The commercial real estate industry has seen a growing trend in companies defaulting on office buildings. One firm to recently default on a property in Santa Monica is New York-based Terra Property Trust. The firm has defaulted on a loan linked to the leasehold interest of a 100,000 square foot office building located at 1733 Ocean Ave. The default was reported in a notice filed with Los Angeles County and indicates the firm owed $28.3 million on the loan as of June 30, according to a report from The Real Deal.
In 2018, Centennial Bank issued a loan of $34 million to Terra Property Trust, with undisclosed terms. This loan was secured against the leasehold interest of the Santa Monica office building. However, the recent default indicates that Terra Property Trust has been unable to fulfill its financial obligations.
Terra Property Trust was previously involved with the property as a lender before acquiring the leasehold interest through a foreclosure in 2018. This acquisition came after Maguire Investments failed to meet its obligations on the $54 million loan.
Terra Property Trust is not the only firm to default on a property within the Greater Los Angeles area.
The Registry recently reported in June that Brookfield was facing the potential risk of defaulting on $400 million in loans linked to its 1.4 million square foot Bank of America tower located at 333 South Hope St. Also in June, China Oceanwide Holdings, a developer based in Beijing, defaulted on an EB-5 loan associated with the Oceanwide Plaza project, an unfinished development in downtown Los Angeles. As of January 2023, the company had a debt of $157.4 million owed to a group of EB-5 lenders.