MPG Office Trust narrows loss
MPG Office Trust Inc., the largest office landlord in downtown Los Angeles, narrowed its loss in the fourth quarter even as occupancy in its buildings continued to slip.
The Los Angeles real estate investment trust also faced rising costs of office space improvements required to keep and attract tenants.
“The downtown L.A. market continues to bounce along the bottom, and MPG faces considerable leasing challenges,” said analyst Michael Knott of Green Street Advisors. “Tenants hold the upper hand, as MPG’s leasing costs increased to even higher levels, and its occupancy is now below 80%.”
MPG, which also owns buildings in Orange and San Diego counties, finished the quarter with a net loss of $31.5 million, or 62 cents a share. In the same period last year, MPG lost $138.3 million, or $2.82 a share.
Revenue was $84.9 million, down 4% from the fourth quarter last year.
“They’re not bleeding as much as they were,” said analyst Craig Silvers, president of Bricks & Mortar Capital.
MPG said it had $172.9 million in cash at the end of the year, of which nearly $118 million was unrestricted. Two of its buildings in Glendale were placed in receivership in October in preparation for a cooperative foreclosure.
“They are taking the right actions by hoarding cash and giving certain properties back to lenders,” Silvers said. “They are buying time for a downtown L.A. recovery.”
Shares of MPG closed up 18 cents at $2.44 before earnings were announced.
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