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

Industrious founder says landlords are missing out on huge profits

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

Brookfield Asset Management CEO Bruce Flatt

“We underwrite every investment like we’re going to hit a recession”: Brookfield CEO

Vornado founder Steve Roth and Industrious co-founder Jamie Hodari (Credit: Getty Images)

Industrious to take 100K sf at Vornado’s One Penn Plaza

Cadre founder Ryan Williams and Allen Smith

Cadre brings on former Four Seasons CEO as president

135 West 50th Street and Industrious co-founders Justin Stewart and Jamie Hodari

Industrious reaches deal for 60K square feet in Midtown

AKS Capital Partners Managing Partners Aaron Appel and Walker & Dunlop CEO Willy Walker

Walker & Dunlop acquires Aaron Appel’s AKS Capital Partners

From left: Publisher and founder Amir Korangy, Editor-in-chief Stuart Elliott and VP of Corporate Development Yoav Barilan

TRD’s founders share war stories from over the years

As the years go by_A look back at 17 years of real estate history

A look back at 17 years of real estate history

250th Issue

The Real Deal celebrates 250 issues