Downtown Los Angeles could become livelier as federal workers return to more than 1 million square feet of offices across the city next month.
The U.S. Office of Personnel Management gave federal agencies 30 days to comply with President Donald Trump’s Jan. 20 directive ending remote work for more than 2 million federal employees, about half of whom are currently either fully remote or following a hybrid schedule, according to a recent House Oversight Committee report.
Some 8.2 percent of that workforce is in California, and there are 10,000 federal workers based in Downtown L.A., according to the DTLA Alliance, a landlord association. It’s a small but significant slice of the public sector’s workforce, totaling about 100,000 federal, state, county and city employees based in the Civic Center and neighboring areas Downtown.
“The public sector is sometimes overlooked when it comes to return-to-office,” said DTLA Alliance Executive Vice President Nicholas Griffin. “One of the things that makes Downtown so dynamic is the mix of industries and professionals. So we want to do whatever we can to nurture that ecosystem.”
Griffin said the rise of remote work remains a chief struggle for the city’s office sector.
The federal government’s Downtown footprint includes 140,377 square feet at Deka Immobilien’s 915 Wilshire Boulevard — about a third of the property — and 94,145 square feet at the 41-story EY Plaza at 725 South Figuera Street.
Both properties have struggled to keep tenants on their rent rolls. EY Plaza saw its appraised value drop from $446 million to $150 million as Downtown office buildings emptied out after the COVID-19 pandemic, and Brookfield Properties handed the keys back to its lenders in 2023.
In a best-case scenario, the private sector might even take a cue from Trump’s directive since the majority of company executives want to enforce more in-person work policies, said Kevin Shannon, co-head of capital markets at Newmark.
“The president is following in the footsteps of J.P. Morgan and Amazon,” Shannon said. “The trend is clearly headed in this direction. Three days per week will become four days and then five.”
Downtown L.A. needs more foot traffic if it wants to keep pace with other major U.S. metro areas, according to Shannon.
“If you go to New York, it feels like pre-COVID days — or even busier,” Shannon said. “The more people that are there, the more energy, the better it is for restaurants and dry cleaners and other retailers.”
For that matter, it would help if Los Angeles Mayor Karen Bass took similar action for city employees, Griffin noted.
“It’s in the best interest of the city and state to have thriving downtowns,” Griffin said. “We’ve been disappointed by the number of employees at both the city and county level that have returned to the office. It’s a much bigger number of employees than the federal workers, so it would have a bigger impact. We feel there’s a certain responsibility to be supportive of the center of the county.”
The picture could become more complicated as Trump carries out his full agenda for the federal workforce, which has so far also included a hiring freeze and other steps to increase government efficiency.
That means the federal government’s real estate portfolio — including office leases — could be on the chopping block, which could bring a huge amount of space onto the market on the West Coast.
Federal agencies lease 12.6 million square feet of space in California, the largest footprint of any state outside the Washington, D.C. metro area, according to the U.S. General Services Admiration’s leasing inventory. Los Angeles accounts for about 1 million square feet.