Published on Monday, February 22, 2021

CBRE is also shifting its own flex space unit to Industrious as it doubles down on this sector.


CBRE has acquired a 35% stake in flexible workplace provider Industrious and has plans in the coming weeks to acquire another 5% ownership for a total of 40%. The deal makes CBRE the company’s largest shareholder and significantly increases CBRE’s footprint in the flex workplace sector. <

CBRE paid $200 million for Industrious’ primary and secondary shares. The deal also includes the transfer of Hana, <CBRE’s own flex space offering. The transfer provides the necessary scale for CBRE to answer to the growing demand for flex space with a first class operator, Andrew Kupiec, CEO of Hana, tells When the transaction closes, the 10 existing Hana locations in the US and UK will be operated by Industrious.<

The company declined to provide a full valuation of the deal. <

Under the agreement, two CBRE executives—President & CEO Bob Sulentic and Global Chief Investment Officer Emma Giamartino—will join Industrious’ Board of Directors. Kupiec will oversee CBRE’s day-to-day relationship with Industrious once the Hana transaction is completed in the second quarter. He will also continue as the leader of CBRE’s Host employee experience platform.

“We are happy with the investment,” Kupiec says. “We wanted a large non controlling interest with a powerful commercial arrangement and this is exactly the arrangement CBRE has reached with Industrious.”<

CBRE and Industrious will also develop and bring to market new solutions in the flex-space sector. They see the space as target rich with recent CBRE surveys showing that 86% 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% will favor buildings that offer a flex-office component.<

There are two minds about the future of the flex workplace sector, the one embraced by CBRE and Industrious and the other illustrated by the <recent bankruptcy of Knotel. At the start of the month, it filed for bankruptcy relief under Chapter 11, with plans to be acquired by an affiliate of Newmark Group. It also plans to exit multiple locations in the US. <

The pandemic had a significant impact on the company, according to CEO and co-founder Amol Sarva. “The pandemic created a uniquely challenging operating environment, with significant impacts on leasing velocity and the rate of renewals in key markets, particularly New York and San Francisco,” he said in prepared remarks at the time. <