LOS ANGELES — In some areas, the new look of U.S. Bank Tower in downtown Los Angeles will feel more like hanging out in a hotel than an office building.
Tenants in the building can relax on a newly renovated 54th floor with couches and lounge chairs, stay warm in front of a fireplace, check out the various artworks from 8mm film cameras and projectors to vintage movie posters, or just marvel at downtown's skyline.
Having a hard time booking a reservation to Bestia or Bavel? The U.S. Bank Tower offers a hospitality ambassador or a concierge service that can advise on the best restaurants to impress a client or even help get tickets to a Lakers or Dodgers game or a trip to the Pantages.
The building also offers a coffee and juice bar and a fitness room.
The amenities are all part of Silverstein Properties' $60 million "hoteling" of the iconic 1,000-foot U.S. Bank Tower, one of the tallest skyscrapers west of the Mississippi.
"It's hard to encourage folks to leave the comfort of their home to commit and work in the office unless you provide them things they can't find at home," said Dara McQuillan, chief marketing officer for Silverstein Properties to Spectrum News. "We added spaces that encourage people to come together."
The high-end improvements highlight the cultural tug-of-war property owners face as employers — their tenants — grapple with bringing workers, who many have grown accustomed to working remotely, back to the drab office buildings.
Three years after the coronavirus pandemic forced most office building owners to shut their doors, downtown's office market has still not fully recovered. Downtown's other segments — tourism, hospitality and residential occupancy — have either rebounded or surpassed their pre-pandemic levels. However, offices still lag far behind.
Occupancy at several office buildings is down and so is foot traffic.
According to access control company Kastle, which has tracked the number of people coming in and out of their more than 2,600 buildings nationwide, the Los Angeles metro area averaged a 48% occupancy rate ending March.
Before the pandemic, office occupancy in downtown Los Angeles was in the high 90s. During the height of the pandemic, it dropped to single digits.
The Downtown Center Business Improvement District's end of the 2022 year report found that office occupancy in downtown LA rose as high as 68%. However, total visitation still lags pre-pandemic numbers. In the fourth quarter of 2022, there were 3.4 million workplace visits. At the end of 2019, it was 5.4 million.
"As you see with city centers around the country, the DTLA office market continues to struggle from the effects of the pandemic and the reality of the remote/hybrid work environment," said Nick Griffin, executive director of the DCBID, in an email to Spectrum News. "Thankfully, DTLA office visits are up year over year, but it will be some time before we know what the new reality will be. Yet, despite the concern over remote work, we have seen no indications of employers leaving the market."
Silverstein Properties, a New York-based real estate developer who has built notable hotels and offices in New York City and Walt Disney World in Florida, believes if they build it, they — employers and their employees — will come.
Silverstein purchased the U.S. Bank Tower, more known for its glass slide outside of the 70th floor and observatory deck, from Singapore-based OUE Limited in a $430 million deal a couple of months after the pandemic hit in 2020.
With most tenants working remotely, Silverstein remodeled and renovated the building. The company got rid of the observatory deck and glass slide.
"When no one was working in it, we figured that was a good opportunity to make a series of physical improvements and changes in how we interact with our customers or tenants of the building," said McQuillan.
McQuillan said they'd also offer programming and special events for tenants as part of the amenities.
"Everything from space to have an event or celebration to bringing in photographers to shoot business headshots free, cooking classes or flower arrangements and fitness programs," he said.
Griffin, the executive director of DCBID, said Silverstein has created a space that embraces and connects to the surrounding community, inviting them inside with food and beverage options and comfortable seating and gathering areas, much like a hotel.
"They’ve created a place where people will want to work, not where they have to work," he said.
Griffin added that other office property owners will need to do something similar to attract and retain tenants.
In November, the company signed five new companies to leases totaling 72,000 square feet.
The building has a 50% to 70% occupancy rate, mostly Monday to Thursday, with Friday having the fewest people coming in, according to McQuillan.
McQuillan said there are a lot of benefits to working from the office. He talked about the importance of mentorship and camaraderie. Eventually, he sees many employers moving to a flexible hybrid working environment in the future.
"Flexibility is the key," he said. "As a landlord and property owners, we need to build incredible spaces for companies. We find it drives more people back into the office."