Two Tenants Ditch Brookfield Office Towers in Downtown L.A.
Sidley Austin is the second largest tenant at the Gas Company Tower
By Greg Cornfield July 6, 2023 5:10 pm
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A law firm and an insurance services company are vacating their spots at beleaguered Brookfield office towers in Downtown Los Angeles to move into different locations nearby.
Law firm Sidley Austin signed a 57,148-square-foot relocation lease at 350 South Grand Avenue, owned by Related Companies and CIM Group, and will leave Brookfield (BN)’s Gas Company Tower building, according to Savills’s second-quarter office report. According to Trepp, Sidley Austin is currently the second largest tenant at the tower, leasing almost 10 percent of the nearly 1.4 million-square-foot building until 2026.
Additionally, Brown & Riding Insurance Services is vacating Brookfield’s 777 Tower at 777 Figueroa Street after signing a 10-year, 13,043-square-foot office lease at the 1,018-foot-tall U.S. Bank Tower, owned by investment and development firm Silverstein Properties. The insurance brokerage firm will move in early 2024.
Brookfield defaulted on $784 million in loans tied to the two skyscrapers earlier this year. The Gas Company Tower was put into a receivership in April. The L.A. Housing Department, however, is in negotiations to move into nearly 300,000 square feet at the Gas Company Tower.
Office availability is at an all-time high in L.A., with 26.6 percent of the total office market either vacant, soon to be vacant, or available for sublease, according to Savills’s report. Further, L.A. has also seen the nation’s steepest declines in office values.
The Brown & Riding lease is the first signing at U.S. Bank Tower since Silverstein finished its two-year, $60 million transformation. Silverstein Properties acquired U.S. Bank Tower in September 2020 for $430 million, a 31 percent discount from the building’s $650 million valuation at the end of 2019.
“The state-of-the-art amenities at U.S. Bank Tower provide the facilities and atmosphere we’ve been seeking and will create an elevated experience for our employees and clients,” Chris Brown, chairman of Brown & Riding, said in a statement.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
