WeWork’s First Investor Declares Bankruptcy at DTLA’s ‘Metaverse Hub’

Joel Schreiber and 801 South Broadway (Google Maps)
Joel Schreiber and 801 South Broadway (Google Maps)

The Real Deal has learned that WeWork’s first investor, Joel Schreiber, has filed for bankruptcy on a vacant lot in a planned Metaverse Hub redevelopment in downtown Los Angeles.

Schreiber, which recently won the bidding war for Union Bank Plaza, filed a Chapter 11 petition in New York bankruptcy court ahead of a planned foreclosure sale by lender Starwood. In the filing, Schreiber said the petition was filed on an “emergency basis” because Starwood refused to extend the property’s debt of about $214 million.The foreclosure sale was scheduled for his August 9. was scheduled for the day.

“The impact of the COVID-19 pandemic over the past few years has taken a toll on intended development, Schreiber wrote in the petition. , elected to initiate this Chapter 11 litigation to prevent immediate foreclosure and to have a last chance to save the project. To reignite it, we will pursue a comprehensive new marketing approach.”

Located at 801 South Broadway, the property is a 10 story, 1.2 million square foot building. A joint venture led by Waterbridge Capital, in 2014 he acquired this asset for $123 million. Since 2017, project lender Berry Enterpises has made several attempts to sell a minority stake in the asset. The latest notice from Berry advertised a May 26th auction, which was later called off.

Starwood filed for foreclosure on the property last July. In a filing, the company argued that it was “financially impossible” for Schreiber and his partner Jack Jangana to settle their $221 million default.

Over the years, several plans have emerged for the property. After acquiring the site, Schreiber and his partner Continental Equities announced plans for a mixed-use development that will include a 200-room hotel, offices, luxury retail and restaurants. The property was subsequently put on the market with an asking price of $425 million. In February, an unnamed New York-based startup called Emcee reportedly signed a deal to purchase the property with plans to convert the space into a “metaverse hub.” increase. Schreiber has a stake in his Emcee, according to a Commercial Observer report. The transaction was not listed in the bankruptcy filing.

Schreiber is currently under contract to purchase KBS’s Union Bank Plaza office tower in downtown Los Angeles for $155 million. Schreiber could face liquidated damages of up to $7.5 million if the transaction does not go through.

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