Thomas Properties puts LA site on the block

NEW YORK (Reuters) - Thomas Properties Group Inc TPGI.O has put a 24-acre development parcel of fully permitted land next to the Los Angeles International Airport up for sale, exiting the development business as it becomes a real estate investment trust.

Thomas, based in Los Angeles, has hired Jones Lang LaSalle Inc (JLL.N) to market the property, known as Campus El Segundo. The property has been subdivided to allow for the construction of a mixture of commercial real estate, such as hotel, retail, research and development, or office buildings.

"We are now on a path towards becoming a REIT, and currently, as part of that migration, the sale of assets that are not income-producing on a monthly basis are taking a lower priority," Executive Vice President Thomas Ricci told Reuters.

A REIT is a tax structure available to companies that generate most of their revenue in the form of mortgage receipts or rent. In exchange for passing at least 90 percent of their taxable income to shareholders, the companies are sheltered from most income taxes but have very little left to focus on development.

With interest rates low, shareholders are eager to invest in REITs because of their naturally high dividends. Several companies, including document storage company Iron Mountain Inc (IRM.N) and wireless communications site owner American Tower Corp (AMT.N), are also opting to or have become REITs.

Jones Lang LaSalle expects the Los Angeles site to fetch about $75 million and support commercial real estate worth ten times that amount. Due to its size, location and potential for development, Jones Lang LaSalle sees the property attracting international investors.

Campus El Segundo is permitted for 1.825 million square feet of development. The current development plan calls for eight buildings. It also includes a sales and marketing office next to the property at 800 Parkview Drive North, a 5,750-square-foot, two-story building, as well as naming rights for an adjacent soccer complex. The property is accessible to Interstates 105 and 405 and borders the Metro Rail Green Line.

Thomas installed roads and other infrastructure on the site after a four-year battle with rival REIT Kilroy Realty Corp (KRC.N) ended in 2006. It was about to start construction of an office building before it had a tenant, but shelved it in 2008 because of the recession.

(Reporting by Ilaina Jonas; Editing by Lisa Von Ahn)