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Blackstone has written down its stake in a Los Angeles office complex backing $482M in loans.
Called the Playa District, the West Los Angeles property was previously valued as high as $583M, Bloomberg reported. Blackstone is in talks with its lenders to determine the fate of the property, which is 70% leased, according to Real Estate Alert.
Playa District is made up of six Class-A office buildings at 6060 Center Drive near Playa Vista, a hub for tech companies where Apple and Google have offices.
“Given the challenges facing the property, we began writing this property down over 3 years ago and completely wrote it off earlier this year,” a Blackstone spokesperson told Bisnow via email.
Blackstone bought Playa District, also called the Howard Hughes Center, in 2016 as part of a 3M SF office portfolio acquisition from a Hines-sponsored REIT. The other properties in the portfolio were sold off before the pandemic, a Blackstone spokesperson said.
Last month, when the loan on a New York office building Blackstone handed back to its lenders was going up for sale, Blackstone told Bisnow it had written off that building two years ago. It is unclear how many office properties in Blackstone’s portfolio it has written off.
The fund that owns Playa District, Blackstone Real Estate Partners VIII, reported a 15% net internal rate of return in its third-quarter earnings.
Blackstone has largely divested itself of office properties, with its real estate portfolio including mostly logistics, student housing and data center properties, the spokesperson said. Traditional U.S. offices make up less than 2% of Blackstone’s owned portfolio.
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