MetLife Acquires SoCal Office From Former Borrowers at 45% Discount
Starwood Capital and Artisan Ventures defaulted on financing tied to the property earlier this year.
By Nick Trombola July 8, 2024 4:31 pm
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Starwood Capital and Artisan Ventures left their wallets in El Segundo.
MetLife acquired a 257,000-square-foot property at 1960 East Grand Avenue in El Segundo, Calif. — a small coastal city on Los Angeles County’s Westside, just south of LAX — in a nonjudicial foreclosure sale last month.
The former lender on the property paid $72.8 million for the building, according to The Real Deal, which cited property records. That’s 45 percent less than the $132 million that former owners Starwood and Artisan paid for it in 2020.
The partnership owed $83.9 million of a $85 million loan provided by MetLife that same year, per TRD. The life insurance firm filed a foreclosure notice on the building after Starwood and Artisan defaulted on the loan earlier this year. Details on the building’s occupancy were not immediately available.
Starwood and Artisan had planned to redevelop an adjacent parking lot into nearly 100,000 square feet of additional office space, though it wasn’t meant to be, per TRD.
Representatives for Starwood, Artisan and MetLife did not immediately respond to requests for comment.
MetLife may have acquired the property for a nice discount, far from unusual these days as office properties in particular plunge in value, but finding enough office tenants could prove a serious challenge.
The office availability rate in Los Angeles was a staggering 27.4 percent in the second quarter of this year, according to a new market report by Savills. Although that’s 20 basis points below the figure reported in the first quarter of this year, it’s still 120 basis points above where the rate was a year ago.
Nick Trombola can be reached at NTrombola@commercialobserver.com.
