WeWork is canceling a long-term lease in Hollywood as part of a wider restructuring of its real estate portfolio.
The 47,500 square feet account for three-quarters of CIM Group’s 925 N. La Brea Avenue, according to Commercial Observer. The report cited a loan watchlist that said it was “terminating its lease.”
WeWork signed the lease in 2016 and it was set to expire in 2029. The rent was around $50 per square foot, according to the report.
Last June, WeWork CEO Sandeep Mathrani said the company was rethinking 1 in 5 of its leases. A month later, the company hired JLL and CBRE to fill millions of square feet of vacant space in Los Angeles and New York City last summer.
But at the start of this year, the embattled co-working firm closed and exited four locations in Manhattan. It has also slashed its fees for customers at locations across the country. A new report found the firm had lost $3.2 billion last year as the pandemic slashed demand for flexible office spaces.
While WeWork is dealing with some unique difficulties, other companies are also rethinking their L.A. office footprints following the pandemic.
The amount of sublease space available in L.A. at the end of 2020 was up 50 percent since the beginning of the pandemic. Overall, about 20 percent of office space in L.A. was available for lease by the end of the year, an eight-year high.
Tenants leased about 10 million square feet of space last year, almost half the 18 million leased in 2019.
[CO] — Dennis Lynch