Home Gear market Morgan Stanley and Wells Fargo behind $ 305 million loan for Brookfield Los Angeles office – Business Watcher

Morgan Stanley and Wells Fargo behind $ 305 million loan for Brookfield Los Angeles office – Business Watcher


In the darkness of an economic downturn and in the midst of an office-killing work-from-home phenomenon, a sign of hope has emerged in the form of institutional trust in downtown Los Angeles.

Morgan stanley and Wells fargo provided $ 305 million in refinancing for Brookfield Real Estate Partners” 41 floors Ernst & Young Square turn to 725 Figueroa Street South, The real deal reported. The term of the 940,000 square foot office loan is two years, and comes with three one-year extension options.

Brookfield is the largest office owner in downtown LA

The financing replaces a $ 265 million loan from Wells Fargo in 2018. The tower is 78.4% leased to 43 tenants. The building is named after its biggest tenant, an accounting firm Ernst and Young, which is signed at over 120,000 square feet. the American Secret Service is another tenant, signed in at 94,000 square feet.

About $ 15.1 million of the proceeds from the CMBS deal will go to leasehold improvements and rental costs, and $ 6.3 million will go to unpaid free rent.

The interest rate on senior debt of $ 275 million is LIBOR plus 2.86%, while interest on mezzanine debt of $ 30 million is LIBOR plus 6.85%, according to TRD. Brookfield has a controlling 47.5% stake in the borrowing entity, while the remaining ownership is split among three other funds.

Office rents in LA have fallen between 5 to 10 percent in the midst of the pandemic, CCommercial Observer reported this month. Experts say the city center will continue to facing challenges with a vacancy rate of almost 20%.

The vote of confidence in office buildings comes as Brookfield experiences pandemic pain with its retail arm. Last week it was revealed that Brookfield was planning to lay off approximately 20 percent of its retail staff, and earlier this month, CO reported that major store closures are putting serious pressure on retailers. CMBS loans of $ 895 million.

Brookfield’s Los Angeles office portfolio is more stable. Just before the pandemic took hold, Marcum LLP announced that it was relocation of its seat from Century City to Brookfield’s 52-story office building in 777 Figueroa Street South.

Meanwhile, Morgan Stanley and Wells Fargo have major commitments in the region. In May, Morgan Stanley joined Goldman Sachs providing $ 550 million in debt for the 2.5 million square foot office complex National town square. And, at this time last year, Wells Fargo provided $ 194.9 million in the financing of two offices in Beverly Hills and Norwalk.


Please enter your comment!
Please enter your name here