Wilshire Grand Wins Biggest New DTLA Tenant

The Wilshire Grand, the brand new 73-story luxury high-rise, has won the largest new office lease this year in Downtown Los Angeles. ARUP Engineering signed on for three full floors in the building, becoming the largest in-migration office tenant to the market so far this year. While owners in the market have focused on attracting creative tenants and transforming traditional office towers into creative spaces, it is notable that this lease is a traditional tenant occupying a class-A high-rise. The lease has a 15-year term and a $57 million total value. "Tenants in Downtown Los Angeles, particularly in the traditional class-A office towers, are playing musical chairs," Terence Kirk, an SVP at Colliers International who represented the tenant in the lease deal along with VP Nathan Pellow. "Since the economic downturn of 2007, 2008 and 2009, there were a lot of companies that did rightsizing deals. I think that is why this deal is so important; it represents the largest in-migration tenant into downtown this year. Additionally, this deal is in the financial core, and a lot of the other migration into downtown has been on the fringe in the Arts District." The firm considered both West L.A. and Downtown Los Angeles for potential office space, but landed on Downtown Los Angeles for its central location. Wilshire Grand is the newest office project in the market in decades, and ARUP was attracted to the quality of the property. "For ARUP, Downtown made the most sense. They wanted access to public transit and local amenities, and being in the heart of Los Angeles was really important to them," says Kirk. "Wilshire Grand rose to the top because this building really represented the company. They really wanted to focus on high-end buildings that speak to their clients. ARUP is a world-class engineering firm, this really made sense for their brand and where they are going as an organization." The market has a 17% office vacancy rate. So, while Wilshire Grand is the newest project in Downtown Los Angeles, there are many options for high-rise traditional office space. The brokerage team used the supply to their favor in negotiating the lease. "We looked at a large number of buildings, and we considered many very seriously," says Kirk. "We had a dozen options to look at in Downtown Los Angeles, and that did allow us to improve the economics in our favor." The Wilshire Grand has been open for nearly a year and has large blocks of space available for lease. Kirk believes that this deal will help to fuel momentum for more leasing activity in the building. "Wilshire Grand is a unique project. It is the newest building in almost 30 years in Downtown Los Angeles," he says. "I think this is a great sign for downtown, and I think this is a good sign for the building. I think others will be more interested than they were previously."