Los Angeles, September 4, 2025
News Summary
One California Plaza, a key skyscraper in downtown Los Angeles, has entered receivership following a dramatic 74% drop in its value since 2013. Facing a $300 million debt default and a significant decrease in cash flow, the building’s economic viability is in jeopardy. This situation reflects broader challenges in the downtown office market, exacerbated by the COVID-19 pandemic and rising interest rates. Stakeholders are advocating for converting vacant office spaces into residential units to address both the housing shortage and the decline in property values.
California – One California Plaza, a prominent 42-story skyscraper located in downtown Los Angeles, has officially entered receivership amid a troubling decline in the office market. This significant shift occurred as the building’s value dropped by an alarming 74% since its peak market valuation, now appraised at $121.2 million compared to its original $459 million in 2013.
The owners of One California Plaza have defaulted on a $300 million debt that is set to mature in November, prompting a judge to appoint Trigild, a receivership service, to manage the property at the request of lenders. The financial woes have been exacerbated by a 37% shortfall in net cash flow recorded last year, further complicating the building’s economic viability.
Currently, One California Plaza is 62% leased, with the loss of several key tenants, notably the prestigious law firm Skadden, Arps, Slate, Meagher & Flom. This loss of tenants not only impacts leasing revenue but also highlights the challenges facing the broader commercial real estate sector in downtown Los Angeles.
Several factors can be attributed to the declining state of the office market in downtown LA. The aftermath of the COVID-19 pandemic has led many companies to reconsider their need for physical office space, embracing remote work as a permanent alternative. In addition, escalating interest rates have adversely affected property values, making refinancing an uphill battle for many building owners.
The situation is concerning, as downtown Los Angeles currently has 54 office buildings identified as at immediate risk of devaluation, which could lead to an estimated $70 billion loss in property value over the coming decade. Such losses are expected to impact local economy significantly, potentially resulting in a property tax revenue loss of $353 million.
In light of these challenges, stakeholders are pushing for city support to facilitate the conversion of vacant office buildings into residential units, addressing the ongoing housing shortage in Los Angeles. Data suggests that transforming 10 major office buildings to residential properties could enhance their combined value by as much as $12 billion and create approximately 3,800 new housing units.
Additionally, the Gas Company Tower and neighboring buildings have witnessed steep declines in value, contributing to concerns over the overall perception of downtown LA as a destination for businesses. Business leaders are particularly worried about the implications of these trends as the city prepares to host global events such as the World Cup and the Summer Olympics.
Compounding these issues, Oceanwide Plaza, another major redevelopment nearby, remains stalled in bankruptcy, grappling with financial difficulties attributed to high-interest rates and increasing construction costs, hampering efforts to bring its units to market.
The outlook for One California Plaza and the overall downtown Los Angeles office market remains uncertain as industry leaders struggle to navigate the changing landscape. Adjustments in urban planning, real estate finance, and economic recovery strategies will be crucial in determining the future of this vital area.
FAQs
What is the current status of One California Plaza?
One California Plaza has entered receivership due to a significant decline in its value and owners defaulting on a $300 million debt.
How much has the value of One California Plaza decreased?
The property’s value has decreased by 74%, now appraised at $121.2 million compared to $459 million in 2013.
Why is the office market in downtown LA struggling?
The decline is largely due to the shift to remote work following the COVID-19 pandemic and high-interest rates affecting property values and refinancing options.
Key Features Overview
| Feature | Details |
|---|---|
| Current Appraised Value | $121.2 million |
| Peak Market Value | $459 million (2013) |
| Debt Default | $300 million |
| Leased Percentage | 62% |
| Net Cash Flow Shortfall | 37% |
| Potential Housing Units from Office Conversions | 3,800 |
| Projected Property Tax Revenue Loss | $353 million |
| Potential Overall Loss from Office Buildings | $70 billion |
Deeper Dive: News & Info About This Topic
- Los Angeles Times: Sale of Graffiti-Tarnished Towers in Downtown Los Angeles
- Wikipedia: Los Angeles
- KTLA: Downtown Los Angeles Skyscraper Loses 2/3 of Value
- Google Search: Downtown Los Angeles Real Estate
- MSN: Residential Skyscraper for Downtown L.A. Mall Clears Hurdle to City Approval
- Google Scholar: Downtown Los Angeles Real Estate Market
- Daily News: LA County Skyscraper Retrofit Surprises Supervisors
- Encyclopedia Britannica: Los Angeles Real Estate
- CBS News: Plummeting Skyscraper Value Deals Huge Blow to Downtown Los Angeles
- Google News: Los Angeles Skyscraper Market
Author: STAFF HERE BEVERLY HILLS WRITER
The Beverly Hills Staff Writer represents the experienced team at HEREBeverlyHills.com, your go-to source for actionable local news and information in Beverly Hills, Los Angeles 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 the Rodeo Drive Concours d'Elegance, the Beverly Hills artSHOW, Concerts on Canon, and holiday celebrations throughout the city. Our coverage extends to key organizations like the Beverly Hills Chamber of Commerce and Visit Beverly Hills, plus leading businesses in luxury fashion, hospitality, and entertainment that drive the local economy. As part of the broader HERE network, including HERELosAngeles.com, HERESantaAna.com, HEREHuntingtonBeach.com, and HERECostaMesa.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
