On the last day of your hopefully fun holiday weekend, we’ve got news on Los Angeles leases, special-serviced debt and real estate tussles. Enjoy.
Let’s start downtown, where Paul Hastings wants to sublet its space at City National Plaza, a twin-tower complex in the Financial District, according to a brochure viewed by The Real Deal.
The very-prestigious law firm tapped CBRE to shop its around three and a half floors, or about 90,000 square feet, at 515 South Flower Street. The real estate is owned by a joint venture of CommonWealth Partners and California Public Employees’ Retirement System, the country’s largest public pension fund. There is $550 million commercial mortgage-backed securities debt on the complex, which has retail and parking, too.
Paul Hastings’ lease is up in August 2032, per the 2026 brochure, which does not include a price-tag. It only says the space is available immediately, with the price negotiable. The company earlier shrunk its space there, per a Fitch Ratings analysis, and now it only occupies about four percent of its peak footprint. Still, per the latest Morningstar Credit data, the complex is 81 percent occupied, better than a lot of downtown offices.
The law firm has offices in Century City, too, at 1999 Avenue of the Stars. Could it be that Paul Hastings wants to totally ditch downtown and relocate all its people to Century City? Sounds logical, but the firm did not immediately respond to requests for comment.
A Lot to consider
In other lease happenings, we’re hearing HBO moved out of the Lot at Formosa in West Hollywood earlier this year before its October expiration. The entertainment giant occupied seven soundstages at the CIM studio campus, where CBRE handles leasing.
HBO now has space at its parent company’s lot in Burbank, and its departure from the Lot at Formosa probably didn’t hurt CIM much. But it likely added to the soundstage business woes while offices at the West Hollywood campus remain 95 percent occupied and busy. A fashion label, repped by Newmark’s Jay Luchs, recently inked a 45,000 square-foot lease for offices at 1041 North Formosa Avenue. And, a post production company just signed on for 5,000 square feet of space at the Lot, where Michael Hackman recently took the stage.
Matchups
Now, staying in WeHo but moving onto the real estate matchups portion of our program, we’ve got a forfeit. Witkoff, founded by President Donald Trump’s special envoy to the Middle East, Steve Witkoff, handed over the keys to its Edition hotel to the Reuben brothers.
UK billionaires Simon and David Reuben were mezzanine lenders who had attempted to foreclose on the Witkoff hotel years ago, but Witkoff held them off via a refinancing. That was until the duo purchased J.P. Morgan’s debt. Then, they took over the trendy Sunset Strip hotel at 9040 Sunset Boulevard via a deed in lieu of foreclosure dated April, which put Witkoff’s unpaid debt at $211 million.
Next up is CIM versus a private members club in a landlord-tenant dispute. CIM claims the Gathering Spot owes $828,000 in unpaid rent for a location in Los Angeles’ West Adams neighborhood. But the landlord wants that, plus future rent, attorneys’ fees, interest and more in anticipation of a trial — which comes out to almost $7 million. The CEO of the Black-owned club, Ryan Wilson, disputed CIM’s characterizations and claims.
Transferred
Lastly, to the world of special servicing. Another Jamison loan sponsored by the family patriarch, Dr. David Lee, moved to special servicing, per Morningstar. It is a $30 million loan (originally $37 million) on the Los Angeles Superior Court Tower at 600 South Commonwealth Avenue in the Westlake neighborhood. This is the debt’s second stint in special servicing, and the loan joins Jamison’s about $170 million special-serviced debt on Koreatown and downtown real estate.
It was previously reported that Jamison was planning to turn the offices into apartments, but that may no longer be the case. June servicer commentary, via Morningstar, noted the property is under contract and the buyer needs more time to close. Jamison did not immediately respond to a request for comment.
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Commercial
Los Angeles
Reuben brothers take keys to Witkoff’s West Hollywood hotel
Commercial
Los Angeles
CIM sues private members club over unpaid rent in West Adams to tune of $830K