MPG Disposes of 550 S. Hope Office Building

LOS ANGELES-MPG Office Trust continues to dispose of assets encumbered by high levels of debt, reporting that it sold its 565,738-square-foot 550 S. Hope office tower in Downtown Los Angeles in cooperation with the special servicer for the mortgage on the building. MPG says it was relieved of an obligation to repay the $200 million mortgage on the property, as well as contractual and default interest on the loan, which was in default as of Dec. 31, according to the REIT's annual report.

MPG did not name the buyer, but industry sources said it was LBA Realty, which has acquired other distressed MPG assets. MPG did not say how much the property sold for, but industry sources peg the deal at about $157 million.

MPG remains the largest owner and operator of class A office properties in the Los Angeles central business district, according to the company's announcement regarding the 550 S. Hope disposition. More than 5.4 million square feet of MPG's Downtown L.A. office properties are either in or headed for special servicing, according to a recent GlobeSt.com report, including the REIT's US Bank Tower and its Wells Fargo Tower, which are close to 1.4 million square feet each.As that report noted, MPG has pursued a strategy for several years that is aimed at reducing debt. In its latest annual report, the REIT said that it disposed of a total of 5.3 million square feet of office properties in 2009 and 2010.