Maguire Properties Inc. said on Tuesday that the potential loss of key tenant New Century Financial Corp. would not be a major blow to the Los Angeles-based office landlord.
Maguire is making contingency plans to re-lease space at its Park Place campus in Irvine at much higher rates than embattled subprime lender New Century is paying.
Irvine-based subprime lender New Century faces the prospect of bankruptcy, according to analysts.
New Century is due to take 190,000 square feet of space at 3161 Michelson, the $240 million office tower Maguire is building just off the San Diego (I-405) Freeway and Jamboree Road. The building should be done later this year.
New Century leases another 267,000 square feet in two other Park Place buildings owned by Maguire, now the county’s second-largest landlord following the acquisition of former Equity Office Properties Trust buildings here last month.
New Century pays monthly rents of a little more than $2 per square foot at the existing Park Place buildings. It is set to pay about $2.94 per square foot for the top four floors of the new 20-story office tower.
Current market rates should allow Maguire to re-lease the existing space for 50% more than what New Century was paying, according to the company. The 3161 Michelson tower could see rents 25% higher, Maguire said.
“We believe we have minimal exposure to New Century,” Chief Executive Rob Maguire said. “If, for example, it took us a year to re-lease the existing space our lost rent would total approximately $6.5 million.”
