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MPG Office Trust swings to profit after shedding assets

Downtown L.A.'s biggest office landlord cuts loose its stakes in heavily indebted properties and reports fourth-quarter net income of $205.2 million, or $3.52 a share.

March 05, 2013|By Roger Vincent, Los Angeles Times

MPG Office Trust Inc., the largest office landlord in downtown Los Angeles, unloaded enough assets in the fourth quarter to show a profit.

The Los Angeles real estate investment trust, which also owns an office building in Pasadena, repeated its recent pattern of cutting loose its stakes in heavily indebted properties including One California Plaza and Two California Plaza downtown.

MPG reported fourth-quarter net income of $205.2 million, or $3.52 a share, compared with a loss of $9.9 million, or 20 cents, a year earlier. Revenue was $53.9 million, down 6%.

A foreclosure sale of Two California Plaza relieved MPG of its obligation to repay a $470-million mortgage loan. MPG sold its 20% interest in companion office building One California Plaza and netted $41 million. The foreclosure sale of 3800 Chapman in Orange County relieved MPG of repaying a $44.4-million loan.

If MPG hadn't experienced those cuts, it would have shown a small loss in the fourth quarter instead of a profit, said analyst Craig Silvers, president of Bricks & Mortar Capital.

"They're continuing to shrink the company, getting rid of assets that burn cash and keeping assets that generate cash," he said.

MPG reported having $192.5 million in cash at the end of the year.

Funds from operations, a key measure for REITs, were $130.9 million, or $2.24 a share, compared with a loss of $9.9 million, or 20 cents, a year earlier.

Shares of MPG fell 2 cents to close at $2.72 before earnings were released.

roger.vincent@latimes.com

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