One California Plaza in Foreclosure

After landing in special servicing due to imminent monetary default last year, Rising Realty Partners’ One California Plaza in Downtown Los Angeles is in foreclosure, according to Trepp.

The Class A office property’s appraised value was slashed 74 percent to around $121 million from $459 million due to “high vacancy and tenant departures,” a Trepp report notes.

That means not only has the value of the property plummeted more than two thirds in only eight years, but it’s $179 million less than the $300 million commercial mortgage-backed securities loans tied to the office tower.

Christopher Rising’s Rising Realty purchased the 42-story office tower at 300 South Grand Avenue in Bunker Hill for $465 million in 2017 with the help of equity partner Colony Capital (formerly Colony Northstar), The Real Deal previously reported. Rising Realty Partners did not respond to a request for comment.

Occupancy at the 1,050,000 square foot One California Plaza dropped to about 63 percent this year from 88 percent in 2017 at the time of underwriting. The property saw a sharp fall in net operating income to $9 million in 2024 compared to $17 million the year before. The same can be said for net operating cash flow, which sunk to $7.7 million from $14.6 million during that period, according to Morningstar. The debt service ratio is suspected to be below one, which means the property is not pulling in enough income to cover debts.

Current tenants include AECOM, Watson Morgan Lewis and Nixon Peabody. AECOM, the largest tenant, leases 12 percent of One California Plaza’s space, or about 124,000 square feet; its lease is not set to expire until 2032. The building lost its second biggest tenant, Skadden Arps Slate, who had a lease totaling 10 percent of the space, in November last year.

Downtown offices continue to see distress post-pandemic. Offices in Downtown Los Angeles have an almost 33 percent vacancy rate compared to Greater Los Angeles’ 24 percent, according to a second-quarter CBRE report.

Rising Realty Partners has had some trouble outside of Los Angeles. Last year, the company handed the keys to a Denver office tower back to the lender in lieu of foreclosure.