Maguire to Sell Founder’s Pet Project, CFO to Leave Company

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In one of his first major steps since being named chief executive of struggling Maguire Properties Inc., Nelson Rising hopes to raise hundreds of millions of dollars by selling Park Place, a 105-acre office park and development site in Orange County, Calif., that had been a pet project of founder and former Chief Executive Robert Maguire III, the Wall Street Journal reports.


Maguire Properties, a large owner of California office buildings, also will raise $100 million to $110 million of much needed cash by adding debt to its Plaza Las Fuentes, a mixed-use property, and Westin Pasadena Hotel, both in Pasadena. In addition, the company is set to announce Monday that its chief financial officer, Martin Griffiths, and two other senior executives will be leaving the company.


Mr. Rising was brought in to run Maguire last month after a tumultuous year in which the company’s financial condition deteriorated and Mr. Maguire struggled with pressure to sell assets from hedge funds that had acquired more than 60% of the company. Mr. Maguire, who tried at one point to buy the company himself, stepped down as chairman and chief executive after his most recent effort to salvage control collapsed.


Mr. Rising, best known for his success at turning around Catellus Development Corp. in the 1990s, said in an interview Sunday that he also is considering selling other Orange County properties and is talking to creditors about restructuring debt on some of Maguire’s poorly performing properties. “We have significant challenges on many of our buildings,” he said.


At this point, Mr. Rising says Maguire has no plans to sell any of its buildings in downtown Los Angeles, where Maguire is the largest owner of institutional-quality office space. He predicted that demand for that space will rise because of attractive rents and access to public transportation, a more important factor with gas prices soaring.


Maguire’s biggest problem is its crushing $5 billion debt load, much of it taken on to finance the ill-timed acquisition of Orange County office buildings last year just before the market turned south. Even with Maguire’s recent decision to stop paying a dividend, the company isn’t generating enough cash to pay its debt service.


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