In 2013, Brookfield Property Partners became Downtown Los Angeles’ biggest landlord — by acquiring the company that previously held that title, MPG Office Trust.
The $2 billion deal saw Brookfield pick up four Downtown office towers spanning 5 million square feet. That included the 54-story Gas Company Tower at 555 West 5th Street, which had an allocated purchase price of about $460 million. In the following years, Brookfield invested another $41 million in the 1.4 million-square-foot building, bringing in major new tenants like Deloitte and WeWork.
In 2016, the landlord refinanced the property with a $450 million debt package from Deutsche Bank and Barclays, the senior portion of which was securitized into several CMBS transactions. Documents associated with the financing provide a closer look at the property’s rent roll.
The largest tenant at the property is its namesake, the Southern California Gas Company, whose headquarters occupies more than a third of the building. SoCalGas is a subsidiary of San Diego-based Sempra Energy, and is the largest natural gas distribution utility in the United States. The company has been at the complex since 1991, when it was built.
Average base rent in the building was about $23 per square foot in 2016, with WeWork paying the highest rent among major tenants at $27, while SoCalGas paid the least at $21 a foot.
The second largest tenant, law firm Sidley Austin, has also been at the building for nearly three decades, having moved in in 1992. The other law firm in the top five, Latham & Watkins, first became a tenant in 2003.
At the time of the refinancing, the property was 83 percent leased to 21 tenants, with the five largest tenants accounting for 68 percent of the space and 80 percent of annual rent, according to the loan prospectus. A more recent report from DBRS Morningstar shows that the top five tenants have not changed since then, while Trepp data shows that the building is now 85 percent leased.
The largest new tenant to move in since the Brookfield acquisition, and the third largest overall, is “Big Four” accounting firm Deloitte, in 2014. Deloitte also became the first tenant to have its logo affixed to the top of the building, which had previously been left empty.
Rounding out the top five, WeWork occupies 92,000 square feet at the property, with subtenants that range “from writers and film editors to social media marketers, PR firms, and major corporations,” according to its website. The co-working firm’s lease commenced shortly before the 2016 refinancing.
The Gas Company Tower, like Brookfield’s other properties in the area, is owned by Brookfield DTLA Holdings LLC, an entity that is 47 percent owned and fully controlled by Brookfield Office Properties. The remaining interest in the entity is held by two sovereign wealth funds and a pension fund.
One of the company’s other Downtown LA properties, Ernst & Young Plaza at 725 South Figueroa Street, recently secured a $305 million refinancing package from Morgan Stanley and Wells Fargo.
The collateral for the Gas Company Tower loan also includes a 1,186-stall parking garage a few blocks away, at 350 South Figueroa Street. The five-year loan is set to mature next August.