Nearly six months after filing for bankruptcy, flexible space provider WeWork Inc. has filed a motion to assume its lease at 5161 Lankershim Blvd., a four-story, 205,000-square-foot office building located in North Hollywood’s Arts District.
The property, which boasts close proximity to some of the biggest players in film and television, features modern private offices, lounges, a boardroom and two classrooms which can host upwards of 80 people.
WeWork was able to work with the landlord to amend its lease terms to reach a new, mutually beneficial agreement, according to a WeWork spokesperson.
“We’re excited to reaffirm our commitment to providing flexible workspace solutions in Los Angeles through our assumption of 5161 Lankershim Boulevard, a location in the heart of the North Hollywood Arts District,” a WeWork spokesperson wrote in a release. “With this new agreement, we’re pleased to strengthen our partnership with our landlord and continue delivering premier spaces, products and services to our members well into the future.”
The motion marks the second lease WeWork has assumed in Los Angeles, the first being its lease at Constellation Place, a 35-story skyscraper in Century City.
The company has announced substantial progress in its portfolio optimization, with a goal of assuming 90% of its global portfolio and reducing its total future rent commitments by over $8 billion, or more than 40%, according to a company statement.
Coworking sector remains strong
And while WeWork might’ve had an easier time handing over its properties, its strong hustle to maintain its portfolio signifies its continued faith in the coworking business.
“Coworking is a great solution for companies that have smaller employee headcount and are able to allow more flexible workplace opportunities for shorter term means,” Marin Turney, an executive vice president and office leasing expert at Jones Lang LaSalle Inc., said. “Whereas the bigger the company, the less nimble they are and the more permanence there is to their office needs.”
As opposed to traditional offices, coworking spaces tend to be great alternatives for individuals and smaller businesses that aren’t looking for a long-term property commitment. Due to the current office market fluctuation, multiple companies have turned to this approach due to the flexibility coworking provides.
“In terms of activity in the market, coworking has remained a lot more consistent,” Jackie Benavidez, a vice president and office broker at CBRE Group Inc., said. “But with that, there are ins and outs. You have tenants that sign month-to-month, you have some that do longer term. There’s definitely a higher turnover, but it seems to be pretty stable. I think it’s because they find a way to cater to each unique individual.”
Los Angeles, in specific, is leading the curve in terms of location count.
In the first quarter of this year, the Los Angeles market gained two more coworking spaces, reaching 270 coworking spaces and continuing to lead at the national level, above the Manhattan market which lost four locations in the past three months, according to a recent report published by CoworkingCafe.
Earlier this month, coworking company Industrious signed a 10-year lease agreement for a full floor of space at Century City’s Watt Plaza.
The newly signed 19,000-square-foot coworking space comes in addition to two other floors occupied by Industrious in Watt Plaza – one of its most successful locations in the U.S.
“The demand is still there, which is great,” Benavidez said. “I think it’s good for the market and I think it’s good to see that level of interest remain consistent.”
“I think coworking follows the trend of return to office,” Turney added. “We’re seeing people coming back to the office and deciding that, for whatever reason, their work from home scenario no longer works for them. I think we would probably see the same trend in a coworking operation as well.”