February 23, 2021
CBRE Group has announced the acquisition of a 35 percent interest in Industrious, a provider of flexible office space, which will also see CBRE’s existing flexible workplace firm Hana absorbed into Industrious. CBRE is now Industrious’ largest shareholder. In addition, CBRE is expected to acquire an additional 5 percent of Industrious in the coming weeks, which would result in a 40 percent total stake. The investment significantly increases CBRE’s participation in the flexible workplace sector and positions the company to meet rising demand from occupiers for agile space solutions — a trend that is being accelerated by the Covid-19 pandemic.
Recent CBRE surveys show that 86 percent of its occupier clients, which include many of the world’s largest global corporations, plan to incorporate flex office space in their real estate strategies, and 82 percent will favour buildings that offer a flex-office component.
Under the agreement, two CBRE executives — President & CEO Bob Sulentic and Global Chief Investment Officer Emma Giamartino — will join Industrious’ Board of Directors. As part of the transaction, CBRE’s flexible office business, Hana, will be merged into Industrious. Industrious has more than 100 locations in more than 50 US cities and specialises in flexible office operating models.
CBRE acquired its 35 percent ownership in Industrious in the form of primary and secondary shares. The consideration includes approximately $200 million in cash and the transfer of Hana.
“Our investment in Industrious is consistent with our view that flexible office space is playing an increasingly central role in companies’ occupancy strategies and aligns us with an exceptional operator and an outstanding leadership team that is executing a great strategy,” Mr. Sulentic said. “We have been building our Hana flex-space business expressly to meet the flex-space opportunity and Industrious now enables us to capitalize on it at scale with a portfolio of well-situated units in key markets.”
“Industrious is committed to being the voice that matters most in the future of work, and we share a vision with CBRE for delivering market-leading workplace experiences on a global scale,” said Jamie Hodari, Co-Founder and CEO of Industrious. “This investment grew out of a shared understanding that neither of our organizations can fulfill that vision alone. It’s a tremendous moment for Industrious to get this vote of confidence, and we look forward to expanding what we can do for our customers while keeping the same commitment to the highest customer satisfaction in the industry.”
When the transaction closes, the 10 existing Hana locations in the US and UK will be operated by Industrious. CBRE and Industrious will also work collaboratively to develop and bring to market new innovative solutions in the flex-space sector, offering products that will set a new standard for flexible, amenity-driven office environments. These offerings will combine Industrious’ demonstrated skills in operating market-leading flexible workplaces with CBRE’s extensive corporate occupier and investor relationships, together with broad service offerings and expertise.
CBRE’s Andrew Kupiec, who leads the Hana business, will oversee CBRE’s day-to-day relationship with Industrious once the Hana transaction is completed in the second quarter. Mr. Kupiec will also continue as the leader of CBRE’s Host employee experience platform.