CBRE, the world’s largest real estate services firm, is jumping into the growing business of flexible workspace.
The $13.75 billion company has launched Hana, a workspace provider that aims to compete with major coworking firms including WeWork, Regus and Knotel.
Unlike many other flexible office companies that primarily lease their spaces and operate them independently, Hana will instead focus exclusively on partnership agreements with landlords in which the brand will co-invest in the cost of building out workspaces, manage them, and then share in the revenue—forgoing rent.
“We think that as the flexible workspace market becomes more attractive to owners, they’ll view our model as superior,” said Hana CEO Andrew Kupiec. “There are a lot of landlords who want to tap into the growth in the flexible workspace market but don’t want to operate these spaces themselves.”
CBRE plans to grow Hana across the globe, but Kupiec said New York City, where coworking has expanded rapidly to encompass about 4 percent of the office market, will be a focus for the brand. About 1 percent of the global supply of Class A office space offers flexible terms, Kupiec said, and he and other stakeholders in the coworking business see room for more market share.
“We see it expanding to 15 percent or 20 percent of the market,” Kupiec said.
He said Hana is close to deals to open locations in the city, although he would not yet disclose where. He estimated a typical space will be about 50,000 to 60,000 square feet and cater to larger office users who want partitioned, private space while also enjoying access to communal amenities, conference facilities and networking opportunities.
“Sophisticated occupiers want private space, but they also want the traditional coworking amenities,” Kupiec said.