'All The Energy And Action Is On Display Here': Office Workers Have Returned To Century City

Office usage is struggling across LA, but there is at least one area where data indicates office workers are back at their pre-pandemic level: Century City, a postage stamp of a neighborhood with fewer than 20 office properties in less than a square mile.

Plus, it got a shoutout in this year's summer blockbuster, Barbie.

It may be small, especially in the broader context of Los Angeles' legendary sprawl, but its plentiful amenities, including a high-end mall with retail and food options, high walkability and parking, have helped it stand out in a rising sea of office availability. 

“A lot of it has to do with the environment – Century City is and feels safe, it’s clean,” Cushman & Wakefield Executive Director Scott Menkus said. “There's been a tremendous amount of investment in Century City when you consider how small of a neighborhood it is and the billions of dollars that have gone into it.”

Among those investments is the new office tower under construction at 1950 Avenue of the Stars, which Menkus represents, the renovation of the Fairmont Century Plaza hotel and the massive upgrade to the Westfield Century City mall. 

“A lot of times, a real estate director, president or founder of a company already knows and has positive associations with this area, so a lot of the selling is done in advance, which is nice,” Cushman & Wakefield Executive Director Peter Collins said. 

Through their conversations with landlords tracking card entry swipes in seven Century City buildings, Menkus and Collins said they have found that Monday-through-Thursday office attendance is back to pre-pandemic levels — an achievement when attendance estimates in LA metro offices hover around 50% of pre-pandemic levels, per Kastle Systems data. 

“Often when we're talking to tenants, the first thing they say is if they're going to bring employees back, they’re going to have to earn the commute,” Collins said. “There has to be some sort of pot of gold to get people into their cars and back in the office. All the amenities are just incredibly important selling points.”

Year-to-date leasing activity in Century City has totaled 591K SF, more than any other Westside submarket, according to a second-quarter report from Cushman & Wakefield. Class-A space is renting for an average of $6.44 per SF, more than the $6.06 average for Class-A space in Santa Monica, which has approximately the same inventory, according to C&W.

The name recognition of Century City is also a strong motivator, Collins said. Before it was a Westside office hub, Century City was associated with the studios at Fox, which still takes up a considerable amount of space within the neighborhood’s borders. The media company is planning to spend $1.5B to upgrade its property in Century City, adding two new office towers and nine new soundstages and production facilities on the site.

In June and July of this year, foot traffic to 16 office buildings in Century City increased 22.5% and 10.3% year-over-year, respectively, compared to the 17.3% and 10.8% increases seen in the same period citywide, according to data from Placer.ai. 

“If you look at the size of Century City and the geography of it, it's quite compact," Collins said. “All the energy and action is on display here. It’s really easy to see.” 

The Westfield Century City mall is one of the area's amenities and perhaps the largest one available to the public. After a $1B makeover in 2017 and a $925M refinance this month, the mall’s owner, Unibail-Rodamco-Westfield, has signaled that the mall is a valuable asset. The open-air retail center features a range of eating and entertainment options. 

“The Century City mall is one of the premier landing places for any retailer to come into Los Angeles,” JLL Senior Vice President, Retail Brokerage Greg Briest said.

The renovations, the outdoor aspect of the mall and its mix of tenants provide a draw for workers and locals alike. 

“It’s an important driver,” Menkus said. “It's not that these decision-makers are envisioning going to a movie matinee midday. It's more there's a robust, concentrated retail amenity base with a lot of different options for food at different price points. That makes it attractive for lots of different tenants.”

In June and July of this year, foot traffic to the Westfield Century City mall increased 13.1% and 8.5% year-over-year, respectively — far more than the modest year-over-year increases of 3.6% in June and 3% in July that shopping centers in the overall LA area saw in the same period, according to Placer.ai data. 

The neighborhood is also set to gain 100K SF of retail space in the Fairmont Century Plaza project, which includes residential and hotel uses. 

The neighborhood will also get a new subway stop, slated to open in 2025, on the extension of the Purple Line. The station is under construction about a block away from an under-construction 700K SF tower where the talent agency CAA will move its headquarters. 

While it is another amenity to add to the list, it is unclear how much the train station plays into tenant motivations given the propensity of many LA workers to shun public transit in favor of their cars, Collins and Menkus said. Parking, on the other hand, is likely more valuable, at least for now. 

“When you get to the office, knowing there’s a parking stall in a nice, clean structure that is immediately adjacent to your tower versus circling the block three or four times, that’s also a helpful element,” Menkus said.