$200M refi for Century City office tower
Barclays provided loan on trophy at 1888 Century Park East
A Century City office tower just got some trophy treatment, The Real Deal has learned.
CommonWealth Partners and California pension fund CalPERS scored a $200 million refinancing on their 21-story, 528,900-square-foot office tower in Century City, county records show.
Barclays’ real estate division provided the loan on undisclosed terms. Neither CommonWealth nor CalPERS responded to a request for comment.
The new financing replaces a $148 million loan CommonWealth and CalPERS took in 2013 from Bank of America, a month after acquiring the property for $305 million. The firms bought the tower from Equity Commonwealth.
The office tower, located just off Santa Monica Boulevard and almost opposite Century City Westfield, counts the law firm of Sullivan & Cromwell and First Republic Bank among its tenants.
At least 70,000 square feet of space at the tower is currently up for lease, or around 13 percent, according to marketing materials from JLL.
The vacancy rate at the property is about average for upscale Century City, which saw a 12.7 percent overall office vacancy rate at the end of the third quarter, according to Newmark. That’s markedly better than the 19 percent office vacancy rate across the entirety of West Los Angeles, which spans from Hollywood to Beverly Hills down to Playa Vista.
The refinancing appears to offer a signal of a recovering the Class A office market, as institutional investors are willing to bet on a return to office towers and the pandemic continues to subside. Few office towers in Los Angeles have scored refinancing deals during the pandemic. Earlier this year, Brookfield got a $350 million floating-rate loan for its 54-story Gas Company Tower in Downtown Los Angeles.
It’s notable that Barclays provided the financing for 1888 Century Park East before the emergence and spread of the Omicron variant, which has disrupted the industry’s outlook for the office market across the country. The surge in new Covid cases across the U.S. has led employers to shut down their offices once again.
How long the latest cautionary period lasts remains to be seen.
The first phases of the pandemic pushed institutional investors away from offices to instead provide financing to studio space and mixed-use projects, like Madison Realty providing $485 million in construction financing for Harridge Development’s Crossroads project in Hollywood.