Despite Office Sector Challenges, Downtown LA Is Ready For The Future

Leading up to 2020, Downtown Los Angeles had re-established itself as the epicenter of culture and commerce for Southern California, becoming both a globally recognized destination and a vibrant, rapidly growing residential neighborhood. However, its prospects seemed much less promising in the immediate wake of the pandemic.

But as a level of normalcy has returned in recent months, Downtown’s residential, retail and hospitality sectors have regained their momentum. The office sector, however, has continued to struggle, held back primarily by the rise of hybrid and remote work. 

With much of DTLA significantly more active today, office buildings are still only about half as occupied as they were before the pandemic. This directly impacts property owners and surrounding businesses but also has ripple effects throughout the ecosystem of Downtown LA. 

The Downtown Center Business Improvement District organization recently released an update of its DTLA Works: Guide to the Future of Office in Downtown Los Angeles. DCBID Executive Director Nick Griffin said that despite the challenges in the office sector, Downtown remains vital to the regional economy and a key piece of how LA is planning for its future.

“DTLA is Southern California’s largest and most diverse commercial submarket, with 40M SF of office and creative space in an unparalleled mix of Class-A towers, historic buildings and industrial conversions,” he said. “It is also home to a rapidly growing population of over 90,000 residents and welcomes over 17 million annual visitors. Despite covering only 1.4% of LA’s land, DTLA is home to 315,000 jobs and features 780 retail businesses and 184 food and beverage options per square mile.”

As the hub of the region’s growing transportation network, located at the center of both the freeway and mass transit systems, DTLA provides more convenient access to more workers than anywhere else in the region. With the recent opening of Metro’s Regional Connector, millions of square feet of office space on Bunker Hill, in the Civic Center and Financial District, can now be reached by one train ride from Pasadena, Santa Monica, Long Beach and more, Griffin said. 

He added that the future expansion of the Purple Line will connect DTLA to Century City, Beverly Hills and Westwood, further establishing its role as the hub at the center of the region’s economy. 

LA’s long history of resilience and adaptation with changing times, not just the currently hot topic of adapting office buildings to residential use, is the key to dealing with the seemingly existential challenges facing the city, he said. 

A range of factors is shaping the future of work in the area. 

Griffin said one of the first steps is exploring how people work in different kinds of environments and how that integrates with the rest of their lives — all of which inform the development of new office spaces, policies and practices, along with the reimagining of office districts. It’s about work-life balance and flexibility for individuals, productivity and collaboration for companies and economic vitality for city centers like DTLA.

“As companies assess their office plans, the factors that helped make DTLA a hotbed of talent, innovation and creativity remain as vital as ever,” he said. “At the same time, Downtown’s residential population continues to expand in both size and influence, as does its dining, entertainment and culture scene and hospitality market, further diversifying DTLA and increasing its appeal as a live-work-play destination.”

DCBID’s office guide highlights how DTLA’s property owners are adapting to new conditions. They are investing tens of millions of dollars to enhance the workplace experience with collaborative spaces, the latest technologies, indoor and outdoor areas, on-site services and amenities that meet tenants’ evolving needs.

Griffin said that while DTLA was once known chiefly for traditional offices in high-rise properties, it now boasts some of the most innovative spaces in a wide range of modern and historic building types. 

“Our guide features case studies showcasing how these properties have been reimagined into some of the most creative, amenity-rich office environments available anywhere and what that means for the district more broadly,” he said.

The quality and diversity of DTLA’s office buildings — plus the vibrancy of its neighborhoods and the lifestyle it offers — has appeal for an increasingly diverse mix of industries and companies, he added. 

Although traditional business sectors once dominated the market, the growth from the creative and tech industries has drawn in a broader mix of professional talent and reshaped DTLA as a place of innovation and creativity. 

“With companies like Adidas, Forever 21, Spotify, Warner Music, McKinsey and Condé Nast planting their flags in various parts of downtown, that trend is continuing,” he said. “When coupled with its increasing appeal as a place to live, a center of arts and culture and a destination for tourism, entertainment and dining, a reimagined future for DTLA is beginning to come into focus. It absolutely still includes a dynamic core of forward-looking businesses.”

This article was produced in collaboration between Studio B and the Downtown Center Business Improvement District. Bisnow news staff was not involved in the production of this content.

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