Ikea Parent Launches Coworking Business at San Francisco Mall

Ingka Group, the parent company of home furnishings retailer Ikea, is launching a coworking business in the US in a partnership with NYC-based Industrious.

Ingka Centres is preparing to open its first coworking franchise—to be known as Hej!Workshop—at a vacant San Francisco mall located at 945 Market Street, according to report in CoStar. The Ikea sister company will occupy 46K SF at the 250K SF mall.

The mall on Market Street has been vacant since construction was completed in 2016. Ingka Centres acquired 945 Market Street for $198M in 2020 and began construction on the Hej!Workshop facility last year.

The Hej!Workshop—equipped, of course, with Ikea furnishings—is scheduled to open early next year. The owner also is planning an Ikea store to anchor the mall, which also will feature restaurants and entertainment.

In 2021, CBRE acquired a 35% stake in Industrious, which operates coworking spaces in management agreement with landlords. CBRE paid $200M for the stake and subsequently increased its investment by $130M.

A CBRE survey found that about 60% of office occupiers are planning to use coworking space for about 10% of their office needs within the next two years.

Coworking industry giant International Working Group (IWG) is targeting the Las Vegas market as a key hub in its western US expansion, which is set to open 37 new spaces this year, according to a report last month in Coworking Café.

The new IWG coworking locations in La Vegas include 302 E. Carson Street; 3820 Meadows Lane; 7401 West Charleston Boulevard; and 4220 South Maryland Parkway.

In a State of the Industry Report in March, Coworking Café said the national inventory of coworking space totals 5,612 locations encompassing more than 113M SF, with flex office space expanding beyond urban cores into suburbs.

While 113M SF is equivalent to less than 2% of the total office inventory in the US, this represents a tenfold increase in the flex office sector in the past 12 years. In 2010, JLL reported that the coworking sector encompassed about 12M SF.

The lion’s share of coworking spaces are concentrated in coastal markets including Manhattan, Los Angeles, Washington DC, Boston and Houston.

Coworking Café reported national median rates for open workspaces of $134, while dedicated desks have monthly subscriptions of $326 and virtual offices run $94. Monthly rates were higher in Manhattan and San Francisco.