MPG Disposes of Non-Core Assets, Enters JV
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LOS ANGELES-MPG Office Trust Inc., a Southern California and Downtown Los Angeles-focused REIT, has completed previously revealed transactions between itself and Australia’s Charter Hall Office REIT and affiliates of Beacon Capital Partners LLC. As part of the transactions, MPG has sold certain non-core assets and entered into a new joint-venture agreement with an affiliate of Beacon.
At the closing of the transactions, MPG, together with Charter Hall, sold its interests in Wells Fargo Center, located in Denver, and San Diego Tech Center in San Diego. In addition, MPG sold its development rights and an adjacent land parcel at San Diego Tech Center and received a payment in consideration for terminating its right to receive certain fees following the closing date. Net proceeds to MPG of approximately $44 million will be used for general corporate purposes.
The new joint venture between MPG and the affiliate of Beacon will continue to own interests in One California Plaza, located in Downtown Los Angeles; Cerritos Corporate Center, located in Cerritos, CA; and Stadium Gateway, located in Anaheim, CA, unless such asset is sold pursuant to an ongoing marketing effort. The new joint-venture agreement provides for a three-year lockout period, during which time neither partner will have the right to exercise the marketing rights under the joint-venture agreement. The company will continue to maintain a 20% interest in the new joint venture.
According to David Weinstein, president and CEO of MPG, the transactions “provide us with the liquidity to maintain our dominant market position in Downtown Los Angeles.” GlobeSt.com was unable to reach MPG before deadline to discuss more details of the joint venture.
As GlobeSt.com previously reported, in July 2011 MPG and Charter Hall Office REIT refinanced their 42-story, 992,000-square-foot One California Plaza office tower at 300 S. Grand Ave. in Downtown Los Angeles with $160 million in new debt. The new financing consisted of a $140 million mortgage loan, bearing interest at a fixed rate of 4.775%, and an up to $20 million mortgage bearing interest at a floating rate equal to one month LIBOR plus 3%, according to an announcement from MPG. The financing matures on July 1, 2016.
At that time, news releases from MPG, Charter and Jones Lang LaSalle, which arranged the financing, identified the capital source as “a major US lending institution.” JLL senior vice president Reid McGlamery, executive vice president Mathew Comfort and managing director Paul House led the Jones Lang LaSalle team on the financing.
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