Manulife US REIT (MUST) is looking to divest Figueroa to the City of Los Angeles’ Department of Water and Power at a sale price of US$92.5 million ($119.2 million).
The entry into the purchase and sale agreement is subject to board and council meetings where members of the public may attend, says the REIT. The agreement will only be executed when the purchaser has obtained the necessary approvals.
The sale price marks a discount of some 5.71% to Figueroa’s valuation of US$98.1 million as at Dec 31, 2025. As at the same period, the freehold 35-storey Class A office building was 45.6% occupied with a weighted average lease expiry (WALE) of 4.9 years by net lettable area.
Located in the central business district (CBD) of Downtown Los Angeles, Figueroa was part of MUST's initial public offering (IPO) portfolio. Developed and owned by MUST's sponsor since 1991, MUST bought the building in 2016 at US$284.7 million, years before the Downtown Los Angeles office market was hit by Covid-19. The building was valued at US$296 million as at Dec 31, 2015.
After factoring in fees and expenses including the manager's divestment fee of about US$0.4 million, MUST will receive net proceeds of approximately US$82.4 million.
The sale, should it go through, will more than cover MUST’s divestment target, which remains US$55.6 million short.
See also: Stoneweg Europe Stapled Trust to invest another €50 million in sponsor's data centre platform AiOnX
MUST’s manager says it intends to use the net proceeds to repay its outstanding loan due in 2026 and to partially repay its loans due in 2027. The remaining proceeds will go towards funding capital expenditures.
On a pro forma basis, if the sale was completed on Jan 1, 2025, MUST’s distribution per unit (DPU) would have fallen to 1.41 US cents from its FY2025 DPU of 1.44 cents. If the transaction was completed on Dec 31, 2025, MUST’s net asset value (NAV) would have fallen to 18 US cents per unit, from 19 US cents as at the end of December last year.
Once the required approvals are obtained, the agreement will be fully executed around May this year.
As at 9.34am, units in MUST are trading 0.1 US cent lower or 1.75% down at 5.6 US cents.
