The share price of Brookfield’s Downtown L.A. office fund dropped to a new low of $1.73 on Monday afternoon, putting it within striking distance of the New York Stock Exchange’s $1 listing requirement.
Brookfield DTLA Fund Office Trust Investor, which owns 7.6 million square feet of office space across six towers in Downtown L.A., has suffered major losses over the last year, as vacancy rates across the buildings has remained stubbornly high and Brookfield has admitted it defaulted on $785 million worth of loans connected to two properties.
But Monday marked the first time the entity closed below $2 a share, a 22 percent drop compared to the close of trading on Friday.
The NYSE will initiate a delisting process if an entity’s share price crosses the $1 per share threshold and trades below $1 for 30 consecutive days, or if it has an average market cap of less than $15 million over a consecutive 30-day period.
The entity currently has a market cap of $16.8 million — also teetering close to NYSE’s minimum requirement — a roughly 27 percent decrease compared to its market cap a month ago.
Shareholders have already lost big on the fund.
Angelo Gordon, the Los Angeles-based real estate investment firm and the second-largest shareholder in the Brookfield entity, shed about 328,000 shares between Feb. 13 and March 2, according to filings with the Securities & Exchange Commission.
At its highest on Feb. 28, the Brookfield entity was trading at about $3.30 a share, meaning Angelo Gordon could have sold the shares at a maximum of $1.08 million.
Angelo Gordon bought 874,000 shares in September 2019, when the entity’s stock price was at about $20 a share, SEC filings show.
Those 328,000 shares were worth about $6.7 million at the time.
The entity’s stock price has deteriorated since the firm disclosed its defaults on the 1 million-square-foot tower at 777 South Figueroa Street and the 1.3 million-square-foot Gas Company Tower at 555 West 5th Street.
“An event of default” occurred on both loans last month, a Brookfield subsidiary disclosed, adding “lenders may exercise their remedies,” which include foreclosure.