Accounting giant KPMG will move out of its Grand Street offices later this year, choosing instead a Hope Street location that's closer to L.A. Live, reports the Business Journal, citing sources. In the world of office leases, this is a big deal - the firm occupied eight floors and 176,000 square feet at 355 S. Grand Ave., dubbed KPMG Tower. Its new home will be at 550 S. Hope St., though the newspaper reports that KPMG will sharply downsize its operations to the tune of 20 percent to 38 percent. Accounting and law firms have been cutting back in L.A. and elsewhere, part of a general cost-cutting effort that dovetails with a change in work-styles. That's created mega-headaches for the owners of downtown office property.
The loss of the large occupant is another setback for MPG, which has seen a number of its tenants move out or downsize as it struggles with $1.9 billion in debt and the possible sale of its portfolio. The move is a blow to the Bunker Hill neighborhood, too, coming on the heels of accounting firm PricewaterhouseCoopers LLP's announcement that it would move its 135,000-square-foot requirement to the Historic Core's 601 Figueroa St. from Bunker Hill's 350 S. Grand. Other large professional Bunker Hill tenants, including law firm Morrison Foerster LLP, have significantly reduced the space they occupy in downtown offices in the last year. KPMG Tower now joins U.S. Bank Tower and Gas Co. Tower - both owned by MPG - and 2 California Plaza and 444 S. Flower St. among the Bunker Hill buildings with more than 25 percent vacancy.
*Update: MPG Office Trust has agreed to sell U.S. Bank Tower, the tallest building west of the Mississippi River, for $368 million. Buyer is an affiliate of Overseas Union Enterprise Ltd., an investment company in Singapore. The 1.4 million-square-foot building, built in 1989 is only 56 percent occupied. (Bloomberg)