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Foreclosure is underway for the Jamison Properties-owned office building at 811 Wilshire Boulevard, after the landlord defaulted on debt connected to the property and a deal to sell it fell apart.
Jamison had a buyer under contract to sell the property and pay off the loan, and it turned over a deposit to the lender, but the sale was terminated. The lender lawyered up and started foreclosure, according to the servicer’s comments in July and August, via Morningstar Credit. The lender is reviewing a modification proposal to the commercial mortgage-backed securities debt.
The debt balance connected to the offices is about $35 million, compared to the original $39 million note that matured and moved to special servicing last year. A notice of default and election to sell under deed trust was recorded early May. The balance amounts to about $103 per square foot.
It is unclear who the buyer was, how far along a sale was, and why the deal collapsed. A person familiar with the matter said it was an off-market deal. Jamison did not immediately respond to a request for comment; the special servicer declined to comment.
The 21-story, 337,000 square-foot office building was listed in July, in an offering that included a nearby parking garage. That appears to be around when the earlier deal fell through. CBRE has been marketing the property as a conversion opportunity.
Jamison purchased the building in the early 2000s for $26.5 million. When the loan originated in 2014, the property was valued at $68 million. A decade later, it is worth $40.5 million, according to Morningstar. That is still more than the debt tied to it, which is something in downtown Los Angeles, where many offices are valued or sold for less than their debt.
Consider the Wedbush Center, which is valued at $60.5 million, less than half its $128 million debt, or the Brookfield Properties’ Figueroa office tower, which sold for $210 million, less than its $250 million debt, to Uncommon Developers. At the end of last year, 811 Wilshire was only 36 percent occupied. In 2015, there was an explosion in the basement of the building. Beyond the Financial District, Jamison had $200 million in troubled debt as of this summer.
Read more
Jamison looks for buyer after $35M default on LA offices
Jamison’s $35M loan for LA office building heads to special servicing
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Alena Botros
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