MPG Office Trust posts narrower loss

MPG Office Trust Inc., a real estate investment trust that is one of the region’s largest office landlords, reported a narrower second-quarter loss Monday as the weak economy held down rents.

The Los Angeles firm, which was formerly known as Maguire Properties Inc., owns some of the region’s best-known skyscrapers including the US Bank Tower in downtown Los Angeles.

It finished the quarter with a loss of $53.5 million, or $1.10 a share. That’s a substantial improvement from a loss of $380.5 million, or $7.95, a year earlier. But finances in both quarters were influenced by significant one-time events.

This year, MPG wrote down by $17.5 million the value of a Glendale office building and another property in Irvine it gave back to its lender. Last year, MPG wrote down the value of some of its properties by $384.7 million. Among them were two Orange County office buildings in default.

MPG’s funds from operations, a key measure for REITs, were a negative $25.2 million, or 52 cents a share. Without the one-time charges, funds from operations would have been a negative 1 cent a share, short of analysts’ average estimate of a gain of 2.6 cents.

Revenue was $107.7 million, down 6% from a year earlier. The company is no longer covering its interest expenses, said analyst Craig Silvers, president of Bricks & Mortar Capital.

“That is not a good sign,” Silvers said. “They have got to work on bringing down interest costs and increase occupancy.”

MPG officers are shrinking the company by shedding properties in markets outside the company’s downtown Los Angeles core.

“That can only take you so far,” Silvers said. “The economy has got to get better for these guys to right the ship.”

MPG shares dropped 11 cents to $3, then fell an additional 25 cents in after-hours trading.

roger.vincent@latimes.com