CBRE has struck a deal to buy a full stake in co-working space firm Industrious National Management Company, LLC in a move that will include the formation of a new unit.
Before acquiring 100 percent control, CBRE owned 40 percent of Industrious and a $100 million convertible note. Now, the Dallas-based firm is acquiring the remaining 60 percent for roughly $400 million, bringing the implied enterprise valuation of Industrious to about $800 million.
With the deal, CBRE said it will create a segment called building operations & experience (BOE), which will be headed by Jamie Hodari, co-founder and CEO of Industrious. Plus, Hodari will assume the role of chief commercial officer for CBRE, which will consist of carrying out marketing and branding activities for the new controlling company.
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The new unit will help CBRE with building operations, property management, and workplace experience to provide solutions across multiple CRE asset classes including office, data centers, and warehouses. BOE will consist of not only Industrious but other CBRE segments including local facilities management, enterprise facilities management, and property management. All four of these combined for roughly $20 billion in revenue last year.
Also, Industrious has seen revenue surge at a compound yearly rate of greater than 50 percent since 2021. In the process, it has grown its workplace locations to more than 200 in over 65 cities worldwide.
“The global economy needs physical spaces to make it hum — safe and efficient logistics centers for our goods, magnetic offices for our teams and secure and resilient data centers for our information. Running these spaces with excellence requires sophistication at scale,” Hodari said in a statement.
“I have found CBRE to be second-to-none in this respect, and I’m thrilled to be joining — not just because of how great it already is, but because of the opportunity ahead of us. I believe the new Building Operations & Experience segment will transform how buildings are operated, creating immense value for building users and owners.”
Moreover, with the news, CBRE said its chief operating officer Vikram Kohli has been promoted to CEO of advisory services, which is the company's largest business unit, and will keep his original job title as well. The new responsibility will include leading the growth of CBRE's advisory services, which consists of capital markets and valuations, as well as leasing.
With BOE now including four components, CBRE now has three other business units in 2025. That's advisory services, real estate investments, and project management.
CBRE expects its purchase of Industrious to close later in January.
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