LOS ANGELES — In a blockbuster deal, Singapore-based Overseas Union Enterprise Ltd. (OUE) has agreed to acquire the U.S. Bank Tower as well as Maguire Gardens and a parking facility in downtown Los Angeles for $367 million. The sale is expected to close June 28.
OUE, through its wholly owned U.S. subsidiary Beringia Central LLC, acquired the properties from Library Square Associates LLC, a subsidiary of MPG Office Trust Inc. (NYSE: MPG). OUE has made a non-refundable deposit in the amount of $7.5 million.
U.S. Bank Tower is a Class A office property located at the foot of Bunker Hill, a neighborhood that separates downtown Los Angeles from the rest of the city. The 72-story, 1.4 million-square-foot office tower, includes six levels of underground parking, and was 56.3 percent leased at the time of sale. The building was completed in 1989.
Net proceeds from the sale are estimated to be $103 million and will be used for general corporate purposes, including potential loan rebalancing for the refinancing of the MPG Office Trust’s upcoming 2013 debt maturities.
The purchase is part of OUE’s efforts to strengthen its portfolio of commercial properties and enhance long-term shareholder value, says OUE Executive Chairman Dr. Stephen Riady. “After a successful 2012, OUE is seeking new avenues for growth where value can be identified and realized. We intend to bring our knowledge and network to bear in pursuing new opportunities to generate value for shareholders.”
OUE plans to use its strengths in leasing and asset repositioning to increase occupancy and net operating income at the property. OUE has developed expertise from its active lease management of office and retail properties in Singapore. “U.S. Bank Tower is a well-positioned building that we expect to appeal to a broad base of both local and international office tenants operating in California,” says Riady. The Singapore focus will continue after the acquisition of U.S. Bank Tower.
A diversified real estate owner, developer and operator, OUE has a portfolio of office and retail assets in Singapore, and hotels in Malaysia and the People’s Republic of China. The company trades under the symbol OUE on the Singapore Stock Exchange.
MPG Office Trust is the largest owner and operator of Class A office properties in the Los Angeles central business district. MPG’s stock price closed at $2.77 per share on Friday, March 8, up from $2.52 a year ago.
— Rachel Goff