Brookfield lawsuit: Mom-and-pop retailers unfashionably late in paying rent
Landlord alleges handful of tenants at California Market Center haven’t paid in months
Brookfield Property Partners has dropped the hammer on a handful of small retailers who haven’t been paying rent at an iconic Downtown Los Angeles property.
The real estate arm of Brookfield Asset Management filed seven lawsuits this week against tenants at California Market Center for skipping rent since the early spring. That’s when coronavirus-closures prohibited all nonessential businesses from operating in the city. Brookfield’s lawsuit is the latest legal filing by a retail landlord against a tenant over nonpayment.
The 1.85 million-square-foot California Market Center in the Fashion District is synonymous with the city’s wholesale apparel industry. Brookfield is remodeling the complex, at a cost of $170 million. The work is expected to be completed by 2021.
Like most retail landlords, Brookfield has seen a significant drop in revenue during the pandemic. In the second quarter, the company collected just 34 percent of rent across its retail portfolio. Brookfield has sued The Gap for rent nonpayment across its mall properties; the retailer has countersued.
Brookfield’s latest legal action — filed in L.A. County Superior Court — provides some detail on the companies and owners named, and what they owe. All are small businesses forced to shutter because of Covid-caused closures.
Brookfield alleges that one of its tenants, Balijit Singh Bedi, who does business as wholesale clothing retailer Krishma Overseas, stopped paying his monthly rent of $9,200 on April 1. Bedi now owes Brookfield $55,000, according to suit, or $64,000 after interest.
Krishma Overseas advertises as both an electronics store and women’s clothing retailer that “can make anything in our factory for you in India as well.” The store is listed as “temporarily closed” and messages left Wednesday with Krishma Overseas were not returned.
Three companies named in the suit are Baldwin Sun, Dream Apparel and Proven Luxury. The rest are individuals. Along with Bedi, the others include Alberto Makali, Antonio Barough and Yaacov Hassidim. Brookfield claims all seven tenants owe between $15,000 and $70,000 each in back rent.
Most of the retailers are longtime renters at the space. For example, Hassidim — the owner of Zirconmania, a wholesale cubic zirconia jewelry company, has been renewing leases at the California Market Center since 2004.