Los Angeles, September 4, 2025
News Summary
One California Plaza, a prominent 42-story skyscraper in downtown Los Angeles, has entered receivership due to financial distress and a significant drop in value. The building’s worth has plummeted by 74% since 2013, attributed to a challenging office market and the departure of key tenants. The owners, Rising Realty Partners and DigitalBridge, failed to meet a $300 million debt obligation, prompting judicial action to appoint a receiver. This situation reflects broader trends impacting the downtown office sector, raising alarms about property values and potential municipal revenue losses.
California – One California Plaza, a 42-story skyscraper located in downtown Los Angeles, has officially entered receivership amidst a challenging declining office market. This significant legal and financial move comes as the building’s value has diminished sharply by 74% from its peak market worth, raising substantial concerns about the state of office real estate in the area.
The property, once appraised at $459 million in 2013, is now valued at only $121.2 million. The current distress follows the building owners’ failure to meet their financial obligations, including defaulting on a $300 million debt that is set to mature in November. In response to this situation, a judge has appointed Trigild, a service specializing in receivership management, to take control of the property at the request of the lenders.
One California Plaza’s financial performance has deteriorated significantly, with net cash flow falling short of expectations by 37% in the past year. Compounding these challenges, the building’s occupancy has dropped to 62% after losing several key tenants, among them the prominent law firm Skadden, Arps, Slate, Meagher & Flom.
The ownership structure of One California Plaza is comprised of Rising Realty Partners and DigitalBridge, although neither organization has commented on the recent receivership move. This incident is reflective of broader trends in the downtown Los Angeles office market, where many businesses have reduced their office requirements due to the continued shift towards remote work in the aftermath of the COVID-19 pandemic.
The prevailing high-interest rates have further exacerbated challenges for office property owners, rendering refinancing efforts increasingly difficult and resulting in to a decrease in property values across the market. Currently, 54 office buildings in downtown Los Angeles are considered at immediate risk of devaluation, which could lead to potential losses amounting to $70 billion over the next decade. These financial declines further threaten municipal revenue, with estimates suggesting a potential loss of $353 million in property tax revenue.
In light of these mounting concerns, various stakeholders are advocating for city support to convert vacant office properties into residential units as part of an effort to mitigate the acute housing shortage that Los Angeles is facing. Advocates propose that converting just ten major office buildings into residential spaces could boost their combined value by $12 billion and possibly lead to the creation of approximately 3,800 new housing units.
Recent trends also indicate that neighboring buildings, including the Gas Company Tower, have faced significant value declines in recent years. Business leaders are expressing concern about the perception of downtown Los Angeles, particularly in anticipation of high-profile events such as the World Cup and the Summer Olympics scheduled in the coming years.
Another notable development in the area, Oceanwide Plaza, remains stalled due to ongoing bankruptcy issues linked to high-interest rates and escalating construction costs that are complicating efforts to sell the project. These circumstances highlight the pressing need for strategic solutions to address the financial and operational challenges facing downtown Los Angeles.
FAQ Section
What is receivership?
Receivership is a legal process where a court appoints a receiver to manage a property or business due to financial distress or default on debts.
Why did One California Plaza enter receivership?
One California Plaza entered receivership after the owners defaulted on a $300 million debt and the building’s value fell significantly due to a declining office market.
What are the current occupancy and cash flow levels at One California Plaza?
Currently, One California Plaza’s occupancy is at 62%, and its net cash flow fell 37% short of expectations last year.
How much has the value of One California Plaza decreased?
The value of One California Plaza has decreased by 74%, falling from $459 million in 2013 to $121.2 million currently.
What is the potential impact of the current office market decline on Los Angeles?
There are concerns that the decline in office property values could result in $70 billion in losses over the next decade and a potential property tax revenue loss of $353 million.
What solutions are being proposed to address the office space vacancies?
Advocates are recommending the conversion of vacant office buildings into residential units to help alleviate the housing shortage in Los Angeles.
Key Features of One California Plaza Situation
| Feature | Data |
|---|---|
| Original Value (2013) | $459 million |
| Current Value | $121.2 million |
| Percentage Decrease | 74% |
| Occupancy Rate | 62% |
| Debt Amount | $300 million |
| Cash Flow Shortfall (last year) | 37% |
| Potential Loss in Property Tax Revenue | $353 million |
| Risk of Devaluation in Downtown LA | 54 buildings |
| Potential Total Loss over 10 Years | $70 billion |
| Proposed New Housing Units (if converted) | 3,800 |
Deeper Dive: News & Info About This Topic
- Los Angeles Times: Sale of Graffiti-Tarnished Towers
- Wikipedia: Skyscraper
- KTLA: Downtown Los Angeles Skyscraper Value Loss
- Google Search: Skyscraper Los Angeles
- MSN: Residential Skyscraper Approval
- Encyclopedia Britannica: Real Estate
- Daily News: LA County Skyscraper Retrofit
- Google News: Los Angeles Skyscraper
- San Francisco Chronicle: Proposed Skyscraper Comparison
- AOL: Los Angeles County Skyscraper Purchase
- CBS News: Plummeting Skyscraper Values
Author: STAFF HERE HUNTINGTON BEACH
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