July 9, 2008
Wall Street Journal

Maguire Properties Inc. has begun its path of selling off pieces of its Orange County, Calif., portfolio as it fights off hedge-Fund investors.  Two disgruntled hedge funds that represent more than 18% of Maguire’s shares said Monday that they would push for a new board later this year.

Maguire announced it has a tentative deal to unload Irvine’s Main Plaza complex to San Francisco-based Shorenstein Properties LLC for $211 million.  Shorenstein will get two towers and two shorter buildings, totaling 607,000 square feet, which are about 75% leased.  Shorenstein assumes a $161 million mortgage and gets an additional $10 million interest reserve that Maguire had put up.

Mike Knott, an analyst at Green Street Advisors, notes the complex’s book value is around $260 million.  He says the price was slightly better than his pessimistic estimates but is still “a fairly large loss” for Maguire.

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