Finance  ·  CMBS

Brookfield’s $148M Loan Backed By One Pierrepont Plaza Sent to Special Servicing

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A Downtown Brooklyn building that’s home to the Metropolitan Transportation Authority’s 192,000-square-foot office may be facing distress.

The $148 million commercial mortgage-backed securities (CMBS)  loan tied to Brookfield PropertiesOne Pierrepont Plaza went into special servicing after Brookfield failed to pay it off before it reached maturity in December, The Real Deal first reported, citing a Trepp alert. 

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A spokesperson for Brookfield said the company is in conversation with a special servicer and hopes to reach an agreement to modify or extend the CMBS loan. A spokesperson for Trepp declined to comment, citing privacy laws. It’s unclear who the special servicer is.

The 19-story office building has been in Brookfield’s hands since 2018, when Brookfield Asset Management acquired Forest City Realty Trust for $11.4 billion

That transaction put Brookfield in charge of managing some 6.3 million square feet of office space in Forest City’s portfolio, including the Pierrepont building, which gained notoriety in 2015 when former presidential candidate Hillary Clinton chose it for her campaign headquarters.

The acquisition also left Brookfield on the hook for $402 million in debt tied to seven office properties in Baltimore, Philadelphia, New York City and Richmond, Va. originated by Forest City in 2018, according to TRD

The loan’s $148 million outstanding balance is tied to two of the seven original office properties and Brookfield has already won three extensions on it since it first came due in 2020, TRD reported.

Rising interest rates have taken a toll on office owners, and Brookfield has not been spared. The Canadian commercial real estate giant handed over the keys to its lenders for two Downtown Los Angeles office towers in early 2023 after defaulting a $784 million loan tied to the properties

Two months later, Brookfield defaulted on a $161 million CMBS loan backed by nine Class B office buildings largely in the Washington, D.C. area, as Commercial Observer previously reported.

Abigail Nehring can be reached at anehring@commercialobserver.com.