CBRE Acquires Full Ownership of Industrious Co-Working Space at $800 Million Valuation
In a significant move for the co-working industry, real estate powerhouse CBRE has announced its acquisition of the remaining stake in the co-working startup Industrious, elevating its valuation to over $800 million. This strategic acquisition highlights CBRE’s commitment to expanding its footprint in the evolving workspace market.
About Industrious: A Growing Co-Working Startup
Founded in 2013 and based in New York, Industrious has made waves in the co-working space, raising a total of $522 million from notable investors like Riverwood Capital and Fifth Wall Ventures. By February 2021, the company was valued at $571.4 million after securing a $200 million funding round, as reported by PitchBook.
Key Highlights of the Acquisition
- CBRE had previously invested in Industrious, acquiring a 40% equity interest and a $100 million convertible note.
- The acquisition of the remaining stake is valued at approximately $400 million.
- This deal is anticipated to close by the end of the month and is expected to enhance CBRE’s core EBITDA and free cash flow by 2025.
Industrious vs. WeWork: A Different Approach
Industrious has distinctly separated itself from competitors like WeWork, especially after WeWork’s dramatic decline and subsequent bankruptcy filing in November 2023. Unlike WeWork, which relied heavily on capital-intensive real estate leases, Industrious focused on:
- Partnering with property managers
- Providing tailored office design and workplace services
- Creating flexible, community-oriented spaces
Riverwood co-founder Francisco Alvarez-Demalde noted that Industrious experienced an impressive 24x growth since his firm’s investment began in 2016.
Future Plans for CBRE and Industrious
As part of this acquisition, CBRE plans to establish a new business segment known as Building Operations & Experience (BOE). This segment aims to integrate:
- Building operations
- Workplace experience
- Property management
Industrious CEO Jamie Hodari will lead this new unit while also serving as CBRE’s chief commercial officer, reflecting the company’s commitment to enhancing the user experience for its clients.
In a heartfelt message on Industrious’ blog, Hodari expressed, “When we started this company, it was a lark… Now, it’s something closer to a calling.” He emphasized the potential for the combined resources of CBRE and Industrious to transform the co-working experience and reach a broader audience.
Conclusion
This acquisition marks a new chapter for both CBRE and Industrious, indicating that the co-working model remains viable and essential for modern working environments. As CBRE continues to innovate and expand, the integration of Industrious is poised to redefine workplace experiences in the coming years.
