March 27, 2023 #1 Local News, Forum, Information and Event Source for Venice Beach, California.

Brookfield Corp. Defaults on $784M Loans for Two Buildings

Brookfield fails to pay a $465 million loan package for the Gas Company Tower at 555 W. 5th St. and $319 million in loans for 777 S. Figueroa St.

A wave of defaults on office towers has hit downtown Los Angeles as demand for office space continues to decline. Brookfield Corp., a major office owner in the area, defaulted on $784 million worth of loans on two towers, according to an SEC filing on February 10th. And while these defaults are occurring far from the Westside, the fact that many corporate executives live in areas like Palisades and Santa Monica could be contributing to the decline of downtown in a work environment changed by a pandemic.   

Brookfield failed to pay a $465 million loan package for the Gas Company Tower at 555 W. 5th St. and $319 million in loans for 777 S. Figueroa St. The loan on the 52-story Gas Company Tower was comprised of a $350 million mortgage loan, a $65 million mezzanine loan and a $50 million junior mezzanine loan. The 52-story tower at 777 S. Figueroa St. was made up of a $269 million mortgage and a $50 million mezzanine loan.

This is not an isolated incident as other buildings have also faced foreclosure due to missed payments. In January, Oaktree foreclosed on Coretrust Capital Partners’ 48-story tower at 444 S. Flower St., which it had purchased in 2016 for $336 million with a Bank of China loan of $230 million that year. After missing the due date on its loan with Oaktree in 2021, Coretrust and Oaktree reached a forbearance agreement for Coretrust to pay by May 31 last year, but when they missed their payment, Oaktree initiated foreclosure proceedings.

Similarly, last year saw the Broadway Trade Center at 801 S. Broadway foreclosed upon as Starwood Capital acquired the building through public foreclosure auction after it defaulted on loans.

The pandemic’s shift towards remote work has caused demand for office space in downtown Los Angeles to plummet even further with vacancy rates hovering around 22%, according to Jones Lang LaSalle Inc.’s Q4 report from last year. Asking rents averaged out at $3.86 per square foot during this period while LA County had an asking rent of $4.14 per square foot.

As companies continue to embrace remote work policies post-pandemic, it remains uncertain how long it will take before demand returns to pre-pandemic levels or if businesses will permanently change their approach toward commercial real estate altogether.

“The office environment downtown is not appealing,” Shlomi Ronen, a managing principal and founder of Dekel Capital told the LA Business Journal. “I don’t know of a single company CEO who wakes up in the morning, has a home in Beverly Hills or in the Palisades or Pasadena and says my goal is to go spend my day living and working in downtown.”

Related Posts

Los Angeles County Board Rejects Extension of Tenant Protections

March 26, 2023

March 26, 2023

County Board of Supervisors votes down measure affecting landlords in unincorporated areas. The Los Angeles County Board of Supervisors voted...

Proposition 22 Upheld as Court Allows Uber, Lyft to Treat Drivers as Contractors

March 24, 2023

March 24, 2023

Proposition 22 exempted ride-share companies from certain labor laws, court rules in favor of the companies By Sam Catanzaro ​​A...

Laguna Niguel Man Accused of Swindling $1.6 Million From Investors, 92-Year-Old Playa Del Rey Resident

March 23, 2023

March 23, 2023

Federal lawsuit alleges John David Gessin used false pretenses to fund lavish expenses By Sam Catanzaro A Laguna Niguel man...

Vote This Sunday in the Venice Neighborhood Council Election!

March 23, 2023

March 23, 2023

Vote in-person at the Oakwood Recreation Center, 767 California Avenue. Polls open at 10:00 AM By Nick Antonicello  VENICE –...

Do You Think Outdoor Dining Should Be a Permanent Option? Take the Survey and Share Your Opinion

March 23, 2023

March 23, 2023

The COVID-19 pandemic drastically changed the way we live our lives, and one of the most significant impacts has been...

California Lawmaker Proposes Bill to Offer Relief to Restaurants Struggling With Outdoor Dining Fees

March 22, 2023

March 22, 2023

Legislation would preempt local ordinances and preserve regulatory flexibility for struggling neighborhood restaurants By Sam Catanzaro A new bill proposed...

Venice Shorts: One-on-One With VNC Presidential Candidate Brian Averill

March 21, 2023

March 21, 2023

Avid surfer, author and photographer makes second try for the VNC’s top spot after falling short in 2021 By Nick...

Los Angeles Institutions Offer Free Admission to LAUSD Students During Strike

March 21, 2023

March 21, 2023

Natural History Museum and La Brea Tar Pits provide free admission during three-day strike, Los Angeles Zoo and Botanical Gardens...

LA Sanitation & Environment Hosts Community Celebration Inaugurating Venice Dual Force Main Sewer

March 20, 2023

March 20, 2023

Two-mile long 54-inch force sewer main will operate as a parallel system in conjunction with the existing 48-inch force main...

LAUSD Families Prepare for Potential Three-Day Strike Starting Tuesday

March 20, 2023

March 20, 2023

Union representing workers, including custodians, cafeteria workers, teacher assistants and other support staff have voted to walk off the job...

LAPD Investigates Shooting in Palms After Man Dies from Multiple Gunshot Wounds

March 20, 2023

March 20, 2023

Andrew Conaway arrested in connection to March 16 shooting The Los Angeles Police Department’s West Bureau Homicide Detectives are investigating...