Brookfield becomes dominant landlord in L.A. financial district With its acquisition of some of the tallest skyscrapers in downtown Los Angeles finally complete, New York-based Brookfield Office Properties Inc. is now the dominant office landlord in the city's financial district. Brookfield completed its purchase of longtime L.A. office tower owner MPG Office Trust Inc. on Tuesday. The new owner controls seven high-profile skyscrapers in the financial district, which has suffered for years from too much office vacancy even as downtown's overall reputation has improved. In his first public statement about the deal since it was announced in April, Brookfield's top Los Angeles executive vowed to upgrade the former MPG buildings and aggressively court new tenants, including technology and entertainment firms that have shied away from downtown in the past. Brookfield is gambling that the office market will finally turn around as tenants are attracted to downtown's burgeoning residential, retail and entertainment scene. Thousands of new residents have arrived in recent years and apartments, hotels and stores are being built at a rapid pace. "Los Angeles is in the early stages of what I would call this revolution," Brookfield's Bert Dezzutti said. That's why we have been so attracted to this deal for so long. Brookfield has an uphill climb ahead as it seeks to fill its buildings. Vacancy in the company's seven towers is about 17%, which is less than average in the central business district but still formidable considering that Brookfield controls a total of 8.3 million square feet. The former MPG buildings, which include the Gas Co. Tower and Wells Fargo Tower on Bunker Hill, need maintenance and improvements that were postponed because of MPG's financial problems. Dezzutti said Brookfield would pay for upgrades to common areas such as lobbies and explore ways to make the buildings dating to the 1980s more attractive to today's tenants. The company will also expand its Arts Brookfield program, which brings art displays and musical performances to its properties. Brookfield agreed to pay about $430 million for four of MPG's high-rises in April and assume $2 billion in MPG's debt. Complete financial terms of Tuesday's deal were not disclosed, but real estate experts estimated the full value at $3 billion. The buyer of MPG was a new fund controlled by Brookfield called DTLA Holdings. The fund now owns the former MPG high-rises and property that Brookfield had amassed earlier downtown, including the Fig at 7th shopping center and a prime development site on Figueroa Street. Brookfield might build a hotel or residential building on that site a few blocks north of Staples Center, Dezzutti said. The demand for housing and hospitality in downtown L.A. is extraordinary and underserved. MPG was delisted from the New York Stock Exchange on Tuesday. Brookfield paid holders of MPG's common stock $3.15 a share in cash at the close of the merger. Some preferred stock was converted to shares in DTLA Holdings. Brookfield owns 47% of DTLA Holdings and institutional funds hold the remaining 53%, Dezzutti said. MPG had a long run as one of Southern California's most prominent real estate developers. Founded by Los Angeles developer Robert F. Maguire in the 1960s, MPG was for decades the best-known builder of top-quality office space in Southern California. During the real estate boom of the mid-2000s, it paid top dollar for a large portfolio of premium properties, mostly in Orange County. But that expansion backfired when the economy tanked. The firm owed billions of dollars in mortgages at a time when many of its tenants were shrinking their offices, going out of business or begging for rent reductions. Maguire left the troubled company in 2008 after a contentious battle for control. The company's name was changed from Maguire Properties Inc. to MPG in 2010. In the following years it sold some buildings and let others fall into foreclosure to stay afloat while looking for suitors who might step in with a rescue plan. The once-great real estate company's failure was of its own making, said analyst Michael Knott of Green Street Advisors. "Ten years after Maguire's IPO, the company is gone, the victim of self-inflicted wounds from poor capital allocation and financing choices," Knott said. Now Brookfield faces downtown L.A.'s landlord challenges of high office vacancy, tepid demand and difficulty raising rents in a soft market, Knott said. An MPG representative declined to comment Tuesday. Shares of Brookfield Office Properties closed down 23 cents at $18.82. As one of the wealthiest real estate companies in the country, Brookfield has a shot at making its downtown L.A. purchases into a good investment, analyst Craig Silvers said. "There is good potential because vacancy rates are so high that there is almost nowhere to go but up," said Silvers, president of Bricks & Mortar Capital. But the kind of landlord that is needed is one that is willing and able to spend on various tenant improvements to make downtown more competitively attractive.