Realty Bancorp Equities recently finalized the sale of a Santa Monica office complex to First Citizens Bank and Trust for $86.7 million, signaling new development in the property’s financial saga. Despite the considerable price of $1,131 per square foot for the 76,900 square foot building, the sale proceeds fell short of addressing the debts linked to the property, according to a report from The Real Deal.
The property is located at 1540 2nd St. and was developed in 2008, according to a Loopnet listing. The building stands three stories and also features three levels of subterranean parking and private terraces. In addition, the building is home to several retailers, including McDonald’s and CorePower Yoga.
Originally purchased from McDonald’s, the property maintained the fast-food chain as a tenant, along with CorePower Yoga. Although McDonald’s retained a right to repurchase the property under the lease, that option expired in November.
In March, Realty Bancorp defaulted on a $79 million loan on the property from Haymarket Insurance, followed by another default on a $30 million loan from the same lender a month later. These defaults were accompanied by missed property tax payments and neglected debt service payments, further exacerbating the financial strain, The Real Deal reported.
The buyer, First Citizens Bank and Trust, is based in Raleigh, North Carolina, and currently has more than 15,000 associates and more than 550 bank branches in 23 states. In 2023, the bank also acquired Silicon Valley Bank, absorbing $110 billion in assets.
Based in Woodland Hills, Realty Bancorp Equities is a real estate development and management firm that has been active throughout the Southern California region for more than 40 years. Currently, the firm owns and operates more than two million square feet of retail, office and industrial properties, according to its website.
