The vote of confidence in the co-working space industry continues. The latest example comes courtesy of commercial real estate services and investment firm CBRE who acquired 35% interest in flexible workspace provider Industrious this week. The purchase makes CBRE Industrious’ largest shareholder. The real estate firm is expected to acquire another 5% in the flexible office space provider in the coming weeks to bring its stake up to 40%.
CBRE’s investment in Industrious is a sign the company is looking at the future of the co-working industry, rather than its present. Many companies are working from home these days due to the COVID-19 pandemic, but when tenants do return to offices, they’ll likely want the lease flexibility a company like Industrious provides—at least that’s what companies like CBRE are counting on. CBRE’s recent surveys show that 86% of its occupier clients, including many of the world’s largest global corporations, plan to add flexible office space to their real estate strategies. Meanwhile 82% will lean towards buildings that offer a flexible office environment.
“Our investment in Industrious is consistent with our view that flexible office space is playing an increasingly central role in companies’ occupancy strategies and aligns us with an exceptional operator and an outstanding leadership team that is executing a great strategy,” CBRE President and CEO Bob Sulentic said in a statement. “We have been building our Hana flex-space business expressly to meet the flex-space opportunity and Industrious now enables us to capitalize on it at scale with a portfolio of well-situated units in key markets.”
Under the agreement Sulentic and CBRE Global Chief Investment Officer Emma Giamartino will join Industrious’ Board of Directors. Meanwhile, CBRE’s flexible space solutions offering Hana will be merged into Industrious. CBRE’s Andrew Kupiec, who leads the Hana business, will oversee CBRE’s day-to-day relationship with Industrious once the Hana transaction is completed in the second quarter. He will also continue as the leader of CBRE’s Host employee experience platform.
Industrious will tuck CBRE’s 10 Hana locations in with its current footprint
The co-working space provider currently has more than 100 locations in more than 50 U.S. cities. CBRE purchased its 35% stake in Industrious via primary and secondary shares. The consideration includes $200 million in cash and the Hana transfer.
“Industrious is committed to being the voice that matters most in the future of work, and we share a vision with CBRE for delivering market-leading workplace experiences on a global scale,” Industrious Co-Founder and CEO Jamie Hodari said in a statement. “This investment grew out of a shared understanding that neither of our organizations can fulfill that vision alone. It’s a tremendous moment for Industrious to get this vote of confidence, and we look forward to expanding what we can do for our customers while keeping the same commitment to the highest customer satisfaction in the industry.”
Industrious will operate CBRE’s 10 existing Hana locations in the U.S. and U.K. when the transaction closes. Additionally, the companies will collaborate to develop and bring new flexible office space solutions to the market. CBRE and Industrious will also look to offer products that will create a new standard for flexible, amenity-driven office environments. These offerings will combine Industrious’ demonstrated skills in operating market-leading flexible workplaces with CBRE’s extensive corporate occupier and investor relationships, together with broad service offerings and expertise.
Joe Dyton can be reached at joed@fifthgenmedia.com.
