WeWork keeps North Hollywood location, sees LA as “key market”

WeWork, the embattled New York-based coworking firm, has filed a motion to keep its lease for its location in North Hollywood, the firm announced this week.

The deal for 5161 Lankershim Boulevard in North Hollywood, owned by New York Life Investments, is one of five lease assumptions it has requested as part of its Chapter 11 bankruptcy reorganization. Last month, WeWork requested to assume its lease at 10250 Constellation Boulevard in Century City, according to court records.

As part of the lease assumption, New York Life agreed to reduce rent and the term of the lease, according to the motion, though no other details were provided. WeWork and New York Life also agreed to a reduced letter of credit, often a guarantee from a bank that a tenant will pay its obligations.

According to a WeWork spokesperson, the company has seen “really strong demand” for coworking spaces with the rise of flexible work post-pandemic, describing Los Angeles as a “key market for WeWork.” The firm reports market demand for both “on demand” daily bookings and monthly memberships, called WeWork All Access, which “factored into” WeWork’s decision to stay in the NoHo building. 

“We continue to work with our landlords to achieve more sustainable lease terms so that we can really stay in as many buildings in the city as possible,” the spokesperson said.

In addition to coworking space itself, the 5161 Lankershim Boulevard WeWork location offers nearby amenities such as restaurants in the NoHo Arts District and galleries in Valley Village.

“The buildings we’ve assumed in L.A. are ones where we see a sustainable path forward for our operations in the long term,” the spokesperson noted. “We’re just really excited by the progress that we’ve made in L.A. so far, and we look forward to continuing this momentum.”

Across the country, WeWork has been on a hunt for fresh financing while negotiating leases with landlords as a part of its comeback plan.

Earlier this month, the company announced that it “determined a final path forward at 90 percent of the locations in its global real estate portfolio through amended leases, new management agreements, or via the lease rejection process” in a statement on April 2. The company plans to exit Chapter 11 by the end of May.

“We remain committed to emerging from our global real estate and financial restructuring later this quarter, and expect to do so with little to no debt,”said CEO David Tolley.