Business
Wedbush Securities joins downtown L.A. exodus, opting for smaller, more flexible office in Pasadena
One of downtown Los Angeles’ familar tenants is pulling up stakes as the office rental market continues to contract from shrinking occupancy stoked by the pandemic.
Financial services firm Wedbush Securities has begun its move from a prominent office tower to Pasadena, where it will occupy much smaller offices meant to accommodate employees who now work remotely much of the time.
The firm is leaving behind Wedbush Center, which overlooks the Harbor Freeway and sports two signs on top bearing the company name. Wedbush has been headquartered in the Wilshire Boulevard building since 2001 and its lease expires next year.
“It’s a big deal, a very big decision for the firm,” President Gary Wedbush said of the move. “The pandemic and COVID created a different kind of office for us.”
With most employees required to be in the office only a third of the time, Wedbush is creating an office oriented toward shared workspaces that can be used as needed by various employees instead of assigned desks, he said.
The move was also influenced by the changed nature of downtown’s financial district since thousands of office workers departed during the COVID-related shutdown and probably won’t return again in pre-pandemic numbers. Many shops and restaurants remain closed and office tenants have said the streets feel less safe than they used to.
Although Wedbush said “downtown has been fantastic for us,” other locations have become more attractive. “There are places like Pasadena that seem to have recovered more fully from the pandemic than downtown Los Angeles has. That was a part of the decision-making” to move.
The firm leases more than 100,000 square feet at Wedbush Center but will occupy about 20,000 square feet in an office complex on Lake Avenue in one of Pasadena’s leading commercial districts.
“The amenities on Lake Avenue are fantastic,” Wedbush said. “Casual restaurants to really fine dining, fitness centers — it just had everything.”
Wedbush’s move, which will take place formally in the first half of 2025, reflects a trend that has been affecting downtown and much of Los Angeles County for the last few years, real estate brokerage CBRE said in a recent report on office leasing.
“The Greater Los Angeles office market continued its search for the bottom” in the third quarter, CBRE said, as both tenants and landlords “navigate the ongoing supply and demand imbalance exacerbated by the shift to hybrid and remote work.”
Companies adapting to new work models are leaving behind large chunks of office space, and the change is particularly noticeable downtown, where CBRE said overall vacancy is more than 30%, triple the amount considered to be a healthy balance between tenant and landlord interests.
Wedbush Securities’ shift to hybrid work, with people in the office some days and not others, created the chance to make a different kind of office with a smaller footprint and more shared spaces to collaborate or work away from a traditional desk, Wedbush said.
About 70% of the office will be considered “hotel” space where employees can choose a workstation on days they are present while the remaining 30% will be offices for financial advisors and others who need privacy to meet with clients.
A stark difference will be that the shared workstations will be around the windows with views of the city and the offices will be in the center of the building. In the old arrangement, individual offices were much larger and occupied the prime space along the windows, Wedbush said.
One of the two floors Wedbush Securities leased in Pasadena has a rooftop deck that Wedbush plans to make into an outdoor office space with conference tables, workstations where people can plug in their computers and places to unwind.
“It’s not just going to be a couple of tables and umbrellas,” he said. “The opportunity to build out this new space was a big driver in us moving out of our building that we’ve loved for so, so many years.”
Wedbush Securities was co-founded in 1955 by Wedbush’s father, Edward, in Los Angeles and now has close to 900 employees in 28 cities across the country, Wedbush said. “We’re really proud of our Los Angeles legacy.”
Wedbush’s decision to dramatically shrink its headquarters underscores not only the continued struggles of the office rental market in the wake of the pandemic but broader vulnerabilities in commercial real estate throughout L.A. County.
A report released by real estate services firm NAI Capital said that in the third quarter of 2024, Los Angeles County’s commercial real estate market experienced a sharp 18.4% year-to-date decline in sales volume and a rise in real estate cap rates, a metric used to estimate an investor’s rate of return based on the income that the property is expected to generate.
It may be a low point in the real estate cycle for property sales, NAI Capital Chief Executive Chris Jackson said.
“With cap rates on the rise, California regulations, and high interest rates throughout 2024, the commercial real estate market took a bit of a dip” with office properties “hit particularly hard,” Jackson said. “However, with interest rates expected to decline more substantially in 2025, we anticipate a significant rebound in real estate sales.”
Sales are being further limited by taxes and government fees, particularly Measure ULA, the property transfer tax in Los Angeles that took effect in 2023, the report said. Dubbed the “mansion tax,” Measure ULA imposed a 4% tax on real estate transactions over $5 million and a 5.5% tax on those exceeding $10 million. In June, those thresholds increased to $5.15 million and $10.3 million.
The tax has contributed to a nearly 40% year-over-year drop in sales of office, retail, industrial and multifamily properties, or $1.9 billion below last year’s total, the report said.
Nike is cutting about 1,400 jobs in its operations division, mostly from its technology department, the company said Thursday.
In a note to employees, Venkatesh Alagirisamy, the chief operating officer of Nike, said that management was nearly done reorganizing the business for its turnaround plan, and that the goal was to operate with “more speed, simplicity and precision.”
“This is not a new direction,” Mr. Alagirisamy told employees. “It is the next phase of the work already underway.”
Nike, the world’s largest sportswear company, is trying to recover after missteps led to a prolonged sales slump, in which the brand leaned into lifestyle products and away from performance shoes and apparel. Elliott Hill, the chief executive, has worked to realign the company around sports and speed up product development to create more breakthrough innovations.
In March, Nike told investors that it expected sales to fall this year, with growth in North America offset by poor performance in Asia, where the brand is struggling to rejuvenate sales in China. Executives said at the time that more volatility brought on by the war in the Middle East and rising oil prices might continue to affect its business.
The reorganization has involved cuts across many parts of the organization, including at its headquarters in Beaverton, Ore. Nike slashed some corporate staff last year and eliminated nearly 800 jobs at distribution centers in January.
“You never want to have to go through any sort of layoffs, but to re-center the company, we’re doing some of that,” Mr. Hill said in an interview earlier this year.
Mr. Alagirisamy told employees that Nike was reshaping its technology team and centering employees at its headquarters and a tech center in Bengaluru, India. The layoffs will affect workers across North America, Europe and Asia.
The cuts will also affect staffing in Nike’s factories for Air, the company’s proprietary cushioning system. Employees who work on the supply chain for raw materials will also experience changes as staff is integrated into footwear and apparel teams.
Nike’s Converse brand, which has struggled for years to revive sales, will move some of its engineering resources closer to the factories they support, the company said.
Mr. Alagirisamy said the moves were necessary to optimize Nike’s supply chain, deploy technology faster and bolster relationships with suppliers.
A bill that would have required insurers to offer coverage to homeowners who take steps to reduce wildfire risk on their property died in the Legislature.
The Senate Insurance Committee on Monday voted down the measure, SB 1076, one of the most ambitious bills spurred by the devastating January 2025 wildfires.
The vote came despite fire victims and others rallying at the state Capitol in support of the measure, authored by state Sen. Sasha Renée Pérez (D-Pasadena), whose district includes the Eaton fire zone.
The Insurance Coverage for Fire-Safe Homes Act originally would have required insurers to offer and renew coverage for any home that meets wildfire-safety standards adopted by the insurance commissioner starting Jan. 1, 2028.
It also threatened insurers with a five-year ban from the sale of home or auto insurance if they did not comply, though it allowed for exceptions.
However, faced with strong opposition from the insurance industry, Pérez had agreed to amend the bill so it would have established community-wide pilot projects across the state to better understand the most effective way to limit property and insurance losses from wildfires.
Insurers would have had to offer four years of coverage to homeowners in successful pilot projects.
Denni Ritter, a vice president of the American Property Casualty Insurance Assn., told the committee that her trade group opposed the bill.
“While we appreciate the intent behind those conversations, those concepts do not remove our opposition, because they retain the same core flaw — substituting underwriting judgment and solvency safeguards with a statutory mandate to accept risk,” she said.
In voting against the bill Sen. Laura Richardson, (D-San Pedro), said: “Last I heard, in the United States, we don’t require any company to do anything. That’s the difference between capitalism and communism, frankly.”
The remarks against the measure prompted committee Chair Sen. Steve Padilla, (D-Chula Vista), to chastise committee members in opposition.
“I’m a little perturbed, and I’m a little disappointed, because you have someone who is trying to work with industry, who is trying to get facts and data,” he said.
Monday’s vote was the fourth time a bill that would have required insurers to offer coverage to so-called “fire hardened” homes failed in the Legislature since 2020, according to an analysis by insurance committee staff.
Fire hardening includes measures such as cutting back brush, installing fire resistant roofs and closing eaves to resist fire embers.
Pérez’s legislation was thought to have a better chance of passage because it followed the most catastrophic wildfires in U.S. history, which damaged or destroyed more than 18,000 structures and killed 31 people.
The bill was co-sponsored by the Los Angeles advocacy group Consumer Watchdog and Every Fire Survivor’s Network, a community group founded in Altadena after the fires formerly called the Eaton Fire Survivors Network.
But it also had broad support from groups such as the California Apartment Association, the California Nurses Association and California Environmental Voters.
Leading up to the fires, many insurers, citing heightened fire risk, had dropped policyholders in fire-prone neighorhoods. That forced them onto the California FAIR Plan, the state’s insurer of last resort, which offers limited but costly policies.
A Times analysis found that that in the Palisades and Eaton fire zones, the FAIR Plan’s rolls from 2020 to 2024 nearly doubled from 14,272 to 28,440. Mandating coverage has been seen as a way of reducing FAIR Plan enrollment.
“I’m disappointed this bill died in committee. Fire survivors deserved better,” Pérez said in a statement .
Also failing Monday in the committee was SB 982, a bill authored by Sen. Scott Wiener, (D-San Francisco). It would have authorized California’s attorney general to sue fossil fuel companies to recover losses from climate-induced disasters. It was opposed by the oil and gas industry.
Passing the committee were two other Pérez bills. SB 877 requires insurers to provide more transparency in the claims process. SB 878 imposes a penalty on insurers who don’t make claims payments on time.
Another bill, SB 1301, authored by insurance commissioner candidate Sen. Ben Allen, (D-Pacific Palisades), also passed. It protects policyholders from unexplained and abrupt policy non-renewals.
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Politicians in Washington and the reporters who cover them have an often adversarial relationship.
But on the last Saturday in April, they gather for an irreverent celebration of press freedom and the First Amendment at the Washington Hilton Hotel: The White House Correspondents’ Association dinner.
Hosted by the association, an organization that helps ensure access for media outlets covering the presidency, the dinner attracts Hollywood stars; politicians from both parties; and representatives of more than 100 networks, newspapers, magazines and wire services.
While The Times will have two reporters in the ballroom covering the event, the company no longer buys seats at the party, said Richard W. Stevenson, the Washington bureau chief. The decision goes back almost two decades; the last dinner The Times attended as an organization was in 2007.
“We made a judgment back then that the event had become too celebrity-focused and was undercutting our need to demonstrate to readers that we always seek to maintain a proper distance from the people we cover, many of whom attend as guests,” he said.
It’s a decision, he added, that “we have stuck by through both Republican and Democratic administrations, although we support the work of the White House Correspondents’ Association.”
Susan Wessling, The Times’s Standards editor, said the policy is a product of the organization’s desire to maintain editorial independence.
“We don’t want to leave readers with any questions about our independence and credibility by seeming to be overly friendly with people whose words and actions we need to report on,” she said.
The celebrity mentalist Oz Pearlman is headlining the evening, in lieu of the usual comedy set by the likes of Stephen Colbert and Hasan Minhaj, but all eyes will be on President Trump, who will make his first appearance at the dinner as president.
Mr. Trump has boycotted the event since 2011, when he was the butt of punchlines delivered by President Barack Obama and the talk show host Seth Meyers mocking his hair, his reality TV show and his preoccupation with the “birther” movement.
Last month, though, Mr. Trump, who has a contentious relationship with the media, announced his intention to attend this year’s dinner, where he will speak to a room full of the same reporters he often derides as “enemies of the people.”
Times reporters will be there to document the highs, the lows and the reactions in the room. A reporter for the Styles desk has also been assigned to cover the robust roster of after-parties around Washington.
Some off-duty reporters from The Times will also be present at this late-night circuit, though everyone remains cognizant of their roles, said Patrick Healy, The Times’s assistant managing editor for Standards and Trust.
“If they’re reporting, there’s a notebook or recorder out as usual,” he said. “If they’re not, they’re pros who know they’re always identifiable as Times journalists.”
For most of The Times’s reporters and editors, though, the evening will be experienced from home.
“The rest of us will be able to follow the coverage,” Mr. Stevenson said, “without having to don our tuxes or gowns.”
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