A global management consulting firm is expanding within a Los Angeles office building by adding a full floor of space. But instead of cubicles and water coolers, the top floor has been converted into a gathering space that includes a velvet-walled cocktail bar, a lounge lined with plant-covered walls, and high-end lighting and art.
Bain & Co., a firm known for advising Fortune 500 companies and private equity clients, expanded its Los Angeles footprint by about 70% by leasing the top floor at 1999 Avenue of the Stars, a Century City building owned by JMB Financial Advisors. The 17,536-square-foot addition expands Bain & Co.’s space in the building to 42,705 square feet. The tenant brought on JTM Construction Group to manage a conversion of traditional office space into a modern floor more reminiscent of a high-end hotel lobby.
It’s not the first office tenant around the country to embark on such an investment, with major technology companies like Google and Meta priding themselves on the office perks they offer to U.S. tenants. But such investments have become somewhat rare among employers in the wake of the pandemic that sent workers home and forced office-using companies to rethink the space they needed, with fewer tenants leasing new space today than six years ago.
However, some landlords have offered to pay for some of these upgrades to make a lease more attractive to prospective tenants. It’s unclear if Bain & Co. received an incentive for its own upgrades.
“Creative office is out, hospitality office is in,” said Catherine Yeh, CoStar’s director of market analytics for Los Angeles. “More and more companies are turning to luxe, hotel lobby-like design and amenities to draw employees back to the office and make a statement. It’s the next big trend we’re seeing in office buildouts.”
Tenant, landlords invest in space
Office building owners have been quicker than tenants to invest in modernizing their properties to boost their own occupancy rates, as the national vacancy rate is at a historic high of 14% and lease sizes average about 15% less than pre-pandemic norms.
In San Francisco, the owners of the 39-story tower at 525 Market St. recently opened a $22.5 million, 29,000-square-foot space on the seventh floor called the Cove, with an infrared sauna, podcast studio, massage facilities and a speakeasy.
In New York City, JPMorgan Chase’s $3 billion, 60-story future Manhattan headquarters will include amenities ranging from customized coffee service to interior lights that complement employees’ circadian rhythms.
That project, coupled with Bain & Co.’s recent upgrades, hint that some tenants are back to making their own investments to upgrade their office and appeal to both employees and clients.
Bain & Co.’s new amenity space on the 39th floor has hospitality-inspired environments ranging from sunlit lounges with sweeping skyline views to a secretive, velvet-upholstered bar tucked behind a hidden panel.
The new level includes a multipurpose room with a retractable partition, open-concept conference space, a coffee bar, a pantry and a lounge anchored by a living green wall. Employees can retreat into alcoves lined with wave murals for casual meetings or perch at a sleek white counter with pendant lights overhead.
The space is connected to the company’s other two floors via an internal staircase that cuts through the office, a design that posed “one of the key challenges” to the project, according to Christina Karabatsos, a project manager at JTM CGI.
“The design carefully marries the existing stair with the new ... through introduction of a full wall graphic and light fixtures that visually connect all of the floors,” Karabatsos said in a statement.
Century City standout
Bain’s expansion comes as most tenants are downsizing in Los Angeles, where companies in entertainment, law and technology have shed space in response to remote work.
Office tenants have given back 2.1 million square feet in the past year, driving vacancy to 16.1% from 15.8% a year ago, according to CoStar data.
The upgrades reflect a broader push by professional services firms to lure back workers after the pandemic emptied buildings. By layering in lounges and sleek coffee counters, Bain’s design aims to compete with home comforts while offering a venue for client collaboration, the company said.
The firm has been growing its office presence in top markets across the country. In August, Bain announced plans to expand in Chicago by taking on the top five floors of hedge fund Citadel’s longtime office tower in Chicago’s Loop, completing one of the largest new leases in the city in recent years. Last year, Bain signed a deal to nearly double the size of its New York office.
Century City has remained one of Los Angeles’ strongest office areas, attracting law firms, agencies and consultancies willing to pay for top-tier addresses.
Office tenants here, in constrast with LA generally, have absorbed 503,000 more square feet of space in the neighborhood in the past year than they did in the previous year, pushing Century City's vacancy levels down to 15% from 16% a year ago. Trophy towers like 1999 Avenue of the Stars have drawn expanding professional services firms seeking to differentiate their work environments from commodity office space elsewhere in Los Angeles, real estate analysts tell CoStar News.
For the record
HLW provided architecture and design. ME Engineers handled engineering. CBRE served as project manager.