A national workspace network is eyeing a new destination at the buzzing East Market retail and entertainment mall.
The so-called Fashion District, which officially opened on Sept. 19, will soon be home to Industrious’ third Philly coworking space, following its four-year-old space at 230 S. Broad St. and a forthcoming space at Two Liberty Place in the first quarter of 2020. Industrious operates more than 85 locations over nearly 50 cities nationwide.
Expected to open in Q2, Industrious at 9th and Market streets will include 47,000 square feet of shared and private offices and amenities such as a cafe with daily breakfast, WiFi, access to Industrious’ national coworking network and programming.
The deal comes by way of a partnership with real estate investment trust Macerich, which co-owns the Fashion District with PREIT and is associated with three other Industrious locations around the country, in which Industrious pays Macerich a percentage of the revenue it earns from managing the space rather than a fixed monthly rent, per spokesperson Natalie Hernandez.
“This allows Industrious to operate in a more asset-light and capital-efficient manner, which has put them on the road to reach profitability by Q1 2020,” Hernandez wrote in an email. It’s a model that reminds of 1776’s shift from signing leases to partnering with asset owners in a management capacity.
“We’ve seen strong demand for the Industrious product in Philadelphia and are excited to be deepening our presence in the market,” said Joyce Oh, Industrious’ Mid-Atlantic area manager, in a statement. “Our existing relationship with Macerich led us to Fashion District and we’re proud to be a part of this city-wide destination.”
Last month, Technical.ly reviewed the growth rate of flexible workspaces in Philadelphia and across the nation via a report released by CBRE. The report showed that the top three shared workspace operators in the city are 1776, WeWork and Cambridge Innovation Center (CIC) based on square footage.
With three locations soon totaling 123,000 square feet, Industrious may pull into the top three — especially with impending closure of 1776’s Washington Square location. And we’ll see what happens with WeWork.
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