Finance  ·  Distress

SoCal Office Campus Limps to Foreclosure Auction

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The Pasarroyo office complex in Pasadena is heading to a foreclosure auction later this month, according to reporting by Bisnow, which cited Los Angeles County records.

The property at 251 South Lake Avenue contains about 600,000 square feet of office space and about 40,000 square feet of retail space. Owner Coretrust Capital Partners is selling in order to pay some $271 million in debts that were due in July, per Bisnow. 

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Coretrust did not immediately respond to requests for comment. 

Coretrust bought the property in May 2018 for $254 million and said at the time that it planned to invest $90 million in renovations. Workspace provider Industrious announced just prior to that COVID-19 outbreak that it took 29,000 square feet at the office. NAI Capital Commercial also leases office space at the property, while Dunkin' Donuts and Citibank are some of the retail tenants.

An entity controlled by Heitman, a Chicago-based REIT, loaned Coretrust over $267 million in 2018 for the properties that now comprise the Pasarroyo complex and is the same entity listed on the default and foreclosure sale notices, according to Bisnow. 

News of the Pasarroyo foreclosure auction comes about a year after Coretrust lost a prominent office tower in Downtown Los Angeles in a foreclosure. 

Greater L.A., along with many other cities across the U.S., is expected to be hit hard by office mortgage maturities in the coming years. Nearly 36 percent of all office loans in L.A., roughly $21.6 billion, are expected to mature by 2026, according to CommercialEdge.

Nick Trombola can be reached at NTrombola@commercialobserver.com.