WeWork Inc. has lost its former New York City headquarters to coworking rival Industrious.
What Happened: Industrious signed a 10-year deal to manage office space at Tower 49 in midtown Manhattan, previously occupied by WeWork, Bloomberg reported on Monday.
Industrious will oversee approximately 240,000 square feet of space across 16 floors at Kato International's 12 E. 49th St. This move follows WeWork’s recent court-approved bankruptcy exit, which allowed the company to reduce debt and offload unprofitable leases.
Industrious, which focuses on management contracts with landlords rather than leasing properties, has seen its revenue triple from 2019 to 2023. The firm has been actively scouting new locations, including former WeWork sites.
Industrious CEO Jamie Hodari stated, "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."
Hodari added that Industrious had been seeking a large office space in New York to experiment with new products and design concepts. The availability of WeWork's space presented an ideal opportunity. "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.
Despite the global decline in office space demand post-pandemic, coworking firms like Industrious have thrived. Tenants are increasingly opting for smaller, flexible office spaces.
Why It Matters: This development comes after a series of significant events for WeWork. In April, former CEO Adam Neumann proposed a $600 million bid to regain control of the company amid its bankruptcy proceedings. Neumann’s attempt was part of WeWork’s broader efforts to secure funding and avoid a sale, as the company required up to $400 million in fresh capital to emerge successfully from bankruptcy.
In June, Anant Yardi, a low-profile software tycoon, took control of WeWork as his company became the largest shareholder. This transition followed a federal bankruptcy court’s decision to hand over the company to its creditors. Yardi, who built a multibillion-dollar fortune through his company Yardi Systems, specializes in property management software.
Image: Shutterstock/ Tada Images
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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