The following discussion should be read in conjunction with the consolidated financial statements and the related notes thereto that appear in

Overview and Background

We are a self-administered and self-managed real estate investment trust ("REIT"), and we operate as a REIT for federal income tax purposes. We are the largest owner and operator of Class A office properties in the Los Angeles Central Business District ("LACBD").

Through our controlling interest in MPG Office, L.P. (the "Operating Partnership"), of which we are the sole general partner and hold an approximate 90.7% interest, and the subsidiaries of our Operating Partnership, including MPG TRS Holdings, Inc., MPG TRS Holdings II, Inc., and MPG Office Trust Services, Inc. and its subsidiaries (collectively known as the "Services Companies"), we own, manage and lease real estate located primarily in the greater Los Angeles area of California. This real estate primarily consists of office properties, parking garages and land parcels.

As of June 30, 2012, our Operating Partnership indirectly owns whole or partial interests in 13 office properties, off-site parking garages, and on-site structured and surface parking (our "Total Portfolio"). We hold an approximate 90.7% interest in our Operating Partnership, and therefore do not completely own the Total Portfolio. Excluding the 80% interest that our Operating Partnership does not own in MPG Beacon Venture, LLC (the "joint venture"), our Operating Partnership's share of the Total Portfolio is 9.1 million square feet and is referred to as our "Effective Portfolio." Our Effective Portfolio represents our Operating Partnership's economic interest in the office properties and parking garages from which we derive our net income or loss, which we recognize in accordance with U.S. generally accepted accounting principles ("GAAP"). The aggregate square footage of our Effective Portfolio has not been reduced to reflect our limited partners' 9.3% share of our Operating Partnership.

Our property statistics as of June 30, 2012 are as follows:

                                  Number of                         Total Portfolio                        Effective Portfolio
                                                                          Parking                                 Parking
                                                            Square        Square       Parking      Square        Square       Parking
                           Properties       Buildings        Feet         Footage      Spaces        Feet         Footage      Spaces
LACBD                            6                 7      7,409,486     3,058,384       9,370     6,582,179     2,697,682       8,320
Other Properties                 3                 6        792,615       416,290       1,285       313,126        83,258         257
Properties in Default            4                 7      2,220,023     1,678,978       4,494     2,220,023     1,678,978       4,494
                                13                20     10,422,124     5,153,652      15,149     9,115,328     4,459,918      13,071
Percentage Leased
LACBD                                                          78.8 %                                  78.9 %
Other Properties                                               89.9 %                                  94.9 %
Properties in Default                                          78.4 %                                  78.4 %

We directly manage the properties in our Total Portfolio through our Operating Partnership and/or our Services Companies, except for 500 Orange Tower, Two California Plaza, Glendale Center and 3800 Chapman (each of which is in receivership as of June 30, 2012) and Cerritos Corporate Center (a joint venture property).

We receive income primarily from rental revenue (including tenant reimbursements) from our office properties, and to a lesser extent, from our on- and off-site parking garages. We receive income from the joint venture for providing management services for One California Plaza and leasing services for all joint venture properties.

Liquidity and Capital Resources

General

Our business requires continued access to adequate cash to fund our liquidity needs. Over the last several years, we have improved our liquidity position through secured debt financings, cash-generating asset sales and asset dispositions at or below the debt in cooperation with our lenders, as well as reductions in leasing costs, discretionary capital expenditures, property operating expenses, and general and administrative expenses.

Sources and Uses of Liquidity

Our expected actual and potential liquidity sources and uses are, among others,
as follows:

                     Sources                                   Uses
      •  Unrestricted and restricted          •  Property operations and corporate
         cash;                                   expenses;
      •  Cash generated from operations;      •  Capital expenditures (including
                                                 commissions and tenant
                                                 improvements);
      •  Asset dispositions;                  •  Payments in connection with loans
                                                 (including debt service,
                                                 principal payment obligations and
                                                 payments to extend, refinance or
                                                 exit loans);
      •  Proceeds from public or private      •  Swap obligation;
         issuance of debt or equity
         securities;
      •  Cash generated from the              •  Entitlement-related costs; and/or
         contribution of existing assets
         to joint ventures; and/or
      •  Proceeds from additional secured     •  Distributions to common and
         or unsecured debt financings.           preferred stockholders and unit
                                                 holders.

Actual and Potential Sources of Liquidity-

As described below, we currently believe that we will have access to some of the liquidity sources identified above, and that those sources will be sufficient to meet our near-term liquidity needs. We are working to proactively address challenges to our longer-term liquidity position, particularly debt maturities, leasing costs and capital expenditures. We do not currently have committed sources of cash adequate to fund our projected longer-term needs. Management believes that access to future sources of significant cash will be challenging. These sources are essential to our liquidity and financial position, and if we are unable to generate adequate cash from these sources we will have liquidity-related problems and will be exposed to material risks. Our inability to secure adequate sources of liquidity could lead to our eventual insolvency. For a further discussion of risks associated with (among other matters) loan defaults, economic conditions, our liquidity position and our substantial indebtedness, see Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K filed with the SEC on March 15, 2012.

                             MPG OFFICE TRUST, INC.

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Unrestricted and Restricted Cash-

A summary of our cash position as of June 30, 2012 is as follows (in millions):

Unrestricted cash and cash equivalents                            $ 166.5
Restricted cash:
Leasing and capital expenditure reserves                              6.5
Tax, insurance and other working capital reserves                    11.0
Prepaid rent reserves                                                 9.2
Collateral accounts                                                   0.6
Total restricted cash, excluding mortgages in default                27.3
Total restricted cash and unrestricted cash and cash equivalents,
   excluding mortgages in default                                   193.8
Restricted cash of mortgages in default                              33.8
                                                                  $ 227.6

The leasing and capital expenditure, tax, insurance and other working capital, and prepaid rent reserves are held in restricted accounts by our lenders in accordance with the terms of our mortgage loan agreements. The collateral accounts are held by our counterparties under other obligations.

The following is a summary of our available leasing reserves (excluding mortgages in default) as of June 30, 2012 (in millions):

                    Restricted
                  Cash Accounts
LACBD properties $           6.5
Other Properties               -
                 $           6.5

The leasing reserves at our LACBD properties have been exhausted in large part, and future leasing costs will need to be funded primarily from property-generated cash flow.

Cash Generated from Operations-

Our cash generated from operations is primarily dependent upon (1) the occupancy level of our portfolio, (2) the rental rates achieved on our leases, and (3) the collectability of rent from our tenants. Net cash generated from operations is tied to our level of operating expenses and other general and administrative costs, described below under "-Actual and Potential Uses of Liquidity."

Occupancy levels. There was negative absorption in 2011 in most of our submarkets, and our overall occupancy levels declined in 2011 in the LACBD. We expect our occupancy levels in 2012 to be flat or lower than our year end 2011 levels for the following reasons (among others):

• We are experiencing aggressive competition from other property owners.

• Our perceived liquidity challenges and recent loan defaults may impact potential tenants' willingness to enter into leases with us.

• Economic conditions and stock market volatility have resulted in some companies shifting to a more cautionary mode with respect to leasing.

• Some of our current and potential tenants rely heavily on the availability of financing to support operating costs (including rent).

• We face competition from high-quality sublease space, particularly in the LACBD.

For a discussion of other factors that may affect our ability to sustain or improve our occupancy levels, see Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K filed with the SEC on March 15, 2012.

Rental rates. Average asking rental rates were essentially flat during 2011. On average, our in-place rents are generally close to current market in the LACBD and above market in the Other Properties. Because of economic volatility and uncertainty, there can be no assurance that rental rates will not decline during 2012.

Collectability of rent from our tenants. Our rental revenue depends on collecting rent from tenants, and in particular from our major tenants. As of June 30, 2012, our 20 largest tenants represented 55.0% of the LACBD's total annualized rental revenue. In the event of tenant defaults, we may experience delays in enforcing our rights as landlord and may incur substantial costs in pursuing legal possession of the tenant's space and recovery of any amounts due to us from the tenant. This is particularly true in the case of the bankruptcy or insolvency of a major tenant or where the Federal Deposit Insurance Corporation is acting as receiver.

Asset Dispositions-
During the past several years, we have systematically disposed of assets in order to (1) preserve cash, through the disposition of properties with current or projected negative cash flow and/or other potential near-term cash outlay requirements (including debt maturities) and (2) generate cash, through the disposition of strategically-identified non-core properties with positive equity value.

Cash-Preserving Dispositions-

During 2011, we disposed of development land and 1.7 million square feet of
office space. These transactions resulted in the elimination of $483.8 million
of debt and the generation of $20.3 million in net proceeds (after the repayment
of debt).

During the six months ended June 30, 2012, we closed the following
cash-preserving transactions:

•         On February 2, 2012, trustee sales were held with respect to 700 North
          Central and 801 North Brand as part of cooperative foreclosure
          proceedings. As a result of the foreclosures, we were relieved of the
          obligation to repay the $27.5 million mortgage loan secured by
          700 North Central and the $75.5 million mortgage loan secured by
          801 North Brand as well as accrued contractual and default interest on
          both loans. In addition, we received a general release of claims under
          the loan documents pursuant to our previous in-place agreements with
          the special servicer.



•         On April 19, 2012, we disposed of Brea Corporate Place and
          Brea Financial Commons ("Brea Campus") pursuant to a deed-in-lieu of
          foreclosure agreement. As a result, we were relieved of the obligation
          to repay the $109.0 million mortgage loan secured by these properties
          as well as accrued contractual interest on the mortgage loan. In
          addition, we received a general release of claims under the loan
          documents.

                             MPG OFFICE TRUST, INC.

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

•         On May 18, 2012, trustee sales were held with respect to Stadium Towers
          Plaza and an adjacent land parcel. As a result of the foreclosures, we
          were relieved of the obligation to repay the $100 million mortgage loan
          secured by the properties as well as accrued contractual and default
          interest on the mortgage loan. In addition, we received a general
          release of claims under the loan documents pursuant to our previous
          in-place agreement with the special servicer.

We have exited, have entered into agreements to exit and may potentially exit additional non-core assets during the remainder of 2012:

•         We have reached an agreement with the special servicer for 500 Orange
          Tower that establishes a definitive outside date of September 25, 2012,
          by which time we will cease to own the asset. We will receive a general
          release of claims under the loan documents upon disposition of this
          asset pursuant to our previous in-place agreement with the special
          servicer.



•         On April 10, 2012, Glendale Center was placed in receivership pursuant
          to an agreement with the special servicer that provides for a
          cooperative foreclosure and a general release of claims under the loan
          documents at the conclusion of the foreclosure process. On
          August 3, 2012, a trustee sale was held with respect to
          Glendale Center. See "Subsequent Events."



•         On May 23, 2012, we entered into an agreement with the special servicer
          for Two California Plaza. A receiver had previously been put in place
          on March 23, 2012. Pursuant to this agreement, the Company will
          temporarily remain the title holder of the asset until Two California
          Plaza is transferred to another party or there is a completed
          foreclosure, with a definitive outside date of December 31, 2012, by
          which time we will cease to own the asset. We are not obligated to pay
          any amounts and are not subject to any liability or obligation in
          connection with our exit from the asset, other than to cooperate in the
          sale or other disposition. We will receive a general release of claims
          under the loan documents at the time of exit. In connection with this
          agreement, we paid $1.0 million to the special servicer related to
          certain historical operational liabilities.



•         On June 6, 2012, we entered into an agreement with the special servicer
          for 3800 Chapman and the asset was placed in receivership on
          June 13, 2012. Pursuant to this agreement, the Company will temporarily
          remain the title holder of the asset until 3800 Chapman is transferred
          to another party or there is a completed foreclosure, with a definitive
          outside date of December 31, 2012, by which time we will cease to own
          the asset. We are not obligated to pay any amounts and are not subject
          to any liability or obligation in connection with our exit from the
          asset, other than to cooperate in the sale or other disposition. We
          will receive a general release of claims under the loan documents at
          the time of exit. Also pursuant to this agreement, our Operating
          Partnership received a release from all claims under the guaranty of
          partial payment in return for a payment of $2.0 million.



•         On July 12, 2012, we disposed of Stadium Gateway (a joint venture
          property in which we owned a 20% interest) located in
          Anaheim, California. We received net proceeds of approximately
          $1 million, including reimbursement of loan reserves, which will be
          used for general corporate purposes.

                             MPG OFFICE TRUST, INC.

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Cash-Generating Dispositions-

During the six months ended June 30, 2012, we closed the following
cash-generating transactions:

•         On March 30, 2012, we sold our interests in Wells Fargo Center - Denver
          and San Diego Tech Center (both joint venture properties in which we
          owned a 20% interest) to Beacon Capital. In addition, we sold our
          development rights and an adjacent land parcel at San Diego Tech Center
          to Beacon Capital and received a payment in consideration for
          terminating our right to receive certain fees from the joint venture
          following the closing date. We received net proceeds from these
          transactions totaling approximately $45 million, which will be used for
          general corporate purposes.



•         On May 25, 2012, we disposed of the City Tower development site located
          in Orange, California. We received net proceeds of approximately
          $7 million, which will be used for general corporate purposes.

We do not anticipate any substantial cash-generating dispositions in the near term, and we have a very limited number of assets remaining that could be sold in the near term to generate net cash proceeds. Although not currently contemplated, we currently believe that we could sell 777 Tower and the adjacent 755 South Figueroa land parcel in the near-term to generate net cash proceeds. However, if we choose to pursue such a disposition, we cannot assure you that such a disposition could be completed in a timely manner or on terms acceptable to us.

In connection with our initial public offering, we agreed to indemnify Robert F. Maguire III and related entities and other contributors from all direct and indirect adverse tax consequences in the event that our Operating Partnership directly or indirectly sells, exchanges or otherwise disposes (including by way of merger, sale of assets, completion of a foreclosure or otherwise) of any portion of its interests in certain properties in a taxable transaction. Certain types of transactions, including but not limited to joint ventures and refinancings, can be structured to avoid triggering the tax indemnification obligations.

As a condition to the continuation of the tax indemnification period to its maximum length, Mr. Maguire and related entities must maintain ownership of common units (or shares of common stock received by Mr. Maguire and related entities in exchange for common units of our Operating Partnership in accordance with Section 8.6B of the Amended and Restated Agreement of Limited Partnership of MPG Office, L.P., as amended) of our Operating Partnership equal to 50% of the units received by them in the formation transactions. As of the measurement date, Mr. Maguire met the 50% ownership requirement and the tax indemnification periods were extended to June 27, 2013.

On July 23, 2012, we received notices from Mr. Maguire and related entities requesting the redemption of 3,975,707 noncontrolling common units. On July 24, 2012, we issued 3,975,707 shares of common stock in exchange for these units. At Mr. Maguire's request, we issued the common stock to a party not related to Mr. Maguire. See "Subsequent Events." The redemption of these units and subsequent issuance of the common stock to a party not related to Mr. Maguire causes Robert F. Maguire III and related entities to fall below the 50% ownership requirement set forth in his contribution agreement. As a result, all tax indemnification in favor of him and related entities, as well as all remaining limited partners, will now expire on June 27, 2013. Therefore, pursuant to the terms of the contribution agreement, all restrictions on disposition relating to the following assets will now expire on June 27, 2013:
Gas Company Tower, US Bank Tower, KPMG Tower, Wells Fargo Tower and Plaza Las Fuentes.

Proceeds from Public or Private Issuance of Debt or Equity Securities-

Due to market conditions and our high leverage level, among other factors, it may be extremely difficult to raise cash through public or private issuance of debt or equity securities on favorable terms or at all. In the event of a successful issuance, existing equity holders would likely face substantial dilution.

Cash Generated from the Contribution of Existing Assets to Joint Ventures-

Although not currently planned or contemplated, in the long term we may seek to raise capital by contributing one or more of our existing assets to a joint venture with a third party. Investments in joint ventures are typically complicated and may, under certain circumstances, involve risks not present were a third party not involved. Our ability to successfully identify, negotiate and close joint venture transactions on acceptable terms or at all is highly uncertain in the current economic environment.

Proceeds from Additional Secured or Unsecured Debt Financings-

We do not currently have arrangements for any future secured financings and do not expect to obtain any secured debt financings in the near term that will generate net cash proceeds. We currently do not believe that we will be able to address challenges to our longer-term liquidity position (particularly debt maturities, leasing costs and capital expenditures) through future secured debt financings. Additionally, we do not believe that we will be able to obtain any significant unsecured financings on terms acceptable to us in the near future.

Actual and Potential Uses of Liquidity-

The following are the projected uses, and some of the potential uses, of our cash in the near term. Because of the current uncertainty in the real estate market and the economy as a whole, there may be other uses of our cash that are unexpected (and that are not identified below).

Property Operations and Corporate Expenses-

Management is focused on a careful and efficient use of cash to fund property operating and corporate expenses. All of our business units underwent a thorough budgeting process in the fourth quarter of 2011 to allow for support of the Company's 2012 business plan, while preserving unrestricted cash. Management continues to take steps to reduce general and administrative expenses. Our completed and any future property dispositions may further reduce these expenses. Regardless of these efforts, operating our properties and business requires a significant amount of capital.

Capital Expenditures (Including Commissions and Tenant Improvements)-

Capital expenditures fluctuate in any given period, subject to the nature, extent and timing of improvements required to maintain our properties. Leasing costs also fluctuate in any given period, depending upon such factors as the type of property, the length of the lease, the type of lease, the involvement of external leasing agents and overall market conditions. Our costs for capital expenditures and leasing fall into two categories: (1) amounts that we are contractually obligated to spend and (2) discretionary amounts.

As of June 30, 2012, we have executed leases (excluding those related to mortgages in default) that contractually commit us to pay $23.0 million for leasing costs, of which $1.5 million is contractually due in 2013, $1.0 million in 2014, $0.3 million in 2015, $0.5 million in 2016 and $11.7 million in 2017 and thereafter. The remaining $8.0 million is contractually available for payment to tenants upon request during 2012, but actual payment is largely determined by the timing of requests from those tenants.

We continue to have limited unrestricted cash. We may limit the amount of discretionary funds allocated to capital expenditures and leasing costs in the near or longer term. If this occurs, it may result in a decrease in the number of leases we execute (particularly new leases, which are generally more costly . . .