Flexible workspace provider Industrious has taken over another former location of rival WeWork in New York as it looks to take advantage of hybrid work patterns.
Industrious, backed by brokerage giant CBRE, opened a new location Monday at 11 Park Place in the southeast Tribeca neighborhood, the company said in a statement.
The Stahl Organization owns the 205,000-square-foot building, according to CoStar data. Colliers, which arranged the deal with Industrious, is the leasing and managing agent, an Industrious spokesperson told CoStar News.
The Manhattan location, spanning about 40,000 square feet across three floors, includes dozens of private offices, an open coworking space, six private suites, and several meeting rooms that Industrious said are “perfect” for “solo entrepreneurs, growing teams and established businesses.”
Industrious Senior Real Estate Manager Natalie Levine said in the statement the deal is its "first-ever partnership with building ownership and Colliers," describing it as a “real win-win partnership that provides our members a prime location just off City Hall Park.”
Industrious has over 25 locations between Manhattan and Brooklyn. In contrast, WeWork has 31 locations in New York, according to its website.
Industrious this year announced it was taking over WeWork’s former headquarters space, spanning 240,000 square feet and covering 16 floors, at Tower 49 at 12 E. 49th St. in a 10-year management agreement model with landlord Kato International. The company said at the time it plans to open as many as 50 locations each year globally. That office space was set to become Industrious’ largest as the New York firm, founded in 2012, typically has locations across the United States and in the United Kingdom averaging 30,000 square feet to 50,000 square feet, Industrious CEO Jamie Hodari told CoStar News at the time.
Revenue sharing
Industrious’ expansion comes as the company has been moving to management agreement models with landlords that do away with traditional leasing risks.
About 90% of Industrious’ over 200 global locations are structured as management agreements that involve some profit or revenue sharing with landlords instead of a traditional lease, Hodari told CoStar in June, adding the company has been profitable since the end of last year with the “vast majority” of each of its locations also in the black.
As WeWork has rejected or restructured leases as part of its moves to cut leasing costs before exiting Chapter 11 bankruptcy protection in June, rivals such as Industrious or industry giant IWG, which owns brands including Spaces and Regus, have been eyeing some of its former locations. For instance, IWG this month signed a 93,400-square-foot deal across floors six to 11 at the mixed-use Metropolitan Tower at 142 W. 57th St. that's set to become an IWG location under its Spaces brand.
As employers try to navigate the desire to bring more workers back against the hybrid work trend of spending just some days of the week in the office, various studies have shown demand for flexible workspace is poised to benefit.
The majority of remote, hybrid and fully-in-office companies said they plan to increase their office space in the next two years, primarily through flexible workspace, according to a September survey of 500 business decision-makers in the United States and United Kingdom conducted by WeWork. For instance, 59% of companies that plan to expand their workspace in the next two years chose flexible over traditional offices, including nearly three-quarters of remote companies, the study said.