A rare office expansion in Downtown Los Angeles is the latest sign of positive news for one of the country's hardest hit office markets.
Global consulting firm West Monroe leased a full floor totaling 25,000 square feet at The Bloc in Downtown Los Angeles. The deal at 700 South Flower Street is nearly double the size of the company's previous Los Angeles office at Wedbush Center at 1000 Wilshire Blvd.
The company, a professional services consultant with clients in the technology, financial services, private equity, healthcare, consumer & industrial products, and energy and utilities sectors, says it needs more office space to impress existing clients and recruit new ones.
The lease is the latest example of West Monroe taking advantage of high vacancies in downtown markets to snap up full floors at a discount, according to Brian Paulen, head of offices and global enterprise services for the firm. Last year it doubled its office space to a full floor in a move to 45 Fremont St in San Francisco and in October it upgraded and expanded its space in Seattle to a full floor at 1201 2nd Avenue.
“We are making a long-term investment in these markets while others are scaling back because we believe that collaboration is at the heart of effective consulting,” Paulen said, in a statement.
The Bloc, owned by National Real Estate Investors and Blue Vista, is currently 28% vacant, higher than the neighborhood average of 21%. Other tenants at the 33-story tower include engineering firm KPFF Consulting, design firm DLR Group and accounting firm GHJ. Annual asking rent at the property is $47 per square foot, compared to the downtown Los Angeles average of $38 per square foot, according to CoStar data.
West Monroe isn't the only tenant to announce plans to leave Cerberus Capital Management's Wedbush Center recently. Last year the tower's namesake tenant Wedbush announced plans to move its Los Angeles hub to a smaller office in Pasadena. The tower is currently 38% vacant.
The move is win for Downtown LA, where office vacancy remains stubbornly high with tenants giving back 661,000 more square feet of office space than they leased in the past year, according to CoStar data. National office vacancy, meanwhile, is holding steady below 14%.
The notable leases of late in the area have involved tenants reducing their footprint, like California Bank & Trust and United Way of Greater Los Angeles both slashing their office footprints by 40% while moving to new buildings, according to Ryan Patap, senior director of market analysis at CoStar.
In-person office mandates, a concentrated housing push and an increase in job availability, however, have contributed to signs of a possible recovery for the region, according to the nonprofit DTLA Alliance. The number of workers visiting downtown Los Angeles hit a post-pandemic high in the fourth quarter of 2024, the group reports.