Brokerage JLL has been tapped to market for sale the Gas Company Tower in downtown Los Angeles, a building in receivership at a time of low office demand in the neighborhood.
Filings in foreclosure proceedings involving the 52-story building at 555 W. Fifth St. indicate the property has potential buyers that include the city of Los Angeles, an interested party that previously was in talks to lease a large space. Los Angeles city officials did not immediately respond to requests from CoStar News to comment.
A JLL statement Tuesday said the brokerage was retained by Gregg Williams of Trident Pacific, the court-appointed receiver, to market the tower that spans nearly 1.4 million square feet on a 1.4-acre site in the Bunker Hill area of Los Angeles’ downtown business district. Built in 1991 and renovated in 2023, the tower is 57% leased to tenants including Southern California Gas Co., Deloitte, Starbucks and law firm Latham & Watkins.
“The sale of Gas Company Tower represents a generational investment opportunity to acquire a trophy asset at an exceptional basis,” said JLL Managing Director Andrew Harper, who will be marketing the property with the firm’s Jeffrey Bramson and Will Poulsen.
“While the office market has been challenged, we’ve seen a surge in demand for high-quality, top-tier assets such as 555 W. Fifth St. that are located in vibrant mixed-use destinations like Bunker Hill,” Harper said in the statement.
Owner Brookfield DTLA, a local affiliate of Brookfield Properties, defaulted on its loans and gave up the Gas Company Tower in early 2023, sending it to foreclosure proceedings.
The Gas Company Tower was appraised in 2020 at $632 million but is now valued at closer to $200 million, according to financial services firm Barclays. Court filings tied to the receivership indicate the property could potentially sell for between $150 million and $220 million or higher.
City officials in December resumed previously stalled talks in which the city was negotiating to lease about 308,000 square feet at the Gas Company Tower, according to a city report. Such a transaction, spanning 11 floors in a proposed 15-year lease, would be among the largest of the past year for a downtown Los Angeles market that has struggled for several years with rising office vacancies.
Downtown Los Angeles’ office vacancy is at 20.8%, according to CoStar data. Brookfield, among downtown’s largest office owners, defaulted during the past year on three of its downtown L.A. towers including the Gas Company building.
The brokerage assignment comes after last week’s news that brokerage Colliers and Hilco Real Estate were hired to lead the sale and potential completion of Oceanwide Plaza, a partially built mixed-use complex in downtown Los Angeles that drew national attention to the area’s real estate struggles when its towers were tagged with graffiti.