Downtown L.A.’s co-working extravaganza continues.
In the latest episode, New York-based workspace provider Industrious signed its first L.A. lease at 600 Wilshire, The Real Deal has exclusively learned.
The 10-year lease, valued at $8 million, gives Industrious 18,853 square feet of office space on the fifth floor of the building Vancouver-based Onni Group bought for $78 million in 2014. Jerome Fried and Michael Nieman of CBRE brokered the lease deal.
The DTLA space is among 25 outposts Industrious will launch by the end of the year, CEO Jamie Hodari told The Real Deal. But L.A. is “the single most exciting market” for the company, he said.
“Despite L.A.’s size, a lot of mid-sized and national businesses don’t actually have offices here,” Hodari said. “As supply grows, it will be easier for companies based in Atlanta, for instance, to be open a five-person creative office in L.A., which wasn’t possible five years ago.”
In L.A. alone, Industrious plans to open at least four locations by mid- to late-2017, including offices in Santa Monica, Hollywood, Century City and potentially Culver City.
Hodari isn’t the only one who thinks co-working will take off in L.A. Just last week, fellow co-working firm WeWork signed a 75,400-square-foot lease in Playa Vista at 12655 West Jefferson Boulevard. WeWork also plans to open two new locations in Pasadena and Culver City.
And earlier this year, Cross Campus pre-leased 30,000 square feet at 840 Apollo, one of Continental Development Corporation’s two locations in El Segundo, in addition to its space Downtown at 800 Wilshire.
Cross Campus’ DTLA location, which opens in May, will soon see competition from Industrious’ 600 Wilshire venue, which is slated to open this fall.
According to a recent report by CBRE, the demand for co-working space is so high in the Greater Los Angeles Area that overall office vacancy is decreasing.
The co-working surge in the market isn’t without consequence, however. The CBRE report attributes higher office rents to those falling vacancy rates. But for Hodari, this comes as no surprise.
“When a product takes a market by storm as quickly as co-working is, it’s typically driven by demand, and it’s the demand that’s outpacing supply,” he said. “For people like us, we’re not putting a product out there and crossing our fingers and hoping people will want it. We have a lot of data that says co-working will expand very rapidly.”