Wilshire Courtyard

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

Wilshire Courtyard was sold in September of 2005.