Los Angeles Business Journal

MPG Opts for Piecemeal Sale of L.A. Portfolio

By Jonathan Polakoff Wednesday, February 13, 2013

Shares of MPG Office Trust Inc. closed down 18 percent Wednesday following a report that the downtown L.A. real estate investment trust has failed to find a buyer for its portfolio of L.A. office properties.

MPG will instead try to sell its office properties individually, according to the report from industry newsletter Real Estate Alert. The properties include the West Coast’s tallest building, the 1.4 million-square-foot US Bank Tower at 633 W. Fifth St., and the 1.1 million-square-foot KPMG Tower at 355 S. Grand Ave.

MPG, formerly Maguire Properties, hired real estate advisor Eastdil Secured in August to explore bringing on a capital partner or possibly selling the company. Investors, many of them hedge funds, were hoping a deal would materialize by the end of last year.

Today’s news of an asset-by-asset sale disappointed investors with a short time horizon and raised questions about whether the properties will command top dollar, said John Guinee III, an analyst who follows MPG at Stifel Nicolaus & Co. in Baltimore.

“The ownership of Maguire is primarily hedge funds looking for quick execution of a company sale,” he said. “The news that the company sale is likely not to materialize – and that an asset by asset transaction is more likely – definitely extends the timeframe by six to 12 months and raises questions about the ultimate pricing and execution.”

Shares closed down 18 percent to $2.64 in Wednesday trading on the New York Stock Exchange.