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MPG Office Trust posts narrower third-quarter loss

The largest owner of offices in downtown L.A. reports a loss of $17.9 million, a big improvement over a loss of $46.8 million a year earlier. Results were helped by the sale of Park Place II in Irvine.

November 02, 2010|By Roger Vincent, Los Angeles Times

MPG Office Trust Inc., the largest owner of offices in downtown Los Angeles, reported a narrower third-quarter loss Monday amid a punishing market for landlords.

The Los Angeles firm, which also owns several buildings in Orange and San Diego counties, finished the quarter with a loss of $17.9 million, or 36 cents a share. That's a significant improvement from a loss of $46.8 million, or 97 cents a share, in the third quarter last year.

Results were helped by a $23.7-million gain from selling Park Place II in Irvine. That was partially offset by $9.9 million of interest that MPG paid on buildings the company let go into default in 2009. In the third quarter of that year, the company reported $16.2 million in one-time impairment charges.

MPG's funds from operations, a key measure for real estate investment trusts, were negative $2.4 million, or 5 cents a share, a penny better than analysts' average estimate of a loss of 6 cents.

Revenue was $112.2 million, up 1% from a year earlier.

Occupancy and rental revenue each declined more than 2%, however, and the rents MPG is charging on new leases and renewed leases are down more than 30%.

MPG Chief Executive Nelson Rising faces forces beyond his control in his efforts to right the company, according to analyst Craig Silvers, president of Bricks & Mortar Capital.

"He needs the economy to improve and employers to start hiring," Silvers said.

MPG shares fell 9 cents to $2.62 before the quarterly results were announced.

roger.vincent@latimes.com

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