Another Downtown L.A. Tower Heads to Special Servicing as Anchor Tenant Leaves

The debt behind a 21-story office tower in Downtown Los Angeles has transferred to special servicing in just the latest example of DTLA office distress.

Cerberus Capital Management missed the March maturity date on a $128.4 million commercial mortgage-backed securities loan tied to Wedbush Center, a 476,000-square-foot building at 1000 Wilshire Boulevard, according to a Morningstar Credit report. Cerberus acquired the building from Lincoln Property Company in 2018 for $196 million, with Goldman Sachs (GS) providing the CMBS debt that same year.

Cerberus’ debt problems at the tower, like much of Downtown L.A.’s office woes lately, come down to occupancy. Wedbush Center was last reported as 75 percent occupied, down from 87 percent at the time of the loan’s issuance, and net cash flow for 2023 was 45 percent below underwriting, per Morningstar.

Occupancy at the building is set to significantly decline even further with its namesake tenant, Wedbush Securities, leaving its 100,000-square-foot digs at the Wedbush Center and moving to a 20,000-square-foot space in Pasadena when its lease expires in December.

A representative for Cerberus did not immediately respond to a request for comment.

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