WeWork has struck a huge deal to occupy the bulk of a five-story office near John Wayne Airport, its latest notable lease in Irvine this year.
The New York-based coworking firm recently inked a deal to take over multiple floors at 18191 Von Karman Ave., part of the Lakeshore Towers office complex a few blocks from the airport.
The deal initially involves about 75,000 square feet of currently empty space in the building, according to data from brokerage Cushman & Wakefield, whose brokers were marketing the site for its San Diego-based owners, Sentre.
That amount of square footage represents the largest reported office lease in the airport area over the past quarter, and is among the top five office leases in the city so far this year, according to data from real estate market tracker CoStar Group Inc.
It would be WeWork’s second-largest spot in Orange County.
More in Store?
WeWork’s deal at 18191 Von Karman is expected to ultimately run larger.
Once other remaining tenants in the building depart, WeWork plans to take over their space, according to Cushman & Wakefield data.
The building totals about 128,000 square feet. American Healthcare Investors, which runs several real estate investment funds geared toward medical properties, was the only other listed tenant in the building during a visit last week; the length of its lease is not known.
If WeWork takes over the entire building, it will be their largest spot in Orange County and its second full-building location here. It also plans to take over one of the three just-built offices at Spectrum Terrace, a new development in the city’s Spectrum area.
The Spectrum Terrace building runs 116,261 square feet; WeWork’s confirmed lease for that space—first reported by the Business Journal—is the largest office deal in the city this year.
Other Sports Nearby
WeWork recently began advertising its impending location at Lakeshore Towers on its website.
Private offices there will run $830 a month, while less formal “hot desks” and use of the building’s shared common spaces will go for $430 a month, according to the company, which is planning a $1 billion initial public offering.
Tenant improvement work appeared to be underway last week at the Sentre-run building, which was built in 1999.
WeWork’s Irvine, Costa Mesa and Newport Beach collection of 10 open and soon-to-open locations total close to 600,000 square feet, according to Cushman & Wakefield data.
Locally, among coworking competitors, “WeWork continues to be the dominant player with the biggest presence,” said Cushman & Wakefield executive managing director Bob Thagard.
The company now accounts for nearly 40% of the county’s total coworking footprint, according to Thagard.
Orange County and Los Angeles represents one of the company’s seven largest bases of shared space locations, according to the company’s updated registration statement for its IPO, filed last week.
WeWork’s valuation was previously estimated to be in the $47 billion range earlier this year, following a private funding deal.
A report in the Wall Street Journal last week said that the company’s valuation could end up being much lower—closer to $20 billion—once the IPO terms are set, due to a chilly reception from potential Wall Street investors.
The Lakeshore Towers spot is a short walk from another impending location for the company, the 2211 Michelson building that’s part of the Von Karman Towers office complex next door.
That spot, running three floors and about 71,000 square feet, hasn’t opened yet.
Pay Attention
Millennials, and their affinity for amenitized, modern workspaces, are driving the local coworking trend—there’s nearly 1.8 million square feet of various types of shared space locations in OC, according to a recent industry report from Cushman’s Thagard.
“Coworking locations have become an integral space option for both large corporations and freelancers alike,” he said.
Still, “there is still a lot that remains to be seen.”
“Since economic cycles always ebb and flow, time will tell how this segment of the market is impacted by future changes. Yet with the coworking industry showing no signs of slowing down soon, Orange County real estate experts would do well to stay attuned to the trend.”
