Fortune: Brookfield Corp., parent of the largest office landlord in downtown Los Angeles, is defaulting on loans tied to two buildings rather than refinancing the debt as demand for space weakens in the center of the second-largest US city.
The two properties in default, part of a portfolio called Brookfield DTLA Fund Office Trust Investor, are the Gas Company Tower, with $465 million in loans, and the 777 Tower, with about $290 million in debt, according to a filing. The fund manager had warned in November that it may face foreclosure on properties.
The company had the option to extend the maturity on the loans tied to the Gas Company Tower, but elected not to, according to its latest filing. It also elected not to get interest-rate protection that was required for loans for the 777 Tower property, which amounts to an event of default, the filing said.
“We believe DTLA’s decision to default on these two assets increases the risk for the remaining loans in their portfolio,” Barclays Plc research analysts Lea Overby and Anuj Jain wrote in a note Tuesday. MORE
Is this a sign of things to come? I am cautious with money having lived through the high interest mortgages of the 1980’s/1990’s (first mortgage at 16%, second house at 14%) and the fact that for most of my working life, I was self-employed in the design/construction part of the economy(or the canary in the coal mine). I am Canadian and know of so many people who have used their homes as ATM’s and of companies who are overextended. Even my daughter (who should know better) told me that the old rules do not apply as the economy is so different from when I was in university and then during my career years.
I think the next 2 years are going be “very interesting”.
Just have The Federal Reserve whip up $775 mil and it’ll be like nothing ever happened.
Chump change for Brookfield, Newson will probably let the tax payers bail them out.
Or is it time for another TARP scam?
Brookfield – from Wikipedia.
Revenue Increase – US$76 billion (2021)
Net income Increase – US$12.4 billion (2021)
AUM Increase – US$725 billion (2022)
Total assets Increase – US$391 billion (2021)
Total equity Increase – US$134 billion (2021)
A friend is getting ready to retire from an executive position at a huge commercial real estate business in the Denver area. He says that downtown Denver is a ghost town because of the covid work at home feature and the ‘homeless’ problem and traffic…..It’s nothing new though, it started when the democrats took over Colorado front range politics 50 years ago….
Too big to fail.
But be late on you filing this spring and meet one of the 87K new agents that Shitpants has deployed.
The commercial real estate bubble has been waiting to burst for far too long. It will be very ugly when it bursts.
At least the homeless could take advantage of the vacancies.
The Dems might take a lesson from Chavez and convert vacant commercial property into torture prisons … for those of us who will be unhappy about owning nothing.
Hard to service a mortgage when intrusive government tells your renters they don’t have to pay you rent.
COVID BS is going to haunt this nation for decades to come 😡
We should have just rode the storm out and let the virus take it’s course 🤒
Thanks big government you stinking rats and that goes for the Rino’s too 🤪
No doubt the bank will find a way for the taxpayers to foot the bill for this. Too big to be accountable… er… I mean… to fail.
those 2 towers will make great homeless shelters!
‘never let a crisis go to waste’
On w/ the Dystopia!