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A CMBS loan secured by a West Los Angeles office property at 1950 Sawtelle Blvd. has transferred to special servicing after its January 2026 maturity date passed without the loan's $33M balance being paid off.
The loan, the sponsor of which is connected to LA-based Jade Enterprises, was split three ways and originally issued for $36.5M, according to Morningstar Credit.
Occupancy at the Sawtelle office property has declined since 2019 and was down to just 43% in June 2025.
One of the building's largest tenants, Butterfield Productions, downsized from 42% of the building's rentable space to 32%. Another tenant, video game developer Kung Fu Factory, previously occupied 14% of the building but vacated, according to servicer notes.
These decreases in occupancy dropped the net cash flow in 2024 to just 29% of the underwritten level, according to Morningstar Credit.
Office space is still plentiful in many parts of the LA market. The West Side has 22.8% vacancy, below the citywide vacancy average of 23.4%, according to a Q4 2025 report from Cushman & Wakefield.
Leasing activity slowed during the winter months, according to Cushman. Total leasing volume was just over 1.7M SF in Q4 2025, a 29.6% decline quarter-over-quarter and a 39.6% decline year-over-year.
Jade Enterprises owns a number of office and multifamily buildings in and around Downtown. Last year, the firm sold a 154-unit apartment building to the Housing Authority of the city of Los Angeles and in 2024 listed a Downtown office high-rise that was about two-thirds vacant.
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