GlobeSt.com UPDATE: Maguire Closes $1B-Plus Acquisition

Maguire funded the purchase through the assumption of $155 million of mortgage financing, approximately $1 billion in new mortgage financing and proceeds from a $450-million term loan originated by Credit Suisse First Boston. Credit Suisse First Boston also originated a new $100-million secured revolving credit facility which will replace the company's current $100-million secured credit facility.

Maguire plans to market and sell some of its assets in less strategic markets to generate proceeds estimated at $190 million to $195 million that will be used to pay down the $450-million term loan. The properties it is marketing include the Austin Research Park in Austin, TX; Renaissance Square in Phoenix; and the Glendale properties of 700 N. Central and 801 North Brand.

Approximately three million sf of the CommonWealth portfolio consists of properties in Southern California, including the one-million-sf 777 S. Figueroa building in Downtown Los Angeles, 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 deal will 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. Overall, including the properties in Southern California and elsewhere, the portfolio is 86.4% leased.

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.

Along with the closing of the CommonWealth portfolio, Maguire has hired 31CommonWealth employees who will continue to manage and lease substantially all of the acquired properties. Additionally, Maguire has retained CommonWealth on an interim basis to provide asset management and development services.