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
Mack-Cali Realty CEO Mahbod Nia and MaryAnne Gilmartin (Photos via Mack-Cali Realty)
Mack-Cali Realty names Mahbod Nia as CEO
Mack-Cali Realty names Mahbod Nia as CEO
The comedy club argues that if SNL can operate, then they should be allowed to operate too. (Getty)
Manhattan comedy club sues Cuomo over pandemic closures
Manhattan comedy club sues Cuomo over pandemic closures
(iStock)
These were Manhattan’s best office submarkets in Q4
These were Manhattan’s best office submarkets in Q4
(iStock/Illustration by Alexis Manrodt for The Real Deal)
Order up: Real estate investors line up to buy drive-throughs
Order up: Real estate investors line up to buy drive-throughs
Mayor Bill de Blasio (Getty, iStock)
NYC to revive $17B in public construction projects
NYC to revive $17B in public construction projects
Houston House at 298 East 2nd Street and Matt Lee (Houston House, LinkedIn)
Developer Matt Lee to auction off East Village condo
Developer Matt Lee to auction off East Village condo
(Getty)
Hotel stocks went bonkers in February
Hotel stocks went bonkers in February
Homebuilding is largely responsible for the increase in construction spending. (Getty / Photo Illustration for The Real Deal)
Construction spending hits new record in January
Construction spending hits new record in January
arrow_forward_ios

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

Loading...