MPG Office Trust To Sell U.S. Bank TowerOriginally published March 11, 2013 at 3:03 p.m., updated March 11, 2013 at 11:15 a.m.
Struggling downtown real estate investment trust MPG Office Trust Inc. announced it had agreed to sell U.S. Bank Tower, the tallest building west of the Mississippi River, and a related parking garage, for $368 million.
The 72-story downtown Los Angeles building, at 633 W. Fifth St., and the Westlawn Garage, 524 S. Flower St., will be purchased by an affiliate of Overseas Union Enterprise Ltd., a publicly traded hotel and property investment company in Singapore.
Overseas Union Enterprise has paid a non-refundable deposit of $7.5 million.
The deal could net MPG as much as $103 million, which could be used for general company purposes, including assisting in refinancing loans coming due this year, according to Reuters.
The 1.4 million-square-foot building, built in 1989 by MPG’s now ousted founder Robert F. Maguire III, is only 56 percent occupied. MPG was at risk of being delinquent on a portion of its $260 million debt on the building. It was sent in December to special servicer LNR Partners Inc., which represents debt bond investors in modifying loans or foreclosing on properties, according to a report from Trepp LLC, a securities analytics company in New York.
MPG has been struggling under an immense debt load acquired during its rapid expansion as the market rose in the last decade. To pay down its debt, MPG has been selling off non-core properties outside of downtown. The company reported reduced debt of $1.9 billion in its fourth quarter last year, according to an earnings report filed with the Securities and Exchange Commission last week.