Cerberus Capital Management’s Wedbush Center in downtown Los Angeles faces foreclosure after a debt default.
The alternative investment outfit owes about $135 million on its office tower on Wilshire Boulevard, according to a notice of default and election to sell dated last month. The trustee sale, which is a foreclosure auction under a deed of trust that occurs post-default, cannot be scheduled until three months after a notice is sent out.
The $128 million commercial mortgage-backed securities debt on the Wedbush Center was sent to special servicing after missing its maturity date. Then, the office tower’s value declined to $60.5 million compared to $197.5 million at loan issuance, per Morningstar Credit. That was a 69 percent decline in around seven years, The Real Deal previously reported. And, at a $60.5 million hypothetical price tag, a deal would come out to around $127 per square foot.
Cerberus Capital Management did not immediately respond to a request for comment.
The building at 1000 Wilshire Boulevard has an occupancy issue. The 22-story, more than 475,000-square-foot property was 67 percent occupied at the end of 2024, per the latest data available via Morningstar. And that doesn’t account for the loss of its largest tenant.
The Wedbush Center lost Wedbush Securities after more than two decades. The financial services company occupied 100,000 square feet, or 21 percent of the space, before relocating its headquarters to Pasadena for a new, much smaller corporate headquarters.
Downtown offices have a 34 percent vacancy rate, per the latest CBRE numbers.
The post-modern building on Wilshire that has a glass facade and faces the 110 Freeway is located in the Financial District. Goldman Sachs originated the loan in 2018, and the special servicer is Rialto Capital Advisors, per Securities and Exchange Commission filings.
The latest servicer commentary, via Morningstar, doesn’t say much other than that settlement discussions remain ongoing. The $128 million commercial mortgage-backed securities debt consists of two notes but there is another smaller mezzanine loan that was sold off.
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