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n Los Angeles, a commercial mortgage-backed security loan of $300 million is causing trouble for Rising Realty Partners due to its association with a 42-story office building in Downtown Los Angeles. The locally based investor is dealing with this issue for its One California Plaza tower located at 300 South Grand Avenue in Bunker Hill. Bisnow reported this news, citing Morningstar as their source. The commercial mortgage-backed security loan for this 1-million-square-foot skyscraper is set to mature in November.

    The building, now known as 1 Cal Plaza, has been facing financial challenges. In 2021, it entered special servicing due to a cash management issue that was eventually resolved. According to Morningstar, the net cash flow for the property last year was 37% lower than the underwritten amount. Occupancy has been a common problem for commercial offices since the shift to remote work during the pandemic.

    Law firm Skadden is leaving its 100,000-square-foot offices at 1 Cal Plaza this year, after signing a deal for half that size in Century City. This move will reduce occupancy to 63%. Morningstar reported this information.

    Approximately 20% of all office loans in Los Angeles are set to mature between last year and 2025, according to a previous Morningstar report. This report estimated that $1.8 billion in CMBS debt was due this year alone.

    One California Plaza was built in 1985 as part of the urban renewal of Bunker Hill, next to its twin, Two California Plaza. Rising Realty bought the building in 2017 for $460 million or $460 per square foot.

    This week, Southern California Gas signed a lease agreement for nearly 200,000 square feet on eight floors at the 52-story 2 Cal tower at 350 South Grand Avenue. The relocation from their long-held home at the Gas Company Tower at 555 West 5th Street is scheduled for spring 2026. The terms of the deal with Mid-Wilshire-based CIM Group, the building's owner, were not disclosed.

    Rising Realty Partners, founded in 2012 by Nelson Rising and his son Christopher, manages commercial real estate assets worth $1.7 billion, including 6.4 million square feet of properties, according to their website.

    In June last year, Rising Realty and Lionstone Investments sold a 300,000-square-foot, 11-story Art Deco building at 433 South Spring Street in Downtown L.A. for under $40 million or less than $133 per square foot. The buyer of The Trust Building was UCLA.