Peri Demestihas, Industrious’ senior director of real estate, said his company aims to open its fifth South Florida location at 350 Lincoln Road this summer. It will occupy the space previously filled by WeWork (NYSE: WE) from November 2014 until August 2018, when the company was forced to scale back its operations.
“We are really excited about it. South Florida is the hottest market in the country for us,” Demestihas said.
Nancy Cibrano, asset manager for The Wings Group, the New York-based landlord of the Lincoln Building, stated that Industrious beat out other coworking office companies who sought WeWork’s old space. The real estate agency paid $14 million for the five-story Lincoln Building in April 2008. The property was built in 1946.
“After a very long vetting process, Industrious was a clear choice with its proven success record in being the highest-rated flexible workspace provider,” Cibrano said in a press release.
The South Florida office market in general has been thriving thanks to the migration of out-of-state companies into the region as well as local expanding companies. Brokers credit the state’s low regulations, good weather, and lack of income tax for the office market upswing.
The office market in Miami Beach is surging as well, thanks to wealthy hedge fund managers buying homes in the city. The pandemic brought a wave of monied residents would rather have an office in close proximity to their mansions than to drive several miles in traffic to downtown Miami. That demand has pushed up the average asking rate from office landlords in the greater Miami Beach area to $53.73 a square foot, according to Colliers (Nasdaq: CIGI). It has also inspired Miami Beach officials to encourage more Class A office development in an effort to diversify the economy beyond hospitality.
Demestihas said his company is well aware of the “huge influx of decision-makers who have moved to South Beach” and wish to have an office nearby. Industrious is also appreciative of the youthful atmosphere and pedestrian friendly atmosphere of South Beach.
“It is a creative, cool place and there is a lot of appeal to the walkability of this location,” he said.
After being trounced during the pandemic, coworking spaces appear to be on a rebound, with demand for flexible office space increasing by 50% between the first and fourth quarters of 2021, according to a study by Denver-based Upsuite Corp.
Within South Florida, Chilean company Co-Work LatAm is rapidly expanding its presence in South Florida due to the demand for leases that are far shorter than the three-year terms required by most landlords.
Industrious has additional locations planned for South Florida, too. Operating out of the Sabadell Financial Center in Brickell since March 2019, the company will open office locations in Aventura, Wynwood, and downtown West Palm Beach.
Demestihas said Industrious’ expansion is partly due to the company’s model of partnering with office landlords.
“In our partnership deals, the landlords income is dependent on our income,” he said.
And part of that deal is providing the flexible office space that most landlords are unable to provide on their own. “Our job is to take on this demand [for flexible leases] on behalf of landlords,” Demestihas said.
Started by Jamie Hodari and Justin Stewart in 2012, Industrious has more than 100 locations in 50 cities in the United States, Great Britain, and Singapore. Industrious offers spaces for individuals and companies and members have access to amenities that include private conference rooms. Corporations that have used Industrious space in the past and present include Cisco (Nasdaq: CSCO), Lyft (Nasdaq: LYFT), Spotify (NYSE: SPOT), Heineken (OTC Markets: Heiny), Chipotle (NYSE: CMG), Pinterest (NYSE: PINS), and Salesforce (NYSE: CRM).