A flex office operator is poised to seize on rising interest in alternative office arrangements with a deal establishing the dominant player in the online listing marketplace.
IWG is investing about $350 million into the venture with office listing service Instant Group. The Wall Street Journal reported the two companies are aiming to create the world’s largest online marketplace for flexible office space.
The new venture will allow tenants to find and book spaces, including offices managed by the likes of IWG and WeWork, hotel meeting rooms and vacant corporate office space. The Journal reported that under the deal merging IWG’s digital offerings with the Instant Group, the Switzerland-based firm is set to own 85 percent of the business, while Instant management will own the remaining 15 percent.
A big portion of IWG’s investment in the business was used to buy out Bowmark Capital, the private equity firm behind Instant Group. The companies plan to take the business public within the next two year; Instant Group CEO Tim Rodber will helm the online marketplace business, which will also offer software to aid companies managing remote workers.
Demand for flexible office space and hybrid work arrangements are on the rise since the onset of the pandemic. A survey by JLL found 41 percent of office tenants expected to increase use of flexible office space due to the pandemic, which the Journal noted as a rise from 29 percent recorded in a 2020 survey.
Read more
Commercial
New York
WeWork’s losses narrow but are still huge
IWG CEO Mark Dixon told the Journal he believes the swell of interest means the timing is right for the online venture.
“Many have tried, but here we start off with a very strong position at the right time in the market, we believe,” Dixon said, according to the Journal.
IWG has previously shown its confidence in the flexible office market with new locations opened last year in New York. The company had plans for three new hubs in the city last year, including a 58,000-square-foot space at 250 Park Avenue.
Meanwhile, the most well-known player in the flexible office space, WeWork, saw its losses narrow in the fourth quarter and its revenue climbed by more than $50 million. The company expects $4 billion in revenue in 2022.
[WSJ] — Holden Walter-Warner