Real Estate Investment Trust

Public Storage Properties XII Ltd., a Glendale partnership that invests in storage properties, has proposed reorganizing into a real estate investment trust. In a filing with the Securities and Exchange Commission, the partnership proposed giving its limited partners shares in the new trust, which could be traded in the stock market. The general partners of Public Storage Properties XII are PSI Associates Inc., a unit of Public Storage Inc.

MPG Office Trust Inc., the largest office landlord in downtown Los Angeles, turned a profit in the third quarter as it continued to shrink its property portfolio. The Los Angeles real estate investment trust, which also owns buildings in Glendale and Cerritos, continued to sell heavily indebted properties while hanging on to most of its trophy buildings in L.A.'s financial district. MPG reported third-quarter net income of $88 million, or $1.57 a share, up from $25.6 million, or 51 cents, in the same period last year.

After unsuccessfully asking tight-fisted bankers for loans, more real estate developers may sidle up to Wall Street in the wake of real estate magnate A. Alfred Taubman disclosing plans Monday for a public stock offering to raise up to $388 million for his company. The Bloomfield Hills, Mich., developer, which owns 19 regional shopping malls--including Beverly Center near Beverly Hills--would launch one of the largest real estate investment trusts since the property slump began in 1989.

MPG Office Trust Inc., the largest office landlord in downtown Los Angeles, narrowed its loss in the fourth quarter even as occupancy in its buildings continued to slip. The Los Angeles real estate investment trust also faced rising costs of office space improvements required to keep and attract tenants. "The downtown L.A. market continues to bounce along the bottom, and MPG faces considerable leasing challenges," said analyst Michael Knott of Green Street Advisors. "Tenants hold the upper hand, as MPG's leasing costs increased to even higher levels, and its occupancy is now below 80%. " MPG, which also owns buildings in Orange and San Diego counties, finished the quarter with a net loss of $31.5 million, or 62 cents a share.

Citing less-than-inviting market conditions, the Irvine Co. said Tuesday it will delay the sale of shares in its much-anticipated real estate investment trust. "We're going to postpone a decision until at least next week," an Irvine Co. official said Tuesday. The entire REIT market, which closely follows the bond market, has seen prices decline dramatically in the past two weeks because of concerns that interest rates will rise, analysts said.

A San Diego-based real estate investment trust said Tuesday that it has agreed to purchase from an Orange County developer a La Puente shopping center for $58 million in cash--one of the largest single-property purchases made by an REIT. Dicker Warmington Properties of Fullerton built the 775,000-square-foot Plaza at Puente Hills shopping center in 1986. Its tenants include an Ikea furniture store, AMC Theaters and a Miller's Outpost.

Real estate investment trusts took a pounding in the late 1980s, but now they're coming back. And leading the Wall Street rally are health-care REITs such as LTC Properties of Oxnard. Last year LTC shareholders got a hefty 39% return in the form of dividends and higher stock prices--double the average return for the entire REIT industry, according to the National Assn. of Real Estate Investment Trusts, a Washington, D.C.-based trade group.

Beverly Investment Properties Inc., Pasadena, named David A. Davidson as executive vice president and chief operating officer. The firm is a real estate investment trust, investing primarily in nursing home properties.

Santa Ana Property Sold: A real estate investment trust in San Diego said it paid $14.3 million for a 120,000-square-foot store leased by Home Depot on 12 acres in Santa Ana. Buying was Price REIT; selling was the Price Co., which owns five properties jointly with the real estate investment trust. The property is the former site of a Price Club discount warehouse store.

The downtown Los Angeles apartment building know as the Pegasus has been sold to Chicago real estate investment trust Equity Residential for $100 million. It was one of the largest residential property sales ever in the central business district and a sign that downtown's revitalization has caught the attention of national institutional investors, said real estate broker Marc Renard of Cushman & Wakefield. "Equity Residential's purchase is a tremendous endorsement of downtown L.A.," Renard said.

The Sheraton Delfina Santa Monica Hotel has been acquired for $102.8 million by a Maryland real estate investment trust. Pebblebrook Hotel Trust said Monday that it bought the upscale 310-room hotel on Pico Boulevard and will spend an additional $9 million to refurbish the guest rooms and common areas. The 10-story inn was built in 1972 and expanded in 1984. It was remodeled at a cost of $11 million in 2005. Pebblebrook bought the property from Regis Properties, an investment group headed by Los Angeles real estate developer and hotelier Brad Korzen.

The stock of Hudson Pacific Properties Inc., a real estate investment trust founded by Los Angeles investor Victor Coleman, closed up 2.4% from its initial offering price in its first day of trading on the New York Stock Exchange. The company, based in West Los Angeles, said it priced its shares at $17 apiece and raised $210.5 million after fees in its initial public offering. Shares closed Thursday at $17.40. Hudson Pacific, which trades under the ticker symbol HPP, said it intends to use the proceeds to repay mortgage debt, to fund acquisitions and for general corporate and working capital purposes.

Long-suffering office landlord Maguire Properties Inc. on Monday reported a first-quarter profit linked largely to the forgiveness of a $49.1-million debt it was unable to pay. The Los Angeles real estate investment trust, which owns some of the region's best-known skyscrapers including the US Bank Tower in downtown Los Angeles, finished the quarter with $18.6 million in net income attributable to common shareholders, a dramatic contrast from...

Even though times are tough for many commercial landlords as rents and occupancy continue to decline, the stocks of real estate investment trusts have surged lately as investors bet that good times are ahead for the industry. REIT stocks outperformed the S&P 500 by nearly double in the first quarter and doubled their value compared with the same period a year earlier, according to the National Assn. of Real Estate Investment Trusts. Shares of Los Angeles office REIT Maguire Properties Inc., for example, jumped nearly 300% during the quarter from the year-earlier period but are still trading at a fraction of their peak price in 2007.

Many investors chase hot returns, buying assets that have recently performed well, but experts have long maintained that you'd be better off putting your money in sectors that are down in the dumps. That's why it might make sense to take a look at real estate investment trusts -- publicly traded investment pools that typically buy commercial properties such as shopping centers and medical buildings. Although REITs have outperformed stocks over the last decade, they have been slammed this year.

The Newport Beach real estate investment trust posted net earnings of $5.3 million, or 20 cents a share, down from $11.1 million, or 48 cents a share, for the year-earlier period. Total assets were down 6% to $1.6 billion, from $1.7 billion.