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Maguire may sell O.C. property

June 16, 2008|Roger Vincent | Times Staff Writer

The new chief executive of Southern California landlord Maguire Properties Inc. is today expected to announce plans to sell some buildings -- including an Orange County landmark -- mortgage others and replace some top executives.

The major initiatives from Nelson Rising come less than a month after the company's board of directors put him in charge of the real estate investment trust. Founder Robert F. Maguire stepped down under pressure from dissident shareholders alarmed by the company's escalating losses and falling stock price.

Maguire Properties is the largest office landlord in downtown Los Angeles.

Its holdings include the cylindrical 72-story US Bank Tower, the tallest building in the West.

The cash-strapped company intends to put some of its Orange County properties on the block, starting with Park Place in Irvine, an enormous office, retail and residential complex next to the 405 Freeway.

The complex, built in 1978, once served as the headquarters of engineering giant Fluor and consists of interconnected buildings, including a 10-story, hexagonal tower that is a local landmark.

The futuristic-looking campus appeared in the 1991 Albert Brooks movie "Defending Your Life."

Rising declined to say how much he hopes Park Place will sell for, but the company paid $475 million to acquire it in two purchases starting in 2004 and has since built another office building on the 105-acre site at Jamboree Road and Michelson Drive.

"This is a wonderful asset, but given our current situation, our shareholders are better off if we offer it for sale," Rising said. "We are prepared to part with it to strengthen the company."

Other Orange County properties may also be sold, though Rising didn't identify them. The company has 15 other properties there, including Main Plaza in Irvine, City Tower in Orange and Pacific Arts Plaza, adjacent to South Coast Plaza in Costa Mesa.

The company will hang on to all of its downtown Los Angeles properties, Rising said. During Robert Maguire's final months with the company, speculation was widespread that it might sell some of its high-profile buildings there, and some large national investors reportedly made offers to buy them.

"Those are our signature properties," Rising said. "We don't have any intention of selling those buildings. I think the future of downtown Los Angeles is extremely bright."

The company will, however, mortgage its Pasadena holdings. Rising said he expects to raise between $100 million and $110 million in the third quarter of this year by taking out short-term loans on the Plaza las Fuentes office complex and the Westin Pasadena hotel.

The money will be used to bolster company cash reserves, Rising said.

Changes in top management were also announced by Rising, a former company executive who left in 1994 to head Catellus Development Corp. in San Francisco but was wooed back by the board last month.

Leaving the company by July 11 will be Chief Financial Officer Martin A. Griffiths; Executive Vice President Paul S. Rutter, who was in charge of major transactions; and William H. Flaherty, senior vice president of marketing.

A long-time partner of Rising's, Douglas J. Gardner, joined him as executive vice president last month and will now be in charge of asset management, leasing, development and human resources.


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