LP is currently headquartered in the 26-story Fox Tower, Portland's newest Downtown office building, where it signed a 10-year lease for 122,000 sf that commenced in March 2001 at a full service base rate believed to be in the mid-$20s per sf per year. Company officials tell GlobeSt.com the company has subleased one of its eight floors to a law firm but still occupies the remaining seven floors, where it employs about 160 people. Current asking rates for space in the building range from $18- to $26 per sf.
How much space LP would require if it relocated is not being released, according to company officials. Portland and the other cities have offered up incentive packages but LP is not detailing the contents of those packages. The current and would-be landlords will be tapped next to see what incentives they may be able to throw into the deal, a source at LP tells GlobeSt.com.
Louisiana-Pacific has changed significantly since it announced a divestiture and debt reduction program in May 2002. The company has sold approximately one-third of its businesses and is in the process of selling off the last of its timberland as well as eight lumber mills and two hardboard plants, mostly located in the Northwest. LP is abandoning its lumber business in favor of plastic building products and oriented strand board, which has been taking market share from plywood.
On Tuesday, LP reported a wider second quarter loss than anticipated due to bad weather and higher than expected energy costs. LP's reported a loss of $17.2-million, or $0.16 per share, which compares to a loss of $13.2 million, or $0.13 per share, last year. Excluding items, the company reported earnings of $0.9 per share, well below the average analyst earnings estimate of $0.17 per share. Sales rose to $479 million from $432 million in the year-earlier quarter. The good news is the company said its continuing businesses-- oriented strand board, siding and engineered wood products--showed strength at the end of the second quarter and has continued to grow in the third quarter.
LP shares stood at $12.43 at close of markets Friday, July 25. On Tuesday, the day the company released its quarterly results the company's share price fell to $11.21. On Wednesday afternoon, shares were trading at $11.75 on news that Standard & Poor's Ratings Service would maintain its "stable" outlook on the company following its quarterly results.
The company has never issued a press release with regard to its headquarters relocation, but said in May 2003 at its annual meeting that the company was performing a study of its administrative operation to see if it is properly structured based on the aforementioned changes in its operations. A source at the company tells GlobeSt.com it is the results of that study that will determine whether the company remains in Portland or moves to the Southeast.
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