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The local commercial real estate industry is eagerly awaiting news about Atlantic Richfield Co.'s future real estate plans, including word about whether the oil giant plans to retain its corporate headquarters at Arco Plaza in downtown Los Angeles.
On July 18, Arco announced another major restructuring. Arco, the largest public company in Los Angeles County, said 2,000 employees companywide will lose their jobs. Approximately 400 of the layoffs will affect the 1,600-person corporate staff, the vast majority of whom work at Arco Plaza.
The restructuring means Arco will likely downsize the amount of office space it occupies in downtown Los Angeles. A partial or total withdrawal from downtown L.A. would be a further blow to that overbuilt office market, where high vacancies and low rents have persisted for years.
Typically, real estate brokers estimate the amount of office space a company requires based on a ratio of four office workers for every 1,000 square feet of office space. Given that formula, Arco is likely to downsize its occupancy at Arco Plaza by about 100,000 square feet. It presently occupies 425,000 square feet there. Layoffs are also expected at Arco's Products division, which is located at Arco Center, 1055 W. Seventh St. in downtown.
Local commercial landlords and brokers have been monitoring Arco's moves closely, given the size and prestige of the company's tenancy in downtown Los Angeles.
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