L.A. Mayor Eric Garcetti looked to WeWork Cos. when he decided the city needed space to headquarter the recently established Clean Energy Smart Manufacturing Innovation Institute, a $140 million partnership between UCLA, the City of Los Angeles, the U.S. Department of Energy.
WeWork donated space at its center in Century City for the manufacturing institute’s headquarters, part of the private sector’s participation in the bid to foster the trend of giving local makers an edge with advanced manufacturing methods.
WeWork and other companies that offer coworking spaces are a significant trend in their own right – generally membership-based companies that offer shared workplaces such as suites for freelancers, entrepreneurs, telecommuters and others seeking flexibility in their office locations.
They’ve grown in popularity among users who cite a desire to have an office close to home, a desire to avoid traffic, build a community, network with colleagues and work in a hip environment among the reasons for the trend.
It’s not all blue sky for the coworking spaces, though. A number of them cropped up amid the Great Recession, when they could get big chunks of space on the cheap. Signs of strain have emerged for several outfits, even as investors continue to fund a number of them.
Members of WeWork in L.A. County typically pay a monthly fee of $350 to rent a desk and $800 for an office, according to the company. The fee generally ranges based on location and the extent of access to the shared space.
The sector has seen strong growth in recent years in and around Los Angeles County.
Cushman & Wakefield said eight coworking companies are set to take more than 364,000 square feet in the county so far this year, and stand a good chance of matching or topping 2017’s total.
“The level of new coworking occupancy in Greater LA in 2018 is already among the highest annual totals we have tracked on record (post-recession), and is pacing pretty evenly with 2017 (over 500,000 square feet) and 2016 (over 600,000 square feet) – the two highest annual levels tracked across Greater L.A.,” wrote Vincent Chang, associate market director of research for greater L.A. for Cushman & Wakefield, in a research note.
There’s plenty of competition in the segment.
Spaces, part of Switzerland-based IWG, which also owns executive suites provider Regus, plans to open five additional Southern California locations by July, including Hollywood, Calabasas, El Segundo and downtown.
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