LOS ANGELES, April 26 (UPI) -- The New York firm Brookfield Office Properties says it has agreed to buy four major office buildings in downtown Los Angeles for $430 million.
Brookfield already owns several prominent office buildings in the city. The deal with MPG Office Trust Inc. would put in the hands of one company five of the 10 tallest buildings in the city and control of 8.3 million square feet of office space in the downtown area, the Los Angeles Times reported Friday.
The deal with MPG includes purchase of the Gas Company Tower and the Wells Fargo Tower, two of the city's best known office structures. Brookfield already owns the notable properties of 777 Tower and Bank of America Plaza.
The deal is pending MPG shareholder approval, which is expected, the newspaper said.
MPG has been struggling with huge debts incurred before the economic downturn hit. In 2012, the company sold U.S. Bank Tower, the tallest building in the city. It is also allowing some properties to fall into foreclosure, the Times said.
The terms of the Brookfield offer include a $3.15 per share cash payment at the close, a 21 percent premium above MPG's $2.60 per share closing value on Wednesday.
The deal is rattling to some in Los Angeles, however, as one company would end up with control of an enormous portion of the high-end rental market in the city.
"Brookfield buying the rest of MPG's portfolio is like putting together Chrysler, Ford and General Motors. It's that impactful," said John Cushman, chairman of real estate brokerage Cushman & Wakefield.
"They will totally control the high end of the market," Cushman said.
Business analyst Craig Silvers at Brick & Mortar Capital said the purchase was not a giveaway.
"I think it's a fair price because there are a limited number of buyers for this size of a portfolio and its particular location," he said.
"There is a recovery going on and no one told downtown."