Cross Campus, a shared office-space provider with five locations in the Los Angeles, CA, region, has snapped up DeskHub in the latest step in a plan to expand its West Coast presence.
DeskHub, one of San Diego’s oldest co-working companies, has about 500 members across two locations: a 23,000-square-foot space in Little Italy and about 15,000 square feet of space in Scottsdale, AZ. Cross Campus has a total of about 185,000 square feet across the Los Angeles area and about 2,500 members.
BisNow first reported the deal. Terms aren’t being disclosed.
Jay Chernikoff, founder and CEO of DeskHub, is joining Cross Campus as its chief marketing officer. He’ll also work on developing the company’s pipeline of other potential acquisitions.
For DeskHub members, “there should be very few changes on the ground,” Chernikoff said. “Our members will now have access to all the locations in Los Angeles, which we think is a huge benefit.”
And the chain could soon add on more spaces. It aims to raise a second round of institutional funding this year—it’s targeting $50 million—and is looking for other co-working companies and buildings in growing West Coast markets to snap up, Chernikoff said.
He and Cross Campus CEO Ronen Olshansky have known one another since they launched their respective companies in the sector, he added.
DeskHub opened its San Diego spot in August 2015. At the time, it occupied about 15,000 square feet at its office in Little Italy. It expanded that footprint by roughly 50 percent about a year later. The space has been the site of many gatherings for and by local startup groups, and a number have gotten their start in the space before moving their growing teams to private offices.
Since DeskHub’s debut, dozens of additional co-working spaces have opened in the San Diego region. Competition has intensified as money has poured into the flexible office-space sector. Just last week, CommonGrounds, a co-working company based in San Diego’s Carlsbad community, announced it had raised $100 million to expand from its current four sites to about 50 locations over the next 24 months.
WeWork, the best-known shared office-space provider in the world, announced around the turn of the year that it had raised another $2 billion from Japan’s SoftBank, one of its existing investors, bringing the total the group had put into the company to more than $10 billion. However, the new investment was less than the investor had reportedly been considering ponying up: $16 billion. News reports cited volatility in the stock market as among the reasons for the shortfall.