MPG Office Trust's CEO Discusses Q1 2011 Results - Earnings Call Transcript
We placed 700 North Central and 801 North Brand, both located in Glendale, California into special servicing. It is premature to speculate as to the outcome on these assets at this time. We are close to completing the sale of the 350-room Westin Pasadena Hotel. A buyer has been selected and the buyer has completed its due diligence. The purchase contract has a non-refundable deposit in place.
We are pursuing approval of the buyer with the city of Pasadena. We expect the transaction to close within two weeks of that approval. Once we complete the sale, we intend to fully repay the $78.6 million loan that presently encumbers both the hotel and the 193,000 square foot Plaza Las Fuentes office building and retail components.
The net proceeds after the repayment of the loan will be disclosed once the transaction has been completed. There is no assurance that the buyer will be approved by the city of Pasadena or that the sale will close as expected. We are currently working with the lender to finance the Plaza Las Fuentes office building and retail components. The financing, which will occur after the closing of the Westin Pasadena sale, will generate significant additional net proceeds which will be used for general corporate purposes. While we are optimistic that financing will occur, there is no assurance that the financing will be completed.
As part of our overall corporate objective to initiate restructuring discussions involving our core downtown Los Angeles assets, we placed Wells Fargo Tower and US Bank Tower into special servicing, which occurred in March, 2011. This is a critical first step in order to have a meaningful dialogue with lenders. We also sent an immediate default notice on Gas Company Tower in March. The master servicer is still completing its analysis of the asset. None of these assets are in default. Our goal of these assets is to achieve a successful modification to loan agreements. There can be no assurance that we’ll be successful.
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