Maguire Seals $1B-Plus Commonwealth Deal

The acquisition, , expected to close in the first quarter, will add three million sf to Maguire Properties' Southern California portfolio, including the one-million-sf 777 S. Figueroa building Downtown, which is near Maguire's Bunker Hill properties. It will also increase the REIT's dominance in the Downtown Los Angeles market, where it is already the largest owner of office space. The out-of-state properties are in Denver, Phoenix and Austin, TX. Overall, the portfolio is 86.4% leased.

The deal will also boost Maguire's presence in Orange County, where it expanded significantly with major acquisitions last year, by adding the Pacific Arts Plaza property adjacent to South Coast Plaza near the REIT's Park Place and Washington Mutual Campus projects. In addition, the new properties mark Maguire's entrance into the San Diego market, where the company says it intends to substantially expand its holdings.

Besides the existing buildings, the Commonwealth acquisition gives Maguire four development sites in Los Angeles, Glendale, Orange County and San Diego that are entitled for more than 1.5 million sf of office space.

Robert F. Maguire III, chairman and Co-CEO, points out that the L.A. suburban, Orange County and San Diego buildings are all in submarkets with vacancies of 10% or lower.Besides the properties mentioned above, the assets that Maguire has agreed to acquire include 700 North Central and 801 N. Brand in Glendale, Wateridge Plaza and Mission City Corporate Center in San Diego, Regents Square I & II in La Jolla, Wells Fargo Center in Denver, Austin Research Park in Austin and One Renaissance Square in Phoenix. The development parcels are 755 S. Figueroa in Downtown Los Angeles, 200 N. Burchett in Glendale, at Pacific Arts in Orange County and at Mission City in San Diego County.

The deal will be funded initially with assumed debt and financing provided by Credit Suisse First Boston, which acted as financial advisor to Maguire. The REIT plans to hire CommonWealth in an interim contract for management and leasing services of the new portfolio.