Corporate Executives’ Living Choices May Contribute to LA Office Space Decline

Brookfield fails to pay a $465 million loan package for the Gas Company Tower at 555 W. 5th St. and $319 million in loans for 777 S. Figueroa St.

A wave of defaults on office towers has hit downtown Los Angeles as demand for office space continues to decline. Brookfield Corp., a major office owner in the area, defaulted on $784 million worth of loans on two towers, according to an SEC filing on February 10th. And while these defaults are occurring far from the Westside, the fact that many corporate executives live in areas like Palisades and Santa Monica could be contributing to the decline of downtown in a work environment changed by a pandemic.   

Brookfield failed to pay a $465 million loan package for the Gas Company Tower at 555 W. 5th St. and $319 million in loans for 777 S. Figueroa St. The loan on the 52-story Gas Company Tower was comprised of a $350 million mortgage loan, a $65 million mezzanine loan and a $50 million junior mezzanine loan. The 52-story tower at 777 S. Figueroa St. was made up of a $269 million mortgage and a $50 million mezzanine loan.

This is not an isolated incident as other buildings have also faced foreclosure due to missed payments. In January, Oaktree foreclosed on Coretrust Capital Partners’ 48-story tower at 444 S. Flower St., which it had purchased in 2016 for $336 million with a Bank of China loan of $230 million that year. After missing the due date on its loan with Oaktree in 2021, Coretrust and Oaktree reached a forbearance agreement for Coretrust to pay by May 31 last year, but when they missed their payment, Oaktree initiated foreclosure proceedings.

Similarly, last year saw the Broadway Trade Center at 801 S. Broadway foreclosed upon as Starwood Capital acquired the building through public foreclosure auction after it defaulted on loans.

The pandemic’s shift towards remote work has caused demand for office space in downtown Los Angeles to plummet even further with vacancy rates hovering around 22%, according to Jones Lang LaSalle Inc.’s Q4 report from last year. Asking rents averaged out at $3.86 per square foot during this period while LA County had an asking rent of $4.14 per square foot.

As companies continue to embrace remote work policies post-pandemic, it remains uncertain how long it will take before demand returns to pre-pandemic levels or if businesses will permanently change their approach toward commercial real estate altogether.

“The office environment downtown is not appealing,” Shlomi Ronen, a managing principal and founder of Dekel Capital told the LA Business Journal. “I don’t know of a single company CEO who wakes up in the morning, has a home in Beverly Hills or in the Palisades or Pasadena and says my goal is to go spend my day living and working in downtown.”

Related Posts

Defensible Space, Defined: How A Plus Tree Protects Communities from Wildfire

May 30, 2025

May 30, 2025

In the wildfire-prone landscapes of the Western United States, safeguarding homes and communities requires proactive measures. A Plus Tree, a...

Santa Monica Public Library Launches Summer Reading Program to Promote Literacy

May 30, 2025

May 30, 2025

Running from June 14 through August 16, the program encourages participants of all ages to track their reading progress and...

Palisades Village to Reopen in 2026 with Revamped Retail, Dining, and Community Spaces

May 29, 2025

May 29, 2025

Elysewalker Set to Return With Park Reconstruction, Holiday Events, and Streetscape Upgrades Palisades Village, the open-air shopping and lifestyle destination...

(Video) Signs That Your Aging Loved Ones Are in Need of Caregiving

May 29, 2025

May 29, 2025

To Find Out More, Go To Safelyhomeagain.com To Find Out More, Go To https://t.co/xwoTFv7YNV pic.twitter.com/3ci6iKi7Xs — Palisades News (@PalisadesNewsLA) May...

(Video) Last Thursday Concert Series Kicks off at Venice Boardwalk

May 29, 2025

May 29, 2025

The shows happen at Dudley Ave. at the pergolas on the north end of the boardwalk The shows happen at...

Dozens of Wildfire Tax Refunds Returned Due to Invalid Addresses, L.A. County Officials Say

May 29, 2025

May 29, 2025

Refunds and revised assessments have already been issued to hundreds of homeowners, but many notices and checks are now being...

Westside Ballet to Present Spring Showcase and Gala Featuring NYCB Stars This Weekend

May 29, 2025

May 29, 2025

The Huntley Santa Monica Beach Community Service Award will go to first responders from Los Angeles and Santa Monica in...

Santa Monica Landlord to Pay $685K in Tenant Harassment Lawsuit

May 29, 2025

May 29, 2025

The settlement, announced Tuesday, resolves allegations of tenant harassment and discrimination under the city’s Tenant Harassment and Housing Anti-Discrimination ordinances...

Officials Outline Community-Focused Plans for Venice Beach in 2028 Olympics

May 29, 2025

May 29, 2025

Councilwoman Traci Park and LA28 leaders promise local engagement, minimal disruption, and a showcase of the neighborhood’s cultural identity LA...

(Video) Interviews with Rick Caruso and Elyse Walker, with a Dennis Quaid cameo

May 28, 2025

May 28, 2025

We spoke at the Press Conference to announce plans to reopen Palisades Village Shopping Mall. Actor Dennis Quaid arrives to...

DoorDash to Award $200K in Grants to Restaurants Affected by Wildfires

May 28, 2025

May 28, 2025

The funding can be used to cover a range of wildfire-related expenses, including rent, repairs, and payroll DoorDash will distribute...

Thomas Mann House to Reopen in Following Wildfire Repairs: REPORT

May 27, 2025

May 27, 2025

Though the house remained structurally intact, it underwent months of environmental testing, cleanup, and repairs The Thomas Mann House in...

(Video) Main Street Bars & Restaurants Give a Taste in 10th Annual ‘MAINopoly’ Event

May 27, 2025

May 27, 2025

The event took place Sunday, May 25, transforming five blocks of Santa Monica’s Main Street into a Monopoly-themed culinary experience...

Friends of Ballona Wetlands to Host Migration Celebration May 31

May 27, 2025

May 27, 2025

The celebration will feature avenger hunts, a science lab, and native plant sales, offering attendees a chance to engage with...

Sen. Allen’s Wildfire Relief Bills Advance, Targeting Insurance Reform, Firefighting Jobs, and Housing Protections

May 27, 2025

May 27, 2025

The bills reflect a comprehensive approach to recovery, addressing immediate needs like insurance payouts and long-term strategies like workforce stability...