Maguire in talks to extend California office loans

Maguire Properties Inc, the largest office landlord in downtown Los Angeles, is in discussions to extend loans on buildings in Irvine and Glendale, California, CEO Nelson Rising said on Tuesday.

The loan on a 150,000 square foot office building in Irvine matures in May and the other matures in June, Mr Rising said in a conference call with analysts and investors. There is a US$24.2 million construction loan on the Irvine building, and a US$22.4 million loan on the Glendale property, according to a Maguire investor presentation released on Monday.

Los Angeles-based Maguire may try to sell the buildings, Mr Rising said. The company also plans talks on extending a loan on Plaza Las Fuentes in Pasadena, California, beyond its September maturity date, he said. The construction loan on that property, which includes an eight-story office building and a 350-room Westin hotel, is for US$92.6 million.

‘Depending on various criteria, it may require some paydown, which we set aside in our budget’, to extend the Plaza Las Fuentes loan, Mr Rising said in the call.

Maguire surged 33 per cent to US$3.54 at 4:15pm in New York Stock Exchange composite trading. The stock has more than doubled this month, boosting the market value to US$169.7 million.

The company is selling buildings to pay debt incurred in 2007, when it bought 24 office properties and 11 development sites from Blackstone Group LP. Maguire paid US$2.88 billion for all the real estate in downtown Los Angeles and Orange County, California, that Blackstone purchased in its acquisition of Sam Zell’s Equity Office Properties Trust.

Maguire reduced its outstanding debt excluding defaults by a third to US$3.4 billion at the end of 2009, the company said on Monday in its statement of fourth-quarter results. It has cut debt by an additional US$162.5 million since the end of last year by selling office buildings in Orange County and San Diego.

The company has mortgages totalling US$888.5 million in default, according to Monday’s statement.

Source : Business Times – 25 Mar 2010