Ownership of the twin six-story office towers at 100 Bayview Circle has been taken over by the construction lender under what the buildings' former owner says was a long-approved reorganization plan for its ailing Canadian parent.
The change of ownership reflects the continuing impact the recession is having on real estate in Southern California, but was not rooted in local financial problems, said officials of Canadian developer Bramalea Ltd.
A subsidiary, Bramalea California Properties, had owned the Bayview Circle project.
"There isn't any default here," said Marvin Marshall, chief executive officer with Toronto-based Bramalea Ltd. "As part of our March 22 business plan, we agreed to deed the property back to Credit Suisse," which held a mortgage on the towers. The change of ownership, recorded earlier this month in Orange County, "was not adversarial in any way," Marshall said.
Marshall said Bramalea wanted to get rid of the Newport Beach complex because it was "a property that was not cash-flow positive." Bramalea has had a problem renting its buildings for enough to make the mortgage payments because most of Southern California suffers from a glut of offices and Bramalea was competing with a pair of office towers, next door at 3501 Jamboree Road, that are owned by Downey Savings & Loan.
Documents filed by Credit Suisse on July 12 with the county recorder's office showed the unpaid debt on the 305,000-square-foot Bramalea property at $65.7 million.
Marshall said there was a "technical default" on the property last year, when Bramalea Ltd. sold a Canadian shopping mall that had served as collateral for the Newport Beach project. But Bramalea was never behind in its payments, he said.
Bramalea Ltd.'s Southern California home building subsidiary, Bramalea California Inc. in Newport Beach, is not involved in the Canadian company's commercial real estate ventures.