Oaktree (OAK-A) Capital Management announced a game plan to make a well-known — but distressed — Downtown Los Angeles building profitable again.
Five months after Coretrust Capital Partners lost the office tower to Oaktree in a foreclosure, the new owner has locked in a loan extension for 444 South Flower Street, freeing up capital to get the tower leased up. Property records show American General Life Insurance provided the $258.8 million financing.
SEE ALSO: Cohen Brothers Facing Foreclosure at 3 East 54th Street Amid High Debt
Oaktree also secured JLL (JLL)’s Hayley Blockley, Josh Wrobel and Peter Hajimihalis as leasing agents, while CBRE (CBRE) will handle management of the asset, also known as FourFortyFour.
“Oaktree has been a constant presence in DTLA for nearly three decades, and is excited to invest directly into an office project that is in our backyard,” Justin Guichard, managing director of Oaktree, said in a statement. “The building’s team now has the resources to more aggressively secure new tenants, continue our lease-up trajectory and look for ways to enhance the experience for current and prospective tenants. We know that a return to office will drive a flight to quality.”
Coretrust took out a $64.7 million mezzanine loan from Oaktree in 2018 to refinance the property at an 8.6 percent rate that matured in December 2021, but after going into forbearance and Coretrust failing to come up with the cash, the lender took it over from them.
By January 2023, Coretrust owed $110 million on the loan while 23 percent of one of L.A.’s tallest skyscrapers was sitting vacant, The Real Deal reported at the time.
Coretrust acquired the 48-story tower for $336 million from Hines in November 2016 with $207 million from a senior lender.
Things didn’t always seem that bleak for the Coretrust and FourFortyFour, since in May 2022 the landlord claimed that it had leased up to 60,000 square feet of the 915,000-square-foot property in the six months preceding that time.
Since taking over the building in January, Oaktree says it has rented out 90,000 square feet.
Mark Hallum can be reached at mhallum@commercialobserver.com.
