The Los Angeles office market has shown signs of slowing compared to six years ago, but businesses continue to adapt, renegotiate, and secure new leases in a landscape that offers tenants more leverage.
Companies are seizing opportunities in a market where landlord concessions are at historically high levels, a trend detailed in the second-quarter office report by Savills.
The overall availability rate in Los Angeles was recorded at 28.1% in Q2, reflecting the shifting dynamics within the commercial real estate sector.
Bisnow recently reached out to three tenants who signed new leases this year. Each shared their unique needs in seeking new office spaces, highlighting overlapping priorities of cost, location, and the allure of modern environments that can entice employees back to the office.
Josh Gorin, the Savills Los Angeles Region President, stated, “People just get really excited about new things and the new space, and they want to be a part of it.”
**Room to Grow**
One notable case is West Monroe, a business and technology consulting firm that found itself outgrowing its previous office in Downtown Los Angeles. As the end of their lease approached, they sought a larger and more collaborative space, ultimately selecting a new location at 700 South Figueroa St., overlooking the Bloc shopping center.
With approximately 25,000 square feet, the new office is nearly three times the size of their former location in the Wedbush building.
Jordan Sternlieb, the Los Angeles Office Lead for West Monroe, found the rental cost particularly appealing, saying that on a per-square-foot basis, it was less than what they had previously paid.
He commented, “Compared to other places in Downtown, the per square foot value was really appealing, not to mention all the other things we love about Downtown.”
The new office boasts direct access to the 7th Street/Metro Center rail station, significantly improving parking options for employees.
The aesthetic of the space exudes a raw, industrial feel, with plenty of open areas, no drop ceilings, and panoramic views of the city from the 30th floor—an aspect Sternlieb initially underestimated but has grown to appreciate.
West Monroe also invested in upgrading its internet to ensure effective connectivity for its consultants, who frequently travel to meet clients and visit project sites across various sectors such as life sciences, energy, healthcare, and financial services.
Beyond merely providing a workspace, the new office is designed as a venue for gatherings, debriefings, and events, allowing the firm to foster a proud representation of their brand.
Sternlieb remarked, “This space that we picked really stood out compared to the other options we had, in terms of not being a traditional, regular sort of office space.”
**Mission-Aligned**
Another tenant making a strategic move is Amanecer Community Counseling Services, a long-time tenant at 1200 Wilshire Blvd. in Westlake. When the organization needed to accommodate new staff members including therapists and administrative personnel, they opted for a lease renewal and expansion.
The nonprofit secured just over 29,000 square feet across two floors in their current building, allowing them to maintain their established presence in a community where their services are crucial for both adults and children in need of mental health support.
Amanecer Vice President Teddie Valenzuela indicated that their longstanding relationship with the landlord played a significant role in their decision to stay put.
After navigating cash-flow challenges through a merger, recent collaborations with the landlord have cultivated goodwill.
“When we were going through some hard times, they really worked with us on our payments, and they’ve always supported and donated to our cause,” she stated.
Affordability was a key factor for Amanecer, as they are located in Westlake—a neighborhood with a significant demand for their services but lower rental prices than more fashionable office districts.
Accessibility for clients is also a priority; the building sits in a transit-friendly location, enhancing visibility and convenience for those they serve.
Over the years, Amanecer has been fortunate to negotiate various enhancements, including improved security measures. Valenzuela was particularly pleased that the ownership agreed to renovate the bathrooms in conjunction with their recent lease extension and expansion, addressing wear and tear that had accumulated.
“They’ve always really been accommodating and really cared about what was going on with our clientele,” she affirmed.
**Logical Consolidation**
Meanwhile, real estate services provider Savills has made a calculated decision to consolidate its Los Angeles offices in the Century City submarket. This year, they announced plans to lease approximately 24,000 square feet that combines the space of their two current offices.
Savills has operated with separate offices in Downtown and Westwood for many years, a model that had become increasingly impractical. Gorin expressed, “I don’t think anyone cares anymore where your office is, from a client perspective.”
Emphasizing the importance of cultivating an appealing work environment, he noted, “It’s really more for us about creating an environment that people get excited about.”
Employee sentiment leaned towards preferring the Westside location in recent years, as many employees opted to work from there rather than commuting to the Downtown office.
Following an extensive workplace study that involved focus groups and surveys, the firm settled on a space at 1900 Avenue of the Stars. This high-profile building has undergone a recent $100 million renovation, enhancing its attractiveness in an otherwise challenging market.
“After navigating these market shifts, this property represents a steady bright spot,” Gorin mentioned regarding the allure of the facility.
Crucial to their decision-making was not only the financial and aesthetic appeal of the building but also the convenient parking options and direct access to Westfield Century City’s restaurants and shops—features that contribute to making work an engaging experience.
“It really makes it convenient, exciting—a reason to come to work,” Gorin emphasized.
In summary, these case studies illustrate the evolving landscape of the Los Angeles office market.
With significant shifts in tenant preferences and a growing focus on quality and environment, businesses are strategically reassessing their office needs to foster productivity and engagement among employees.
Through a combination of careful negotiation, leveraging market conditions, and emphasizing relationships with landlords, these companies have successfully navigated their search for spaces that align with their missions, growth strategies, and employee satisfaction.
image source from：bisnow
