The Opportunity
In 1997, MCC together with its
partners Blackstone Real Estate Advisors and Merrill Lynch
acquired the first mortgage debt on Wilshire Courtyard, a 1
million square foot Class A office campus in Los Angeles. Prior to
closing the acquisition, the borrower filed for bankruptcy
protection. The first mortgage together with a $200 million second
mortgage held by other parties made Wilshire Courtyard, at $365
million, the largest single asset bankruptcy case in Los Angeles
County history. The bankruptcy notwithstanding, MCC and its
investors elected to proceed with the acquisition.
The opportunity presented by Wilshire
Courtyard was to prevail in bankruptcy and take control of the
property. At the time of the bankruptcy, the project was 50%
leased and only 40% occupied. In early 1998, a bankruptcy
settlement was reached with the borrower whereby ownership of the
asset was transferred to the MCC led partnership. Subsequently,
MCC led the acquisition of six other minority interests. MCC then
leased over 800,000 square feet to credit tenants in less than two
years, bringing occupancy to nearly 100%.
Performance Highlights
Implemented a successful bankruptcy
strategy that led to the transfer of fee ownership to MCC and its
partners.
Negotiated the buyout of a long-term,
$170 million lease for 505,000 square feet which provided
additional capital to the partners to re-tenant the project.
Leased over 800,000 square feet during
the first 24 months of ownership to bring the project from 50%
leased to nearly 100% leased.
Completed over $30 million in interior
improvements and capital expenditures.
MCC's management team captured the
2000 BOMA Building of the Year Award for Wilshire Courtyard.
Repositioned Wilshire Courtyard into
one of the preeminent media/entertainment campuses in Los Angeles.
Completed over 1.6 million square feet
of leases throughout the ownership period.
Current Status
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