Maxxam's Santa Monica mixed-use threatened with $90M default
The $90 million commercial mortgage-backed securities debt connected to a mixed-use property on Third Street Promenade landed in special servicing before its December maturity date due to imminent monetary default, according to Morningstar Credit.
Maxxam Enterprises faces $90M default on Santa Monica mixed-use property
A $90 million commercial mortgage-backed securities debt linked to a mixed-use property on Third Street Promenade in Santa Monica is at risk of default before its December maturity date, according to a report by Morningstar Credit.
The seven-story, 130,000-square-foot property, which includes office, multifamily, and retail spaces, has been performing well until the recent loss of two major tenants: WeWork and AMC Theaters. This has caused the property's occupancy rate to drop to 69 percent, putting it in danger of defaulting on its debt.
WeWork, which filed for bankruptcy, has canceled its lease at the property, while AMC Theaters did not renew its lease. Both tenants were key anchors at the property, and their departure has had a significant impact on the property's financial stability.
The property is owned and managed by an entity connected to Beverly Hills-based Maxxam Enterprises. The Real Deal previously reported that Maxxam purchased the property in 2016 for a reported $112 million.
The property's current financial troubles highlight the challenges that many commercial real estate owners and developers are facing due to the economic downturn caused by the COVID-19 pandemic. The loss of major tenants and the decrease in occupancy rates have put many properties at risk of defaulting on their debts.