Maguire Selling OC Assets; Execs Exiting

Maguire says its proceeds from the sale of its Orange County assets will be used to pay down debt and for other general corporate purposes. The company has retained Eastdil Secured to start marketing Park Place, a 105-acre real estate campus that already includes 2.3 million sf of space in nine buildings and is expected to be fully developed over the next five to seven years. Park Place, which is in the Airport Area submarket, is adjacent to the San Diego Freeway at Jamboree Road and Michelson Drive.

Rising, in comments in the public filing, says that the asset sales, the restructuring of the management team and the new financing are all designed to increase shareholder value, a goal that analysts and investors have been urging the REIT to pursue for some time. The execs leaving their posts areMartin A. Griffiths, EVP and CFO; Paul S. Rutter, EVP and president of major transactions; and William H. Flaherty, SVP of marketing. Griffiths and Rutter are leaving their posts on June 30, Flaherty on July 11.

Maguire has launched a search for a new EVP and chief financial officer, with SVP and chief accounting officer Shant Koumriqian taking over those roles in the interim.

In other management changes, Douglas J. Gardner, recently appointed EVP, will focus on the company's operations with responsibility for the asset management, leasing, development, and human resources functions. Mark T. Lammas will continue to serve as EVP with responsibility for acquisitions, dispositions, financings and other transactions.

On the financing front, the company is in what it calls "advanced discussions" with EuroHypo Bank, with whom it has an existing banking relationship, to obtain a short-term, floating-rate loan on its Pasadena-based properties, Plaza Las Fuentes and the Westin Pasadena Hotel. Proceeds are expected to range between approximately $100 million to $110 million but will not be immediately deployed because they are "intended to provide the company with an additional liquidity cushion," the REIT says. The financing is expected to close in the third quarter of 2008.

Rising comments in the public filing that the new management structure "will create a more efficient and effective organization." The management changes, asset sales and new financing are intended to "address near-term challenges and build the long-term value" of the company's portfolio, he says.

Analysts have long cited the big debt load that Maguire's properties carry, which was one of the chief obstacles when Maguire sought to sell the company in recent years and months. Major shareholders also have cited the debt, and other aspects of Maguire's operations, in pressing the company to implement changes aimed toward boosting shareholder value.