RealShare EXCLUSIVE: Maguire Details Acquisition Plans

IRVINE, CA-Rob Maguire may not be an Orange County resident, but few people outside of the Irvine Co. wield as much weight in local real estate circles as the chairman and co-CEO of Maguire Properties Inc. Maguire shared his vision for his Los Angeles-based REIT at yesterday’s 2nd Annual RealShare Orange County event held at the Irvine Marriott.Maguire sat down for a talk with Real Estate Media editor-in-chief Michael G. Desiato during the one-day conference. More than 250 real estate professionals attended the event, which was produced by Real Estate Media, publisher of Globest.com and Real Estate Southern California .During the nearly hour-long discussion, the usually tight-lipped Maguire opened up on the evolution of his career and his company’s plans for future growth. After a childhood spent in Europe, including an education in Paris, Maguire told Desiato his expatriate upbringing landed him in an Oregon logging camp. But that was dangerous work and “fear motivated me to go back to school,” Maguire said.A stint in the financial sector gave Maguire his first taste of real estate, eventually nudging him toward creating his own development company in 1965. “I focused on building relationships with major national tenants with great credit,” he said. “There were firms on the East Coast doing that” but he was a pioneer on the West Coast.Over the next 40 years, Maguire built a massive portfolio and took the company public in 2003. According to Desiato, Maguire took a few hits from Wall Street for that decision. “They said you were too secretive and were concerned you would go off and do your own thing,” Desiato told Maguire.Although Maguire agreed that the concerns were warranted, the Los Angeles-based REIT has experienced tremendous growth since the IPO. “We’ve grown from $1.9 billion to $5 billion since going public and delivered returns of 74%,” he said.In recent weeks, Maguire furthered that growth with the joint venture the firm formed with Australia’s Macquarie Office Trust. In the partnership, called Maguire Macquarie Office, the Australian-based firm takes an 80% interest in the four-million-sf portfolio, which will initially include five Maguire properties and one of Macquarie’s. The JV will own, operate and acquire office properties primarily in Southern California.The portfolio includes the Washington Mutual Campus in Irvine and Stadium Gateway in Anaheim. The deal will generate net proceeds to Maguire Properties of approximately $350 million.Maguire said the REIT is not through with $1-billion-plus joint ventures and could make more than one of those in 2006. The firm is very bullish on Southern California, but also is eyeing portfolios in Northern California and Washington, DC, he added.As for Orange County, Maguire said the REIT owns 3.5 million sf and has entitlements for an additional 4.5 million sf locally. “We have an 850-unit [residential] complex on the horizon and will do another two office buildings here,” Maguire said. “We like this market–its barriers to entry and favorable job growth.”Besides his own dealings, Maguire said the REIT industry is not through making major deals. He said Los Angeles-based REIT Arden Realty Inc. could be the next portfolio to sell. In light of the market’s record low cap rates, if the rumored Arden sale were to go through “it would signal institutional investor’s extraordinary appetite” for Southern California real estate,” Maguire said.Another important speaker session at RealShare Orange County included “The Great Debate: Who Really Rules the OC?” The panel featured a discussion between Irvine City Council member and former Mayor of Irvine, Larry Agran and current Anaheim Mayor Curt Pringle.Both leaders agreed that Anaheim and Irvine are moving growth forward by the advent of creative master plans. Anaheim is focusing on growth rippling outward from its ballpark, while Irvine is reinventing its IBC as a high-density urban complex.However, for OC to continue its growth projections, the area will have to solve its increasing traffic problems, according to Agran. “This transportation business threatens to wreck everything,” he said. “We have to figure it out and find ways to create high-speed links between areas such as the IBC and the stadium.”