Nonperforming Loan / Short Sale — $78.5M ($143.25 PSF). 24-story LEED Platinum Class A office tower in Glendale offered as a note sale on a nonperforming loan with unpaid balance of $89.6M ($163 PSF). Loan matured 2/6/2025 at SOFR + 230 bps. Current owner DivcoWest invested $33M+ in capital improvements since 2019. Available individually or as part of "Project Grizzly" portfolio. Building-top signage visible to 300,000+ vehicles/day on the 134 Freeway. At 52% occupancy, significant lease-up upside with in-place rents averaging ~$40/SF FSG vs. market asking of $3.24 PSF/month ($38.88/SF annualized).
Property Overview
Address655 N Central Ave, Glendale 91203
SubmarketGlendale CBD
Building ClassClass A · LEED Platinum
Stories24
Site Area2.5 Acres (109,336 SF)
APN5637-001-229
ZoningDSP/GAT (C2-R4)
Parking1,463 stalls (2.67/1,000 SF)
ConstructionSteel frame, concrete slab
Pricing & Basis
Sale TypeNonperforming Loan / Short Sale
GWC Target Price$65–70M ($119–128 PSF)
Seller Model Price$78.5M ($143 PSF)
UPB$89.6M ($163 PSF)
Est. All-In Cost$97–102M ($177–186 PSF)
Closing Costs$785K (1%)
Construction / Deferred Maint$2.52M
TIs / Leasing Commissions$29.19M
Deposit$2.36M (3%)
3
Building Tour
Building Tour · Glendale Plaza Amenities & Common Areas
4
Property Details
Building Systems
Year Built / Renovated1998 / 2018
WindowsDouble-pane
Elevators3 passenger + 1 freight
HVACCentral: 3 chillers + 2 cooling towers
Parking Structure6-floor adjacent garage
Capital Invested (2019+)$33M+
Amenities
Security24/7 on-site
Food & BeverageCafe
FitnessFitness center, showers, lockers
Meeting SpaceConference center + event space
OutdoorLandscaped outdoor areas
SignageBuilding-top (300K+ vehicles/day)
5
Loan & Sale Details
Nonperforming Loan — Matured 2/6/2025. Current rate of 6.626% (SOFR + 230 bps), interest-only. Available individually or as part of "Project Grizzly" Loan Portfolio. Seller financing available upon request.
UPB
$89.6M
$163 PSF
Current Rate
6.626%
SOFR + 230 bps
Loan Status
Matured
Nonperforming
Owner
DivcoWest
Current borrower
1
Occupancy Overview
Total Occupied
284,904 SF
52% of rentable area
Total Vacant
263,081 SF
48% of rentable area
WALT
2.9 Yrs
Weighted avg lease term
Avg In-Place Rent
$40.38/SF
FSG basis
Occupied (284,904 SF)52%
Vacant (263,081 SF)48%
2
Tenant Roster
Tenant
SF
% of NRA
Rent/SF/Yr
Annual Rent
Expiration
Status
State Farm
46,441
8.5%
$41.18
$1,912,244
4/30/2027
Near-Term
Womble Bond Dickinson
42,112
7.7%
$37.89
$1,595,603
12/31/2026
Expiring
PCL Construction
29,582
5.4%
$43.82
$1,296,483
6/30/2030
Stable
Travelers Indemnity
29,183
5.3%
$41.00
$1,196,503
5/31/2029
Stable
State Comp Ins Fund
23,173
4.2%
$39.55
$916,492
3/31/2031
Stable
RGN-Glendale III (Regus)
23,582
4.3%
$43.27
$1,020,504
7/31/2028
Flex
Hearst Media
20,011
3.7%
$38.40
$768,422
12/31/2034
Long-Term
CalPERS
15,885
2.9%
$42.01
$667,529
11/30/2027
Near-Term
Mitsubishi Chemical
11,480
2.1%
$39.00
$447,720
8/31/2029
Stable
CIBOA
10,701
2.0%
$42.62
$456,078
11/30/2028
Stable
Holthouse Carlin
6,432
1.2%
$40.50
$260,496
12/31/2025
Expired
First Citizens Bank
6,620
1.2%
$44.58
$295,130
11/30/2026
Expiring
Advantage Engineers
5,215
1.0%
$39.75
$207,296
3/31/2026
Expiring
Gibson Transportation
4,799
0.9%
$40.00
$191,960
12/31/2027
Near-Term
Unum Group
4,012
0.7%
$41.50
$166,498
5/31/2028
Stable
Limonjyan Law
3,240
0.6%
$38.00
$123,120
8/31/2027
Near-Term
TOTAL OCCUPIED
284,904
52.0%
$40.38
$11,498,368
3
Lease Expiration Schedule
Year
Expiring SF
% of Occupied
Expiring Revenue
Key Tenants Expiring
2026
42,112
14.8%
$1,595,603
Womble Bond Dickinson
2027
82,877
29.1%
$3,155,349
State Farm, CalPERS, Holthouse, Gibson, Limonjyan
2028
52,730
18.5%
$2,121,796
Regus, CIBOA, First Citizens, Advantage, Unum
2029
40,663
14.3%
$1,644,223
Travelers, Mitsubishi
2030
29,582
10.4%
$1,296,483
PCL Construction
2031+
43,184
15.2%
$1,684,914
State Comp Ins Fund, Hearst Media
Lease Expiration Schedule — SF & Revenue at Risk by Year
Near-term rollover risk: 43.9% of occupied SF expires by end of 2027. Active lease-up strategy and tenant retention program critical to value creation.
1
2024 Income Statement
Total Income
$14.89M
$27.16/SF (total NRA)
Total Expenses
$9.67M
$17.63/SF
NOI
$5.22M
$9.53/SF · 35.1% margin
Net Income
($201K)
After $5.4M interest
2
Revenue Breakdown
Line Item
Annual Amount
$/SF
% of Total
Base Rent
$13,515,658
$24.66
90.8%
Less: Free Rent
($1,311,850)
($2.39)
-8.8%
Less: Bad Debt
($453,235)
($0.83)
-3.0%
CAM Reimbursements
$1,201,618
$2.19
8.1%
Tax Reimbursements
$637,337
$1.16
4.3%
Parking Income
$1,136,270
$2.07
7.6%
Other Income
$160,573
$0.29
1.1%
TOTAL INCOME
$14,886,371
$27.16
100.0%
3
Operating Expenses
RE Taxes25.7%
Insurance13.4%
R&M13.0%
Utilities12.3%
G&A9.0%
Non-Recoverable8.6%
Janitorial7.1%
Other10.9%
Expense Category
Annual Amount
$/SF
% of Total
R&M
$1,252,806
$2.29
13.0%
Janitorial
$688,795
$1.26
7.1%
Utilities
$1,192,292
$2.18
12.3%
Common Area
$633,889
$1.16
6.6%
RE Taxes
$2,481,946
$4.53
25.7%
Insurance
$1,295,907
$2.36
13.4%
Management
$419,719
$0.77
4.3%
G&A
$868,976
$1.59
9.0%
Non-Recoverable
$830,746
$1.52
8.6%
TOTAL EXPENSES
$9,665,075
$17.63
100.0%
4
Cash Flow Summary
Line Item
Amount
Notes
Total Income
$14,886,371
All revenue sources
Total Expenses
($9,665,075)
All operating expenses
NOI
$5,221,296
35.1% margin
Interest Expense
($5,422,816)
6.626% on UPB
Net Income
($201,520)
Negative cash flow
Negative cash flow position — The property currently generates negative net income of ($201K) annually after debt service on the $89.6M UPB at 6.626%. This is the primary driver of the distressed sale opportunity.
5
NOI Waterfall
Revenue → Expenses → NOI → Net Income
1
Return Summary — Two Models
Dual-model comparison. Two independent underwriting approaches: Galaxy Way (base case, 7-yr hold, 70% stabilized occupancy) and SPG Analysis (partner model with refi strategy). See sensitivity analysis below for upside and conservative scenarios.
Metric
Galaxy Way Model
SPG Analysis
Hold Period
7 Years
7 Years + Refi
Levered IRR
17.8%
23.60%
Equity Multiple
3.12x
3.12x
Going-In Cap
6.65%
8.46%
ProForma Cap
8.91%
13.51%
Stabilized Yield on Cost
13.6%
9.76%
Avg Cash-on-Cash
25.5%
29.25%
Exit Cap / Exit Value
7.25% / $208.3M
7.00% / $190.3M
2
Astro Intelligence Sensitivity Analysis
Stress-tested scenarios. The Galaxy Way model above represents the base case at 70% stabilized occupancy. Below we present upside and conservative scenarios reflecting varying assumptions around lease-up velocity in the context of 31.8% Class A vacancy and negative absorption in the Glendale market.
Metric
Upside Case
Base Case
Conservative Case
Exit Occupancy
75%
70%
65%
Stabilized NOI
$16.9M
$15.1M
$13.9M
Exit Cap Rate
7.00%
7.25%
7.50%
Exit Value
$241.4M
$208.3M
$185.3M
Equity Multiple
3.80x
3.12x
2.64x
Levered IRR
21.5%
17.8%
14.2%
Lease-Up Timeline
3–4 years
4–5 years
5–6 years
Key Assumptions: All scenarios assume $65–70M acquisition basis, $29M TI/LC budget, and 7-year hold. Base Case assumes lease-up to 70% occupancy (vs. current 52%) reflecting persistent Class A vacancy headwinds, with 25 bps cap rate widening. Conservative Case assumes limited net absorption — occupancy reaching only 65% at exit as tenant departures partially offset new leasing, with 50 bps cap rate widening. All scenarios return capital above a 2.5x multiple due to the distressed basis.
3
Galaxy Way Model — Capital Stack
Senior Debt
$54.95M
70% LTV · 6.50% · 36mo I/O
Cash Equity
$56.0M
GP + LP combined
Exit Value
$208.3M
7.25% exit cap · 70% occ
Levered IRR
17.8%
3.12x equity multiple
4
GP-LP Waterfall (Galaxy Way Model)
Structure
LP / GP Split80% / 20%
LP Capital$44.8M
GP Capital$11.2M
LP Investors10 at $4.48M each
Preferred Return8%
LP Returns
LP Equity Multiple3.45x
LP Total Distributions$154.6M
LP IRR (GWC Model)20.5%
Hurdle Rates8% / 10% / 12% / 15%
5
SPG Analysis — Partner Model
Levered IRR
23.60%
7-yr hold + refi
Equity Multiple
3.12x
On total equity
LP IRR (with Refi)
39.37%
10 LP investors
LP Check Size
$2.43M
Per LP investor
1
Vacancy Summary
Total Vacant
263,081 SF
48% of NRA
Available Suites
14
Floors 2–25
Avg Suite Size
18,792 SF
Range: 3,240–24,111 SF
White Box
2 Suites
Suites 500, 900
2
Occupancy by Floor
Floor-by-Floor Occupancy (SF)
3
Available Suites (VTS Data)
Suite
Floor
SF
Condition
Notes
200
2
23,625
2nd Gen
Full floor
400
4
23,135
2nd Gen
Full floor
500
5
23,146
White Box
Full floor, blank canvas
600
6
23,156
2nd Gen
Full floor
700
7
23,156
2nd Gen
Full floor
900
9
14,325
White Box
Divisible to 2,000 SF
1440
14
6,902
Pre-Existing
Partial floor
1820
18
3,598
2nd Gen
Partial floor
1900
19
23,582
2nd Gen
Full floor
2000
20
23,534
2nd Gen
Full floor
2100
21
23,457
2nd Gen
Full floor
2210
22
3,240
2nd Gen
Partial floor
2400
24
23,802
2nd Gen
Full floor, high floor
2500
25
24,111
2nd Gen
Top floor, premium views
TOTAL
262,769 SF
Lease-up opportunity: 10 of 14 available suites are full-floor plates (~23,000 SF each), ideal for mid-to-large tenants. Two white-box suites offer clean build-out for spec or built-to-suit. Suite 900 is divisible to 2,000 SF for smaller tenants.
1
Glendale Office Market
Class A Inventory
5.2 MSF
Glendale submarket
Direct Vacancy
31.8%
Elevated post-COVID
Avg Asking (FSG)
$3.24/SF/mo
$38.88 annualized
YoY Absorption
Negative
Market still correcting
2
Submarket Rent Comparison
Significant discount to neighboring markets. Glendale’s $3.24/SF/month asking rate represents a 14–37% discount versus adjacent submarkets, offering compelling relative value for tenants seeking Class A space.
Submarket
Avg Asking (FSG/Mo)
Annualized
Premium vs Glendale
Glendale
$3.24
$38.88
—
Burbank
$4.44
$53.28
+37%
North Hollywood
$4.31
$51.72
+33%
Pasadena
$3.77
$45.24
+14%
3
Comparable Transactions
Property
Date
Type
SF
Price
$/SF
655 N Central (Subject)
3/2025
Sale
547,300
$179M
$327
655 N Central (Refi)
2/2025
Refi
591,958
$145M
$245
505 N Brand
2/2025
Sale
329,431
$56M
$170
801 N Brand
4/2025
Sale
293,193
$42.8M
$146
101 N Brand
2/2025
Sale
410,000
$58M
$141
400 N Brand
12/2025
Sale
441,000
$60M
$136
Acquisition at $143/SF is at the low end of recent Glendale comps ($136–$327/SF), providing a substantial basis advantage vs. historical valuations and refinancing benchmarks.
1
Investment Strategy
01
Distressed Basis Acquisition
Acquire via note sale at $143/SF — a 56% discount to the prior $327/SF valuation and well below replacement cost. DivcoWest invested $33M+ in capex since 2019, creating a turnkey asset at a fraction of cost basis.
02
Aggressive Lease-Up
48% vacancy represents ~263K SF of lease-up opportunity. Full-floor plates averaging 23K SF are ideal for mid-market tenants. Target 70–75% occupancy within 36–48 months through competitive pricing and TI packages.
03
Tax Reassessment Arbitrage
Prop 13 reassessment at acquisition price ($78.5M vs. current assessed value) should yield significant RE tax reduction, lowering operating expenses and improving NOI immediately upon closing.
04
Market Rent Discount Play
Glendale asking rents ($3.24/SF/mo) are 14–37% below Burbank, Pasadena, and North Hollywood. Position as the value alternative for entertainment, tech, and professional services tenants priced out of adjacent markets.
05
Trophy Signage & Visibility
Building-top signage visible to 300,000+ vehicles daily on the 134 Freeway. Premium branding opportunity for corporate tenants seeking high-profile Glendale presence.
06
Capital Recycling via Refi
Upon stabilization (70% occupancy target), refinance at 60–65% LTV to return LP capital. Galaxy Way base case projects $208.3M exit at 7.25% cap; upside case (75% occ) projects $241.4M at 7.00% cap. See sensitivity analysis in Underwriting tab for full scenario range.
2
Risk Factors
Lease-Up Risk: 48% vacancy with 2.9-year WALT means significant near-term rollover. 43.9% of current occupied SF expires by end of 2027. Failure to retain major tenants (State Farm, Womble Bond) would further increase vacancy.
Market Risk: Glendale Class A vacancy at 31.8% reflects ongoing post-COVID office market correction. Negative absorption trend may persist. Remote/hybrid work continues to reduce office demand.
Capital Intensity: $29.2M in projected TI/LC costs required for lease-up. Total all-in cost of $111M represents significant capital deployment with execution risk on lease-up timeline.
Interest Rate Risk: Acquisition financing at 6.50% assumes current rate environment. Further Fed tightening or spread widening would increase cost of capital and compress exit values.
3
Astro Intelligence Target Pricing
Astro Target Acquisition: $65–70M ($119–128 PSF). While seller underwriting models use $78.5M, our analysis indicates the asset is worth $65–70M based on current distressed conditions, 48% vacancy, negative cash flow after debt service, near-term lease rollover risk, and the $29M+ capital required for stabilization. This pricing represents a 27–35% discount to the unpaid loan balance ($89.6M) and positions well below comp sales of $136–170 PSF for similar Glendale office product.
Astro Target Price
$65–70M
$119–128 PSF
Seller Ask / UPB
$89.6M
$163 PSF · Nonperforming
Discount to UPB
22–27%
Distressed basis
vs. Comp Sales
−6–13%
Below $136–170/SF range
Pricing Rationale — Bear Case ($65M)
Going-In Cap (Current NOI)8.03%
Price / SF$118.62
Discount to Loan Basis27.4%
All-In Cost (w/ $32M capex)$97M ($177/SF)
Stabilized Yield on Cost11.3%
Pricing Rationale — Bull Case ($70M)
Going-In Cap (Current NOI)7.46%
Price / SF$127.74
Discount to Loan Basis21.9%
All-In Cost (w/ $32M capex)$102M ($186/SF)
Stabilized Yield on Cost10.8%
4
Astro Intelligence Tenant Retention Analysis
Astro Assessment. Based on lease terms, tenant industry, space utilization, and Glendale market dynamics, we've assessed the renewal probability for each major tenant. Key risk: 43.9% of occupied SF expires by end of 2027.
Tenant
SF
Expiration
Outlook
Rationale
Hearst Media
20,011
12/31/2034
High Renewal
Longest lease in building. Media production requires specialized buildout — high switching cost. Committed through 2034.
State Comp Ins Fund
23,173
3/31/2031
High Renewal
State government agency. Long lease, low turnover profile. Government tenants rarely relocate absent a mandate. Stable.
PCL Construction
29,582
6/30/2030
High Renewal
Major construction firm with SoCal operations base. Multi-floor presence (Suites 1500+1600) suggests operational commitment. Lease runs to 2030.
Travelers Indemnity
29,183
5/31/2029
Likely Renewal
Fortune 100 insurer. Multi-floor (Suites 800+1100) with staggered expirations. Large institutional tenants tend to renew. Suite 800 expires 11/2026 — watch for early renewal signal.
Mitsubishi Chemical
11,480
8/31/2029
Likely Renewal
Japanese multinational — corporate decisions move slowly, prefer stability. Lease through 2029 with no near-term rollover pressure.
CalPERS
15,885
11/30/2027
Moderate
State pension fund. Government tenant is sticky but lease expires in 2027. New ownership with active leasing could secure early renewal. Monitor.
CIBOA
10,701
11/30/2028
Moderate
Commercial building owners association — Glendale-based org, unlikely to leave the market. But smaller tenants are more price-sensitive. Lease runs to 2028.
State Farm
46,441
4/30/2027
Uncertain
Largest tenant (8.5% of NRA). Insurer has been consolidating offices nationally post-COVID. Paying $41.18/SF — above market. Lease expires 4/2027. Critical to engage early under new ownership. High renewal concession likely needed.
RGN-Glendale (Regus)
23,582
7/31/2028
At Risk
Flex/coworking operator. IWG/Regus has been shedding locations globally and renegotiating leases aggressively. Paying $43.27/SF — well above market. High probability of downsizing or exit at expiration.
Womble Bond Dickinson
42,112
12/31/2026
High Vacancy Risk
2nd largest tenant (7.7% NRA). Law firm with national footprint — has been consolidating to fewer, smaller offices. Lease expires 12/2026, only ~21 months out. Below-market rent ($37.89/SF) may help retention, but law firms are downsizing post-COVID. Plan for vacancy.
First Citizens Bank
6,620
11/30/2026
Likely Vacating
Small bank branch/office. Paying $44.58/SF — highest rent in building. Banking sector consolidating physical footprint. Expect departure.
Holthouse Carlin
6,432
12/31/2025
Vacating
CPA firm. Lease expired/expiring Dec 2025. Likely already vacated or on holdover. Underwrite as vacant.
Advantage Engineers
5,215
3/31/2026
Likely Vacating
Small engineering firm. Lease expires 3/2026 — only months away. No renewal signals. Underwrite as vacant.
High Renewal Probability
113,429 SF
5 tenants · 39.8% of occupied
Moderate / Uncertain
73,027 SF
3 tenants · 25.6% of occupied
At Risk / Likely Vacating
83,961 SF
5 tenants · 29.5% of occupied
5
Astro Intelligence Valuation Analysis
Astro Fair Value Estimate: $65–70M ($119–128 PSF). Our valuation synthesizes four independent approaches: current income capitalization, comparable sales, loan basis analysis, and risk-adjusted replacement cost. All methods converge in the $60–75M range, with our target of $65–70M reflecting a balanced view of the distressed opportunity and execution risk.
Valuation Method
Implied Value
$/SF
Notes
Current Income (Cap Rate)
$65.3–74.6M
$119–136
$5.22M NOI at 7.0–8.0% cap rate. Reflects current cash flow without stabilization credit.
Comparable Sales
$74.5–93.2M
$136–170
Based on recent Glendale office trades at $136–170/SF (505 N Brand, 801 N Brand). Discount warranted for 48% vacancy & capital needs.
Loan Basis / Distress Discount
$62.7–71.7M
$114–131
UPB of $89.6M with 20–30% distress haircut. Lender motivated — nonperforming, past maturity.
Replacement Cost Discount
$82.2–109.6M
$150–200
Replacement cost est. $400+/SF for Class A in Glendale. At 50–63% discount, reflects functional obsolescence risk.
Astro Blended Target
$65–70M
$119–128
Weighted toward income and loan basis methods. Reflects execution risk, capital intensity, and market headwinds.
Valuation Range Comparison ($/SF)
Key Assumptions
Stabilized Occupancy Target70% base / 75% upside
Market Rent$3.24 PSF/mo ($38.88/SF/yr)
Stabilized NOI (Est. Yr 4–5)$15.1–16.9M
Lease-Up Capital Required$29–32M
Time to Stabilize4–5 years
Stabilized Value Range
At 70% Occ / 7.25% Cap$208.3M (base)
At 75% Occ / 7.00% Cap$241.4M (upside)
At 65% Occ / 7.50% Cap$185.3M (conservative)
All-In Cost at $67.5M~$100M ($182/SF)
Gross Profit Potential$85–141M
1
Property Location
Address
Street655 N Central Ave
CityGlendale, CA 91203
SubmarketGlendale CBD
APN5637-001-229
Access & Transit
FreewaySR-134 (adjacent)
Visibility300K+ vehicles/day
Parking1,463 stalls (2.67/1K SF)
Site Area2.5 Acres
2
Comparable Properties Map
Property
Distance
SF
Sale Price
$/SF
505 N Brand
0.2 mi
329,431
$56M
$170
801 N Brand
0.4 mi
293,193
$42.8M
$146
101 N Brand
0.3 mi
410,000
$58M
$141
400 N Brand
0.2 mi
441,000
$60M
$136
700 N Brand
0.3 mi
350,000
—
—
Confidential Memorandum — Disclaimer
This document has been prepared by Galaxy Wayco (“GWC”) for informational purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation regarding any security, investment, or real property. This is not intended to be, and should not be construed as, investment, legal, tax, or accounting advice.
All information contained herein has been obtained from sources believed to be reliable, but GWC makes no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of such information. All financial projections, estimates, and forward-looking statements are based on assumptions that may not be realized and are subject to significant uncertainty and market risk. Actual results may differ materially from those projected.
Prospective investors and buyers should conduct their own independent due diligence and consult with their own legal, tax, financial, and other advisors before making any investment decision. Past performance is not indicative of future results.
This document is confidential and proprietary. It is intended solely for the use of the authorized recipient and may not be reproduced, distributed, or disclosed to any third party without the prior written consent of GWC. By accepting this document, the recipient agrees to maintain its confidentiality and to return or destroy all copies upon request.
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