Los Angeles-based MPG Office Trust Inc. has agreed to be acquired by New York-based Brookfield Office Properties Inc. If MPG shareholders approve the $430 million deal, Brookfield would become owner of four more L.A. office towers:
- Wells Fargo Tower
- Gas Company Tower
- KPMG Tower
- 777 Tower
Brookfield already owns the Bank of America Plaza, Figueroa at Wilshire, and the Ernst and Young tower. Adding MPG's four towers would make Brookfield downtown L.A.'s largest landlord, with control over 8.3 million square feet of office space. In acquiring MPG, Brookfield will set up a fund called DTLA Holdings that combines the two firms' downtown assets.
MPG's history in Los Angeles goes back nearly half a century to 1965, when Robert Maguire founded Maguire Properties. The company became a commercial real estate powerhouse. In 2007, the firm paid a lot of money for a large portfolio of Southern California properties just before the real estate boom went bust. Maguire left the company the following year, and its name changed to MPG Office Trust.
MPG has been struggling with debt ever since, selling off assets and exploring potential deals to be acquired. Last month, it sold the U.S. Bank building, the tallest office building on the west coast. Now it has found the right buyer for the rest.
“Following a lengthy and exhaustive search, we have found a strategic buyer who has the capital and the market presence to appreciate the potential long-term value of our assets,” said David Weinstein, President & Chief Executive Officer of MPG, in a statement.
John Cushman, Chairman of real estate brokerage Cushman & Wakefield agrees.
"MPG was breathing on fumes," Cushman told KPCC. "They didn't have the leadership, passion, credibility with prospective tenants or existing tenants like Brookfield will have under their new ownership."
Cushman says the acquisition will be good for downtown Los Angeles, as Brookfield will bring the capital needed to make its new skyscrapers more attractive to businesses looking for office space.
|Wilshire Grand (under construction)||1250||Korean Air (South Korea)|
|US Bank Tower||1018||Overseas Union Enterprise Ltd. (Singapore)|
|Aon Center||858||Beacon Capital Partners (Boston)|
|Two California Plaza||750||Foreclosed on in 2012|
|Gas Company Tower||749||To be sold to Brookfield Office Properties Inc. (NY)|
|Bank of America||735||Brookfield Office Properties Inc. (NY)|
|777 Tower||725||To be sold to Brookfield Office Properties Inc. (NY)|
|Wells Fargo Center||723||To be sold to Brookfield Office Properties Inc. (NY)|
|601 S. Figueroa||717||Brookfield Office Properties Inc. (NY)|
|City National Tower||699||Thomas Properties Group (LA)|
|Paul Hastings Tower||699||Thomas Properties Group (LA)|
|KPMG Tower||606||To be sold to Brookfield Office Properties Inc. (NY)|
|Ernst & Young Tower||534||Brookfield Office Properties Inc. (NY)|