Pasadena Office Tower Value Haircut

A new appraisal slashed the value of Albert Taban and Michael Pashaie’s Pasadena Office Tower by more than half as tenants flee the property.

The nine-story tower at 150 South Los Robles Avenue was reappraised at $23 million, a 59 percent decrease from its appraisal a decade ago, according to Morningstar Credit. The new appraisal is worth about $20 million less than the loan on the property.

The $40 million commercial mortgage-backed securities loan went to special servicing per the borrower’s request for imminent monetary default in March, according to a Morningstar report. That suggests the borrower is looking to refinance the property.

Entities connected to Taban and Pashaie bought the properties in 2002 for $22 million. Taban and Pashaie did not respond to a request for comment.

Taban is managing partner at Jade Enterprises, a Los Angeles-based real estate firm who specializes in value-add investments.

The Pasadena Office Tower owners have indicated that they are unable to pay off the loan before its maturity in June because of “ongoing challenges including tenant flight to higher quality space,” Morningstar servicer commentary notes.

The slash in value is the latest example of the flight to quality in the office sector. Throughout Los Angeles tenants are ditching older offices for newer, Class A properties that have ample amenities to entice workers back to the office after the pandemic.

Occupancy at the Pasadena Office Tower has sunk to 69 percent in 2024 from 93 percent in 2015. The five largest leases — totaling 39 percent of the building — are set to expire at the end of 2027, including ones for the City of Pasadena, Pacific Marina Ventures and the Department of Rehabilitation Services.

The debt service coverage ratio is 1.10, which means income can cover debt, but the office tower is still seeing a drop in income to $2.9 million in 2024 from $3.3 million the year before, per Morningstar data.

Taban’s Jade Enterprises isn’t new to distress. Last year it listed a mostly vacant office tower in Downtown Los Angeles for sale, a sign of the times as office vacancies downtown are at almost 34 percent, according to a CBRE report.