CBRE Group, Inc. Acquires 35 Percent Interest in Industrious, Leading Provider of Flexible Space Solutions

Download as PDF

CBRE’s Stake Expected to Grow to 40 Percent; CBRE to Have Two Seats on Industrious Board;
Industrious to Take Ownership of CBRE Hana;
CBRE and Industrious to Innovate on Future Flexible Workplace Solutions

DALLAS--(BUSINESS WIRE)-- CBRE Group, Inc. (NYSE:CBRE) today announced the acquisition of a 35 percent interest in Industrious, a leading provider of premium flexible workplace solutions in the U.S. CBRE is now Industrious’ largest shareholder. In addition, CBRE is expected to acquire an additional 5 percent of Industrious in the coming weeks, which would result in a 40 percent total stake.

The investment significantly increases CBRE’s participation in the flexible workplace sector and positions the company to meet rising demand from occupiers for agile space solutions — a trend that is being accelerated by the Covid-19 pandemic. Recent CBRE surveys show 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.

Under the agreement, two CBRE executives — President & CEO Bob Sulentic and Global Chief Investment Officer Emma Giamartino — will join Industrious’ Board of Directors. As part of the transaction, CBRE’s flexible-space solutions offering, Hana, will be merged into Industrious. Industrious has more than 100 locations in more than 50 U.S. cities and specializes in asset-lite flexible workplace operating models.

CBRE acquired its 35% ownership in Industrious in the form of primary and secondary shares. The consideration includes approximately $200 million in cash and the transfer of Hana.

“Our investment in Industrious is consistent with our view that flexible office space is playing an increasingly central role in companies’ occupancy strategies and aligns us with an exceptional operator and an outstanding leadership team that is executing a great strategy,” Mr. Sulentic said. “We have been building our Hana flex-space business expressly to meet the flex-space opportunity and Industrious now enables us to capitalize on it at scale with a portfolio of well-situated units in key markets.”

“Industrious is committed to being the voice that matters most in the future of work, and we share a vision with CBRE for delivering market-leading workplace experiences on a global scale,” said Jamie Hodari, Co-Founder and CEO of Industrious. “This investment grew out of a shared understanding that neither of our organizations can fulfill that vision alone. It’s a tremendous moment for Industrious to get this vote of confidence, and we look forward to expanding what we can do for our customers while keeping the same commitment to the highest customer satisfaction in the industry.”

When the transaction closes, the 10 existing Hana locations in the U.S. and U.K. will be operated by Industrious.

CBRE and Industrious will also work collaboratively to develop and bring to market new innovative solutions in the flex-space sector, offering products that will set a new standard for flexible, amenity-driven office environments. These offerings will combine Industrious’ demonstrated skills in operating market-leading flexible workplaces with CBRE’s extensive corporate occupier and investor relationships, together with broad service offerings and expertise.

CBRE’s Andrew Kupiec, who leads the Hana business, will oversee CBRE’s day-to-day relationship with Industrious once the Hana transaction is completed in the second quarter. Mr. Kupiec will also continue as the leader of CBRE’s Host employee experience platform.

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services; and development services. Please visit our website at www.cbre.com. We routinely post important information on our website, including corporate and investor presentations and financial information. We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in the Investor Relations section of our website at https://ir.cbre.com. Accordingly, investors should monitor such portion of our website, in addition to following our press releases, Securities and Exchange Commission filings and public conference calls and webcasts.

About Industrious

Industrious’ private offices and suites — the highest-rated workspaces in the industry — provide the most sustainable option for companies to manage newly distributed teams for the long term. We make it easy to find an office that works for you — even if you come in just once or twice a week. Recognized as one of America’s 500 fastest-growing companies in 2020 by Inc. Magazine, Industrious offers flexible terms and locations in more than 50 U.S. markets. For more information, visit Industriousoffice.com.

Forward-Looking Statements

Certain of the statements in this release regarding the acquisition of an ownership interest in Industrious and the transfer of CBRE Hana to Industrious that do not concern purely historical data are forward-looking statements within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are made based on our management’s expectations and beliefs concerning future events affecting us and are subject to uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Accordingly, actual performance, results and events may vary materially from those indicated in forward-looking statements, and you should not rely on forward-looking statements as predictions of future performance, results or events. Numerous factors could cause actual future performance, results and events to differ materially from those indicated in forward-looking statements, including, but not limited to, our ability to effect the sale of CBRE Hana to Industrious, the further development of the flexible-office space market and occupiers’ appetite for housing their operations in such space, Industrious’ ability to execute its strategy to take advantage of the growth of the flexible-office space market and the ability of CBRE and Industrious to work together successfully in the pursuit of that strategy, as well as other risks and uncertainties discussed in our filings with the U.S. Securities and Exchange Commission (SEC). Any forward-looking statements speak only as of the date of this release. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. For additional information concerning factors that may cause actual results to differ from those anticipated in the forward-looking statements and other risks and uncertainties to our business in general, please refer to our SEC filings, including our Form 10-K for the fiscal year ended December 31, 2019 and Form 10-Q for the quarter ended September 30, 2020. Such filings are available publicly and may be obtained from our website at www.cbre.com or upon request from the CBRE Investor Relations Department at investorrelations@cbre.com.

Kristyn Farahmand
Investors
214.863.3145

Steve Iaco
Media
212.984.6535

Source: CBRE Group, Inc.

Released February 22, 2021