The future of a landmark 37-story residential tower in Downtown Los Angeles hangs in the balance as Realm Group and the Bascom Group face the repercussions of defaulting on a $32.9 million loan from TerraCotta Group, according to a report from The Real Deal.
Orange County-based Realm Group and the Bascom Group had plans for a 422-unit tower at 675 South Bixel St., having assembled the site for $28.6 million in 2019. However, a recent notice filed with L.A. County reveals that the companies defaulted on a multimillion-dollar loan from TerraCotta Group tied to the development. Under state regulations, a foreclosure on the site could be scheduled no earlier than Feb. 28, adding a layer of uncertainty to the project’s timeline and completion.
Initially financed by Starwood Capital Group, Realm and Bascom opted for a refinancing strategy in 2021, securing a loan from TerraCotta.
Realm and Bascom listed the development site for sale last year, The Registry previously reported. The project site is marketed by JLL and is already entitled for the project, which is known as Bixel Tower. In addition to the residential space, the project would feature 4,900 square feet of ground-floor commercial space as well as various other amenities, such as parking, a rooftop sky lounge and more.
The default by Realm Group and Bascom reflects a broader trend in the construction loan landscape, with other firms also grappling with financial difficulties tied to construction loans for multifamily projects.
In November, Portland, Ore.-based BPM Real Estate Group defaulted on a $127 million loan linked to a 326-room hotel project in Anaheim. Located at 1601 South Anaheim Blvd., the project is known as The Viv.
Prior to that, in October, it was reported that TA Partners defaulted on loans totaling approximately $200 million for two apartment projects in Irvine. The projects, situated at 18831 Von Karman Ave. and 17422 Derian Ave., included the construction of 658 apartments.
