Rialto Seeks Control of Historic Office Tower in Santa Monica
Santa Monica’s historic Clock Tower possibly has more woes on the way after Rockwood’s loan went to special servicing in June. Rialto Capital Advisors has sued an affiliate of Rockwood Capital, alleging default on a $26.7 million commercial mortgage–backed securities loan tied to the 12-story office building overlooking the Pacific, as reported by The Real Deal.
The loan shifted to special servicing in June after Rockwood failed to repay the debt at maturity. Rialto’s complaint, filed this month, seeks to foreclose on the property and appoint a receiver to take control of the 225 Santa Monica Boulevard landmark. The company claims roughly $25 million remains unpaid.
Rockwood acquired the 53,500-square-foot Art Deco building in 2019 from Sorgente Group of America for $58 million, or about $1,084 per square foot. The alleged default amount equates to roughly $447 per square foot.
The loan’s transfer to special servicing coincided with a steep valuation downgrade. Morningstar Credit reported that the Clock Tower’s market value fell to $27.4 million in July. down from $49 million in 2015, as occupancy slid to 43 percent.
The debt, originally originated by German American Capital Corporation, was sold to investors through commercial mortgage–backed securities.
