The Real Deal New York

Servcorp signs deal at 667 Madison

The Australian flex-office company will oversee 36K sf at Hartz Group building
February 08, 2019 02:00PM

667 Madison Avenue (Credit: Google Maps)

Servcorp, an Australia-based flexible office space firm, has locked in a management agreement at 667 Madison Avenue, the first such arrangement for a company that typically takes space through conventional leases.

The firm will take over 36,000 square feet on the fourth and fifth floors of the building owned by the Hartz Group, according to Commercial Observer.

About 15 percent of the space is used for coworking. The company, however, has been wary of the traditional coworking model.

Marcus Moufarrige, Servcorp’s former chief operating officer, told The Real Deal in November that “co-working doesn’t work.”

“The latest iteration of it is not that new; it was around pretty extensively during the dot-com boom. And it didn’t work then, either,” he said.

The newest location is expected to open in June. The space was originally being marketed at $100 a square foot, but the ultimate agreement was a 10-year management agreement.

The firm has four locations in New York, and 22 in the U.S.

Flexible-space and coworking firms have been inking a flurry of deals. Knotel announced it was taking 76,000 square feet at new locations, and Industrious said Thursday that it had signed new leases at 325 Hudson Street and 1411 Broadway. Spaces, the Dutch co-working firm owned by IWG (formerly Regus), signed for a space at 31 Penn Plaza, and WeWork, the largest private tenant in Manhattan, also announced this week that it had signed four new locations for its HQ By WeWork service, which caters to mid-sized tenants. [CO] — David Jeans