Maguire results show bad times for commercial real estate

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Maguire Properties Inc., one of the region’s largest office landlords, reported widening losses Monday and said it is about to default on more than $1 billion worth of loans on seven buildings in Orange County and downtown Los Angeles.

By giving back the keys to properties it overpaid for at the peak of the last boom, Maguire hopes that it can reduce debt enough to keep the company solvent. The company still owes $3.4 billion, however, company President Nelson Rising said.

But he insisted that the dramatic move to cut loose prime office buildings that the Los Angeles company can no longer afford to keep does not mean that Chapter 11 is also imminent. ‘We are not considering bankruptcy.’

Maguire’s decision to default on its loans is a sign that the troubled commercial real estate market continues to decline in value and that more steep losses for landlords and lenders are coming, industry observers said.

-- Roger Vincent