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Wednesday, Jun 7, 2023

WeWork Expanding To Boardwalk Midrise

WeWork Inc. has plans to open the largest co-working space in Orange County, at the newly-built Boardwalk office development near John Wayne Airport.

The New York-based shared space giant recently agreed to take 63,816 square feet of space at the 545,000-square-foot office complex along Jamboree Road, according to data from real estate market tracker CoStar Group Inc.

It’s the largest reported office lease in OC thus far in the third quarter, according to CoStar’s data.

WeWork’s lease starts in February, and runs until the beginning of 2031.

The new lease is for the sixth floor of the glass-sheathed complex, which counts nine floors of space in two buildings that are interconnected by a series of indoor and outdoor bridges.

The development, headed up by the Newport Beach office of project developer Trammell Crow Co. opened earlier this year. It’s the largest new office development in the airport area of Irvine in about a decade.

The amenity-heavy property, with a variety of concierge-type services designed to echo the feel of a luxury hotel, is about 40% full following the co-working space landlord’s lease, according to CoStar’s data.

WeWork’s lease is the second reported full-floor deal made at the complex, along with financial firm Pathway Capital.

Other tenants at the building include accounting firm Holthouse Carlin & Van Trigt LLP and online advertising company Propel Media Inc.

Monthly leases at the building are in the $4 per square foot range, according to regulatory filings.

Tops for Space

The WeWork deal marks another notable sign of expansion in Orange County’s fast-growing base of co-working locations.

As of early September, the top 24 shared space operators—who lease large blocks of space from a traditional landlord under long-term deals, upgrade the facilities to meet the needs of multiple tenants, and then sublease that space to start-ups, small businesses and other entities for terms as short as a month or two—had about 1.2 million square feet of space in OC, according to Business Journal data.

That figure is up nearly 20% year-over-year, with the growth largely due to well-funded out-of-town operators like WeWork, Spaces and Industrious Offices.

The Boardwalk location will mark WeWork’s third spot in OC, with a total base approaching 150,000 square feet.

Its first location, the 200 Spectrum Center tower in Irvine, runs about 44,000 square feet and opened two years ago. A second spot that opened this year at the Pacific Arts Plaza in Costa Mesa totals another 40,000 square feet.

Both the Spectrum and Pacific Arts Plaza buildings are owned by Newport Beach-based Irvine Co., which has worked with other shared space providers to fill some of its newly-built offices in the area.

The Costa Mesa WeWork location is estimated to accommodate 700 members—who pay about $625 per month for a dedicated desk, and $800 a month for a private office.

That’s more than triple the number of employees that would typically be seen at a traditional office running the same amount of space.

The Boardwalk location will likely be large enough to accommodate close to 1,000 WeWork members.

The largest individual co-working location currently in OC is the Aliso Viejo office of TechSpace Inc., which runs a little more than 55,000 square feet.

WeWork rented about 14 million square feet of space as of April, according to reports; the 8-year-old company has space in about 20 countries.

In the first half of the year, it signed on to lease eight times as much newly leased space in the U.S. as the next nine largest firms combined, according to data from brokerage Cushman & Wakefield Inc.

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Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.

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