Industrious Takes Over WeWork’s Former Midtown HQ in 240K-SF Deal
By Abigail Nehring June 10, 2024 7:08 pm
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Flexible office company Industrious will continue its growth spurt by taking over the former Midtown headquarters of archrival WeWork (WE).
Industrious signed a 10-year partnership agreement to develop and operate 240,000 square feet of flexible office space across 16 floors of Kato International’s Tower 49, a spokesperson for the 12-year-old Industrious announced Monday. The deal was first reported by Bloomberg.
The agreement puts Industrious in charge of floors two through 11 and floors 15, 17, 18, 19, 21 and 22 of the 45-story tower.
The spokesperson did not disclose the other terms of the deal with Kato, and declined to share pricing information for the flexible office space Industrious will manage at the building between East 48th and East 49th streets. Average asking rent for office space in the submarket near Grand Central Terminal was $67.03 per square foot in the first quarter of 2024, according to a Cushman & Wakefield report.
Coworking giant WeWork dropped its 300,000-square-foot lease at the 45-story office tower in late May, the same week it finalized its plan to emerge from bankruptcy.
A spokesperson for WeWork declined to comment on the latest turn of events at its former headquarters.
The two companies have contrasting business models, with Industrious focused on signing partnership agreements it says are mutually beneficial for office landlords. The approach is “totally different from WeWork’s model and is designed to de-risk our business for the long haul,” Industrious Chief Commercial Officer Anna Levine wrote on the company’s blog last year. (WeWork tried to pivot to similar arrangements with little success in 2019.)
Robert Bakst, who represented Kato in-house, called the deal “a match made in heaven.”
“Industrious has built a reputation for delivering excellence in the workplace and being a trusted partner and operator,” Bakst said in a statement.
It’s unclear if Industrious hired its own brokers to arrange the deal. The spokesperson did not provide more information.
“Our goal is to transform this space into a vibrant community where businesses thrive,” Jamie Hodari, Industrious’s CEO and co-founder, said in a statement.
The Midtown building at 12 East 49th Street will be Industrious’ 23rd New York City location. It plans to begin renting the space to members in July.
Abigail Nehring can be reached at anehring@commercialobserver.com.
