(Bloomberg) — Brookfield Corp. is seeking approval to restructure a loan secured against London’s CityPoint tower after failing to sell or refinance the building ahead of an extended deadline.
The firm has asked bondholders to agree to a further extension of the loan to January 2028 from its current deadline of April 20, according to a notice Tuesday. It has also proposed securing an additional loan with a margin of 15% that would help cover the cost of fees associated with the restructuring and amendments to a change of control clause that would allow the private equity firm to transfer the asset to another Brookfield managed vehicle.
The proposed restructuring, which will now be put to a bondholder vote, would buy Brookfield time to deal with upcoming lease expiries that together with higher interest rates have weighed on the property’s valuation even as Brookfield has filled empty spaces in the 36-story office building.
The company appointed brokers to sell the tower last year but bids fell short of the £459 million ($593 million) of outstanding debt secured against the property, Bloomberg News reported in December, prompting Brookfield to seek a temporary extension.
CityPoint became one of the symbols of the financial crisis when a fund managed by a previous owner missed a payment on loans secured by the skyscraper. Brookfield subsequently acquired the building in 2016 for £561 million and has since invested in upgrading parts of the space.
The building is one of the last remaining assets held in the Brookfield Real Estate Partners I fund, a 2012 vintage vehicle that has already returned more than two times its capital to investors. Under the terms of the proposed restructuring, the “definition of sponsor is to be updated to permit a transfer of the senior obligors within Brookfield,” according to the notice.
A spokesperson for Brookfield declined to comment further.
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