Los Angeles, September 4, 2025
News Summary
One California Plaza, a major 42-story skyscraper in downtown Los Angeles, has entered receivership after its value fell 74% from its peak in 2013 due to significant financial struggles. The property, currently appraised at $121.2 million, faced issues including a $300 million debt maturity and only 62% occupancy. The current challenges highlight broader trends in the LA commercial real estate market, aggravated by remote work and economic conditions. Stakeholders are contemplating converting vacant offices into housing to address both devaluation and local housing shortages.
California – One California Plaza, a prominent 42-story skyscraper in downtown Los Angeles, has officially entered receivership as the commercial office market grapples with significant declines. The building’s value has plummeted by an alarming 74% from its peak market value of $459 million in 2013, to its current appraisal of $121.2 million. This drastic drop comes on the heels of the property’s owners failing to meet a $300 million debt obligation that is set to mature in November.
A judge has since appointed Trigild, a receivership service, to oversee the property following a request from lenders distressed by the owners’ inability to manage their financial responsibilities. Last year, the net cash flow from One California Plaza fell short of expectations by 37%, further complicating financial recovery attempts. Currently, the 42-story structure is only 62% leased, having lost several key tenants, including the notable law firm Skadden, Arps, Slate, Meagher & Flom.
The ownership of One California Plaza includes Rising Realty Partners and DigitalBridge. However, neither entity has commented publicly on the situation following the receivership ruling. This action highlights larger trends in the downtown Los Angeles office market, especially in the wake of the COVID-19 pandemic, which has encouraged companies to reassess their office space needs due to the rise of remote work.
The economic landscape is further strained by high-interest rates, which have made refinancing increasingly difficult for property owners. As a result, many properties in the region are at risk of significant devaluation; in fact, downtown Los Angeles currently has 54 office buildings at immediate risk, amounting to a potential $70 billion loss over the next decade. Such losses could translate into a staggering $353 million drop in property tax revenue, complicating the city’s budget and fiscal health.
Amidst these challenges, local stakeholders are urging city officials to consider converting vacant office spaces into housing. The proposal suggests that transforming just 10 major office buildings into residential units could boost their combined value by $12 billion and create approximately 3,800 new housing units to help alleviate the ongoing housing shortage in Los Angeles.
The situation is further illuminated by the experiences of nearby structures, such as the Gas Company Tower, which has also seen substantial value declines as part of the broader trend affecting downtown real estate. Concerns have been raised by business leaders about the implications for the area’s reputation, particularly as Los Angeles prepares to host both the World Cup and Summer Olympics in the coming years.
Additionally, the nearby Oceanwide Plaza development remains stalled due to bankruptcy and ongoing challenges related to soaring interest rates and rising construction costs, which have delayed its completion and impacted potential sale opportunities.
Summary of Key Information
| Feature | Detail |
|---|---|
| Property Name | One California Plaza |
| Location | Downtown Los Angeles |
| Number of Stories | 42 |
| Peak Market Value | $459 million (2013) |
| Current Appraisal | $121.2 million |
| Debt | $300 million |
| Occupancy Rate | 62% |
| Net Cash Flow Shortfall | 37% |
| Buildings at Risk of Devaluation in Downtown LA | 54 |
| Estimated Loss Over Next Decade | $70 billion |
| Potential Property Tax Revenue Loss | $353 million |
| Potential Residential Units from Conversions | 3,800 |
FAQ
What does it mean for a property to go into receivership?
Receivership occurs when a court appoints a neutral third party to manage a property due to the owner’s financial difficulties, particularly when debts are not being paid.
How has the COVID-19 pandemic affected the office market in downtown LA?
The pandemic has led many companies to downsize or eliminate their office spaces, significantly reducing demand for commercial offices.
What are the consequences of declining property values for local governments?
Decreased property values can lead to reduced property tax revenue, affecting the city’s budget and its ability to fund public services.
What are the potential benefits of converting office buildings into residential units?
Converting office spaces into residential units can enhance property values and address housing shortages in urban areas, leading to increased housing availability.
Deeper Dive: News & Info About This Topic
- Los Angeles Times: Sale of Graffiti-Tarnished Towers in Downtown Los Angeles
- MSN: Residential Skyscraper for Downtown L.A. Mall Clears Hurdle to City Approval
- Daily News: LA County Skyscraper Retrofit Surprises Supervisors
- CBS News: Plummeting Skyscraper Value Deals Huge Blow to Downtown Los Angeles
- Los Angeles Times: Residential Skyscraper for Downtown L.A. Mall Clears Hurdle
- Wikipedia: Skyscraper
- Google Search: Downtown Los Angeles Real Estate
- Google Scholar: Downtown Los Angeles Real Estate
- Encyclopedia Britannica: Skyscraper
- Google News: Los Angeles Real Estate Market
Author: Anaheim Staff Writer
Anaheim Staff Writer The Anaheim Staff Writer represents the experienced team at HEREAnaheim.com, your go-to source for actionable local news and information in Anaheim, Orange County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as major conventions at the Anaheim Convention Center, including NAMM and VidCon, exciting games at Angel Stadium and Honda Center, and developments at Disneyland Resort Our coverage extends to key organizations like the Anaheim Chamber of Commerce and Visit Anaheim, plus leading businesses in hospitality, entertainment, and innovation that power the local economy As part of the broader HERE network, including HERECostaMesa.com, HEREHuntingtonBeach.com, HERESantaAna.com, and HERELosAngeles.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
