CMBS Loan on Former WeWork Hollywood Office Building Hits Special Servicing
By Andrew Coen May 21, 2024 3:00 pm
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A $21.7 million commercial mortgage-backed securities (CMBS) loan backed by a former WeWork (WE)-anchored office property in Los Angeles along Hollywood’s Walk of Fame has transferred to special servicing for “imminent default” after loan payments fell 60 days delinquent, according to a report from Morningstar.
The loan, which comprises 2.8 percent of the collateral in JPMCC 2016-JP2, is secured by an 82,180-square-foot office complex at 7083 Hollywood Boulevard. WeWork vacated the building in 2021 causing occupancy to drop to 16 percent before another coworking provider, Industrious, signed a lease for part of the vacated space the next year and brought occupancy up to 51 percent, according to Morningstar.
New York-based Vanbarton Group acquired the office building for $37.75 million in September 2017 from Crown Realty & Development. Newmark (NMRK) announced the purchase in June 2018 after brokering the sale.
Newmark listed the property for sale again in September 2023. The proposed deal included an assumption of the $21.7 million loan, which has an interest rate of 4.14 percent and is scheduled to mature in July of 2026, The Registry reported at the time.
Tenants at the property include Braveman Media and BPM Technologies. The average weighted lease term of current tenants is 6.5 years with only 4 percent of leases scheduled to expire in 2030, according to the Registry.
Officials at Vanbarton and Newmark did not immediately return requests for comment.
Andrew Coen can be reached at acoen@commercialobserver.com
