Anthem’s former Warner Center office building gets 75% valuation cut

Goes from $150M to $39M; $120M CMBS loan in default since December

The property at 21555 Oxnard Street (Credit: Google Maps)
The property at 21555 Oxnard Street (Credit: Google Maps)

Since Anthem Blue Cross relocated to Campus @ Warner Center late last year, the health insurance provider’s former office property it vacated nearby has found itself in dire financial straits.

A $120 million CMBS loan on that 450,000-square-foot building matured in December, and the owner, a group that includes Apollo Real Estate Fund, was unable to pay it off. The value of the property at 21555 Oxnard Street, once pegged at $150 million, has been slashed to just $39.1 million with a new appraisal in June, Trepp reported. Anthem was the sole tenant in the building — which it previously owned — and had occupied the property, known as Center Point, since 1977.

The building owner and loan borrower is TA/Warner Center Investors LLC, according to the loan prospectus from 2007. The ownership group includes managing partners Abraham Lerner and Christopher Ellis, and limited partners Manfred Simchowitz and Apollo Real Estate Investment Fund.

The LLC already made three discounted payoff proposals, all of which were declined because they were below “market value indications.” The special servicer, C-III Asset Management, is moving forward in pursuit of a foreclosure.

The oddly long-lived 13-year-old CMBS loan was part of a transaction named GECMC 2007-C1, originated before the financial crisis.

Anthem had sold Center Point by 2007 but continued to occupy the building. In 2017, it sought to sell off the 26-acre plot of land surrounding it as well, which it still owned.

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Soon after Anthem announced plans to relocate, Center Point was put on the market as a redevelopment opportunity, with brokers expecting it to fetch bids between $110 to $125 million.

Last April, the building owners were reported to be working with Lincoln Property Company on a $50 million repositioning of the property to attract media and tech tenants. Lincoln, along with Angelo, Gordon & Co., is also the owner of Campus @ Warner Center.

The city adopted the Warner Center 2035 master plan in 2013 in an effort to encourage new, especially residential, development in this section of the San Fernando Valley, which is mostly occupied by office buildings and parking lots.

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Contact Kevin Sun at ks@therealdeal.com