Brookfield Corporation has defaulted on a $161.4 million mortgage for twelve office buildings located mainly around Washington, DC, according to Bloomberg. The loan has been transferred to a special servicer who is working with the borrower to determine the path forward.
The pandemic and shift towards remote work have had an impact on high-quality office property values, resulting in an increase of large office landlords defaulting on their loans . This follows Brookfield’s previous defaults of $784 million debt tied to two downtown Los Angeles skyscrapers – the 52-story Gas Company Tower at 555 W 5th St and 777 Tower at S Figueroa Street – as well as another Brookfield Office Property in LA being transferred into special servicing by Kroll Bond Rating Agency.
Overall, it appears that commercial real estate is feeling strain from COVID-19 related economic pressures which are leading many large landlords into financial difficulty .
