Business
Downtown L.A.’s cratering real estate market is changing — rich renters are buying their buildings
As the office market bottoms out after a long fall, renters are swooping in to buy their own buildings.
Occupant businesses are seizing the opportunity to become owners, especially in downtown Los Angeles, where glittering high-rises have plummeted in value since occupancy dropped during the pandemic. It has never fully recovered, but investors believe the market has at least stabilized.
Among the latest to snag a skyscraper is fund manager Capital Group, which has agreed to pay about $210 million for the 55-story Bank of America Plaza atop Bunker Hill, where it has offices. Others choosing to buy over rent include Riot Games and the Los Angeles Department of Water and Power.
“We knew the best landlord we could possibly have would be ourselves,” Capital Group Chief Executive Mike Gitlin said.
There are some good reasons tenants want to become landlords right now, Newmark property broker Kevin Shannon said, starting with timing.
“Everyone knows we’re near the bottom of this cycle, and it’s always good to buy near the bottom,” he said.
Downtown has suffered from an oversupply of office space since a building spree in the 1980s and early 1990s. The lack of rent-paying tenants that has driven down office values has become more acute since the pandemic. Nearly 40% of the office space in the financial district was available at the end of last year, according to CBRE. Overall vacancy downtown has climbed from 14% in 2019 to 34%.
Investors are finding deals to be had that include trophy properties such as San Francisco’s Transamerica Pyramid, a 48-story tower that has served as a symbol of the city since its completion in the 1970s. A European investment firm, Yoda PLC, recently paid around $690 million for the building, reflecting a deep loss for the previous owner, who had invested about $1 billion to buy and improve the famous skyscraper, according to CoStar.
A sign of the bottom of falling values is that office leasing levels seem to have stabilized, Shannon said.
“We’re far enough past COVID that office users are comfortable” and know how much space they’ll need going forward, he said.
Recent changes in federal tax laws regarding property depreciation benefits have added incentive, he said, and with office leasing improving around the country, lenders are looking more favorably on backing office purchases.
By owning their own buildings, white-shoe firms can maintain their properties in their own image.
Capital Group is already an anchor tenant in Bank of America Plaza, and it will consolidate other offices there after the sale closes.
Renters are taking advantage of the depressed office market and buying their own building, including Bank of America Plaza at 333 S. Hope St. which was just purchased by investment firm Capital Group.
(Robert Gauthier / Los Angeles Times)
“The best way to ensure a great environment in downtown L.A. is to create what we’re calling a vertical campus,” Gitlin said. “It was just this unique opportunity where the price was much lower than it had been historically, and it was for sale.”
Capital Group declined to confirm the reported $210-million sale price, but the building was last appraised in late 2024 at $212.5 million, down from $605 million 10 years earlier, according to Bloomberg.
Shannon said Capital Group paid about $150 per square foot for a property that would cost as much as $800 a foot to build at current costs. It will end up occupying the majority of the 1.4-million-square-foot building with 2,100 employees.
Owner-users have surged as key players in L.A.’s office market, now accounting for nearly half of all deals, real estate data provider CoStar said, while institutional investors’ share of purchases has fallen from 45% to 26%.
Office users from the public sector are among the buyers. The city of Los Angeles plans to buy a 35-story tower downtown for use by the Department of Water and Power.
The depressed office market in downtown Los Angeles has some renters looking to buy their own buildings.
(Robert Gauthier / Los Angeles Times)
Manulife U.S. Real Estate Investment Trust said this week that it would sell its high-rise at 865 S. Figueroa St. for $92.5 million pending approval from Los Angeles officials. It has an assessed value of $248 million.
The DWP confirmed in a statement that its negotiators will bring a proposal to the Board of Water and Power Commissioners next month to buy the Figueroa Street property. The polished red granite-clad building north of L.A. Live has been a prestigious corporate address since its completion in 1990.
“If approved, this acquisition would provide needed office space to support the expansion of LADWP’s workforce, consolidate operations and maintain the reliable delivery of water and power to the city of Los Angeles,” spokeswoman Renee A. Vazquez said.
Another major public buyer of a downtown office building was Los Angeles County, which in 2024 bought Gas Co. Tower for $200 million, a steep drop from its $632-million valuation in 2020. County officials said at the time that the foreclosure sale was too good a deal to pass up.
The county is gradually moving workers into the 55-story skyscraper at the base of Bunker Hill that was widely considered one of the city’s most desirable office buildings when it was completed in 1991.
A major renter takeover on the Westside happened in December, when video game giant Riot Games bought its five-building headquarters campus in the Sawtelle neighborhood for $150 million, one of the priciest Los Angeles office sales of the year.
The campus is home to a movie-studio-like environment that includes theaters and one of the largest commercial kitchens on the Westside, serving a wide range of fare that changes daily and is provided free to the company’s employees. Among the company’s well-known products is “League of Legends,” a multiplayer online battle arena video game played daily by millions of people around the world.
The colorful campus “unlocks the creative heart and spirit of Riot,” Chief Executive Dylan Jadeja said. “When the opportunity came up to own the property, we knew it made sense to invest for the long term. This allows us to continue cultivating an environment that reflects our mission and enables Rioters to do their life’s best work.”
The Sawtelle complex has been Riot Games’ global headquarters since 2015.
“It’s become far more than just an office for us,” Jadeja said. “This is where Rioters have pushed the boundaries of game development in service of delivering incredible games and experiences to players around the world.”
Business
Meta, Oracle and Qualcomm share details on layoffs across California
Tech behemoths, including Oracle and Meta Platforms, are laying off hundreds of California workers as they invest heavily in artificial intelligence.
Some of the top companies in tech that already had announced big plans to lay off thousands have revealed more details about where they are cutting in recent government filings.
Software giant Oracle has shed more than 700 workers in Santa Monica, Redwood City, Pleasanton and Santa Clara, filings to the California Employment Development Department show. The company, which was founded in California before moving its headquarters to Texas, started notifying employees of mass layoffs in late March.
Oracle declined to comment. The company hasn’t said publicly how many workers it has laid off. Several news outlets, citing people familiar with the matter, reported that the company laid off thousands of employees across multiple divisions.
As of May 2025, Oracle had 162,000 workers.
Software developers, analysts, sales representatives and product managers were among California Oracle workers who lost their jobs. Laid-off employees will officially separate from the company June 1.
California is home to some of the world’s most powerful and largest tech companies. But as they race ahead to advance AI-powered tools that can generate text, images and code, workers are anxious that businesses will automate tasks and shrink their workforce workforces. Tech companies also are more wary about their expenses, even as they spend billions of dollars on data centers and developing new products.
In March, Meta began laying off employees who worked on its virtual reality efforts.
The company laid off roughly 200 employees at its offices in Burlingame and Sunnyvale. They’re expected to leave the company May 29. Meta laid off engineers, recruiters, product managers and other workers.
“Teams across Meta regularly restructure or implement changes to ensure they’re in the best position to achieve their goals. Where possible, we are finding other opportunities for employees whose positions may be impacted,” a Meta spokesperson said in a statement.
Meta has been doubling down on its efforts to sell AI-powered smart glasses and is working on more powerful AI that surpasses human intelligence. The company, which debuted a new AI model Wednesday, is building a personal “superintelligence” to help people achieve their goals, create and be more productive.
Meta had 78,865 workers as of December 2025.
Chipmaker Qualcomm recently laid off more than 60 workers. The cuts hit employees across various offices in San Diego. Laid-off employees are anticipated to leave the company May 26. Various information technology and cybersecurity jobs were among the roles slashed as part of the layoffs.
Qualcomm didn’t immediately respond to a request for comment.
Business
Jeff Shell steps down as Paramount president after legal battle with gambler
Jeff Shell agreed to step down as president of Paramount Skydance after becoming entangled in a legal battle with a controversial Las Vegas gambler and self-styled “fixer.”
Paramount announced Shell’s departure Wednesday after the two sides negotiated an amicable resolution to the drama. Paramount said its external review into Shell’s conduct, initiated by Paramount’s board of directors, found no violation of securities laws.
Shell also resigned as a Paramount board member to focus on his legal skirmish, the company said.
His departure comes after just eight months on the job.
Paramount Skydance “is grateful for Mr. Shell’s many contributions and to have relied on him as a valued advisor,” the company said in its statement.
The veteran entertainment executive officially joined the media company with David Ellison’s takeover in August, though he had been a key member of Ellison’s team for nearly two years as the group worked to assemble the pieces of the tech scion’s growing empire. Ellison’s Skydance Media acquired Paramount and then pulled off a stunning $111-billion deal to buy Warner Bros. Discovery in late February.
Shell brought substantial experience running a media company to Ellison’s inner circle, a group that included former investment bankers and others who haven’t run a large-scale enterprise. But his role within the company long felt awkward because key division managers, including the heads of CBS, the Paramount movie studio and the company’s streaming businesses, reported to Ellison, which left Shell with a nebulous portfolio.
He wasn’t planning to stay on after the company acquires Warner Bros. Discovery, according to two people close to the situation who were not authorized to speak publicly. Paramount hopes to complete that deal this summer.
Shell’s exit this week was prompted by his unlikely association with the high-roller, Robert James “R.J.” Cipriani, who created a public stir after his dealings with Shell went south.
Cipriani sued Shell in Los Angeles County Superior Court on March 9, alleging fraud and breach of an oral contract. Cipriani claimed that he provided Shell with “sophisticated, high-value crisis communications services,” according to his suit.
He alleged Shell spilled corporate secrets, which Shell has denied. Cipriani said he reported Shell to the U.S. Securities & Exchange Commission because Shell allegedly had discussed highly sensitive Paramount information with him: Paramount’s $7.7-billion deal last summer to bring UFC mixed-martial arts fights to CBS and other Paramount outlets.
Cipriani accused Shell of failing to deliver on a verbal pledge to help him produce an English-language version of a Roku TV Spanish music show.
Shell maintained Cipriani fictionalized the two men’s dealings, then spread “false and salacious lies to extract a massive payday,” according to a counterclaim filed by Shell. Cipriani has been seeking $150 million in damages.
In his court documents, Shell said the two men met only twice and that Shell owed him nothing.
But the Cipriani controversy made Shell’s future at Paramount untenable, the sources told The Times.
There was just “too much noise,” one of the sources said.
The Ellisons wanted to stay focused on building Paramount and completing their Warner Bros. takeover. The company needs to line up regulatory approvals in the U.S. and abroad.
Jeff Shell, Paramount Skydance president.
(Paramount / Skydance)
Paramount’s board last month hired the Gibson Dunn law firm to look into Cipriani’s allegations.
The firm conducted a “complete and thorough” review, Paramount said.
“The facts demonstrated that [Cipriani’s] allegations do not establish a securities law violation,” Paramount said. “Mr. Shell promptly notified PSKY of these accusations and is taking forceful legal action.”
Paramount Skydance, and its board members also named in Cipriani’s lawsuit, plan to respond “to the frivolous and baseless claims against PSKY and its named board members and stockholders,” the company said.
The firm attributed Shell’s decision to step down as “consistent with Mr. Shell’s commitment to prioritizing PSKY’s success.”
His departure comes three years after he was ousted as NBCUniversal chief executive.
NBCUniversal-owner Comcast hired a law firm to investigate him after a CNBC anchor filed an internal sexual harassment claim against him. Shell stepped down, acknowledging that he’d had an “inappropriate relationship” with the journalist, who has since left the company.
The job at Paramount was envisioned to be his second act.
Shell’s dealings with Cipriani began with an August 2024 meeting at litigator Patty Glaser’s Century City office.
At the time, Glaser represented both men and urged Cipriani to “cease” his efforts to drum up damaging stories about Shell, who was trying to recover from the scandal that cost him his job at NBC.
Robert James “R.J.” Cipriani in Amazon Prime Video’s 2025 series, “Cocaine Quarterback.”
(Courtesy of Prime)
Near the end of that meeting, Cipriani pledged to help Shell keep negative publicity at bay, according to sources and court documents.
The two men communicated via text messages, on-and-off, for about 18 months.
“Nobody believed me,” Cipriani said Wednesday. “The best thing I did was cooperate with Gibson Dunn and showed them that the texts were real.”
It’s unclear whether Ellison will look to bring in other experienced media executives or look to senior Warner Bros. Discovery executives following Paramount’s proposed takeover of that company.
Times staff writer Stacy Perman contributed to this report.
Business
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