Yard sale? NY-based co-working firm is hunting for equity

With 14 NYC locations, the firm led by Morris Levy and Richard Beyda has held discussions with Knotel and the Office Group

TRD New York /
May.May 06, 2019 06:22 PM
The Yard CEO Morris Levy and The Yard coworking space (Credit: iStock and Croissant Blog)

The Yard CEO Morris Levy and The Yard coworking space (Credit: iStock and Croissant Blog)

Executives at the Yard, a New York-based flexible-office space firm with 14 locations, have been in talks with competitors about potentially selling the company or a partial stake in it, sources familiar with the discussions told The Real Deal.

According to the sources, the Yard held discussions with the Office Group, a London-based company owned by the Blackstone Group. Office Group has 33 locations globally and has been looking to crack into the New York market for about a year. The Yard also had preliminary discussions with Knotel regarding a potential sale, according to people who were involved. Nothing came of those talks.

In an email, Morris Levy, co-founder and CEO of the Yard, acknowledged that the firm had been approached by “multiple firms,” but said the firm was instead working with investment-banking firm Houlihan Lokey to raise “growth equity.”

“We are currently focused on funding a phase of massive growth, the most important part of which has been to maintain the brand focus, feel and identity that are the reasons why businesses choose The Yard,” Levy said.

Representatives for the Office Group didn’t immediately respond to requests for comment. Knotel, which is in talks for a roughly $200 million Series C round, declined to comment.

Levy co-founded the Yard with Richard Beyda in 2011, opening a location in Williamsburg. It started off with private funding and secured a $15 million credit line from an Israeli bank in 2017.

Firms of similar size to the Yard have been acquired by the larger players dominating the space. Industrious, which has 65 locations, last week acquired California-based TechSpace, which has seven locations. Last August, it also acquired Chicago-based firm Assemble, with three locations. The sector’s largest player, WeWork, is a key investor in female-focused co-working company The Wing.

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