B of A to Vacate Tower Leased by Security Pacific : Real estate: Consolidating merged operations in the Bank of America tower may worsen the downtown office space glut.

In a move that could further exacerbate the office space glut in downtown Los Angeles, BankAmerica Corp. said Tuesday that it will vacate the Security Pacific Plaza tower and consolidate its Southern California headquarters in its Bank of America tower a few blocks away.

The decision follows BankAmerica’s merger with Security Pacific Corp. last week, creating the second-largest bank in the United States with about $200 billion in assets.

The two banking giants occupy sizable space in office towers in several cities where they have a presence. As a result, their merger is expected to dump more than 2 million square feet of space onto the market in California and nine other western states where BankAmerica has operations.

“It’s become a dog-eat-dog market; companies have been reducing their demand for office space and this (consolidation) doesn’t help us,” said Perry S. Herst, chairman of Tishman West Cos., the Los Angeles firm that manages Security Pacific Plaza.

The move comes as demand for downtown office space has been picking up.

Price Waterhouse Real Estate Group issued an April report forecasting that “the downtown Los Angeles office market is very likely to begin its recovery” in late 1992, with full recovery in some segments of the market by 1995.

Robert O. Bach, director of research at the commercial real estate brokerage firm of Grubb & Ellis Co., said the addition of the vacated B of A space “won’t have a major impact” but will boost the downtown vacancy rate by about two percentage points to about 22.5%.

Brokers estimated that Security Pacific is now leasing 690,000 square feet in its headquarters building but is using only about 550,000 square feet because of a cost-reduction program.

BankAmerica said its Security Pacific banking office will stay open at Security Pacific Plaza. However, its move will leave plaza owner Metropolitan Life Insurance Co.--which also owns the recently completed, but 65% unleased, California Plaza II--as the landlord of about 1 million square feet of vacant office space, or about one-sixth of the unleased space in downtown Los Angeles.

BankAmerica said a major reason for its move was that eight years remained on its lease at the Bank of America tower, while Security Pacific had just two years to go on its lease. The company did not say when the move would take place.

Daniel Costello, BankAmerica’s head of corporate real estate, told the Associated Press that his company will eventually occupy 360,000 square feet on 15 floors of the Bank of America tower, which is owned by Japan’s Shuwa Corp., plus 67,000 square feet in its main Los Angeles branch.