{"id":1004665025,"date":"2023-05-26T03:11:27","date_gmt":"2023-05-26T11:11:27","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004665025"},"modified":"2023-05-26T05:29:00","modified_gmt":"2023-05-26T13:29:00","slug":"la-brookfield-office-tower-goes-to-receivership","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/la-brookfield-office-tower-goes-to-receivership\/","title":{"rendered":"Brookfield LA Office Tower Goes to Receivership"},"content":{"rendered":"
\"EY<\/a>

EY Plaza. Image courtesy of Colliers<\/em><\/p><\/div>\n

Following a default by Brookfield<\/strong> on $275 million in CMBS financing for EY Plaza, a downtown Los Angeles office tower, the 41-story property has been placed in receivership.<\/p>\n

Colliers<\/strong> said Thursday that it was awarded the exclusive leasing and property management assignment for the 968,184-square-foot tower at 725 S. Figueroa St. by Gregg Williams of Trident Pacific Real Estate<\/strong>, who was appointed receiver for the property.<\/p>\n

Sean Fulp, Head of Office Capital Markets, U.S. Southwest, at Colliers, was named lead advisor and is tasked with ensuring EY Plaza\u2019s value is preserved despite the turbulent market conditions. He is joined by Vice Chair Matthew Heyn and Executive Vice President Ian Gilbert, who will oversee the leasing efforts. Kevin Rude, regional managing director of West Coast, and Tina Minook, regional managing director of California Real Estate Management Services, will lead full-service property management.<\/p>\n

\n

READ ALSO<\/strong>: Office Owners Face Financing Dilemma<\/a><\/p>\n

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The news was not surprising as word spread in recent weeks that Brookfield DTLA Fund Office Trust Investor Inc. had not made payments on the 4-acre property\u2019s CMBS package\u2014a $220 million senior loan and $35 million mezzanine loan. Last week, Morgan Stanley<\/strong> and Wells Fargo<\/strong>, the lenders on the CMBS package, filed a lawsuit in Los Angeles County Superior Court asking that the property go to a special servicer, according to The Real Deal<\/em>.<\/p>\n

Brookfield DTLA had also stated in early April it might not be able to make payments on the EY Plaza building along with the 54-story Wells Fargo Center North Tower. Brookfield DTLA has been dealing with distressed assets in its downtown Los Angeles office portfolio since early this year. In February, the fund defaulted on $755 million in loans for the Gas Company Tower and the 777 Tower. To date, Brookfield has defaulted on $1.1 billion in loans for the portfolio.<\/p>\n

The 52-story Gas Company Tower at 555 W. 5th St. was sent to receivership last month. Gregg Williams of Trident Pacific Real Estate was also appointed as receiver for that asset and tapped the Colliers team to lease and manage it.<\/p>\n

\n

READ ALSO<\/strong>: Today\u2019s Most-Desired Office Amenities<\/a><\/p>\n

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Built in 1985, Brookfield acquired the LEED-certified Platinum building in June 2002 for approximately $150 million, according to CommercialEdge data. In September 2020, Wilmington Trust<\/strong> originated a $275 million loan for the property that matured in October 2022, CommercialEdge reported. The building has first-floor retail and a fitness center along with a 904-space multi-level parking structure. As of last week, EY Plaza had 114,905 square feet in available space, according to CommercialEdge.<\/p>\n

DC dilemma<\/strong><\/h2>\n

Brookfield, the Canadian-based alternative asset management firm, also recently defaulted on a mortgage for Class B office properties in the Washington, D.C., area<\/a>. The properties were located mainly in the Maryland suburbs and were transferred to a special servicer working with Brookfield to execute a pre-negotiation agreement, according to several news reports. Rising interest rates that have more than doubled in the last year were cited as contributing to increased monthly payments for an approximately $161.4 million mortgage held by Brookfield that had initially backed the purchase in 2018 of a dozen smaller office buildings. At the time of the default, Brookfield still owned nine of the assets and had sold three of the assets in the mortgage.<\/p>\n

A Brookfield spokesperson told Commercial Property Executive<\/em> in April the DC-area assets represented a very small percentage of the firm\u2019s office portfolio. The spokesperson noted most of the company\u2019s office properties are Class A trophy buildings that see strong demand globally and benefit from the flight-to-quality trend.<\/p>\n

Office distress<\/strong><\/h2>\n

In February, asset manager PIMCO<\/strong>\u2019s Columbia Property Trust defaulted<\/a> on $1.7 billion of debt tied to an office portfolio that included properties in New York City and San Francisco.<\/p>\n

The situation, exacerbated by higher interest rates and lower vacancy rates due to more companies adopting hybrid work schedules or moving to newer, higher-quality buildings, could worsen in the second half of this year and 2024. In February, Trepp<\/strong> reported a total of $40.47 billion in office loans is scheduled to mature by late 2024, consisting of 353 loans backed by 583 office properties.<\/p>\n

The office delinquency rate rose to 2.77 percent in April, up from 2.61 percent in March and was up almost 1 percent over a three-month period, according to the Trepp CMBS Delinquency Rate. By comparison, in April 2022, the office delinquency rate was 1.71 percent.<\/p>\n

The Trepp Special Servicing Rate for all property types rose 7 basis points between March and April to 5.62 percent. The largest increase in delinquency rates occurred in the office sector, which had a rate of 5.39 percent, up from 4.77 percent in March. Trepp stated the office sector was responsible for 53.4 percent of the new special servicing transfers in April. A total of $2.75 billion worth of CMBS loans were transferred to special serving in April, with office and lodging making up $2.51 billion of the total.<\/p>\n","protected":false},"excerpt":{"rendered":"

Colliers has been tapped to lease and manage the downtown property. <\/p>\n","protected":false},"author":1068,"featured_media":1004665066,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21784,21808,1594,21742,21747,15],"tags":[33497,35498,32774,35305,33277],"class_list":["post-1004665025","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-brokerage","category-featured","category-los-angeles","category-latest","category-office","category-west","tag-brookfield-properties","tag-colliers","tag-morgan-stanley","tag-trepp-inc","tag-wells-fargo"],"acf":[],"yoast_head":"\nBrookfield LA Office Tower Goes to Receivership - Commercial Property Executive<\/title>\n<meta name=\"description\" content=\"After defaulting on $275 million in CMBS financing, Brookfield\u2019s EY Plaza in downtown Los Angeles has been placed in receivership.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/la-brookfield-office-tower-goes-to-receivership\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Brookfield LA Office Tower Goes to Receivership\" \/>\n<meta property=\"og:description\" content=\"After defaulting on $275 million in CMBS financing, Brookfield\u2019s EY Plaza in downtown Los Angeles has been placed in receivership.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/la-brookfield-office-tower-goes-to-receivership\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2023-05-26T11:11:27+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-05-26T13:29:00+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/05\/23Q2_EY_Hero2_featured.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"450\" \/>\n\t<meta property=\"og:image:height\" content=\"338\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Gail Kalinoski\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/la-brookfield-office-tower-goes-to-receivership\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/la-brookfield-office-tower-goes-to-receivership\/\",\"name\":\"Brookfield LA Office Tower Goes to Receivership - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/la-brookfield-office-tower-goes-to-receivership\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/la-brookfield-office-tower-goes-to-receivership\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/05\/23Q2_EY_Hero2_featured.jpg\",\"datePublished\":\"2023-05-26T11:11:27+00:00\",\"dateModified\":\"2023-05-26T13:29:00+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/fc5b5df1393e5023d2417bd48c2fda57\"},\"description\":\"After defaulting on $275 million in CMBS financing, Brookfield\u2019s EY Plaza in downtown Los Angeles has been placed in receivership.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/la-brookfield-office-tower-goes-to-receivership\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/la-brookfield-office-tower-goes-to-receivership\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/la-brookfield-office-tower-goes-to-receivership\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/05\/23Q2_EY_Hero2_featured.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/05\/23Q2_EY_Hero2_featured.jpg\",\"width\":450,\"height\":338,\"caption\":\"EY Plaza. 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