Downtown Los Angeles isn’t what it used to be — and it seems no one knows that better than Brookfield, which now is looking to dispose of four distressed office buildings that account for nearly one-fifth of the Class A space in the Financial District.
The commercial giant has ceded control of some ailing offices to a court-appointed receiver, sold some at steep discounts — and it still has plenty in play. Brookfield and its lenders (and receivers and special servicers) are peddling four active offerings that totals about 4.9 million square feet of Class A office space in the submarket, roughly 18 percent of the total inventory.
The Financial District has a total of around 26.5 million square feet of Class A space, according to the most recent data from brokerage Avison Young (Bunker Hill is commonly considered part of the Financial District, although Avison Young breaks out the data).
Investors with deep pockets and hearty appetites for risk can consider:
- EY Plaza: Colliers is marketing the $275 million, non-preforming note tied to the property at 725 South Figueroa Street, in receivership. That note is expected to trade at a massive discount. Last the publication heard, Colliers was calling for offers. It is unclear whether it found a lucky buyer. If the brokerage did, who knows if the deal would hold — Carolwood’s prior $130 million deal collapsed.
- Bank of America Plaza: Colliers is shopping the defaulted commercial mortgage-backed securities loan connected to the skyscraper at 333 South Hope Street, in receivership. The debt balance is $400 million, and the brokerage anticipates substantially discounted bids.
- Wells Fargo Center’s North Tower: Eastdil Secured is marketing the mortgage loan on 333 South Grand Avenue, which includes an office tower and a retail asset. The roughly $506 million debt on the property is in default, though it is not in the hands of a receiver. Bids are anticipated around $196 million, according to data and analytics provider Green Street.
- Wells Fargo Center’s South Tower: Newmark is shopping the skyscraper — a sister to its sibling to the north — at 355 South Grand Avenue. Bids are anticipated to come in around $157 million, per Green Street, not enough to cover the $263 million debt balance that came due.
What happens now?
A truism seems to be in the works, according to an informed industry source who said the buildings will find buyers, it’s just a matter of pricing.
Sounds as though downtown’s office market is still bouncing along a soft bottom. Now to see if Brookfield’s latest offerings set a firm floor.
Turnbridge turns up in desert
Turnbridge Equities closed on a long-delayed, debt-laden development in a Palm Springs-area resort city, getting the SilverRock Resort project in La Quinta out of bankruptcy for a haircut price of $65 million, or $500,000 an acre.
The unfinished resort’s prior developer, Robert Green, defaulted on debt and later filed for bankruptcy — $270.5 million in claims. Prior estimates put the property’s value at $300 million to $400 million.
Turnbridge has a single luxe hotel with branded condominiums and estate-sized single-family homes on its mind for the 130 acres it got. The new owner anticipates that as an initial phase that will cost $735 million to build out.
The SilverRock Golf Course, owned and operated by the city, is set to be transferred to Turnbridge once the hotel is completed.
The property, at 79179 Ahmanson Lane, isn’t far from where the Coachella and Stagecoach music festivals are held, ultra-exclusive Madison Club, where Apple’s Tim Cook and Grammy-winning singer Adele are among the list of bold-faced names who own vacation homes there.
Unmatch
Tinder and Hinge parent company Match Group dumped a West Hollywood office building. The property at 8800 West Sunset Boulevard traded hands for $35.5 million, or around $480 per square foot.
The buyers appear to be Omega Law Group founding partners Edwin Saghian, Robin Saghian and Shahab Mossavar-Rahmani, who signed a loan document and are members of the limited liability company named as grantee. It could be the partners were representing a client, but their accident and injury firm is located at the purchased property, so it seems more likely they are the buyers.
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