came to fruition.
Today, Maguire is continuing to pursue its initiatives for enhancing shareholder value, including the reorganization of its management team, the pursuit of new financing, and the sale of certain Orange County assets. To that end, real estate services firm Eastdil Secured has been tapped to market Park Place, a 105-acre mixed-use campus in Irvine that is on target to reach full development over the next five to seven years.
Maguire owns and operates office properties in Southern California. The public REIT is the largest owner of Class A office buildings in the Los Angeles Central Business District, with 9.1 million square feet at eight properties.
Headquartered in San Francisco, Shorenstein is a private real estate investment company that owns and manages office and mixed-use properties across the United States. The 84-year-old firm has sponsored nine closed-end real estate investment funds since 1992.
By: Barbra Murray, Contributing Editor
Los Angeles-based Maguire Properties Inc. has closed the disposition of Main Plaza, selling the 607,000-square-foot trophy office complex in Irvine, Calif., to Shorenstein Properties L.L.C for $211 million including the assumption of $161 million of project level financing.
The transaction reached completion two months after the parties entered into the agreement, and leaves Maguire with net proceeds totaling $48 million to be used for debt reduction and general corporate purposes.
Maguire revealed in June that reducing debt through the sale of certain Orange County assets would be one component of its multi-faceted plan to revitalize the company, which has seen its stock plummet as much as 75 percent over the last year.
Located a stone's throw from the 405 Freeway and just minutes from John Wayne Airport, Main Plaza consists of twin 12-story structures that were built in 1988 and a six-level parking facility connected to the structures by an enclosed glass bridge. Maguire came into possession of 1920 Main Plaza and 2010 Main Plaza when it purchased a portfolio of former Equity Office Properties holdings consisting of 24 buildings and development sites in Los Angeles and Orange County totaling 8.1 million square feet from The Blackstone Group for nearly $3 billion in April 2007. The company relied on new mortgage financings totaling $2.3 billion, a $530 million corporate facility and a $223 million bridge loan to finance that acquisition.
Not long after the mega-transaction, Maguire began to run into trouble. In December 2007, Maguire announced the formation of a special committee, with Morgan Stanley & Co. acting as financial advisor, to consider strategic alternatives for increasing shareholder value, including a potential sale of the company. In March, in the midst of finalizing its review of strategic alternatives, the company removed selling from the list of options, citing the state of the credit markets and a lack of feasible acquisition offers. The next month, Maguire received an expression of interest from chairman & CEO Robert Maguire involving a proposed purchase at $21 per share, but the deal never came to fruition.
Today, Maguire is continuing to pursue its initiatives for enhancing shareholder value, including the reorganization of its management team, the pursuit of new financing, and the sale of certain Orange County assets. To that end, real estate services firm Eastdil Secured has been tapped to market Park Place, a 105-acre mixed-use campus in Irvine that is on target to reach full development over the next five to seven years.
Maguire owns and operates office properties in Southern California. The public REIT is the largest owner of Class A office buildings in the Los Angeles Central Business District, with 9.1 million square feet at eight properties.
Headquartered in San Francisco, Shorenstein is a private real estate investment company that owns and manages office and mixed-use properties across the United States. The 84-year-old firm has sponsored nine closed-end real estate investment funds since 1992.
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