COMMERCIAL
Orange County continues to be a drag on Los Angles-based landlord Maguire Properties Inc.
The real estate investment trust,which is in the midst of a power struggle and the target of numerous buyout rumors,posted a net loss of $48.6 million for the first quarter, the company said earlier this month. That compares to a loss of $12.6 million a year earlier.
Maguire can blame its buildings in OC and the implosion of the local mortgage industry for much of the loss.
At the end of the quarter, the local portfolio for OC’s second-largest office landlord was a third empty. That’s an increase in vacancy rates of nearly 5% during the past quarter, and well above the county average of about 16%.
Maguire counts a companywide vacancy rate of 19%.
About 41% of the company’s portfolio,much of it was acquired in early 2007,is in OC, where its 8 million square feet of space now brings in close to $100 million in rents annually.
Among OC submarkets, Maguire’s offices around John Wayne Airport are 67% leased. Central County buildings are 68% leased. Costa Mesa is Maguire’s best-performing local sector, with a 76% occupancy rate. Brea is the worst at 44%.
On the upside, office brokers say that Maguire appears to be generating interest for some of its more prominent office towers in Irvine as of late.
While no leases have been announced in the past few months, multiple deals for full-floor space on the top half of its most prominent OC tower,Irvine’s 3161 Michelson tower,are said to be close to being finalized, according to local brokers.
Leases are said to include a long-expected deal with Hyundai Motor Co.’s credit and finance division for the top floor of the building.
The rough going in OC is believed to be one reason Chief Executive Robert Maguire late last month proposed to hold onto the area’s buildings, while selling the remainder of his company’s portfolio. The roughly $745 million buyout offer was his latest attempt to take the company private, and keep control of the company he founded.
While the real estate investment trust’s trophy properties in downtown Los Angeles are seen as attractive acquisition targets, industry watchers don’t see too many takers for Maguire’s OC buildings right now.
Robert Maguire’s proposal was rebuffed by a board-appointed committee that’s looking at strategic alternatives for the company. The committee said a proposal with more details would be given additional consideration.
The company said it spent $6.4 million in the quarter for costs incurred by the special committee.
Sanderson Sales Continue
Irvine developer Sanderson J. Ray Corp. continues to sell off some of its local buildings.
The latest: Irvine’s Bristol Park Medical Plaza.
The 28,365-square-foot building, near the Kaiser Permanente Medical building, sold for $13 million, or about $458 per square foot at a 6% capitalization rate.
The property’s at the corner of Barranca Parkway and East Yale Loop, and is fully occupied. Among the building’s five tenants is Bristol Park Medical, which has a 17-year lease, and Irvine Diagnostics Center.
The buyer was a Newport Beach-based 1031 exchange buyer, Yorba Hawthorne LLC. Dennis Vaccaro, from Irvine’s Faris Lee Investments, represented both parties.
It’s the third local Sanderson J. Ray sale Faris Lee’s worked on this year. The other two, in Santa Ana and La Palma, were for a combined $10.4 million.
According to Vaccaro, Sanderson J. Ray is selling some of its assets in order to provide money for the development of larger future projects.
RESIDENTIAL
In March, I wrote a page 1 story about Irvine-based National Home Auction Corp., a new foreclosure auction company that’s been in business for less than a year. The company sold close to $40 million of bank-owned homes in one of its first auctions earlier that month.
National Home’s largest competitor is another Irvine-based company, Real Estate Disposition Corp. The company, which has been embroiled in lawsuits with National Home Auction in the past few months, uses Irvine-based Impac Mortgage Holdings Inc. as its primary source of foreclosed homes.
Real Estate Disposition has been pulling in some startling sales figures as of late. The company said it has sold $550 million of homes in three auctions during the past month.
Some $250 million of that was for roughly 1,000 homes in Southern California, the company said.
In the past year, Real Estate Disposition has sold $2 billion worth of homes.
The next local auction the company’s holding is June 17, at the Anaheim Convention Center.
