One of downtown Los Angeles' biggest office towers has officially hit the market for sale after its owner said earlier this year it defaulted on loans related to the building.
The 52-story 777 Tower at 777 S. Figueroa St. is being listed by Eastdil, according to three people familiar with the offering. The office tower is the latest to reach the market in downtown Los Angeles as higher interest rates, economic uncertainty, cost cuts by businesses and the popularity of working from home has weakened demand in the largest office market in America's second-biggest city.
In February, owner Brookfield DTLA said it defaulted on roughly $318.6 million in loans related to 777 Tower. Two other buildings in downtown Los Angeles that the investment group owns, the 52-story Gas Company Tower and the 41-story EY Plaza, are in receivership.
Representatives for Eastdil and Brookfield DTLA didn't immediately respond to emailed requests to comment from CoStar News.
Ryan Patap, senior director of market analytics in CoStar Group's Los Angeles office, said the 777 Tower is desirable but the buyer pool for this property may be small given that institutional investors aren't as interested in purchasing office space today.
"Despite it being one of the better towers in downtown L.A., given the weakness in the market, it's likely the buyer is going to be opportunistic," Patap said, meaning 777 Tower is on the risky side but has potential to bring returns.
777 Tower opened in 1991 and is located in downtown Los Angeles' financial district. The roughly 1 million-square-foot building's biggest tenants include insurance company Lockton, law firm Arnold & Porter, and law firm Nossaman. CoStar Group, the publisher of CoStar News, also leases space there.
The skyscraper is the seventh-tallest building in Los Angeles. Architect César Pelli designed the building, which features a rose marble lobby and is located adjacent to the retail center FIGat7th. The building appeared in the 2001 action movie "Swordfish" when a helicopter hauls a bus onto the tower's roof.
The last major office sale downtown occurred in June when UCLA bought the 334,000-square-foot Trust Building at 433 S. Spring St. for roughly $40 million, or about $119 per square foot. That's below the downtown Los Angeles office market average of $329 per square foot, according to CoStar data.
The downtown office market has a 19.2% vacancy rate, above the greater Los Angeles average of 15.4%, according to CoStar data. The office market's average rent is $38.76 per square foot, below the greater Los Angeles average of $41.80 per square foot.