Private Equity Firm Carolwood in Escrow to Purchase L.A.’s EY Plaza for $130M

About six months after Los Angeles County approved a deal to purchase the Gas Company Tower, another distressed Downtown L.A. office tower is primed to change hands. 

Adam Rubin and Andrew Shanfeld’s private equity firm Carolwood is in escrow to purchase EY Plaza for $130 million, according to The Real Deal, citing industry sources. The deal is expected to close next month with a sale price notably less than the plaza’s $150 million assessed value last August, per a Morningstar Credit report. 

Previous owner Brookfield in 2023 defaulted on $305 million in debt tied to the property, including a $275 million commercial mortgage-backed securities loan from Morgan Stanley and Wells Fargo, and an additional $30 million mezzanine loan, emblematic of Brookfield’s office tower troubles in L.A. in recent years. The debt has been held in special servicing under Trident Pacific Real Estate’s Gregg Williams since that spring. Brookfield has since received several extensions on the loan package, which is set to mature in October, per TRD.

The 41-story tower, which spans roughly 920,000 square feet, has tanked in value since the debt was originally issued in 2020. The assessed value of the property at the time was $446 million, or about 71 percent more than Carolwood expects to pay for it. 

Eastdil Secured is brokering the deal on behalf of Brookfield’s lenders on the property, per TRD. The building’s namesake tenant, Ernst & Young, has occupied the property since 1999 and currently takes about 128,000 square feet at the property. The California FAIR Plan Association and law firm Pillsbury Winthrop Shaw Pittman are other tenants there. 

Representatives for Carolwood and Brookfield did not immediately respond to requests for comment. 

The office is at 725 South Figueroa Street, not far from Brookfield’s other offices in Downtown L.A. that have faced one form of distress or another since the pandemic began. In December, L.A. County closed on its $200 million deal for the Gas Company Tower, which had been in the works since the previous July. The property was placed into receivership in early 2023, around the same time as EY Plaza’s special servicing move, after Brookfield defaulted hundreds of millions of dollars in loans tied to both it and 777 Tower, which the company also owned. 

An unidentified Chinese investor paid $120 million for the 777 Tower in July, after a deal attempt by a South Korean investor fell through the previous spring. The most recent assessed value of about $403 million, per property records. 

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