A lender is pursuing a receiver for the Rising Realty Partners-owned One California Plaza, a 1-million square foot office tower downtown, after it defaulted on $300 million commercial mortgage-backed securities debt and landed in foreclosure.
US Bank, on behalf of the loan holders and through a special servicer, requested a receiver be appointed to take possession of the property and collect rents in a complaint filed earlier this month in the Superior Court of Los Angeles County.
“Borrower is in default under the loan documents and is depriving plaintiff of its interest in the rents, causing material, immediate and irreparable damage to plaintiff,” the lawsuit reads. It later noted: “unless a receiver is appointed, plaintiff will suffer great and irreparable damage.”
Christopher Rising’s company and Colony Capital purchased the office tower at 300 South Grand Avenue for $465 million eight years ago. (Colony Capital was once Colony Northstar and is now DigitalBridge). Christopher Rising declined to comment.
The 42-story, Bunker Hill office tower is worth less than the debt connected to it and less than its purchase price. A recent appraisal put its value at about $121 million, compared to $459 million at loan issuance in 2017. Occupancy plummeted to about 63 percent this year compared to 88 percent at underwriting, according to Morningstar Credit.
Net operating income fell to $9 million in June 2024 from $17 million in December 2023, the latest data available shows. The complaint notes that the plaintiff believes the borrower intends to consent to the appointment of a receiver.
Downtown Los Angeles has an about 33 percent office vacancy rate; Bunker Hill has a slightly lower vacancy rate at about 31 percent.
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