Brookfield Asset Management Ltd. is seeking to kick off talks with lenders on debt for a downtown Brooklyn office tower ahead of the loan’s maturity.
(Bloomberg) — Brookfield Asset Management Ltd. is seeking to kick off talks with lenders on debt for a downtown Brooklyn office tower ahead of the loan’s maturity.
Brookfield said it’s hopeful that a deal can be reached on its roughly $130 million loan for 15 MetroTech Center, a 675,000-square-foot (63,000-square-meter) office building. The loan won’t be in default as it transfers to special servicing, and the company continues to manage and lease the property, also known as 115 Myrtle Ave.
Property owners are confronting borrowing costs that have soared over the past year, as well as shifting demand for offices given the rise in remote work and layoffs. Some landlords are defaulting on debt as a way to kick-start renegotiations over loan terms, while other owners are simply cutting their losses and walking away from properties.
Brookfield has been caught up in the market’s turn. Earlier this year, the Toronto-based firm defaulted on a mortgage tied to a dozen office buildings, mostly around Washington, and handed over control of two major buildings in downtown Los Angeles.
The company isn’t looking to walk away from all properties that are tied up in negotiations with lenders. Brookfield and MetLife Inc. recently worked out a modification to the loan on a Denver office building called Republic Plaza that went into special servicing, according to a spokesperson. The loan will be extended through March 2026.
“Republic Plaza is an in-demand office asset, and we are glad to have achieved a positive outcome as expected, both for the building and downtown Denver,” Andrew Brent, a Brookfield spokesperson, said in an emailed statement. “As we’ve said, special servicing is often a path toward a successful resolution for a property that requires a loan modification.”
Brookfield office property defaults account for 0.08% of its total real estate assets, according to a spokesperson.
When Brookfield acquired MetroTech Center in 2018, it was a dated office complex. Last year, the firm rebranded the site as Brooklyn Commons and announced a $50 million plan to upgrade buildings plus the outdoor space.
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