San Francisco Centre loses to Westfield Century City

The desolate and distressed San Francisco Centre, once a Westfield mall before its owners handed back the keys, stands in stark contrast to Unibail-Rodamco-Westfield’s outdoor shopping center in Century City. 

The San Francisco mall, owned by Unibail-Rodamco-Westfield and Brookfield Properties until the two entities stopped making payments on a $558 million note and then bailed, is now worth less than $200 million. 

That means the shopping center is worth a billion dollars less than it was nine years ago. It isn’t hard to see why: the 1.5 million square foot retail spot is only seven percent occupied. And the lender wants the shopping complex off its books and to recoup some of what it is owed immediately, per special servicer commentary. 

The Westfield Century City doesn’t compare. Its owner was recently set to close a $925 million commercial mortgage-backed securities refinancing — and an appraisal a couple months ago put the Los Angeles mall’s value at $2 billion. Plus, it is nearly 96 percent occupied. 

Time to surrender?

Does Rockwood Capital have time to save the Santa Monica Clock Tower? That’s the question The Real Deal posed last month after learning the Art Deco office building that was once the city’s largest skyscraper saw its value slashed and its debt land in special servicing.

But it appears Rockwood is ready to surrender. Special servicer commentary said: “Borrower has expressed interest to transfer title back to the Lender,” per Morningstar Credit.

The century-old Santa Monica Clock Tower was recently appraised at $27.4 million compared to $49 million at loan issuance. That was after the $26.7 million commercial mortgage-backed securities loan connected to the offices went to special servicing and missed its maturity date.

Occupancy declined to 43 percent earlier this year compared to 100 percent at loan underwriting a decade ago — and the around 50,000 square foot property is not making enough money to pay off its debt.

Still, handing the keys back may not be a done deal. The special servicer said it was evaluating all options.

Buyer revealed

We knew Tishman Speyer was selling a Beverly Hills office building for more than $200 million when we published the scoop earlier in the summer, but the buyer was a mystery. Now we know it is none other than Kilroy Realty — and according to a person familiar, the deal, coming out to about $707 a square foot, was a competitive process.

The publicly traded real estate investment trust purchased the offices for $205.3 million — a debut in the affluent area for Los Angeles-based Kilroy Realty, and an exit for Tishman Speyers from a trio of Beverly Hills office properties purchased two decades ago. Tishman Speyer cashed in all three in the past year or so, all at a profit.

The latest, Maple Plaza, which was 75 percent leased, Kilroy Realty purchased via cash on hand and recent disposition proceeds. This comes after Kilroy Realty sold a Santa Monica office building for $40 million and teased another sale at a similar price next year during second quarter earnings.

On the scene

Commercial real estate executives gathered for back-to-back events this week: a TRD roundtable conversation led by Editor-in-Chief Stuart Elliott and dinner at Mother Wolf Tuesday evening and a Bisnow conference the next morning downtown.

TRD’s panelists — Cityview’s Sean Burton, Cain International’s Larry Green, and Christie’s International Real Estate’s Aaron Kirman — discussed whether the tariff bark is worse than bite, Measure ULA pain and more (video coming soon, so stay tuned). Developer Leo Pustilnikov made an appearance at both events. 

The other event — on the gutted 23rd floor of 601 S. Figueroa, the office tower Uncommon Developers purchased from Brookfield Properties for $210 million earlier this year — at times felt like a marketing opportunity and maybe could have focused more on downtown’s homelessness problem but still offered thoughtful insights. 

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