Brookfield’s BofA Tower in LA Sees incredible 69% Decline in Appraised Value - But did it??

The value of a downtown Los Angeles tower owned by an affiliate of Brookfield Asset Management Ltd. was slashed 69%, the latest sign of troubles for offices in US central business districts.

The Bank of America Plaza, a 55-floor tower that hosts the home office of asset manager Capital Group, was appraised at $188.9 million, down from $605 million 10 years ago, according to a filing last week for the property’s mortgage.

US office values have plunged and vacancies soared since the double shock of the post-pandemic vacancy increases and soaring borrowing costs. Office values in US central business districts fell almost 53% from March 2022 through September, according to MSCI Inc.

The office availability rate in downtown LA, which is among the hardest hit areas, was about 38% in the third quarter, according to CBRE Group Inc. The delinquency rate on US office CMBS jumped to 9.3% in October, up from 5.7% a year earlier, according to data compiled by Bloomberg.

The BofA Plaza, built in 1974 and renovated in 2009, has $400 million in commercial mortgage-backed security debt that matured on Sept. 1 without being paid off or refinanced. It was 79% leased as of July.