Bloomberg News reports that Blackstone Inc. has entered into conversations with the lenders about the future of an office complex in Los Angeles. The complex was once upon a time valued at $583 million. The valuation was obtained after having written down the whole stake in the property. The same was revealed as per the knowledge of an individual familiar with the matter. Portfolio purchase Playa District was acquired by the private equity giant in 2016. The same was done as part of a portfolio purchase from a real estate investment trust sponsored by the Hines. The property was formerly known as Howard Hughes Center and, according to Real Estate Alert, backs $482 million of loans. The report also states that about 70 percent of the buildings are on lease. Office Values in the United States The value of offices in the United States was found to drop as the borrowing cost increased, and there is a weak demand amidst the post-pandemic acceptance of remote work. The landlords Brookfield Asset Management and Blackstone no longer pay for some of the money-losing properties. Jilian Kary, a spokesperson for Blackstone, revealed in a mail that less than 2% of the portfolio Blackstone owns is in the traditional offices in the US. Most of the real estate they have owned is in the segments like data centers, student housing, and logistics. Funds of Playa District The fund valued at $16.6 billion that owns Playa District and Blackstone Real Estate Partners VIII has had an internal return rate of 15% as of September 30th, as reported by Blackstone. Further Reading \t Blackstone to Acquire Bluerock Residential In $3.6 Million Deal \t Amazon to Cut 18,000+ Jobs Amidst E-Commerce Cool Off \t With Recession Looming Large are Employee Perks Being Threatened?