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Gas Company Tower receiver seeks court OK for $375M lease with LA
Gregg Williams sees a “lucrative opportunity,” but needs $47M for upfront costs
From left: Mayor Karen Bass Trident Real Estate’s Gregg Williams and 555 West 5th Street (Getty, Trident Real Estate, Google Maps)
The receiver on the Gas Company Tower, the 54-story Downtown L.A. office tower formerly owned by Brookfield Properties, has asked a court to approve a 308,000-square-foot lease with the City of Los Angeles.
Gregg Williams at Trident Real Estate, who was appointed as receiver on the building last year, has asked a Los Angeles Superior Court judge to release $47 million in funding to help secure the lease, and ultimately, approve it.
“The receiver is in the process of negotiating a lucrative opportunity for a lease of nearly a quarter of the building,” Williams wrote in a memo earlier this month, adding the deal “would put the building well on the road to financial stability.”
But without it, the building could soon be 76 percent vacant, Williams said.
Williams needs the $47 million protective advance to pay broker and management fees, make building repairs and fund tenant improvement allowances, according to court records.
The court has scheduled a hearing on April 12 to review Williams’ request.
Williams has negotiated the lease with the city for months, since he was tasked with filling up the building and improving income. A group of investors in a commercial mortgage-backed securities loan tied to the property sued to place the property into a receivership last year, after Brookfield defaulted on a $350 million loan.
In December, the city’s Department of General Services proposed a new lease agreement for five city departments to take up 308,000 square feet at the tower in a 15-year deal, according to City Council documents.
The proposed lease is not finalized, Williams said in court filings, but he expects “the lease will be ready for execution shortly.”
Under the proposal, the city will pay $15 million in rent for the first year and more than $25 million by the 15th year. If signed, the lease is expected to generate $375 million in base rent over the next 15 years.
“The long term of the lease will contribute to the financial security of the building,” Williams said in a memo. “The commitment of this long-term tenant and the financial security that it will bring, [will] increase the building’s desirability to other prospective tenants.”
Last month, bankrupt co-working firm WeWork vacated 92,000 square feet at the Gas Company Tower after failing to reach a deal with the receiver.