Block-Sized Pasadena Office Property To Be Sold At Foreclosure Auction
Coretrust Capital Partners' Pasarroyo office building at 251 South Lake Ave. in Pasadena will to go to a foreclosure auction Dec. 20, according to a notice of trustee’s sale filed with the Los Angeles County Recorder’s office.
Coretrust Capital Partners managing principal John Sischo told Bisnow the firm tried to refinance the property for about two years to no avail.
“The capital markets are not in existence to take out a refinance for an office building, no matter how great the property is,” Sischo said. “It’s not there.”
Sischo declined to comment further.
The property, which holds about 600K SF of office and 40K SF of retail space, is being sold to pay debts secured by the deed of trust. The amount of those obligations, which include the loan’s unpaid principal balance and interest, come to $271M and were due on July 6, according to a notice of default filed with the county in August.
Office loan maturities could hit Los Angeles hard in the coming years. Just over 20% of all Los Angeles office loans — about 59.3M SF — are slated to mature between 2023 and 2025, Bisnow has previously reported. When the debt comes due, these properties are likely looking at values that are much lower than the ones they last refinanced for.
Coretrust bought the Pasarroyo complex in 2018 for $254M, the Los Angeles Business Journal reported at the time. It invested approximately $50M in renovations to the property, from seismic and HVAC upgrades to courtyard and lobby improvements. Tenants of the retail portion include Dunkin' Donuts and Citibank. Office tenants include Industrious and NAI Capital Commercial.
Also in 2018, public records show an entity controlled by Chicago-based real estate investment management firm Heitman gave Coretrust a loan of $267.1M for the properties that are now the Pasarroyo complex. That same entity is listed on the notices reporting the default and initiating the nonjudicial foreclosure sale.
Representatives for Heitman did not respond to Bisnow's requests for comment.