BofA Seeks Receiver in 2600 Michelson Default

According to the BofA complaint, Maguire is in default on the 2600 Michelson Dr. property, on which it owes a principal balance of $95 million, which does not include interest fees, late charges and other amounts due under the loan documents. BofA is acting as the trustee for holders of Credit Suisse First Boston Mortgage Securities Corp. CMBS, according to the complaint.

Nelson Rising, president and CEO of Maguire, said in the company's second-quarter earnings conference call in August that the Los Angeles-based REIT planned to default on the loans for 2600 Michelson and the five other properties to "eliminate the adverse effect these assets have had on the company's cash position." Rising pointed out at the time, and reiterated during the company's third-quarter conference call on Nov. 3, that the borrowers for all six of the properties were all special-purpose entities formed for the purpose of owning and operating an individual property.

The five other properties are the 264,000-square-foot Stadium Towers in Central Orange County, the 827,000-square-foot Pacific Arts Plaza in Costa Mesa, the 622,000-square-foot 550 S. Hope in Downtown Los Angeles, the 334,000-square-foot 500 Orange Tower in Central Orange County and Park Place II in Irvine. Rising said in the company's third-quarter earnings call on Nov. 3 that all six of the loans are now in default. The company bought five of the properties in April 2007 from EOP Blackstone and the other from the Commonwealth Portfolio in March 2005.

In addition to deciding to allow the six properties to go into default, Maguire in August completed a deed in lieu transaction with the portfolio lender on its 1.7-million-square-foot Park Place I office complex in Irvine to divest that property. LBA Realty of Irvine acquired the Park Place property for an undisclosed sum, one of a number of Orange County assets that Maguire has shed in the past year or so in its quest to improve its balance sheet by eliminating debt.