Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 24, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-36135 | ||
Entity Registrant Name | BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC. | ||
Entity Incorporation, State or Country Code | MD | ||
Entity Tax Identification Number | 46-2616226 | ||
Entity Address, Address Line One | 250 Vesey Street | ||
Entity Address, Address Line Two | 15th Floor | ||
Entity Address, City or Town | New York | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 10281 | ||
City Area Code | 212 | ||
Local Phone Number | 417-7000 | ||
Title of 12(b) Security | 7.625% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share | ||
Trading Symbol | DTLA-P | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 0 | ||
Documents Incorporated by Reference | None | ||
Entity Central Index Key | 0001575311 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | DELOITTE & TOUCHE LLP |
Auditor Location | New York, New York |
Auditor Firm ID | 34 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Investments in Real Estate: | ||
Land | $ 216,982 | $ 222,555 |
Buildings and improvements | 2,145,830 | 2,308,836 |
Tenant improvements | 420,010 | 418,460 |
Investments in real estate, gross | 2,782,822 | 2,949,851 |
Less: accumulated depreciation | 561,382 | 580,403 |
Investments in real estate, net | 2,221,440 | 2,369,448 |
Investment in unconsolidated real estate joint venture | 44,421 | 43,191 |
Cash and cash equivalents | 23,523 | 38,901 |
Restricted cash | 35,206 | 49,322 |
Rents, deferred rents and other receivables, net | 135,447 | 125,625 |
Intangible assets, net | 10,067 | 16,023 |
Deferred charges, net | 54,877 | 57,529 |
Due from affiliates | 6,823 | 10,062 |
Prepaid and other assets, net | 12,365 | 12,377 |
Total assets | 2,544,169 | 2,722,478 |
Liabilities: | ||
Secured debt, net | 2,279,573 | 2,255,921 |
Accounts payable and other liabilities | 71,029 | 77,612 |
Due to affiliates | 5,553 | 1,782 |
Intangible liabilities, net | 2,905 | 4,455 |
Total liabilities | 2,359,060 | 2,339,770 |
Commitments and Contingencies (See Note 15) | ||
Mezzanine Equity: | ||
Total mezzanine equity | 1,147,955 | 1,116,512 |
Stockholders’ Deficit: | ||
Common stock, $0.01 par value, 1,000 shares issued and outstanding as of December 31, 2022 and 2021 | 0 | 0 |
Additional paid-in capital | 204,369 | 203,369 |
Accumulated deficit | (1,167,270) | (865,927) |
Noncontrolling interests | 55 | (71,246) |
Total stockholders’ deficit | (962,846) | (733,804) |
Total liabilities and deficit | 2,544,169 | 2,722,478 |
Series A Preferred Stock | ||
Mezzanine Equity: | ||
7.625% Series A Cumulative Redeemable Preferred Stock, $0.01 par value, 9,730,370 shares issued and outstanding as of December 31, 2022 and 2021 | 484,126 | 465,577 |
Series A-1 preferred interest returns | ||
Mezzanine Equity: | ||
Noncontrolling Interests: | 469,666 | 452,454 |
Senior participating preferred interest redemption measurement adjustments | ||
Mezzanine Equity: | ||
Noncontrolling Interests: | 11,677 | 21,191 |
Series B preferred interest returns | ||
Mezzanine Equity: | ||
Noncontrolling Interests: | $ 182,486 | $ 177,290 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 1,000 | 1,000 |
Common stock, shares outstanding (in shares) | 1,000 | 1,000 |
Series A Preferred Stock | ||
Preferred stock, dividend rate, percentage | 7.625% | 7.625% |
Preferred stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares issued (in shares) | 9,730,370 | 9,730,370 |
Preferred stock, shares outstanding (in shares) | 9,730,370 | 9,730,370 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue: | |||
Lease income | $ 264,090 | $ 257,352 | $ 256,733 |
Total revenue | 295,900 | 283,798 | 285,548 |
Expenses: | |||
Rental property operating and maintenance | 108,719 | 97,444 | 96,347 |
Real estate taxes | 39,719 | 39,702 | 39,292 |
Parking | 11,128 | 8,570 | 10,648 |
Other expenses | 10,535 | 8,604 | 13,952 |
Depreciation and amortization | 101,252 | 104,047 | 104,920 |
Interest | 101,801 | 79,739 | 82,808 |
Impairment of real estate and intangible assets | 112,073 | 0 | 0 |
Total expenses | 485,227 | 338,106 | 347,967 |
Other Income (Expense): | |||
Equity in earning (loss) of unconsolidated real estate joint venture | 1,230 | 796 | (525) |
Total other income (expense) | 1,230 | 796 | (525) |
Net loss | (188,097) | (53,512) | (62,944) |
Net income (loss) attributable to noncontrolling interests: | |||
Net loss attributable to Brookfield DTLA | (282,794) | (121,009) | (208,028) |
Series A preferred stock dividends | 18,549 | 18,549 | 18,548 |
Net loss attributable to common interest holders of Brookfield DTLA | (301,343) | (139,558) | (226,576) |
Series A-1 preferred interest returns | |||
Net income (loss) attributable to noncontrolling interests: | |||
Preferred interest returns | 17,212 | 17,212 | 17,213 |
Senior participating preferred interest redemption measurement adjustments | |||
Net income (loss) attributable to noncontrolling interests: | |||
Senior participating preferred interest redemption measurement adjustments | (8,248) | 1,028 | (1,580) |
Series B preferred interest returns | |||
Net income (loss) attributable to noncontrolling interests: | |||
Preferred interest returns | 14,432 | 16,063 | 17,708 |
Series B common interest – allocation of net income | |||
Net income (loss) attributable to noncontrolling interests: | |||
Series B common interest – allocation of net income | 71,301 | 33,194 | 111,743 |
Parking | |||
Revenue: | |||
Parking | 30,725 | 25,426 | 27,775 |
Interest and other | |||
Revenue: | |||
Interest and other | $ 1,085 | $ 1,020 | $ 1,040 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (188,097) | $ (53,512) | $ (62,944) |
Interest rate swap contracts designated as cash flow hedges: | |||
Unrealized derivative holding gains | 0 | 0 | 562 |
Reclassification adjustment for realized loss included in net loss | 0 | 0 | 1,779 |
Total other comprehensive income | 0 | 0 | 2,341 |
Comprehensive loss | (188,097) | (53,512) | (60,603) |
Less: comprehensive income attributable to noncontrolling interests | 94,697 | 67,497 | 145,084 |
Comprehensive loss attributable to common interest holders of Brookfield DTLA | $ (282,794) | $ (121,009) | $ (205,687) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Non- controlling Interests |
Balance at beginning of year (in shares) at Dec. 31, 2019 | 1,000 | |||||
Balance at beginning of year at Dec. 31, 2019 | $ (520,782) | $ 0 | $ 197,535 | $ (499,793) | $ (2,341) | $ (216,183) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | (62,944) | (208,028) | 145,084 | |||
Other comprehensive income | 2,341 | 2,341 | ||||
Contributions | 4,834 | 4,834 | ||||
Dividends, preferred returns and redemption measurement adjustments on mezzanine equity | (51,889) | (18,548) | (33,341) | |||
Balance at end of year (in shares) at Dec. 31, 2020 | 1,000 | |||||
Balance at end of year at Dec. 31, 2020 | (628,440) | $ 0 | 202,369 | (726,369) | 0 | (104,440) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | (53,512) | (121,009) | 67,497 | |||
Other comprehensive income | 0 | |||||
Contributions | 1,000 | 1,000 | ||||
Dividends, preferred returns and redemption measurement adjustments on mezzanine equity | $ (52,852) | (18,549) | (34,303) | |||
Balance at end of year (in shares) at Dec. 31, 2021 | 1,000 | 1,000 | ||||
Balance at end of year at Dec. 31, 2021 | $ (733,804) | $ 0 | 203,369 | (865,927) | 0 | (71,246) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | (188,097) | (282,794) | 94,697 | |||
Other comprehensive income | 0 | |||||
Contributions | 1,000 | 1,000 | ||||
Dividends, preferred returns and redemption measurement adjustments on mezzanine equity | $ (41,945) | (18,549) | (23,396) | |||
Balance at end of year (in shares) at Dec. 31, 2022 | 1,000 | 1,000 | ||||
Balance at end of year at Dec. 31, 2022 | $ (962,846) | $ 0 | $ 204,369 | $ (1,167,270) | $ 0 | $ 55 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Cash flows from operating activities: | |||
Net loss | $ (188,097) | $ (53,512) | $ (62,944) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 101,252 | 104,047 | 104,920 |
Equity in (earning) loss of unconsolidated real estate joint venture | (1,230) | (796) | 525 |
(Recovery) write-off of lease receivables previously deemed uncollectible | (196) | (1,136) | 8,400 |
Provision for loan losses | 0 | 0 | 2,653 |
Amortization of acquired below-market leases, net of acquired above-market leases | (141) | 206 | 1,331 |
Straight-line rent amortization | (3,655) | (1,413) | 1,441 |
Amortization of tenant inducements | 2,529 | 3,803 | 3,897 |
Amortization and write-off of debt financing costs | 6,763 | 7,825 | 5,471 |
Impairment of real estate and intangible assets | 112,073 | 0 | 0 |
Loss on early extinguishment of debt | 0 | 4,575 | 0 |
Unrealized loss (gain) on interest rate cap contracts | 1,832 | (41) | 127 |
Realized loss on interest rate swap contracts | 0 | 0 | 1,779 |
Changes in assets and liabilities: | |||
Rents, deferred rents and other receivables, net | (6,282) | 6,383 | (4,496) |
Deferred charges, net | (8,965) | (9,446) | (7,053) |
Due from affiliates, net | 1,324 | 1,043 | (647) |
Prepaid and other assets, net | 10,157 | (1,726) | (1,019) |
Accounts payable and other liabilities | 8,692 | 1,758 | (1,570) |
Due to affiliates | 3,771 | 82 | 134 |
Net cash provided by operating activities | 39,827 | 61,652 | 52,949 |
Cash flows from investing activities: | |||
Expenditures for real estate improvements | (64,660) | (23,836) | (58,062) |
Net cash used in investing activities | (64,660) | (23,836) | (58,062) |
Cash flows from financing activities: | |||
Proceeds from secured debt | 18,590 | 465,000 | 305,000 |
Principal payments on secured debt | 0 | (450,000) | (265,000) |
Proceeds from Series B preferred interest | 47,564 | 25,500 | 47,850 |
Proceeds from senior participating preferred interest | 288 | 629 | 777 |
Distributions to Series B preferred interest | (9,825) | (17,794) | (17,865) |
Repurchases of Series B preferred interest | (46,975) | (45,306) | (34,218) |
Distributions to senior participating preferred interest | (1,554) | (879) | (1,146) |
Contributions to additional paid-in capital | 1,000 | 1,000 | 1,000 |
Purchase of interest rate cap contracts | (12,048) | (107) | (130) |
Payment for early extinguishment of debt and termination of interest rate swap contracts | 0 | (4,575) | (849) |
Debt financing costs paid | (1,701) | (6,544) | (5,811) |
Net cash (used in) provided by financing activities | (4,661) | (33,076) | 29,608 |
Net change in cash, cash equivalents and restricted cash | (29,494) | 4,740 | 24,495 |
Cash, cash equivalents and restricted cash at beginning of year | 88,223 | 83,483 | 58,988 |
Cash, cash equivalents and restricted cash at end of year | 58,729 | 88,223 | 83,483 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 91,596 | 67,976 | 76,873 |
Cash paid for income taxes | 473 | 1,723 | 792 |
Supplemental disclosure of non-cash investing and financing activities: | |||
Accrual for current-year additions to real estate investments | 15,946 | 12,818 | 53,760 |
Increase in fair value of interest rate swaps | 0 | 0 | 562 |
Writeoff of fully depreciated investments in real estate | 24,008 | 24,233 | 36,613 |
Writeoff of fully amortized intangible assets | 6,322 | 8,634 | 14,414 |
Writeoff of fully amortized intangible liabilities | 14,746 | 13,529 | 6,850 |
Noncash contributions to additional paid-in capital | 0 | 0 | 3,834 |
Reconciliation of cash, cash equivalents and restricted cash: | |||
Cash and cash equivalents | 23,523 | 38,901 | 37,394 |
Restricted cash | 35,206 | 49,322 | 46,089 |
Cash, cash equivalents and restricted cash | $ 58,729 | $ 88,223 | $ 83,483 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business Brookfield DTLA Fund Office Trust Investor Inc. (“ Brookfield DTLA ” or the “ Company ”) is a Maryland corporation and was incorporated on April 19, 2013. Brookfield DTLA was formed for the purpose of consummating the transactions contemplated in the Agreement and Plan of Merger dated as of April 24, 2013, as amended, and the issuance of shares of 7.625% Series A Cumulative Redeemable Preferred Stock (the “ Series A preferred stock ”) in connection with the acquisition of MPG Office Trust, Inc. and MPG Office, L.P. (together, “ MPG ”). Brookfield DTLA is a direct subsidiary of Brookfield DTLA Holdings LLC, a Delaware limited liability company (“ DTLA Holdings ”, and together with its affiliates excluding the Company and its subsidiaries, the “ Manager ”). DTLA Holdings is an indirect partially-owned subsidiary of Brookfield Property Partners L.P. (“ BPY ”), an exempted limited partnership under the Laws of Bermuda, which in turn is the flagship commercial property entity wholly-owned by Brookfield Corporation, a corporation under the laws of Ontario, and the primary vehicle through which Brookfield Corporation invests in real estate on a global basis. On December 9, 2022, Brookfield Asset Management Inc. (“ BAM ”) completed a distribution and listing of 25% of its asset management business — Brookfield Asset Management Ltd. The global alternative asset management business is now owned and operated through Brookfield Asset Management ULC. BAM is now known as Brookfield Corporation. As of December 31, 2022 and 2021, Brookfield DTLA owned Bank of America Plaza (“ BOA Plaza ”), EY Plaza, Wells Fargo Center–North Tower, Wells Fargo Center–South Tower, Gas Company Tower and 777 Tower, which are Class A office properties, and FIGat7th, a retail center nestled between EY Plaza and 777 Tower. Additionally, Brookfield DTLA Fund Properties II LLC (“ Fund II ”) has a noncontrolling interest in an unconsolidated real estate joint venture with Brookfield DTLA FP IV Holdings LLC (“ DTLA FP IV Holdings ”), a wholly‑owned sub sidiary of DTLA Holdings, which owns Beaudry (previously known as 755 South Figueroa), a residential development property. All of these properties are located in the Los Angeles Central Business District (the “LACBD”) in Downtown Los Angeles, which has long been a major office district for law firms, accounting firms and government agencies. Brookfield DTLA primarily receives its income from lease income, including tenant reimbursements, generated from the operations of its office and retail properties, and to a lesser extent, revenue from its parking garages. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements and related notes have been prepared in accordance with generally accepted accounting principles in the United States of America (“ GAAP ”). The consolidated balance sheets as of December 31, 2022 and 2021 include the accounts of Brookfield DTLA and subsidiaries in which it has a controlling financial interest. All material intercompany transactions have been eliminated in consolidation as of and for the years ended December 31, 2022, 2021 and 2020. Liquidity and Going Concern The consolidated financial statements have been prepared in accordance with GAAP on the basis that the Company will continue as a going concern. The going concern basis assumes that the Company will be able to meet its obligations and continue its operations one year from the date of the issuance of the Annual Report, which is dependent upon the Company’s ability to effectively implement plans related to the secured debt currently in default and the secured debt that matures within one year after the date of the issuance of the Annual Report, as discussed below (together, the “Maturing Loans”). As of the issuance date of this Annual Report, the Company had $2.3 billion of total consolidated debt, including $1,128.9 million and $400.0 million maturing in 2023 and 2024, respectively. Our substantial indebtedness requires us to use a material portion of our cash flow to service interest on our debt. Additionally, our consolidated debt also includes $288.9 million of mortgage and mezzanine debt secured by 777 Tower and $465.0 million of mortgage and mezzanine debt secured by Gas Company Tower that is in default. The Company has experienced a decline in occupancy since the onset of the COVID-19 pandemic as tenant leases expire which has resulted in a decrease in cash flow from operations and has negatively impacted the market values of the properties. Additionally, in order to attract or retain tenants needed to increase occupancy and sustain operations, the Company will need to spend a substantial amount on capital leasing costs (such as tenant improvements), however, the Company has limited amounts of liquidity to make these capital commitments. Furthermore, since the second quarter of 2022, uncertainty in the overall economy has increased due to the Federal Reserve materially raising interest rates to fight inflation. The increase and volatility in interest rates, not only increase the cost of our floating rate debt and the rates or spread on any refinancing we may seek, but it also materially increased the cost of interest rate protection agreements and interest rate risk hedging. We are required to obtain interest rate protection agreements with respect to the Company’s existing floating rate secured loans (and which we expect will be required to obtain for refinancing our maturing debt). The Company may be unable to extend or refinance the upcoming loan maturities at current terms and may be required to paydown a portion of the maturing debt in order to extend or refinance the loans. With the Company’s limited amount of unrestricted cash on hand, the Company’s ability to make any loan paydowns is limited without the sale of real estate assets, and we do not have any contracts to sell our properties as of the issuance date of this Annual Report. Nevertheless, if one or more of the properties securing our Maturing Loans were to be foreclosed upon by the lenders, as these secured debt obligations are not cross-collateralized with other properties in the portfolio, we believe we will have sufficient cash from our remaining properties and our Series B financings to meet our obligations to continue our operations within one year after the date of the issuance of the Annual Report. While these conditions and events raise substantial doubt about the Company’s ability to continue as a going concern, for the reasons stated in this paragraph and the further discussion below, management has determined that it is probable that the conditions and events raising substantial doubt about the entity’s ability to continue as a going concern have been alleviated, and that the Company will continue as a going concern during one year from the date of the issuance of the Annual Report. The Company’s ability to continue as a going concern is dependent upon the Company’s ability to effectively implement plans related to the Maturing Loans. Debt Maturing within One Year From the Date of the Issuance of the Annual Report: FIGat7th — In March 2023, the lender granted a short-term extension of the maturity date from March 1, 2023 to April 3, 2023. Brookfield DTLA is currently engaged in discussions with the lender to extend the debt secured by FIGat7th for three years. As of the issuance date of this Annual Report, we currently do not have a commitment from the lenders to extend the maturity dates of this loan for three years. If we are unable to extend the FIGat7th loan, then the lender would have the right to exercise its remedies under the FIGat7th loan, including, but not limited to, declaring the debt to be immediately payable and foreclosing on FIGat7th. Wells Fargo Center — South Tower — As of December 31, 2022, and the issuance date of this Annual Report, wholly-owned subsidiaries of the Company had and continue to have a secured mortgage loan of $265.4 million on Wells Fargo Center—South Tower (the “Wells Fargo Center South Loan”) that matures on November 4, 2023. We currently plan to operate the property and pay debt service on the loan through maturity. We will attempt to extend the Wells Fargo Center South Loan with the current lenders or refinance the loan with different lenders. As of the issuance date of this Annual Report, we currently do not have a commitment from the lenders to extend the maturity dates of this loan. Additionally, we do not know what paydown may be required upon any refinancing of this loan, and therefore are not certain if we will have sufficient unrestricted cash on hand to make any such paydown. We do not currently have any commitment for additional capital to the extent any paydown requires cash in excess of the unrestricted cash on hand that we would be able or willing to allocate to such paydown. If we are unable to negotiate a loan modification with the current lenders or refinance the Well Fargo Center South Loan, then the lenders would have the right to exercise the remedies under the WFC South Loan, including, but not limited to, declaring the debt to be immediately payable and foreclosing on Wells Fargo Center – South Tower. Wells Fargo Center — North Tower Loans — As of December 31, 2022, and the issuance date of this Annual Report, wholly-owned subsidiaries of the Company (the “WFC North Borrowers”) had and continue to have secured loans of $500.0 million on Wells Fargo Center — North Tower, comprised of a $400.0 million mortgage loan, a $65.0 million mezzanine loan, and a $35.0 million junior mezzanine loan (collectively, the “WFC North Loans”). The maturity date of the WFC North Loans is October 9, 2023. In March 2023, the lender of the junior mezzanine loan agreed, subject to certain conditions, to forbear from exercising any remedy as a result of non-payment of the monthly debt service payment for March due on the junior mezzanine loan. The amount of cash the property currently generates from its operations is not sufficient to cover the upcoming debt obligations, leasing costs and capital expenditures with respect to Wells Fargo Center – North Tower. The WFC North Borrowers will not have sufficient available cash to make the interest payments on the WFC North Loans. The WFC North Borrowers will attempt to negotiate favorable amendments to the WFC North Loans and/or interest payment forbearances from the current lenders. If WFC North Borrowers are unsuccessful, the forbearance agreement with any lender lapses, and the interest payments are not made on the due date or if the mechanics liens currently existing on the asset are not timely discharged, then the lenders would have the right to exercise the remedies under the WFC North Loans, including, but not limited to, declaring the debt to be immediately payable and foreclosing on Wells Fargo Center – North Tower. EY Plaza — As of December 31, 2022, and the issuance date of this Annual Report, wholly-owned subsidiaries of the Company (the “EY Borrowers”) have secured loans of $305.0 million on EY Plaza, comprised of a $275.0 million mortgage loan and a $30.0 million mezzanine loan (collectively, the “EY Plaza Loans”). The maturity date of the EY Plaza Loans is October 9, 2023, with two one-year extension options. The EY Borrowers have received notices from certain tenants of EY Plaza stating that they are not in compliance with the terms of their respective lease agreements. The amount of cash the EY Borrowers currently generate from operations is not sufficient to cover its upcoming debt obligations, leasing costs and capital expenditures with respect to EY Plaza. It is unlikely that they will be able to obtain additional sources of liquidity or negotiate favorable amendments to the EY Plaza Loans or interest payment forbearances from the lenders in time. In this case, the EY Borrowers will not have sufficient operating cash flow to cure the non-compliance with the leases or discharge mechanics liens currently existing on the asset or make the April 2023 interest payments on the EY Plaza Loans. If the lenders send the EY Borrowers a notice of default to cure the non-compliance with the leases and the EY Borrowers are unsuccessful in curing the defaults during the available cure period or discharging the mechanics liens within the time required under the EY Plaza Loans, or the interest payment is not made on the due date of April 7, 2023, then the lenders would have the right to exercise the remedies under the EY Plaza Loans, including, but not limited to, declaring the debt to be immediately payable and foreclosing on EY Plaza. Debt in Default: 777 Tower Loans — As previously disclosed in our public filings, wholly-owned subsidiaries of the Company (the “777 Borrowers”) have secured loans of $318.6 million on 777 Tower, comprised of a $268.6 million mortgage loan and a $50.0 million mezzanine loan (collectively, the “ 777 Tower Loans ”). There was $288.9 million outstanding under the 777 Tower Loans as of December 31, 2022 and the issuance date of this Annual Report. In November 2022, the 777 Borrowers did not obtain an Interest Rate Protection Agreement (as defined in the underlying loan agreements) which constitutes an Event of Default (as defined in the underlying loan agreements). Wells Fargo Bank, National Association, as Administrative Agent for the lenders under the mortgage loan, and Mesa West Core Lending Fund, LLC, have notified the 777 Borrowers that defaults and potential defaults have occurred under the loan and that the lenders have the right to exercise their remedies under the 777 Tower Loans, including, without limitation, declaring the debt to be immediately due and payable and foreclosing on 777 Tower. As a result of the default under the mortgage loan, an Event of Default (as defined in the underlying loan agreements) has occurred and is continuing under the mezzanine loan. As of the issuance date of this Annual Report, the lenders have not exercised any of their remedies under the 777 Tower Loans. In addition, as of the issuance date of this Annual Report, the 777 Borrowers have not paid the March 2023 interest expense accrued on the mezzanine loan and currently do not intend to pay this or the future interest expense accrued on the 777 Tower Loans. Certain mechanics’ liens have also been filed against the asset, and if the 777 Borrowers do not discharge such liens within the time required under the 777 Tower Loans, an additional Event of Default on these loans will occur. Gas Company Tower Loans — As previously disclosed in our public filings, wholly-owned subsidiaries of the Company (the “Gas Company Borrowers”) have secured loans of $465.0 million on Gas Company Tower, comprised of a $350.0 million mortgage loan, a $65.0 million mezzanine loan and a $50.0 million junior mezzanine loan (collectively, the “ Gas Company Tower Loans ”). There was $465.0 million outstanding under the Gas Company Tower Loans as of December 31, 2022 and the issuance date of this Annual Report. The initial maturity date of the Gas Company Tower Loans was February 9, 2023, with three one-year extension options. Gas Company Borrowers did not exercise the option to extend the maturity of the loans and therefore, subsequent to the current year-end period, on February 9, 2023, the Gas Company Tower Loans matured, and an Event of Default (as defined in the underlying loan agreements) has occurred and is continuing. The lenders may exercise their remedies under the loans, including foreclosing on Gas Company Tower. As of the issuance date of this Annual Report, the lenders have not exercised any of their remedies under the Gas Company Tower Loans, and have transferred these loans to a special servicer. In addition, as of the issuance date of this Annual Report, the Gas Company Borrowers have not paid the March 2023 interest expense accrued on the mezzanine loan and currently do not intend to pay this or the future interest expense accrued on the Gas Company Tower Loans. There are several potential outcomes with respect to 777 Tower Loans and Gas Company Tower Loans, including negotiating a modification to the loans, refinancing the loans, or consensual short sales. However, there is no assurance that we will be successful in achieving any of these potential outcomes. If unsuccessful, the lenders would retain their right to exercise the remedies under the loans including, but not limited to, declaring the debt to be immediately payable and foreclosing on the assets. Determination of Controlling Financial Interest We consolidate entities in which Brookfield DTLA is considered to be the primary beneficiary of a variable interest entity (“ VIE ”) or has a majority of the voting interest in the entity. We are deemed to be the primary beneficiary of a VIE when we have (i) the power to direct the activities of the VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE. We do not consolidate entities in which the other parties have substantive kick-out rights to remove the Company’s power to direct the activities, and most significantly impacting the economic performance, of the VIE. In determining whether we are the primary beneficiary, we consider factors such as ownership interest, management representation, authority to control decisions, and contractual and substantive participating rights of each party. Brookfield DTLA Fund Properties II LLC. The Company earns a return through an indirect investment in Fund II. DTLA Holdings, the parent of Brookfield DTLA, owns all of the common interest in Fund II. Brookfield DTLA has an indirect preferred stock interest in Fund II and its wholly-owned subsidiary is the managing member of Fund II. The Company determined that Fund II is a VIE. As a result of having the power to direct the significant activities of Fund II that impact Fund II’s economic performance, and the obligation to absorb losses of, or the right to receive benefits from, Fund II that could potentially be significant to the Fund II , Brookfield DTLA meets the two conditions for being the primary beneficiary of Fund II. We consolidate entities through which we conduct substantially all of our business, and own, directly and through subsidiaries, substantially all of our asse ts. As of December 31, 2022, these consolidated VIEs had in aggregate total consolidated assets of $2.5 billion (of which $2.2 billion is related to investments in real estate) and total consolidated liabilities of $2.4 billion (of which $2.3 billion is related to non-recourse debt secured by our office and retail properties). The Company is obligated to repay substantially all of the liabilities of our consolidated VIEs, except for the non-recourse secured debt. Investment in Unconsolidated Real Estate Joint Venture. Fund II has a noncontrolling interest in a joint venture, Brookfield DTLA Fund Properties IV LLC (“ Fund IV ”), with DTLA FP IV Holdings. The Company determined that the joint venture is a VIE mainly because its equity investment at risk is insufficient to finance the joint venture’s activities without additional subordinated financial support. While the joint venture meets the definition of a VIE, Brookfield DTLA is not its primary beneficiary as the Company lacks the power through voting or similar rights to direct the activities that most significantly impact the joint venture’s economic performance. Therefore, the Company accounts for its ownership interest in the joint venture under the equity method. Under the equity method of accounting, we initially recognize Fund II’s investment in the joint venture at the fair value of the assets contributed, and subsequently adjust the joint venture’s carrying amount for Fund II’s share of the joint venture’s redemption value and other-than-temporary impairments (if any). The redemption value represents the amount to be distributed to Fund II in the event of termination or liquidation of the joint venture. Adjustments to the joint venture’s carrying amount to its redemption value are recorded in the consolidated statements of operations as equity in earning (loss) of unconsolidated real estate joint venture. As of December 31, 2022, the Company’s ownership interest in the unconsolidated real estate joint venture was 22.1%, a decrease from 33.6% as of December 31, 2021 as a result of additional capital contributed by DTLA FP IV Holdings during the year ended December 31, 2022. The liabilities of the joint venture may only be settled using the Beaudry assets and are not recourse to the Company. Brookfield DTLA’s exposure to its investment in the joint venture is limited to its investment balance and the Company has no obligation to make future contributions to the joint venture. Pursuant to the operating agreement of the joint venture, DTLA FP IV Holdings may be required to fund additional amounts for the Beaudry development, routine operating costs, and guaranties or commitments of the joint venture. Impact of COVID-19 pandemic Leasing activity and occupancy in the LACBD has not caught up to pre-pandemic levels as businesses consider how to best implement return-to-office plans and transition to hybrid or remote work policies. Office tenants are still active in the leasing markets but are more selective in making real estate decisions. Relocating and renewing tenants are pursuing space efficiencies which are often accompanied by size reduction and a focus on highest quality assets. Retail tenants have continued to benefit from higher visitor traffic since COVID mandates throughout California were lifted in June 2021 (the “ Reopening ”) but short of pre-pandemic levels. During the years ended December 31, 2022 and 2021, the Company recorded favorable lease income adjustments of $0.2 million and $1.1 million, respectively, as a result of the Reopening with various retail tenants benefited from higher visitor traffic, as well as office employees returning to offices. In contrast, during the year ended December 31, 2020, due to the uncertainties posed to our retail and office tenants by the restrictions implemented to combat the spread of COVID-19 pandemic, adjustments of $8.4 million were recognized to lower our lease income related to certain leases where we determined that the collection of future lease payments was not probable. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods presented. The Company bases its estimates on historical experience and on various other assumptions that it considers to be reasonable under the circumstances, including the impact of events such as COVID-19 pandemic and the measures taken to combat the spread of the pandemic. For example, estimates and assumptions have been made with respect to the useful lives of assets, recoverable amounts of receivables, impairment of long-lived assets and the fair value of debt. Actual results could ultimately differ from such estimates. Significant Accounting Policies Investments in Real Estate, Net— Land is carried at cost. Buildings are recorded at historical cost and are depreciated on a straight‑line basis over their estimated useful lives of 60 years. Building improvements are recorded at historical cost and are depreciated on a straight-line basis over their estimated useful lives, ranging from 5 years to 25 years. Land improvements are combined with building improvements for financial reporting purposes and are carried at cost. Tenant improvements that are determined to be assets of Brookfield DTLA are recorded at cost and amortized on a straight‑line basis over the shorter of their estimated useful life or the applicable lease term, with the related amortization reported as part of depreciation and amortization expense in the consolidated statements of operations. Depreciation expense related to investments in real estate during the years ended December 31, 2022, 2021 and 2020 totaled $87.3 million, $87.3 million and $87.5 million, respectively, and is reported as part of depreciation and amortization expense in the consolidated statements of operations. The Company capitalizes costs associated with capital expenditures and tenant improvements. Capitalization of costs is required while activities are ongoing to prepare an asset for their intended use. Costs incurred after the capital expenditures and tenant improvement projects are substantially complete and ready for its intended use are expensed as incurred. Expenditures for repairs and maintenance, real estate taxes and insurance are expensed as incurred. Impairment Review— Investments in long-lived assets, including our investments in real estate, are individually reviewed for impairment quarterly or if events or changes in circumstances indicate that the carrying amount of the long-lived assets might not be recoverable, which is referred to as a “triggering event” or an “impairment indicator.” Indicators of potential impairment include the following: • Change in strategy resulting in an increased or decreased holding period; • Lower stabilized occupancy levels; • Deterioration of the rental market as evidenced by rent decreases, record-high capital expense obligations, and/or elevated concessions such as tenant improvement, over numerous quarters; • Properties with recent impairment issues that are adjacent to or located in the same submarket; • Significant decrease in properties’ market price; • Tenant financial problems; and/or • Comparable market barriers of competitors in the same submarket. The carrying amount of long-lived assets to be held and used is deemed not recoverable if it exceeds the sum of undiscounted cash flows expected to result from the use and eventual disposition of the asset. Triggering events or impairment indicators for long-lived assets to be held and used are assessed by property and include significant fluctuations in estimated net operating income, changes in leasing activity, significant near-term lease expirations, current and historical operating and/or cash flow losses, rental rates, and other market factors. When conducting the impairment review of our investments in real estate, we assessed the expected undiscounted cash flows based upon numerous factors. These factors include, but are not limited to, the credit quality of our tenants, available market information, known trends, current market/economic conditions that may affect the asset, and historical and forecasted financial and operating information relating to the property, such as net operating income, leasing activity statistics, vacancy projections, renewal percentage, and rent collection rates. If the undiscounted cash flows expected to be generated by a property are less than its carrying amount, the Company determines the fair value of the property and an impairment loss would be recorded to write down the carrying amount of such property to its fair value. During the year ended December 31, 2022 , the Company recognized impairment charges the year ended December 31, 2022 , in light of the evolving office rental business environment and the slowdown in economic growth in the near term because of rising interest rates, decreases in our property valuations may lead to additional impairment charges in our portfolio in the near future. In comparison, during the same period in 2021 , none of Brookfield DTLA’s real estate prop erties were impaired. See “ Note 12 - Fair Value Measurements ” for a detailed discussion of the factors that were considered when determining the fair value of Wells Fargo Center–South Tower. The Company’s investment in its unconsolidated real estate joint venture is also reviewed for impairment quarterly or when conditions exist that may indicate that the decrease in the carrying amount of the investment has occurred and is other than temporary. Triggering events or impairment indicators for the Company’s unconsolidated real estate joint venture include its recurring operating losses, and other events such as significant changes in construction costs, estimated completion dates, intended holding periods, and other factors related to the Beaudry development. Upon determination that an other-than-temporary impairment has occurred, a write-down is recognized to reduce the carrying amount of the investment to its estimated fair value. Based on its review, management concluded that Brookfield DTLA’s investment in its unconsolidated real estate joint venture was not i mpaired as of December 31, 2022 and 2021. Cash and Cash Equivalents— Cash and cash equivalents include cash, deposits with major commercial banks, and short-term investments with an original maturity of three months or less. Restricted Cash— Restricted cash consists primarily of deposits for leasing costs, tenant improvements and capital expenditures; real estate taxes and insurance reserves, debt service reserves and other items as required by certain of the Company’s secured debt agreements. It also includes cash accounts controlled by loan administrative agents or lenders pursuant to cash sweep events associated with the loans secured by certain properties. S ee Note 5 — Secured Debts, Net for details. Rents, Deferred Rents and Other Receivables, Net — Deferred rents receivable represents the amount by which straight-line rental revenue exceeds rents currently billed in accordance with lease agreements. The Company offers various types of lease incentives to induce tenants to sign a lease, including free rent lease periods, and various allowances such as cash paid to tenants and for tenant improvements that are the assets of the tenants. The Company records these allowances as tenant inducements, which are included in rents, deferred rents and other receivables in the consolidated balance sheets and amortized as a reduction to lease income on a straight-line basis over the term of the related lease. See Note 3—“Rents, Deferred Rents and Other Receivables, Net.” Under ASC Topic 842, Leases , Brookfield DTLA must assess on an individual lease basis whether it is probable that the Company will collect the future lease payments throughout the term of the lease. The Company considers the tenant’s payment history and current credit status when assessing collectibility. If the collectibility of the lease payments is probable at lease commencement, the Company recognizes lease income over the term of the lease on a straight-line basis. During the term of the lease, Brookfield DTLA monitors the credit quality and any related material changes of our tenants by (i) reviewing financial statements of the tenants that are publicly available or that are required to be delivered to us pursuant to the applicable lease, (ii) monitoring news reports regarding our tenants and their respective businesses, (iii) monitoring the tenant’s payment history and current credit status, and (iv) analyzing current economic trends, and reasonable and supportable forecasts of future economic conditions. When collectibility is not deemed probable at the lease commencement date, the Company’s lease income is constrained to the lesser of (i) the income that would have been recognized if collection were probable, or (ii) the lease payments that have been collected from the lessee. If the collectibility assessment changes to probable after the lease commencement date, any difference between the lease income that would have been recognized if collectibility had always been assessed as probable and the lease income recognized to date is recognized as a current-period adjustment to lease income. If the collectibility assessment changes to not probable after the lease commencement date, lease income is reversed to the extent that the lease payments that have been collected from the lessee are less than the lease income recognized to date. Changes to the collectibi lity of operating leases are recorded as adjustments to lease income in the consolidated statements of operations. As the result of our assessment of the collectibility of amounts due under leases with our tenants, the Company recognized a recovery (reduction) of lease income totaling $0.2 million, $1.1 million and $(8.4) million, respectively, during the years ended December 31, 2022, 2021 and 2020. Intangible Assets and Liabilities, Net— Brookfield DTLA evaluates each acquisition of real estate to determine whether the integrated set of assets and activities meets the definition of a business and needs to be accounted for as a business combination. An acquisition of an integrated set of assets and activities that does not meet the definition of a business is accounted for as an asset acquisition. For acquisitions of real estates that are accounted for as business combinations, the Company allocates the acquisition consideration (excluding acquisition costs) to the assets acquired, liabilities assumed, noncontrolling interests, and any previously existing ownership interests at fair value as of the acquisition date. Acquired assets include tangible real estate assets consisting primarily of land, buildings, and tenant improvements, as well as identifiable intangible assets and liabilities, consisting primarily of acquired above- and below-market leases, in-place leases and tenant relationships. The principal valuation technique employed by Brookfield DTLA in determining the fair value of identified assets acquired and liabilities assumed is the income approach, which is then compared to the cost approach. Tangible values for investments in real estate are calculated based on replacement costs for like-type quality assets. Above- and below-market lease values are determined by comparing in-place rents with current market rents. In‑place lease amounts are determined by calculating the potential lost revenue during the replacement of the current leases in place. Leasing commissions and legal/marketing fees are determined based upon market allowances pro-rated over the remaining lease terms. Loans assumed in an acquisition are analyzed using current market terms for similar debt. The value of acquired above- and below-market leases are amortized and recorded as either a decrease (in the case of above-market leases) or an increase (in the case of below-market leases) to lease income in the consolidated statements of operations over the remaining terms of the associated leases. The value of tenant relationships is amortized as an expense over the expected term of the relationship, which includes an estimated probability of lease renewal. The value of in-place leases is amortized as an expense over the remaining life of the leases. Amortization of tenant relationships and in‑place leases is included as part of depreciation and amortization in the consolidated statements of operations. Deferred Charges, Net— Defer |
Rents, Deferred Rents and Other
Rents, Deferred Rents and Other Receivables, Net | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Rents, Deferred Rents and Other Receivables, Net | Rents, Deferred Rents and Other Receivables, Net Brookfield DTLA’s rents, deferred rents and other receivables are comprised of the following: As of December 31, 2022 2021 Straight-line and other deferred rents $ 114,414 $ 108,913 Tenant inducements receivable 31,689 28,445 Tenant receivables 2,406 3,316 Other receivables 1,588 362 Rents, deferred rents and other receivables, gross 150,097 141,036 Less: accumulated amortization of tenant inducements 14,650 15,411 Rents, deferred rents and other receivables, net $ 135,447 $ 125,625 See Note 2 “Basis of Presentation and Summary of Significant Accounting Policies — Significant Accounting Policies — Rents, Deferred Rents and Other Receivables, Net” for a discussion of assessments regarding the collectibility of rents and deferred rent receivables and related adjustments made during the year ended December 31, 2022, 2021 and 2020. |
Intangible Assets and Liabiliti
Intangible Assets and Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Liabilities | Intangible Assets and Liabilities Brookfield DTLA’s intangible assets and liabilities are summarized as follows: As of December 31, 2022 2021 Intangible Assets In-place leases $ 32,678 $ 41,422 Tenant relationships 2,151 6,432 Above-market leases 8,231 16,734 Intangible assets, gross 43,060 64,588 Less: accumulated amortization 32,993 48,565 Intangible assets, net $ 10,067 $ 16,023 Intangible Liabilities Below-market leases $ 18,670 $ 33,416 Less: accumulated amortization 15,765 28,961 Intangible liabilities, net $ 2,905 $ 4,455 A summary of the effect of amortization/accretion of intangible assets and liabilities reported in the consolidated financial statements is as follows: For the Year Ended December 31, 2022 2021 2020 Lease income $ 141 $ (206) $ (1,331) Depreciation and amortization expense $ 3,562 $ 4,267 $ 6,217 As of December 31, 2022, the estimated amortization/accretion of intangible assets and liabilities in future periods is as follows: In-Place Other Intangible 2023 $ 1,546 $ 1,800 $ 730 2024 920 1,752 280 2025 840 1,112 265 2026 585 443 246 2027 115 3 154 Thereafter 918 33 1,229 Total future amortization/accretion of intangibles $ 4,924 $ 5,143 $ 2,905 |
Secured Debt, Net
Secured Debt, Net | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Secured Debt, Net | Secured Debt, Net Brookfield DTLA’s secured debt is as follows as of December 31, 2022: Maturity Date Contractual Interest Rates Principal Amount 2022 2021 Variable-Rate Loans: Wells Fargo Center–North Tower 10/9/2023 SOFR + 1.76% $ 400,000 $ 400,000 Wells Fargo Center–North Tower 10/9/2023 SOFR + 4.11% 65,000 65,000 Wells Fargo Center–North Tower (1) 10/9/2023 SOFR + 5.11% 35,000 35,000 Wells Fargo Center–South Tower (2) 11/4/2023 SOFR + 1.80% 265,447 260,796 EY Plaza 10/9/2023 LIBOR + 2.86% 275,000 275,000 EY Plaza 10/9/2023 LIBOR + 6.85% 30,000 30,000 Gas Company Tower (4) 2/9/2023 LIBOR + 1.89% 350,000 350,000 Gas Company Tower (4) 2/9/2023 LIBOR + 5.00% 65,000 65,000 Gas Company Tower (4) 2/9/2023 LIBOR + 7.75% 50,000 50,000 Total variable-rate loans 1,535,447 1,530,796 Fixed-Rate Debt: BOA Plaza 9/1/2024 4.05% 400,000 400,000 FIGat7th (5) 3/1/2023 3.88% 58,500 58,500 Total fixed-rate debt 458,500 458,500 Total secured debt, excluding debt in default 1,993,947 1,989,296 Debt in Default: 777 Tower (3) 12/30/2022 LIBOR + 1.60% 243,594 231,842 777 Tower (3) 12/30/2022 LIBOR + 4.15% 45,345 43,158 Total debt in default 288,939 275,000 Total secured debt 2,282,886 2,264,296 Less: unamortized debt financing costs 3,313 8,375 Total secured debt, net $ 2,279,573 $ 2,255,921 __________ (1) Brookfield Corporation owns a significant interest in a company whose subsidiary is the lender of this loan. See Note 13—“Related Party Transactions” for details. (2) As of December 31, 2022, a future advance amount of $24.6 million is available under this loan that can be drawn to fund approved leasing costs (as defined in the underlying loan agreement), including tenant improvements and inducements, leasing commissions, and common area improvements. (3) Starting December 2022, the mortgage and mezzanine loans secured by 777 Tower were in default for failing to enter into interest rate cap contracts. The lender may accelerate the maturity date of the debt. See “Debt Compliance” below for details . (4) The Company did not exercise the option to extend the maturity of the loans secured by Gas Company Tower and therefore on February 9, 2023, the Gas Company Tower Loans matured and, since this loan has not been repaid, an event of default has occurred and is continuing. See “Debt Compliance” below for details. (5) In March 2023, the lender granted a short-term extension of the maturity date from March 1, 2023 to April 3, 2023. The weighted average interest rate of the Company’s secured debt was 5.82% and 2.91% as of December 31, 2022 and 2021, respectively. As of December 31, 2022, the weighted average term to maturity of our debt (excluding debt in default as of December 31, 2022) was approximately one year. Debt Maturities The following table provides information regarding the Company’s minimum future principal payments due on the Company’s secured debt as of December 31, 2022: 2023 (2) $ 1,593,947 2024 400,000 Total $ 1,993,947 Principal loan balances with maturity date prior to December 31, 2022 (1) 288,939 Total secured debt $ 2,282,886 (1) Represents the aggregate principal balance as of December 31, 2022 of the mortgage and mezzanine loans secured by 777 Tower, which are in default. See “Debt Compliance” below for details . (2) Includes the aggregate principal balance of the mortgage and mezzanine loans secured by the Gas Company Tower of $465.0 million , which are in maturity default effective February 9, 2023. See “Debt Compliance” below for details . Excluding the debt secured by 777 Tower that are in default, as of December 31, 2022, $1,593.9 million of the Company’s secured debt may be prepaid without penalty (including principal balance of the mortgage and mezzanine loans secured by the Gas Company Tower of $465.0 million, which are in maturity default effective February 9, 2023), and $400.0 million may be defeased (as defined in the underlying loan agreements). Non-Recourse Carve Out Guarantees All of our secured debt is subject to “non-recourse carve out” guarantees that expire upon elimination of the underlying loan obligations. In connection with these loans, Brookfield DTLA entered into “non-recourse carve out” guarantees, which provide for these otherwise non-recourse loans to become partially or fully recourse against DTLA Holdings, if certain triggering events (as defined in the loan agreements) occur. Debt Compliance Mortgage and Mezzanine Debt in Default See Note 2 “Basis of Presentation and Summary of Significant Accounting Policies — Significant Accounting Policies — Liquidity and Going Concern” for detailed discussion of the 777 Tower and Gas Company Tower loans that are in currently default. Certain loan agreements held by Brookfield DTLA contain debt yield and debt service coverage ratios. As of December 31, 2022, excluding the secured debt that are in default as of the issuance date of this Annual Report (the 777 Tower Loans and Gas Company Tower Loans), Brookfield DTLA was meeting or exceeding these financial ratios, with the exception of the loans secured by Wells Fargo Center—South Tower and Wells Fargo Center—North Tower that did not meet their respective minimum debt yield ratio. Wells Fargo Center–South Tower — Pursuant to the terms of the Wells Fargo Center–South Tower mortgage loan agreement, effective Septemb er 2020, a cash sweep event commenced as the borrower’s debt yield ratio was under the minimum debt yield ratio. While this does not constitute an Event of Default under the terms of the mortgage loan agreement, any excess operating cash flows are currently swept to a cash account controlled by the loan administrative agent. Funds within this account shall be applied to the borrower's approved operating expenses, capital expenditures and leasing costs; property taxes and insurance; interest and any other amounts due and payable under the loan and interest rate cap contracts; and fees and expenses due to the loan administrative agent. Wells Fargo Center–North Tower — As of December 31, 2022, the borrower’s debt yield ratio was under the minimum debt yield ratio. While this does not constitute an Event of Default under the terms of the mortgage loan agreement, following the occurrence of such debt yield event, any excess operating cash flows are to be swept to a cash account controlled by the loan administrative agent. Funds within this account shall be applied to the borrower's approved operating expenses; tenant improvement costs and leasing commissions (capped at the leasing reserve deposit amount as specified in the loan agreements); property taxes and insurance; interest and any other amounts due and payable under the loan and interest rate cap contracts; reserve accounts; and fees and expenses due to the loan administrative agent. The cash sweep started in January 2022. London Interbank Offered Rate (“ LIBOR ”) Transition The chief executive of the United Kingdom Financial Conduct Authority (“ FCA ”), which regulates LIBOR, previously announced that the FCA intended to stop compelling banks to submit rates for the calculation of LIBOR after 2021. In response, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee (“ ARRC ”) which identified the SOFR as its preferred alternative to USD-LIBOR in derivatives and other financial contracts. In November 2020, the Intercontinental Exchange (“ ICE ”) Benchmark Administration Limited, the benchmark administrator for USD-LIBOR rates, proposed extending the publication of certain commonly-used USD-LIBOR settings until June 30, 2023 and the FCA issued a statement supporting such proposal. In connection with this proposal, certain U.S. banking regulators issued guidance strongly encouraging banks to generally cease entering into new contracts referencing USD-LIBOR as soon as practicable and in any event by December 31, 2021. As of December 31, 2022, we have outstanding variable debt and interest rate cap contracts that are indexed to LIBOR. All of the Company’s variable debt contracts contain fallback language that lay out the process through which a replacement rate can be identified or used when LIBOR is not available. The LIBOR interest rate index for the debt secured by Wells Fargo Center–North Tower and Wells Fargo Center–South Tower was replaced by SOFR in October 2022 and November 2022, respectively. |
Accounts Payable and Other Liab
Accounts Payable and Other Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Accounts Payable and Other Liabilities | Accounts Payable and Other Liabilities Brookfield DTLA’s accounts payable and other liabilities are comprised of the following: As of December 31, 2022 2021 Tenant improvements and inducements payable $ 23,644 $ 32,973 Unearned rent and tenant payables 27,136 31,249 Accrued capital expenditures and leasing commissions 6,162 7,422 Accrued expenses and other liabilities 14,087 5,968 Accounts payable and other liabilities $ 71,029 $ 77,612 |
Noncontrolling Interests
Noncontrolling Interests | 12 Months Ended |
Dec. 31, 2022 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests | Noncontrolling Interests Mezzanine Equity Component Mezzanine equity in the consolidated balance sheets is comprised of the following: Series A Preferred Stock. Brookfield DTLA is authorized to issue up to 10,000,000 shares of Series A preferred stock, $0.01 par value per share, with a liquidation preference of $25.00 per share. As of December 31, 2022 and 2021, 9,730,370 shares of Series A preferred stock were outstanding, of which 9,357,469 shares were issued to third parties and 372,901 shares were issued to DTLA Fund Holding Co., a subsidiary of DTLA Holdings. Series A Preferred Interest. The Series A preferred interest in Fund II is indirectly held by the Company through wholly-owned subsidiaries (subject to certain REIT accommodation preferred interests). Series A-1 Preferred Interest. The Series A-1 preferred interest is held by DTLA Holdings or wholly-owned subsidiaries of DTLA Holdings. Senior Participating Preferred Interest. Brookfield DTLA Fund Properties III LLC (“ Fund III ”), a wholly-owned subsidiary of DTLA Holdings, issued a senior participating preferred interest to DTLA Holdings in connection with the formation of Brookfield DTLA and the MPG acquisition. Series B Preferred Interest. At the time of the merger with MPG, DTLA Holdings made a commitment to contribute up to $260.0 million in cash or property to Fund II, which directly or indirectly owns the Brookfield DTLA properties. P ursuant to the amendments to the Limited Liability Company Agreement of Fund II effective November 2020, May 2022 and November 2022, such contribution commitment by DTLA Holdings increased by $50.0 million, $40.0 million and $75.0 million, respectively, to $425.0 million. A s of December 31, 2022, $88.6 million is available to the Company under this commitment for future funding. The Series B preferred interest in Fund II held by DTLA Holdings is senior to the interest in Fund II indirectly held by the Company and has a priority on distributions senior to the equity securities of such subsidiaries held indirectly by the Company and, as a result, rank senior to the Series A preferred stock. The Series B preferred interest in Fund II may limit the amount of funds available to the Company for any purpose, including for dividends or other distributions to holders of its capital stock, including the Series A preferred stock. The Series A-1 preferred interest, senior participating preferred interest and Series B preferred interest are held by a noncontrolling interest holder. Series A preferred stock, Series A-1 preferred interest, senior participating preferred interest and Series B preferred interest are classified as mezzanine equity because they are callable, and the holder of the Series A-1 preferred interest, senior participating preferred interest, Series B preferred interest, and some of the Series A preferred stock indirectly controls the ability to elect to redeem such instruments, through its controlling interest in the Company and its subsidiaries. See Note 8—“Mezzanine Equity.” Stockholders’ Deficit Component |
Mezzanine Equity
Mezzanine Equity | 12 Months Ended |
Dec. 31, 2022 | |
Temporary Equity Disclosure [Abstract] | |
Mezzanine Equity | Mezzanine Equity A summary of the change in mezzanine equity is as follows: Number of Series A Noncontrolling Interests Total Series A-1 Senior Series B Balance, December 31, 2019 9,730,370 $ 428,480 $ 418,029 $ 22,362 $ 185,352 $ 1,054,223 Issuance of Series B preferred interest 47,850 47,850 Dividends 18,548 18,548 Preferred returns 17,213 17,708 34,921 Redemption measurement adjustments (1,580) (1,580) Contributions from noncontrolling 777 777 Repurchases of noncontrolling interests (34,218) (34,218) Distributions to noncontrolling interests (1,146) (17,865) (19,011) Balance, December 31, 2020 9,730,370 447,028 435,242 20,413 198,827 1,101,510 Issuance of Series B preferred interest 25,500 25,500 Dividends 18,549 18,549 Preferred returns 17,212 16,063 33,275 Redemption measurement adjustments 1,028 1,028 Contributions from noncontrolling 629 629 Repurchases of noncontrolling interests (45,306) (45,306) Distributions to noncontrolling interests (879) (17,794) (18,673) Balance, December 31, 2021 9,730,370 465,577 452,454 21,191 177,290 1,116,512 Issuance of Series B preferred interest 47,564 47,564 Dividends 18,549 18,549 Preferred returns 17,212 14,432 31,644 Redemption measurement adjustments (8,248) (8,248) Contributions from noncontrolling 288 288 Repurchases of noncontrolling interests (46,975) (46,975) Distributions to noncontrolling interests (1,554) (9,825) (11,379) Balance, December 31, 2022 9,730,370 $ 484,126 $ 469,666 $ 11,677 $ 182,486 $ 1,147,955 Series A Preferred Stock As of December 31, 2022 , the Series A preferred stock is reported at its redemption value of $484.1 million calculated using the redemption price of $243.3 million plus $240.9 million of accumulated and unpaid dividends on such Series A preferred stock through December 31, 2022. No dividends w ere declared on the Series A preferred stock during the years ended December 31, 2022, 2021 and 2020. Dividends on the Series A preferred stock are cumulative, and therefore, will continue to accrue at an annual rate of $1.90625 per share. The Series A preferred stock does not have a stated maturity and is not subject to any sinking fund or mandatory redemption provisions. We may, at our option, redeem the Series A preferred stock, in whole or in part, for $25.00 per share, plus all accumulated and unpaid dividends on such Series A preferred stock up to and including the redemption date. Other than as required under the “Distribution Waterfall” in this footnote, there is no commitment or obligation on the part of Brookfield DTLA or DTLA Holdings to redeem or make distributions to the Series A preferred stock. The Series A preferred stock is not convertible into or exchangeable for any other property or securities of Brookfield DTLA. Noncontrolling Interests There is no commitment or obligation on the part of Brookfield DTLA or DTLA Holdings to redeem the Preferred Interests. Series A-1 Preferred Interest As of December 31, 2022, the Series A-1 preferred interest is reported at its redemption value of $469.7 million calculated using its liquidation value of $225.7 million plus $243.9 million of unpaid interest through December 31, 2022. Interest earned on the Series A-1 preferred interest is cumulative and accrues at an annual rate of 7.625%. Senior Participating Preferred Interest As of December 31, 2022, the senior participating preferred interest is reported at its redemption value of $11.7 million using the 4.0% participating interest in the residual value of BOA Plaza, EY Plaza and FIGat7th upon disposition or liquidation. Series B Preferred Interest As of December 31, 2022, the Series B preferred interest is reported at its redemption value of $182.5 million calculated using its liquidation value of $175.4 million plus $7.1 million of unpaid preferred returns on such Series B preferred interest through December 31, 2022. Brookfield DTLA is entitled to receive a market rate of return on its contributions, current ly 9.0% as of December 31, 2022. Distribution Waterfall Brookfield DTLA may, at its discretion, distribute all or a portion of its available cash (as defined in the limited liability company agreement of Fund II) in the following priority: (1) First to: Series B preferred interest unpaid preferred return Second to: Series B preferred interest unreturned preferred capital Third, proportionally in respect of Series A preferred interest unpaid preferred return (2) Series A-1 preferred interest unpaid preferred return (3) Fourth, proportionally in respect Series A preferred interest unreturned capital Series A-1 preferred interest unreturned capital (3) And fifth to: Common interests to Brookfield DTLA and DTLA Holdings (5) __________ (1) Cash available to Fund II arises from its interests in its investments. Fund II owns indirectly all of the interests in Gas Company Tower, Wells Fargo Center–South Tower, Wells Fargo Ce nter–North Tower, 777 Tower and an interest in the 755 South Figueroa development site which will decrease as capital is called to fund the development. See Note 1 “Organization and Description of Business” . In addition, Fund II owns 96% indirectly of the interests in EY Plaza, FIGat7th and BOA Plaza (the “Fund III Assets”). DTLA Holdings owns the remaining 4% interest in the Fund III Assets. The amounts due to DTLA Holdings on the senior participating preferred interest for its pre ferred return and unreturned capital in Fund III were fully paid as of December 31, 2015. All of Fund II’s interests in these assets are subject to certain REIT accommodation preferred interests. This waterfall may be effected by future equity issuances in respect of Fund II, Fund III, Fund IV, or their subsidiaries, and are subject to all of the indebtedness of the entities. (2) The Fund II Series A preferred interest is comprised of two parts, one is a preferred component with the analogous economic terms as the Company’s Series A Preferred Stock and a common component, which is junior to the preferred component of the Series A interest on analogous terms to the relationship between the Company’s Series A Preferred Stock and Common Stock. The Series A preferred interest is junior to the Fund II Series B preferred interest. See Note 7 “Noncontrolling Interests — Series B Preferred Interest” . Amounts paid in respect of the Fund II’s Series A preferred interest are generally available upon distribution to the Company for further distribution in respect of the Company’s Series A Preferred Stock, and, when and if distributed in respect of the Series A Preferred Stock, will be distributed first to accumulated and unpaid dividends and to reduce its unreturned liquidation capital. (3) DTLA Holdings in its capacity as the holder of the Series A-1 preferred interest can waive receipt of distributions that would otherwise be made to it in respect of the Series A-1 preferred interest and such amounts shall be paid instead to the Series A preferred interest or as otherwise provided by the subsequent provisions of the waterfall. Any amounts waived by DTLA Holdings shall not reduce the Series A-1 unpaid preferred return or unreturned capital. (4) Applicable if distribution is (a) in connection with a liquidating event or redemption or (b) at the election of Brookfield DTLA. (5) Based on the interests of the Series A and Series B interests of the Fund after repayment of the preferred capital portion of each of them, until the Senior A junior unreturned liquidation capital is reduced to zero. |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Deficit | Stockholders’ Deficit Common Stock Brookfield DTLA is authorized to issue up to 1,000,000 shares of common stock, $0.01 par value per share. As of December 31, 2022 and 2021, 1,000 shares of common stock were issued and outstanding . No dividends were declared on the Company’s common stock during the years ended December 31, 2022, 2021 and 2020. Brookfield DTLA has not paid any cash dividends on its common stock in the past. Any future dividends declared would be at the discretion of Brookfield DTLA’s board of directors and would depend on its financial condition, results of operations, contractual obligations and the terms of its financing agreements at the time a dividend is considered, and other relevant factors. Additional Paid-in Capital |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss A summary of the change in accumulated other comprehensive loss related to Brookfield DTLA’s derivative financial instruments designated as cash flow hedges is as follows: For the Year Ended December 31, 2022 2021 2020 Balance at beginning of year $ — $ — $ (2,341) Net unrealized gains arising during the year — — 562 Reclassification of losses related to — — 1,779 Net changes — — 2,341 Balance at end of year $ — $ — $ — |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | Financial Instruments Derivative Financial Instruments The following table presents the interest rate cap contracts pursuant to the terms of certain of its loan agreements as of December 31, 2022: Notional Strike Expiration Interest Rate Caps: Wells Fargo Center–North Tower $ 400,000 3.40 % (1) 10/15/2023 Wells Fargo Center–North Tower 65,000 3.40 % (1) 10/15/2023 Wells Fargo Center–North Tower 35,000 3.40 % (1) 10/15/2023 Wells Fargo Center–South Tower 263,219 2.87 % (1) 11/4/2023 EY Plaza 275,000 6.02 % (2) 10/15/2023 EY Plaza 30,000 6.02 % (2) 10/15/2023 Gas Company Tower (3) 350,000 4.00 % (2) 2/15/2023 Gas Company Tower (3) 65,000 4.00 % (2) 2/15/2023 Gas Company Tower (3) 50,000 4.00 % (2) 2/15/2023 Total derivatives not designated $ 1,533,219 __________ (1) The index used for these derivative financial instruments is 1-Month SOFR. (2) The index used for these derivative financial instruments is 1-Month LIBOR. (3) As of the issuance date of this Annual Report, debt secured by Gas Company Tower is in maturity default, and the related interest rate cap contracts expired. See Note 18 “Subsequent Event” for details. A summary of the fair value of Brookfield DTLA’s derivative financial instruments is as follows: Fair Value as of December 31, Balance Sheet Location 2022 2021 Derivatives not designated as Prepaid and other assets, net $ 10,262 $ 46 The following table presents the gain recorded on interest rate swaps for the year ended December 31, 2020: Gain Recognized Loss Reclassified Derivatives designated as cash flow hedging instruments: For the year ended: December 31, 2020 $ 562 $ (1,779) (1) __________ (1) Included in other expenses in the consolidated statements of operations. In September 2020, in conjunction with the extinguishment of our loans that previously encumbered EY Plaza, the Company terminated the related LIBOR-based interest rate swap contracts. Unrealized (loss) gain on interest rate cap contracts recognized in the consolidated statements of operations during the years ended December 31, 2022, 2021 and 2020 were $(1,832) thousand, $41 thousand and $(127) thousand, respectively. Other Financial Instruments Brookfield DTLA’s other financial instruments that are exposed to concentrations of credit risk consist primarily of bank deposits and rents receivable. Brookfield DTLA places its bank deposits with major commercial banks. Cash balances with any one institution may at times be in excess of the Federal Deposit Insurance Corporation-insured limit of $250,000. See Note 2 “Basis of Presentation and Summary of Significant Accounting Policies — Rents, Deferred Rents and Other Receivables, Net” for a discussion of assessments regarding the collectibility of rents and deferred rents receivable and related adjustments made during the year ended December 31, 2022, 2021 and 2020. |
Fair Value Measurements and Dis
Fair Value Measurements and Disclosures | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Disclosures | Fair Value Measurements and Disclosures ASC Topic 820, Fair Value Measurement , defines fair value and establishes a framework for measuring fair value. The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the “exit price”). ASC Topic 820 established a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three categories: • Level 1— Quoted prices (unadjusted) in active markets that are accessible at the measurement date. • Level 2— Observable prices that are based on inputs not quoted in active markets but corroborated by market data. • Level 3— Unobservable prices that are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. Brookfield DTLA utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs, to the extent possible, as well as consider counterparty credit risk in its assessment of fair value. Recurring Measurements— The fair value of Brookfield DTLA’s interest rate swap contracts was determined using widely accepted valuation techniques, including discounted cash flow analyses on the expected cash flows of the derivatives. These analyses reflect the contractual terms of the derivatives, including the period to maturity, and use observable market-based inputs, including interest rate curves and implied volatilities. The Company has incorporated credit valuation adjustments to appropriately reflect both our and the respective counterparty’s non‑performance risk in the fair value measurements. The interest rate swap contracts were terminated in September 2020. See Note 11 “Financial Instruments.” The fair value of interest rate cap contracts wa s $10,262 thousand and $46 thousand a s of December 31, 2022 and 2021, respectively. The Company classified them as Level 2 in the fair value hierarchy. Nonrecurring Measurements— As of December 31, 2022, assets measured at fair value on a nonrecurring basis on our consolidated balance sheets consisted of real estate assets and their associated intangible assets that have been written down to estimated fair value for impairment losses. Such impairment losses of $112.1 million were related to Wells Fargo Center — South Tower. In comparison, as of December 31, 2021, the Company did not have any assets or liabilities that are measured at fair value on a nonrecurring basis. Refer to Note 2—“Basis of Presentation and Summary of Significant Accounting Policies—Impairment Review” for further discussion. The Company uses the discounted cash flow method to assess the fair value of investments in real estate, including Wells Fargo Center — South Tower. All inputs used to value investments in real estate fall within Level 3 of the fair value hierarchy. Even if observable market data is available, such inputs are considered Level 3 if any significant data point used in the valuation process is not observable. When estimating the fair value of our investments in real estate, we assessed the expected undiscounted cash flows based upon numerous factors. These factors include, but are not limited to, available market information, known trends, current market/economic conditions that may affect the asset, and historical and forecasted financial and operating information relating to the property, such as net operating income, leasing activity statistics, vacancy projections, renewal percentage, and rent collection rates. Fair value is primarily determined by discounting the expected future cash flows, generally over a term of 10 years including a terminal value based on the application of a capitalization rate to estimated year 11 cash flows. The measurement of the fair value of the Company's investment is impacted by the discount rate and terminal capitalization rate utilized in the discounted cash flows model which are significant unobservable inputs. As of December 31, 2022, the discount and terminal capitalization rates used in the discounted cash flows model of Wells Fargo Center — South Tower, which was measured at fair value on a nonrecurring basis, were 9.3% and 5.8%, respectively. The following table presents the carrying amounts of assets that were still held and had fair value adjustments measured on a nonrecurring basis as of December 31, 2022: Total Level 1 Level 2 Level 3 Investments in Real Estate Assets $ 311,066 $ — $ — $ 311,066 Disclosures about Fair Value of Financial Instruments— Secured debt — The Company estimates the fair value of its debt by calculating the credit-adjusted present value of principal and interest payments for each loan. The calculation incorporates observable market interest rates (Level 2 inputs), assumes that each loan will be outstanding until maturity, and excludes any options to extend the maturity date of the loan available per the terms of the loan agreement, if any. The table below presents the estimated fair value and carrying value of the Company’s secured debt included in liabilities: As of December 31, 2022 2021 Fair Value $ 2,265,201 $ 2,263,160 Carrying value $ 2,279,573 $ 2,530,921 Other financial instruments — |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Management Agreements Certain subsidiaries of Brookfield DTLA have entered into arrangements with the Manager, pursuant to which the Manager provides property management and various other services. The following table presents the basis of fees incurred to the Manager and Brookfield affiliates during the years ended December 31, 2022, 2021 and 2020: Fee Type Affiliate Fee Description Property management The Manager 2.75% of rents collected (as defined in the management agreements) Asset management BPY and Brookfield Corporation 0.75% of DTLA Holdings’ invested equity in Brookfield DTLA’s properties Leasing The Manager and Brookfield affiliates 1.00% to 4.00% of expected rents, depending on the terms of the lease and whether a third-party broker was paid a commission for the transaction Construction management The Manager 3.00% of hard and soft construction costs Development management Affiliate of the Manager 3.00% of hard and soft construction costs Entitlement Affiliate of the Manager 20.00% of the entitlement costs incurred by BOA Plaza, if the entitlement budget is less than $3,000,000 A summary of fees and costs incurred by the applicable Brookfield DTLA subsidiaries under these arrangements is as follows: For the Year Ended December 31, 2022 2021 2020 Property management $ 8,045 $ 8,037 $ 8,035 Asset management (2) $ 6,346 $ 6,166 $ 6,040 Leasing $ 1,549 $ 1,607 $ 2,105 Construction management $ 1,148 $ 400 $ 3,239 Development management (1) $ 1,230 $ 1,881 $ 1,007 Entitlement $ 111 $ 639 $ — General, administrative and reimbursable expenses $ 3,904 $ 2,807 $ 2,492 __________ (1) Amounts presented are calculated by applying the Company’s ownership interest percentage in the unconsolidated real estate joint venture as of year end to the costs incurred during the year. (2) As of December 31, 2022 and 2021, asset management fee payables totaled $3.2 million and $0.0 million, respectively. Expenses incurred under these arrangements are included in rental property operating and maintenance expense in the consolidated statements of operations, with the exception of asset management fee which is included in other expenses. Leasing fees are capitalized as deferred charges, construction management and entitlement fees are capitalized as part of investments in real estate, and development management fees are capitalized and included in the investment in unconsolidated real estate joint venture in the consolidated balance sheets. Insurance Agreements Properties held by certain Brookfield DTLA subsidiaries and affiliates are covered under insurance policies entered into by the Manager that provide, among other things, all risk property and business interruption coverage for BPY’s commercial portfolio with a portfolio shared aggregate limit of $2.5 billion per occurrence as well as an aggregate limit of $500.0 million of earthquake insurance for California, and $350.0 million of flood and weather catastrophe insurance. In addition, Brookfield DTLA’s properties are covered by a terrorism insurance policy that provides a maximum of $4.0 billion per occurrence for all of BPY’s properties located in the United States. Brookfield DTLA is in compliance with the contractual obligations regarding terrorism insurance contained in such policies. Insurance premiums for Brookfield DTLA’s properties are paid by the Manager. Brookfield DTLA reimburses the Manager for the amount of fees and expenses related to such policies that have been allocated to the Company’s properties as determined by the Manager in its reasonable discretion taking into consideration certain facts and circumstances, including the value of the Company’s properties. A summary of costs incurred by the applicable Brookfield DTLA subsidiaries and affiliates under this arrangement, which are included in rental property operating and maintenance expense in the consolidated statements of operations, is as follows: For the Year Ended December 31, 2022 2021 2020 Insurance expense (1) $ 12,905 $ 12,473 $ 11,836 (1) An affiliate of Brookfield Corporation secures insurance policies for the Company through third-party brokers and insurance companies and charges the Company a fee for the services it provides. Fees charged vary but will not exceed 2.50% of the total net insurance premiums of the Company and its covered propert ies. Effective November 1, 2021, this affiliate of Brookfield Corporation ceased charging such fee. Fees incurred for these services totaled $244 thousand and $282 thousand during the years ended December 31, 2021 and 2020, respectively. Additionally, the Company’s terrorism insurance coverage is purchased through a captive facility that is an affiliate of BPY. Insurance premiums incurred totaled $127 thousand, $129 thousand and $149 thousand during the years ended December 31, 2022, 2021 and 2020, respectively. Other Related Party Transactions with Brookfield Corporation Affiliates A summary of the impact of other related party transactions with Brookfield Corporation affiliates on the Company’s consolidated statements of operations is as follows: For the Year Ended December 31, 2022 2021 2020 Lease income (1) $ 14,315 $ 13,343 $ 11,443 Parking revenue (1) $ 988 $ 1,001 $ 1,317 Interest and other revenue $ — $ — $ 51 Rental property operating and maintenance expense (2) $ — $ 318 $ 577 Other expenses $ — $ — $ 90 Interest expense (3)(4) $ 3,087 $ 2,201 $ 1,982 __________ (1) In September 2019, Brookfield Corporation acquired a significant interest in Oaktree Capital Group, LLC (“ Oaktree ”), an existing tenant at Wells Fargo Center–North Tower. Lease income and parking revenue from Oaktree and its subsidiaries have been reported as related party transactions since the date of acquisition by Brookfield Corporation. (2) Amounts presented are for purchases of chilled water for air conditioning at one of the Company’s properties supplied by an affiliate of Brookfield Corporation. In July 2021, such supplier was acquired by third parties. (3) A subsidiary of Oaktree is the lender of the $35.0 million mezzanine loan secured by Wells Fargo Center–North Tower. Interest payable to the lender totaled $146 thousand and $84 thousand as of December 31, 2022 and 2021, respectively, and is reported as part of accounts payable and other liabilities in the consolidated balance sheets. See Note 5—“Secured Debt, Net.” Interest expense on this loan has been reported as a related party transaction since the date of acquisition by Brookfield Corporation. (4) In February 2021, Brookfield Corporation purchased $18.2 million of commercial mortgage-backed securities (“ CMBS ”) secured by the Gas Company Tower loans in the open market. The CMBS are payable in monthly installments over a two-year period at a floating interest rate of one-month LIBOR + 2.35%. The transaction was conducted on an arm’s length basis at fair market value. In September 2021, this CMBS was s old to Brookfield Corporation Reinsurance Ltd., an affiliate of Brookfield Corporation. During the years ended December 31, 2022 and 2021, the Company incurred interest expense of $712 thousand and $391 thousand, respectively, on this CMBS to Brookfield Corporation. The Manager or its affiliates may incur certain out-of-pocket expenses on behalf of the Company and pass through such expenses at cost to the Company. |
Future Minimum Base Rents
Future Minimum Base Rents | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Future Minimum Base Rents | Future Minimum Base Rents Brookfield DTLA leases space to tenants primarily under non-cancelable operating leases that generally contain provisions for payment of base rent plus reimbursement of certain operating expenses. The table below presents the undiscounted cash flows for future minimum base rents to be received from tenants under executed non-cancelable office and retail leases as of December 31, 2022: 2023 $ 151,283 2024 144,415 2025 131,058 2026 115,960 2027 88,806 Thereafter 471,023 Total future minimum base rents $ 1,102,545 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation Brookfield DTLA and its subsidiaries may be subject to pending legal proceedings and litigation incidental to its business. After consultation with legal counsel, management believes that any liability that may potentially result upon resolution of such matters is not expected to have a material adverse effect on the Company’s business, financial condition or consolidated financial statements as a whole. Concentration of Tenant Credit Risk Credit risk arises from the possibility that tenants may be unable to fulfill their lease commitments. Brookfield DTLA’s properties are typically leased to high credit-rated tenants for lease terms ranging fro m five ough we also enter into some shorter or longer-term leases. As our entire portfolio is located in the LACBD, any specific economic changes within that location could affect our tenant base, and by extension, our profitability. Brookfield DTLA generally does not require collateral or other security from its tenants, other than security deposits or letters of credit. Our credit risk is mitigated by the high quality of our existing tenant base, review of prospective tenants’ risk profiles prior to lease execution, and frequent monitoring of our tenant portfolio to identify problem tenants. However, since we may have a concentration of lease income from certain tenants within the concentration of the professional services sector, the inability of those tenants to make payments under their leases could have a material adverse effect on our results of operations, cash flows or financial condition. Concentration of Lease Income Risk During the years ended December 31, 2022, 2021 and 2020, BOA Plaza, Wells Fargo Center–North Tower, Wells Fargo Center–South Tower, Gas Company Tower, EY Plaza and 777 Tower each contributed more than 10% of Brookfield DTLA’s consolidated lease revenue. The revenue generated by these six properties totaled 96%, 95% and 97% of Brookfield DTLA’s consolidated revenue during the years ended December 31, 2022, 2021 and 2020, respectively. Capital Commitments |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2022 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (Unaudited) | Quarterly Financial Information (Unaudited) The following is a summary of consolidated financial information on a quarterly basis for 2022 and 2021: Quarter First Second Third Fourth 2022 Total revenue $ 72,021 $ 73,722 $ 74,531 $ 75,626 Total expenses 82,631 86,611 191,050 124,935 Total other income 213 378 395 244 Net loss (10,397) (12,511) (116,124) (49,065) Net income (loss) attributable to Series A-1 preferred interest returns 4,303 4,303 4,303 4,303 Senior participating preferred interest (201) 142 (4,016) (4,173) Series B preferred interest returns 3,750 3,562 3,401 3,719 Series B common interest – (3,064) (12,196) 86,545 16 Net loss attributable to Brookfield DTLA (15,185) (8,322) (206,357) (52,930) Series A preferred stock dividends 4,637 4,637 4,637 4,638 Net loss attributable to common interest $ (19,822) $ (12,959) $ (210,994) $ (57,568) Quarter First Second Third Fourth 2021 Total revenue $ 69,692 $ 69,210 $ 68,820 $ 76,076 Total expenses 87,625 82,925 83,486 84,070 Total other income 199 97 268 232 Net loss (17,734) (13,618) (14,398) (7,762) Net income (loss) attributable to Series A-1 preferred interest returns 4,303 4,302 4,303 4,304 Senior participating preferred interest 601 299 (325) 453 Series B preferred interest returns 4,282 4,146 3,896 3,739 Series B common interest – 15,204 (6,669) 27,222 (2,563) Net loss attributable to Brookfield DTLA (42,124) (15,696) (49,494) (13,695) Series A preferred stock dividends 4,637 4,638 4,637 4,637 Net loss attributable to common interest $ (46,761) $ (20,334) $ (54,131) $ (18,332) |
Investments in Real Estate
Investments in Real Estate | 12 Months Ended |
Dec. 31, 2022 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Abstract] | |
Investments in Real Estate | Investments in Real Estate A summary of information related to Brookfield DTLA’s investments in real estate as of December 31, 2022 is as follows: Encum- Initial Cost Costs Capitalized Gross Amount at Which Accum- Year Land Buildings and Buildings and Land Buildings Total (3) Los Angeles, CA Wells Fargo Center– North Tower 333 S. Grand Avenue $ 500,000 $ 41,024 $ 448,562 $ 167,437 $ 41,024 $ 615,999 $ 657,023 $ 134,932 2013 A BOA Plaza 333 S. Hope Street 400,000 54,163 342,164 80,610 54,163 422,775 476,938 132,187 2006 A Wells Fargo Center– South Tower 355 S. Grand Avenue 265,447 21,231 388,761 (93,353) (6) 15,658 (6) 295,408 (6) 311,066 — (7) 2013 A Gas Company Tower 525-555 W. Fifth Street 465,000 20,742 392,650 76,249 20,742 468,898 489,640 102,965 2013 A EY Plaza 725 S. Figueroa Street 305,000 47,385 242,108 97,083 47,385 339,189 386,574 98,129 2006 A 777 Tower 777 S. Figueroa Street 288,939 38,010 293,958 54,625 38,010 348,583 386,593 67,168 2013 A FIGat7th 735 S. Figueroa Street 58,500 — 44,743 30,244 — 74,988 74,988 26,001 2013 C $ 2,282,886 $ 222,555 $ 2,152,946 $ 412,895 $ 216,982 $ 2,565,840 $ 2,782,822 $ 561,382 __________ (1) Land improvements are combined with building improvements for financial reporting purposes and are carried at cost. (2) Includes tenant improvements. (3) The aggregate gross cost of Brookfield DTLA’s investments in real estate for federal income tax purposes approximated $3.0 billion as of December 31, 2022. (4) Depreciation in the consolidated statements of operations is computed on a straight-line basis over the following estimated useful lives: buildings (60 years), building improvements (ranging from 5 years to 25 years), and tenant improvements (the shorter of the useful life or the applicable lease term). (5) Year represents either the year the property was acquired by the Company (“A”) or the year the property was placed in service by the Company after construction was completed (“C”). (6) Includes reductions in costs of $187.8 million and $5.6 million related to Wells Fargo Center — South Tower’s buildings and improvements, and land, respectively, during the year ended December 31, 2022, due to impairment. See the table below for the cost rollforward of Brookfield DTLA’s investments in real estate. (7) Includes reductions in accumulated depreciation of $82.3 million related to Wells Fargo Center — South Tower’s buildings and improvements during the year ended December 31, 2022 due to impairmen t. See the table below for the accumulated deprecation rollforward of Brookfield DTLA’s investments in real estate. The following is a reconciliation of Brookfield DTLA’s investments in real estate: For the Year Ended December 31, 2022 2021 2020 Investments in Real Estate Balance at beginning of year $ 2,949,851 $ 2,967,431 $ 2,925,575 Additions during the year: Improvements 50,394 6,653 78,469 Deductions during the year: Dispositions — — — Writeoff of fully depreciated investments in real estate 24,008 24,233 36,613 Impairment charges related to Wells Fargo Center — South Tower 193,415 — — Balance at end of year $ 2,782,822 $ 2,949,851 $ 2,967,431 The following is a reconciliation of Brookfield DTLA’s accumulated depreciation on its investments in real estate: For the Year Ended December 31, 2022 2021 2020 Accumulated Depreciation Balance at beginning of year $ 580,403 $ 517,329 $ 466,405 Additions during the year: Depreciation expense 87,314 87,307 87,537 Deductions during the year: Writeoff of fully depreciated investments in real estate 24,008 24,233 36,613 Impairment charges related to Wells Fargo Center — South Tower 82,327 — — Balance at end of year $ 561,382 $ 580,403 $ 517,329 .y |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event Gas Company Tower Loans and 777 Tower Loans Defaults— See Note 2 “Basis of Presentation and Summary of Significant Accounting Policies — Significant Accounting Policies — Liquidity and Going Concern” for detailed discussion. FIGat7th Loan Extension — See Note 2 “Basis of Presentation and Summary of Significant Accounting Policies — Significant Accounting Policies — Liquidity and Going Concern” for detailed discussion. Voluntary Delisting of Series A Preferred Stock — On March 31, 2023, Brookfield DTLA notified the New York Stock Exchange of its intention to voluntarily delist its Series A preferred stock from the New York Stock Exchange. See Part II, Item 9B. “Other Information.” for detailed discussion. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements and related notes have been prepared in accordance with generally accepted accounting principles in the United States of America (“ GAAP |
Liquidity and Going Concern | Liquidity and Going Concern The consolidated financial statements have been prepared in accordance with GAAP on the basis that the Company will continue as a going concern. The going concern basis assumes that the Company will be able to meet its obligations and continue its operations one year from the date of the issuance of the Annual Report, which is dependent upon the Company’s ability to effectively implement plans related to the secured debt currently in default and the secured debt that matures within one year after the date of the issuance of the Annual Report, as discussed below (together, the “Maturing Loans”). As of the issuance date of this Annual Report, the Company had $2.3 billion of total consolidated debt, including $1,128.9 million and $400.0 million maturing in 2023 and 2024, respectively. Our substantial indebtedness requires us to use a material portion of our cash flow to service interest on our debt. Additionally, our consolidated debt also includes $288.9 million of mortgage and mezzanine debt secured by 777 Tower and $465.0 million of mortgage and mezzanine debt secured by Gas Company Tower that is in default. The Company has experienced a decline in occupancy since the onset of the COVID-19 pandemic as tenant leases expire which has resulted in a decrease in cash flow from operations and has negatively impacted the market values of the properties. Additionally, in order to attract or retain tenants needed to increase occupancy and sustain operations, the Company will need to spend a substantial amount on capital leasing costs (such as tenant improvements), however, the Company has limited amounts of liquidity to make these capital commitments. Furthermore, since the second quarter of 2022, uncertainty in the overall economy has increased due to the Federal Reserve materially raising interest rates to fight inflation. The increase and volatility in interest rates, not only increase the cost of our floating rate debt and the rates or spread on any refinancing we may seek, but it also materially increased the cost of interest rate protection agreements and interest rate risk hedging. We are required to obtain interest rate protection agreements with respect to the Company’s existing floating rate secured loans (and which we expect will be required to obtain for refinancing our maturing debt). The Company may be unable to extend or refinance the upcoming loan maturities at current terms and may be required to paydown a portion of the maturing debt in order to extend or refinance the loans. With the Company’s limited amount of unrestricted cash on hand, the Company’s ability to make any loan paydowns is limited without the sale of real estate assets, and we do not have any contracts to sell our properties as of the issuance date of this Annual Report. Nevertheless, if one or more of the properties securing our Maturing Loans were to be foreclosed upon by the lenders, as these secured debt obligations are not cross-collateralized with other properties in the portfolio, we believe we will have sufficient cash from our remaining properties and our Series B financings to meet our obligations to continue our operations within one year after the date of the issuance of the Annual Report. While these conditions and events raise substantial doubt about the Company’s ability to continue as a going concern, for the reasons stated in this paragraph and the further discussion below, management has determined that it is probable that the conditions and events raising substantial doubt about the entity’s ability to continue as a going concern have been alleviated, and that the Company will continue as a going concern during one year from the date of the issuance of the Annual Report. The Company’s ability to continue as a going concern is dependent upon the Company’s ability to effectively implement plans related to the Maturing Loans. Debt Maturing within One Year From the Date of the Issuance of the Annual Report: FIGat7th — In March 2023, the lender granted a short-term extension of the maturity date from March 1, 2023 to April 3, 2023. Brookfield DTLA is currently engaged in discussions with the lender to extend the debt secured by FIGat7th for three years. As of the issuance date of this Annual Report, we currently do not have a commitment from the lenders to extend the maturity dates of this loan for three years. If we are unable to extend the FIGat7th loan, then the lender would have the right to exercise its remedies under the FIGat7th loan, including, but not limited to, declaring the debt to be immediately payable and foreclosing on FIGat7th. Wells Fargo Center — South Tower — As of December 31, 2022, and the issuance date of this Annual Report, wholly-owned subsidiaries of the Company had and continue to have a secured mortgage loan of $265.4 million on Wells Fargo Center—South Tower (the “Wells Fargo Center South Loan”) that matures on November 4, 2023. We currently plan to operate the property and pay debt service on the loan through maturity. We will attempt to extend the Wells Fargo Center South Loan with the current lenders or refinance the loan with different lenders. As of the issuance date of this Annual Report, we currently do not have a commitment from the lenders to extend the maturity dates of this loan. Additionally, we do not know what paydown may be required upon any refinancing of this loan, and therefore are not certain if we will have sufficient unrestricted cash on hand to make any such paydown. We do not currently have any commitment for additional capital to the extent any paydown requires cash in excess of the unrestricted cash on hand that we would be able or willing to allocate to such paydown. If we are unable to negotiate a loan modification with the current lenders or refinance the Well Fargo Center South Loan, then the lenders would have the right to exercise the remedies under the WFC South Loan, including, but not limited to, declaring the debt to be immediately payable and foreclosing on Wells Fargo Center – South Tower. Wells Fargo Center — North Tower Loans — As of December 31, 2022, and the issuance date of this Annual Report, wholly-owned subsidiaries of the Company (the “WFC North Borrowers”) had and continue to have secured loans of $500.0 million on Wells Fargo Center — North Tower, comprised of a $400.0 million mortgage loan, a $65.0 million mezzanine loan, and a $35.0 million junior mezzanine loan (collectively, the “WFC North Loans”). The maturity date of the WFC North Loans is October 9, 2023. In March 2023, the lender of the junior mezzanine loan agreed, subject to certain conditions, to forbear from exercising any remedy as a result of non-payment of the monthly debt service payment for March due on the junior mezzanine loan. The amount of cash the property currently generates from its operations is not sufficient to cover the upcoming debt obligations, leasing costs and capital expenditures with respect to Wells Fargo Center – North Tower. The WFC North Borrowers will not have sufficient available cash to make the interest payments on the WFC North Loans. The WFC North Borrowers will attempt to negotiate favorable amendments to the WFC North Loans and/or interest payment forbearances from the current lenders. If WFC North Borrowers are unsuccessful, the forbearance agreement with any lender lapses, and the interest payments are not made on the due date or if the mechanics liens currently existing on the asset are not timely discharged, then the lenders would have the right to exercise the remedies under the WFC North Loans, including, but not limited to, declaring the debt to be immediately payable and foreclosing on Wells Fargo Center – North Tower. EY Plaza — As of December 31, 2022, and the issuance date of this Annual Report, wholly-owned subsidiaries of the Company (the “EY Borrowers”) have secured loans of $305.0 million on EY Plaza, comprised of a $275.0 million mortgage loan and a $30.0 million mezzanine loan (collectively, the “EY Plaza Loans”). The maturity date of the EY Plaza Loans is October 9, 2023, with two one-year extension options. The EY Borrowers have received notices from certain tenants of EY Plaza stating that they are not in compliance with the terms of their respective lease agreements. The amount of cash the EY Borrowers currently generate from operations is not sufficient to cover its upcoming debt obligations, leasing costs and capital expenditures with respect to EY Plaza. It is unlikely that they will be able to obtain additional sources of liquidity or negotiate favorable amendments to the EY Plaza Loans or interest payment forbearances from the lenders in time. In this case, the EY Borrowers will not have sufficient operating cash flow to cure the non-compliance with the leases or discharge mechanics liens currently existing on the asset or make the April 2023 interest payments on the EY Plaza Loans. If the lenders send the EY Borrowers a notice of default to cure the non-compliance with the leases and the EY Borrowers are unsuccessful in curing the defaults during the available cure period or discharging the mechanics liens within the time required under the EY Plaza Loans, or the interest payment is not made on the due date of April 7, 2023, then the lenders would have the right to exercise the remedies under the EY Plaza Loans, including, but not limited to, declaring the debt to be immediately payable and foreclosing on EY Plaza. Debt in Default: 777 Tower Loans — As previously disclosed in our public filings, wholly-owned subsidiaries of the Company (the “777 Borrowers”) have secured loans of $318.6 million on 777 Tower, comprised of a $268.6 million mortgage loan and a $50.0 million mezzanine loan (collectively, the “ 777 Tower Loans ”). There was $288.9 million outstanding under the 777 Tower Loans as of December 31, 2022 and the issuance date of this Annual Report. In November 2022, the 777 Borrowers did not obtain an Interest Rate Protection Agreement (as defined in the underlying loan agreements) which constitutes an Event of Default (as defined in the underlying loan agreements). Wells Fargo Bank, National Association, as Administrative Agent for the lenders under the mortgage loan, and Mesa West Core Lending Fund, LLC, have notified the 777 Borrowers that defaults and potential defaults have occurred under the loan and that the lenders have the right to exercise their remedies under the 777 Tower Loans, including, without limitation, declaring the debt to be immediately due and payable and foreclosing on 777 Tower. As a result of the default under the mortgage loan, an Event of Default (as defined in the underlying loan agreements) has occurred and is continuing under the mezzanine loan. As of the issuance date of this Annual Report, the lenders have not exercised any of their remedies under the 777 Tower Loans. In addition, as of the issuance date of this Annual Report, the 777 Borrowers have not paid the March 2023 interest expense accrued on the mezzanine loan and currently do not intend to pay this or the future interest expense accrued on the 777 Tower Loans. Certain mechanics’ liens have also been filed against the asset, and if the 777 Borrowers do not discharge such liens within the time required under the 777 Tower Loans, an additional Event of Default on these loans will occur. Gas Company Tower Loans — As previously disclosed in our public filings, wholly-owned subsidiaries of the Company (the “Gas Company Borrowers”) have secured loans of $465.0 million on Gas Company Tower, comprised of a $350.0 million mortgage loan, a $65.0 million mezzanine loan and a $50.0 million junior mezzanine loan (collectively, the “ Gas Company Tower Loans ”). There was $465.0 million outstanding under the Gas Company Tower Loans as of December 31, 2022 and the issuance date of this Annual Report. The initial maturity date of the Gas Company Tower Loans was February 9, 2023, with three one-year extension options. Gas Company Borrowers did not exercise the option to extend the maturity of the loans and therefore, subsequent to the current year-end period, on February 9, 2023, the Gas Company Tower Loans matured, and an Event of Default (as defined in the underlying loan agreements) has occurred and is continuing. The lenders may exercise their remedies under the loans, including foreclosing on Gas Company Tower. As of the issuance date of this Annual Report, the lenders have not exercised any of their remedies under the Gas Company Tower Loans, and have transferred these loans to a special servicer. In addition, as of the issuance date of this Annual Report, the Gas Company Borrowers have not paid the March 2023 interest expense accrued on the mezzanine loan and currently do not intend to pay this or the future interest expense accrued on the Gas Company Tower Loans. |
Determination of Controlling Financial Interest | Determination of Controlling Financial Interest We consolidate entities in which Brookfield DTLA is considered to be the primary beneficiary of a variable interest entity (“ VIE ”) or has a majority of the voting interest in the entity. We are deemed to be the primary beneficiary of a VIE when we have (i) the power to direct the activities of the VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE. We do not consolidate entities in which the other parties have substantive kick-out rights to remove the Company’s power to direct the activities, and most significantly impacting the economic performance, of the VIE. In determining whether we are the primary beneficiary, we consider factors such as ownership interest, management representation, authority to control decisions, and contractual and substantive participating rights of each party. Brookfield DTLA Fund Properties II LLC. The Company earns a return through an indirect investment in Fund II. DTLA Holdings, the parent of Brookfield DTLA, owns all of the common interest in Fund II. Brookfield DTLA has an indirect preferred stock interest in Fund II and its wholly-owned subsidiary is the managing member of Fund II. The Company determined that Fund II is a VIE. As a result of having the power to direct the significant activities of Fund II that impact Fund II’s economic performance, and the obligation to absorb losses of, or the right to receive benefits from, Fund II that could potentially be significant to the Fund II , Brookfield DTLA meets the two conditions for being the primary beneficiary of Fund II. Investment in Unconsolidated Real Estate Joint Venture. Fund II has a noncontrolling interest in a joint venture, Brookfield DTLA Fund Properties IV LLC (“ Fund IV ”), with DTLA FP IV Holdings. The Company determined that the joint venture is a VIE mainly because its equity investment at risk is insufficient to finance the joint venture’s activities without additional subordinated financial support. While the joint venture meets the definition of a VIE, Brookfield DTLA is not its primary beneficiary as the Company lacks the power through voting or similar rights to direct the activities that most significantly impact the joint venture’s economic performance. Therefore, the Company accounts for its ownership interest in the joint venture under the equity method. Under the equity method of accounting, we initially recognize Fund II’s investment in the joint venture at the fair value of the assets contributed, and subsequently adjust the joint venture’s carrying amount for Fund II’s share of the joint venture’s redemption value and other-than-temporary impairments (if any). The redemption value represents the amount to be distributed to Fund II in the event of termination or liquidation of the joint venture. Adjustments to the joint venture’s carrying amount to its redemption value are recorded in the consolidated statements of operations as equity in earning (loss) of unconsolidated real estate joint venture. As of December 31, 2022, the Company’s ownership interest in the unconsolidated real estate joint venture was 22.1%, a decrease from 33.6% as of December 31, 2021 as a result of additional capital contributed by DTLA FP IV Holdings during the year ended December 31, 2022. The liabilities of the joint venture may only be settled using the Beaudry assets and are not recourse to the Company. Brookfield DTLA’s exposure to its investment in the joint venture is limited to its investment balance and the Company has no obligation to make future contributions to the joint venture. Pursuant to the operating agreement of the joint venture, DTLA FP IV Holdings may be required to fund additional amounts for the Beaudry development, routine operating costs, and guaranties or commitments of the joint venture. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods presented. The Company bases its estimates on historical experience and on various other assumptions that it considers to be reasonable under the circumstances, including the impact of events such as COVID-19 pandemic and the measures taken to combat the spread of the pandemic. For example, estimates and assumptions have been made with respect to the useful lives of assets, recoverable amounts of receivables, impairment of long-lived assets and the fair value of debt. Actual results could ultimately differ from such estimates. |
Investments in Real Estate, Net | Investments in Real Estate, Net— Land is carried at cost. Buildings are recorded at historical cost and are depreciated on a straight‑line basis over their estimated useful lives of 60 years. Building improvements are recorded at historical cost and are depreciated on a straight-line basis over their estimated useful lives, ranging from 5 years to 25 years. Land improvements are combined with building improvements for financial reporting purposes and are carried at cost. Tenant improvements that are determined to be assets of Brookfield DTLA are recorded at cost and amortized on a straight‑line basis over the shorter of their estimated useful life or the applicable lease term, with the related amortization reported as part of depreciation and amortization expense in the consolidated statements of operations. Depreciation expense related to investments in real estate during the years ended December 31, 2022, 2021 and 2020 totaled $87.3 million, $87.3 million and $87.5 million, respectively, and is reported as part of depreciation and amortization expense in the consolidated statements of operations. |
Investment in Unconsolidated Real Estate Joint Venture | |
Impairment Review | Impairment Review— Investments in long-lived assets, including our investments in real estate, are individually reviewed for impairment quarterly or if events or changes in circumstances indicate that the carrying amount of the long-lived assets might not be recoverable, which is referred to as a “triggering event” or an “impairment indicator.” Indicators of potential impairment include the following: • Change in strategy resulting in an increased or decreased holding period; • Lower stabilized occupancy levels; • Deterioration of the rental market as evidenced by rent decreases, record-high capital expense obligations, and/or elevated concessions such as tenant improvement, over numerous quarters; • Properties with recent impairment issues that are adjacent to or located in the same submarket; • Significant decrease in properties’ market price; • Tenant financial problems; and/or • Comparable market barriers of competitors in the same submarket. The carrying amount of long-lived assets to be held and used is deemed not recoverable if it exceeds the sum of undiscounted cash flows expected to result from the use and eventual disposition of the asset. Triggering events or impairment indicators for long-lived assets to be held and used are assessed by property and include significant fluctuations in estimated net operating income, changes in leasing activity, significant near-term lease expirations, current and historical operating and/or cash flow losses, rental rates, and other market factors. When conducting the impairment review of our investments in real estate, we assessed the expected undiscounted cash flows based upon numerous factors. These factors include, but are not limited to, the credit quality of our tenants, available market information, known trends, current market/economic conditions that may affect the asset, and historical and forecasted financial and operating information relating to the property, such as net operating income, leasing activity statistics, vacancy projections, renewal percentage, and rent collection rates. If the undiscounted cash flows expected to be generated by a property are less than its carrying amount, the Company determines the fair value of the property and an impairment loss would be recorded to write down the carrying amount of such property to its fair value. During the year ended December 31, 2022 , the Company recognized impairment charges the year ended December 31, 2022 , in light of the evolving office rental business environment and the slowdown in economic growth in the near term because of rising interest rates, decreases in our property valuations may lead to additional impairment charges in our portfolio in the near future. In comparison, during the same period in 2021 , none of Brookfield DTLA’s real estate prop erties were impaired. See “ Note 12 - Fair Value Measurements ” for a detailed discussion of the factors that were considered when determining the fair value of Wells Fargo Center–South Tower. The Company’s investment in its unconsolidated real estate joint venture is also reviewed for impairment quarterly or when conditions exist that may indicate that the decrease in the carrying amount of the investment has occurred and is other than temporary. Triggering events or impairment indicators for the Company’s unconsolidated real estate joint venture include its recurring operating losses, and other events such as significant changes in construction costs, estimated completion dates, intended holding periods, and other factors related to the Beaudry development. Upon determination that an other-than-temporary impairment has occurred, a write-down is recognized to reduce the carrying amount of the investment to its estimated fair value. Based on its review, management concluded that Brookfield DTLA’s investment in its unconsolidated real estate joint venture was not i mpaired as of December 31, 2022 and 2021. |
Cash and Cash Equivalents | Cash and Cash Equivalents—Cash and cash equivalents include cash, deposits with major commercial banks, and short-term investments with an original maturity of three months or less. |
Restricted Cash | Restricted Cash— Restricted cash consists primarily of deposits for leasing costs, tenant improvements and capital expenditures; real estate taxes and insurance reserves, debt service reserves and other items as required by certain of the Company’s secured debt agreements. It also includes cash accounts controlled by loan administrative agents or lenders pursuant to cash sweep events associated with the loans secured by certain properties. S ee Note 5 — Secured Debts, Net |
Rents, Deferred Rents and Other Receivables, Net | Rents, Deferred Rents and Other Receivables, Net — Deferred rents receivable represents the amount by which straight-line rental revenue exceeds rents currently billed in accordance with lease agreements. The Company offers various types of lease incentives to induce tenants to sign a lease, including free rent lease periods, and various allowances such as cash paid to tenants and for tenant improvements that are the assets of the tenants. The Company records these allowances as tenant inducements, which are included in rents, deferred rents and other receivables in the consolidated balance sheets and amortized as a reduction to lease income on a straight-line basis over the term of the related lease. See Note 3—“Rents, Deferred Rents and Other Receivables, Net.” Under ASC Topic 842, Leases , Brookfield DTLA must assess on an individual lease basis whether it is probable that the Company will collect the future lease payments throughout the term of the lease. The Company considers the tenant’s payment history and current credit status when assessing collectibility. If the collectibility of the lease payments is probable at lease commencement, the Company recognizes lease income over the term of the lease on a straight-line basis. During the term of the lease, Brookfield DTLA monitors the credit quality and any related material changes of our tenants by (i) reviewing financial statements of the tenants that are publicly available or that are required to be delivered to us pursuant to the applicable lease, (ii) monitoring news reports regarding our tenants and their respective businesses, (iii) monitoring the tenant’s payment history and current credit status, and (iv) analyzing current economic trends, and reasonable and supportable forecasts of future economic conditions. When collectibility is not deemed probable at the lease commencement date, the Company’s lease income is constrained to the lesser of (i) the income that would have been recognized if collection were probable, or (ii) the lease payments that have been collected from the lessee. If the collectibility assessment changes to probable after the lease commencement date, any difference between the lease income that would have been recognized if collectibility had always been assessed as probable and the lease income recognized to date is recognized as a current-period adjustment to lease income. If the collectibility assessment changes to not probable after the lease commencement date, lease income is reversed to the extent that the lease payments that have been collected from the lessee are less than the lease income recognized to date. Changes to the collectibi |
Intangible Assets and Liabilities, Net | Intangible Assets and Liabilities, Net— Brookfield DTLA evaluates each acquisition of real estate to determine whether the integrated set of assets and activities meets the definition of a business and needs to be accounted for as a business combination. An acquisition of an integrated set of assets and activities that does not meet the definition of a business is accounted for as an asset acquisition. For acquisitions of real estates that are accounted for as business combinations, the Company allocates the acquisition consideration (excluding acquisition costs) to the assets acquired, liabilities assumed, noncontrolling interests, and any previously existing ownership interests at fair value as of the acquisition date. Acquired assets include tangible real estate assets consisting primarily of land, buildings, and tenant improvements, as well as identifiable intangible assets and liabilities, consisting primarily of acquired above- and below-market leases, in-place leases and tenant relationships. The principal valuation technique employed by Brookfield DTLA in determining the fair value of identified assets acquired and liabilities assumed is the income approach, which is then compared to the cost approach. Tangible values for investments in real estate are calculated based on replacement costs for like-type quality assets. Above- and below-market lease values are determined by comparing in-place rents with current market rents. In‑place lease amounts are determined by calculating the potential lost revenue during the replacement of the current leases in place. Leasing commissions and legal/marketing fees are determined based upon market allowances pro-rated over the remaining lease terms. Loans assumed in an acquisition are analyzed using current market terms for similar debt. |
Deferred Charges, Net | Deferred Charges, Net— Deferred charges mainly include initial direct costs, primarily commissions related to the leasing of the Company’s office properties, and are stated net of accumulated amortization of $52.0 million as of both December 31, 2022 and 2021. All leasing commissions paid for new or renewed leases are capitalized and deferred. Deferred leasing costs are amortized on a straight‑line basis over the initial fixed terms of the related leases as part of depreciation and amortization expense in the consolidated statements of operations. Costs to negotiate or arrange a lease, regardless of its outcome, such as tax or legal advice to negotiate lease terms, and lessor costs related to advertising or soliciting potential tenants, are expensed as incurred. |
Due From/To Affiliates | Due From/To Affiliates—Amounts due from/to affiliates consist of related party receivables from and payables due to affiliates of BPY and Brookfield Corporation, primarily related to lease income, parking revenue, and fees for property, development and asset management and other services. |
Prepaid and Other Assets, Net | Prepaid and Other Assets, Net— Prepaid and other assets, net, mainly include interest rate cap contracts. |
Secured Debt, Net | Secured Debt, Net—Debt secured by our properties is presented in the consolidated balance sheets net of unamortized debt financing costs. |
Mezzanine Equity | Mezzanine Equity— Mezzanine equity in the consolidated balance sheets is comprised of the Series A preferred stock, a Series A-1 preferred interest, a senior participating preferred interest, and a Series B preferred interest (collectively, the “ Preferred Interests ”). The Series A-1 preferred interest, senior participating preferred interest and Series B preferred interest are held by a noncontrolling interest holder. The Preferred Interests are classified as mezzanine equity because they are callable, and the holder of the Series A-1 preferred interest, senior participating preferred interest, Series B preferred interest, and some of the Series A preferred stock indirectly controls the ability to elect to redeem such instruments, through its controlling interest in the Company and its subsidiaries. There is no commitment or obligation on the part of Brookfield DTLA or DTLA Holdings to redeem the Preferred Interests. The Preferred Interests included within mezzanine equity were recorded at fair value on the date of issuance and have been adjusted to the greater of their carrying amount or redemption value as of each reporting period. Adjustments to increase or decrease the carrying amount to redemption value are recorded in the consolidated statements of operations as redemption measurement adjustments. |
Lease Income | Lease Income— Brookfield DTLA’s lease income primarily represents revenue related to agreements for rental of our investments in real estate, subject to ASC Topic 842, Leases . All of the leases in which the Company is the lessor are classified as operating leases. The Company’s leases do not have guarantees of residual value of the underlying assets. We manage risk associated with the residual value of our leased assets by carefully selecting our tenants and monitoring their credit quality throughout their respective lease terms. Upon the expiration or termination of a lease, the Company often has the ability to re-lease the space with an existing tenant or to a new tenant within a reasonable amount of time. The Company’s lease income is comprised of variable payments including fixed and contingent rental payments and tenant recoveries. Fixed contractual payments from the Company’s leases are recognized on a straight-line basis over the terms of the respective leases. This means that, with respect to a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of lease income recognized during the period. Straight-line rental revenue is commenced when the tenant assumes control of the leased premises. Certain leases with retail tenants also provide for the payment by the lessee of additional rent based on a percentage of the tenant’s sales. Percentage rents are recognized as lease income in the consolidated statements of operations only after the tenant sales thresholds have been achieved. Tenant recoveries, including reimbursements of utilities, repairs and maintenance, common area expenses, real estate taxes and insurance, and other operating expenses, are recognized as part of lease income in the consolidated statements of operations in the period when the applicable expenses are incurred and the tenant’s obligation to reimburse us arises. |
Parking Revenue | Parking Revenue— Parking revenue is recognized in accordance with ASC Topic 606, Revenue from Contracts with Customers , when the services are provided and the performance obligations are satisfied, which normally occurs at a point in time. |
Income Taxes | Income Taxes— Brookfield DTLA has elected to be taxed as a real estate investment trust (“ REIT ”) pursuant to Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with its tax period ended December 31, 2013. Brookfield DTLA conducts its operations with the intent to continue to qualify as a REIT. Accordingly, Brookfield DTLA is not subject to U.S. federal income tax, provided that it continues to qualify as a REIT and makes distributions to its stockholders, if any, that generally equal or exceed its taxable income. Brookfield DTLA has elected to treat certain of its subsidiaries as taxable REIT subsidiaries (“ TRS |
Derivative Financial Instruments | Derivative Financial Instruments— Brookfield DTLA uses interest rate swap and cap contracts to manage interest rate fluctuation risk by limiting the impact of changes in LIBOR and SOFR on certain of its debt. Interest rate swaps involve the receipt of variable-rate amounts in exchange for fixed-rate payments over the life of the agreements without exchange of the underlying principal amount. Interest rate caps involve the receipt of variable-rate amounts beyond a specified strike price over the life of the agreements without exchange of the underlying principal amount. The Company believes these contracts are with counterparties who are creditworthy financial institutions. At the inception of the contracts, Brookfield DTLA designates its interest rate swap contracts as cash flow hedges and documents the relationship of the hedge to the underlying transaction. Hedge effectiveness is assessed at inception and throughout the life of the hedge to ensure the hedge qualifies for hedge accounting. Changes in fair value associated with hedge ineffectiveness, if any, are recorded as part of interest expense in the consolidated statements of operations. Changes in fair value of cash flow hedge derivative financial instruments are deferred and recorded as part of accumulated other comprehensive loss in the consolidated statements of stockholders’ deficit until the underlying transaction affects earnings. In the event that an anticipated transaction is no longer likely to occur, the Company recognizes the change in fair value of the derivative financial instrument in the consolidated statement of operations in the period the determination is made. Interest rate swap assets are included in prepaid and other assets, net and interest rate swap liabilities are included in accounts payable and other liabilities in the consolidated balance sheets. In September 2020, in conjunction with the extinguishment of our loans that previously encumbered EY Plaza, the Company terminated the related LIBOR-based interest rate swap contracts. Additionally, Brookfield DTLA uses interest rate cap contracts to limit impact of changes in LIBOR on certain of its debt. The Company does not elect hedge accounting for these contracts, and as such, changes in fair value are recorded in the period of change as part of other expenses in the consolidated statements of operations. |
Other Financial Instruments | Other Financial Instruments—Brookfield DTLA’s other financial instruments that are exposed to concentrations of credit risk consist primarily of cash and lease receivables. Brookfield DTLA assesses collectibility of lease receivables by monitoring the credit quality and any related material changes of our tenants. This involves (i) reviewing financial statements of the tenants that are publicly available or that are required to be delivered to us pursuant to the applicable lease, (ii) monitoring news reports regarding our tenants and their respective businesses, (iii) monitoring the tenant’s payment history and current credit status, and (iv) analyzing current economic trends. As a consequence, management believes that its lease receivable credit risk exposure is limited. Brookfield DTLA places its temporary cash investments with federally insured institutions. Cash balances with any one institution may at times be in excess of the federally insured limits. |
Fair Value Measurements | Fair Value Measurements— Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis, such as interest rate swaps and cap contracts. In addition, the Company is required to measure other financial instruments and balances at fair value on a non-recurring basis (e.g., carrying value of impaired long-lived assets such as investments in real estate and unconsolidated real estate joint venture). Fair value is defined as the price that would be received to sell an asset or the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date and, in many cases, requires management to make a number of significant judgments. Based on the observable inputs used in the valuation techniques, Brookfield DTLA classifies its assets and liabilities measured and disclosed at fair value in accordance with a three-level hierarchy (i.e., Level 1, Level 2 and Level 3) established under ASC Topic 820, Fair Value Measurement . The Company estimates the fair value of its debt by calculating the credit-adjusted present value of principal and interest payments for each loan. The calculation incorporates observable market interest rates, which management considers to be Level 2 inputs, assumes that each loan will be outstanding until maturity, and excludes any options to extend the maturity date of the loan available per the terms of the loan agreement, if any. See Note 11—“Financial Instruments.” |
Recently Issued Accounting Literature | Recently Issued Accounting Literature New Accounting Pronouncements Adopted In March 2020, the Financial Accounting Standards Board (“ FASB ”) issued Accounting Standards Update (“ ASU ”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides accounting relief from the future impact of the cessation of LIBOR by, among other things, providing optional expedients to treat contract modifications resulting from such reference rate reform as a continuation of the existing contract and for hedging relationships to not be de-designated resulting from such changes provided certain criteria are met. The guidance is effective beginning on March 12, 2020, and we may elect to apply the amendments prospectively through December 31, 2022 (the “sunset date”). In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope , which amends the scope of ASU 2020-04 to include derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. ASU 2021-01 became effective upon issuance and may be applied on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 or prospectively for contract modifications made on or before December 31, 2022 (the “sunset date”). The Company adopted ASU 2020-04 and ASU 2021-01 on a prospective basis on January 1, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which defers the sunset date of ASC 848, Reference Rate Reform, from December 31, 2022 to December 31, 2024. ASU 2022-06 is effective immediately for all entities. At the time of adoption, the guidance did not have a material impact on the Company’s consolidated financial statements. The Company will continue to track the exposure as of each reporting period and to assess the impact as the reference rate transition occurs through the cessation of LIBOR. Accounting Pronouncements Issued But Not Yet Adopted The Company does not anticipate any recently issued accounting standards pronouncements to have a significant impact on the consolidated financial position or results of operations in these or future consolidated financial statements. |
Segment Reporting | Segment Reporting Brookfield DTLA currently operates as one reportable segment, which includes the operation and management of its six commercial office properties and one retail property. Each of Brookfield DTLA’s properties is considered a separate operating segment, as each property earns revenues and incurs expenses, individual operating results are reviewed and discrete financial information is available. Management does not distinguish or group Brookfield DTLA’s consolidated operations based on geography, size or type. Brookfield DTLA’s properties have similar economic characteristics and provide similar products and services to tenants. As a result, Brookfield DTLA’s properties are aggregated into a single reportable segment. |
Rents, Deferred Rents and Oth_2
Rents, Deferred Rents and Other Receivables, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Rents, Deferred Rents and Other Receivables | Brookfield DTLA’s rents, deferred rents and other receivables are comprised of the following: As of December 31, 2022 2021 Straight-line and other deferred rents $ 114,414 $ 108,913 Tenant inducements receivable 31,689 28,445 Tenant receivables 2,406 3,316 Other receivables 1,588 362 Rents, deferred rents and other receivables, gross 150,097 141,036 Less: accumulated amortization of tenant inducements 14,650 15,411 Rents, deferred rents and other receivables, net $ 135,447 $ 125,625 |
Intangible Assets and Liabili_2
Intangible Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Liabilities | Brookfield DTLA’s intangible assets and liabilities are summarized as follows: As of December 31, 2022 2021 Intangible Assets In-place leases $ 32,678 $ 41,422 Tenant relationships 2,151 6,432 Above-market leases 8,231 16,734 Intangible assets, gross 43,060 64,588 Less: accumulated amortization 32,993 48,565 Intangible assets, net $ 10,067 $ 16,023 Intangible Liabilities Below-market leases $ 18,670 $ 33,416 Less: accumulated amortization 15,765 28,961 Intangible liabilities, net $ 2,905 $ 4,455 |
Schedule of Effect of Intangible Amortization/Accretion | A summary of the effect of amortization/accretion of intangible assets and liabilities reported in the consolidated financial statements is as follows: For the Year Ended December 31, 2022 2021 2020 Lease income $ 141 $ (206) $ (1,331) Depreciation and amortization expense $ 3,562 $ 4,267 $ 6,217 |
Schedule of Estimated Future Intangible Amortization/Accretion | As of December 31, 2022, the estimated amortization/accretion of intangible assets and liabilities in future periods is as follows: In-Place Other Intangible 2023 $ 1,546 $ 1,800 $ 730 2024 920 1,752 280 2025 840 1,112 265 2026 585 443 246 2027 115 3 154 Thereafter 918 33 1,229 Total future amortization/accretion of intangibles $ 4,924 $ 5,143 $ 2,905 |
Secured Debt, Net (Tables)
Secured Debt, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Secured Debt | Brookfield DTLA’s secured debt is as follows as of December 31, 2022: Maturity Date Contractual Interest Rates Principal Amount 2022 2021 Variable-Rate Loans: Wells Fargo Center–North Tower 10/9/2023 SOFR + 1.76% $ 400,000 $ 400,000 Wells Fargo Center–North Tower 10/9/2023 SOFR + 4.11% 65,000 65,000 Wells Fargo Center–North Tower (1) 10/9/2023 SOFR + 5.11% 35,000 35,000 Wells Fargo Center–South Tower (2) 11/4/2023 SOFR + 1.80% 265,447 260,796 EY Plaza 10/9/2023 LIBOR + 2.86% 275,000 275,000 EY Plaza 10/9/2023 LIBOR + 6.85% 30,000 30,000 Gas Company Tower (4) 2/9/2023 LIBOR + 1.89% 350,000 350,000 Gas Company Tower (4) 2/9/2023 LIBOR + 5.00% 65,000 65,000 Gas Company Tower (4) 2/9/2023 LIBOR + 7.75% 50,000 50,000 Total variable-rate loans 1,535,447 1,530,796 Fixed-Rate Debt: BOA Plaza 9/1/2024 4.05% 400,000 400,000 FIGat7th (5) 3/1/2023 3.88% 58,500 58,500 Total fixed-rate debt 458,500 458,500 Total secured debt, excluding debt in default 1,993,947 1,989,296 Debt in Default: 777 Tower (3) 12/30/2022 LIBOR + 1.60% 243,594 231,842 777 Tower (3) 12/30/2022 LIBOR + 4.15% 45,345 43,158 Total debt in default 288,939 275,000 Total secured debt 2,282,886 2,264,296 Less: unamortized debt financing costs 3,313 8,375 Total secured debt, net $ 2,279,573 $ 2,255,921 __________ (1) Brookfield Corporation owns a significant interest in a company whose subsidiary is the lender of this loan. See Note 13—“Related Party Transactions” for details. (2) As of December 31, 2022, a future advance amount of $24.6 million is available under this loan that can be drawn to fund approved leasing costs (as defined in the underlying loan agreement), including tenant improvements and inducements, leasing commissions, and common area improvements. (3) Starting December 2022, the mortgage and mezzanine loans secured by 777 Tower were in default for failing to enter into interest rate cap contracts. The lender may accelerate the maturity date of the debt. See “Debt Compliance” below for details . (4) The Company did not exercise the option to extend the maturity of the loans secured by Gas Company Tower and therefore on February 9, 2023, the Gas Company Tower Loans matured and, since this loan has not been repaid, an event of default has occurred and is continuing. See “Debt Compliance” below for details. (5) In March 2023, the lender granted a short-term extension of the maturity date from March 1, 2023 to April 3, 2023. |
Schedule of Debt Maturities | The following table provides information regarding the Company’s minimum future principal payments due on the Company’s secured debt as of December 31, 2022: 2023 (2) $ 1,593,947 2024 400,000 Total $ 1,993,947 Principal loan balances with maturity date prior to December 31, 2022 (1) 288,939 Total secured debt $ 2,282,886 (1) Represents the aggregate principal balance as of December 31, 2022 of the mortgage and mezzanine loans secured by 777 Tower, which are in default. See “Debt Compliance” below for details . (2) Includes the aggregate principal balance of the mortgage and mezzanine loans secured by the Gas Company Tower of $465.0 million , which are in maturity default effective February 9, 2023. See “Debt Compliance” below for details . |
Accounts Payable and Other Li_2
Accounts Payable and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Schedule of Accounts Payable and Other Liabilities | Brookfield DTLA’s accounts payable and other liabilities are comprised of the following: As of December 31, 2022 2021 Tenant improvements and inducements payable $ 23,644 $ 32,973 Unearned rent and tenant payables 27,136 31,249 Accrued capital expenditures and leasing commissions 6,162 7,422 Accrued expenses and other liabilities 14,087 5,968 Accounts payable and other liabilities $ 71,029 $ 77,612 |
Mezzanine Equity (Tables)
Mezzanine Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Temporary Equity Disclosure [Abstract] | |
Schedule of Change in Mezzanine Equity | A summary of the change in mezzanine equity is as follows: Number of Series A Noncontrolling Interests Total Series A-1 Senior Series B Balance, December 31, 2019 9,730,370 $ 428,480 $ 418,029 $ 22,362 $ 185,352 $ 1,054,223 Issuance of Series B preferred interest 47,850 47,850 Dividends 18,548 18,548 Preferred returns 17,213 17,708 34,921 Redemption measurement adjustments (1,580) (1,580) Contributions from noncontrolling 777 777 Repurchases of noncontrolling interests (34,218) (34,218) Distributions to noncontrolling interests (1,146) (17,865) (19,011) Balance, December 31, 2020 9,730,370 447,028 435,242 20,413 198,827 1,101,510 Issuance of Series B preferred interest 25,500 25,500 Dividends 18,549 18,549 Preferred returns 17,212 16,063 33,275 Redemption measurement adjustments 1,028 1,028 Contributions from noncontrolling 629 629 Repurchases of noncontrolling interests (45,306) (45,306) Distributions to noncontrolling interests (879) (17,794) (18,673) Balance, December 31, 2021 9,730,370 465,577 452,454 21,191 177,290 1,116,512 Issuance of Series B preferred interest 47,564 47,564 Dividends 18,549 18,549 Preferred returns 17,212 14,432 31,644 Redemption measurement adjustments (8,248) (8,248) Contributions from noncontrolling 288 288 Repurchases of noncontrolling interests (46,975) (46,975) Distributions to noncontrolling interests (1,554) (9,825) (11,379) Balance, December 31, 2022 9,730,370 $ 484,126 $ 469,666 $ 11,677 $ 182,486 $ 1,147,955 |
Schedule of Distribution Waterfall | Brookfield DTLA may, at its discretion, distribute all or a portion of its available cash (as defined in the limited liability company agreement of Fund II) in the following priority: (1) First to: Series B preferred interest unpaid preferred return Second to: Series B preferred interest unreturned preferred capital Third, proportionally in respect of Series A preferred interest unpaid preferred return (2) Series A-1 preferred interest unpaid preferred return (3) Fourth, proportionally in respect Series A preferred interest unreturned capital Series A-1 preferred interest unreturned capital (3) And fifth to: Common interests to Brookfield DTLA and DTLA Holdings (5) __________ (1) Cash available to Fund II arises from its interests in its investments. Fund II owns indirectly all of the interests in Gas Company Tower, Wells Fargo Center–South Tower, Wells Fargo Ce nter–North Tower, 777 Tower and an interest in the 755 South Figueroa development site which will decrease as capital is called to fund the development. See Note 1 “Organization and Description of Business” . In addition, Fund II owns 96% indirectly of the interests in EY Plaza, FIGat7th and BOA Plaza (the “Fund III Assets”). DTLA Holdings owns the remaining 4% interest in the Fund III Assets. The amounts due to DTLA Holdings on the senior participating preferred interest for its pre ferred return and unreturned capital in Fund III were fully paid as of December 31, 2015. All of Fund II’s interests in these assets are subject to certain REIT accommodation preferred interests. This waterfall may be effected by future equity issuances in respect of Fund II, Fund III, Fund IV, or their subsidiaries, and are subject to all of the indebtedness of the entities. (2) The Fund II Series A preferred interest is comprised of two parts, one is a preferred component with the analogous economic terms as the Company’s Series A Preferred Stock and a common component, which is junior to the preferred component of the Series A interest on analogous terms to the relationship between the Company’s Series A Preferred Stock and Common Stock. The Series A preferred interest is junior to the Fund II Series B preferred interest. See Note 7 “Noncontrolling Interests — Series B Preferred Interest” . Amounts paid in respect of the Fund II’s Series A preferred interest are generally available upon distribution to the Company for further distribution in respect of the Company’s Series A Preferred Stock, and, when and if distributed in respect of the Series A Preferred Stock, will be distributed first to accumulated and unpaid dividends and to reduce its unreturned liquidation capital. (3) DTLA Holdings in its capacity as the holder of the Series A-1 preferred interest can waive receipt of distributions that would otherwise be made to it in respect of the Series A-1 preferred interest and such amounts shall be paid instead to the Series A preferred interest or as otherwise provided by the subsequent provisions of the waterfall. Any amounts waived by DTLA Holdings shall not reduce the Series A-1 unpaid preferred return or unreturned capital. (4) Applicable if distribution is (a) in connection with a liquidating event or redemption or (b) at the election of Brookfield DTLA. (5) Based on the interests of the Series A and Series B interests of the Fund after repayment of the preferred capital portion of each of them, until the Senior A junior unreturned liquidation capital is reduced to zero. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Summary of Change in Accumulated Other Comprehensive Loss | A summary of the change in accumulated other comprehensive loss related to Brookfield DTLA’s derivative financial instruments designated as cash flow hedges is as follows: For the Year Ended December 31, 2022 2021 2020 Balance at beginning of year $ — $ — $ (2,341) Net unrealized gains arising during the year — — 562 Reclassification of losses related to — — 1,779 Net changes — — 2,341 Balance at end of year $ — $ — $ — |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | The following table presents the interest rate cap contracts pursuant to the terms of certain of its loan agreements as of December 31, 2022: Notional Strike Expiration Interest Rate Caps: Wells Fargo Center–North Tower $ 400,000 3.40 % (1) 10/15/2023 Wells Fargo Center–North Tower 65,000 3.40 % (1) 10/15/2023 Wells Fargo Center–North Tower 35,000 3.40 % (1) 10/15/2023 Wells Fargo Center–South Tower 263,219 2.87 % (1) 11/4/2023 EY Plaza 275,000 6.02 % (2) 10/15/2023 EY Plaza 30,000 6.02 % (2) 10/15/2023 Gas Company Tower (3) 350,000 4.00 % (2) 2/15/2023 Gas Company Tower (3) 65,000 4.00 % (2) 2/15/2023 Gas Company Tower (3) 50,000 4.00 % (2) 2/15/2023 Total derivatives not designated $ 1,533,219 __________ (1) The index used for these derivative financial instruments is 1-Month SOFR. (2) The index used for these derivative financial instruments is 1-Month LIBOR. (3) As of the issuance date of this Annual Report, debt secured by Gas Company Tower is in maturity default, and the related interest rate cap contracts expired. See Note 18 “Subsequent Event” for details. |
Summary of Fair Value of Derivative Financial Instruments | A summary of the fair value of Brookfield DTLA’s derivative financial instruments is as follows: Fair Value as of December 31, Balance Sheet Location 2022 2021 Derivatives not designated as Prepaid and other assets, net $ 10,262 $ 46 |
Summary of Effect of Derivative Financial Instruments | The following table presents the gain recorded on interest rate swaps for the year ended December 31, 2020: Gain Recognized Loss Reclassified Derivatives designated as cash flow hedging instruments: For the year ended: December 31, 2020 $ 562 $ (1,779) (1) __________ (1) Included in other expenses in the consolidated statements of operations. |
Fair Value Measurements and D_2
Fair Value Measurements and Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement Inputs and Valuation Techniques | ASC Topic 820 established a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three categories: • Level 1— Quoted prices (unadjusted) in active markets that are accessible at the measurement date. • Level 2— Observable prices that are based on inputs not quoted in active markets but corroborated by market data. • Level 3— Unobservable prices that are used when little or no market data is available. |
Schedule of Carrying Amounts of Assets Measured On Nonrecurring Basis | The following table presents the carrying amounts of assets that were still held and had fair value adjustments measured on a nonrecurring basis as of December 31, 2022: Total Level 1 Level 2 Level 3 Investments in Real Estate Assets $ 311,066 $ — $ — $ 311,066 |
Schedule of Carrying Values and Estimated Fair Values of Secured Debt | The table below presents the estimated fair value and carrying value of the Company’s secured debt included in liabilities: As of December 31, 2022 2021 Fair Value $ 2,265,201 $ 2,263,160 Carrying value $ 2,279,573 $ 2,530,921 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following table presents the basis of fees incurred to the Manager and Brookfield affiliates during the years ended December 31, 2022, 2021 and 2020: Fee Type Affiliate Fee Description Property management The Manager 2.75% of rents collected (as defined in the management agreements) Asset management BPY and Brookfield Corporation 0.75% of DTLA Holdings’ invested equity in Brookfield DTLA’s properties Leasing The Manager and Brookfield affiliates 1.00% to 4.00% of expected rents, depending on the terms of the lease and whether a third-party broker was paid a commission for the transaction Construction management The Manager 3.00% of hard and soft construction costs Development management Affiliate of the Manager 3.00% of hard and soft construction costs Entitlement Affiliate of the Manager 20.00% of the entitlement costs incurred by BOA Plaza, if the entitlement budget is less than $3,000,000 A summary of fees and costs incurred by the applicable Brookfield DTLA subsidiaries under these arrangements is as follows: For the Year Ended December 31, 2022 2021 2020 Property management $ 8,045 $ 8,037 $ 8,035 Asset management (2) $ 6,346 $ 6,166 $ 6,040 Leasing $ 1,549 $ 1,607 $ 2,105 Construction management $ 1,148 $ 400 $ 3,239 Development management (1) $ 1,230 $ 1,881 $ 1,007 Entitlement $ 111 $ 639 $ — General, administrative and reimbursable expenses $ 3,904 $ 2,807 $ 2,492 __________ (1) Amounts presented are calculated by applying the Company’s ownership interest percentage in the unconsolidated real estate joint venture as of year end to the costs incurred during the year. (2) As of December 31, 2022 and 2021, asset management fee payables totaled $3.2 million and $0.0 million, respectively. A summary of costs incurred by the applicable Brookfield DTLA subsidiaries and affiliates under this arrangement, which are included in rental property operating and maintenance expense in the consolidated statements of operations, is as follows: For the Year Ended December 31, 2022 2021 2020 Insurance expense (1) $ 12,905 $ 12,473 $ 11,836 (1) An affiliate of Brookfield Corporation secures insurance policies for the Company through third-party brokers and insurance companies and charges the Company a fee for the services it provides. Fees charged vary but will not exceed 2.50% of the total net insurance premiums of the Company and its covered propert ies. Effective November 1, 2021, this affiliate of Brookfield Corporation ceased charging such fee. Fees incurred for these services totaled $244 thousand and $282 thousand during the years ended December 31, 2021 and 2020, respectively. Additionally, the Company’s terrorism insurance coverage is purchased through a captive facility that is an affiliate of BPY. Insurance premiums incurred totaled $127 thousand, $129 thousand and $149 thousand during the years ended December 31, 2022, 2021 and 2020, respectively. A summary of the impact of other related party transactions with Brookfield Corporation affiliates on the Company’s consolidated statements of operations is as follows: For the Year Ended December 31, 2022 2021 2020 Lease income (1) $ 14,315 $ 13,343 $ 11,443 Parking revenue (1) $ 988 $ 1,001 $ 1,317 Interest and other revenue $ — $ — $ 51 Rental property operating and maintenance expense (2) $ — $ 318 $ 577 Other expenses $ — $ — $ 90 Interest expense (3)(4) $ 3,087 $ 2,201 $ 1,982 __________ (1) In September 2019, Brookfield Corporation acquired a significant interest in Oaktree Capital Group, LLC (“ Oaktree ”), an existing tenant at Wells Fargo Center–North Tower. Lease income and parking revenue from Oaktree and its subsidiaries have been reported as related party transactions since the date of acquisition by Brookfield Corporation. (2) Amounts presented are for purchases of chilled water for air conditioning at one of the Company’s properties supplied by an affiliate of Brookfield Corporation. In July 2021, such supplier was acquired by third parties. (3) A subsidiary of Oaktree is the lender of the $35.0 million mezzanine loan secured by Wells Fargo Center–North Tower. Interest payable to the lender totaled $146 thousand and $84 thousand as of December 31, 2022 and 2021, respectively, and is reported as part of accounts payable and other liabilities in the consolidated balance sheets. See Note 5—“Secured Debt, Net.” Interest expense on this loan has been reported as a related party transaction since the date of acquisition by Brookfield Corporation. (4) In February 2021, Brookfield Corporation purchased $18.2 million of commercial mortgage-backed securities (“ CMBS ”) secured by the Gas Company Tower loans in the open market. The CMBS are payable in monthly installments over a two-year period at a floating interest rate of one-month LIBOR + 2.35%. The transaction was conducted on an arm’s length basis at fair market value. In September 2021, this CMBS was s |
Future Minimum Base Rents (Tabl
Future Minimum Base Rents (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Future Minimum Base Rents Receivable for Operating Leases (Topic 842) | Brookfield DTLA leases space to tenants primarily under non-cancelable operating leases that generally contain provisions for payment of base rent plus reimbursement of certain operating expenses. The table below presents the undiscounted cash flows for future minimum base rents to be received from tenants under executed non-cancelable office and retail leases as of December 31, 2022: 2023 $ 151,283 2024 144,415 2025 131,058 2026 115,960 2027 88,806 Thereafter 471,023 Total future minimum base rents $ 1,102,545 |
Quarterly Financial Informati_2
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information (Unaudited) | The following is a summary of consolidated financial information on a quarterly basis for 2022 and 2021: Quarter First Second Third Fourth 2022 Total revenue $ 72,021 $ 73,722 $ 74,531 $ 75,626 Total expenses 82,631 86,611 191,050 124,935 Total other income 213 378 395 244 Net loss (10,397) (12,511) (116,124) (49,065) Net income (loss) attributable to Series A-1 preferred interest returns 4,303 4,303 4,303 4,303 Senior participating preferred interest (201) 142 (4,016) (4,173) Series B preferred interest returns 3,750 3,562 3,401 3,719 Series B common interest – (3,064) (12,196) 86,545 16 Net loss attributable to Brookfield DTLA (15,185) (8,322) (206,357) (52,930) Series A preferred stock dividends 4,637 4,637 4,637 4,638 Net loss attributable to common interest $ (19,822) $ (12,959) $ (210,994) $ (57,568) Quarter First Second Third Fourth 2021 Total revenue $ 69,692 $ 69,210 $ 68,820 $ 76,076 Total expenses 87,625 82,925 83,486 84,070 Total other income 199 97 268 232 Net loss (17,734) (13,618) (14,398) (7,762) Net income (loss) attributable to Series A-1 preferred interest returns 4,303 4,302 4,303 4,304 Senior participating preferred interest 601 299 (325) 453 Series B preferred interest returns 4,282 4,146 3,896 3,739 Series B common interest – 15,204 (6,669) 27,222 (2,563) Net loss attributable to Brookfield DTLA (42,124) (15,696) (49,494) (13,695) Series A preferred stock dividends 4,637 4,638 4,637 4,637 Net loss attributable to common interest $ (46,761) $ (20,334) $ (54,131) $ (18,332) |
Investments in Real Estate (Tab
Investments in Real Estate (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Abstract] | |
Schedule of Real Estate Properties | A summary of information related to Brookfield DTLA’s investments in real estate as of December 31, 2022 is as follows: Encum- Initial Cost Costs Capitalized Gross Amount at Which Accum- Year Land Buildings and Buildings and Land Buildings Total (3) Los Angeles, CA Wells Fargo Center– North Tower 333 S. Grand Avenue $ 500,000 $ 41,024 $ 448,562 $ 167,437 $ 41,024 $ 615,999 $ 657,023 $ 134,932 2013 A BOA Plaza 333 S. Hope Street 400,000 54,163 342,164 80,610 54,163 422,775 476,938 132,187 2006 A Wells Fargo Center– South Tower 355 S. Grand Avenue 265,447 21,231 388,761 (93,353) (6) 15,658 (6) 295,408 (6) 311,066 — (7) 2013 A Gas Company Tower 525-555 W. Fifth Street 465,000 20,742 392,650 76,249 20,742 468,898 489,640 102,965 2013 A EY Plaza 725 S. Figueroa Street 305,000 47,385 242,108 97,083 47,385 339,189 386,574 98,129 2006 A 777 Tower 777 S. Figueroa Street 288,939 38,010 293,958 54,625 38,010 348,583 386,593 67,168 2013 A FIGat7th 735 S. Figueroa Street 58,500 — 44,743 30,244 — 74,988 74,988 26,001 2013 C $ 2,282,886 $ 222,555 $ 2,152,946 $ 412,895 $ 216,982 $ 2,565,840 $ 2,782,822 $ 561,382 __________ (1) Land improvements are combined with building improvements for financial reporting purposes and are carried at cost. (2) Includes tenant improvements. (3) The aggregate gross cost of Brookfield DTLA’s investments in real estate for federal income tax purposes approximated $3.0 billion as of December 31, 2022. (4) Depreciation in the consolidated statements of operations is computed on a straight-line basis over the following estimated useful lives: buildings (60 years), building improvements (ranging from 5 years to 25 years), and tenant improvements (the shorter of the useful life or the applicable lease term). (5) Year represents either the year the property was acquired by the Company (“A”) or the year the property was placed in service by the Company after construction was completed (“C”). (6) Includes reductions in costs of $187.8 million and $5.6 million related to Wells Fargo Center — South Tower’s buildings and improvements, and land, respectively, during the year ended December 31, 2022, due to impairment. See the table below for the cost rollforward of Brookfield DTLA’s investments in real estate. (7) Includes reductions in accumulated depreciation of $82.3 million related to Wells Fargo Center — South Tower’s buildings and improvements during the year ended December 31, 2022 due to impairmen t. See the table below for the accumulated deprecation rollforward of Brookfield DTLA’s investments in real estate. |
Schedule of Investments in Real Estate | The following is a reconciliation of Brookfield DTLA’s investments in real estate: For the Year Ended December 31, 2022 2021 2020 Investments in Real Estate Balance at beginning of year $ 2,949,851 $ 2,967,431 $ 2,925,575 Additions during the year: Improvements 50,394 6,653 78,469 Deductions during the year: Dispositions — — — Writeoff of fully depreciated investments in real estate 24,008 24,233 36,613 Impairment charges related to Wells Fargo Center — South Tower 193,415 — — Balance at end of year $ 2,782,822 $ 2,949,851 $ 2,967,431 |
Schedule of Accumulated Depreciation | The following is a reconciliation of Brookfield DTLA’s accumulated depreciation on its investments in real estate: For the Year Ended December 31, 2022 2021 2020 Accumulated Depreciation Balance at beginning of year $ 580,403 $ 517,329 $ 466,405 Additions during the year: Depreciation expense 87,314 87,307 87,537 Deductions during the year: Writeoff of fully depreciated investments in real estate 24,008 24,233 36,613 Impairment charges related to Wells Fargo Center — South Tower 82,327 — — Balance at end of year $ 561,382 $ 580,403 $ 517,329 .y |
Organization and Description _2
Organization and Description of Business (Details) | 12 Months Ended | |||
Apr. 24, 2013 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 09, 2022 | |
Brookfield Asset Management Inc. | ||||
Organization and Description of Business [Line Items] | ||||
Distribution percentage | 25% | |||
Series A Preferred Stock | ||||
Organization and Description of Business [Line Items] | ||||
Preferred stock, dividend rate, percentage | 7.625% | 7.625% | 7.625% |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details) | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2022 USD ($) building segment option | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Real Estate Properties [Line Items] | ||||
Total secured debt | $ 2,282,886,000 | $ 2,264,296,000 | ||
2023 | 1,128,900,000 | |||
2024 | 400,000,000 | |||
Principal loan balances | 288,900,000 | |||
Total consolidated assets | 2,544,169,000 | 2,722,478,000 | ||
Total consolidated investments in real estate, net | 2,221,440,000 | 2,369,448,000 | ||
Total consolidated liabilities | 2,359,060,000 | 2,339,770,000 | ||
Total consolidated secured debt | 2,279,573,000 | 2,255,921,000 | ||
Lease income collectability recovery (write-off) | 200,000 | 1,100,000 | $ 8,400,000 | |
Depreciation expense related to investments in real estate | $ 87,300,000 | 87,300,000 | 87,500,000 | |
Impairment, Intangible Asset, Finite-Lived, Statement of Income or Comprehensive Income [Extensible Enumeration] | Impairment of real estate and intangible assets | |||
Impairment of real estate | $ 0 | 0 | ||
Impairment of investment in unconsolidated real estate joint venture | 0 | 0 | ||
Deferred leasing costs, accumulated amortization | 52,000,000 | 52,000,000 | ||
Amortization of debt financing costs and discounts | 6,800,000 | 7,500,000 | 5,400,000 | |
(Reversed) accrued income tax expenses | 400,000 | 400,000 | 800,000 | |
Net operating loss carryforwards | 474,000,000 | 406,400,000 | ||
Unrecognized tax benefits | $ 0 | 0 | ||
Number of reportable segments | segment | 1 | |||
Building | ||||
Real Estate Properties [Line Items] | ||||
Useful life | 60 years | |||
Building Improvements | Maximum | ||||
Real Estate Properties [Line Items] | ||||
Useful life | 25 years | |||
Building Improvements | Minimum | ||||
Real Estate Properties [Line Items] | ||||
Useful life | 5 years | |||
Office and Retail | ||||
Real Estate Properties [Line Items] | ||||
Lease income collectability recovery (write-off) | $ 200,000 | 1,100,000 | $ 8,400,000 | |
Office Properties | ||||
Real Estate Properties [Line Items] | ||||
Number of real estate properties | building | 6 | |||
Retail Property | ||||
Real Estate Properties [Line Items] | ||||
Number of real estate properties | building | 1 | |||
Variable Interest Entity, Primary Beneficiary | ||||
Real Estate Properties [Line Items] | ||||
Total consolidated assets | $ 2,500,000,000 | |||
Total consolidated investments in real estate, net | 2,200,000,000 | |||
Total consolidated liabilities | 2,400,000,000 | |||
Total consolidated secured debt | 2,300,000,000 | |||
Secured Debt | ||||
Real Estate Properties [Line Items] | ||||
Total secured debt | 2,282,886,000 | |||
2023 | 1,593,947,000 | |||
2024 | 400,000,000 | |||
Total secured debt, excluding debt in default | 1,993,947,000 | |||
Fixed Rate Debt | ||||
Real Estate Properties [Line Items] | ||||
Total secured debt, excluding debt in default | 458,500,000 | 458,500,000 | ||
FIGat7th | Fixed Rate Debt | ||||
Real Estate Properties [Line Items] | ||||
Total secured debt, excluding debt in default | $ 58,500,000 | 58,500,000 | ||
Fixed interest rate | 3.88% | |||
FIGat7th | Fixed Rate Debt | Subsequent Event | ||||
Real Estate Properties [Line Items] | ||||
Option extension period | 3 years | |||
Wells Fargo Center - South Tower | ||||
Real Estate Properties [Line Items] | ||||
Impairment of real estate | $ 111,100,000 | |||
Impairment of intangible assets | 1,000,000 | |||
Wells Fargo Center - South Tower | Building Improvements | ||||
Real Estate Properties [Line Items] | ||||
Impairment of real estate | 187,800,000 | |||
Wells Fargo Center - South Tower | Non-recourse Mortgage Loan | ||||
Real Estate Properties [Line Items] | ||||
Total secured debt, excluding debt in default | 265,400,000 | |||
Wells Fargo Center– North Tower 333 S. Grand Avenue | Variable Rate - Secured Mortgage And Mezzanine Loan | ||||
Real Estate Properties [Line Items] | ||||
Total secured debt, excluding debt in default | 500,000,000 | |||
Wells Fargo Center– North Tower 333 S. Grand Avenue | Variable Rate - Secured Mortgage Debt | Secured Debt | ||||
Real Estate Properties [Line Items] | ||||
Total secured debt, excluding debt in default | 400,000,000 | |||
Wells Fargo Center– North Tower 333 S. Grand Avenue | Variable Rate - Secured Mezzanine Loan | Secured Debt | ||||
Real Estate Properties [Line Items] | ||||
Total secured debt, excluding debt in default | 65,000,000 | |||
Wells Fargo Center– North Tower 333 S. Grand Avenue | Variable Rate - Secured Mezzanine Loan Two | Secured Debt | ||||
Real Estate Properties [Line Items] | ||||
Total secured debt, excluding debt in default | 35,000,000 | |||
777 Tower | ||||
Real Estate Properties [Line Items] | ||||
Principal balance | 288,900,000 | |||
777 Tower | Secured Debt | ||||
Real Estate Properties [Line Items] | ||||
Total secured debt, excluding debt in default | 318,600,000 | |||
777 Tower | Secured Mortgage Loan | Secured Debt | ||||
Real Estate Properties [Line Items] | ||||
Total secured debt, excluding debt in default | 268,600,000 | |||
777 Tower | Secured Mezzanine Loan | Secured Debt | ||||
Real Estate Properties [Line Items] | ||||
Total secured debt, excluding debt in default | 50,000,000 | |||
Gas Company Tower | Secured Debt | ||||
Real Estate Properties [Line Items] | ||||
Total secured debt, excluding debt in default | $ 465,000,000 | |||
Option extension period | 1 year | |||
Number of extension option | option | 3 | |||
Gas Company Tower | Variable Rate - Secured Mortgage Debt | ||||
Real Estate Properties [Line Items] | ||||
Total secured debt, excluding debt in default | 350,000,000 | |||
Gas Company Tower | Variable Rate - Secured Mortgage Debt | Secured Debt | ||||
Real Estate Properties [Line Items] | ||||
Total secured debt, excluding debt in default | $ 350,000,000 | |||
Gas Company Tower | Variable Rate - Secured Mezzanine Loan | ||||
Real Estate Properties [Line Items] | ||||
Total secured debt, excluding debt in default | 65,000,000 | |||
Gas Company Tower | Variable Rate - Secured Mezzanine Loan | Secured Debt | ||||
Real Estate Properties [Line Items] | ||||
Total secured debt, excluding debt in default | 65,000,000 | |||
Gas Company Tower | Variable Rate - Secured Mezzanine Loan Two | ||||
Real Estate Properties [Line Items] | ||||
Total secured debt, excluding debt in default | $ 50,000,000 | |||
Gas Company Tower | Variable Rate - Secured Mezzanine Loan Two | Secured Debt | ||||
Real Estate Properties [Line Items] | ||||
Total secured debt, excluding debt in default | $ 50,000,000 | |||
755 South Figueroa | Brookfield DTLA Fund Properties IV LLC | ||||
Real Estate Properties [Line Items] | ||||
Ownership interest in unconsolidated joint venture | 22.10% | 33.60% | ||
EY Plaza | Secured Debt | ||||
Real Estate Properties [Line Items] | ||||
Total secured debt, excluding debt in default | $ 305,000,000 | |||
Option extension period | 1 year | |||
Number of extension option | option | 2 | |||
EY Plaza | Variable Rate - Secured Mortgage Debt | Secured Debt | ||||
Real Estate Properties [Line Items] | ||||
Total secured debt, excluding debt in default | $ 275,000,000 | |||
EY Plaza | Variable Rate - Secured Mezzanine Loan | Secured Debt | ||||
Real Estate Properties [Line Items] | ||||
Total secured debt, excluding debt in default | $ 30,000,000 |
Rents, Deferred Rents and Oth_3
Rents, Deferred Rents and Other Receivables, Net - Schedule of Rents, Deferred Rents and Other Receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||
Straight-line and other deferred rents | $ 114,414 | $ 108,913 |
Tenant inducements receivable | 31,689 | 28,445 |
Tenant receivables | 2,406 | 3,316 |
Other receivables | 1,588 | 362 |
Rents, deferred rents and other receivables, gross | 150,097 | 141,036 |
Less: accumulated amortization of tenant inducements | 14,650 | 15,411 |
Rents, deferred rents and other receivables, net | $ 135,447 | $ 125,625 |
Intangible Assets and Liabili_3
Intangible Assets and Liabilities - Schedule of Intangible Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Intangible Assets | ||
In-place leases | $ 32,678 | $ 41,422 |
Tenant relationships | 2,151 | 6,432 |
Above-market leases | 8,231 | 16,734 |
Intangible assets, gross | 43,060 | 64,588 |
Less: accumulated amortization | 32,993 | 48,565 |
Intangible assets, net | 10,067 | 16,023 |
Intangible Liabilities | ||
Below-market leases | 18,670 | 33,416 |
Less: accumulated amortization | 15,765 | 28,961 |
Intangible liabilities, net | $ 2,905 | $ 4,455 |
Intangible Assets and Liabili_4
Intangible Assets and Liabilities - Schedule of Effect of Intangible Amortization/Accretion (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lease income | |||
Acquired Indefinite-lived Intangible Assets and Liabilities [Line Items] | |||
Amortization of intangible assets and liabilities | $ 141 | $ (206) | $ (1,331) |
Depreciation and amortization expense | |||
Acquired Indefinite-lived Intangible Assets and Liabilities [Line Items] | |||
Amortization of intangible assets and liabilities | $ 3,562 | $ 4,267 | $ 6,217 |
Intangible Assets and Liabili_5
Intangible Assets and Liabilities - Schedule of Estimated Future Intangible Amortization/Accretion (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity | ||
Intangible assets, net | $ 10,067 | $ 16,023 |
Intangible Liabilities, Net, Amortization Income, Fiscal Year Maturity | ||
2023 | 730 | |
2024 | 280 | |
2025 | 265 | |
2026 | 246 | |
2027 | 154 | |
Thereafter | 1,229 | |
Intangible liabilities, net | 2,905 | $ 4,455 |
In-Place Leases | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity | ||
2023 | 1,546 | |
2024 | 920 | |
2025 | 840 | |
2026 | 585 | |
2027 | 115 | |
Thereafter | 918 | |
Intangible assets, net | 4,924 | |
Other Intangible Assets | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity | ||
2023 | 1,800 | |
2024 | 1,752 | |
2025 | 1,112 | |
2026 | 443 | |
2027 | 3 | |
Thereafter | 33 | |
Intangible assets, net | $ 5,143 |
Secured Debt, Net - Schedule of
Secured Debt, Net - Schedule of Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Total debt in default | $ 288,939 | $ 275,000 |
Total secured debt | 2,282,886 | 2,264,296 |
Less: unamortized debt financing costs | 3,313 | 8,375 |
Total secured debt, net | 2,279,573 | 2,255,921 |
Variable Rate Loans | ||
Debt Instrument [Line Items] | ||
Total secured debt, excluding debt in default | 1,535,447 | 1,530,796 |
Fixed Rate Debt | ||
Debt Instrument [Line Items] | ||
Total secured debt, excluding debt in default | 458,500 | 458,500 |
Total secured debt, excluding debt in default | ||
Debt Instrument [Line Items] | ||
Total secured debt, excluding debt in default | 1,993,947 | 1,989,296 |
Wells Fargo Center - North Tower | Variable Rate Debt - Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Total secured debt, excluding debt in default | 400,000 | 400,000 |
Wells Fargo Center - North Tower | Variable Rate Debt - Mezzanine A Loan | ||
Debt Instrument [Line Items] | ||
Total secured debt, excluding debt in default | 65,000 | 65,000 |
Wells Fargo Center - North Tower | Variable Rate Debt - Mezzanine B Loan | ||
Debt Instrument [Line Items] | ||
Total secured debt, excluding debt in default | $ 35,000 | 35,000 |
Wells Fargo Center - North Tower | SOFR | Variable Rate Debt - Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.76% | |
Wells Fargo Center - North Tower | SOFR | Variable Rate Debt - Mezzanine A Loan | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 4.11% | |
Wells Fargo Center - North Tower | SOFR | Variable Rate Debt - Mezzanine B Loan | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 5.11% | |
Wells Fargo Center - South Tower | Variable Rate Debt - Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Total secured debt, excluding debt in default | $ 265,447 | 260,796 |
Wells Fargo Center - South Tower | SOFR | Variable Rate Debt - Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.80% | |
EY Plaza | Variable Rate Debt - Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Total secured debt, excluding debt in default | $ 275,000 | 275,000 |
EY Plaza | Variable Rate Debt - Mezzanine A Loan | ||
Debt Instrument [Line Items] | ||
Total secured debt, excluding debt in default | $ 30,000 | 30,000 |
EY Plaza | LIBOR | Variable Rate Debt - Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.86% | |
EY Plaza | LIBOR | Variable Rate Debt - Mezzanine A Loan | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 6.85% | |
Gas Company Tower | Variable Rate - Secured Mortgage Debt | ||
Debt Instrument [Line Items] | ||
Total secured debt, excluding debt in default | 350,000 | |
Gas Company Tower | Variable Rate - Secured Mezzanine Loan | ||
Debt Instrument [Line Items] | ||
Total secured debt, excluding debt in default | 65,000 | |
Gas Company Tower | Variable Rate - Secured Mezzanine Loan Two | ||
Debt Instrument [Line Items] | ||
Total secured debt, excluding debt in default | 50,000 | |
Gas Company Tower | LIBOR | Variable Rate - Secured Mortgage Debt | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.89% | |
Gas Company Tower | LIBOR | Variable Rate - Secured Mezzanine Loan | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 5% | |
Gas Company Tower | LIBOR | Variable Rate - Secured Mezzanine Loan Two | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 7.75% | |
BOA Plaza | Fixed Rate Debt | ||
Debt Instrument [Line Items] | ||
Fixed interest rate | 4.05% | |
Total secured debt, excluding debt in default | $ 400,000 | 400,000 |
FIGat7th | Fixed Rate Debt | ||
Debt Instrument [Line Items] | ||
Fixed interest rate | 3.88% | |
Total secured debt, excluding debt in default | $ 58,500 | 58,500 |
777 Tower | Variable Rate Debt - Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Total debt in default | 243,594 | 231,842 |
777 Tower | Variable Rate Debt - Mezzanine A Loan | ||
Debt Instrument [Line Items] | ||
Total debt in default | $ 45,345 | $ 43,158 |
777 Tower | LIBOR | Variable Rate Debt - Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.60% | |
777 Tower | LIBOR | Variable Rate Debt - Mezzanine A Loan | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 4.15% |
Secured Debt, Net - Schedule _2
Secured Debt, Net - Schedule of Debt (Footnote) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
777 Tower | |
Debt Instrument [Line Items] | |
Principal balance | $ 288.9 |
Variable Rate Debt - Mortgage Loan | Wells Fargo Center - South Tower | |
Debt Instrument [Line Items] | |
Remaining future advance amount | $ 24.6 |
Secured Debt, Net - Narrative (
Secured Debt, Net - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Weighted average interest rate of debt outstanding | 5.82% | 2.91% |
Weighted average term to maturity | 1 year | |
Prepayment amount without penalty | $ 1,593,900 | |
Amount available to be defeased after lock-out periods | 400,000 | |
Secured Debt | ||
Debt Instrument [Line Items] | ||
Secured debt, outstanding loans | 1,993,947 | |
777 Tower | ||
Debt Instrument [Line Items] | ||
Principal balance | 288,900 | |
777 Tower | Secured Debt | ||
Debt Instrument [Line Items] | ||
Secured debt, outstanding loans | 318,600 | |
777 Tower | Secured Mortgage Loan | Secured Debt | ||
Debt Instrument [Line Items] | ||
Secured debt, outstanding loans | 268,600 | |
777 Tower | Secured Mezzanine Loan | Secured Debt | ||
Debt Instrument [Line Items] | ||
Secured debt, outstanding loans | 50,000 | |
Gas Company Tower | Secured Debt | ||
Debt Instrument [Line Items] | ||
Secured debt, outstanding loans | 465,000 | |
Gas Company Tower | Variable Rate - Secured Mortgage Debt | ||
Debt Instrument [Line Items] | ||
Secured debt, outstanding loans | $ 350,000 | |
Gas Company Tower | Variable Rate - Secured Mortgage Debt | Secured Debt | ||
Debt Instrument [Line Items] | ||
Secured debt, outstanding loans | 350,000 | |
Gas Company Tower | Secured Mezzanine Loan | ||
Debt Instrument [Line Items] | ||
Secured debt, outstanding loans | 65,000 | |
Gas Company Tower | Secured Mezzanine Loan | Secured Debt | ||
Debt Instrument [Line Items] | ||
Secured debt, outstanding loans | 65,000 | |
Gas Company Tower | Variable Rate - Secured Mezzanine Loan Two | ||
Debt Instrument [Line Items] | ||
Secured debt, outstanding loans | $ 50,000 | |
Gas Company Tower | Variable Rate - Secured Mezzanine Loan Two | Secured Debt | ||
Debt Instrument [Line Items] | ||
Secured debt, outstanding loans | 50,000 | |
Wells Fargo Center– North Tower 333 S. Grand Avenue | Variable Rate - Secured Mortgage Debt | Secured Debt | ||
Debt Instrument [Line Items] | ||
Secured debt, outstanding loans | 400,000 | |
Wells Fargo Center– North Tower 333 S. Grand Avenue | Secured Mezzanine Loan | Secured Debt | ||
Debt Instrument [Line Items] | ||
Secured debt, outstanding loans | 65,000 | |
Wells Fargo Center– North Tower 333 S. Grand Avenue | Variable Rate - Secured Mezzanine Loan Two | Secured Debt | ||
Debt Instrument [Line Items] | ||
Secured debt, outstanding loans | $ 35,000 |
Secured Debt, Net - Schedule _3
Secured Debt, Net - Schedule of Debt Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
2023 | $ 1,128,900 | |
2024 | 400,000 | |
Total debt in default | 288,939 | $ 275,000 |
Total secured debt | 2,282,886 | $ 2,264,296 |
Secured Debt | ||
Debt Instrument [Line Items] | ||
2023 | 1,593,947 | |
2024 | 400,000 | |
Total | 1,993,947 | |
Total debt in default | 288,939 | |
Total secured debt | 2,282,886 | |
Gas Company Tower | Secured Debt | ||
Debt Instrument [Line Items] | ||
Total | $ 465,000 |
Accounts Payable and Other Li_3
Accounts Payable and Other Liabilities - Schedule of Accounts Payable and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Tenant improvements and inducements payable | $ 23,644 | $ 32,973 |
Unearned rent and tenant payables | 27,136 | 31,249 |
Accrued capital expenditures and leasing commissions | 6,162 | 7,422 |
Accrued expenses and other liabilities | 14,087 | 5,968 |
Accounts payable and other liabilities | $ 71,029 | $ 77,612 |
Noncontrolling Interests - Narr
Noncontrolling Interests - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | |||||
Nov. 30, 2022 | May 31, 2022 | Nov. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 24, 2013 | |
Series A Preferred Stock | ||||||
Noncontrolling Interest [Line Items] | ||||||
Preferred stock, shares authorized (in shares) | 10,000,000 | |||||
Preferred stock, par value (in USD per share) | $ 0.01 | $ 0.01 | ||||
Preferred stock, liquidation preference (in USD per share) | $ 25 | |||||
Preferred stock, shares outstanding (in shares) | 9,730,370 | 9,730,370 | ||||
Series A Preferred Stock | Third Party Issuance | ||||||
Noncontrolling Interest [Line Items] | ||||||
Preferred stock, shares outstanding (in shares) | 9,357,469 | 9,357,469 | ||||
Series A Preferred Stock | DTLA Fund Holding Co. | ||||||
Noncontrolling Interest [Line Items] | ||||||
Preferred stock, shares outstanding (in shares) | 372,901 | 372,901 | ||||
Series B preferred interest returns | ||||||
Noncontrolling Interest [Line Items] | ||||||
Maximum funding commitment | $ 425 | $ 260 | ||||
Increase to funding commitment | $ 75 | $ 40 | $ 50 | |||
Future funding commitment available | $ 88.6 |
Mezzanine Equity - Schedule of
Mezzanine Equity - Schedule of Change in Mezzanine Equity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Balance, beginning | $ 1,116,512 | $ 1,101,510 | $ 1,054,223 |
Issuance of Series B preferred interest | 47,564 | 25,500 | 47,850 |
Dividends | 18,549 | 18,549 | 18,548 |
Preferred returns | 31,644 | 33,275 | 34,921 |
Redemption measurement adjustments | (8,248) | 1,028 | (1,580) |
Contributions from noncontrolling interests | 288 | 629 | 777 |
Repurchases of noncontrolling interests | (46,975) | (45,306) | (34,218) |
Distributions to noncontrolling interests | (11,379) | (18,673) | (19,011) |
Balance, ending | $ 1,147,955 | $ 1,116,512 | $ 1,101,510 |
Series A Preferred Stock | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Balance, beginning (in shares) | 9,730,370 | 9,730,370 | 9,730,370 |
Balance, beginning | $ 465,577 | $ 447,028 | $ 428,480 |
Dividends | $ 18,549 | $ 18,549 | $ 18,548 |
Balance, ending (in shares) | 9,730,370 | 9,730,370 | 9,730,370 |
Balance, ending | $ 484,126 | $ 465,577 | $ 447,028 |
Series A-1 Preferred Interest | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Balance, beginning | 452,454 | 435,242 | 418,029 |
Preferred returns | 17,212 | 17,212 | 17,213 |
Balance, ending | 469,666 | 452,454 | 435,242 |
Senior Participating Preferred Interest | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Balance, beginning | 21,191 | 20,413 | 22,362 |
Redemption measurement adjustments | (8,248) | 1,028 | (1,580) |
Contributions from noncontrolling interests | 288 | 629 | 777 |
Distributions to noncontrolling interests | (1,554) | (879) | (1,146) |
Balance, ending | 11,677 | 21,191 | 20,413 |
Series B Preferred Interest | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Balance, beginning | 177,290 | 198,827 | 185,352 |
Issuance of Series B preferred interest | 47,564 | 25,500 | 47,850 |
Preferred returns | 14,432 | 16,063 | 17,708 |
Repurchases of noncontrolling interests | (46,975) | (45,306) | (34,218) |
Distributions to noncontrolling interests | (9,825) | (17,794) | (17,865) |
Balance, ending | $ 182,486 | $ 177,290 | $ 198,827 |
Mezzanine Equity - Narrative (D
Mezzanine Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Apr. 24, 2013 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Class of Stock [Line Items] | |||||
Redemption value | $ 1,147,955 | $ 1,116,512 | $ 1,101,510 | $ 1,054,223 | |
Fund III | |||||
Class of Stock [Line Items] | |||||
Fund asset interest | 96% | ||||
Series A Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Redemption price | $ 484,126 | $ 465,577 | |||
Liquidation value | 243,300 | ||||
Preferred stock, amount of accumulated and unpaid dividends | $ 240,900 | ||||
Preferred stock dividends declared (in USD per share) | $ 0 | $ 0 | $ 0 | ||
Preferred stock, dividend rate (in USD per share) | 1.90625 | ||||
Preferred stock, liquidation preference (in USD per share) | $ 25 | ||||
Redemption value | $ 484,126 | $ 465,577 | $ 447,028 | 428,480 | |
Preferred stock, dividend rate, percentage | 7.625% | 7.625% | 7.625% | ||
Series A-1 Preferred Interest | |||||
Class of Stock [Line Items] | |||||
Liquidation value | $ 225,700 | ||||
Redemption value | 469,666 | $ 452,454 | 435,242 | 418,029 | |
Interest payable | $ 243,900 | ||||
Preferred stock, dividend rate, percentage | 7.625% | ||||
Senior Participating Preferred Interest | |||||
Class of Stock [Line Items] | |||||
Redemption value | $ 11,677 | 21,191 | 20,413 | 22,362 | |
Senior Participating Preferred Interest | Fund III | DTLA Holdings | |||||
Class of Stock [Line Items] | |||||
Redemption value | $ 11,700 | ||||
Participating interest in residual value | 4% | ||||
Senior Participating Preferred Interest | Fund III | DTLA Holdings | |||||
Class of Stock [Line Items] | |||||
Participating interest in residual value | 4% | ||||
Series B preferred interest returns | |||||
Class of Stock [Line Items] | |||||
Liquidation value | $ 175,400 | ||||
Redemption value | 182,486 | $ 177,290 | $ 198,827 | $ 185,352 | |
Unpaid preferred returns | $ 7,100 | ||||
Series B preferred interest returns | Expected Dividend Rate | |||||
Class of Stock [Line Items] | |||||
Preferred return rate | 9% |
Stockholders' Deficit (Details)
Stockholders' Deficit (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | |||
Common stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 | |
Common stock, shares issued (in shares) | 1,000 | 1,000 | |
Common stock, shares outstanding (in shares) | 1,000 | 1,000 | |
Dividends declared on common stock (in USD per share) | $ 0 | $ 0 | $ 0 |
Cash and non-cash contributions to additional paid-in capital | $ 1 | $ 1 | $ 4.8 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Summary of Change in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accumulated Other Comprehensive Loss [Roll Forward] | |||
Balance at beginning of year | $ (733,804) | $ (628,440) | $ (520,782) |
Net unrealized gains arising during the year | 0 | 0 | 562 |
Reclassification of losses related to terminated interest rate swaps to other expenses included in net income | 0 | 0 | 1,779 |
Total other comprehensive income | 0 | 0 | 2,341 |
Balance at end of year | (962,846) | (733,804) | (628,440) |
AOCI Including Portion Attributable to Noncontrolling Interest | |||
Accumulated Other Comprehensive Loss [Roll Forward] | |||
Balance at beginning of year | 0 | 0 | (2,341) |
Balance at end of year | $ 0 | $ 0 | $ 0 |
Financial Instruments - Schedul
Financial Instruments - Schedule of Interest Rate Caps (Details) - Interest Rate Cap - Not Designated as Hedging Instrument $ in Thousands | Dec. 31, 2022 USD ($) |
Derivative Instruments, Interest Rate Caps | |
Notional Amount | $ 1,533,219 |
Wells Fargo Center - North Tower | Variable Rate Debt - Mortgage Loan | |
Derivative Instruments, Interest Rate Caps | |
Notional Amount | $ 400,000 |
Strike rate | 3.40% |
Wells Fargo Center - North Tower | Variable Rate Debt - Mezzanine A Loan | |
Derivative Instruments, Interest Rate Caps | |
Notional Amount | $ 65,000 |
Strike rate | 3.40% |
Wells Fargo Center - North Tower | Variable Rate Debt - Mezzanine B Loan | |
Derivative Instruments, Interest Rate Caps | |
Notional Amount | $ 35,000 |
Strike rate | 3.40% |
Wells Fargo Center - South Tower | Variable Rate Debt - Mortgage Loan | |
Derivative Instruments, Interest Rate Caps | |
Notional Amount | $ 263,219 |
Strike rate | 2.87% |
EY Plaza | Variable Rate Debt - Mezzanine A Loan | |
Derivative Instruments, Interest Rate Caps | |
Notional Amount | $ 30,000 |
Strike rate | 6.02% |
EY Plaza | Variable Rate - Mortgage Debt | |
Derivative Instruments, Interest Rate Caps | |
Notional Amount | $ 275,000 |
Strike rate | 6.02% |
Gas Company Tower | Variable Rate Debt - Mezzanine A Loan | |
Derivative Instruments, Interest Rate Caps | |
Notional Amount | $ 65,000 |
Strike rate | 4% |
Gas Company Tower | Variable Rate Debt - Mezzanine B Loan | |
Derivative Instruments, Interest Rate Caps | |
Notional Amount | $ 50,000 |
Strike rate | 4% |
Gas Company Tower | Variable Rate - Mortgage Debt | |
Derivative Instruments, Interest Rate Caps | |
Notional Amount | $ 350,000 |
Strike rate | 4% |
Financial Instruments - Summary
Financial Instruments - Summary of Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Prepaid and other assets, net | Not Designated as Hedging Instrument | ||
Derivatives, Fair Value | ||
Derivative asset, fair value | $ 10,262 | $ 46 |
Financial Instruments - Summa_2
Financial Instruments - Summary of Effect of Derivative Instruments (Details) - Interest Rate Swap - Cash Flow Hedging - Designated as Hedging Instrument $ in Thousands | 12 Months Ended |
Dec. 31, 2020 USD ($) | |
Derivative | |
Gain Recognized in OCL | $ 562 |
Loss Reclassified from AOCL to Consolidated Statements of Operations | $ (1,779) |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative | |||
Unrealized gain (loss) on derivatives | $ (1,832) | $ 41 | $ (127) |
Interest Rate Cap | |||
Derivative | |||
Unrealized gain (loss) on derivatives | $ (1,832) | $ 41 | $ (127) |
Fair Value Measurements and D_3
Fair Value Measurements and Disclosures - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Impairment of real estate and intangible assets | $ 112,073 | $ 0 | $ 0 |
Wells Fargo Center - South Tower | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Impairment of real estate and intangible assets | $ 112,100 | ||
Level 3 | Fair Value, Nonrecurring | Measurement Input, Discount Rate | Valuation Technique, Discounted Cash Flow | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Real estate owned, measurement input | 0.093 | ||
Level 3 | Fair Value, Nonrecurring | Measurement Input, Terminal Capitalization Rate | Valuation Technique, Discounted Cash Flow | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Real estate owned, measurement input | 0.058 | ||
Interest Rate Cap | Level 2 | Fair Value, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Fair value of interest rate cap contracts | $ 10,262 | $ 46 |
Fair Value Measurements and D_4
Fair Value Measurements and Disclosures - Carrying Amounts of Assets Measured On Nonrecurring Basis (Details) - Fair Value, Nonrecurring $ in Thousands | Dec. 31, 2022 USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |
Investments in Real Estate Assets | $ 311,066 |
Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |
Investments in Real Estate Assets | 0 |
Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |
Investments in Real Estate Assets | 0 |
Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |
Investments in Real Estate Assets | $ 311,066 |
Fair Value Measurements and D_5
Fair Value Measurements and Disclosures - Summary of (Liabilities) Assets Measured at Fair Value on a Recurring Basis (Details) - Level 2 - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Secured debt | $ 2,265,201 | $ 2,263,160 |
Carrying value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Secured debt | $ 2,279,573 | $ 2,530,921 |
Related Party Transactions - Ma
Related Party Transactions - Management Agreements - Narrative (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Related Party Transaction | |
Business interruption insurance | $ 2,500,000 |
Earthquake insurance | 500,000 |
Flood and weather catastrophe insurance | 350,000 |
Terrorism insurance policy | $ 4,000,000 |
Property Management Fee | |
Related Party Transaction | |
Related party transaction rate | 2.75% |
Asset Management Fee | |
Related Party Transaction | |
Related party transaction rate | 0.75% |
Leasing Management Fee | Minimum | |
Related Party Transaction | |
Related party transaction rate | 1% |
Leasing Management Fee | Maximum | |
Related Party Transaction | |
Related party transaction rate | 4% |
Construction management | |
Related Party Transaction | |
Related party transaction rate | 3% |
Development management | |
Related Party Transaction | |
Related party transaction rate | 3% |
Entitlement | |
Related Party Transaction | |
Related party transaction rate | 20% |
Related party expense, budget threshold limit | $ 3,000 |
Related Party Transactions - Su
Related Party Transactions - Summary of Costs Incurred Under Agreements with Related Parties (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property management | |||
Related Party Transaction | |||
Related party transaction rate | 2.75% | ||
Related party expense | $ 8,045 | $ 8,037 | $ 8,035 |
Asset management | |||
Related Party Transaction | |||
Related party expense | 6,346 | 6,166 | 6,040 |
Asset management fee payables | 3,200 | 0 | |
Leasing | |||
Related Party Transaction | |||
Related party expense | $ 1,549 | 1,607 | 2,105 |
Construction management | |||
Related Party Transaction | |||
Related party transaction rate | 3% | ||
Related party expense | $ 1,148 | 400 | 3,239 |
Development management | |||
Related Party Transaction | |||
Related party transaction rate | 3% | ||
Related party expense | $ 1,230 | 1,881 | 1,007 |
Entitlement | |||
Related Party Transaction | |||
Related party transaction rate | 20% | ||
Related party expense | $ 111 | 639 | 0 |
General, administrative and reimbursable expenses | |||
Related Party Transaction | |||
Related party expense | 3,904 | 2,807 | 2,492 |
Insurance Expense | |||
Related Party Transaction | |||
Related party expense | $ 12,905 | 12,473 | 11,836 |
Insurance Fees | Brookfield Asset Management Inc. | |||
Related Party Transaction | |||
Related party transaction rate | 2.50% | ||
Related party expense | 244 | 282 | |
Insurance Premiums | Affiliated Entity | |||
Related Party Transaction | |||
Related party expense | $ 127 | $ 129 | $ 149 |
Related Party Transactions - _2
Related Party Transactions - Summary of the Impact of Other Related Party Transactions with BAM Affiliates (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lease income | |||
Related Party Transaction | |||
Related party revenue | $ 14,315 | $ 13,343 | $ 11,443 |
Parking revenue | |||
Related Party Transaction | |||
Related party revenue | 988 | 1,001 | 1,317 |
Interest and other revenue | |||
Related Party Transaction | |||
Related party revenue | 0 | 0 | 51 |
Rental property operating and maintenance expense | |||
Related Party Transaction | |||
Related party expense | 0 | 318 | 577 |
Other expenses | |||
Related Party Transaction | |||
Related party expense | 0 | 0 | 90 |
Interest expense | |||
Related Party Transaction | |||
Related party interest expense | $ 3,087 | $ 2,201 | $ 1,982 |
Related Party Transactions - _3
Related Party Transactions - Summary of the Impact of Other Related Party Transactions with BAM Affiliates (Footnote) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Feb. 28, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Interest expense | ||||
Related Party Transaction | ||||
Related party interest expense | $ 3,087 | $ 2,201 | $ 1,982 | |
Commercial Mortgage Backed Securities | Issuance Of Commercial Mortgage Backed Securities | Brookfield Asset Management Inc. | ||||
Related Party Transaction | ||||
Payments to acquire commercial mortgage-backed securities | $ 18,200 | |||
Securitized debt instrument, monthly | 2 years | |||
Fixed interest rate | 2.35% | |||
Commercial Mortgage Backed Securities | Interest expense | Brookfield Asset Management Inc. | ||||
Related Party Transaction | ||||
Related party interest expense | 712 | 391 | ||
Variable Rate Debt - Mezzanine B Loan | Wells Fargo Center - North Tower | ||||
Related Party Transaction | ||||
Related party loan | 35,000 | |||
Interest payable on related party loan | $ 146 | $ 84 |
Future Minimum Base Rents - Sch
Future Minimum Base Rents - Schedule of Future Minimum Base Rents Under Executed Noncancelable Tenant Operating Leases (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 151,283 |
2024 | 144,415 |
2025 | 131,058 |
2026 | 115,960 |
2027 | 88,806 |
Thereafter | 471,023 |
Total future minimum base rents | $ 1,102,545 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 USD ($) property | Dec. 31, 2021 property | Dec. 31, 2020 property | |
Tenant Improvements and Leasing Commissions Due to Lessees | |||
Concentration Risk [Line Items] | |||
Capital commitments | $ 25.4 | ||
Capital commitments to be paid during the remainder of fiscal year | 16.4 | ||
Capital commitments to be paid during year two | $ 6.7 | ||
Revenue | BOA Plaza, Wells Fargo Center-North Tower, Wells Fargo Center-South Tower, Gas Company Tower, EY Plaza and 777 Tower | |||
Concentration Risk [Line Items] | |||
Number of real estate properties | property | 6 | 6 | 6 |
Revenue | BOA Plaza, Wells Fargo Center-North Tower, Wells Fargo Center-South Tower, Gas Company Tower, EY Plaza and 777 Tower | Product Concentration Risk | |||
Concentration Risk [Line Items] | |||
Percentage of consolidated revenue generated by six properties | 96% | 95% | 97% |
Minimum | |||
Concentration Risk [Line Items] | |||
Typical length of lease term | 5 years | ||
Maximum | |||
Concentration Risk [Line Items] | |||
Typical length of lease term | 10 years |
Quarterly Financial Informati_3
Quarterly Financial Information (Unaudited) - Schedule of Quarterly Financial Information (Unaudited) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Quarterly Financial Information [Line Items] | |||||||||||
Total revenue | $ 75,626 | $ 74,531 | $ 73,722 | $ 72,021 | $ 76,076 | $ 68,820 | $ 69,210 | $ 69,692 | $ 295,900 | $ 283,798 | $ 285,548 |
Total expenses | 124,935 | 191,050 | 86,611 | 82,631 | 84,070 | 83,486 | 82,925 | 87,625 | 485,227 | 338,106 | 347,967 |
Total other income | 244 | 395 | 378 | 213 | 232 | 268 | 97 | 199 | 1,230 | 796 | (525) |
Net loss | (49,065) | (116,124) | (12,511) | (10,397) | (7,762) | (14,398) | (13,618) | (17,734) | (188,097) | (53,512) | (62,944) |
Net loss attributable to Brookfield DTLA | (52,930) | (206,357) | (8,322) | (15,185) | (13,695) | (49,494) | (15,696) | (42,124) | (282,794) | (121,009) | (208,028) |
Series A preferred stock dividends | 18,549 | 18,549 | 18,548 | ||||||||
Net loss attributable to common interest holders of Brookfield DTLA | (57,568) | (210,994) | (12,959) | (19,822) | (18,332) | (54,131) | (20,334) | (46,761) | (301,343) | (139,558) | (226,576) |
Series A-1 preferred interest returns | |||||||||||
Quarterly Financial Information [Line Items] | |||||||||||
Preferred interest returns | 4,303 | 4,303 | 4,303 | 4,303 | 4,304 | 4,303 | 4,302 | 4,303 | 17,212 | 17,212 | 17,213 |
Senior participating preferred interest redemption measurement adjustments | |||||||||||
Quarterly Financial Information [Line Items] | |||||||||||
Senior participating preferred interest redemption measurement adjustments | (4,173) | (4,016) | 142 | (201) | 453 | (325) | 299 | 601 | (8,248) | 1,028 | (1,580) |
Series B preferred interest returns | |||||||||||
Quarterly Financial Information [Line Items] | |||||||||||
Preferred interest returns | 3,719 | 3,401 | 3,562 | 3,750 | 3,739 | 3,896 | 4,146 | 4,282 | 14,432 | 16,063 | 17,708 |
Series B common interest – allocation of net income | |||||||||||
Quarterly Financial Information [Line Items] | |||||||||||
Series B common interest – allocation of net (loss) income | 16 | 86,545 | (12,196) | (3,064) | (2,563) | 27,222 | (6,669) | 15,204 | $ 71,301 | $ 33,194 | $ 111,743 |
Series A Preferred Stock | |||||||||||
Quarterly Financial Information [Line Items] | |||||||||||
Series A preferred stock dividends | $ 4,638 | $ 4,637 | $ 4,637 | $ 4,637 | $ 4,637 | $ 4,637 | $ 4,638 | $ 4,637 |
Investments in Real Estate - Su
Investments in Real Estate - Summary of Information Related to Investments in Real Estate (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encum- brances | $ 2,282,886 | |||
Initial Cost to Company | ||||
Land | 222,555 | |||
Buildings and Improve- ments | 2,152,946 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improve- ments | 412,895 | |||
Gross Amount at Which Carried at Close of Period | ||||
Land | 216,982 | |||
Buildings and Improvements | 2,565,840 | |||
Total | 2,782,822 | $ 2,949,851 | $ 2,967,431 | $ 2,925,575 |
Accumulated Depreciation | 561,382 | $ 580,403 | $ 517,329 | $ 466,405 |
Office Properties | Wells Fargo Center– North Tower 333 S. Grand Avenue | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encum- brances | 500,000 | |||
Initial Cost to Company | ||||
Land | 41,024 | |||
Buildings and Improve- ments | 448,562 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improve- ments | 167,437 | |||
Gross Amount at Which Carried at Close of Period | ||||
Land | 41,024 | |||
Buildings and Improvements | 615,999 | |||
Total | 657,023 | |||
Accumulated Depreciation | 134,932 | |||
Office Properties | BOA Plaza 333 S. Hope Street | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encum- brances | 400,000 | |||
Initial Cost to Company | ||||
Land | 54,163 | |||
Buildings and Improve- ments | 342,164 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improve- ments | 80,610 | |||
Gross Amount at Which Carried at Close of Period | ||||
Land | 54,163 | |||
Buildings and Improvements | 422,775 | |||
Total | 476,938 | |||
Accumulated Depreciation | 132,187 | |||
Office Properties | Wells Fargo Center– South Tower 355 S. Grand Avenue | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encum- brances | 265,447 | |||
Initial Cost to Company | ||||
Land | 21,231 | |||
Buildings and Improve- ments | 388,761 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improve- ments | (93,353) | |||
Gross Amount at Which Carried at Close of Period | ||||
Land | 15,658 | |||
Buildings and Improvements | 295,408 | |||
Total | 311,066 | |||
Accumulated Depreciation | 0 | |||
Office Properties | Gas Company Tower 525-555 W. Fifth Street | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encum- brances | 465,000 | |||
Initial Cost to Company | ||||
Land | 20,742 | |||
Buildings and Improve- ments | 392,650 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improve- ments | 76,249 | |||
Gross Amount at Which Carried at Close of Period | ||||
Land | 20,742 | |||
Buildings and Improvements | 468,898 | |||
Total | 489,640 | |||
Accumulated Depreciation | 102,965 | |||
Office Properties | EY Plaza 725 S. Figueroa Street | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encum- brances | 305,000 | |||
Initial Cost to Company | ||||
Land | 47,385 | |||
Buildings and Improve- ments | 242,108 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improve- ments | 97,083 | |||
Gross Amount at Which Carried at Close of Period | ||||
Land | 47,385 | |||
Buildings and Improvements | 339,189 | |||
Total | 386,574 | |||
Accumulated Depreciation | 98,129 | |||
Office Properties | 777 Tower 777 S. Figueroa Street | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encum- brances | 288,939 | |||
Initial Cost to Company | ||||
Land | 38,010 | |||
Buildings and Improve- ments | 293,958 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improve- ments | 54,625 | |||
Gross Amount at Which Carried at Close of Period | ||||
Land | 38,010 | |||
Buildings and Improvements | 348,583 | |||
Total | 386,593 | |||
Accumulated Depreciation | 67,168 | |||
Retail Property | FIGat7th 735 S. Figueroa Street | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encum- brances | 58,500 | |||
Initial Cost to Company | ||||
Land | 0 | |||
Buildings and Improve- ments | 44,743 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improve- ments | 30,244 | |||
Gross Amount at Which Carried at Close of Period | ||||
Land | 0 | |||
Buildings and Improvements | 74,988 | |||
Total | 74,988 | |||
Accumulated Depreciation | $ 26,001 |
Investments in Real Estate - _2
Investments in Real Estate - Summary of Information Related to Investments in Real Estate (Footnote) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||
Investment in real estate for federal income tax purposes, gross cost | $ 3,000,000,000 | |
Impairment of real estate | 0 | $ 0 |
Wells Fargo Center - South Tower | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||
Impairment of real estate | $ 111,100,000 | |
Buildings | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||
Useful life | 60 years | |
Building Improvements | Wells Fargo Center - South Tower | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||
Impairment of real estate | $ 187,800,000 | |
Accumulated depreciation | $ 82,300,000 | |
Building Improvements | Minimum | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||
Useful life | 5 years | |
Building Improvements | Maximum | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||
Useful life | 25 years | |
Land | Wells Fargo Center - South Tower | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||
Impairment of real estate | $ 5,600,000 |
Investments in Real Estate - Sc
Investments in Real Estate - Schedule of Reconciliation of Investments in Real Estate and Accumulated Depreciation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Investments in Real Estate | |||
Balance at beginning of year | $ 2,949,851 | $ 2,967,431 | $ 2,925,575 |
Improvements | 50,394 | 6,653 | 78,469 |
Dispositions | 0 | 0 | 0 |
Writeoff of fully depreciated investments in real estate | 24,008 | 24,233 | 36,613 |
Impairment charges related to Wells Fargo Center — South Tower | 193,415 | 0 | 0 |
Balance at end of year | 2,782,822 | 2,949,851 | 2,967,431 |
Accumulated Depreciation | |||
Balance at beginning of year | 580,403 | 517,329 | 466,405 |
Depreciation expense | 87,314 | 87,307 | 87,537 |
Writeoff of fully depreciated investments in real estate | 24,008 | 24,233 | 36,613 |
Impairment charges related to Wells Fargo Center — South Tower | 82,327 | 0 | 0 |
Balance at end of year | $ 561,382 | $ 580,403 | $ 517,329 |