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State Street delinquent on $81M in loans tied to Irvine office towers
WeWork vacated 9% of 880K sf Lakeshore Towers last month
State Street Corporation is delinquent on $81 million in loans tied to an office complex in Irvine and failed to pay off the loan in full when it came due in March, The Real Deal has learned.
The Boston-based investment manager holds two loans on the 893,000-square-foot complex at 18101 Von Karman Avenue — one for $45 million and the other for $36 million — that are in default, according to data from Trepp. Both loans were originated by Starwood Property Trust and then packaged into commercial mortgage-backed securities deals and sold to investors.
Neither State Street nor Starwood responded to a request for comment.
In total, State Street holds $195 million in CMBS loans connected to the property, called Lakeshore Towers, according to Morningstar Credit.
The borrower failed to make payments in May and June, according to Morningstar. The loans originally matured in March, but State Street scored a 60-day extension.
In May, State Street lost WeWork as a tenant — its third-largest at the 879,000-square-foot complex. The co-working firm, which is battling steep losses and a tumbling stock price, exited its 75,000-square-foot space at the complex. WeWork’s lease was originally set to expire in 2034, according to Trepp data.
The landlord did score a lifeline last year, when First Foundation renewed its 70,200-square-foot lease at the office building.
State Street inherited the leasehold interest in the office complex when it acquired General Electric Asset Management in 2016 for up to $485 million. General Electric’s pension fund bought the leasehold interest in the property in the early 1990s, in partnership with Irvine-based MBK Real Estate.
And history seems to repeat itself at the property. In 1996, GE’s pension trust and MBK filed for bankruptcy on the building, after failing to meet loan payments.