The Gas Company Tower, L.A.’s fifth tallest building, is worth one-fifth less than a year ago and two-thirds less than its value in 2021.
The value of the 52-story tower, now on the market by a receiver after Toronto-based Brookfield walked away from its debt obligations, is $214.5 million — 21 percent less than its appraisal last summer, the Commercial Observer reported, citing figures from Trepp.
The spire at 555 West 5th Street in Downtown is backed by a $350 million commercial-mortgage backed securities loan and more than $100 million in mezzanine financing.
Three years ago, the 1.4 million-square-foot building was valued at $632 million, or $451 per square foot. That means its latest value amounts to 34 percent of its worth in 2021.
The new valuation for the property works out to $153 per square foot — a potent indicator of the decline in the Downtown office market since the pandemic shift to remote work.
The Gas Company Tower, set for a foreclosure sale, is 57 percent leased, according to JLL, down from 73 percent in September 2022.
In February of last year, Brookfield defaulted on two senior loans attached to the property — one for $210 million and another for $140 million. The combined debt is now $465 million.
The alternative investment firm, ranked by Zippia as the world’s second-largest real estate company behind Austin-based Keller Williams Realty, last spring handed over its keys to the receiver, Gregg Williams of Trident Real Estate Group.
This month, Trident hired JLL to market the 33-year-old tower, revamped in 2017, for an undisclosed price.
CoStar also reported the city could be a potential buyer, according to foreclosure filings
The City of Los Angeles is set to move more than 1,200 employees from five municipal departments into the Gas Company Tower after signing a 15-year lease for 308,000 square feet.
The deal came after WeWork announced in February it would vacate 92,000 square feet at the tower, and law firm Sidley Austin is set to exit 137,000 square feet in October 2026.
— Dana Bartholomew
Read more
The post Value of Gas Company Tower in DTLA drops another 21% appeared first on The Real Deal.
Powered by WPeMatico