Coretrust Capital Partners LLC’s Pasarroyo office property, located at 251 South Lake Ave. in Pasadena, is heading into foreclosure. The four-building complex spanning 640,000 square feet will go to auction on Dec. 20, according to a notice of trustee’s sale filed with the Los Angeles County Recorder’s office.
The property, which consists of about 600,000 square feet of office space and 40,000 square feet of retail space, is being sold to pay off debts secured by the deed of trust. According to a notice of default filed with the county in August, the amount of those obligations is worth $271 million.
According to representatives from Coretrust, the firm tried for two years to get refinancing on the loan with no success.
Coretrust, which purchased the property for $254 million in 2018 through an investment fund, aimed to inject $90 million more into renovations.
“This is a rare opportunity to own a major and well-located campus and bring to it all of the amenities most sought by todays’ tenants,” John Sischo, managing principal of Coretrust, said at the time of purchase. “We intend to transform (the then-named) Corporate Center Pasadena into one of the most desirable office environments in the city, appealing to professional firms, technology companies and corporate headquarters.”
Although the firm did not reach the $90 million they sought out to achieve, they did do a lavish $50 million transformation of the space, from seismic and HVAC upgrades to courtyard and lobby improvements.
Some of the property’s current tenants include NAI Capital Commercial, Industrious and LA Fitness. The complex is LEED Gold certified.
And while its ownership was short, Pasarroyo’s foreclosure is not the first of its kind for downtown-based real estate investment firm Coretrust Capital Partners.
Earlier this year, Oaktree Capital Management took control of 444 S. Flower St., a 48-story, 914,000-square-foot tower in Bunker Hill that Coretrust was unable to pay off after receiving multiple loans, again following many lavish renovations.
Coretrust purchased the Flower Street building in 2016, at the time known as Citigroup Center, for $336 million. It took out a $230 million loan from the Bank of China that year. Coretrust refinanced the property in 2018, securing a $64.7 million mezzanine loan from Oaktree as well as a $210 million senior loan from AIG. After missing the due date on its loan with Oaktree in 2021, Coretrust and Oaktree reached a forbearance agreement for Coretrust to pay by May 31 last year. When Coretrust missed its payment again, Oaktree initiated the foreclosure.
