Los Angeles’ largest investment manager by assets is deepening its downtown roots.

Downtown-based Capital Group bought the 1.4-million-square-foot Bunker Hill tower that houses its headquarters at 333 S. Hope St., sending a rare signal of hope for the city core’s distressed office market. 

The 55-story building, Bank of America Plaza’s centerpiece, sold for around $210 million, the Commercial Observer reported. That’s about $150 per square foot, well below CoStar’s average price estimate of $240 for downtown office space. 

The tower was last appraised at $212.5 million in late 2024, according to Morningstar – a steep drop from $605 million 10 years prior. The property’s previous owner, New York City-based Brookfield Properties, handed it over after defaulting on a $400 million loan.

Capital Group did not respond to the Business Journal’s request for comment.

Rent to own

A longtime tenant-turned-owner, Capital Group moved into 333 S. Hope St. four years after construction wrapped on the building in 1974 as one of the first occupants. Its latest 15-year lease for 323,000 square feet was set to expire in 2030. 

The firm, which in nearly a century of business has amassed $3.4 trillion in assets under management, will consolidate its L.A.-area operations in the tower and eventually house more than 2,100 employees there. 

“We knew the best landlord we could possibly have would be ourselves,” Capital Group President and Chief Executive Mike Gitlin told Bloomberg. “The best way to ensure a great environment in downtown L.A. is to create what we’re calling a vertical campus.”

The deal is among several recently announced tenant purchases of downtown office buildings, including the L.A. Department of Water and Power’s pending deal to buy the 35-story office tower it leases on South Figueroa Street for $92.5 million.

Stephen Somer, vice chairman at CBRE based in L.A., said buy-outs by major tenants like Capital Group make sense at today’s heavily discounted prices.

“It’s probably less expensive to buy the building (compared to leasing long-term), especially with other tenants in place that give you income support,” Somer said. “I’m assuming it’s a very accretive transaction for them relative to their occupancy cost via lease structure.”

The skyscraper’s other occupants include consultancy Guidehouse, real estate investment firm Cottonwood Management, and its name tenant, Bank of America, which staked out its L.A. headquarters at 333 S. Hope St. in a 1992 takeover from Security Pacific Bank.

The Charlotte-based bank’s logo sits atop the tower, though Capital Group was the largest tenant by space as of its last lease signing. Gitlin told Bloomberg the firm had yet to decide whether it would replace Bank of America’s branding with its own following the sale.

‘Commitment’ to downtown’s future

Over the last decade, downtown’s office scene has faced hit after hit, struggling to manage a growing homeless population and public safety concerns. The coronavirus pandemic sent workers home and drove out retail that depended on 9-to-5ers in an exodus that even a post-pandemic return to office push couldn’t counteract. 

The neighborhood’s office vacancy rate still tops 20%, and big-time property managers have defaulted on loans.

Apart from the Bank of America Plaza, Brookfield couldn’t pay off its debt on a handful of other downtown buildings, including the Gas Company Tower, which the city of L.A. snapped up for a hefty discount in August 2024.

Brookfield also appears to have halted plans to build a 34-story residential building flanking the tower Capital Group bought. The project – proposed in 2021, approved in 2024 and expected to finish construction in 2026 – would have taken the place of the outdoor park and sunken fountain at the Plaza.

However, putting up new buildings starts to make little sense, CBRE’s Somer said, when construction costs far outweigh existing property values and rents struggle to climb out of historic lows. 

“The rents in downtown L.A. typically don’t support new construction rents and cost of capital,” he said. “I’d be very surprised if anyone is planning to build a tower there for the foreseeable future.”

The past year, however, has seen selective signs of life returning to the downtrodden office market. A few major leases and purchases anchored an uptick in activity in 2025 and early 2026, from Oaktree Capital Management’s relocation to 555 S. Flower St. to Banc of California’s new 40,000-square-foot lease at 865 S. Figueroa St. 

These moves “highlight the flight-to-quality momentum and strategic tenant decisions shaping the market’s current trajectory,” analysts at Avison Young wrote in the brokerage’s fourth-quarter 2025 report. Leasing of downtown’s Class A, or best-in-class, assets was up 3.6% last year with 1.72 million square feet of activity, per the report.

While investors like Brookfield might not see a path to recovery for severely down-valued office assets, big new buys can be seen as a bet on the market’s future, Somer said.

“The Capital Group transaction, in a lot of ways, helps downtown,” he said. “It shows a commitment to the market.”

Eye on the Carolinas

Capital Group’s downtown office acquisition comes as the firm ramps up its expansion into booming Southeast markets with a just-announced East Coast operations hub in Charlotte, North Carolina. 

The city was chosen for its “strong financial services ecosystem, growing talent base and long-term outlook,” the firm wrote in a statement. The hub will accommodate between 500 and 700 employees in “key operational roles.”

The push, supported by a Job Development Investment Grant, gave North Carolina’s leaders a reason to celebrate: It’s expected to grow the state’s economy by $5.2 billion over 12 years. 

“We’re excited that Charlotte’s reputation as one of the nation’s top banking centers has attracted Capital Group to establish its East Coast hub here,” said North Carolina Gov. Josh Stein in a news release. 

Charlotte has quickly grown into the second-largest financial hub in the U.S., trailing only New York City, and has drawn in several of the sector’s biggest players. 

Citigroup, Huntington Bank, TD Bank, U.S. Bank and downtown-based City National Bank are among the institutions now setting up shop or broadening their footprint in Charlotte.

“The demographics are fantastic. There’s a lot of business formation,” said Chris Edmonds, City National’s executive vice president of middle market banking, of the Carolinas. “There’s net migration to those states, and then there’s also an incredible local talent pool.”