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Vancouver-based Bonnis Properties has defaulted on a loan tied to a Downtown LA building that less than a year ago opened as an outpost of the short-term rental company Sonder.
Bonnis defaulted on a $56.4M loan from Ladder Capital, The Real Deal reported. The loan is linked to 404 W. Seventh St., also known as the Foreman & Clark building. With interest and late fees, Bonnis owes more than $60M to Ladder Capital, according to a foreclosure notice.
The Ladder Capital loan dates to 2021 and was used to refinance construction debt and lease up the property.
A foreclosure auction can be scheduled on or after Aug. 8. A representative for Bonnis Properties couldn't be reached. Ladder Capital didn't immediately respond to a request for comment.
Bonnis bought the 147K SF property in 2016 for $52.5M, planning to turn the 13-story, 1920s-built former retail and office property into apartments. But in early 2023, Bonnis engaged CBRE to market the property for sale. In October, Sonder announced it would open in the property and offer 125 rooms for short-term rentals.
Bonnis owns and is renovating another historic downtown building a few blocks away, Urbanize LA previously reported.
Sonder has had its own troubles. In March, the San Francisco-based company told investors that two years' worth of its financial statements contained errors such that they "should no longer be relied upon," the San Francisco Business Times reported. The company went public in 2021 at a $2.2B valuation, but it was worth $33.4M after markets closed Friday.
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