MPG Office Trust swings to a profit in second quarter
MPG Office Trust Inc., the largest office landlord in downtown Los Angeles, reported a profit in the second quarter as the sale of some large commercial buildings boosted the bottom line.
“Operating conditions are still challenging, but MPG is making headway clearing out some junk in the trunk,” said analyst Michael Knott of Green Street Advisors. “MPG has made some nice progress but really needs a strong rebound in downtown L.A. leasing and cash flow.”
The Los Angeles real estate investment trust, which also owns several buildings in Orange and San Diego counties, finished the quarter with a profit of $118.4 million, or $2.42 a share. In the same period last year, the company lost $53.5 million, or $1.10 a share. Finances in both quarters were influenced by significant one-time events.
Last year, MPG wrote down by $17.5 million the value of a Glendale office building and a property in Irvine it gave back to its lender.
This year, the company reported $92 million in proceeds from the sale of the Westin Pasadena hotel. MPG also received debt forgiveness on other buildings it disposed of and reported losses from writing down the value of certain properties in its portfolio.
“It was a very noisy quarter,” said analyst Craig Silvers, president of Bricks & Mortar Capital, “but things seem to be moderating a bit.”
Revenue was $86.4 million, down 2%. Office rents have continued to decline in most markets, but occupancy is stabilizing, Silvers said.
MPG shares were up 3 cents to $3.34 before the earnings were released, then rose 9 cents in after-hours trading.
