Carolwood’s $130M Deal for Downtown L.A.’s EY Plaza Falls Through

A $130 million deal for Downtown Los Angeles’ distressed EY Plaza tower has fizzled out.

Adam Rubin and Andrew Shanfeld’s Carolwood, a L.A.-based private equity firm, will no longer take over the 41-story office building after entering escrow to acquire it earlier this year, according to The Real Deal. The deal had been expected to close earlier this summer. The property’s special servicer, Trident Pacific Real Estate, indicated via Morningstar Credit commentary that it was “unable to negotiate acceptable documentation with the selected buyer,” per TRD.

Former owner Brookfield defaulted on $305 million in debt tied to the tower in 2023. That debt included a $275 million commercial mortgage-backed securities loan from Morgan Stanley and Wells Fargo, as well as a $30 million mezzanine loan. Since issuance of the loan in 2020, the property’s value has cratered  from $446 million to just $150 million at the end of 2024.

Spokespeople for the lenders declined to comment, and a representative for Carolwood did not immediately respond to a request for comment. 

The deal for EY Plaza would’ve ended a zigzagging chapter for Brookfield, which has seen copious financial challenges in Downtown L.A. in recent years. These include multiple defaults, lender assumptions and building sales for far less than their appraised values or debt amounts, such as L.A. County’s $200 million purchase of Gas Company Tower, Uncommon Developers’ $210 million deal for Figueroa at Wilshire and a Chinese investor’s $120 million deal for 777 Tower.

Still, despite its faults, Downtown L.A. is cresting the recovery hill after years of surging office vacancy rates and public safety concerns. Renewed investor activity, strong residential numbers and a focus on fighting crime and homelessness ahead of the 2028 Olympics are helping the urban center find its footing in the post-COVID era. 

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