A $21.7 million commercial mortgage-backed securities (CMBS) loan secured by the former WeWork (WE) anchor office building on Los Angeles' Hollywood Walk of Fame has been placed into special administration due to “imminent default” after loan payments fell 60 days behind, Morningstar reported.
The loan, which represents 2.8% of JPMCC 2016-JP2's collateral, is secured by an 82,180-square-foot office building at 7083 Hollywood Boulevard. WeWork vacated the building in 2021, causing occupancy to fall to 16%, but the following year, Industrious, another co-working space provider, leased some of the vacant space, causing occupancy to rise to 51%, according to Morningstar.
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New York-based Van Burton Group acquired the office building from Crown Realty & Development for $37.75 million in September 2017. Newmark (NMRK) announced the acquisition in June 2018 after brokering the deal.
Newmark put the property up for sale again in September 2023. The proposed deal included the assumption of a $21.7 million loan set to mature in July 2026 with an interest rate of 4.14%, The Registry reported at the time.
Tenants at the property include Braveman Media and BPM Technologies. Current tenants have an average weighted lease term of 6.5 years, with just 4% of leases due to expire in 2030, according to the registry.
Officials for Van Burton and Newmark did not immediately respond to requests for comment.
Andrew Coen can be reached at acoen@commercialobserver.com