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Coworking Provider Industrious Enters Unique Management Partnership with Rubenstein at Carlyle Tower

Flexible Workspace Company to Operate Location as Well as Handle Conferencing and Amenity Management at Mixed-Use Redevelopment in Alexandria, Virginia
October 11, 2018
Coworking space provider Industrious, in one of the first agreements of its kind, has launched a new partnership with Philadelphia-based fund manager Rubenstein Partners to bring its hospitality-driven flexible workspace to Rubenstein's Carlyle Tower project located just outside the nation's capital in Alexandria, Virginia.

The partnership operates as a management agreement, where Rubenstein would own and develop the space in the company’s 14-story, 365,000-square-foot mixed-use development at 2461 Eisenhower Ave., while Industrious would act as its operator. Rubenstein and Industrious would share design, construction and marketing responsibilities, while Industrious would also oversee conferencing, programming and amenities for Carlyle Tower tenants and visitors.

"After an extensive vetting process, we chose to partner with Industrious based on their proven track record, the value they place on delivering superior quality, amenities and care to their customers, and the synergies that will be created with the environment Rubenstein is creating at Carlyle Tower," said Steve Evans, regional director of the Washington, D.C., market for Rubenstein Partners.

Industrious, founded in Brooklyn, New York, five years ago by Jamie Hodari, is a shared office space provider geared toward mature working professionals. Like other coworking providers, the company typically leases space directly from a landlord then builds it out with amenities and desks that are subleased on flexible terms to entrepreneurs and businesses.

The arrangement with Rubenstein Partners is similar to the partnership Industrious launched with EQ Office earlier this year, where, instead of a direct lease, Industrious agreed to operate coworking facilities of up to 140,000 square feet, as well as maintain the common area on the ground floor, of EQ's 1.3 million-square-foot Howard Hughes Center at 6100 Center Dr. in Los Angeles.

“This is part of an industry shift away from arms-length leases,” said Hodari, chief executive and co-founder of Industrious, at the time of the EQ Office deal in June. “Part of the reason why landlords in circumstances like this prefer a management arrangement with an operator like us is that it greatly enhances and expands the scope of what we are able to do for the building."

Rubenstein Partners is currently wrapping up its redevelopment of the 2461 Eisenhower Ave. building the company paid $58 million for in September 2015. At completion, the roughly 365,000-square-foot Carlyle Tower is expected to feature 335,000 square feet of office space, 22,500 square feet of retail and a 7,500-square-foot retail pad.

Industrious, whose users include Lyft, Hyatt, GM and Freddie Mac, is scheduled to open its Carlyle Tower location in January 2019. The square footage of the new space has not yet been disclosed.

Industrious operates more than 50 locations in 33 cities across the U.S., with local offices at One Thomas Circle in Northwest Washington and 7200 Wisconsin Ave. in Bethesda, Maryland. The company also plans to open a location at 1660 International Dr. in Tysons Corner, Virginia, in winter 2019.

This summer, the fast-growing workspace provider reached an agreement with Santa Monica, California-based mall operator Macerich Inc. to add flexible workplaces to Macerich malls across the country. One of the largest mall operators in the U.S., Macerich owns 52 million square feet of real estate, and has a stake in 48 regional shopping centers.

Daniel Doyon, managing principal of Workplace Hospitality Management in San Francisco and former resident director of research and development at Rubenstein, served as a consultant in the deal at Carlyle Tower.
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