Brookfield Properties is selling 777 South Figueroa Tower, formerly one of its trophy office towers in Downtown Los Angeles, for about half of the outstanding debt on the property.
South Korea-based investment firm Consus Asset Management is in a deal to buy the 1 million-square-foot tower for about $145 million, according to reports from Bloomberg and Real Estate Alert, which cited unidentified sources. Brookfield did not immediately respond to a request for comment.
If the deal closes at that price, it will come out to about $145 per square foot, in line with other Downtown L.A. office trades in the last year.
Brookfield defaulted on $319 million in loans tied to the 52-story tower last year, after rising interest rates squeezed profits from the building. The firm put the property up for sale in the fall.
Sources previously told TRD that Brookfield had received at least 15 offers on the tower, which is about 52 percent leased.
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 — is 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 about $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 tower.
Brookfield has defaulted on a total of $1.1 billion in debt tied to Downtown L.A. office towers since last February. Two other Brookfield-owned buildings Downtown, 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.
Dov Hertz and his partners unloaded a Sunset Park industrial site to FedEx two years after landing a big construction loan for an ambitious project.
Hertz’s DH Property Holdings, Bridge Industrial and Banner Oak Capital Partners are selling the project unfinished: They had borrowed $442 million in 2021 for the project, but records show the sale to FedEx was for only $248 million. Crain’s reported the deal Friday afternoon.
Hertz had planned a 1.3 million-square-foot Brooklyn distribution hub at the 18-acre property, which runs along Third Avenue between 19th and 21st streets. At the time of the November 2021 loan from JPMorgan, construction was supposed to take 36 to 40 months, which would have meant completion late this year or early next year.
It is unclear if Hertz, Bridge and Banner will complete the project for FedEx. Changing developers midstream can be disruptive.
Hertz, Bridge and Banner Oak formed an LLC called SIP Holdings to purchase the site at 75-81 20th Street for $255 million in 2019, with $200 million in financing from Apollo Commercial Real Estate. The deeds of sale to Memphis-based Federal Express list the primary address as 75 20th Street and 50 21st Street and show five parcels totaling 16.4 acres changing hands.
The developers were looking to capitalize on fervid demand from e-commerce and logistics companies for distribution points within the city. Hertz noted the prime location of the property: within a one-hour drive of 13 million customers.
“It sits at the nexus of the inbound and outbound traffic needs of any third-party logistics, parcel carrier, or retailer looking to meet same- or next-day delivery in New York City,” he said at the time.
A call to Bridge Development was not immediately returned.