Industrious Adds Manhattan Location
CBRE Group’s Industrious has signed its newest location in Manhattan, Industrious Lex & E 50th St. Starting this fall, the flex office provider will occupy the entire second floor, spanning 20,000 square feet, at 560 Lexington Ave. in Midtown East. Cushman & Wakefield negotiated on behalf of the tenant, while Rudin had in-house representation.
The new space will have 158 seats available for solo entrepreneurs, growing teams and established businesses. The amenity suite comes with a new café, lounge, conferencing area and outdoor space, currently created by Rudin within the tower.
The Lexington location will join Industrious’ other New York City spaces: Tower 49, at 12 E. 49th St.; Midtown on 50th St, at 135 W. 50th St.; Carnegie Hall, at 152 W. 57th St.; 1411 Broadway; Bryant Park off Fifth, at 25 W. 39th St.; 261 Madison; and Penn 1, at 250 W. 34th St.
Cushman & Wakefield’s Justin Halpern, Ed Wartels and Ben Bouganim assisted Industrious. Kevin Daly of Rudin represented building ownership.
A Midtown Manhattan office building
Built in 1980 and cosmetically renovated in 2015, the office building at 560 Lexington Ave. features floorplates averaging 17,204 square feet and 3,500 square feet of retail space, according to CommercialEdge information. The 22-story building is easily accessible to public transit and Grand Central.
The tower is LEED Silver-certified and gold-certified by WiredScore, featuring a building operation system that optimizes it through AI to reduce emissions. The property recently underwent a modernization program that involved the creation of a new lobby, addition of new elevator cabs and construction an on-site, glass-enclosed subway entrance for the nearby train station.
State of the NYC coworking market
CommercialEdge listed Manhattan as the top coworking market in the U.S. for total square footage as of February. Chicago and Los Angeles were the other two metros on the podium.
Michael T. Cohen, a principal with Williams Equities, which owns and operates approximately 3.5 million square feet of NYC office space, told Commercial Property Executive, “Coworking is back. Once again, it is part of the mix of tenants expanding into and absorbing office space in Manhattan.”
He added that the epoch of coworking firms “signing a market-rate lease and absorbing the lion’s share of the risk is gone for good.” Similarly, few New York City building owners have been willing to accept the so-called “management deals” under which they enjoy the “upsides and downsides.”
As such, the sophisticated coworking operators have developed new leasing models that involve sharing their profits and losses with the landlord, Cohen mentioned.
READ ALSO: Where’s the Coworking Sector Headed?
“WeWork appears to be making a comeback by leveraging its occupier relationships and taking space where it has a pre-existing commitment to fill. On the other hand, Industrious is exploiting the demand for office suite occupiers and landlords looking to add an amenity to their building and diversify their product mix.”
Cohen said IWG and others are all scouting suitable locations across the city.
“You can expect many coworking lease announcements as the year progresses,” he added.
Adapting to businesses’ needs
Flex space providers’ ability to adapt to businesses’ evolving needs and deliver high-quality office and conference spaces has made them a valued partner for local banks, hedge funds and companies “that simply don’t have enough space for all of their employees,” said Jeff Gural, chairman of GFP Real Estate.
Lee Brodsky, CEO of BEB Capital, told CPE, “While many coworking operators have come and gone, flexible office space has remained essential,” underscoring that today’s hybrid and remote workers “seek spaces that foster community, productivity and connection—beyond a home office or coffee shop.”
Recognizing this demand, BEB Capital launched Work at 26 Harbor Park Drive in Long Island, creating a coworking space designed for professionals to work alongside like-minded individuals in the community.
“Since our February launch, we’ve seen strong demand for private offices and expect momentum to continue growing in the months ahead,” Brodsky concluded.
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