One of Downtown Los Angeles’ most recognizable glass towers may be headed for the auction block after its owner defaulted on more than $100 million in debt. Cerberus Capital Management’s Wedbush Center, a 22-story glass tower on Wilshire that faces the 110 Freeway, now carries a recorded notice of default that could lead to a trustee auction. A sharp drop in value and the loss of major tenants have left the property badly underwater relative to its CMBS obligations.
A notice of default and election to sell filed last month shows Cerberus owes roughly $135 million on the Wilshire tower and that the $128 million commercial mortgage-backed securities loan was sent to special servicing after missing its maturity date, according to The Real Deal. Under California law, a trustee sale, which is a foreclosure auction under a deed of trust, cannot be scheduled until at least three months after a notice of default is recorded, as laid out in California Civil Code Section 2924. That statutory pause gives owners and servicers time to chase a sale, refinance, or workout before an auction date is set.
Steep value haircut
Recent data watched closely by the market show the building’s estimated value has plunged to about $60.5 million from roughly $197.5 million at the time the loan was issued, a decline of roughly 69 percent, according to Bisnow. That gulf between today’s appraisal and the outstanding debt is what pushed the loan into special servicing and has lenders weighing how to limit their losses. The tower totals more than 475,000 square feet, so the valuation haircut sharply squeezes any potential sale proceeds compared with the loan balance.
Namesake tenant exits
The tower’s anchor tenant is also pulling back. Wedbush Securities, which leased roughly 100,000 square feet at the Wedbush Center, has said it will move to a smaller Pasadena office and occupy roughly 20,000 square feet when its lease expires next December, according to the Los Angeles Times. Losing that large block of space will push vacancy higher at the building and make it that much tougher to regain pre-default cash flow levels.
Loan history and special servicing
The CMBS loan was originated in 2018 by Goldman Sachs, and the debt later moved into special servicing after the borrower missed its maturity date, with Rialto Capital Advisors listed as the special servicer, per reporting in the Commercial Observer. The CMBS structure includes two senior notes and a smaller mezzanine piece that has since traded, leaving the senior CMBS holders as the dominant voices in any workout or sale scenario. That stack of claims limits the number of realistic paths to an out-of-court deal.
What comes next
If no private deal is reached, the trustee sale process must run through California’s statutory timeline and notice requirements, which include a minimum waiting period after the notice of default is recorded. In practical terms, that gives lenders and the borrower a short window to negotiate a sale, recapitalization, or loan modification before a public auction can move forward. Any trustee sale can be postponed under state law, and courts or servicers sometimes delay auctions while they hunt for higher-value resolutions.
DTLA market context
The Wedbush Center’s distress mirrors broader trouble in Downtown Los Angeles, where office vacancy has remained stubbornly high. Brokerage data cited by the Los Angeles Times put downtown vacancy near 34 percent. Buyers willing to take on aging central business district towers have been scarce, and many older properties face a future of steep discounts, potential conversions, or protracted workouts.
For now, the Wedbush Center is likely to sit in a kind of financial limbo while servicers and prospective buyers try to bridge the gap between current pricing and the debt stack, all against the backdrop of shrinking tenancy. Cerberus did not immediately respond to requests for comment, according to reporting on the filings.
