Grind to open fourth location in Manhattan
Co-workspace provider, Grind, has signed a lease on an 18,000 sq ft space at 1216 Broadway. The new location, the company's largest yet and its first in midtown south, takes its total to four. The lease has been structured to offer Grind protection against fall in demand. Grind will pay the landlord a share of profit from the location in return for sub-market rent.

Grind, a coworking company with three locations in Manhattan, is opening its fourth.

The company agreed to rent 18,000 square feet at 1216 Broadway on the building’s second and third floors. The space will feature an outdoor terrace on its second level.

The new space is Grind’s largest yet and its first in midtown south, along a stretch of Broadway where the nearby Ace and NoMad Hotels have helped make the area hip.

The number of shared office spaces in the city has grown swiftly in recent years, led by the the world's largest coworking firm, WeWork, and fed by demand from startups and small businesses.

This rapid growth has led to concerns of a glut of coworking space if the economy slows, a repeat of what happened to the industry in the early 2000s.

Grind Chief Executive David Beale said the lease for the new space was structured to protect the company from a downturn. Grind will pay a below-market rent in exchange for granting 1216 Broadway’s landlord, Raizada Shubindu Vaid, a share of Grind’s profits at the location, Beale said.

“This is a collaboration between us and the asset owner,” Beale said. “When you look at the numbers, the building owner ends up with a premium to what the space would generate from a conventional market rate lease.”

Beale would not say how much Grind will pay for the space.

The arrangement relieves Grind of the risk of being locked into a costly space commitment if the real estate market drops, which happens in the city every decade or so. During downturns, coworking companies can take a drubbing because the price of the short term leases they have with their members falls quickly while their own leasing costs remain the same.

“These more flexible arrangements better align the interests of both parties,” Beale said.

Grind has had a similar agreement for its coworking space at 140 West Street, leased from Verizon, which owns the space. The rent is below market, and Grind splits its coworking profits with the company. If its business falters for any reason, such as a recession, Beale said the low rent will allow it to ride out the difficult patch and bounce back.