SAN FRANCISCO — California is moving forward with plans to sell 11 state-owned office buildings to investors who would lease them back to the state.

The plan would result in the early retirement of almost $1.2 billion of outstanding debt issued to finance construction of the properties. The state’s lease payments on the space back the outstanding bonds.

The Department of General Services has issued a request for proposals for commercial real estate brokers and-or investment bankers to market the properties.

“Were hoping to have the broker on board by the end of the year,” said DGS spokesman Eric Lamoureux.

The 11 properties in question were built — or completely rebuilt — between 1983 and 2005 and include buildings in the city centers of Los Angeles, San Francisco, and Oakland, as well as a mix of central and suburban Sacramento office buildings.

According to a DGS fact sheet, eight of the properties are encumbered with lease-revenue bond debt, ranging from $16.4 million for the attorney general’s office building in Sacramento to $407.4 million for the Capitol East End Complex. The complex is made up of five modern office buildings that opened between 2002 and 2003 on the block just east of the state capitol, housing agencies that include the Department of Health Care Services, the Department of Public Health, and the Department of Education.

Other buildings to be leased out include the Ronald Reagan State Building in Los Angeles, the San Francisco headquarters of the state’s Public Utilities Commission, and the Earl Warren/Hiram Johnson office complex in downtown San Francisco, where tenants include the state Supreme Court.

There was a shade under $1.2 billion of outstanding bond debt attached to the properties as of June 2008, according to the DGS fact sheet.

“Once they’re sold, they’ll pay off the bonds,” Lamoureux said.

The sale-leaseback plan is part of a strategy laid out by Gov. Arnold Schwarzenegger to monetize some of the state’s real estate assets, which was enacted into law as part of this summer’s budget revision package.

It will provide a short-term cash infusion, while making the state a long-term renter of the properties, including three of which have no outstanding bond debt and three others with bonds slated to mature by 2015.

“The most important thing today is to sell these properties to tap that revenue there,” Lamoureux said.

The Schwarzenegger administration projects that the state will net between $600 million and $675 million in one-time money after selling the buildings and paying off the associated debt.

The DGS fact sheet predicts that the buildings could generate $215.7 million in annual rent payments to investors — almost $40 million more annually than the $175.7 million it currently charges tenant agencies.

“We anticipate being able to realize the revenues more than likely in the 2010-2011 budget cycle,” Lamoureux said.

The deadline for the real estate proposals is Friday.

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