Equitable Plaza’s $88M Office CMBS Loan Sent to Special Servicing
Jamison Properties, the owner of the 34-story office tower on Wilshire Boulevard, told lenders it couldn’t pay its loan at maturity next month
By Brian Pascus May 15, 2024 3:10 pm
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Los Angeles’ office sector continues to make headlines for all the wrong reasons.
An $87.5 million commercial mortgage-backed securities (CMBS) loan secured by Jamison Properties’ Equitable Plaza, a prominent 34-story office tower on Wilshire Boulevard, has been sent to special servicing due to an imminent maturity default, according to a report from Trepp.
The loan’s special servicer reported that the borrower told the lender it would not be able to pay off the loan at its expected maturity date of June 2024. The building’s loan makes up roughly 15 percent of a CMBS conduit deal, COMM 2014-USB3, according to Trepp data.
Located at 3435 Wilshire Boulevard in the Koreatown neighborhood that sits west of Downtown L.A., Equitable Plaza, also known as The Equitable Trust Building, is a 688,292-square-foot office property that towers over the entire landscape of Koreatown and is the 39th tallest building in Los Angeles. The office tower was constructed in 1969 in a distinctly Modernist style of precast limestone, concrete and glass windows, and renovated in 1993.
The building had an appraised value of $150.5 million at the time of the loan’s 2014 securitization, per Trepp.
David Lee, a local landlord specializing in assets along the Wilshire Center corridor, is the building’s principal owner. Lee founded Jamison Properties, which is listed as the building’s primary contact per Loopnet.
Recently, the building has been hit by vacancy. Occupancy fell from 67 percent in 2021 to 57 percent in 2023, while debt service coverage dropped from 1.68x to 1.12x, per Trepp.
Trepp’s notes state that the building’s top tenants — Commonwealth Business Bank and Wilshire Business Center — leases expire in the last two months of the year.
“Transferring the loan to the special servicer at maturity is a necessary procedural step in order to obtain an extension on the existing CMBS loan,” according to a Jamison company spokesperson. “Ownership has always met its payment obligations on this positive cash flowing asset over the entire term of the loan. Any reports of major tenants vacating the building are patently false.”
Jamison is the most prominent and active developer in Koreatown, and for the past decade has been converting much of its portfolio of underperforming offices into multifamily housing. The firm has since become one of the largest multifamily landlords in the city.
Correction: An earlier version of this article incorrectly noted that Commonwealth Business Bank and Wilshire Business Center plan to vacate the building.
Brian Pascus can be reached at bpascus@commercialobserver.com
