Realm Group and the Bascom Group had their sights set on a 37-story residential tower in Downtown L.A., slated to be one of the tallest apartment buildings in the market.
But the future of the development has landed in uncertainty as the Orange County-based companies defaulted on a $32.9 million loan from TerraCotta Group tied to the site, according to a notice filed with L.A. County.
Under state rules, a foreclosure on the site can be scheduled no earlier than Feb. 28.
Realm and Bascom planned a 422-unit building at 675 South Bixel Street, to be dubbed Bixel Tower, after assembling seven parcels of land for the site for $28.6 million in 2019, records show.
Neither Realm nor Bascom responded to requests for comment.
Starwood Capital Group had initially provided debt on the property, but the firms refinanced in 2021 with a loan from TerraCotta.
The firms had listed the development site for sale last year, according to marketing materials from JLL. The site, JLL said, is already entitled for the residential units and almost 5,000 square feet of commercial space.
The sellers did not disclose a listing price.
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Realm, run by Darrin Olsen, also plans to build a separate tower in Downtown L.A., at 222 East 7th Street in the Fashion District. The firm teamed up with Urban Offerings to pay $24.3 million for the site in 2018 and announced plans to build a 33-story building with more than 450 units.
According to DTLA Alliance, formerly known as the Downtown Center Business Improvement District, that project is still in the works.
Realm and Bascom are not the only firms grappling with paying off construction loans, given the higher interest rate environment. In October, TA Partners defaulted on almost $200 million in construction loans tied to two planned multifamily projects in Irvine.