Los Angeles' office sector continues to be in the news for all the wrong reasons.
An $87.5 million commercial mortgage-backed securities (CMBS) loan secured by Jamison Properties' Equitable Plaza, a prominent 34-story office building on Wilshire Boulevard, has been placed into special administration due to an imminent default on the maturity debt, according to a Trepp report.
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The special servicer for the loan reported that the borrower told lenders it wouldn't be able to repay the loan by its scheduled maturity date in June 2024. The building's loans account for about 15% of CMBS conduit transaction COMM 2014-USB3, according to Trepp data.
Located at 3435 Wilshire Boulevard in the Koreatown neighborhood on the west side of Downtown Los Angeles, Equitable Plaza (also known as the Equitable Trust Building) is a 688,292 square foot office building overlooking the entire Koreatown landscape and is the 39th tallest building in Los Angeles. The office tower was constructed in 1969 in a distinctive modernist style of precast limestone, concrete and glass windows and was renovated in 1993.
When the loans were securitized in 2014, the building was valued at $150.5 million, Trepp said.
David Lee, a local landlord who specializes in real estate along the Wilshire Center, is the building's principal owner. Lee founded Jamison Properties, which Loopnet lists as the building's main contact.
The building has been plagued by vacancies recently: Occupancy rates have fallen from 67% in 2021 to 57% in 2023, according to Trepp, and debt-to-equity ratios have dropped from 1.68 to 1.12.
Trepp's memo noted that the building's anchor tenants, Commonwealth Business Bank and Wilshire Business Center, have leases expiring two months into the year.
“Transferring the loan to a special servicing company at maturity is a necessary process to obtain an extension on the existing CMBS loan,” a Jamison spokesman said. “The owner has always met its payment obligations on this cash flow positive asset over the life of the loan. Reports that the anchor tenant has vacated the building are clearly false.”
Jamison is Koreatown's most prominent and active developer, having converted much of its underperforming office portfolio into apartment buildings over the past decade, and the company has since become one of the city's largest multifamily landlords.
Correction: An earlier version of this story incorrectly stated that Commonwealth Business Bank and Wilshire Business Center were planning to vacate the building.
Brian Pascus can be reached at bpascus@commercialobserver.com