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Co-working spaces: Not just for start-up bros anymore

Roger Vincent, Los Angeles Times on

Published in Business News

LOS ANGELES -- Co-working is often more pleasant these days than putting in eight hours at a traditional office.

If you'd prefer a workspace that looks like a chic hotel lobby with waiters at your service, that can be arranged.

Want to be around other women in a cabana on an outdoor terrace? There's a place in West Hollywood for you.

Is your goal to hang with other creative types? There are co-working clubs that want you as a member.

But while the offices strive to be oases of fellowship, the co-working business is more like a free-for-all.

Co-working offices emerged a decade ago as offbeat, bare-boned affairs that served start-ups and the self-employed of the emerging gig economy. But now their appeal has broadened even to mainstream companies looking for the flexibility to ramp up or wind down operations as quickly as situations demand. Other big tenants just want to avoid the hassle of setting up and maintaining their own offices.

 

And as co-working has evolved and its appeal has proved more than a fad, a rush of start-ups has joined the competition, including one from the real estate services industry, which has long had a near monopoly on leasing office space.

The new players are driven both by opportunity and competition: specifically, the ravenous reach of WeWork, the co-working pioneer that has spent freely to lock up market share and shows no signs of slowing.

WeWork has been willing to absorb massive losses as the company follows the internet model of getting big before getting profitable -- best epitomized by ride-hailing giant Uber, which raised $8.1 billion in its initial public offering last week even though its total operating losses exceeded $10 billion over the last three years.

The two companies share a common lead investor -- Japan's SoftBank Vision Fund, itself pumped up by Saudi Arabia's huge sovereign wealth fund.

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