Bisnow/Samantha D’Angelo
Greenberg Glusker’s Brian Kang, Uncommon Developers’ Ryan Hekmat, DTLA Chamber of Commerce’s Claudia Oliveira, Central City Association of LA’s Nella McOsker, Ennead Architects’ Michael Saltzman, Erewhon’s Yuval Chiprut and SLH investment Principal Leo Pustilnikov.
Los Angeles’ Downtown is grappling with a number of challenges, one being the perception that the area is a veritable ghost town. While that is not the reality seen on the street, speakers at the Downtown Los Angeles CRE Market Update agreed that foot traffic is still lagging from an important segment of the workforce: public employees.
“A lot of the private sector employers are really stepping up, really making that commitment to their presence in Downtown,” Central City Association President and CEO Nella McOsker told attendees at 601 S. Figueroa. “We do need to call on the public sector.”
Federal workers were ordered back to the office five days a week in January, but have yet to return. There are an estimated 10,000 federal workers based in Downtown alone.
The mandate was set to kick in in February. Because some departments were able to set their own deadlines for compliance, it’s unclear how many federal workers are back in the office five days a week in Downtown Los Angeles to date.
Bisnow/Samantha D’Angelo
Allen Matkins’s Joe Dzida, Langdon Street Capital’s Adam Daneshgar, G.H. Palmer Associates’ Darrel Malamut, DTLA Residents Association’s Cassy Horton, KWP Real Estate’s Justin Weiss, Lincoln Property Co.’s Douglas Brown and Related California’s Peter Garofalo.
In March, Gov. Gavin Newsom ordered state employees to return to the office four days a week – a step up from the two days a week they had been logging since 2024. The new rules were supposed to go into effect on July 1, but unions representing those workers negotiated a one-year delay on implementation, CalMatters reported.
The state auditor found that keeping state workers remote three days a week could save the state $225M a year and allow it to reduce its office space by one-third.
But McOsker said that it was the “massive loss” of city and county employees in the office five days a week that had perhaps the most notable impact on small local businesses, which were being sustained by those workers’ coffee and lunch purchases.
City and county employees make up the largest share of government workers in Downtown. Last year, roughly two-thirds of county employees were no longer working remotely. The county purchased the Gas Company Tower in 2024 to consolidate offices for its workers.
City employees have never been given a return-to-work mandate, and in some cases remain remote. Many in the commercial real estate community feel that not having in-person workers has contributed to delays in processing applications and generally slowed the construction and development process.
“Civic workers, get your asses back in the office,” said Adam Daneshgar, president of Langdon Street Capital, the owner of the Grand Central Market. “We’ve got to bring them back. Permits take too long.”
Bisnow/Samantha D’Angelo
DTLA Alliance’s Nick Griffin and City Councilmember – District 14 Ysabel Jurado.
Even if there are some lags in worker attendance, there have been some big bets on Downtown continuing to be a place that Angelenos are drawn to from all over the city.
A new Erewhon is in the works for Downtown, a market that the company’s chief development officer, Yuval Chiprut, told attendees he watched for five years before finding the right spot. Chiprut estimates the new DTLA Erewhon could open in 12 to 18 months at a property at Olympic Boulevard and Hill Street.
“There are things that attract me to Downtown, and I just want to add to the list,” Chiprut said. “I want to create an oasis within this noise.”
Chiprut pointed to the strength of the grocery market in Downtown, where there is already a Whole Foods and a Ralphs. Erewhon already has a giant 130K SF commissary at Alameda Street and Martin Luther King Jr. Boulevard that serves as a hub for the other stores around Southern California.
Another major bet on Downtown is the new pickleball social club, which is taking up about 105K SF of the 280K SF vacated by Macy’s at The Bloc, KWP Real Estate Vice President Justin Weiss said.
The social club is not only locked in but moving full-steam ahead, with change of use permits for the space expected in the coming weeks.
“Macy’s went out last year and everybody was saying the sky is falling,” Weiss said. “But this is going to be a great year for us in Downtown LA.”