CBRE has acquired a 35% stake in US flexible workspace provider Industrious in a move to significantly expand its presence in the rapidly growing industry.
As part of the deal, the global advisory firm paid about $200m in cash and agreed to merge its flexible space brand Hana into Industrious, which has more than 100 locations in 50 US cities.
The deal makes CBRE the largest shareholder in Industrious, and it expects to acquire a further 5% of the firm in coming weeks.
Under the agreement, two CBRE executives – president and CEO Bob Sulentic and global chief investment officer Emma Giamartino – will join Industrious’ board of directors. The partnership will combine Industrious’ operational expertise with CBRE’s extensive network of occupiers and investors, including some of the world’s largest corporations.
The 10 existing Hana locations in the US and UK will be operated by Industrious once the Hana transaction is completed in the second quarter of the year.
CBRE said it will work with Industrious to develop and bring to market new flex-space products to deliver “a new standard for flexible, amenity-driven office environments.”
The deal stemmed from CBRE’s belief in the rise of agile workspace products, particularly in the wake of the Covid-19 pandemic. It cited a survey it carried out showing that 86% of CBRE’s occupier clients plan to incorporate flexible office space into their real estate strategies. About 82% said they will favour buildings that offer a flex-office component.
Sulentic said: “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.
“We have been building our Hana flex-space business expressly to meet the flex-space opportunity and Industrious now enables us to capitalise on it at scale with a portfolio of well-situated units in key markets.”
Jamie Hodari, co-founder and CEO of Industrious, said: “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.
“This investment grew out of a shared understanding that neither of our organisations can fulfil 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.”
Andrew Kupiec, head of the Hana business, will oversee CBRE’s day-to-day relationship with Industrious once the Hana transaction is complete.