A Chinese investor has bought the troubled 777 Tower in Downtown Los Angeles for $120 million.
The unidentified buyer paid cash for the 1 million-square-foot, 52-story skyscraper at 777 South Figueroa Street, in the Financial District, the Commercial Observer reported, citing unidentified sources. The deal is expected to close in two weeks.
Though Brookfield Properties is still the owner, a syndicate of lenders led by Wells Fargo forced a sale after the unit of the Toronto-based investment giant defaulted on a $319 million loan tied to the property last year. The firm also defaulted on a $50 million mezzanine loan tied to the tower.
At the time of default, about $290 million was outstanding under the loan from the Wells Fargo-led syndicate.
In 777’s sale, brokerage Eastdil Secured represented the seller, while Newmark represented the unidentified buyer. The all-cash deal works out to $120 per square foot, resetting the benchmark for office properties in L.A.’s Downtown.
The firm run by Brookfield Asset Management listed the property in November after going sideways on loans linked to 777 Tower and the Gas Company Tower at 555 West 5th Street.
Since last February, Brookfield has defaulted on $1.1 billion in debt tied to its Downtown L.A. office towers. The Gas Company Tower and EY Plaza are both in court-appointed receiverships.
“It’s just regular business. It’s small and not relevant to the overall business,” Brookfield Asset Management CEO Bruce Flatt said of the defaults last year.
The largest landlord of offices in Downtown had expected to fetch a higher price for 777 Tower. Sources previously told TRD that Brookfield had received at least 15 offers on the tower, which is 52 percent leased.
In March, South Korea-based Consus Asset Management cut a deal to buy the 33-year-old building once known as Citicorp Center for $145 million, or $145 per square foot, The Real Deal reported. The price was equal to half the $290 million in outstanding debt tied to the tower.
But the deal fell through, according to the Observer. Brookfield declined to comment on the latest deal.
Brookfield defaulted on nearly $319 million in loans tied to the 52-story tower last year, after rising interest rates squeezed profits from the building.
Brookfield’s sale serves as another marker for office landlords and brokers in Downtown L.A., suggesting the submarket — severely hit by remote work, high office vacancies and loan defaults — may be close to bottoming out.
In December, Carolwood, run by Adam Rubin and Andrew Shanfeld, bought the 1.1 million-square-foot AON Center at 707 Wilshire Boulevard for $147.8 million, or $134 per square foot.
That sale was technically a deed-in-lieu of foreclosure and relieved the seller, Shorenstein Properties, of its unpaid debt on the skyscraper.
— Dana Bartholomew
Read more
- Brookfield sells 777 Tower in DTLA for 50% below outstanding debt
- Brookfield hangs for-sale sign on troubled DTLA skyscraper
- Good news/bad news: LA’s office market finds bottom
The post Chinese investor buys Brookfield’s 777 Tower in Downtown LA for $120M appeared first on The Real Deal.
Powered by WPeMatico