Brookfield’s Gas Company Tower Moves to Receivership After Default
By Nicholas Rizzi April 25, 2023 2:19 pm
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The Gas Company Tower, one of Brookfield (BN)’s major properties in Downtown Los Angeles, was put into receivership more than a month after Brookfield defaulted on a loan tied to it, The Real Deal reported.
A court appointed Trident Real Estate Group’s Gregg Williams as a receiver for the building, giving him the ability to market the property for sale, at the behest of Brookfield lenders Citi Real Estate Funding and Morgan Stanley (MS), according to TRD.
A spokesperson for Citi did not immediately respond to a request for comment. Williams and spokespeople for Brookfield and Morgan Stanley declined to comment.
The receivership process — a way to avoid bankruptcy — allows lenders to recover their funds either by selling the property or restructuring the deal. Williams has already brought on Colliers to lead leasing and property management for the Gas Company Tower.
The 54-story building going into receivership comes after Brookfield defaulted on $784 million loans tied to the Gas Company Tower and the 777 Tower — part of its Brookfield DTLA Fund Office Trust Investor portfolio — in February.
The fate of the 52-story 777 Tower is unclear, but Citi and Morgan Stanley filed a lawsuit last week to force the Gas Company Tower into receivership. The lenders are behind $350 million in debt on the Gas Company Tower.
Brookfield defaulted on the loans because it failed to pay off by Feb. 9, when the loans reached maturity, and missed a $3.6 million advance in property taxes due April 10, according to TRD.
Downtown Los Angeles’ office market has been struggling since before the pandemic. The vacancy rate for the central business district reached 25.5 percent in the first quarter of 2023, with nearly 7 million square feet vacant, according to a Cushman & Wakefield report.
Nicholas Rizzi can be reached at nrizzi@commercialobserver.com.
