CBRE Acquires Full Stake in Industrious at $800M Valuation
A Strategic Move in the Co-Working Space
Real estate powerhouse CBRE has announced the full acquisition of co-working startup Industrious at an impressive $800 million valuation. This deal marks a significant milestone in the evolving flexible workspace industry.
Key Deal Highlights
- Valuation: $800 million enterprise value
- Transaction Size: Approximately $400 million for remaining equity
- Expected Closing: Later this month
- New Business Unit: Formation of Building Operations & Experience (BOE) segment
Industrious: A Success Story in Flexible Workspaces
Founded in 2013 and headquartered in New York, Industrious has emerged as a leader in the co-working sector with a distinct business model:
- Funding History: $522 million raised from notable investors including Riverwood Capital and Fifth Wall Ventures
- Previous Valuation: $571.4 million in February 2021
- Employee Base: 583 as of February 2023
- Growth Trajectory: 24x expansion during Riverwood Capital’s investment period
Differentiating Factors from WeWork
Industrious set itself apart through:
- Capital-light partnership model with property managers
- Comprehensive service offerings including:
- Lobby activation
- Office design
- Workplace services
Strategic Implications for CBRE
This acquisition builds on CBRE’s existing 40% stake in Industrious, acquired in late 2020 along with a $100 million convertible note. The deal will:
- Create immediate value for 2025 core EBITDA and free cash flow
- Establish a new Building Operations & Experience (BOE) segment
- Combine building operations with workplace experience and property management
Leadership Transition
Jamie Hodari, Industrious CEO and co-founder, will take on dual roles:
- Head of the new BOE business unit
- CBRE’s Chief Commercial Officer
In a company blog post, Hodari emphasized the strategic vision: “Joining CBRE gives us the resources to expand our member offerings and bring the Industrious experience to more people worldwide.”
Industry Context: The Resilience of Co-Working
This transaction demonstrates the continued viability of the co-working model, despite the well-publicized challenges faced by industry giant WeWork. The deal suggests that:
- Properly executed co-working concepts remain valuable
- Strategic partnerships can create sustainable business models
- The demand for flexible workspace solutions persists
The acquisition positions CBRE as a major player in the evolving future of work environments, combining traditional real estate expertise with innovative workplace solutions.
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