Brookfield has cashed out of an office building in Glendale, selling the property to an auto loan company.
An entity linked to the president of Premier Auto Credit, Sean Rastegar, bought the 113,000-square-foot building at 425 East Colorado Street for $23 million, according to public records filed with L.A. County last month. The deal came out to around $200 per square foot.
Rastegar bought the property using a $17 million loan from Umpqua Bank, records show. He will lease the property back to Premier Auto Credit, which is headquartered in Van Nuys.
Brookfield had taken over the property in 2012 as part of foreclosure proceedings, records show. In recent years, the firm struggled to lease out the majority of the building. As of last year, about 86,000 square feet of space at the property was up for lease.
Marketing materials from brokerage CBRE for the building show Brookfield was asking $2.60 per square foot in rent. Average asking rents for Class B office buildings across Glendale, Pasadena and Burbank in the second quarter were $3.07 per square foot a month, according to JLL.
To take up 86,000 square feet under a lease, Premier Auto Credit would have had to shell out $223,600 a month or $2.7 million a year.
Though financial terms of the loan were not disclosed, current interest rates for commercial mortgages stood at more than 4.5 percent in April, according to data from Real Capital Analytics earlier this year, and are higher now, considering the Federal Reserve’s double rate hikes over the summer.
A 10-year, $17 million commercial mortgage with a 4.5 percent interest rate would mean monthly payments of $176,185 per month — significantly less than monthly rents.
The deal beat out another sale earlier this month for the cheapest office sale in Glendale in recent months. At $200 per square foot, the deal was less than Hacienda Associates’ purchase of a 126,500-square-foot office building at 225 West Broadway for $27.5 million, or $217 per square foot.
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