In case you missed it—Scottsdale, AZ is booming.
According to the US Census Bureau, the Phoenix metro area has jumped by more than 78,000 residents since the start of the pandemic. While the sunbelt has always been desirable for its affordable cost of living and warmer weather, Arizona specifically has seen a surge in people returning to the office or relocating to enjoy warmer weather.
For Industrious, Arizona continues to be a state with off the chart occupancy rates since many people are choosing to relocate from the East Coast or more expensive states. In addition, our Arizona team has seen a spike in access memberships since many people are choosing to spend the winter in Arizona and are familiar with the Industrious brand from their home city.
Our Industrious Old Town location is a shining example of how a strong landlord partnership leads to high occupancy pre & post pandemic. At the heart of the city, Old Town Scottsdale is positioned perfectly between nine walkable neighborhoods with a plethora of shops, restaurants, galleries, bars, and museums. Industrious Old Town members get to reap the benefits of premium coworking space in Scottsdale while being so close to its cultural epicenter.
Pivoting during the pandemic
Industrious Old Town opened June of 2018 and quickly reached close to maximum occupancy levels. However, once the pandemic hit, the team had to get creative to keep the doors open. The Industrious team worked closely with the landlord, Macquarie Asset Management—the asset management arm of Macquarie Group, through a revenue share agreement to keep the location open and quickly return to high occupancy by the Fall of 2021. The pivot to a revenue share agreement allowed the landlord and Industrious to work as partners and mutually benefit from the success of the location. Currently with occupancy back to pre-pandemic levels, Macquarie Asset Management is able to make above market rate rent while working with the Industrious team to closely monitor the performance of the location.
Doug Baker, Vice President at Macquarie Asset Management, gave his perspective on why their firm signed a deal with industrious back in 2018.
“The Industrious model was very attractive to us. In 2017 when we were negotiating the deal, there was still more uncertainty around the flex office space, so we knew we would need the right trusted partner if we wanted to explore flex in our portfolio. What stood out to us was that the Industrious executive team was extremely knowledgeable about the industry and had realistic, targeted growth projections. We’ve maintained a healthy working relationship from day one, and when the pandemic hit, the Industrious team came so well prepared that the revenue sharing agreement made perfect sense.”
Doug Baker, VP at Macquarie Asset Management
Using location proximity to boost brand awareness
Our Scottsdale real estate strategy has been a move to leverage the complementary power of having multiple differentiated locations in the same submarket. Industrious Old Town is just a short, 10-minute walk away from Industrious Fashion Square. Both locations boast high occupancy and have not wavered in bouncing back since the pandemic, however it’s easy to assume that one location would be more of a magnet for new members.
“What we’ve seen with our Scottsdale network is two very complementary units that mutually benefit one another. Our Old Town location is a more traditional office setting while our Fashion Square location is nestled inside of a bustling mall. When prospective members are shopping at the mall or out at a local restaurant and see our signage, they go online and schedule a tour for both of these locations, and then pick which solution fits their need and work style best. In this way, the close proximity of two very different offerings has proven to be a great benefit to the performance of both.”
—Shane Jones, Real Estate Manager at Industrious
Creating a space for growth and community
So what’s the secret to the high occupancy rate of both locations? There are many factors to take into consideration, but one component of the Industrious secret sauce is our hospitality-first mindset. Hillary Intinarelli, the Community Manager at Industrious Old Town shed some light on the environment within the location:
“Our Old Town location is a very social, yet productive environment. A lot of our businesses are choosing to expand within our location instead of seeking other office space since they love working amongst our other members. There is even a great understanding between the staff at Industrious Old Town and Fashion Square a few minutes away. When someone tours our space that we think would thrive better at our mall location, we send them over there and vice versa. It’s so important to us to support one another and make sure each member finds the right fit for their needs.”
— Hillary Intinarelli, Industrious Old Town Community Manager
In sum, it takes a holistic partnership between the landlord, service provider, and on-the-ground team to make a flex office location come to life. The successes at Industrious Old Town are a perfect example of the synergies possible when all parties are aligned and invested in delivering a premium flex experience.