The owners of a nine-story building known as Pasadena Office Tower face foreclosure in the wake of a notice of default on $40 million debt and election to sell that was recorded earlier this month.
The commercial mortgage-backed securities loan connected to the office building at 150 South Los Robles Avenue earlier landed in special servicing, with default considered likely and imminent. Borrowers acknowledged they would be unable to pay off the loan prior to maturity, blaming “tenant flight to higher quality space, reduced office demand and inflationary pressures,” according to servicer commentary via Morningstar Credit.
The owners, two entities connected to Albert Taban and Michael Pashaie, managing partners at Jade Enterprises and Golden West Properties, saw the property’s value slashed by more than half as tenants fled. The offices were recently appraised at $23 million compared to $57 million at loan issuance in May 2015, per Morningstar.
That means the 142,000-square-foot property is worth less than the debt connected to it, which the landlords have defaulted on, but still worth around a million dollars more than what it was purchased for in 2002. Taban and Pashaie did not immediately respond to a request for comment.
The offices, which were built in the 1970s, are 69 percent occupied compared to 93 percent occupancy at underwriting 10 years ago. The five largest leases combine to account for 39 percent of the space, and include the city of Pasadena, a California Department of Rehabilitation and the Pasadena Community Access Corporation. The three entities’ leases are set to expire before the end of 2027.
Pasadena offices are not seeing the sort of post-pandemic revival that has lifted submarkets such as Century City on the Westside of Los Angeles, where newer, amenity-laden properties are billed as ways to lure workers back to their desks. Buildings in Pasadena, meanwhile, are generally selling at discounts. An office building at 790 East Colorado Boulevard recently sold for $31.5 million — it was previously purchased for $59 million. An office complex at 55 South Lake Avenue and 800 East Colorado Boulevard sold for $120 million compared to its $256 million previous price.
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