The owner of Downtown Los Angeles’ EY Plaza has handed the keys to the 41-story office tower over to a special receiver.
The move came after news broke that the landlord, a Brookfield (BN)-managed fund, missed payments on $275 million in CMBS financing tied to the 968,184-square-foot building. Gregg Williams of Trident Pacific Real Estate, the appointed receiver, has retained Colliers (CIGI) as exclusive leasing and property manager, the brokerage said.
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The receivership process allows lenders to recover funds by either selling the property or restructuring deals to avoid bankruptcy.
The tower at 725 South Figueroa Street, formerly known as Ernst & Young Plaza, was designed by SOM and completed in 1985. It was 74 percent occupied through September last year, according to Trepp data. But Brookfield had said it would likely not make its interest payments and that certain tenants were not in compliance with their leases — enough to trigger a default.
Colliers’ Sean Fulp is lead adviser for the receivership estate, along with Matthew Heyn and Ian M. Gilbert, who will oversee leasing.
“EY Plaza is one of the best office buildings in all of Los Angeles, and its value is worth protecting,” Fulp said.
The landlord, Brookfield DTLA Fund Office Trust Investor, owns one retail and six office properties with a total of 7.6 million square feet in L.A., according to Trepp. It also defaulted on loans tied to two other downtown skyscrapers in the city, the Gas Company Tower and the 777 Tower, which carry loans totaling $784 million. The Gas Company Tower has since been put into a receivership.
Kevin Rude and Tina Minook of California Real Estate Management Services will manage EY Plaza.
Brookfield certainly isn’t the only office investor with struggling assets in L.A., but it has become perhaps the most prominent example of the effects of the cliff-drop in property values of conventional offices.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
