A luxury apartment complex perched in the heart of Santa Monica’s downtown is at the center of a massive loan default that’s now ensnared one of the world’s largest investment firms and the real estate company founded by a key member of President Trump’s diplomatic team.
Pacific Investment Management Co. and Witkoff Group have defaulted on a loan exceeding $400 million tied to The Park Santa Monica, a gleaming 249-unit development at 500 Broadway that opened its doors just two years ago. The default notice, filed with Los Angeles County, reveals a debt that has ballooned to approximately $439.5 million when accrued interest and late charges are factored in.
The financial structure behind the property tells an interesting story about who’s really calling the shots. Pimco holds a commanding 98.5% equity stake in the development and controlled all major investment decisions as the primary capital partner, while Witkoff Group maintains just a 1.5% sliver of ownership. When reached for comment, Pimco declined to discuss the matter, while a Witkoff representative confirmed the ownership breakdown.
The saga began in 2021 when the partnership secured a $324 million loan from affiliates of Mack Real Estate Credit Strategies. That debt was later expanded to $405 million last November, with repayment scheduled for July of this year. The filing doesn’t spell out exactly why the loan went into default, and Mack Real Estate didn’t respond to requests for comment.
The timing adds another layer of intrigue given Steve Witkoff’s prominent role in the Trump administration. The real estate veteran, who founded his firm back in 1997, now serves as President Trump’s special envoy for Middle East negotiations and the Russia-Ukraine conflict. When he stepped into that diplomatic position earlier this year, Witkoff sold a $120 million interest in his company to sidestep potential conflicts of interest. The firm is now under the leadership of his son Alex.
The property itself represents a slice of Southern California luxury living. Completed in 2022 according to local reports, the complex offers far more than just apartments—it features ground-floor commercial retail space, a swimming pool, a fitness center, and a full acre of rooftop park space. But luxury comes at a price: studio apartments start at roughly $4,000 per month, while those seeking a three-bedroom unit might pay up to $19,800 monthly.
This default fits into a broader pattern that’s been unfolding across commercial real estate since interest rates shot upward in 2022. As borrowing costs climbed and property values sagged, defaults on commercial real estate debt have multiplied. Even Pimco itself previously defaulted on office and hotel portfolios in 2023 when the market shifted beneath them. Beyond this troubled Santa Monica property, Witkoff Group maintains an extensive portfolio spanning New York and South Florida, including the development of One High Line in West Chelsea—a mixed-use project planned to house 235 apartments alongside a hotel.
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