Maguire Properties, hurt by costs, posts $110.6-million loss
Los Angeles office landlord Maguire Properties Inc., which emerged in May from a nearly yearlong takeover battle, reported its third consecutive quarterly loss Monday.
The real estate investment trust, or REIT, which owns many premier office buildings in downtown Los Angeles and Orange County, lost $110.6 million in the second quarter. It also saw the departure of founder Robert Maguire in May after the board of directors rejected his bid to buy the company and appointed new managers.
Chief Executive Nelson Rising moved quickly to try to shore up investor confidence by announcing plans to sell some office buildings, but the quarter still ended on a downbeat. The company lost $2.32 a share, compared with a loss of $24.4 million, or 52 cents, a year earlier.
“This is a bad quarter but not unexpected,” said analyst Craig Silvers, president of Los Angeles investment advisor Bricks & Mortar Capital. “They burned through a lot of cash this year.”
The company was at the center of a power struggle that lasted for months as founder Maguire and a handful of competing office landlords and investors pursued a takeover. The board rebuffed the offers and handed the reins to Rising, a former Maguire protege.
The change in management and a headquarters move from Santa Monica to downtown Los Angeles cost the company $15.6 million in the quarter. Maguire also recorded a $51.9-million write-down on the value of Main Plaza, an Irvine office complex it agreed to sell for $211 million to a San Francisco investor.
Without those charges, the company’s performance was “slightly better than expected,” said analyst Michael Knott of Green Street Advisors in Newport Beach. But Maguire must follow through on plans to sell more properties in Orange County and perhaps Santa Monica to reduce its debt, Knott said.
Funds from operations, a key measure of a REIT’s performance that excludes gains and losses from the sale of assets, fell to a deficit of $56.4 million, or $1.18 a share, in the second quarter compared with a deficit of $2.4 million, or 5 cents, a year earlier.
Maguire shares fell 87 cents, or 7.8%, to $10.22 before the announcement.
