626 Wilshire Note Sale Creates Strong Demand in a Repricing Downtown LA Market

Downtown Los Angeles is in the middle of a significant repricing of office real estate. Vacancy remained above 34% at midyear 2026, while some of the market's most recognizable towers have changed hands well below historical values. At the same time, reset pricing is bringing new capital back into the market when the basis and underlying real estate are compelling. Bank of America Plaza, for example, sold for approximately $150 per square foot in June 2026, while Figueroa at Wilshire traded at roughly $201 per square foot in 2025.

Against that backdrop, the non-performing senior mortgage secured by 626 Wilshire presented a compelling Financial District opportunity. The loan had matured in July 2025 and entered maturity default, with the note secured by a 153,758-square-foot office tower that was 56% occupied and generating approximately $1.6 million in in-place NOI at the outset of the marketing process.

The property also had characteristics that differentiated it from a typical older office asset, including approximately $2 million in recent capital improvements, roughly 15,000 square feet of recent leasing and KDDI/Telehouse’s Los Angeles data center with direct dark-fiber connectivity to One Wilshire. During the marketing period, however, Telehouse/KDDI and two other tenants issued termination notices, reducing annual rent by approximately $1.1 million and materially changing the property’s income profile and the market’s underwriting of the note.

Cushman & Wakefield and RI Marketplace brought the note to auction from April 13–15, combining direct market relationships with broader digital exposure. Despite the change in tenancy, the market response remained strong: 170 investors executed confidentiality agreements, more than 8,600 viewed the listing and 21 qualified to bid. That participation gave the seller a clear view of market demand while bringing a broad group of qualified investors into the same process.

Despite the tenant terminations, the transaction ultimately reached approximately 55% above the broker’s revised expectation, with an all-in basis of approximately $85/SF and creating value on both sides of the transaction. For the buyer, it represented an attractive entry point into a well-located Financial District asset with long-term repositioning potential. For the seller, it created a visible market for a note that had become considerably more difficult to price through private negotiations, providing confidence that the asset had fully met the market and that value was established through real buyer demand.

The result demonstrates how a structured auction can make demand visible, create genuine competition and establish transparent market pricing, while providing a defined path to close for specialized distressed debt that can be difficult to price through traditional channels.