MPG Defaults on $470M Loan for 54-Story Tower

LOS ANGELES-Days after one of its largest Orange County office properties was sold via receivership, MPG Office Trust said Monday that it planned to default on the $470 million mortgage for its 54-story, 1.3-million-square-foot Two California Plaza office property in Downtown Los Angeles as a first step toward restructuring the loan. The Downtown L.A.-based REIT said on Monday that it would deliver a notice of imminent default to the master servicer for the mortgage that day. Two California Plaza is financed with CMBS debt, and as a consequence, in order to comply with real estate mortgage investment conduit (REMIC) rules, the company must send a notice of imminent default to enable any discussions regarding a loan modification with the special servicer, it pointed out in its announcement.

MPG president and CEO David Weinstein described Two California as “a key asset that is materially overleveraged.” MGP would like to keep Two California as a core asset “and expects to have the opportunity to explore various potential options for doing so once the asset is transferred into special servicing,” he said. Weinstein added, “We do not believe that funding current and projected operating deficits at this asset with the company’s precious unrestricted cash is in the best interests of our stockholders.”