What You'll Learn In This Article: 

• Brookfield defaulted on over $1 billion in loans for LA properties, signaling a broader office market crisis.
• The default is part of a looming $1 trillion CMBS loan crisis that could lead to bank bailouts.
• Commercial real estate's non-recourse loans allow firms like Brookfield to walk away without further penalties.
• Widespread property devaluation and changing work habits are reshaping commercial real estate values.

In February, Brookfield defaulted on loans worth over $1 billion tied to its downtown LA properties. The global investment firm faces another $763 million in potential defaults.
Their situation highlights the complete and utter crisis taking place in the office market right now. Low demand for office space from tenants, amplified by high interest rates, has made it difficult for landlords (even massive ones) to pay the debt on their properties. 
The Brookfield corporation is only one of the real estate giants that would have been deemed too big to fail in the past. But now? Properties across the country are defaulting at rapid rates, going into special servicing, and making the path forward extremely murky.
So, let's explore how and why Brookfield defaulted on $1 billion in loans, thus putting a face to 0.1% of the faceless $1 trillion in CMBS coming due and holding the real estate market hostage.