D
owntown Los Angeles is poised to become more vibrant as federal workers return to their offices across the city next month. The U.S. Office of Personnel Management has given agencies 30 days to comply with President Donald Trump's directive ending remote work for over 2 million employees, about half of whom currently work from home or follow a hybrid schedule.

    Around 8% of these employees are based in California, and approximately 10,000 federal workers are located in Downtown L.A. This represents a significant portion of the public sector workforce in the area, which totals around 100,000 employees. The return of federal workers could help revitalize the city's office sector, which has struggled with remote work.

    "The public sector is often overlooked when it comes to return-to-office," said Nicholas Griffin, Executive Vice President of the DTLA Alliance. "We want to nurture the ecosystem that makes Downtown so dynamic." Griffin noted that the rise of remote work remains a challenge for the city's office market.

    The federal government has a significant presence in Downtown L.A., with major properties including 915 Wilshire Boulevard and EY Plaza at 725 South Figuera Street. Both buildings have struggled to retain tenants, with EY Plaza seeing its appraised value drop significantly due to the pandemic.

    Kevin Shannon, co-head of capital markets at Newmark, believes that private companies may follow Trump's lead in enforcing more in-person work policies. "The trend is clearly headed in this direction," he said. Downtown L.A. needs more foot traffic to compete with other major U.S. cities, according to Shannon.

    Los Angeles Mayor Karen Bass has been urged by Griffin to take similar action for city employees, which would have a bigger impact on the downtown area. The picture could become more complicated as Trump carries out his full agenda for the federal workforce, including a hiring freeze and potential changes to government real estate portfolios.