Sony Pictures’ Future LA Office Building Is In Trouble, Too
The entertainment company recently signed a major lease at the Wilshire Courtyard campus, but it doesn’t start until next year
By Greg Cornfield May 17, 2023 2:20 pmreprints
Office investors are facing a bit of a sticky wicket.
A big loan tied to another office campus in Los Angeles is on the hot seat, despite Sony Pictures recently signing for 225,000 square feet at the development months ago.
Borrower and landlord Onni Group’s $408 million commercial mortgage-backed securities loan from Natixis tied to the big Wilshire Courtyard campus on L.A.’s Miracle Mile has been sent to special servicing before its expected expiration in July, The Real Deal reported, citing data from Trepp and Morningstar Credit Information and Analytics. The building has been failing to earn 1.1 times the monthly debt service, which would have allowed Onni the chance to extend the loan by a year.
The asset has been dragged down by rising interest rates and the unprecedented drop in demand for office space. The loan’s special servicer said two major tenants — Mediabrands Worldwide and Skydance Media — are set to vacate 165,000 square feet of space at the property when their leases expire later this year, per TRD. Meanwhile, Sony’s lease doesn’t start until 2024.
This comes shortly after a Brookfield-managed fund fell into delinquency on $275 million in CMBS financing tied to the 920,300-square-foot EY Plaza, and, earlier this year, defaulted on loans tied to two office skyscrapers in the city, the Gas Company Tower and the 777 Tower.
Records show Canadian-based Onni Group acquired the 1 million-square-foot Wilshire Courtyard at 5750 Wilshire Boulevard for $624.9 million in 2019.
Gregory Cornfield can be reached at firstname.lastname@example.org.