Pimco, Witkoff Firm Default on Santa Monica Apartments Loan

Pacific Investment Management Company and the Witkoff firm have defaulted on a loan of more than $400 million tied to a luxury apartment complex in Santa Monica.

The delinquent loan is connected to The Park Santa Monica, a 249-unit residential property at 500 Broadway in downtown Santa Monica, Bloomberg reported.

Pimco owns 98.5 percent of the equity in the property and “controlled investment decisions” as the primary capital partner, a representative for Witkoff told Bloomberg. Witkoff, founded in 1997 by longtime developer-turned-U.S. special envoy Steve Witkoff, owns the remaining 1.5 percent.

Pimco and the Witkoff firm received a $324 million loan for the property in 2021 from affiliates of Mack Real Estate Credit Strategies, according to the notice filed with Los Angeles County. The debt was increased to $405 million in November 2024. The note was due for repayment in July and climbed to about $439.5 million, including accrued interest and late charges, as of last month. A reason for the default was not disclosed.

Steve Witkoff sold a $120 million stake in his firm to avoid potential conflicts of interest after being appointed Pres. Donald Trump’s special envoy for diplomacy in the Middle East and Ukraine earlier this year. His remaining stake, if any, remains unclear. Steve Witkoff’s son Alex now runs day-to-day operations at the firm.

The Park Santa Monica was completed in 2022 and boasts retail space, pool, fitness center and a 1-acre rooftop park. Rents for studio apartments begin at approximately $4,000 per month, and rents for three-bedroom units are as much as $19,800, according to Bloomberg.

After interest rates increased in 2022, so too did defaults on commercial real estate debts. In 2023, Pimco defaulted on several office and hotel portfolios as payments on the loans rose and property values plummeted. That year, appraisers slashed the value of a seven-building office portfolio including buildings in New York City, San Francisco, Boston and Jersey City, New Jersey, by 30 percent following a default on $1.7 billion in loans linked to the properties.

— Chris Malone Méndez