CBRE has acquired a 35 percent interest in flex-space
provide, Industrious, with an option to grow its investment to a 40 percent
The investment significantly increases CBRE’s participation
in the flexible workplace sector and positions the company to meet rising
demand from occupiers for agile space solutions – a trend that is being
accelerated by the Covid-19 pandemic.
Recent CBRE surveys show that 86 percent of its occupier
clients, which include many of the world’s largest global corporations, plan to
incorporate flex office space in their real estate strategies, and 82 percent will
favor buildings that offer a flex-office component.
The deal follows Newmark’s announcement earlier this month
that it is buying Knotel, which has filed for Chapter 11 bankruptcy and given
up multiple locations in the U.S. as part of the process.
Unlike Knotel, however, Industrious has managed to grow during the pandemic with its model of partnering with landlords rather than paying them rent.
“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,” said CBRE president
Bob Sulentic, who will join the Industrious Board of Directors along with Global
Chief Investment Officer Emma Giamartino.
“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, CBRE’s Hana will be merged into
Industrious, which has more than 100 locations in some 50 U.S. cities.
CBRE acquired its 35 percent ownership in Industrious in the
form of primary and secondary shares. The consideration includes approximately
$200 million in cash and the transfer of Hana.
“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,” said Jamie Hodari,
Co-Founder and CEO of Industrious.
“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.”
CBRE and Industrious will also work collaboratively to
develop and bring to market new innovative solutions in the flex-space sector,
offering products that will set 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.
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. Kupiec will also continue as
the leader of CBRE’s Host employee experience platform.
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