This co-working firm says its 400% markup is actually a big problem

Industrious founder says landlords are missing out on huge profits

New York /
Jun.June 20, 2018 09:54 AM

Industrious founder Jamie Hodari and an Industrious work space (Credit: Industrious)

Co-working companies are making a killing, but that’s of little solace to the commercial landlords who own the space.

In fact, the CEO of one shared workspace company thinks landlords should enter joint ventures or profit-sharing agreements with co-working firms, scrapping the traditional loan in the process.

At a panel discussion hosted by leasing management company VTS, Industrious CEO Jamie Hodari cited his firm’s space in Union Square, where his company pays the landlord $67 per square foot, and in turn charges customers $320 per square foot, a mark-up of almost 400 percent that the landlord has no stake in, according to Crain’s.

“It’s the wrong relationship for both sides,” Hodari said. “It’s wrong for tenants, and it’s wrong for landlords.”

In February, Hodari said he expected to open in 50 and 60 locations by the end of the year. The company currently operates in 25 cities, and unlike its competitors WeWork and the Yard, it focused on opening outside of New York first.

The company raised $80 million in a Series C funding round led by Fifth Wall Ventures and Riverwood Capital in February, bringing its total raised to $140 million. [Crains] — David Jeans 


Related Articles

arrow_forward_ios
Saratoga County Homestead (Facebook, iStock, Illustration by Kevin Cifuentes for The Real Deal)
Dilapidated New York tuberculosis hospital, vacant since 1973, hits the market
Dilapidated New York tuberculosis hospital, vacant since 1973, hits the market
From left: Alice Technologies founder and CEO René Morkos; Join CEO Andrew Zukoski (LinkedIn/René Morkos, LinkedIn/ Andrew Zukoski, iStock)
Construction tech startups Alice, Join score new commitments
Construction tech startups Alice, Join score new commitments
Yelp's Jeremy Stoppelman, Remote Work
Yelp shuttering NYC, Chicago offices after eyeing subleases for remote
Yelp shuttering NYC, Chicago offices after eyeing subleases for remote
A photo illustration of the Ram's Head Inn at 107 South Ram Island Drive in Shelter Island Heights (LoopNet, iStock)
On the dock-et: Shelter Island inn owner sues town
On the dock-et: Shelter Island inn owner sues town
Carl Icahn and Rialto Capital’s Adam Singer (Getty Images. Rialto Capital, Illustration by Kevin Cifuentes for The Real Deal)
Carl Icahn goes to war against Rialto, CMBS servicers
Carl Icahn goes to war against Rialto, CMBS servicers
From left: Brookfield’s Brian Kingston and Hospitality Investors Trust's Jonathan P. Mehlman with Hilton Garden Inn Monterey (Brookfield, Hospitality Investors, Hilton)
Brookfield hotel REIT sues insurers for denying pandemic claims
Brookfield hotel REIT sues insurers for denying pandemic claims
Rubenstein Partners' David Rubenstein and Warren Corporate Center (Rubenstein Partners, iStock)
Tri-state deal roundup: King Kullen loses ground, Modell’s cavities filled
Tri-state deal roundup: King Kullen loses ground, Modell’s cavities filled
2001 Story Avenue in the Bronx (Google Maps, iStock)
Fruchthandlers sell Bronx multifamily properties for $169M
Fruchthandlers sell Bronx multifamily properties for $169M
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...