By the end of the year MPG will be down to about 6 or 7 core properties. The tax indemnification will burn off in June 2013. The KPMG can has been kicked down the road. So where does the Company go from here?
It obviously needs to still keep an eye on it's looming debt maturities. KPMG has only been extended a year and some debt is coming due in mid-2013 (I believe US bank and 777) which shouldn't be too hard to refinance. Although the occupancy rate of US Bank is gross.
Here are my thoughts: 1.) Once the tax indemnification burns off the Company could be bought by a third party. 2.) If the stock price rose enough the Company could issue common equity. I think the price would have to be above $5 though, otherwise the existing common would get screwed. A lot of REITs did this in the darker days of 2009 and saw the cash injection skyrocket their share prices. 3.) Bring in a JV partner and convert part of an office property to residential or hotel. Maybe US Bank? Although 777 may be in a better location with its proximity to South Park/LA Live and 7th & FIg. This diversification would be much welcomed and downtown has seen a transformation in the past 7 years. People actually live there now! Weinstein did mention that this is a possibility. 4.) Do nothing and pay down debt as little as possible to achieve refinancings in order to kick the can into a better macro environment.