Silverstein Properties Forges Flexible Office Deal

CBRE's coworking unit Hana will manage 85,000 square feet in a Lower Manhattan skyscraper.
Andrew Kupiec. Image courtesy of Hana

CBRE’s flexible office unit Hana has revealed a new partnership with Silverstein Properties that highlights the growing popularity of revenue-sharing deals between coworking operators and landlords.

The arm of the NYSE-listed brokerage is venturing into New York City after reaching a deal to manage two full floors of Silverstein’s 3 World Trade Center in Lower Manhattan, Crain’s New York Business reported. The move comes after Hana inked a lease for its first East Coast location in Northern Virginia last month.

READ ALSO: Industrious to Open New Location at Carnegie Hall Tower

Hana will oversee about 85,000 square feet of coworking and flexible space at the Manhattan office skyscraper, while using about 5,000 square feet of the space for its own headquarters. The company will occupy the entire 37th and 38th floors of the 80-story tower at 175 Greenwich St. in the Financial District. The space is expected to open during the summer, Hana’s CEO Andrew Kupiec told Crain’s.

In it together

Rather than paying rent, Hana struck up a partnership with Silverstein in which the two companies will share the cost of building out the office space and will split the revenue generated from the occupants. Such profit-sharing partnerships have gained traction with a number of prime office owners as a way to boost revenue while avoiding risky long-term leases that could become a liability during a downturn.

Coworking firm Industrious has made this the focus of its business, inking hotel-style management agreements with landlords such as Blackstone’s EQ Office and real estate fund manager Rubenstein Partners LP. Rival operators getting into the game include WeWork, which last May forged a revenue-sharing partnership with RXR Realty to manage four floors totaling 90,000 square feet at Manhattan’s 75 Rockefeller Plaza.

Hana Grows Up

3 World Trade Center. Image courtesy of JJBers via Wikimedia Commons

Launched in late 2018, Hana opened its first location in Dallas last August and currently has eight venues open or under development in the U.S. and London. The new location in Virginia spans 39,000 square feet at JBG SMITH’s National Landing mixed-use development in Arlington.

The brand’s main offering, Hana Team, consists of private office suites with flexible leases available for large and medium-sized firms as well as startups. Hana Share and Hana Meet provide traditional coworking space and conference room and event space, respectively.

Built in 2018, the 2.8 million-square-foot 3 World Trade Center is 9.9 percent vacant, according to Yardi Matrix. Ride-sharing giant Uber leased out more than 300,000 square feet at the building last October, according to media reports. CBRE serves as the leasing manager.