Industrious Taking WeWork's Former Manhattan HQ

Coworking giant Industrious is taking over competitor WeWork’s former headquarters space in midtown Manhattan, but it won’t be signing a lease.

Unlike WeWork, which is emerging from bankruptcy after shedding more than $11B in debt tied to office leases, the business model embraced by Industrious is focused on managing rather than owning or leasing office property, splitting the profits with landlords and reducing the risk.

Industrious has signed a 10-year agreement to manage 240K SF spread across 16 floors at Kato International’s Tower 49 at 12 East 49th Street, Bloomberg reported.

WeWork ended its operations at Tower 49 at the end of last month after unsuccessful negotiations to restructure its 300K SF lease encompassing 20 floors in the building, including WeWork’s corporate headquarters and coworking space for 2,800 WeWork members.

NYC-based Industrious evaluated 70 former WeWork office spaces but has only moved forward on a handful, CEO Jamie Hodari told Bloomberg.

Industrious jumped at the opportunity to occupy the Tower 49 space because it was in the market for a large NYC venue where it can experiment with different flex-office products, including event programming and design concepts that include modular offices, he said.

“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. “It served our problem of wanting to have one mega-Industrious in New York City.”

CBRE has invested $330M in Industrious, which now has more than 200 locations globally. The company’s office management strategy has thrived as an increasing number of landlords are turning to flex offices to compete in the post-pandemic world of hybrid work patterns. Industrious has seen its revenues triple between 2019 and 2023, according to a release.

“It’s been golden years for flex office,” Hodari told Bloomberg. “In recent years, landlords have felt more strongly that they need a flex option in their building if their building’s going to compete, so it has been easier to get management agreements done at great buildings across the country.”

WeWork, which had been an anchor tenant in Tower 49 since 2016, said in a statement last month that it was trying to relocate its members from the midtown tower to other WeWork locations in NYC. The company has relocated its corporate HQ to its Union Square outpost at 18 W. 18th Street.

Tower 49, a 45-story building, was built in 1986.

“We look forward to working with Industrious to create a new flexible workplace experience,” Hisamitsu Hara, Kato International’s senior VP and general manager, said in a statement. “Industrious has a proven track record of creating dynamic and productive work environments, which aligns perfectly with our vision for Tower 49.”