Downtown L.A. Office in Default Sells for Another Big Loss
South Korea-based investment firm to pay $145M, which is half the remaining debt: Reports
By Greg Cornfield March 27, 2024 9:30 am
reprints
A Brookfield-run entity has unloaded another piece of an expansive Downtown L.A. office portfolio that has experienced a shocking decline since the pandemic.
A fund run by Brookfield Asset Management sold the 777 Tower — one of the buildings it defaulted on last year — for $145 million. That’s about half the remaining outstanding debt that’s tied to the building, according to Bloomberg, which cited an anonymous person familiar with the deal, and Real Estate Alert, which first reported the transaction.
South Korea-based Consus Asset Management is set to acquire the 52-story building at 777 South Figueroa Street that was designed by the late starchitect Cesar Pelli. The 1 million-square-foot building is the seventh-tallest in L.A., according to the Los Angeles Conservancy.
With its sale, 777 is no longer part of the Brookfield portfolio that included the Gas Company Tower, which has since been put into a receivership and saw its value deflate by 57 percent, and EY Plaza, which saw its value of fall more than 50 percent in three years and below its loan balance after it went into default.
Of course, Brookfield Asset Management is not the only office landlord with key assets in Downtown L.A. underwater — though it is the most prominent. A year ago this week, KBS sold Union Bank Plaza for less than half it was expected to sell for just a couple years prior. In December, the third-tallest building in the city sold for 45 percent less than it traded for nine years prior, and well below its original listing price.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
