Another Brookfield Tower In DTLA Is Now In Receivership
EY Plaza is the second Brookfield-affiliated Downtown office tower to be placed in receivership, as the office giant's concerns mount in LA.
Colliers announced it was awarded the exclusive leasing and property management assignment for the building by Gregg Williams of Trident Pacific Real Estate, the receiver appointed to the property. Williams is also the receiver for the Gas Co. Tower. Both buildings are owned by the Brookfield entity Brookfield DTLA Fund Office Trust Investor.
Lenders on a CMBS package — originated by Morgan Stanley and Wells Fargo — filed a lawsuit last week after Brookfield became delinquent on payments for the $275M CMBS package on the tower, The Real Deal reported.
An April filing with the Securities and Exchange Commission revealed the building isn’t generating enough cash to pay for its operations and debt, some tenants at the property have notified Brookfield DTLA that it isn’t in compliance with some of the terms of their lease agreements, and there are mechanics liens at the property.
Colliers U.S. Southwest Head of Office Capital Markets Sean Fulp is lead adviser for the receivership estate and has been "tasked with ensuring EY Plaza’s value is preserved despite the turbulent market conditions," according to a Colliers release.
"We will not sit back and wait for the market to determine its fate," Fulp said in a statement. "The building is now very well-capitalized, and we have a highly skilled team of management and transaction professionals to ensure it remains one of the premier options for tenants in downtown LA.”
The Gas Co. Tower was placed in receivership in late April. The fund's November filings with the SEC showed the entity has about $822M in debt set to mature by the end of 2023.
In April, Brookfield DTLA Fund Office Trust Investor filed documents to voluntarily delist its stock, which was in danger of being delisted anyway. It filed a separate document that same month to suspend some of its reporting obligations with the SEC, often done in conjunction with delisting.