Will coworking remain a strong demand driver in Los Angeles?
Coworking has grown exponentially in Los Angeles.
October 23, 2019
- Coworking has grown exponentially in Los Angeles. Over the last four years, flexible workspace operators have doubled their footprint and now control 3.0 percent of the total office inventory .
- Coworking operators have long targeted Los Angeles. The innovative and creative side of the economy is supported by a large number of smaller, entrepreneurial companies which tend to embrace flexibility and short-term leases. The production side of the entertainment sector in particular has been a strong adopter of flexible space solutions.
- Over the past 24 months, coworking accounted for over for 18.1 millions square feet of office absorption across the county. In Los Angeles, flexible leasing operators have taken occupancy of over 1.5 million square feet over the same time frame.
- A recent attempt by a leading coworking firm to go public has exposed its challenges in controlling its cost structure and attaining profitability, raising some concerns over the viability of the sector more broadly.
- However, any vacuum left behind by a single operators will likely be filled. The demand for flexible leasing has proven to be exceptionally strong in the current cycle. Coworking and shared amenity spaces are projected to encompass approximately 30 percent of the U.S. office market by 2030.
Source: JLL Research