Maguire Properties Inc., reporting results from its first full quarter of operation as a public company, showed a profit of $7.2 million, or 17 cents a share.
The Los Angeles real estate investment trust reported third-quarter revenue of $62.5 million for the period ended Sept. 30. Income from operations, a key measure of profitability for REITs, was $20 million, or 48 cents a share, beating Wall Street's estimate by 1 cent.
"It was a good, solid quarter," said Los Angeles money manager Craig Silvers of Bricks & Mortar Capital, who doesn't own stock in Maguire.
Maguire's office buildings -- most of which are on Bunker Hill in downtown Los Angeles -- were 92.1% leased at the end of the quarter, down slightly from 93.7% a year ago and 92.4% in June. That meant Maguire's vacancy rate was still in the single digits, easily beating the average downtown office vacancy, which edged up last quarter to 19.6%, according to real estate brokerage Cushman & Wakefield.
A REIT allows individual investors to participate in large real estate ventures. Unlike other public companies, REITs must distribute 95% of their income to shareholders. Maguire may sell an interest in some downtown buildings to raise money for investment in other markets to diversify and grow, Chairman Robert Maguire said.
In a conference call with investors, company executives said an unidentified tenant had signed a letter of intent to take half the space at 1733 Ocean Blvd. in Santa Monica, an 89,000-square-foot unoccupied office building that Robert Maguire built in 2000 and owns as an individual investor. The company may buy the property from its chairman when more tenants are committed to moving in.
Maguire shares rose 10 cents to $21.80 on the New York Stock Exchange.