Cathay Bank sued the owner of a Downtown Los Angeles commercial property, claiming the landlord defaulted on a $31 million loan.
The lender alleges that a Laeroc Partners affiliate, the borrower and owner of 530 West 6th Street in the Financial District, defaulted when the loan matured in September, after a number of extensions.
Cathay Bank requested a receiver be appointed to take possession of the 160,000-square-foot office and data-center property and for it to be foreclosed upon.
The attorney representing Cathay Bank, Michael Gomez, did not immediately respond to a request for comment; Laeroc Partners could not immediately be reached.
The 13-story property, called Telecom Center LA, is for sale, according to NAI Capital marketing materials that do not include an asking price.
The carrier hotel, on the corner of West 6th Street and Grand Avenue near One Wilshire, was constructed as an office building in 1928 and last renovated in 2016, according to the marketing materials, which claim there are only seven other data center buildings downtown.
Telecom Center tenants include Quadranet, Windstream, Level 3, AT&T and Cogent Communications. It has been non-institutionally owned for decades, per the materials.
NAI Capital’s Mark O’Brien, the building broker, did not immediately respond to a request for information.
The Downtown Los Angeles office market is no stranger to distress with a 33.3 percent vacancy rate during the third quarter, according to CBRE. Office towers are selling for less than the debt connected to them or at discounts to their prior purchase prices, if their deals don’t fall apart.
On the other hand, data centers are in demand because of the artificial intelligence boom, so much so that vacancies are near zero percent across the country, although Southern California is still considered a secondary market when it comes to data centers, according to JLL and CBRE.
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