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Major commercial real estate transaction in downtown Los Angeles

Now that the economy is showing signs of recovery, things are shaking up in the commercial real estate market in downtown Los Angeles. The big news is that Brookfield Office Properties Inc. is willing to shell out $430 million for four major skyscrapers, and the deal, if ratified by shareholders in MPG Office Trust Inc., would make Brookfield a controlling player in the downtown financial district.

The deal means that Brookfield would own a total of 8.3 million square feet in office properties in downtown Los Angeles. The office developer already owns three other buildings in the area.

MPG has struggled in recent years after the economy took a nose dive. Major expansions in the mid-2000s left the company with debts in the billions. In 2010, when MPG was still called Maguire Properties Inc., the company founder, Robert F. Maguire, left when he was unable to gain control.

Brookfield's stepping in is a welcomed move that, if the deal goes through, will allow about $2 billion of debt to be absorbed by the buyer, which is a fund created by Brookfield called DTLA Holdings.

Included in the impending purchase are Wells Fargo Tower and Gas Company Tower, and it's expected that Brookfield will have significant control of commercial property rents in the district. A shareholder ratification of the deal is likely to come this fall, but there is still a chance that another bidder will try to make a move.

If Los Angeles residents would like to learn more about real estate transactions, our Encino real estate litigation page may offer some helpful information.

Source: Los Angeles Times, "New York firm soon to be downtown L.A.'s biggest landlord," Roger Vincent, April 26, 2013

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