"The owners had started restrengthening the building ... obviously this latest earthquake has obviously hit it really hard again."
The area was cordoned off and about 100 people were evacuated from their homes in nearby apartment buildings.
Mayor Justin Lester said there was "significant structural damage" and the council was doing everything possible to make the area safe.
Council staff helped evacuated residents find alternative accommodation.
Ex-Green party chief of staff Andrew Campbell was in the Courtenay Pl apartment he has been house sitting for a friend when the fire alarm sounded about 3.40pm.
With just his phone, laptop and the clothes on his back, he exited the building into a cordoned street lined with people in USAR uniforms.
"They seem to be evacuating the whole block."
Part of Courtenay Pl was closed, as well as Tory St, which remained cordoned last night.
Campbell said authorities told residents they would not be able to reenter the building for at least 48 hours.
The evacuation came without warning and no one had notified residents of potential earthquake damage, he said.
Earlier in the day three other earthquake-damaged buildings in central Wellington were cordoned off.
A section of The Terrace, from 41 to 55, was out of bounds as structural engineers and contractors worked to make it safe. The building that houses Archives New Zealand on Mulgrave St was also evacuated as a "precautionary measure", the Department of Internal Affairs said.
The department was acting on advice from an engineer and was now awaiting a thorough report, a spokeswoman said.
Its Wellington office holds 65,000 metres of public archives, including central government records, immigration records, and 750,000 photos and negatives.
At Wellington's Deloitte House, about 1000 office workers were temporarily barred from returning until more extensive structural checks were made on the building.
Craig Stobo, chairman of Precinct Properties which owns the Brandon St block in the capital's CBD, said the damage would be assessed further over the coming fortnight.
A spokesman for BNZ revealed yesterday that the bank's Harbour Quays building would not reopen for months and the organisation was looking for alternative office space.
It was initially believed it would take weeks to fix the damage caused by Monday's 7.8 magnitude quake, but yesterday the bank announced to staff they would not be back in their offices for months.
"Their welfare is our paramount consideration. We will not rush this process or commit to a date this early on," a spokesman said.
Fletcher Building would oversee the repairs.
Lester hosted a media conference yesterday to address the issue of damaged buildings.
Thousands of buildings in the city had stood up to the test of the earthquake, including most of the 600 identified as 'earthquake prone', Lester said.
He identified Reading carpark, Statistics NZ and 61 Molesworth St as being the worst damaged, with the latter set to be demolished.
CentrePort chairman Lachie Johnstone said engineers had assessed the damaged Statistics NZ building. Reports the building had pancaked were incorrect.
"There has been a situation where the floor sections of the building have separated away from the beams" in isolated areas.
Engineers had cleared the building for staff to remove their belongings and were assessing what went wrong, but enquiries would take weeks, he said.
"The questions we need to ask are: has the building failed? Or has what nature has thrown at the building been too much for it?"
Meanwhile the Government has announced it will launch an inquiry into the failure of several relatively new buildings during Monday's quake.
