Los Angeles-based Maguire Properties Inc. seems to have an Orange County fixation.
The company has boosted the size of a proposed office tower in Irvine by 40%, it’s agreed to buy its third prominent office campus in the county, and it’s hired two executives to manage, lease and develop buildings here.
“Our emphasis is to expand in high job growth and severely supply constrained areas, which should give us higher returns,” said Maguire Chairman and co-Chief Executive Robert Maguire in a statement. He said Orange, Los Angeles and San Diego counties meet the criteria.
The real estate investment trust plans to break ground early next year on a 20-story tower at its sprawling Park Place office campus at the corner of Michelson Drive and Jamboree Road, according to company spokeswoman Peggy Moretti.
Maguire previously planned a 425,000-square-foot building at Park Place. It’s now set for 600,000 square feet.
She said company officials decided the site could accommodate more square feet.
Maguire already has worked out a tentative deal with Irvine-based subprime lender New Century Financial Corp. to take a third of the proposed building. New Century is set to lease other space at Park Place for a total of 480,000 square feet.
Maguire is seeking more tenants for the high-rise and prefers to lease 55% or more of a new building before starting construction, Moretti said.
Last month Maguire outbid competitors with a $1.5 billion offer to Los Angeles-based investor and developer CommonWealth Partners LLC for 5 million square feet of office buildings in four states.
The portfolio includes Pacific Arts Plaza, a four-building class A office complex next to South Coast Plaza in Costa Mesa. The campus includes entitlement to build a 400,000-square-foot office building as well as housing.
Maguire’s Moretti said the company plans to develop at Park Place first.
Industry sources were buzzing about the CommonWealth deal last month. At one point, the list of interested buyers included Newport Beach-based The Irvine Company, which subsequently decided not to bid.
CommonWealth owns the buildings with partners the California Public Employees Re-tirement System and New York-based The Rockefeller Group In-ternational Inc.
Some brokers had speculated that Maguire was too tapped out from last year’s buys of Park Place and the Washington Mutual Inc. campus, also in Irvine, to be a serious bidder on CommonWealth’s holdings.
But the real estate investment trust, at least in the short term, will rely entirely on financing from New York-based Credit Suisse First Boston LLC, a unit of Zurich’s Credit Suisse Group, to fund the $1.5 billion price, according to Maguire.
It’s betting it can pay off a big chunk of the debt by selling buildings outside of California, including those in Phoenix, Austin, Texas, and Denver.
Maguire plans to lease up Denver’s Wells Fargo Center before selling it, according to the company.
Sources said it’s too early to know if Maguire overpaid. They said all final bids were close to CommonWealth’s minimum asking price of $1.5 billion.
Maguire and other companies paying top dollar for office high-rises are betting an improving economy and limited construction in OC will lead to falling vacancies and rising rents.
The company last month hired Greg May to head leasing of its OC office buildings. He previously handled leasing for Transwestern Commercial Services in Irvine.
Maguire also hired Timothy Carey away from Catellus Development Corp. As senior vice president at Maguire, Carey is set to work on planning and developing buildings in Orange and Los Angeles counties.
