MPG Office Trust To Be Acquired By Brookfield

In a deal that will make Brookfield Office Properties the biggest office owner in downtown Los Angeles, MPG Office Trust has agreed to be acquired. The deal is valued at more than $2.2 billion, including debt and after cash proceeds from the planned sale of MPG's U.S. Bank Tower, said Wilkes Graham, a senior vice president at Compass Point Research & Trading LLC. Brookfield and its partners agreed to pay $3.15 a share for MPG Office Trust Inc.'s common stock, a 21% premium to Wednesday's closing price, and will take control of four skyscrapers totaling five million square feet. Taken with a purchase of preferred stock, the Brookfield-led group would pay more than $425 million in cash for the company, which has about $1.9 billion in debt, according to a Wall Street Journal report.

"We have found a strategic buyer who has the capital and the market presence to appreciate the potential long-term value of our assets," MPG Chief Executive Officer David Weinstein said in the company's statement. "This transaction potentially offers both our common and preferred shareholders a liquidity event that would remain uncertain if the company were to continue on as an independent entity."

"It's the best outcome for downtown L.A. because we now have a well-capitalized ownership, which can at least reinvest in the buildings and in the community," said Carl Muhlstein, a managing director at brokerage Jones Lang LaSalle Inc. "Whereas a nearly insolvent MPG never had enough money to even take care of day-to-day stuff."

"Brookfield buying the rest of MPG's portfolio is like putting together Chrysler, Ford and General Motors. It's that impactful," said John Cushman, the Los Angeles-based chairman of real estate brokerage Cushman & Wakefield. "They will totally control the high end of the market."

For more news and information visit Blumberg Capital Partners.

Singapore Firm Pays $367M for US Bank Tower in LA

Overseas Union Enterprise Limited announced this week that it would acquire the US Bank Tower and Maguire Gardens in downtown Los Angeles for $67.5 million. Beringia Central LLC, a wholly owned US subsidiary of Singapore-based Overseas Union Enterprise Limited, is purchasing the building from Library Square Associates LLC, a subsidiary of MPG Office Trust Inc. Terms of the deal and brokers involved in the transaction were not disclosed. Net proceeds from the transaction are estimated to be approximately $103 million, according to an MPG press release.

Overseas Union Enterprise Limited Executive Chairman Dr Stephen Riady commented, "After a successful 2012, OUE is seeking new avenues for growth where value can be identified and realized. We intend to bring our knowledge and network to bear in pursuing new opportunities to generate value for shareholders. US Bank Tower is a well-positioned building that we expect to appeal to a broad base of both local and international office tenants operating in California."

US Bank Tower is a Class A office property at the foot of Bunker Hill. Rising to 1,018 feet, with 72 floors of office accommodation and six levels of underground parking, it has an area of approximately 1.4 million square feet. The building was completed in 1989. US Bank Tower is about 56.3% occupied with a diverse tenant base, including Akin Gump Strauss Hauer & Feld, U.S. Bancorp, and commercial law litigation services provider Cornerstone Research Inc.

For more news and information visit Blumberg Capital Partners.

Dune and Ocean Buy Orange County Office Tower for $70M

A partnership between Dune Real Estate Partners and Ocean West Capital Partners has successfully acquired 2600 Michelson in Irvine, CA for $70 million according to a Bloomberg report. The office building was previously owned by MPG Office Trust, the Los Angeles-based landlord formerly known as Maguire Properties.

Russell Gimelstob of Dune Real Estate Partners stated, "We've seen early signs of improvement in the Orange County office market and believe there is significant value in its long-term fundamentals. The structured nature of this transaction highlights the team's ability to capitalize on opportunities at the intersection of the real estate and capital markets."

"2600 Michelson's contiguous upper-floor vacancies, available building-top signage, and 52% occupancy rate – compared to peak rates of 95% in 2007 – present attractive leasing conditions and create a substantial opportunity to re-introduce and reposition the property in the recovering marketplace," said Troy Miller of Ocean West. "We are confident that the combination of Dune's substantial capital markets expertise and Ocean West's prior experience operating and leasing this property will drive value for this investment."

For more news and information visit Blumberg Capital Partners.