CBRE Group has acquired a 35 percent stake in Industrious ahead of the flex-office provider’s possible 2021 IPO.
“We are big believers in the flexible workspace arena and see a tremendous opportunity,” CBRE CEO Bob Sulentic said in an interview with Bloomberg News.
The investment makes CBRE the largest shareholder in Industrious, and it’s not done yet: The real estate giant plans to buy another 5 percent stake in the company in the next few weeks, Sulentic said.
Dallas-based CBRE paid about $200 million in cash for primary and secondary shares, and is transferring its own flexible workspace brand Hana, which operates 10 locations in the U.S. and U.K., to Industrious as part of the transaction, the companies said.
The deal values Industrious at more than $600 million, a person with knowledge of the matter told the publication. Sulentic and Emma Giamartino, CBRE’s global chief investment officer, are joining Industrious’ board.
Industrious co-founder and CEO Jamie Hodari said the firm’s focus on customer service and its business model based on management agreements with landlords, rather than traditional leases, have been validated.
“It’s partly why we’ve been able to spend the last year planting while others were pruning,” Hodari said.
Industrious has told The Real Deal that the company plans to go public later this year or early 2021.
The move comes at a time when Industrious’ rivals in the flex-office space have been in retreat. Regus and Knotel recently filed for bankruptcy, with the latter set to be acquired by Newmark Group. WeWork is “rightsizing” its footprint as it looks to achieve profitability and contemplates an IPO sometime this year. [Bloomberg News] — Akiko Matsuda
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