Ikea Affiliate Partners With Industrious To Launch U.S. Coworking Business
Ingka Centres, a sister company of furniture and homewares retailer Ikea, is launching its coworking business in the U.S., beginning with a 46K SF space in a vacant San Francisco mall.
Ingka Centres is owned by Ikea's parent, Ingka Group, and is bringing the first of its planned U.S. Hej!Workshop coworking franchises to 945 Market St., a 250K SF mall in San Francisco’s downtown area, in partnership with New York-based coworking provider Industrious, CoStar reports.
“The way we work is changing and our expectations of the workplace need to change with it," Industrious CEO Jamie Hodari told CoStar. “If people are going to leave their homes, they want something warm, welcoming, where they’re exposed to new ideas and experiences.”
The mall has been vacant since construction was first completed in 2016, the San Francisco Chronicle previously reported. Ingka Centres acquired the 945 Market St. mall for $198M in 2020, beginning construction on its first U.S. Hej!Workshop in early 2022, The Real Deal reported at the time.
Ingka Centres has plans for an 87K SF Ikea store — which includes coworking space, the Chronicle reported in June — with dining and entertainment options to anchor the mall. The mall’s Hej!Workshop is due to open in early 2024, complete with Ikea furnishings.
The Mid-Market mall has struggled to attract tenants since it opened in 2017, but Ingka Centers commercial and digital manager Jens Nielsen told CoStar the company hopes to “transform the downtown center into a lively hub that effectively addresses the evolving needs of the modern workplace."
Industrious operates coworking spaces in management agreements with landlords, in which both parties share the risk and upside in the flexible office space. CBRE paid $200M for a 35% stake in the company in 2021. It has since increased its investment by $130M.
Across the U.S., demand for coworking spaces appears to be rising. A recent CBRE survey found that approximately 60% of office occupiers are looking to use flex space for around 10% of their real estate portfolios within the next two years, CoStar reported. That includes tech giant Amazon, which agreed to lease 300K SF of WeWork space in Manhattan.
Nationally, the supply of coworking spaces grew by 10% from Q1 to Q2 this year, according to data from CoworkingCafe. Demand for coworking spaces is up in cities including Miami and Houston, which welcomed high numbers of new residents during the pandemic.
CORRECTION, AUG. 7, 3:50 P.M. ET: A previous version of this story incorrectly identified Ingka Centres as Ikea's parent company. They are sister companies under Ingka Group. This story has been updated.
