EY Plaza can’t catch a break, or at least its lenders can’t.
It wasn’t enough for a deal to purchase the distressed downtown office tower to fall apart, no, its value also took a hit. It’s now worth about $135 million, down about 10 percent from its last valuation, according to Morningstar Credit. That’s a significant drop from the $446 million it was once worth.
It’s becoming more apparent that Adam Rubin and Andrew Shanfeld’s Carolwood dodged a bullet when its $130 million deal collapsed.
The 900,000 square foot, 41-story, Class A office building at 725 S. Figueroa Street was placed in receivership two years ago, after owner Brookfield defaulted on $275 million commercial mortgage-backed securities debt.
Once the deal drama played out, after The Real Deal reported the story, it was announced that Colliers, who replaced Eastdil, was marketing the $275 million non-performing loan connected to the property. Colliers made it clear that it anticipated the note to trade at discount.
It’s not unreasonable to think that news further impacted the marketability of the note. Neither Colliers nor the court-appointed receiver responded to a request for comment.
Mum’s the word
If it weren’t for two analysts and their prodding, Rexford Industrial probably wouldn’t have mentioned activist investor Elliott at all during its third quarter earnings call. But they asked the question we’ve all wanted an answer to since it was revealed Elliott reportedly built an active stake in the industrial real estate investment trust and had become one of the largest shareholders.
Unfortunately Rexford was very hush-hush and only said it has met with Elliott and has a constructive dialogue with Paul Singer’s hedge fund (that tends to command attention), as it encourages with all its shareholders, but wouldn’t discuss the nature of said discussions.
Nonetheless, the company reported a net income of $87.1 million for the third quarter, compared to $65.1 million a year earlier, an increase of about 34 percent. Revenues increased too, to $253.2 million in the three months ended Sept. 30 — and the company executed 3.3 million square feet of leases in the quarter and sold three properties (two in Los Angeles County) for $53.6 million. It was an earnings beat, but it did mark a change, in that Rexford is no longer on a buying spree.
Kilroy Realty and Hudson Pacific Properties are next to report earnings, so stay tuned.
Receiver central
Another downtown Los Angeles commercial property owner could cede control to a receiver.
Lender Cathay Bank sued a company connected to Laeroc Partners, borrower and owner of 530 W. 6th Street, alleging it defaulted on a $31 million loan that matured in September. Cathay Bank requested a receiver be appointed to take possession of the 13-story, 160,000-square-foot data-center and office property and for it to be foreclosed upon. It appears the property called the Telecom Center was already on the market, according to a NAI Capital brochure, which does not include an asking price.
Tour, tour, tour
Senior editor Lauren Schram toured Related California’s new 700 Broadway mixed-use development in Santa Monica that just began leasing, so we’re going to give you a little taste of what we saw.
On par with the Southern California lifestyle, the apartment complex has not one but two gyms (and one is an Equinox); a 75-foot rooftop lap pool with a hot tub, cold plunge and two sauna barrels because health and wellness really is everything nowadays and if celebs have a cold plunge so should you; a pet spa outfitted with Andy Warhol-designed black and white French Bulldog wallpaper because who doesn’t love a Frenchie; and a Vons, instead of an Erewhon, Whole Foods or Trader Joe’s.
That can all be yours for $3,995 a month, if it’s a studio you want.
Lauren Schram contributed reporting.
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