Real estate giant CBRE announced on Tuesday that it is acquiring the rest of the co-working startup diligentIn which it already has a large investment at a valuation of over $800 million.
Founded in 2013, based in New York diligent Raised a total of $522 million in funding from investors including Riverwood Capital and Fifth Wall Ventures. Its last known public valuation was $571.4 million in February 2021 when it announced a $200 million raise, according to Pitchbook. As of February 2023, it had 583 employees.
News of its acquisition at an $800 million-plus valuation is particularly interesting given that competitor WeWork, once valued at $47 billion, Filed for bankruptcy In November 2023.
Riverwood co-founder Francisco Alvarez-Demalde told TechCrunch that Industrious grew 24 times during the time his firm was an investor in the company. Riverwood Got the first share in the company in September 2016.
One way Industrious differs from WeWork can be found in the company’s previous business models. Industrious worked to move away from more capital-intensive real estate leasing for new locations to partnering with property managers to provide everything from lobby activation and services to office design, workplace services, and more.
The deal suggests the concept of co-working isn’t a bad idea for business, even if the biggest player is subject to a spectacular nose-dive. a bookA filmAnd A TV series Called “WeCrashed”.
CBRE was aware of Industrious’ growth in recent years that it has been an investor in the company since late 2020, acquiring an approximately 40% equity interest and a $100 million convertible note.
It is now acquiring the remaining equity stake For about $400 million, representing what it describes as an “implied enterprise valuation of approximately $800 million.” The deal is expected to close later this month.
As part of the acquisition, CBRE said it will create a new business segment called Building Operations and Experience (BOE) that will “integrate building operations, workplace experience and property management.” It expects the transition to 2025 core EBITDA and free cash flow to be “immediately exciting”.
Industrious CEO and co-founder Jamie Hodari will lead the new BOE business unit and serve as CBRE’s chief commercial officer.
In A Blog post On Industries’ website, Hodari wrote: “When we started this company, it was a lark. It was a fun idea at the right time. Now, in a world pushing us toward isolation and the narrow ten-inch frames of our phone screens, it’s something closer to calling: a place where people can step out of their homes and influence the world around them. Can come in contact with new people. And think, and act with kindness. Due to this calling, Industrious is joining CBRE, the world’s largest real estate company. We will have the resources to offer more to our members and the reach to give more people the opportunity to experience Industrious.”
The transaction is expected to be immediately accretive to 2025 core EBITDA and free cash flow.
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