How Will Permanent Remote Work Impact L.A.’s Downtown Core?

The pandemic will permanently change the office sector, and although the future image of the workplace is still unclear, companies have increasingly announced plans to adopt remote work standards permanently. For the urban core, remote work is a major challenge, particularly for markets that have embraced live-work-play lifestyles. Downtown Los Angeles is among the markets closely following remote work adoption and its impact on the market. However the DCBID says that this change could also present new opportunity.

“This is one of the most important challenges/opportunities we may face. The crisis is accelerating existing trends and understanding the underlying factors and how they may play out, is key to adapting successfully,” Nick Griffin, executive director at the Downtown Center Business Improvement District, tells GlobeSt.com.

If rain really does come before the rainbow, office owners are in for quite a storm. Before the reduction in office demand presents opportunity in DTLA, office owners will first face spiking vacancy rates. “Let’s say a combination of telecommuting, flextime, and other factors reduces current office space use by 10-20%, on top of an already stubbornly high vacancy rate,” says Griffin. “Based on existing assumptions, that’s a huge hit for current property owners, but it does open up opportunities for reimagining, reconfiguring, and repositioning those properties.”

However, Griffin still sees a light at the end of the tunnel. Office repositioning supported the resurgence of DTLA decades ago, and could once again support growth. “Keep in mind that the phenomenal Downtown renaissance of the last two decades was initially spurred by the adaptive reuse of older, underutilized office buildings,” says Griffin. “The Downtown residential population has grown exponentially over the last 20 years and demand for housing remains very strong. So, would that evolution accelerate, creating an even more dynamic balance between office and residential? One that might actually be beneficial to both?”

A similar trend unfolded following the September 11 Attacks in New York City. “One of the redefining factors for Lower Manhattan post-9/11 was a huge expansion of the residential population, as office properties were repositioned due to lower demand,” says Griffin. “That, in turn, spurred an influx of amenities, retail, restaurants, and arts & culture that has made the area a much more dynamic and desirable mixed-use neighborhood, even becoming a tourist destination. And guess what happened next? The office market came roaring back because the place had become so appealing.”