Co-working company the Yard landed a $15 million credit line from the Israel Discount Bank of New York.
The firm, which was founded in 2011 operates nine office spaces in New York and Philadelphia, will use the money to pay for new locations. It plans to have 14 locations open by the end of the year and is in talks for six more, with plans to expand to cities like Washington, D.C., Boston, Los Angeles and San Francisco.
Morris Levy and Richard Beyda (Credit: The Yard)
“This is a difficult business to fund because you don’t own the properties,” said co-founder Richard Beyda. He said the Yard was able to land the loan, which carries an interest rate of around 4 percent, in part because of the principals’ prior relationship to the bank.
He added that borrowing money was always the preferred option compared to raising equity. “Why give up a piece of your business if you can finance?” he said. The company claims to have raised $30 million from investors prior to this loan.
The deal comes two months after Industrious, another New York-based co-working company, raised $25 million from VC investors, bringing the firm’s total funding to $76 million. Meanwhile WeWork secured a $300 million investment from the Japanese conglomerate SoftBank.
IDB is an active commercial real estate lender in New York. In July, for example, it financed the Orbach Group’s [TRDataCustom] $26 million acquisition of an Upper West Side rental building.