Finance REITs
Oct 13, 2008
By: Barbra Murray, Contributing Editor
With its stock having vacillated between a high of $30.73 per share and a low of $3.31 per share over the last 52 weeks, Los Angeles-based Maguire Properties has had a rough year. However, a recent stock purchase proves that investors remain interested in the REIT that boasts the title of the largest owner of Class A office buildings in Downtown Los Angeles.
Between Sept. 29 and Oct. 7, California Capital L.P. shelled out a total of nearly $27.5 million to acquire 4,650,000 shares of Maguire common stock accounting for 9.7 percent of the company's total outstanding common stock.
California Capital is a partnership involving California-established Themba L.L.C., which serves as California Capital's general partner; the Themba 2005 Trust I and the Themba 2005 Trust II, both of which were established in the Cook Islands; and the California-established California Capital Trust. The principal business of Themba I and II is estate planning, and California Trust's principal business is estate planning and the holding of securities. The partnership made a total of eight Maguire stock purchase transactions at costs ranging from $5.8137 to $6.2334 per share.
"Because the share price is so low and there are so few outstanding shares--about 44 million--a company can get a sizable percentage of ownership in Maguire without investing a sizable amount of capital," John Guinee, managing director with financial services provider Stifel Nicolaus & Co., told CPN.
Maguire's financial woes commenced soon after the company completed its $3 billion acquisition of an 8.1 million-square-foot former Equity Office Properties portfolio of office and development sites from Blackstone Real Estate Advisors in April 2007. Eight months later, the company announced the formation of a special committee to mull over strategic alternatives. This year, Maguire kicked off a campaign to increase liquidity and shareholder value through the disposition of certain office assets in Orange County, and the company has made great headway in pursuit of that goal. In August, Maguire closed the sale of the 607,000-square-foot Main Plaza trophy office complex in Irvine to Shorenstein Properties L.L.C. for $211 million, and early last month, it wrapped up the sale of the 324,000-square-foot City Plaza office building in Orange to an entity owned by Hudson Capital L.L.C.
On Oct. 10, former Maguire CEO & founder Robert Maguire sent an open letter to company shareholders--Maguire, chairman & chief executive of Maguire Investments, remains a shareholder--touting the company's strong fundamentals. The list highlighted the REIT's premier real estate assets, predictable income streams and highly favorable fixed-rate debt featuring no near term maturities, and adequate liquidity. Maguire also referenced a Sept. 30 analyst report by Guinee, in which he assigned Maguire a private market value of $22 per share, and pointed to the strength of the Los Angeles office market, as well as the company's balanced lease expirations.
"We will know by the end of this year whether Maguire has successfully extricated itself from the disastrous purchase of the EOP portfolio," Guinee said. "There are still a lot of transactions to complete, but the open letter and the California Capital investment are making the assumption that Maguire will successfully extricate itself from Orange County."
Maguire is an owner, developer and manager of premier office properties in Southern California. Its Los Angeles Central Business District portfolio alone encompasses approximately 9.1 million square feet at eight properties. Since its inception, the company, which went public in 2003, has developed more than 33 million square feet of office space.
By: Barbra Murray, Contributing Editor
With its stock having vacillated between a high of $30.73 per share and a low of $3.31 per share over the last 52 weeks, Los Angeles-based Maguire Properties has had a rough year. However, a recent stock purchase proves that investors remain interested in the REIT that boasts the title of the largest owner of Class A office buildings in Downtown Los Angeles.
Between Sept. 29 and Oct. 7, California Capital L.P. shelled out a total of nearly $27.5 million to acquire 4,650,000 shares of Maguire common stock accounting for 9.7 percent of the company's total outstanding common stock.
California Capital is a partnership involving California-established Themba L.L.C., which serves as California Capital's general partner; the Themba 2005 Trust I and the Themba 2005 Trust II, both of which were established in the Cook Islands; and the California-established California Capital Trust. The principal business of Themba I and II is estate planning, and California Trust's principal business is estate planning and the holding of securities. The partnership made a total of eight Maguire stock purchase transactions at costs ranging from $5.8137 to $6.2334 per share.
"Because the share price is so low and there are so few outstanding shares--about 44 million--a company can get a sizable percentage of ownership in Maguire without investing a sizable amount of capital," John Guinee, managing director with financial services provider Stifel Nicolaus & Co., told CPN.
Maguire's financial woes commenced soon after the company completed its $3 billion acquisition of an 8.1 million-square-foot former Equity Office Properties portfolio of office and development sites from Blackstone Real Estate Advisors in April 2007. Eight months later, the company announced the formation of a special committee to mull over strategic alternatives. This year, Maguire kicked off a campaign to increase liquidity and shareholder value through the disposition of certain office assets in Orange County, and the company has made great headway in pursuit of that goal. In August, Maguire closed the sale of the 607,000-square-foot Main Plaza trophy office complex in Irvine to Shorenstein Properties L.L.C. for $211 million, and early last month, it wrapped up the sale of the 324,000-square-foot City Plaza office building in Orange to an entity owned by Hudson Capital L.L.C.
On Oct. 10, former Maguire CEO & founder Robert Maguire sent an open letter to company shareholders--Maguire, chairman & chief executive of Maguire Investments, remains a shareholder--touting the company's strong fundamentals. The list highlighted the REIT's premier real estate assets, predictable income streams and highly favorable fixed-rate debt featuring no near term maturities, and adequate liquidity. Maguire also referenced a Sept. 30 analyst report by Guinee, in which he assigned Maguire a private market value of $22 per share, and pointed to the strength of the Los Angeles office market, as well as the company's balanced lease expirations.
"We will know by the end of this year whether Maguire has successfully extricated itself from the disastrous purchase of the EOP portfolio," Guinee said. "There are still a lot of transactions to complete, but the open letter and the California Capital investment are making the assumption that Maguire will successfully extricate itself from Orange County."
Maguire is an owner, developer and manager of premier office properties in Southern California. Its Los Angeles Central Business District portfolio alone encompasses approximately 9.1 million square feet at eight properties. Since its inception, the company, which went public in 2003, has developed more than 33 million square feet of office space.
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