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Maguire Properties Raises $700 Million

June 25, 2003|Roger Vincent | Times Staff Writer

Los Angeles real estate mogul Robert F. Maguire capped a tumultuous drive to take his company public Tuesday, raising nearly $700 million in an initial public stock offering of Maguire Properties Inc.

The company sold 36.5 million shares at $19 each, at the low end of the range Maguire was seeking. It will begin trading today on the New York Stock Exchange under the symbol MPG.

The 68-year-old Maguire, who built and owns some of the biggest office buildings in Southern California, said in November that he wanted to convert his company into a publicly owned real estate investment trust (REIT) to help fund future acquisitions and developments.

A REIT allows investors to join in large real estate ventures. Unlike other public companies, REITs must distribute 95% of their income to shareholders.

Maguire's downtown buildings are "four of the finest properties owned by any REIT," said analyst Jim Sullivan of Green Street Advisors, an independent real estate securities research firm in Newport Beach. He called the $19 valuation "a warranted price."

Sullivan said a negative for the new REIT is that it has some large tenants paying above market rates whose leases will expire in the next three or four years. He called Maguire "a great deal maker," but said it "remains to be seen, now that Mr. Maguire has made it to the finish line, how much energy he has left to grow and expand the company."

Maguire was unavailable for comment. At $19, his 21% stake in the company is worth $195.6 million.

His decision to take the company public came at a time when the commercial real estate market was slowing and investors were skeptical of publicly traded real estate firms. The stock market has since improved and the office market in downtown L.A., where Maguire owns four major buildings including the 73-story Library Tower, has stabilized.

Credit Suisse First Boston and Citigroup Global Markets Inc. were the chief underwriters.

If the company pays an annual dividend of $1.60 a share, as it has indicated, the dividend yield would be 8.4% at $19 a share. That's higher than the average REIT yield of 6.5%, as measured by the Bloomberg News index of 139 REITs.

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