The 41-story EY Plaza office building in Downtown Los Angeles has joined the ranks of struggling assets in the commercial real estate market, echoing the broader decline in demand for conventional office spaces. According to a report from Commercial Observer, the building’s value has plummeted from $446 million three years ago to $210.7 million this month, significantly below the $275 million commercial mortgage-backed securities (CMBS) loan it secured from Morgan Stanley and Wells Fargo.
The owner, which is Brookfield-managed fund Brookfield DTLA Fund Office Trust Investor, faced financial challenges, leading to missed payments and loan default. Consequently, the 41-story property, located at 725 South Figueroa St., was moved to special servicing. There is also a separate $30 million mezzanine loan, exacerbating the asset’s negative equity to approximately $90 million.
Gregg Williams from Trident Pacific Real Estate has been appointed as the receiver. Under his direction, Colliers has been retained as the exclusive leasing and property management agency.
This predicament isn’t isolated. Brookfield DTLA is also entangled in defaults tied to two other nearby skyscrapers: the Gas Company Tower and the 777 Tower, with combined loans totaling $784 million, according to The Registry’s previous reporting.
The Gas Company Tower, similarly affected, has undergone receivership and witnessed a staggering 57 percent decline in value. Both towers stand at 52 stories and are located at 777 South Figueroa St. and 555 West 5th St., respectively.
