WeWork Makes Lofty Claims In First Economic Impact Study
In Los Angeles, WeWork’s more than 12,000 members across 16 locations generate $4.4B in gross domestic product, nearly 1% of the county’s annual output, and contribute a portion of the $93M in personal and business taxes collected in California, according to an economic study released Wednesday.
The New York-based coworking company has been vital in Los Angeles’ job growth, gives women entrepreneurs a better opportunity and provides locations throughout the city and the county that have meant shorter commutes, sustainability and more personal time for members, according to an economic analysis by HR&A Advisors Inc., an economic development and public policy consulting company commissioned by WeWork for the review.
On the heels of a partnership with the city of Los Angeles for WeWork to house a green incubator, WeWork co-founder Adam Neumann said the company commissioned the economic analysis as proof of the positive impact the coworking company is making in cities.
“Eight years in I’m starting to realize that it’s one thing to say it and another thing to do it,” Neumann said. “Even a better thing if you not only do it but if you have facts and numbers to prove it.”
The study was done in a span of six months and pulls data from the U.S. census, CoStar, WeWork data and analysis from HR&A Advisors. The report examined WeWork’s presence in New York, Chicago and Los Angeles.
WeWork began in 2010 and is valued at $20B. The company released the study at its WeWork Vine location in Hollywood in front of a packed room of media, tenant members and Los Angeles Mayor Eric Garcetti.
In Los Angeles, some of the highlights of the study found:
- 60% of WeWork LA’s female members working at small businesses are executives or sole proprietors.
- A company of four can save $23K a year in rent compared to a traditional office.
- 82% of companies at WeWork are small businesses, higher than the countywide proportion of 55%.
- 75% of WeWork businesses in LA are in the innovation economy.
Garcetti credited WeWork “for helping accelerate this incredible era of innovation” and thanked the coworking company for recently agreeing to donate some of its space at 10250 Constellation Blvd. in Century City to house the Clean Energy Smart Manufacturing Innovation Institute.
The $140M CESMII, currently headquartered at UCLA, is a public-private partnership between the city, UCLA, the U.S. Department of Energy and the private sector.
The institute’s goal is to spur innovation, sustainability and competitiveness and to improve the efficiency of the country’s advanced manufacturing.
Neumann said the partnership with LA is the next step in WeWork’s evolution and along with the report would allow WeWork officials to present the study to prospective city and business leaders as the coworking company expands globally.
“With these numbers we could become partners with mayors, companies and entrepreneurs,” he said.
WeWork Global Head of Public Affairs Jennifer Skyler said by the end of 2020, WeWork plans to triple its presence in Los Angeles with 30 locations and 30,000 members.