Onni Group’s $408 million loan on Wilshire Courtyard is in special servicing, according to Morningstar Credit. Onni owes about $384 million on the around 1-million-square-foot Miracle Mile office complex at 5700 to 5750 Wilshire Boulevard.
Servicer commentary dated early May noted the loan moved due to imminent monetary default.
“The borrower requested a transfer to special servicing due to their inability to make the upcoming [July] balloon payment,” the commentary read. Onni did not immediately respond to a request for comment.
The move could be a workout play. Onni Group is apparently scrapping its office expansion plans at its Miracle Mile real estate in favor of housing.
The developer reportedly filed plans with the City of Los Angeles for two 67-story residential towers. Onni is looking to replace parts of its Wilshire Courtyard office complex with around 2,600 apartments and some retail space. Some offices will remain but the rest are set to be demolished. Not to mention, Onni’s earlier vision for Wilshire Courtyard was all office — having previously proposed adding 1.8 million square feet of office space. The redeveloped property, if all goes as planned, would total 2.4 million square feet.
The commercial mortgage-backed securities loan had a prior stay in special servicing back in 2023 but made its way out after securing an extension. Sony Pictures is Onni’s largest tenant there and its lease isn’t expiring any time soon. Still, “the buildings have been plagued by occupancy issues and ended 2025 at 52 percent occupancy,” per Morningstar. Cash flow fell to around $7 million last year, a long ways away from the more than $20 million six years ago, per Morningstar data. WeWork, Media Brands Worldwide and Sky Dance Media were all once tenants.
Onni purchased the campus for $630 million from Tishman Speyer in 2019, which was of course months before the pandemic drastically changed Los Angeles’ office landscape, where vaccines are still pretty high. Miracle Mile sort of sits between Century City and downtown, arguably the best and worst office markets in Los Angeles.
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