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California  + Los Angeles  + Office  | 
Report: Los Angeles Boasts Top 10 U.S. Ranking in 2022 Office Leases

Brookfield DTLA Office REIT Defaults on $784M in Loans

The downtown office market in major cities continues to struggle after changes brought on by the pandemic, as another major investor has defaulted on loans for a pair of Downtown Los Angeles skyscrapers. According to an SEC filing, Brookfield DTLA Fund Office Trust Investor said that subsidiaries that owned the 52-story Gas Company Tower at 555 W. 5th St were in default on $465 million in loans related to the building. 

In addition, Brookfield DTLA has defaulted on $319 million in loans related to its 52-story building on S. Figueroa Street, the 777 Tower. In both cases, lenders for both properties have not yet exercised their foreclosure option.

The Brookfield DTLA fund owns six office properties and a retail center in Downtown Los Angeles. In November, the REIT warned investors and lenders it wasn’t able to meet loan demands due to declining cash flows and property values. At the end of September, the fund had $2.3 billion of total consolidated debt.

The defaults are the latest sign of a continuing weak office market demand in Downtown LA. A Colliers fourth quarter report showed a vacancy rate of 25.1% in DTLA with a negative net absorption of -407,000 square feet.


Inside The Story

Brookfield DTLA Fund Office Trust Investor

About Mark Nieto

Mark comes to ConnectCRE with an extensive background as a business and news reporter in San Francisco radio, as well as 35 years as a traffic reporter on several stations including KGO, KNBR, KCBS and KFRC. As a business reporter, Mark covered the tech world in Silicon Valley where he became familiar with real estate transactions in the hot Bay Area marketplace. He attended San Jose State University with a BA in Radio and TV Broadcasting and currently resides in the Lake Tahoe area where he gets to frequently enjoy all of his favorite activities: Golfing, Fishing, Hiking and Skiing.