Los Angeles, September 4, 2025
News Summary
One California Plaza in downtown Los Angeles has entered receivership due to a significant drop in value, now $121.2 million from a peak of $459 million. The owners defaulted on a $300 million debt, prompting a court to appoint a receivership service. This situation reflects ongoing challenges in LA’s office market, influenced by remote work trends and rising interest rates. The decline in occupancy and property values raises concerns about broader implications for the city’s economy and housing crisis.
California: One California Plaza in Downtown Los Angeles Goes Into Receivership Amidst Declining Office Market
One California Plaza, a prominent 42-story skyscraper located in downtown Los Angeles, has recently entered receivership after its value saw a staggering 74% decrease from its peak market value. The property, once appraised at $459 million in 2013, is now valued at just $121.2 million, prompting lenders to request a judge’s intervention.
The owners of the skyscraper defaulted on a $300-million debt set to mature this coming November. In light of this, the court appointed Trigild, a real estate receivership service, to take charge of the property handling and management. The move highlights the ongoing challenges facing the commercial real estate market in downtown Los Angeles.
In 2022, the building reported a net cash flow that fell short of expectations by an alarming 37%. Currently, the occupancy rate stands at 62%, significantly impacted by the loss of key tenants, including the well-known law firm Skadden, Arps, Slate, Meagher & Flom. The decline in leasing activity reflects broader trends affecting office spaces in the downtown area.
According to recent analyses, the ongoing COVID-19 pandemic has instigated a fundamental shift in the office market, with many companies opting to downsize their office footprints owing to a sustainable increase in remote working practices. Additionally, rising interest rates have further complicated matters for property owners, inhibiting their ability to refinance existing debts and maintain property values.
The implications of these developments are extensive. There are currently 54 office buildings in downtown Los Angeles identified as being at immediate risk of devaluation. This trend may contribute to an estimated $70 billion loss in property value over the next decade. Moreover, a cascading effect on property taxes is projected, potentially leading to a revenue loss of $353 million for the city.
In response to the crisis, stakeholders within the community are advocating for city support to transition vacant office buildings into residential spaces, aiming to tackle the ongoing housing shortage in Los Angeles. Estimates indicate that converting just ten major office properties into housing could elevate their combined value by $12 billion and result in the creation of 3,800 new housing units.
Nearby developments, including the Gas Company Tower and others, have also registered notable declines in property values in recent years. Business leaders express growing concern regarding the public perception of downtown Los Angeles, especially in light of upcoming events such as the World Cup and Summer Olympics.
Additionally, Oceanwide Plaza, another nearby development, remains stalled in bankruptcy, grappling with issues driven by high interest rates and surging construction costs, which complicate its potential sale.
Conclusion
The situation at One California Plaza is emblematic of broader challenges confronting the office market in downtown Los Angeles. Stakeholders continue to discuss innovative solutions aimed at addressing both the high vacancy rates and the pressing housing needs within the city.
FAQs
What is One California Plaza?
One California Plaza is a 42-story skyscraper located in downtown Los Angeles that has recently entered receivership.
Why did One California Plaza enter receivership?
The property entered receivership after its value plummeted by 74% since its peak, and its owners defaulted on a $300 million debt.
What factors contributed to the decline of office spaces in downtown LA?
The COVID-19 pandemic and an increase in remote work led many companies to downsize their office needs, while rising interest rates have made refinancing difficult.
How can the conversion of office buildings into residential spaces help the housing crisis?
Converting office buildings to residential can potentially create new housing units and increase property value, addressing both vacancy and housing shortages.
Key Features of One California Plaza Situation
| Feature | Details |
|---|---|
| Building Name | One California Plaza |
| Height | 42 stories |
| Current Value | $121.2 million |
| Peak Value | $459 million |
| Debt | $300 million |
| Current Occupancy | 62% |
| Value Decrease | 74% |
| Net Cash Flow Decrease | 37% |
Deeper Dive: News & Info About This Topic
- Los Angeles Times: Graffiti Tarnished Towers
- Wikipedia: One California Plaza
- KTLA: Downtown LA Skyscraper Value Loss
- Google Search: One California Plaza
- Daily News: LA County Skyscraper Retrofit
- Encyclopedia Britannica: Los Angeles Real Estate
- MSN: Residential Skyscraper City Approval
- Google News: Los Angeles Office Market
- AOL: Los Angeles County Skyscraper Purchase
- Google Scholar: Los Angeles Commercial Real Estate
Author: STAFF HERE MISSION VIEJO WRITER
MISSION VIEJO STAFF WRITER The MISSION VIEJO STAFF WRITER represents the experienced team at HEREMissionViejo.com, your go-to source for actionable local news and information in Mission Viejo, 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 Oso Fit 5K Fun Run and Community Health Fair, Walk Against Drugs & Community Fair, and National Night Out. Our coverage extends to key organizations like the Mission Viejo Chamber of Commerce and Providence Mission Hospital Mission Viejo, plus leading businesses in retail and education that power the local economy such as The Shops at Mission Viejo, Capistrano Unified School District, and Amazon Delivery Station. As part of the broader HERE network, including HEREAnaheim.com, HEREBeverlyHills.com, HERECostaMesa.com, HERECoronado.com, HEREHollywood.com, HEREHuntingtonBeach.com, HERELongBeach.com, HERELosAngeles.com, HERESanDiego.com, and HERESantaAna.com, we provide comprehensive, credible insights into California's dynamic landscape.
