WeWork Takes 96,000-square-foot Lease At 660 J St.
Source: Sacramento Business Journal, Ben van der Meer
Photo: Coworking firm WeWork will occupy the top three floors at 660 J St. in downtown Sacramento, with a large investment planned to upgrade both the building’s exterior and interior. (Courtesty of WeWork)
In the single biggest office lease in the Sacramento region this year, coworking firm WeWork will fill more than 96,000 square feet in downtown Sacramento.
The New York-based company will occupy the three top floors, or 96,300 square feet, at 660 J St.
“It’s just very exciting,” said John Rinehart, president of business operations with the Sacramento Kings, which owns the building with JMA Ventures LLC. “It continues on what we’re trying to do with Downtown Commons.”
The location at 660 J St. will have designed workspaces, available conference rooms and common areas for collaboration, according to a news release from WeWork. Rinehart said work will begin by year’s end on an exterior refresh for the four-story building, which will feature WeWork’s name prominently, a rendering supplied by the company shows.
WeWork itself will also make considerable tenant improvements to its three floors, with the goal of opening at 660 J St. in 2021, Rinehart said. The building’s owners will make the exterior improvements. Rinehart declined to disclose the expected cost of the work. No contractor has been named yet.
Ron Thomas, executive director at Cushman & Wakefield’s Sacramento office, worked on both sides of the lease.
In addition to the lease, the two sides will expand the partnership by involving the winner of the Kings’ annual Capitalize contest for local entrepreneurs. The contest winner, announced during a regular-season Kings game, will get a year of available space in WeWork’s J Street location.
Rinehart said the Kings and WeWork have long discussed a potential partnership, and those talks accelerated about a year ago. By bringing in WeWork, he said, the Kings and JMA Ventures are adding a significant component to the work-play-live model sketched out for Downtown Commons, the downtown redevelopment area that includes both 660 J St. and Golden 1 Center.
“For us, it’s a perfect tenant,” Rinehart said.
Elton Kwok, WeWork’s general manager in Northern California, said in the announcement that the location is also a good fit for his company.
“With co-led events and experiences between members and Kings fans, we truly hope to create a campus for the future, where each partner is truly invested in the experiences that happen within that community in a way that’s accessible, meaningful and fun,” he said.
WeWork’s lease at 660 J St., which had been rumored for months, is the company’s second move into the Sacramento region. In April, WeWork said it would lease two floors, or about 45,000 square feet, at 400 Capitol Mall. WeWork described its two downtown Sacramento sites as complementary to each other in the announcement of the new lease.
Greater Sacramento Economic Council CEO Barry Broome said in a statement shared by the Kings that WeWork is “the perfect partner” in the drive to diversify the region’s economy. “Part of WeWork’s mission is to challenge convention and we are happy to add them to the list of economic drivers that will disrupt the status quo in this region,” he said.
The size of WeWork’s lease also is a considerable boost for what’s already a tightening market for downtown Sacramento office space.
Downtown’s vacancy rate in the second quarter of 2019 was 11.8%, down from 13.1% in the first quarter, according to Colliers International Sacramento. The building at 660 J St. is considered a Class B property. The second-quarter vacancy rate was 16.6% for Class B office space, according to Colliers.
Rinehart said the first floor of 660 J St. will remain retail space, including a branch for Golden 1 Credit Union. Other retailers will be added, he said. Since the Kings moved into office space in the nearby Kimpton Sawyer Hotel building, remaining office tenants at 660 J St. are the offices for Downtown Commons and DialSource, a locally headquartered software company.