(Mark Your Calendars: RealShare Orange County, August 18 in Newport Beach).
ORANGE, CA-Los Angeles-based office REIT MPG Office Trust has disposed of its 410,000-square-foot, 21-story City Tower office tower here in the latest effort by the REIT to pare down its portfolio to reduce debt. MPG said that it disposed of the office tower " in cooperation with the special servicer on the mortgage loan." The REIT declined to provide further specifics of the dispoal, but an industry source tells GlobeSt.com that the special servicer took title to the property. MPG said that, in conjunction with the disposition, it was relieved of the obligation to repay the $140-million mortgage secured by the property as well as contractual and default interest.
No current information was available on the percentage of occupancy of City Tower, which is at 333 City Blvd. W., but the latest MPG annual report, filed in March, listed the property then as 78% leased. The office tower was completed in 1988 and includes a six-level parking structure with more than 1,420 spaces, plus additional surface parking.
The $140-million City Tower mortgage was part of mortgages totaling approximately $1.1 billion that were in default at the end of the first quarter on March 31 this year, according to MPG's latest quarterly financial filing. That $1.1 billion was secured by six separate office properties totaling approximately 3.2 million square feet.
MPG's efforts to reduce debt this year have included the sale of the its 565,738-square-foot 550 S. Hope office tower in Downtown Los Angeles in cooperation with the special servicer for the mortgage on the building, which relieved it of an obligation to repay the $200 million mortgage on the property. It also sold its 308,000-square-foot 2600 Michelson tower in Irvine; late last year, its 827,000-square-foot Pacific Arts Plaza in Costa Mesa was sold out of receivership.
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