Value for one of LA's tallest office towers plummets as vacancies climb

One California Plaza joins growing list of buildings hit by pandemic and other headwinds

The 42-story One California Plaza's increased vacancy and reduced cash flow pushed assessors to slash its valuation, according to a Morningstar report.

By Brannon Boswell

CoStar News

April 10, 2025 | 4:39 P.M.

The value of one of downtown Los Angeles’ tallest towers has plunged 74% from its peak, a sharp sign of distress in one of the nation’s hardest-hit office markets.

One California Plaza, a 42-story office building, is now appraised at $121.2 million, down from $459 million in 2013, according to a new Morningstar Credit report.

The tower backs a $300 million commercial mortgage-backed securities loan, which entered special servicing in September 2024. Net cash flow at the property trailed expectations by 37% last year, and the building is currently just 63% occupied following the departure of major tenants including law firm Skadden. Ownership of the property at 300 S Grand Ave, including DigitalBridge, Harel Insurance, and Rising Realty, is challenging the new appraisal.

Downtown Los Angeles has become one of the weakest large office markets in the U.S., with a 21% vacancy rate, far above the 16% average across greater Los Angeles and the United States average of 14%, according to CoStar. Tenants gave back 1.6 million more square feet of space than they leased in the neighborhood last year, and leasing activity remains roughly 25% below pre-pandemic levels.

One California Plaza is far from alone in its post-pandemic distress. The Gas Company Tower at 555 W 5th St recently sold for around $200 million, down 68% from a $632 million valuation just four years ago. The 777 Tower at 777 S Figueroa St traded in July for $120 million, a 70% drop from its 2013 sale. EY Plaza at 725 S Figueroa St, once valued at $446 million, is now worth about $150 million, a 66% decline.

Older office towers in downtown face stiff competition from newer buildings on the Westside and in submarkets like Culver City and Century City, where amenities, energy efficiency, and proximity to entertainment and tech tenants give properties a competitive edge, according to Ryan Patap, senior director of market analytics for Los Angeles.

There are some signs of momentum. The number of workers visiting downtown LA hit a post-pandemic high in the fourth quarter of 2024, according to the DTLA Alliance.

Still, foot traffic alone hasn’t translated into meaningful leasing gains — and for towers like One California Plaza, the road to recovery remains steep and uncertain, Patap said.