Maguire Properties Inc.'s (MPG) second-quarter loss widened on write-downs largely related to more than a handful of troubled properties that were handed over to creditors.
The real-estate investment trust - one of the largest office landlords in Southern California - posted a loss of $375.7 million, or $7.95 a share, compared with a prior-year loss of $105.9 million, or $2.32 a share. The results included 76 cents a share this year and $1.21 a share last year in losses from discontinued operations. In the latest quarter, Maguire also recorded $384.7 million in write-downs. The embattled company also announced that it is planning to hand over control of seven buildings with $1.06 billion in debt to creditors and The Wall Street Journal reported Sunday that itnotified the buildings' mortgage holders Friday that it expected "imminent default" on those loans , Wall Street Journal reports.
Meanwhile, Maguire’s decision is a sign that landlords in Southern California’s overleveraged office market can no longer make payments and may be forced to abandon properties. Maguire has been trying to sell buildings to pay debt incurred in 2007 when it purchased properties from Blackstone Group LP. Loans against six properties were split up into commercial mortgage-backed securities and resold to investors, Bloomberg reports.
However, Maguire management said it is not considering filing for bankruptcy and that there is a possibility of a third-party injection of capital. Executives at the real estate investment trust told Wall Street analysts they are "comfortable" with the firm's liquidity. Shares of Maguire traded as high as $1.19 after falling to 65 cents earlier in the session, according to FactSet Research , MarketWatch reports.
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