Los Angeles County has agreed to acquire the Gas Company Tower, a distressed property in downtown, for $215 million, according to a source familiar with the matter.

The sale is far below the property’s estimated value of $632 million just three years ago. The property also carries more than $379 million in debt, according to Commercial Observer.

The Gas Company Tower, at 555 W. Fifth St., had been slated for a foreclosure auction on Aug. 16, more than a year after Brookfield failed to pay a $465 million loan package for the property.

Brookfield also defaulted on $319 million worth of loans for 777 S. Figueroa St.

The Board of Supervisors must still approve the deal, according to the Los Angeles Times.

Jones Lang LaSalle Inc., which is marketing the property, declined to comment.

JLL was appointed by receiver Gregg Williams at Trident Real Estate to sell the property.

“The sale of Gas Company Tower represents a generational investment opportunity to acquire a trophy asset at an exceptional basis,” Andrew Harper, one of the JLL brokers working on the sale, said in a statement at the time. “While the office market has been challenged, we’ve seen a surge in demand for high-quality, top-tier assets such as 555 W. Fifth St. that are located in vibrant mixed-use destinations like Bunker Hill.”

The City of Los Angeles previously negotiated a deal for a 308,000-square-foot lease for the property.

It’s been a difficult time for the downtown office market. In addition to the Brookfield defaults, in the past few years Oaktree foreclosed on Coretrust Capital Partners’ 48-story tower at 444 S. Flower St. and Broadway Trade Center was foreclosed upon as well.

During the second quarter, the vacancy rate for the area was 28.6%, up from 15.9% in the second quarter of 2019, according to JLL data. The brokerage also found that last year there was more than 900,000 square feet of negative net absorption in the market.