In light of the COVID-19 outbreak, on Thursday, April 9, 2020, the Cornell Baker Program in Real Estate was thrilled to resume its Spring 2020 Distinguished Speaker Series via video conference. Cornell alumni Jerre Riggs and Andrew Powers joined us for a discussion about coworking and their company, Industrious.
Riggs is Director of Real Estate and Powers is a Real Estate Manager at Industrious, a co-working firm that has an impressive track record of innovation and growth. Riggs earned his Bachelor of Arts in 2002 from Cornell University and Juris Doctorate in 2007 from Villanova University. Powers earned his Bachelor of Arts in 2015 from Cornell University.
After graduating from law school, Riggs was a litigator at Campbell Campbell Edwards & Conroy, a Philadelphia based law firm. After spending couple years practicing law, Riggs pivoted to commercial real estate starting with Colliers International. During this time at Collier, Riggs landed upon an opportunity to lead the Philadelphia expansion of Benjamin’s Desk, a mid-Atlantic based coworking and incubation company. Riggs’ current role at Industrious is a culmination of all of his past experiences.
Powers, a native Ithacan, fondly talked about his family’s association with Cornell and reiterated how much of a “big time Cornell supporter” he is. After earning his Bachelors, Powers spent a little over two years with Ernst & Young refining his core skillset that successfully prepared him to take on his current role with Industrious.
Over the course of their presentation, Riggs and Powers covered four main topics. First, they helped shed light on the evolution of coworking and how Industrious’ journey fits into the larger picture. Second, they shared insight into how occupiers are changing the way they consume space. Third, they talked about the impact on landlords as a result of changing market demands. Finally, they provided a brief overview of the ongoing impact that COVID-19 has had on Industrious and coworking industry in general.
Industrious was founded in 2013 and is currently the largest premium flexible workplace provider in the country with locations spanning fifty cities. In a nod to his Hotelie roots, Riggs used the analogy that Industrious is the “Four Seasons” of the coworking industry—a relatively young and fragmented space within real estate with huge growth potential. While other more premium brands may exist, Riggs believes that Industrious has found the sweet spot between luxury and scale, serving an impressive range of large enterprise clients including McKinsey, Lyft, Amazon, and Coca-Cola. Riggs also stressed Industrious’ commitment to running a business that is cash flow positive at each of its locations from day one, contrary to much of the media coverage that coworking has received in last twelve months.
Industrious began like many other coworking business that signed master leases and offered memberships for the use of space. However, the company’s business model has evolved in the last few years and now partners with leading office owners and investors including Hines, Beacon, and Blackstone. Unlike traditional landlords who expect their tenants to sign long-term leases with very little flexibility, Industrious brings operational expertise that allows for more options. Riggs suggested that modern tenants–especially those in the start-up world–require an ability to quickly expand as they receive funding. Even more importantly, Industrious manages to offer this level of flexibility without skimping on luxury or hospitality, providing an unparalleled experience to their tenants. In return, Industrious is able to achieve higher rents and wants to share the profit with the landlord. With this structure Industrious can better manage downside risk and be aligned with the landlords.
In response to the ever-changing demands in office real estate, Industrious is constantly searching for opportunities to better understand and adapt to the needs of occupiers. Powers suggested that “70% of enterprise companies now see flex space as a key part of their portfolio strategy.” To better explain, Powers cited a potential deal in the works with a major consulting firm that is under utilizing their space. This firm has 500 seats that are vacant four out five days a week. If Industrious can help them better optimize their real estate needs, they would be able to improve the overall employee experience without increasing their real estate costs. Powers also mentioned that Industrious is firmly committed to stability and reliability of their service. Industrious wants to communicate to the industry that it will be there to meet the needs of their clients when they arise.
Improving the customer experience (and thereby improving retention) is one of Industrious’ key goals in its partnerships with landlords. The company believes that by meeting these goals it will in turn find opportunities to increase membership fees and ultimately better optimize the use of its buildings. Industrious acknowledges that modern office buildings do not look and feel similar to the old office buildings—and they want to bring their operational expertise to better manage amenities. That starts with conventional things like food and beverage, wellness, and further extends to the integration of technology. Powers explained that Industrious is using apps and sensors to improve the experience for everyone in their spaces. For example, Industrious can easily grant access to conference rooms and meeting space at specific times. Or it can use heat sensors to alert a member as to whether or not a closed office or conference room is occupied and in use.
Finally, in light of the COVID-19 outbreak, Industrious has utilized its existing infrastructure to improve the experience of those working from home, providing services such as tech support, virtual assistant access, and even counseling, if needed. In addition to these core services, the company is offering remote programming for productivity, time-management, self-care, and career growth. Industrious wants to provide the ultimate experience whether or not its clients are in the office.
The Baker Program would like to thank Riggs and Powers for taking time to share their insights into the world of coworking, especially under these unprecedented conditions. The Baker Program looks forward to future conversations with Riggs and Powers and welcoming them back in person to the campus.
