WeWork’s former Midtown headquarters has been taken by a coworking competitor, Industrious.
Industrious said it signed a 10-year agreement to manage office space at Tower 49, where WeWork used to have its headquarters. Industrious will oversee roughly 240,000 square feet of space across 16 floors at the building at 12 E. 49th St.
The move comes after WeWork won court approval to exit bankruptcy, helping the company shed billions in debt and let go of money-losing leases across its massive office portfolio.
Industrious takes a different spin on the business, focusing more on management contracts with landlords instead of striking leases with the property owners. That helps the landlord and Industrious split profits and reduce risk. From 2019 through 2023, Industrious’s revenue has tripled, the firm said. It’s also been scouting new locations, some of which were former WeWork sites.
“We’ve probably considered about 70 takeovers of former WeWork space, and this is one of a very small number we’ve moved forward on,” said Jamie Hodari, Industrious’s chief executive officer.
His firm, which operates more than 200 locations globally, had been looking for a large office spot in New York where it could experiment with different products, such as event programming and design concepts like modular offices. When it was clear WeWork’s space would become available, the firm jumped on it.
“We loved the building, loved the location, and the landlord and us were willing to put real money into it to upgrade the space,” Hodari said. “It served our problem of wanting to have one mega-Industrious in New York City.”
While office landlords across the world have been hit by lower demand for space since the pandemic, some coworking firms have benefited. Tenants have often shifted toward smaller office footprints, wanting real estate that offers more flexibility.
“It’s been golden years for flex office,” Hodari said. “In recent years, landlords have felt more strongly that they need a flex option in their building if their building’s going to compete, so it has been easier to get management agreements done at great buildings across the country.”
Natalie Wong, Bloomberg , 2024-06-11 16:55:05
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