Lenders, Office Landlords Could Face Standoff Over Loans on Troubled Towers

Article originally posted on Phoenix Business Journal on March 13, 2023

Recent news of major office landlords Brookfield Property Partners LP and Columbia Property Trust defaulting on loans for prominent U.S. office properties may’ve sent a shiver through an already anxious commercial real estate industry.

But are they indicative of a looming threat? Some analysts who track the office market say it’s more likely loan defaults will be idiosyncratic rather than a widespread issue, although it’s a segment of the market being carefully watched.

Nick Villa, associate director at Moody’s Analytics Inc., said Brookfield’s loan default on two Los Angeles office towers — Gas Company Tower and 777 Tower — represented about 1% of its overall office portfolio, meaning they’re not likely to have significant financial ramifications for Brookfield.

It’s possible, though, a greater number of office landlords will look to give back the keys on troubled properties when loans on them mature.

Find the Complete Article Here: https://www.bizjournals.com/phoenix/news/2023/03/13/landlord-lenders-standoff-troubled-towers.html