N.Y. real estate firm soon to be downtown L.A.’s biggest landlord
One of the biggest players in Manhattan real estate is about to become the largest landlord in downtown Los Angeles, controlling five of the 10 tallest skyscrapers in the city.
In a blockbuster deal, Brookfield Office Properties Inc. is paying about $430 million for some of the most prominent buildings on the city skyline, including Gas Company Tower and Wells Fargo Tower.
The pending deal marks the end of one of Los Angeles’ most celebrated office developers, MPG Office Trust, the financially struggling firm that just last month agreed to sell U.S. Bank Tower, the tallest building in the West, to foreign investors.
Founded by Robert F. Maguire in the 1960s, MPG was the best-known builder of top-flight office space in Southern California during the construction boom of the 1980s and 1990s. Maguire left the company once known as Maguire Thomas Properties in 2008.
With MPG’s departure, Brookfield will become the dominant operator of prime office space in the city’s financial core and play a major role in setting rents in downtown Los Angeles.
Five tallest buildings in Los Angeles
Under terms of the deal that would still have to be approved by shareholders, holders of MPG’s common shares will receive $3.15 per share in cash at the closing of the merger. The per share price represents a 21% premium to MPG’s closing share price of $2.60 on Thursday.
A subsidiary of Brookfield offered to buy MPG’s outstanding preferred shares for $25 per share in cash. The company also has about $2 billion in debt that Brookfield’s newly formed subsidiary would assume.
“Following a lengthy and exhaustive search, we have found a strategic buyer who has the capital and the market presence to appreciate the potential long-term value of our assets,” said David Weinstein, chief executive of MPG.
The merger is expected to close in the third quarter of this year.
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