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Here’s what you need to know today:
- Prodigy Network Coworking Space Faces Foreclosure
- Former Knotel CEO Expresses Regret Over Newmark Deal
- Returning To The Office In An Optimal Way
- Stress Awareness Month Highlights Support For Remote Workers
- HSBC CEO Throws Support Behind Open Office Plans
- Co-warehousing Company Finds Opportunity In Uncertainty
Prodigy Network Coworking Space Faces Foreclosure
Online commercial real estate crowdfunding platform Prodigy Network may see one of its developments face foreclosure.
Real estate advisory firm Vanbarton Group has initiated the UCC foreclosure auction process for a $36 million junior mezzanine loan for its 17 John Street coworking/coliving facility.
Assemblage John Street was developed by Prodigy, with Vanbarton Group issuing the loan for the space in 2018.
The auction is scheduled for May 12 and will be marketed by Eastdil Secured on behalf of Vanbarton.
This news comes weeks after Prodigy filed for Chapter 7 bankruptcy and nearly one year after its founder Rodrigo Niño passed away. Now, Prodigy is facing mounting lawsuits by investors who invested over $690 million into the company.
According to investor materials, over $50 million of equity for Assemblage John Street derived from small investors who were promised higher returns. However, the project barely broke even for a year after it opened, with the balance sheet turning positive during the second quarter of 2019.
However, the pandemic has critically injured much of the coworking and coliving industries, including Assemblage.
Former Knotel CEO Expresses Regret Over Newmark Deal
Amol Sarva, founder and ousted CEO of Knotel, has become more outspoken about his regrets with his company’s recent dealings with Newmark, who recently purchased the flexible office firm.
In February, it was announced that Newmark would take over Knotel and provide $20 million in debtor-in-possession so the flexible office company can go through bankruptcy proceedings.
However, Sarva’s appearance on YouTube web series The Business of Business revealed that he believes the company’s collapse was primarily caused by nepotism and the “dog-eat-dog” nature of the industry. He added that it was his own poor decisions that led the company to be in someone else’s hands.
According to Sarva, Newmark CEO Barry Gosin approached Knotel operators saying they wanted to support the company. Knotel was then introduced to investment bank Cantor Fitzgerald, whose founder and chairman Howard Lutnick is also the chairman of Newmark.
Late last year, Sarva claimed Knotel’s venture lender TriplePoint Capital had sold its debt, although a refinancing plan was in the works. He then learned that it was Newmark who had purchased the debt.
After this, Sarva says he was told that the company was in default and on the cusp of being foreclosed on.
“[They said] you’re going to have to shut down your whole business, or we can lend you another $20 million now on the condition that you bankrupt the company, run an auction for it and let us buy it,’” said Sarva. “It was just like, consummate Wall Street.”
Returning To The Office In An Optimal Way
Now that about half of U.S. adults have received at least one dose of a Covid-19 vaccine, it is inevitable that people are starting to return to the workplace.
After over a year of working from home, the post-pandemic workplace will be dependent upon employers’ preference. This could range from permanent remote working policies, a hybrid model or a total return to pre-pandemic strategies.
And so far, it appears that this decision varies across different industries. For instance, Microsoft has been liberal with their remote working policies, while Goldman Sachs’ CEO said that this arrangement was an “aberration.”
According to Harvard Business School professor Prithwiraj (Raj) Choudhury, companies need to think deeply about their next move before making significant organizational changes.
He suggests that in order for companies to make the best transition to a post-pandemic workplace, they will need to consider the employee experience and what workers, particularly women, expect from their workplace.
While many companies focus on the needs of younger employees, the past year has disproportionately impacted women in the workforce, so finding ways to bring them back in will be crucial.
Additionally, Choudhury explains that companies may turn to cutting down on real estate to help reduce some costs. For instance, eXp Realty transitioned to a remote workforce after the financial crisis, which allowed them to put more money into talent and an employee stock program.
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“They had no need to raise tons of money from VCs early on and he had lots of equity he could share with agents,” said Choudhury.
Stress Awareness Month Highlights Support For Remote Workers
Instant Offices recently conducted new research to gain insight into how the past year has impacted employees in light of April being Stress Awareness Month.
The transition to remote working has had many perks, but has also led to feelings of isolation and anxiety. The biggest struggles for remote workers included not being able to unplug, poor communication, loneliness, distractions and staying motivated.
All of these frustrations have led to a big surge in work-related stress and anxiety, proving that supporting the mental health of employees in the workplace is more important now than ever before.
But what can workers do to alleviate these negative feelings and better perform their job responsibilities and duties?
Good sleep is a great first step. In fact, the number of Brits having sleep troubles grew from one in six, to one in four recently. So having a healthy nighttime routine that ensures a full night’s sleep is critical.
Another great way to nurture mental health is to take a digital break, especially if you spend most of your work day looking at screens. Avoiding anxiety-inducing headlines for periods of time can help reduce feelings of stress.
Being purposeful about work-life balance is also essential to actually achieving it. That means scheduling in activities and rest throughout the day in order to avoid burnout.
HSBC CEO Throws Support Behind Open Office Plans
This week, HSBC CEO Noel Quinn took to LinkedIn to share that he and the leadership team are moving “to a fully open plan with no designated desks.”
Quinn prefaced this news by sharing his lack of desire to return to an individual office when returning to the workplace, and wanting to have better connections with colleagues.
Along with the transition to a more open plan, Quinn added that his staff’s preference for more flexibility will lead the company to move to a hybrid work arrangement.
Transitioning to a more hybrid model could allow the company to cut down on the expensive cost of office space, while accommodating the needs of employees in a post-pandemic society. This also means staffers won’t be expected to be in the office five times a week.
HSBC has indicated it will cut around 40% of its office space, but would retain its Canary Wharf headquarters. However, Quinn added that the space would become more open and use hot desks rather than offices. Additionally, the company would not renew leases in its other locations in London.
The bank also said it will follow through with its pre-pandemic plan to cut down its staff. In 2019, the company downsized 35,000 jobs, followed by several rounds of layoffs including one for 4,000 people and 10,000 soon after.
Co-warehousing Company Finds Opportunity In Uncertainty
Despite the pandemic having a negative impact on many industries, Atlanta-based co-warehousing company Saltbox is seeing opportunity amidst the uncertainty.
According to Tyler Scriven, CEO and cofounder of Saltbox, the immense growth of ecommerce in the past year has led to a boost in sales for the company’s members.
“Many were not expecting such a jump in sales and have worked resiliently to manage sourcing and other logistical challenges that came along with the pandemic’s effects on global supply chains,” said Scriven.
Saltbox serves as a flexible office space for startups and small businesses, as well as a storage and fulfillment order facility. Additionally, the company offers a product photography studio, conference rooms and office spaces.
This massive growth likely helped the company close a $10.6 million Series A round led by Palo Alto-based Playground Global.
“The rise of e-commerce has allowed millions of small businesses to flourish, but fulfilling orders out of garages and self-storage units is inconvenient, uncomfortable, and not conducive to growing a team,” said Laurie Yoler, General Partner at Playground Global. “Saltbox provides a purpose-built alternative for the entrepreneurs of tomorrow, with additional services to help small businesses scale.”Share this article