Los Angeles, September 4, 2025
News Summary
One California Plaza, a 42-story skyscraper in downtown Los Angeles, has entered receivership due to a 74% drop in its market value from $459 million to $121.2 million. The property’s owners defaulted on a $300 million debt, prompting lenders to seek a court-appointed receiver. The office market faces challenges stemming from the COVID-19 pandemic and rising interest rates, with many companies reducing their office space needs, leading to a potential crisis in Los Angeles’s commercial real estate.
California – One California Plaza, a prominent 42-story skyscraper located in downtown Los Angeles, has officially entered receivership following a significant decline in its market value and related financial issues. This development reflects ongoing challenges within the office market sector, exacerbated by the economic impacts of the COVID-19 pandemic and rising interest rates.
In the latest appraisal, the building’s value plummeted by 74% from its peak market value of $459 million in 2013, now standing at just $121.2 million. The owners of the property, Rising Realty Partners and DigitalBridge, defaulted on a $300 million debt set to mature in November, prompting lenders to request a court-appointed receiver, Trigild, to take control of the property.
The situation worsened as the property’s net cash flow fell short of expectations, reporting a 37% decrease over the past year. Currently, One California Plaza is only 62% leased, having lost major tenants including the well-known law firm Skadden, Arps, Slate, Meagher & Flom.
Beyond these immediate financial concerns, broader changes in the downtown Los Angeles office market are contributing to this crisis. The pandemic has facilitated a major shift, as many companies are reducing their office space needs due to the remote work model becoming more prevalent. Furthermore, current high-interest rates have led to significant declines in property values, complicating the refinancing process for building owners.
Estimates reveal that downtown Los Angeles may face 54 office buildings at immediate risk of devaluation, which could result in an alarming $70 billion loss over the upcoming decade. In parallel, such devaluations carry implications for public funding, including a potential loss of $353 million in property tax revenue.
In light of these developments, various stakeholders are pushing for city support to convert many of the vacant office buildings into much-needed housing, addressing the ongoing housing crisis in Los Angeles. It has been projected that converting just ten major office buildings to residential use could enhance their combined value by $12 billion and yield approximately 3,800 new housing units.
As property values in downtown Los Angeles continue to decline, buildings such as the Gas Company Tower have also registered substantial losses. Business leaders are increasingly concerned about the perception of downtown Los Angeles, particularly with upcoming major events like the World Cup and Summer Olympics looming on the horizon.
Additionally, developments such as Oceanwide Plaza remain stalled in bankruptcy, grappling with ongoing issues tied to high-interest rates and escalating construction costs, which further complicate the landscape for real estate in the area.
Overall, the unfolding situation at One California Plaza serves as a microcosm of a larger trend affecting office spaces in downtown Los Angeles, amidst evolving work patterns and economic factors.
FAQ
What is One California Plaza?
One California Plaza is a 42-story skyscraper located in downtown Los Angeles, which has entered receivership due to financial difficulties.
Why did One California Plaza enter receivership?
The building entered receivership due to a 74% decline in market value, defaulting on a significant debt, and a sharp decrease in net cash flow.
How much did the property’s value decrease?
The property’s value decreased from $459 million in 2013 to $121.2 million in the latest appraisal.
What effects has the pandemic had on the office market in downtown Los Angeles?
The pandemic has prompted many companies to reduce their office space requirements, impacting occupancy rates.
What are stakeholders advocating for to address the housing crisis?
Stakeholders are advocating for converting vacant office buildings into residential housing to alleviate the housing shortage in Los Angeles.
Deeper Dive: News & Info About This Topic
- Los Angeles Times: Sale of Graffiti-Tarnished Towers in Downtown Los Angeles
- Wikipedia: Downtown Los Angeles
- KTLA News: Downtown Los Angeles Skyscraper Loses 2/3 of Value
- Google Search: LA Skyscraper Market Analysis
- MSN: Residential Skyscraper for Downtown L.A. Mall Clears Hurdle
- Encyclopedia Britannica: Los Angeles
- Daily News: LA County Skyscraper Retrofit Surprises Supervisors
- Google News: Downtown LA Real Estate Issues
Author: STAFF HERE CORONADO
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