Industrious Eyes Suburban Growth In Atlanta
One of the biggest players in the co-working industry could be making its next moves in Atlanta's inner ring suburbs.
As Industrious inks its fourth Atlanta deal — a 19K SF lease at Stockyards, a 142,500 SF adaptive reuse project in West Midtown in a joint venture between Federal Capital Partners and Westbridge — CEO and co-founder Jamie Hodari said its growth in Atlanta is far from done, with the firm eyeing potential locations in Central Perimeter, the Cumberland/Galleria area or even Decatur.
“I don't think we're anywhere near sating demand for our product in a market like Atlanta,” Hodari said.
Industrious made its Atlanta debut in 2015 at the Silhouette Building in Midtown. It has since expanded into two other buildings: the highly vaunted Ponce City Market redevelopment in Midtown and the former Aaron's headquarters building at 309 East Paces Ferry in Buckhead Village. Hodari said, so far, no other letters of intent or leases have been signed in Atlanta, but he said the market could accommodate up to eight locations.
The growth boom comes while Industrious is still fresh from a $62M Series B infusion led by Riverwood Capital and its recent acquisition of online short-term office rental platform PivotDesk. It is looking to expand with another 14 U.S. locations in 2017, Hodari said.
Industrious' strategy is to create numerous pockets throughout a metro area, something along the order of nearly a dozen locations, which would act as a network for Industrious' clients to hop around a metro area as needed.
“There's a lot of value in having a network in a city,” Hodari said. "The most likely next place for us to go will be the really vibrant inner ring suburbs.”
Co-working has become one of the fastest-growing office products in Atlanta in recent years. There are big names, including WeWork, which has three locations, Roam, Regus' Spaces co-working concept, as well as local players such as Atlanta Tech Village, Switchyards in Downtown Atlanta and Tech Square Labs. And there is also a smattering of local co-working operators throughout the metro area. In all, Colliers International estimates some 1.2M SF in Atlanta is being used by co-working operators.
Hodari said Industrious has seen stronger demand for its concept in Atlanta than in other markets. It typically takes a co-working provider up to 24 months to reach stabilization — between 75% and 80% full, he said. In Atlanta, Industrious' average occupancy is 95%, and its spaces have reached stabilization within five months. To Hodari, that validates the Industrious brand in the South's second-biggest metro, behind Miami-Fort Lauderdale.
Clients can run the gamut from law and accounting firms to creative companies as well a smattering of traditional businesses. Industrious also caters some national contracts with Fortune 500 companies, Hodari said.
“In a city like Atlanta, a quarter of the people who tour Industrious chose to go to Industrious,” he said. "Having said all that, it's still the case that demand for flexible workspace is growing far more rapidly than demand can keep up with. And that's true in every American city I've seen.”