Maguire’s Equity in Tower Deal is Unclear

By DANNY KING

Staff Reporter

Was MaguirePartners’ coup done without cash?

That’s the question being asked after the developer arranged the buyout of its partner in the 73-story Library Tower, Tokyo-based Dai-ichi Mutual Life.

Dai-ichi’s 75 percent share of the tower, tallest on the West Coast, was valued at $300 million.

Maguire brought in Column Financial and Capital Trust, subsidiaries of Credit Suisse First Boston and Citigroup, respectively, to provide mezzanine debt financing while taking on DLJ Real Estate Partners II, which is managed by CSFB, as an equity partner.

While MaguirePartners appears to have secured control of the 1.3 million-square-foot Library Tower, there are questions about how much equity the developer actually contributed to the deal.

“I don’t think that he put in significant capital,” said Jones Lang LaSalle Inc. Managing Director Thomas McClayton, who, with Tom Miller, represented Dai-ichi.

Robert F. Maguire III, the company’s managing partner, would not say what the firm’s equity contribution was, other than to say it did put up some cash. Maguire estimated that his company had arranged about $1 billion in financing with CSFB over the years.

Regardless of the size of the investment, the move puts MaguirePartners in a better position either to be acquired or go public.

“It is part of our overall strategy that will result in a major capital transaction. It could be a private transaction, and it could be a public transaction like a REIT,” said Maguire. “It’s no mystery that we’ve been active in working with Salomon Smith Barney and CSFB for capital alternatives.”

It also represents an about face from last year, when Maguire nearly sold his portfolio to Chicago-based Equity Office Properties Trust and, later, Toronto-based TrizecHahn Corp. before both deals fell through.

Times have changed, he said, with real estate investors showing renewed interest in Los Angeles.

“The enthusiasm of the major financial resources is a real reflection of how the downtown central business district is being reviewed by the national real estate community,” said Maguire.

The purchase of the interest in Library Tower comes 15 months after MaguirePartners bought Dai-ichi’s 50 percent interest in the Gas Co. Tower downtown.