CBRE Acquires Remaining Stake of Co-Working Firm Industrious

CBRE’s initial investment in co-working company Industrious several years ago has led the commercial real estate services firm to acquire the rest of the company.

Bob Sulentic’s CBRE agreed to acquire the remaining 60 percent stake of the company, the Wall Street Journal reported. The deal values the co-working company at approximately $800 million.

As part of the deal, Industrious chief executive officer Jamie Hodari will transition to CBRE’s senior team. He’ll be in charge of the management of 7 billion square feet of commercial space as the leader of the building operations and experience division; CBRE is reorganizing into four units, the others being property investments, project management and advisory services.

Industrious will remain a separate business unit.

The co-working company piqued CBRE’s interest enough that it acquired a 35 percent stake in the company in early 2021, paying $200 million for the privilege. A year later, CBRE invested another $100 million, earmarked towards accelerating international expansion.

Today, Industrious has more than 200 locations, adding between 30 and 50 annually. Hodari predicts the expansion will accelerate under CBRE’s guise.

Industrious emerged as a viable alternative to WeWork as the latter fought through bankruptcy proceedings. The company’s business model is often viewed as being less risky: instead of leasing office space and renting it back out, Industrious operates co-working spaces and shares in the profits with building ownership.

With Industrious becoming a subsidiary of CBRE, the latter will be able to offer co-working services to both landlords and tenants. That could provide a welcome flexibility for those trying to lure office workers back to physical spaces years after the onset of the pandemic, with more major companies mandating a full-time return to the office.

Hints of how the two companies will work together emerged a week ago when the two partnered on a 64,000-square-foot lease at WatermanClark and Brookfield Properties’ Lever House. Industrious is leading the design, buildout and operations of the six-floor lease; CBRE will initially occupy four of the floors and will share in the profits Industrious generates at the other two floors while retaining the ability to expand as needed.

— Holden Walter-Warner