The value of two iconic office towers in Downtown Los Angeles, owned or tied to Brookfield, has plummeted dramatically, reflecting a broader struggle in the city’s commercial real estate market. New appraisals reveal that the properties at 725 South Figueroa Street (EY Plaza) and 333 South Hope Street (Bank of America Plaza) have seen their valuations slashed by two-thirds, underscoring the challenges facing the office sector amid a shift to remote work and declining tenant demand.
According to Morningstar, the 41-story, 943,000-square-foot EY Plaza was appraised at $150 million this month, translating to $159 per square foot. This represents a staggering 66 percent decline from its $446 million valuation just four years ago. Similarly, the 55-story, 1.4 million-square-foot Bank of America Plaza has seen its value fall to $189 million, or $135 per square foot—a 69 percent drop from its $605 million valuation a decade ago.
The dramatic reduction in value aligns with recent Downtown Los Angeles office transactions. In December, the Aon Center at 707 Wilshire Boulevard sold for $134 per square foot, while the County of Los Angeles purchased The Gas Company Tower at 555 West Fifth Street earlier this month for $148 per square foot.
Brookfield has taken different approaches with these properties. EY Plaza, which the firm relinquished to lenders last year, is now under receivership, with a court-approved sale pending, according to a report in The Real Deal. Meanwhile, Brookfield continues to own Bank of America Plaza, even as its $400 million loan moved to special servicing in July. The company has signaled its intent to hold onto the property for now.
Even as these valuations have challenged the industry, the broader Los Angeles office market shows signs of resilience. It is buoyed by robust demand from the entertainment and media sectors in submarkets like Burbank, Culver City, and Hollywood. While the city’s October 2024 VTS Office Demand Index (VODI) score of 35 lags behind pre-pandemic levels, it outpaces struggling West Coast peers like Seattle (21) and San Francisco (30).
Downtown LA, however, continues to face high vacancies and sluggish leasing, reflecting broader challenges in urban office markets. The city’s focus on smaller, flexible spaces aligns with hybrid work trends, but large-space leasing remains sparse.
