Industrious has taken over a nearly 53,500-square-foot location at 100 Bayview that initially served as the first Newport Beach spot for WeWork; it shuttered that location in February as part of a larger companywide consolidation caused by long-standing internal issues and exacerbated by the coronavirus.
The new lease serves as evidence for a prediction noted by brokers in the wake of the pandemic, in which stronger coworking companies would recover lease givebacks from harder-hit shared space firms.
“Industrious has a demonstrated and proven track record, and their unique business model is how they have sustained their success throughout the pandemic,” said Jason Purvis, senior managing director of Granite.
Industrious now has three locations in Orange County that operate under its own name. It also counts two TechSpace locations, in Aliso Viejo and Costa Mesa, after acquiring the firm—OC’s longest-running area provider of flexible workspace—in 2019.
The Newport Beach location is set to open next month and will include 104 private offices and suites, 19 conference rooms, common space, a café and a wellness room. Granite said that Industrious tenants will also have access to the office complex’s “large landscaped, outdoor workspace.”
Business Model
Industrious gives credit to its management model as to how the firm has been able to expand in spite of the pandemic.
Instead of signing a traditional lease with a landlord, the company instead pairs in a cost-sharing management agreement with property owners, a method it first adopted in 2018.
“It’s more sustainable for coworking operators and landlords to be sitting on the same side of the table,” said Doug Feinberg, director of real estate at Industrious.
This model is beneficial to the landlords too, notes Granite, which acquired 100 Bayview in 2018.
The six-story property—near the intersection of Jamboree Road and South Bristol Street, about 2 miles from the airport—sold for a little more than $125.6 million, according to property records.
Partnerships
It’s the second such landlord partnership in Orange County for Industrious, which first paired with Equity Office Management LLC, also known as EQ Office, as it unveiled Canvas, a repositioning that combined two adjacent Costa Mesa office complexes into a nearly 551,000-square-foot property.
It’s also the second partnership between Granite and Industrious, following the first flexible office lease at Granite’s 500@TheBrand office in Glendale.
2019 TechSpace Buy
Granite says its deals with Industrious stem from its new leasing platform, called Evolve, which “offers a broad menu of leasing solutions from conventional, move-in-ready, short-term, and on-demand space.”
This includes a hub-and-spoke coworking model, in which tenants in any Southern California Granite property have nationwide access to Industrious locations.
“It also opens up flexible options for customers in the building, allowing smaller tenants to expand into a larger space, or larger companies to contract into a more flexible option as their space needs change,” Feinberg said, adding that the company specializes in offering private suites for small companies, but has noticed growing demand from larger companies seeking out flexible lease terms in the wake of the pandemic.
