A joint venture of CommonWealth Partners and California Public Employees’ Retirement System has landed a $550 million refinance on its massive City National Plaza office complex in Downtown Los Angeles.
Morgan Stanley and Goldman Sachs originated the CMBS loan on the 2.5 million-square-foot twin towers, according to Commercial Observer. The 2.44 percent fixed-rate nonrecourse loan has a 10-year term. It closed in March.
The majority of the debt — a $330 million senior note — was securitized in a single-asset, single-borrower transaction.
The financing comes at a time of immense financial pressure on CMBS borrowers and broad concerns over the future of the office market. Some predict the coronavirus pandemic will dampen long-term demand for office space and lead to more remote working.
CalPERS — the largest public pension fund in the U.S. — and CWP paid $858 million for City National Plaza in 2013. The seller was the nation’s second largest public pension fund: the California State Teachers’ Retirement System. In the years since, CalPERs and CWP have poured $193 million into the property.
The complex includes two near-identical 52-story towers, built in 1972. City National Plaza has 125,000 square feet of retail space in an underground concourse area.
It was about 80 percent leased to 81 tenants as of March, according to credit rating agency KBRA, which rated the $330 million senior note. City National Bank is the largest tenant. [CO] — Dennis Lynch