The value of a 41-story office building owned by Brookfield in Downtown Los Angeles has plunged by more than half, with its landlord sliding into default.
EY Plaza, a 920,300-square-foot tower at 725 South Figueroa Street, is now worth $210.7 million, compared to $446 million three years ago, the Commercial Observer reported, citing a report from Trepp.
The building’s 53 percent loss in value puts it below its $275 million commercial mortgage-backed securities loan, originally financed by Morgan Stanley and Wells Fargo.
Last spring, a fund managed by the Toronto-based Brookfield fell behind on payments on the loan tied to EY Plaza, which went into default and entered into receivership.
There’s also a $30 million mezzanine loan on the property outside of the commercial-backed securities trust, putting its negative equity at $90 million, according to Trepp
“The proverbial other shoe dropped with the release of December servicer data,” Trepp said.
Gregg Williams of Trident Pacific Real Estate, the appointed receiver, hired Colliers as the property’s leasing and property manager.
The Brookfield unit, called Brookfield DTLA Fund Office Trust Investor, has also defaulted on loans linked to two 52-story Downtown skyscrapers, the Gas Company Tower and the 777 Tower. In February, the fund defaulted on loans at both properties totalling $784 million.
The Gas Company Tower has since been sent to receivership, and saw its value deflate by 57 percent.
Brookfield hasn’t paid all its bills, and the firm faces hurdles at its properties in Los Angeles and beyond.
In June, the firm’s Brookfield Properties unit and Paris-based Unibail-Rodamco-Westfield said they would stop making payments on a $558 million loan tied to Westfield San Francisco Centre, surrendering the half-empty mall to its lenders. Since then the mall has gone into receivership.
The company also defaulted on a $161 million mortgage tied to office buildings in Washington, D.C, and by August had $763 million in looming defaults. A $260 million loan tied to a Brookfield mall in South Florida also appeared to be in trouble.
One of the world’s largest alternative investment management companies fell on a watchlist this summer for the Stonestown Galleria mall in San Francisco, ahead of two loans for $180 million set to mature on Oct. 1, according to The Real Deal. It wrapped up its refinancing this month.
In September, the Canadian firm that owns more than $850 billion of assets partnered with Ballast Investments to buy $800 million in troubled loans tied to 2,149 San Francisco apartments owned by Veritas Investments.
— Dana Bartholomew
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