In a significant development within the Downtown Los Angeles real estate landscape, Brookfield Properties’ plan to sell the 777 South Figueroa Tower for approximately half of its outstanding debt has fallen through. According to industry reports, Consus Asset Management, a South Korea-based investment firm, was set to acquire the one million square foot tower for approximately $145 million, or about $145 per square foot. However, the firm backed out of the deal last week.
Brookfield’s decision to offload the 52-story tower, which is located at 777 South Figueroa St., was to come in the wake of defaulting on loans amounting to $319 million linked to the property. The default was attributed to the adverse effects of rising interest rates, which squeezed profits from the building.
The property initially hit the market last fall. The first nine months of the previous year witnessed a departure of tenants from 84,000 square feet of office space within the building, resulting in a vacancy rate soaring to 26.9 percent by September 2022, The Registry previously reported.
The potential sale of 777 South Figueroa Tower is just one component of Brookfield’s broader financial restructuring efforts in the region. Since February of the previous year, the real estate giant has grappled with defaulted debt totaling $1.1 billion across its portfolio of Downtown Los Angeles office towers. Two other prominent Brookfield-owned properties in the area, namely the Gas Company Tower and EY Plaza, are currently under court-appointed receiverships.
