$550M Maguire Refinance Funds EOP Buy

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LOS ANGELES-Maguire Properties has completed a $550 million refinancing of its Wells Fargo Tower in Downtown Los Angeles that will provide $225 million in funding toward Maguire’s $3 billion purchase of a portfolio of Southern California office buildings from Equity Office Properties. The new loan on the 1.4-million-sf Wells Fargo Tower is a 10-year fixed rate, interest-only financing at a rate of 5.68%.

Maguire will realize net proceeds of the refinancing after repayment of an existing $250 million mortgage loan and payment of defeasance costs on the Wells Fargo Tower. Closing costs and loan reserves total approximately $290 million in the deal.

Wells Fargo Tower, a 54-story property located in Wells Fargo Center on Bunker Hill, is approximately 91% leased. The Maguire deal to buy EOP assets added about 8.1 million sf of office space to the REIT’s portfolio, including trophy properties like the 1.4-million-sf Two California Plaza and the 621,000-sf 550 S. Hope building in Downtown L.A.

The use of proceeds from the Wells Fargo Tower deal to help fund the EOP purchase follows a move by Maguire in March to help fund the EOP purchase by selling 17 of the L.A.-based REIT’s properties for $2 billion to reduce debt from the EOP acquisition. The properties that Maguire is marketing in that deal include 11 in Orange County, plus six others in Los Angeles and San Diego counties.

Maguire expects the $2 billion sale of its 17 assets to be completed in the second quarter of 2007, with Eastdil Secured acting as adviser for the transaction. The 11 Orange County properties represent the bulk of the buildings on sale, both in terms of number of buildings and square footage, totaling approximately three million sf.