Los Angeles: Coworking spreading throughout the basin
February 07, 2019
- Currently, flexible space operators lease over 4.2 million square feet of office in Los Angeles with over 52.4 percent of the inventory concentrated on the Westside and in Hollywood. Since 2016, the amount of additional square-footage occupied by flexible space companies has increased by 180 percent in these two markets. Technology, entertainment, and media clusters have made the Westside and Hollywood natural destinations for individuals and companies seeking flexible leasing agreements.
- However, coworking leasing activity is beginning to increase in other markets. Las year, Industrious committed to 22,275 square feet at 444 South Flower in Downtown Los Angeles. Coworking operators are reportedly looking at over 100,000 in the Downtown market. Areas like Downtown are well positioned to attract flexible space users given their proximity to LA’s transit network and a strong corporate presence. Yet, Downtown’s key advantage lies in its amenity-rich, urban environment, which has proven to be a major draw for creative entrepreneurs.
- Similarly, high-growth suburban markets such as Glendale have also peaked the interest of flexible space companies. Industrious recently signed for 24,000 square feet at 500 North Brand Boulevard, becoming the sixth Los Angeles location for the firm. Much of this growth has been enabled by the expansion of retail and housing within these markets, as tenants continue to seek out locations that offer a strong mix of live-work opportunities.
- We anticipate Coworking operators to continue to expand east beyond the Westside and Hollywood where high rents are compressing margins and competition is intensifying.
Source: JLL Research