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CBRE Acquires 35% Stake in Industrious for $200M

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CBRE announced on Monday of this week the acquisition of a 35% stake in Industrious ahead of the flexible workspace provider’s potential initial public offering (IPO) later this year.

At an investment of $200M, CBRE is now Industrious’ largest shareholder and plans to acquire an additional 5% in the coming weeks, which would result in a 40% total stake. According to a source, the deal values Industrious at more than $600 million.

The investment not only increases CBRE’s participation in the coworking and flexible office sector, but it positions the company to meet rising demand from enterprises seeking agile workspace solutions.

In an article by Crain’s New York, CBRE President & CEO Bob Sulentic said in an interview that the acquisition will be “significantly accretive” over time and represents a great opportunity for the company.

“We are big believers in the flexible workspace arena and see a tremendous opportunity—we have a huge global occupier business and know that more than 80% of them want to be in multi-tenant offices with flex space,” Sulentic said.

Under the agreement, executives Bob Sulentic and Emma Giamartino, CBRE’s global chief investment officer, will join Industrious’ Board of Directors. 

CBRE’s Hana to merge with Industrious

Additionally, the transaction will merge CBRE’s coworking offering, Hana, into Industrious, transferring 10 spaces in the U.S. and U.K. to the Industrious brand. Currently, Industrious operates more than 100 locations in over 50 U.S. cities, along with one international location in Singapore.

Jamie Hodari, Industrious co-founder & CEO, said the firm’s focus on customer service and being asset-light—or prioritizing management agreements with landlords rather than signing onto long-term leases the way hotel brands do—has been validated.

With its partnership-based model, Industrious is on a growth trajectory that involves plans to take over dozens of coworking spaces that were abandoned during the pandemic by sublease-based operators, such as WeWork. 

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In an interview with Bisnow, Hodari said, “Our strategy will be continued growth in our top 25 cities, and any cities that people move to that weren’t historically work hubs, but might prove to be moving forward.”

Industrious also aims to continue expansion into global markets like Singapore, which they entered last year, though it will be “judicious” in its approach. The company will mainly use CBRE’s cash infusion to fuel growth by hiring and to establish new management agreements.

Will Industrious go public in 2021?

With previous investors such as Brookfield Properties, CPPIB, and Riverwood Capital, the deal keeps Industrious privately owned, Bisnow reports. For Hodari, the investment fortifies the company’s trajectory to going public, which is a goal for 2021.

We’ll be even more appealing as a business in the public markets, if and when the time is right,” Hodari told Bisnow. 


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