A Newmark team has arranged the discounted sale of a $290 million loan secured by Wells Fargo Center South, a Class A office tower in Downtown Los Angeles. The note is collateralized by the fee simple interest in the property, which is located at 355 S. Grand in the Bunker Hill district. The loan buyer is New Age 355, LLC, an affiliate of Kam Sang Company, Inc., while the seller was not disclosed.
Newmark U.S. Capital Markets co-head Kevin Shannon led the assignment, with vice chairmen Ken White, Laura Stumm, Rob Hannan and Michael Moll also representing the seller in the transaction. The deal underscores Newmark’s ongoing role in marketing large office-backed debt positions as capital structures reset across major urban cores.
Wells Fargo Center South was designed by Skidmore, Owings & Merrill and totals approximately 1,160,000 square feet across 45 stories, according to information provided in connection with the loan sale. At the time of the transaction, the building was reported to be roughly 42% leased, highlighting the leasing challenges facing even institutional-quality office assets in Downtown Los Angeles.
In commenting on the sale, Shannon noted that the trade highlights a growing cohort of investors and potential owner-users actively pursuing opportunities in high-quality assets across Downtown Los Angeles. He indicated that as pricing in the market continues to reset, buyers are able to acquire interests in premier office properties at a basis that compares favorably with estimated replacement cost.
Shannon also observed that certain investor groups are demonstrating increasing conviction in the long-term value of top-tier office towers, even amid elevated vacancy levels. The New Age 355, LLC acquisition of the Wells Fargo Center South loan illustrates how capital is positioning to control well-located, large-scale office properties as the next phase of the market cycle unfolds in Downtown Los Angeles.
