Santa Monica Clock Tower is in the hands of a receiver over a $25 million loan balance, according to an October court order.
Special servicer Rialto Capital recently sued a company connected to Rockwood Capital, the Santa Monica Clock Tower owner, after the landlord defaulted on a loan secured by the property.
Rialto requested a receiver and foreclosure in the lawsuit. Attorneys for the two parties did not immediately respond to requests for comment.
Rockwood assumed $26.7 million in commercial mortgage-backed securities debt when it purchased the building, according to the lawsuit. Rialto alleged that Rockwood defaulted when the debt matured in May and owes about $25 million.
Cushman & Wakefield’s Brian Holmes was named receiver, to take possession of the 12-story, 50,000 square foot office building at 225 Santa Monica Boulevard, which has a view of the Pacific Ocean and was once the city’s tallest building.
Rockwood consented to the appointment of a receiver in hopes of a sale, according to court documents. The landlord previously expressed interest in transferring the title back to the lender, according to servicer commentary via Morningstar Credit.
Rockwood, a subsidiary of Colliers International, recently became part of an investment management platform, Harrison Street Asset Management, which has $100 billion in assets.
Special servicers act on behalf of lenders. Here, the loan was originated by one lender but then sold off to investors in commercial mortgage-backed securities.
Rockwood purchased the century-old, Art Deco property from Sorgente Group of America six years ago for $58 million.
The loan later landed in special servicing because of low occupancy. The value of the property sank to $27.4 million this summer, compared to $49 million in 2015. The property is only 43 percent occupied, according to Morningstar.
The office vacancy rate in Santa Monica is 25.8 percent, according to CBRE.
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Commercial
Los Angeles
Rialto sues Rockwood alleging Santa Monica Clock Tower default
Commercial
Los Angeles
Santa Monica Clock Tower’s loan lands in special servicing