Dive Brief:
- CBRE announced Tuesday that it has agreed to acquire the remaining 60% of Industrious National Management Co. for $400 million and plans to consolidate its building operations and management segments into a single business unit.
- The new unit, Building Operations & Experience, will consist of CBRE’s enterprise facilities management, local facilities management and property management segments in addition to Industrious, the firm said in a press release.
- The transaction and restructuring are intended to help it “deliver scalable, future-ready solutions for offices, data centers, warehouses and other facilities,” CBRE said.
Dive Insight:
With more than 200 units across 65 cities, Industrious is one of the top U.S. coworking space operators. Together with Regus, HQ, Vast Coworking, WeWork and Spaces, they account for nearly 25% of all flex space and more than 33% of all coworking square footage, according to Yardi’s Q3 2024 National Office report, released in late November.
Despite efforts by employers to bring workers to the office more frequently — with major corporations like JPMorgan Chase, Goldman Sachs and Amazon implementing five-day-a-week attendance policies — employees are exercising a preference for flexibility and driving demand for flexible office options, according to Cushman & Wakefield’s 2025 flexible office outlook. Coworking spaces can help employers offer greater schedule and location flexibility, the outlook notes.
In Industrious’ asset-light business model, it operates coworking space in a profit-sharing agreement with the property owner. The company’s revenue has grown at a compound annual rate of over 50% since 2021, CBRE said. It has been adding roughly 30 to 50 new locations annually, but it intends to significantly increase that expansion rate as a part of CBRE, Hodari told the Wall Street Journal.
CBRE acquired an approximately 40% equity interest in Industrious in late 2020 and provided a $100 million convertible note. Its acquisition of the rest of the company underscores its “strong conviction about Industrious’ expertise in workplace experience and operations and the long-term growth prospects for the flexible workplace market,” CBRE said. The transaction is expected to close by the end of January.
Industrious plus the CBRE business segments combining with it to form the new BOE segment together produced approximately $20 billion of combined revenue in 2024 across a more than 7 billion-square-foot global property and corporate facilities management portfolio, the company said. Industrious co-founder and CEO Jamie Hodari will lead the segment as its CEO and become CBRE’s chief commercial officer .
“The global economy needs physical spaces to make it hum — safe and efficient logistics centers for our goods, magnetic offices for our teams and secure and resilient data centers for our information. Running these spaces with excellence requires sophistication at scale,” Hodari said in a statement.
Chief operating officer Vikram Kohli takes on the additional title of CEO of advisory services, the company’s largest business segment, which consists of leasing, capital markets and valuation services, CBRE said. In addition to BOE and advisory services, the reorganized CBRE will have two other business segments: project management and real estate investments.