Newmark Group has acquired a majority stake of Space Management, which does business in France as the coworking brand Deskeo, for an unspecified price.
Paris-based Deskeo, which currently operates a flexible office portfolio of more than 50 locations, will be part of Newmark's Global Corporate Services group, providing real estate services worldwide, including facilities operation, lease administration, and program and project management. The French company was founded in 2016 by Benjamin Teboul and Frank Zorn, who will continue to lead it under Newmark's ownership.
"Our acquisition of Deskeo, combined with the existing Knotel portfolio, is a testament to Newmark's long-term bullishness on the future of flexible office," Newmark CEO Barry Gosin said in a statement.
Earlier this year, Newmark took over New York-based coworking specialist Knotel, which filed for bankruptcy only 18 months after reaching unicorn status. Newmark provided $20M in debtor-in-possession financing to facilitate the acquisition, a deal later criticized by former Knotel CEO and co-founder Amol Sarva.
After suffering mightily due to the coronavirus pandemic, coworking operators have more recently said the uncertainty surrounding the return to traditional office space has benefited their business model.
Coworking and flexible office models tend to serve smaller organizations that typically have smaller budgets and require more short-term flexibility than traditional office users. That flexibility has proved more valuable than ever, coworking operators say.
In a post-pandemic environment, investors are also betting that demand for coworking space will grow further. Later this month, for instance, shareholders of the special-purpose acquisition company BowX Acquisition Corp. will vote whether to acquire the storied coworking giant WeWork, thus taking it public.
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