A troubled coworking giant is vacating a large chunk of office space at a distressed tower in Downtown Los Angeles.
WeWork (WE) will close a 92,000-square-foot location next week at the Gas Company Tower after failing to reach a renewal deal with property managers, Bisnow reported.
SEE ALSO: 30K-SF Crunch Fitness Coming to Hagerstown, Md.
“As part of WeWork’s strategic restructuring efforts, we made the difficult decision to end our operations at Gas Company Tower,” a WeWork spokesperson said in a statement sent to Commercial Observer. “We previously offered affected members the option to relocate, with our support, to our other Los Angeles locations and apologize for any inconvenience this has caused. Los Angeles remains a priority market for WeWork and we look forward to continuing to provide members with flexible workspace solutions at our other locations in the city.”
This comes shortly after the City of L.A. signed for nearly 310,000 square feet for 15 years at the 52-story building at 555 West Fifth Street. However, the building’s second-largest tenant, law firm Sidley Austin, is set to vacate the tower in 2026 after more than three decades.
The 1.4 million-square-foot building went into receivership in April 2023 after a Brookfield (BN)-managed fund defaulted on $748 million in loans tied to the property and to 777 Tower. The value of Gas Company Tower plummeted from $632 million in 2021 to $270 million last summer.
WeWork, meanwhile, is struggling after declaring bankruptcy in November. The company has been in the process of reworking some leases throughout the U.S., and also ditching as many as 80 leases so far, according to recent reporting.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
