CBRE is entering the coworking market. Hana, the company’s new wholly owned subsidiary, will partner with property owners to meet the growing demand for flexible office space solutions, while also giving them more control over how the space is designed and operated.
Hana, which means “work” in Hawaiian, will roll out starting in mid-2019 in 25 top global metros, with an initial focus on the U. S. and London, Hana CEO Andrew Kupiec told Commercial Property Executive. Each space is slated to have three components: Hana Team, providing private office suites; Hana Meet, offering conference rooms and event space that can be rented on an hourly, daily or weekly basis; and Hana Share, providing traditional coworking space in which users share services, amenities and technology in a communal setting.
Space requirements will vary based on the local market infrastructure and tenant requirements, but Kupiec said that the company anticipates sites to average about 45,000 to 50,000 square feet.
“Our model will be largely composed of team suites to serve high-growth and enterprise clients, but we will also have traditional coworking amenities available,” he said. “Whether a Hana member wants a comfortable, private space to focus, accessible food and beverage while they work in a common area, or a dedicated meeting room for purposeful collaboration, Hana has a turnkey solution suited for them.”
Asked whether New York City, where WeWork and Knotel have been expanding rapidly in the past year, is a priority, Kupiec said he couldn’t speculate how much of the portfolio would be located there: “While we have a strong pipeline of partners that we look forward to sharing in the coming months, we absolutely view New York City as a viable and strong market for Hana.”
Beginning in 2019, Hana will be the third component of CBRE’s Real Estate Investments business joining CBRE Global Investors (investment management) and Trammell Crow Co. (development services). The Hana team is led by Kupiec, who joined CBRE from Zipcar in 2017 and most recently served as global president of CBRE 360, the firm’s workplace experience offering that connects building occupants to services and amenities.
Joining Kupiec in leadership positions are Scott Marshall, who previously led CBRE’s investor leasing service line in the Americas as president & chief development officer, and Brian Harrington, chief experience officer & former chief product officer of CBRE 360.
“The way space is being used is evolving rapidly. Companies want the flexibility to adjust their occupancy to meet changing business needs and a better workplace experience to attract and retain top talent,” Bob Sulentic, CBRE president & CEO, said in a prepared statement.
CBRE’s decision to launch its own coworking and flexible space service offering comes as competing companies such as WeWork and Knotel are growing, particularly in Manhattan. Knotel, which currently offers full-floor, full-service branded office space at nearly 100 locations in New York, San Francisco, London and Berlin, announced last week that it had closed a $60 million round of funding and signed an 11,940-square-foot lease with GFP Real Estate at 80 Eighth Ave. in Manhattan.
WeWork also announced a major new Manhattan lease last week, taking the entire office portion at 149 Madison Ave.—115,000 square feet—a 12-story building owned by Columbia Property Trust. This is the third Manhattan lease between the two companies.
WeWork’s rapid growth inspired a case study by a leading European credit rating agency, examining whether the coworking giant was growing too fast and posing too much of a risk for property owners. The case study from Scope Ratings and Scope Risk Solutions addressed the growing competition and the dependence on many short- to mid-term leases. However, the paper also noted that WeWork is adding larger corporate clients to its roster.
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