Brookfield Facing Foreclosure at Brooklyn Commons Office Tower Over $133M Loan

Brookfield Properties has been hit with a pre-foreclosure filing at one of its office towers in Downtown Brooklyn.

Brookfield is facing foreclosure at the 19-story office building at 115 Myrtle Avenue — part of the Brooklyn Commons multi-building office property — after defaulting on a $132.7 million loan, according to a filing last week by special servicer Rialto Capital Management in New York State Supreme Court.

The loan originated in 2013 at $170 million for former owner Forest City Enterprises, but Brookfield acquired a controlling stake of 95 percent in the building valued at $200.5 million in December 2018 when it acquired Forest City Realty Trust, according to PincusCo, which first reported the news.

Rialto claimed in the filing that Brookfield failed to “make the payment of all outstanding amounts owed under and in connection with the loan” by its maturity date of Sept. 1, 2023, with at least $132.7 million due.

“115 Myrtle — part of the 2018 Forest City portfolio acquisition that has returned billions in gross proceeds — was written off years ago and is immaterial to our global real estate business, which remains strong,” a spokesperson for Brookfield said in a statement to Commercial Observer. “[Brookfield] delivered nearly $15 billion of realizations this year alone.”

A spokesperson for Rialto did not immediately respond to a request for comment.

Formerly known as MetroTech Center, the entire 12-building, 5.5 million-square-foot office campus near Fort Greene Park was rebranded to Brooklyn Commons in 2022 as part of a $50 million makeover, The Real Deal reported at the time.

Brookfield also made several renovations to 115 Myrtle Avenue, once known as 15 MetroTech Center, including a new lobby, a cafe and a 40-foot mural, as well as new turnstiles, lighting and fixtures, as CO previously reported.

The pre-foreclosure filing comes after a strong second quarter for Brookfield, which signed nearly 4 million square feet of office and retail leases across its portfolio during the period, according to its second-quarter earnings report released earlier this month.

However, the company’s earnings per share dropped slightly during the second quarter to 88 cents per share, a decrease from 98 cents per share during the first quarter and $1.35 per share during the same period last year, according to the report.

News of the potential foreclosure also comes after a bit of an aggressive streak for Rialto, which has filed numerous pre-foreclosure filings in the past year, including one against Wharton Properties at a retail co-op at 144 Fifth Avenue and another against RFR Holding at two retail units at 188 East 78th Street.

Isabelle Durso can be reached at idurso@commercialobserver.com.