TCW to Move HQ from Namesake L.A. Tower, Downsize Footprint

Asset manager TCW Group is moving its headquarters out of the 52-story TCW Tower in downtown Los Angeles and downsizing its office footprint 22% by leasing 140K SF at City National Plaza.

According to reports, the move will be completed in 2024, when TCW’s lease on the 37-story building on Figueroa St. that bears its name expires. The TCW Tower was built in 1990.

City National Plaza is owned by a joint venture between the California Public Employees’ Retirement System and Commonwealth Pacific Capital (CWP Capital), which bought its two 52-story office towers—home to 2.3M in office space and about 250K in retail—in 2013 for $858M. City National Plaza is about a mile from the TCW Tower.

The move by TCW, which has about $264B in assets under management and 600 employees, is the latest high-profile example of an office downsizing trend in cities across the US, as companies adjust to hybrid and remote workforce strategies that increasingly are being embraced as the new normal in the wake of the pandemic.

According to Cushman & Wakefield, the Downtown LA (DTLA) office market has had a spotty recovery from pandemic vacancy levels. Overall leasing activity for the submarket totaled 1.1M SF in 2021, but leasing activity was led by a handful of large transactions and did not offset the amount of vacant space re-entering the market, which registered a negative net absorption of about 160K SF in Q4 2021, C&W said.

According to C&W’s Q4 report, DTLA had an estimated 39M SF of office inventory at the end of 2021. The Omicron surge at the end of the year exacerbated office vacancies in DTLA, the report said.

“The path to pre-pandemic levels of office activity (in DTLA) has been rough. Occupancy losses persisted into Q4 2021 with an additional 59.9K SF of office space re-entering the market. Most of this vacated office square footage was from Class B office building,” C& W reported.

“The constant influx of COVID-19 cases has made some tenants—Class B office tenants in particular—reevaluate their space needs. Hence, the overall office vacancy in DTLA increased 250 basis points compared to the same period last year.”

The bright spot in L.A.’s downtown office market has been the Fashion District, which attracted new leases of 151K and 106K, respectively, from Forever 21 and Adidas at the California Market Center. Bambee signed a 45K SF lease to occupy the top three floors of the Fabric building at 755 Los Angeles St.