Maguire Properties Inc. could be looking to unload more of its Orange County buildings, according to Robert Maguire, the founder and former chief executive of the Los Angeles-based landlord.
The real estate investment trust is in the midst of selling its most prominent property here, Irvine’s Park Place campus. Analysts believe the 2.3 million-square-foot campus is likely to trade for $500 million to $600 million.
Real estate sources said the landlord now is in exclusive negotiations with one potential buyer, believed to be Irvine-based real estate investment and management company LBA Realty.
Due diligence on the nine-building campus is said to be ongoing, but a sale with LBA is far from being a done deal, sources said.
LBA didn’t return inquiries about Park Place.
Additional office sales,which have not been confirmed by Maguire Properties,could pare the company’s OC holdings even further to just a handful of local buildings, Robert Maguire told shareholders this month.
Robert Maguire, who was replaced as chief executive of the company in May, sent a letter to shareholders on Oct. 10 that detailed reasons he thought Maguire Properties was drastically undervalued.
He remains the largest individual shareholder in the company, with about a 16.5% stake. The company was valued at about $225 million at a recent check, which is down more than 80% from its 52-week high.
He told the Business Journal his reason for the letter was to “cut the panic, for God’s sake.”
Robert Maguire said the company’s concentration of offices in Los Angeles,considered by some to be the strongest office market in the country, following the recent woes in Manhattan,is its main selling point.
Maguire Properties owns about 10.3 million square feet in Los Angeles. It also has direct and indirect holdings in about 2 million square feet of space in San Diego and Denver.
Following the conclusion of sales in OC, the company would have a total portfolio of about 13.7 million square feet, according to his letter.
More OC offices would need to be sold to achieve that figure.
At the end of the second quarter, Maguire Properties counted about 7.9 million square feet of office space here. Since then, it has sold two assets totaling about 1 million square feet: Irvine’s Main Plaza towers and the City Plaza tower in Orange.
Factoring in a sale of Park Place, the company still would need to unload several large local properties to get close to the 13.7 million square feet total the letter references.
Sales of its local assets likely would have an end result of Maguire Properties making as much as $50 million, or losing upward of $100 million, according to a report by Stifel Nicolaus & Co. analyst John Guinee.
Robert Maguire said he thought the company still plans to hold on to some of its better OC office properties and wouldn’t leave the market altogether.
The company’s in a good position to renegotiate loans on OC properties, Maguire said, because all the company’s debt is non-recourse, attached only to a particular building.
“If issues exist with one asset, the company is free to renegotiate, or just walk away,” Maguire’s letter to shareholders said.
Maguire said last week that he’s interested in re-investing in OC’s office market, through Maguire Investments Inc., a Santa Monica-based company he started with real estate, energy and aviation holdings.
“We’re definitely going to look hard” at OC acquisitions, although purchases of buildings currently owned by Maguire Properties aren’t likely, he said last week. The local market could rebound quicker than many expect, he said.
Maguire Investments should have the money to make some deals. Last week it sold a 12-story senior living facility in downtown Los Angeles for $56.5 million. The capitalization rate for the deal was said to be below 5%.
The ongoing sales for Maguire Properties are the latest sign that the company’s two-year run as OC’s second-largest landlord is winding down.
The real estate investment trust bought 29 buildings here once owned by Equity Office Properties Trust in early 2007, for $2.9 billion. That boosted the company’s total local portfolio to about 10 million square feet. It has since been selling off OC properties to pay down debt from the Equity Office deal.
After the dominant landlord in the county, Newport Beach’s Irvine Company, the area’s second largest office owner now likely is Olen Properties Corp., brokers said.
Unlike Maguire’s focus on office towers, most of the Newport Beach-based Olen’s properties are low-rise buildings around John Wayne Airport and Brea.
