Real-estate giant JLL is gaining a key partnership as WeWork unloads its Managed by Q business at a fire-sale price
- WeWork just sold facilities-management company Managed by Q to rival facilities-management company Eden for $25 million, a 90% discount from what WeWork paid for the business in 2019.
- The purchase was funded by a $29 million investment in Eden led by real-estate services giant JLL.
- JLL will now partner with Eden to provide facilities-management services to its clients that are too small for JLL's in-house facilities management team, which typically only works with very large businesses.
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Struggling coworking giant WeWork just sold Managed by Q to facilities-marketplace rival Eden for a fraction of what it paid, with commercial brokerage and real estate services company JLL helping bankroll the deal.
San Francisco-based Eden bought Managed by Q for $25 million, according to a source familiar with the deal. WeWork paid $220 million for the firm in April 2019.
Helping enable that deal was $29 million in funding for Eden led by JLL Technologies, the tech division of the real estate firm. Other funders were not disclosed.
Eden and Managed by Q both operate marketplaces that connect clients with office cleaners and other facilities services. With the acquisition, Eden will absorb Managed by Q's clients and providers.
JLL, which has its own in-house facilities management team that caters to Fortune 1000 companies, plans to integrate Eden into its brokerage business so that it can offer the service to smaller firms.
"Small and medium-sized business are already working with JLL to find and lease space, but now we can also provide solutions to improve the management of those workplaces and the experience of those within," Yishai Lerner, co-CEO of JLL Technologies, wrote to Business Insider in an email. "It's a great complement to our existing business lines."
JLL acquired Corrigo, a facilities management platform for enterprise and large retail companies, in December of 2015 for an undisclosed amount. Corrigo remains independent to JLL and is open to any facility manager, whether they are a JLL clients or not.
Lerner wrote that Eden's acquisition of Managed by Q will make them "the primary market player," providing a good opportunity for JLL to expand its service offerings into "underserved" parts of the market, namely small and medium businesses.
Joe DuBey, CEO and co-founder of Eden, said that he had been discussing a potential strategic alignment with JLL for years, and that the sale of Managed by Q provided an opportunity for Eden to grow its business, and for JLL to provide more services to its customers.
"This partnership makes Eden more of a complete business," DuBey told Business Insider."We knew we wouldn't build a brokerage, so now we get the benefit from JLL's brokerage services and JLL will be able to offer Eden as their facilities management offering with whatever type of business they don't typically do in-house."
Eden, which closed a $25 million round in November of last year, works with a range of companies, including flexible office space provider Convene. To date, Eden has raised $69 million.
Another WeWork asset is sold off in the post-Neumann world
WeWork is in the process of slashing jobs and shuttering or selling several non-core investments, including its stake in women's coworking company The Wing, workplace software provider Teem, and content marketer Conductor as well as a $60 million corporate jet it purchased in 2018. WeWork's new CEO, Sandeep Mathrani, joined the company last month.
WeWork had been considering a sale to a group led by Managed By Q co-founder Dan Teran for less than $55 million in December of last year, according to Bloomberg. WeWork acquired Managed by Q in April of last year for a reported $220 million. The sale price would have been less than a quarter of what WeWork paid. A Bloomberg report last week said that Eden's final bid was higher than what Teran was able to offer.
Business Insider has reported WeWork is outsourcing its US and Canada facilities staff to JLL starting last December, per a memo to employees.
A WeWork spokesperson told Business Insider: "The successful divestiture of Managed by Q is the latest example of how WeWork continues to focus on our core workspace business. We are grateful for the contributions of the entire team at Managed by Q and believe the company is well-positioned to succeed as part of Eden."
Managed by Q, founded in 2012, allows office tenants to hire on-demand workers for office-management tasks like cleaning or staffing reception desks, though the company originally hired full-time employees.
After selling the company, Teran spent five months with WeWork as head of corporate development and ventures before leaving last October, per his LinkedIn profile. Teran could not be reached for comment at the time of publication.
