Metlife Sues Rockpoint Over Miracle Mile Office Tower

MetLife is seeking control of an office tower at 5900 Wilshire Boulevard in Los Angeles’ Miracle Mile district after alleging that owner Rockpoint defaulted on a $164 million loan. According to a June complaint, the Boston-based private equity firm failed to repay a $2 million protective advance used for real estate taxes, prompting the lender to request a receiver.

The dispute centers on a protective advance MetLife issued in early April to cover property taxes. Court documents state MetLife gave Rockpoint until April 28 to reimburse the funds, but the borrower “failed and refused to do so.”

MetLife now intends to commence nonjudicial foreclosure proceedings. An attorney for MetLife did not respond to requests for comment, and Rockpoint representatives declined to comment.

Why is the 5900 Wilshire Boulevard loan in default?

The default stems from Rockpoint’s refusal to pay real estate taxes, which forced MetLife to provide the $2 million advance to protect the collateral. According to the complaint, the lender provided the cash in early April to ensure tax obligations were met.

While the loan does not mature until 2030, the failure to repay the advance triggered the current legal action. The note carries a 3.50 percent fixed interest rate, which increases to a 7.50 percent default rate.

Did You Know? Rockpoint purchased the 31-story, 450,000 square-foot tower in 2020 for $303 million from a partnership consisting of PGIM Real Estate, Ratkovich Company, and AXA Capital.

How does this compare to other Miracle Mile properties?

The struggle at 5900 Wilshire reflects broader instability in the district. Nearby, Onni Group’s $408 million loan for an office complex at 5700 to 5750 Wilshire Boulevard is currently in special servicing.

Onni owes approximately $384 million on its 1-million-square-foot complex. Servicer commentary from early May indicated the loan moved to special servicing due to “imminent monetary default.”

Expert Insight: Samantha Carter notes that the contrast between these two cases is significant. While MetLife is pursuing foreclosure over a specific tax advance, Onni Group may be using special servicing as a workout play to scrap office expansion plans in favor of housing.

What happens next for the office tower?

MetLife may successfully install a receiver to take over the management of the property. If a settlement isn’t reached, the lender is likely to proceed with nonjudicial foreclosure to recover the $164 million loan.

The outcome could depend on whether Rockpoint settles the $2 million debt or if the property’s value continues to fluctuate. Similarly, the Onni Group property may see a transition toward residential use if their housing pivot proceeds.

Frequently Asked Questions

What is a protective advance?
It is money a lender gives a borrower to protect the collateral, such as paying overdue taxes to prevent a tax lien on the property.

When does the loan for 5900 Wilshire Boulevard mature?
According to the complaint, the note matures in 2030.

What is the difference between the fixed and default interest rates?
The loan has a 3.50 percent fixed interest rate, which rises to about 7.50 percent upon default.

How do you think the shift toward housing will impact Los Angeles office districts?