Kam Sang buys discounted $290M loan on 42%-leased DTLA tower

New Age 355, LLC, an affiliate of Kam Sang Company, Inc., bought the $290 million mortgage loan on Wells Fargo Center South at a discount, according to Connect CRE. The 45-story tower at 355 S. Grand Ave. in Bunker Hill is about 42% leased. The sale was negotiated, not forced through a foreclosure auction.

For downtown Los Angeles owners and lenders, that makes this a negotiated, willing-buyer price on distressed office debt.

Why it matters

Newmark represented the seller, per Connect CRE. The seller was not named, and the sale price was not disclosed. A lender accepting less than face on a Class A tower signals where downtown office debt is clearing. That number feeds straight into how the next Bunker Hill refinancing gets underwritten.

The numbers

The tower was designed by Skidmore, Owings & Merrill and covers about 1.16 million square feet, per Connect CRE.

The debt traces to a 2018 refinancing. Brookfield DTLA Fund Office Trust’s SEC 10-Q shows a $290.0 million mortgage loan on the Wells Fargo Center South Tower. It carried an initial advance of $253.0 million at LIBOR plus 1.80%. It was set to mature on Nov. 4, 2021.

The same filing lists the tower as one of six Class A office properties the Brookfield fund held in the downtown Los Angeles central business district at the time. Connect CRE’s report does not name the current owner of the building.

What’s next

Kam Sang now controls the paper on a tower that is more than half empty. That position lets it restructure the debt, pursue a deed-in-lieu, or trade the loan again. A lower basis could also let a future owner compete harder on rent against other downtown landlords.

Each path is a fresh data point for how Los Angeles office debt gets repriced. The test is the empty 58% of the building. A buyer that intends to own will lease it up. A buyer that intends to trade will not.