CIM Group Signs Southern California Gas Company to 198,553-Square-Foot Lease at City National 2CAL

Rhea-AI Summary

CIM Group has secured a significant lease agreement with Southern California Gas Company (SoCalGas) for approximately 198,553 square feet at City National 2CAL in Downtown Los Angeles. This marks the largest new office lease in downtown LA for 2024. SoCalGas, the largest gas distribution utility in the US, will relocate its headquarters to the 52-story office building at 350 S. Grand Ave.

The lease follows CIM Group's recent 119,217 square-foot lease to Shepard Mullin in December 2023. CIM Group has implemented various improvements to the property since acquiring it in 2014, including modernizing entrances and renovating The Yard, a 1.5-acre central court. The building has also received several sustainability certifications, including LEED Platinum recertification in 2023.

Positive

• Secured largest new office lease in downtown Los Angeles for 2024 with SoCalGas for 198,553 square feet
• Attracted major tenant SoCalGas, the largest gas distribution utility in the US, to relocate its headquarters
• Recently leased 119,217 square feet to Shepard Mullin in December 2023, marking downtown LA's largest office lease that year
• Implemented capital and operational improvements, enhancing the property's competitive position
• Achieved multiple sustainability certifications, including LEED Platinum recertification in 2023

Negative

• None.

Insights

Financial Analyst

This lease agreement marks a significant development for CIM Group and the Downtown Los Angeles office market. The 198,553-square-foot lease with SoCalGas is the largest new office lease in downtown LA in 2024, following another major lease in December 2023. This demonstrates strong demand for premium office space in the area, despite broader market challenges. For CIM Group, securing a long-term tenant like SoCalGas for such a substantial space enhances the property's value and stabilizes its income stream. The addition of building-top signage for SoCalGas further increases the property's visibility and prestige. This deal likely strengthens CIM Group's position in the competitive LA office market and may positively impact their overall portfolio performance.

Real Estate Market Analyst

This lease transaction reflects a notable trend in the Downtown LA office market. Despite the ongoing debate about the future of office spaces post-pandemic, this deal suggests that prime locations and high-quality properties are still attracting major tenants. The relocation of SoCalGas from its long-time headquarters indicates a shift in tenant preferences towards modernized, sustainable buildings with amenities. City National 2CAL's recent improvements and multiple certifications (LEED Platinum, UL Verified Healthy Building, Fitwel®, ENERGY STAR and WiredScore) likely played a important role in attracting this high-profile tenant. This lease, along with the previous one to Shepard Mullin, could signal a potential recovery in the Downtown LA office market, potentially influencing other property owners to invest in upgrades to remain competitive.

Corporate Strategy Consultant

For SoCalGas, this move represents a strategic decision to maintain its presence in Downtown LA while upgrading its workspace. By relocating to a more modern, sustainable building, SoCalGas is likely aiming to enhance its corporate image and improve employee satisfaction. The new space, with its various certifications, aligns well with SoCalGas's position as a leader in clean energy innovations. This move could potentially boost employee productivity and aid in talent attraction and retention. Furthermore, the prominent signage at City National 2CAL will increase SoCalGas's visibility in the LA skyline, potentially enhancing brand recognition. However, the financial implications of this long-term lease commitment should be carefully considered, especially in the context of evolving work patterns and potential future changes in the energy sector.

LOS ANGELES--(BUSINESS WIRE)-- CIM Group announced today that it has signed Southern California Gas Company (SoCalGas) to a long-term lease for approximately 198,553-square-feet at City National 2CAL.

CIM Group’s 1.4 million-square-foot, 52-story office building at 350 S. Grand Ave. in the Bunker Hill District of Downtown Los Angeles will serve as the new headquarters for SoCalGas. The tenant will be relocating from its namesake Downtown Los Angeles building, Gas Company Tower, where it has been located since the building’s opening in 1991. At its new space, SoCalGas will have project and building top signage at the property.

SoCalGas is the largest gas distribution utility in the United States serving approximately 21 million consumers across approximately 24,000 square miles of Central and Southern California.

“SoCalGas is excited to maintain our headquarters in downtown Los Angeles, where we have a long history as one of the area’s largest tenants,” said Erin Smith, senior vice president, chief talent, culture, and operations support officer. “We look forward to continuing to work collaboratively with the state of California as we lead clean energy innovations and serve our 21 million customers.”

CIM Group’s lease with SoCalGas is the largest new office lease completed to date in downtown Los Angeles in 2024. The SoCalGas lease follows CIM Group’s December 2023 lease to Shepard Mullin for 119,217 square feet at City National 2CAL which marked Downtown Los Angeles’ largest new office lease transaction in 2023.

“SoCalGas had many options for its headquarters location and CIM Group appreciates its selection of City National 2CAL. This is another significant milestone for the property and we believe supports our commitment to ensuring that the building is a premier business location option in downtown Los Angeles. Through CIM Group’s investment in the quality of the physical space as well as the experience at the property, City National 2CAL holds a strong competitive position in the Downtown Los Angeles office market,” said Shaul Kuba, Co-Founder and Principal, CIM Group.

Since acquiring the property in 2014, CIM Group has implemented a program of capital and operational improvements at City National 2CAL. The entrances and plaza levels have been refreshed and modernized to create a more appealing lobby area and greater pedestrian connectivity.

In addition to the building’s interiors, CIM Group contributed to the comprehensive renovation of The Yard, a 1.5-acre central court and performance plaza shared with 1 CAL and the Omni Los Angeles Hotel. The park-like plaza offers expanded and inviting public green spaces with spots for gathering on the lawn and enhances the audience experience when attending the outdoor Grand Performances.

Alongside CIM Group’s continued investment in capital and operational improvements is its commitment to sustainability. In 2023 City National 2CAL was recertified as LEED Platinum for another five years. It has also achieved the UL Verified Healthy Building Verification Mark for Indoor Air and Water and earned Fitwel®, ENERGY STAR, and WiredScore certifications.

Geno St. John from CIM Group’s in-house office leasing team, in partnership with Peter Hajimihalis and Hayley Blockley from JLL, represented the owner. Clay Hammerstein and Danny Rees from CBRE represented the tenant in the transaction.

For more information on City National 2CAL, visit www.citynational2cal.com.

About CIM Group

CIM is a community-focused real estate and infrastructure owner, operator, lender and developer. Since 1994, CIM has sought to create value in projects and positively impact the lives of people in communities across the Americas by delivering more than $60 billion of essential real estate and infrastructure projects. CIM’s diverse team of experts applies its broad knowledge and disciplined approach through hands-on management of real assets from due diligence to operations through disposition. CIM strives to make a meaningful difference in the world by executing key environmental, social and governance (ESG) initiatives and enhancing each community in which it invests. For more information, visit www.cimgroup.com.

About SoCalGas

SoCalGas is the largest gas distribution utility in the United States serving approximately 21 million consumers across approximately 24,000 square miles of Central and Southern California. SoCalGas' mission is to build the cleanest, safest, most innovative energy infrastructure company in America. SoCalGas aims to deliver affordable, reliable, and increasingly renewable gas service through its pipelines to help advance California's clean energy transition by supporting energy system reliability and resiliency and enabling the integration of renewable resources. SoCalGas is a recognized leader in its industry and community, as demonstrated by being named one of Reuters' Top 100 Innovators Leading the Global Energy Transition and Corporate Member of the Year by the Los Angeles Chamber of Commerce. SoCalGas is a subsidiary of Sempra (NYSE: SRE), a leading North American energy infrastructure company. For more information, connect with SoCalGas on social media @SoCalGas.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240912044877/en/

Karen Diehl

Diehl Communications

karen@diehlcommunications.com

(310) 741-9097

Source: CIM Group

FAQ

What is the size of the lease SoCalGas signed with CIM Group at City National 2CAL?

SoCalGas signed a lease for approximately 198,553 square feet at City National 2CAL in Downtown Los Angeles.

How does this lease compare to other office leases in downtown Los Angeles?

This lease is the largest new office lease completed to date in downtown Los Angeles in 2024.

What improvements has CIM Group made to City National 2CAL since acquiring it?

CIM Group has modernized entrances and plaza levels, renovated The Yard (a 1.5-acre central court), and implemented various sustainability measures, earning certifications like LEED Platinum.

What sustainability certifications has City National 2CAL received?

City National 2CAL has been recertified as LEED Platinum and has also achieved UL Verified Healthy Building Verification, Fitwel, ENERGY STAR, and WiredScore certifications.