Flex Office Company Mindspace Locks Down $72M For Expansion In U.S., Overseas

Flex office space continues to be a popular leasing choice in the wake of the coronavirus pandemic, and an Israel-based provider is feeling the gains. 

Coworking operator Mindspace, which has locations in San Francisco, Washington, D.C., and Philadelphia, has locked down $72M in an investment round. The company plans to use the funds to expand in the U.S. as well as Europe, where it already has a large presence, and Israel, according to a company statement. 

“Mindspace is experiencing an impressive growth momentum and high demand in all its locations,” Mindspace CEO and co-founder Dan Zakai said in the statement. "We successfully faced the many challenges of COVID. Today, our locations are almost at full occupancy.” 

Shelter-in-place orders caused by the pandemic threw hurdles at the flex and coworking space, but the industry seems to have turned a corner, recent reports indicate. Between July and September, more coworking and flex office locations opened than closed for the first time since the pandemic began, while rents at those spaces rose 2.5% nationally, indicating the worst of the pandemic disruption might have passed, Bisnow reported earlier this month. 

Mindspace has maintained its pre-pandemic prices, according to the release. 

The company isn't the only one in growth mode. 

Other flexible office providers seeking expansions include Industrious, which received a $200M investment from CBRE earlier this year to expand globally, and Irvine, California-based Premier Workspaces, which plans to add 100 locations nationally over the next few years. 

In Philadelphia and a handful of other new locations opened over the last two years, Mindspace utilized management agreements with landlords instead of traditional leases. This business model, in which shared space providers and landlords share expenses and profits, has been touted by other industry players as a more stable and cost-efficient growth strategy. 

Mindspace is also leaning into on-demand offerings for companies and individual workers who are switching between working from an office and from home. The company said on-demand contracts have tripled over the last six months compared to the same period prior to the pandemic. WeWork has also added on-demand options in an attempt to offer even greater flexibility for workers seeking more control over where they work and when.