Jamison Defaults on Debt Tied to L.A.’s Equitable Plaza
The debt tied to the 34-story tower on Wilshire Boulevard was sent to special servicing earlier this year
By Nick Trombola November 5, 2024 2:37 pm
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Office distress in Los Angeles is still cropping up at a remarkable clip, with a 34-story property in the city’s Koreatown neighborhood as the latest on the chopping block.
Koreatown-based developer Jamison Properties, one of the largest owners of multifamily units and one of the most prominent developers in the city, has defaulted on $84.8 million of commercial mortgage-backed securities (CMBS) debt tied to Equitable Plaza at 3435 Wilshire Boulevard, according to a default notice posted last month. The debt, securitized in 2014, was part of the CMBS conduit deal COMM 2014-USB3. The special servicer is LNR Properties, per property records.
Trouble has been brewing at Equitable Plaza for most of this year. The loan tied to the property was sent to special servicing in the spring due to imminent maturity default, with the servicer noting at the time that Jamison said it was unable to pay off the debt by its June maturity date.
Waning occupancy at the building is at least partly to blame. Its occupancy rate dropped from 67 percent to 57 percent last year, according to a report from Trepp in May. Meanwhile, the leases of the building’s biggest tenants, Commonwealth Business Bank and Wilshire Business Center, expire before the end of this year.
A spokesperson for Jamison declined to comment.
Despite L.A. recording its highest level of leasing activity since before the COVID-19 pandemic this past quarter — much of it driven by large lease renewals or relocations — availability rates in the city are still startlingly and stubbornly high, according to Savills’ latest office market report. Availability rose 90 basis points to 28.3 percent as corporate offices continue to downsize, per Savills.
Even before the pandemic, the office ecosystem and the lack of affordable housing in Southern California led Jamison to shift its focus from office to multifamily, becoming one of the largest apartment landlords in L.A. It has led the charge on office-to-residential conversions, recently beginning its 10th adaptive reuse project on a 13-story building at 3325 Wilshire Boulevard, which it plans to transform into 236 apartments and 15,000 square feet of retail space.
Nick Trombola can be reached at ntrombola@commercialobserver.com.
