Despite missing out on our lowered FFO estimates and a decline in the share price of real estate company Maguire Properties (MPG), Zacks realty analyst Greg Sukenik sticks to his Hold rating on the shares.  The following excerpts explain his position:

'Overall 3Q results were weaker than expected, and MPG missed our lowered FFO (funds from operations) estimates by $0.10 per share. We are again lowering our full-year estimate by 10% due to the miss. Occupancy has dropped due to subprime-lender exposure. In addition, interest expense has increased substantially from last year due to the $2.8 billion EOP portfolio purchase.

'MPG is in the process of selling assets to de-lever from what might have been an overpriced acquisition. Despite the miss, we still rate MPG a Hold as the company has assets in some of the strongest US office markets. Our six-month target price for the stock is $26.00.

'Additionally, with recent share price declines, MPG trades at a substantial discount to NAV (net asset valuation). FFO was 8.9 million, or $0.19 per diluted share, compared to FFO of $24.4 million or $0.51 per diluted share, for the same quarter a year earlier. 3Q FFO does not include a $13.4 million charge for early debt extinguishment. Including the charge, FFO per share was ($0.06) per share.

'FFO dropped from last year due to higher interest expense as a result of the EOP/Blackstone transaction, in addition to higher-than-expected property operating expenses. Due to the miss and the company's high debt load, we are again lowering our full-year FFO estimate to $1.25 per share.'