In another blow to the downtown office rental market, stalwart corporate tenant PricewaterhouseCoopers has agreed to move its offices from Los Angeles to Century City.
London-based PwC is one of the world's largest accounting and professional services firms, perhaps best known publicly as the official vote tabulator for Hollywood's annual Academy Awards.
Its logo is widely visible atop a 52-story skyscraper on Figueroa Street in the downtown financial district, but PwC's lease expires in 2028 and the firm agreed to move that year to a prime building in Century City.
The company has had a presence in the city center since the late 1990s and leased its current office space on Figueroa Street in 2013.
Employees were notified Monday of the pending transition to 2121 Avenue of the Stars. The red granite and glass building overlooking the Fox Studio Lot was previously called Fox Plaza, but movie fans may know it better as the fictional Nakatomi Plaza, where Bruce Willis fought terrorists in “Die Hard.” Ronald Reagan maintained offices in the 34-story tower after his presidency.
“This move is about growth, connectivity and the future of our business in Los Angeles,” office managing partner Andy Sofield said in a statement to the Times. “PwC has continued to grow in the market and the new Century City office provides us with additional space in a location that better supports our people, clients and teams across the region.
“Century City offers strong access to customers, our people, transportation corridors and airport access,” Sofield said. “It is also a return to a neighborhood where PwC previously had an office more than two decades ago. We evaluated multiple options and determined that Century City was the right fit for our future.”
PwC did not disclose details of Century City's lease, but a person with knowledge of the deal who is not authorized to speak publicly said the services firm signed a 15-year lease valued at about $200 million to occupy 150,000 square feet. The company's downtown office, located at 601 S. Figueroa St., is smaller, at 114,000 square feet, according to real estate data provider CoStar.
“Our business has grown, our headcount has grown and this move gives us the opportunity to create a workplace that supports our teams, our customers and the continued evolution of our business in the region,” he said.
The company declined to elaborate on its reasons for leaving the center, but the move marks the latest high-profile exit from the city's financial core.
Many large companies have already reduced their offices or abandoned the center, including Deloitte and KPMG. Financial services firm Wedbush Securities has moved from a prominent financial district office tower to Pasadena.
The move also reflects the change in the nature of the downtown business district since the COVID-related shutdown. Thousands of office workers left and will likely never return to pre-pandemic numbers. Many shops and restaurants remain closed and office tenants have said the streets feel less safe than before.
Downtown has been oversupplied with office space since a construction wave in the 1980s and early 1990s. The lack of rent-paying tenants, which has driven down office values, has worsened since the pandemic. According to CBRE, almost 40% of office space in the financial district was available at the end of last year. General unemployment in the city center has increased from 14% in 2019 to 34%.
“We regret to see PwC leaving and believe Los Angeles city officials must do more to retain major office tenants in downtown, the economic center of the region,” said Nick Griffin, executive vice president of the DTLA Alliance Business Improvement District.
One departure doesn't make up for the boost downtown, which includes a growing residential population and nightlife, entertainment and tourism, he said. “The historic arc of downtown Los Angeles is one of transformation and opportunity.”
Meanwhile, Century City has become one of the region's most sought-after office markets in recent years, said real estate broker Gary Weiss of LA Realty Partners. More than 90% of the offices are rented at rents that are the highest in the city, he said.
“When you look at how many companies have moved in the last three years from downtown to Century City, I'm not surprised” by PwC's decision, Weiss said. The neighborhood next to Beverly Hills with offices, homes and a major shopping center “has excellent amenities in a very safe environment.”
