By John Gittelsohn | Bloomberg
An office tower in downtown Los Angeles is facing foreclosure a year after the owner, an affiliate of Brookfield Asset Management Ltd., walked away from the building.
Also see: Southern California’s empty offices surge 67% in pandemic era
A notice of trustee’s sale for the Gas Company Tower, located at 555 West 5th St., was filed March 21 with the Los Angeles County Recorder’s office, setting the stage for a foreclosure sale as soon as 90 days after the filing.
The foreclosure comes as the value of office buildings has plunged amid higher vacancies. Elevated interest rates have also weighed on prices, making it difficult for building owners to refinance debt.
Also see: Commercial-property loans coming due in US jump to $929 billion
The price for office space in downtown Los Angeles is averaging about $141 a square foot ($1,517 per square meter), according to a note Wednesday by Barclays Plc.
A nearby Brookfield tower at 777 S. Figueroa is being sold for about $145 million, roughly 50% less than the outstanding debt on the property.
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The Gas Company Tower was appraised in 2020 at $632 million but is now worth closer to $200 million, based on the $141-square-foot price cited by Barclays.
The building has roughly $465 million in loans, including $350 million in commercial mortgage backed securities and two mezzanine mortgages for $65 million and $50 million.
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Newport Beach-based Pimco is the largest holder of the most senior debt, a $167 million slice of the CMBS.
A Pimco spokesperson declined to comment. Brookfield didn’t immediately reply to a request for comment.
