CBRE buys the rest of the collaborative company Industrious at a valuation of $800 million

Real estate giant CBRE announced on Tuesday that it has acquired the rest of the co-working startup Industriousin which he already had a considerable investment, at a valuation of more than $800 million.

Founded in 2013, based in New York Industrious raised a total of $522 million in funding from investors including Riverwood Capital and Fifth Wall Ventures. Its last known public valuation was $571.4 million in February 2021 when it announced a $200 million raise, according to PitchBook. It had 583 employees as of February 2023.

The news of its acquisition at a valuation of $800 million more is particularly interesting considering that competitor WeWork, once valued at $47 billion, he filed for bankruptcy in November 2023.

Riverwood co-founder Francisco Alvarez-Demalde told TechCrunch that Industrious grew 24x during the time his firm was an investor in the company. Riverwood first acquired a share in the company in September 2016.

One way Industrious differs from WeWork can be found in the company’s previous business models. Industrious had worked to move away from more capital-intensive real estate leases for new locations to simplify partnering with property managers to provide everything from lobby activation and service to office design, labor services, etc.

The agreement suggests that the concept of co-working is not a bad idea for a business, although the spectacular dive of the biggest player was the subject of a booka movieand a TV series called “WeCrashed”.

CBRE has seen the growth of Industrious in recent years, considering that it was an investor in the company from the end of 2020, acquiring about 40% of the equity and a convertible note of $ 100 million.

The remaining stake is now being acquired for about $400 million, reflecting what he described as “an implied enterprise valuation of about $800 million.” The deal is expected to close later this month.

As part of the acquisition, CBRE said it will create a new business segment called Building Operations & Experience (BOE) that will “unify building operations, work experience and property management.” It expects the transition to be “immediately accretive” to core 2025 EBITDA and free cash flow.

Industrious CEO and co-founder Jamie Hodari will lead the new BOE business unit and serve as CBRE’s commercial director.

In a blog post on the website of Industrious Hodari wrote: “When we started this company, it was a lark. It was a fun idea at the right time. Now, in a world that pulls us towards isolation and the narrow framework of ten inches of our phone screen, it’s something closer to a call: a place where people can get out of their house and impact the world around them, be exposed to new people and ideas, and be treated with kindness.This call that’s why Industrious is joining CBRE, the largest real estate firm in the world. We’ll have the resources to offer our members more, and the reach to offer more people the chance to experience Industrious.”

The transaction is expected to be immediately accretive to core 2025 EBITDA and free cash flow.