601W Buys Brookfield’s Downtown Los Angeles Offices

601W Companies has completed its acquisition of one of Brookfield’s distressed office towers in Downtown Los Angeles.

The New York-based firm purchased the 55-story Class A office building at 333 South Grand Avenue, known as the Wells Fargo Center North Tower, for an undisclosed amount, Commercial Observer reported. 601W was reportedly in talks to pay roughly $180 million earlier this year, per CO.

The firm made the buy with a $132 million first-mortgage acquisition loan from Northwind Group. The loan also includes an additional $48 million “good news” lending facility for costs related to future leasing.

The deal lands as downtown is in the midst of an office value reset after hitting rock bottom in the pandemic. The “broader repricing” of the local market “has created an attractive entry point that fundamentally changes the competitive position of new ownership,” Northwind Group founder Ran Eliasaf said in a statement.

The 1.4-million-square-foot office building recently underwent more than $63 million in capital improvements, including a redevelopment of retail space and renovations to the lobby. The upgrades are expected to attract “a concentration of financial institutions, law firms and government tenants” to the Bunker Hill building, Eliasaf added, as more so-called traditional office users increasingly gobble up space downtown.

Brookfield listed the distressed property for sale last fall. At the time, the Wells Fargo Center’s North Tower was 61 percent leased, while the 63,000-square-foot retail portion was just 35 percent leased, The Real Deal reported. Vacancy at the building’s offices is higher than the downtown office market’s 32.4 percent overall vacancy rate, per Colliers’ first quarter data. A deal for 601W to buy the property first emerged early this year, TRD reported.

The roughly $506 million debt on the Wells Fargo Center North Tower was in default, but the property was not handed over to a receiver, unlike other downtown offices once owned by Brookfield. It’s the latest former Brookfield property downtown to sell out of distress. Earlier this year, the firm sold the adjacent Bank of America Plaza to Capital Group for $210 million. — Chris Malone Méndez