Brookfield office tower in Los Angeles sells for 42% less than 2005 price

[LOS ANGELES] A unit of Brookfield sold an office tower in downtown Los Angeles (LA) for US$210 million, 42 per cent less than its purchase price in 2005.

While the deal was at a deep discount, the price-per-square foot – about US$201 – topped other recent office sales downtown, according to Kevin Shannon, the Newmark Group broker who represented Brookfield. Those prices have been around US$150 or less per square foot, he said.

“I think the worst is behind us in downtown LA,” Shannon said. “Going for over US$200 a foot is a step in the right direction.”

The sale of 601 S Figueroa marks a continued exodus from downtown LA by Brookfield, which was the largest office landlord in the city centre until vacancies and defaults soared and prices plunged after the pandemic and the 2022 surge in interest rates.

Colliers represented the buyer, Uncommon Developers, a closely held Los Angeles-based real estate investing firm that focuses on apartments and offices. The 52-storey building is 73 per cent leased.

The total availability rate for downtown LA offices was 37.2 per cent in the first quarter, counting space currently for lease or sublease or with upcoming lease expirations, one of the highest rates of any US city centre, according to CBRE Group.

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The Brookfield-owned Bank of America Plaza in downtown Los Angeles was appraised at US$212.5 million last year, down 65 per cent from its 2014 valuation. The Gas Company Tower, another former Brookfield property, sold for US$200 million last year, down from a one-time US$630 million value.

Brookfield bought 601 S Figueroa, also known as Figueroa at Wilshire, for US$360 million in 2005, data from CoStar Group show.

Brookfield representatives did not immediately respond to a request for comment. BLOOMBERG